As filed with the Securities and Exchange Commission on April 17, 2002
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-----------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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COLLINS & AIKMAN PRODUCTS CO.
(Exact name of registrant as specified in its charter)
Delaware 3590 13-0588710
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
-----------------------
250 Stephenson Highway
Troy, Michigan 48083
(248) 824-2500
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
-----------------------
Thomas E. Evans
250 Stephenson Highway
Troy, Michigan 48083
(248) 824-2500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
Gary A. Brooks, Esq.
Jonathan A. Schaffzin, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
(212) 701-3000
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Approximate date of commencement of proposed issuance of the securities to
the public: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. |_|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
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. |_|
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CALCULATION OF REGISTRATION FEE
=============================================================================================================================
Title of Each Class of Securities Amount to Be Proposed Maximum Proposed Maximum Amount of Regis-
to Be Registered Registered Offering Price Per Unit Aggregate Offering Price tration Fee (2)
(1)
- -----------------------------------------------------------------------------------------------------------------------------
10-3/4% Senior Notes Due 2011......
$500,000,000 100% $500,000,000 $46,000
=============================================================================================================================
Guarantees of 10-3/4% Senior Notes
Due 2011........................ (3) (3) (3) (3)
=============================================================================================================================
(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(f)(2) under the Securities Act of 1933, as amended
(the "Securities Act").
(2) Calculated pursuant to Rule 457(f)(2) under the Securities Act.
(3) Pursuant to Rule 457(n), no registration fee is required with respect to
the Guarantees
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 or until the registration statement shall become effective on
such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
Additional Registrants
State or other Primary Standard I.R.S.
jurisdiction of Industrial Classifica- Employer Identi-
incorporation or tion Code Number fication No.
Exact name of registrant as specified in its charter organization
Collins & Aikman Corporation Delaware 2273 13-3489233
Collins & Aikman Accessory Mats, Inc. Delaware 3069 34-1532472
Akro Mats, LLC Delaware 3069 *
Collins & Aikman Automotive Mats, LLC Delaware 3069 *
Collins & Aikman Asset Services, Inc. Delaware 6719 95-4225459
Collins & Aikman Automotive International, Inc. Delaware 6719 13-3376151
Collins & Aikman Carpet & Acoustics (MI), Inc. Delaware 3714 38-2831561
Collins & Aikman Carpet & Acoustics (TN), Inc. Tennessee 3714 62-1301605
Collins & Aikman International Corporation Delaware 6719 95-3416790
Collins & Aikman Europe, Inc. Delaware 6719 88-0383716
Collins & Aikman Plastics, Inc. Delaware 3089 34-1376202
Collins & Aikman Properties, Inc. Delaware 6719 95-3416796
Comet Acoustics, Inc. Delaware 7371 56-2225192
Dura Convertible Systems, Inc. Delaware 3714 95-4094096
Amco Convertible Fabrics, Inc. Delaware 2221 38-3254156
Gamble Development Company Minnesota 6519 41-0949764
JPS Automotive, Inc. Delaware 2273 56-2001613
Wickes Asset Management Inc. Delaware 6519 95-4030704
Wickes Manufacturing Company Delaware 6519 95-4001211
Collins & Aikman Interiors, Inc. Delaware 6719 56-2270167
Collins & Aikman Development Company Delaware 3089 56-2270173
Becker Group, L.L.C. Michigan 3089 38-3451471**
Brut Plastics, Inc. Michigan 3089 38-2959954
Collins & Aikman Advanced Processes, Inc. Delaware 3089 56-2270171
Collins & Aikman Canada Domestic Holding Company Delaware 6719 56-2270169
Collins & Aikman Fabrics, Inc. Delaware 2221 38-3024579
M & C Advanced Processes, Inc. Michigan 3089 38-3172585
Textron Automotive Exteriors Inc. Delaware 3089 05-0471352
Textron Automotive Interiors Inc. Delaware 3089 02-0265330
Textron Automotive (Asia) Inc. Delaware 3089 05-0505045
Textron Automotive (Argentina) Inc. Delaware 3089 06-1470649
Textron Automotive Overseas Investment Inc. Delaware 3089 02-0435027
Textron Automotive International Services Inc. Delaware 3089 05-0447633
Textron Properties Inc. Delaware 6719 05-0425768
* This company is a single member limited liability company and for federal
income tax purposes is treated as a division of Collins & Aikman Accessory
Mats, Inc. There is no I.R.S employer identification number assigned to
this company.
** This company is a single member limited liability company and for federal
income tax purposes is treated as a division of C&A Plastics, Inc. The
I.R.S employer identification number listed was used prior to acquisition.
================================================================================
The information in this prospectus is not complete and may be changed. We may
not consummate the exchange offer until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these notes and is not soliciting an offer to acquire these notes
in any state where the offer or sale is not permitted.
PROSPECTUS
SUBJECT TO COMPLETION, DATED APRIL , 2002
COLLINS & AIKMAN PRODUCTS CO.
Exchange Offer
for
$500,000,000 Aggregate Principal Amount
of
10-3/4% Senior Notes due 2011
--------------------------------
Terms of Exchange Offer:
o Expires 5:00 p.m., New York City time, on , 2002 unless extended.
o Subject to certain customary conditions which may be waived by us.
o All outstanding 10-3/4% Senior Notes due 2011 that are validly
tendered and not withdrawn will be exchanged.
o Tenders of outstanding notes may be withdrawn any time prior to the
expiration of this exchange offer.
o The exchange of the outstanding notes will not be a taxable exchange
for U.S. federal income tax purposes.
o We will not receive any cash proceeds from the exchange offer.
o The terms of the notes to be issued in exchange for the outstanding
notes are substantially identical to the outstanding notes, except for
certain transfer restrictions and registration rights relating to the
outstanding notes.
o Any outstanding notes not validly tendered will remain subject to
existing transfer restrictions.
See "Risk Factors," beginning on page 7, for a discussion of certain
factors that should be considered by holders before tendering their outstanding
notes in the exchange offer.
There has not been previously any public market for the exchange notes that
will be issued in the exchange offer. We do not intend to list the exchange
notes on any national stock exchange or on the Nasdaq National Market. There can
be no assurance that an active market for such exchange notes will develop.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is ___________, 2002.
In making your investment decision, you should rely only on the information
contained in or incorporated by reference into this prospectus. We have not
authorized anyone to provide you with any other information. If you receive any
other information, you should not rely on it.
You should not assume that the information contained or incorporated by
reference in this prospectus is accurate as of any date other than the date on
the front cover of this prospectus.
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TABLE OF CONTENTS
PAGE PAGE
WHERE YOU CAN FIND ADDITIONAL INFORMATION.......iii DESCRIPTION OF PRODUCTS PREFERRED STOCK..........36
INCORPORATION OF DOCUMENTS BY REFERENCE.........iii DESCRIPTION OF THE EXCHANGE NOTES................40
SUMMARY...........................................1 MATERIAL UNITED STATES FEDERAL INCOME TAX
RISK FACTORS......................................7 CONSIDERATIONS ..................................84
RATIO OF EARNINGS TO FIXED CHARGES...............20 PLAN OF DISTRIBUTION.............................87
THE EXCHANGE OFFER...............................21 LEGAL MATTERS....................................87
USE OF PROCEEDS..................................30 EXPERTS..........................................87
DESCRIPTION OF OUR OTHER DEBT....................32
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Collins & Aikman Products Co. is a Delaware corporation. Our principal
executive offices are located at 250 Stephenson Highway, Troy, Michigan 48083
and our telephone number at that address is (248) 824-2500.
Unless the context otherwise requires, all information in this prospectus
which refers to (a) "Products" or the "Company" refers only to Collins & Aikman
Products Co., (b) "C&A Corporation," "C&A," "our parent" or "our parent company"
refers only to our parent, Collins & Aikman Corporation, and (c) "Collins &
Aikman," "we," "us" or "our" refers to Collins & Aikman Products Co. and its
subsidiaries.
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FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking" information, as that term is
defined by the federal securities laws, about our financial condition, results
of operations and business. You can find many of these statements by looking for
words such as "may," "will," "expect," "anticipate," "believe," "estimate" and
similar words used in this prospectus.
These forward-looking statements are subject to numerous assumptions, risks
and uncertainties (including trade relations and competition). Because the
statements are subject to risks and uncertainties, actual results may differ
materially from those expressed or implied by the forward-looking statements. We
caution readers not to place undue reliance on the statements, which speak only
as of the date of this prospectus.
The cautionary statements set forth above should be considered in
connection with any subsequent written or oral forward-looking statements that
we or persons acting on our behalf may issue. We do not undertake any obligation
to review or confirm analysts' expectations or estimates or to release publicly
any revisions to any forward-looking statements to reflect events or
circumstances after the date of this prospectus or to reflect the occurrence of
unanticipated events.
Risks and uncertainties that could cause actual results to vary materially
from those anticipated in the forward-looking statements included in this
prospectus include general economic conditions in the market in which we operate
and industry-based factors such as:
o declines in the North American, South American and European automobile
and light truck builds,
o labor costs and strikes at our major customers and at our facilities,
o changes in consumer preferences,
o dependence on significant automotive customers,
o the level of competition in the automotive supply industry and pricing
pressure from automotive customers and
o risks associated with conducting business in foreign countries.
In addition, factors more specific to us could cause actual results to vary
materially from those anticipated in the forward-looking statements included in
this prospectus such as substantial leverage, limitations imposed by our debt
instruments, our ability to successfully integrate acquired businesses including
actions we have identified as providing cost saving opportunities, and pursue
our prime contractor business strategy and our customer concentration.
Our divisions may also be affected by changes in the popularity of
particular vehicle models or particular interior trim packages or the loss of
programs on particular vehicle models.
We disclose important factors that could cause our actual results to differ
materially from our expectations under "Risk Factors." These cautionary
statements qualify all forward-looking statements attributable to us or persons
acting on our behalf. When we indicate that an event, condition or circumstance
could or would have an adverse effect on us, we mean to include effects upon our
business, financial and other conditions, results of operations and ability to
make payments on the notes.
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
C&A files annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document that C&A files at
the SEC's public reference room at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more
information on the public reference rooms. C&A's SEC filings are also available
to you at the SEC's web site at http:// www.sec.gov.
We have agreed that, whether or not we are required to do so by the rules
and regulations of the SEC, for so long as any of the notes remain outstanding,
we will furnish to the holders of the notes and file with the SEC (unless the
SEC will not accept the filing) copies of the financial and other information
that would be contained in the annual report and quarterly reports that we would
be required to file with the SEC if we were subject to the periodic reporting
requirements of the Exchange Act. We will also make such reports available to
prospective purchasers of the notes and the exchange notes, as applicable, and
to securities analysts and broker-dealers upon their request. In addition, we
have agreed that, for so long as the notes remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, we will furnish to holders of the notes and prospective
purchasers of the notes designated by such holders, upon the request of such
holders or such prospective purchasers, the information required to be delivered
pursuant to Rule 144A)(d)(4) under the Securities Act, unless we are then
subject to and in compliance with Section 13 or 15(d) of the Exchange Act. We
will also make all documentation regarding the exchange offer available, without
charge, at the office of the Luxembourg Paying Agent.
Each purchaser of the notes from the initial purchasers will be furnished
with a copy of this prospectus and any related amendments or supplements. Each
person receiving this prospectus acknowledges that (a) he has been afforded an
opportunity to request from us, and to review and has received, all additional
information considered by him to be necessary to verify the accuracy and
completeness of the information herein, (b) he has not relied on the initial
purchasers or any person affiliated or associated with the initial purchasers in
connection with his investigation of the accuracy of such information or his
investment decision and (c) he understands that except as provided pursuant to
(a) above, no person has been authorized to give any information or to make any
representation concerning the notes offered hereby other than those contained
herein and, if given or made, such other information or representation should
not be relied upon as having been authorized by us or the initial purchasers.
INCORPORATION OF DOCUMENTS BY REFERENCE
Rather than include certain information in this prospectus that C&A has
already included in reports filed with the SEC, we are incorporating this
information by reference, which means that we can disclose important information
to you by referring to those publicly filed documents containing the
information. This information incorporated by reference is considered to be part
of this prospectus, and the information that C&A files with the SEC after the
date of this prospectus and prior to the termination of the offerings of the
notes offered hereby will automatically update and supersede the information in
this prospectus. We incorporate by reference the following documents filed by
C&A with the SEC:
o Proxy Statement on Schedule 14A for C&A's annual meeting of
stockholders to be held on May 15, 2002 (other than the sections
entitled "Executive Compensation-Report of the Compensation
Committee," "Performance Graph," "Report of the Audit Committee of the
Board of Directors," and "Audit Fees.")
o Annual Report on Form 10-K for the fiscal year ended December 31,
2001;
o Current Report on Form 8-K filed January 4, 2002 and the report on
Form 8-K/A filed January 14, 2002;
-iii-
o Current Report on Form 8-K filed July 3, 2001 and the report on Form
8-K/A filed September 17, 2001;
o Current Report on Form 8-K filed October 4, 2001 and the report on
Form 8/KA filed October 10, 2001; and
o Current Report on Form 8-K filed April 17, 2002.
-iv-
SUMMARY
Our Company
We are a global leader in the design, engineering and manufacturing of
automotive interior components, including instrument panels, fully assembled
cockpit modules, floor and acoustic systems, automotive fabric, interior trim
and convertible top systems. We have the number one or two North American market
share position in seven out of ten major automotive interior categories tracked
by CSM Worldwide. We are also the largest North American supplier of convertible
top systems. Following our acquisition of TAC-Trim in December 2001, we became a
leading global supplier of fully assembled cockpit modules, a market segment we
expect to grow significantly over the next five years. Our sales are diversified
among North American, European and South American automotive OEMs and Tier I
total interior integrators. In North America, we manufacture components for
approximately 90% of all light vehicle production platforms. We have over 25,000
employees and more than 120 plants and facilities in North America, Europe and
South America.
In February 2001, Heartland Industrial Partners, L.P. acquired a
controlling interest in C&A. Since the investment, we have pursued acquisitions
that have furthered a strategy of serving as a prime contractor to both Tier I
integrators, which are shifting capital and emphasis away from interior
components manufacturing and towards electronics and the delivery of fully
integrated interior modules, and to OEMs, which continue to increase their
outsourcing of complete interior manufacturing.
o On July 3, 2001, we acquired the Becker Group, a leading supplier of
plastic components to the automotive industry.
o On September 21, 2001, we acquired Joan Automotive Industries, a
leading supplier of bodycloth to the automotive industry, and the
assets of Joan's affiliated automotive yarn dyeing operation, Western
Avenue Dyers, L.P.
o On December 20, 2001, we acquired the Textron Automotive Company's
Trim division (TAC-Trim), one of the largest suppliers of instrument
panels and fully assembled cockpit modules and a major automotive
plastics manufacturer of interior and exterior trim components in
North America, Europe and South America.
The combination of Collins & Aikman, Becker, Joan and TAC-Trim created one
of the industry's largest and most broadly based manufacturers of automotive
interior components, systems and modules. We have the capability to supply
diverse combinations of stylistically matched, functionally engineered and
acoustically integrated interior trim components, systems and modules and market
interior products to customers through a single "global commercial operations"
group, which supplies products from three primary categories: plastic components
and cockpits, carpet and acoustics and automotive fabrics. In addition, we
continue to market our convertible top systems through the Dura convertible
group.
-1-
Summary of the Exchange Offer
Registration Rights....................... You are entitled to exchange your
outstanding notes for freely
tradeable exchange notes with
substantially identical terms. The
exchange offer is intended to
satisfy your exchange rights. After
the exchange offer is complete, you
will no longer be entitled to any
exchange or registration rights
with respect to your outstanding
notes. Accordingly, if you do not
exchange your outstanding notes,
you will not be able to reoffer,
resell or otherwise dispose of your
outstanding notes unless you comply
with the registration and
prospectus delivery requirements of
the Securities Act, or there is an
exemption available.
The Exchange Offer........................ We are offering to exchange $1,000
principal amount of our 10-3/4%
Senior Notes due 2011, which have
been registered under the
Securities Act, for $1,000
principal amount of our outstanding
10-3/4% Senior Notes due 2011,
which were issued in a private
offering on December 20, 2001. As
of the date of this prospectus,
there are $500.0 million principal
amount at maturity of outstanding
notes. We will issue exchange notes
promptly after the expiration of
the exchange offer.
Resales................................... We believe that the exchange notes
issued in the exchange offer may be
offered for resale, resold or
otherwise transferred by you
without compliance with the
registration and prospectus
delivery requirements of the
Securities Act, provided that:
o you are acquiring the exchange
notes in the ordinary course of
your business;
o you are not participating, do not
intend to participate and have no
arrangement or understanding with
any person to participate in a
distribution of the exchange notes;
and
o you are not an "affiliate" of
ours.
If you do not meet the above
criteria you will have to comply
with the registration and
prospectus delivery requirements of
the Securities Act in connection
with any reoffer, resale or other
disposition of your exchange notes.
Each broker or dealer that receives
exchange notes for its own account
in exchange for outstanding notes
that were acquired as a result of
market-making or other trading
activities must acknowledge that it
will deliver this prospectus in
connection with any sale of
exchange notes.
-2-
Expiration Date........................... 5:00 p.m., New York City time, on ,
2002, unless we extend the
expiration date.
Conditions to the Exchange Offer.......... The exchange offer is subject to
certain customary conditions, which
may be waived by us. The exchange
offer is not conditioned upon any
minimum principal amount of
outstanding notes being tendered.
Procedures for Tendering Outstanding Notes If you wish to tender outstanding
notes, you must complete, sign and
date the letter of transmittal, or
a facsimile of it, in accordance
with its instructions and transmit
the letter of transmittal, together
with your notes to be exchanged and
any other required documentation,
to The Bank of New York, who is the
exchange agent, at the address set
forth in the letter of transmittal
to arrive by 5:00 p.m., New York
City time, on the expiration date.
See "The Exchange Offer--Procedures
for Tendering Outstanding Notes."
By executing the letter of
transmittal, you will represent to
us that you are acquiring the
exchange notes in the ordinary
course of your business, that you
are not participating, do not
intend to participate and have no
arrangement or understanding with
any person to participate in the
distribution of exchange notes, and
that you are not an "affiliate" of
ours. See "The Exchange
Offer--Procedures for Tendering
Outstanding Notes."
Special Procedures for Beneficial Holders. If you are the beneficial holder of
outstanding notes that are
registered in the name of your
broker, dealer, commercial bank,
trust company or other nominee, and
you wish to tender in the exchange
offer, you should contact the
person in whose name your
outstanding notes are registered
promptly and instruct such person
to tender on your behalf. See "The
Exchange Offer--Outstanding Notes."
Guaranteed Delivery Procedures............ If you wish to tender your
outstanding notes and you cannot
deliver such notes, the letter of
transmittal or any other required
documents to the exchange agent
before the expiration date, you may
tender your outstanding notes
according to the guaranteed
delivery procedures set forth in
"The Exchange Offer--Guaranteed
Delivery Procedures."
Withdrawal Rights......................... Tenders may be withdrawn at any
time before 5:00 p.m., New York
City time, on the expiration date.
Acceptance of Outstanding Notes and
Delivery of Exchange Notes............. Subject to certain conditions, we
will accept for exchange any and
all outstanding notes which are
properly tendered in the exchange
offer before 5:00 p.m., New York
City time, on the expiration date.
The exchange notes will be
delivered promptly
-3-
after the expiration date. See "The
Exchange Offer--Terms of the
Exchange Offer."
Certain Federal Income Tax Considerations. The exchange of outstanding notes
for exchange notes will not be a
taxable event for federal income
tax purposes. You will not
recognize any taxable gain or loss
as a result of exchanging
outstanding notes for exchange
notes, and you will have the same
tax basis and holding period in the
exchange notes as you had in the
outstanding notes immediately
before the exchange. See "Certain
Federal Income Tax Considerations."
Use of Proceeds........................... We will not receive any proceeds
from the issuance of the exchange
notes.
Exchange Agent............................ The Bank of New York is serving as
exchange agent in connection with
the exchange offer. The address,
telephone number and facsimile
number of the exchange agent are
set forth in "The Exchange
Offer--Exchange Agent."
-4-
Summary of the Exchange Notes
The following summary is not intended to be complete. For a more
detailed description of the exchange notes, see "Description of the Exchange
Notes."
Issuer................................... Collins & Aikman Products Co.
Notes Offered............................ $500,000,000 aggregate principal
amount of 10-3/4% Senior Notes due
2011.
Maturity Date............................ The notes will mature on December
31, 2011.
Interest Rate and Payment Dates.......... The notes will accrue interest from
the last interest payment date on
which interest was paid on the
outstanding notes surrendered in
exchange therefore or, if no
interest has been paid on the
outstanding notes, from December
20, 2001 at the rate of 10-3/4% per
year. Interest on the exchange
notes will be payable semi-annually
in arrears on each June 30 and
December 31, commencing on June 30,
2002.
Optional Redemption...................... We may redeem some or all of the
exchange notes at any time on or
after December 31, 2006, at a
redemption price equal to 100% of
the principal amount plus a premium
declining ratably to par, plus
accrued and unpaid interest, if
any. In addition, prior to December
31, 2004, we may redeem up to 35%
of the aggregate principal amount
of the exchange notes with the
proceeds of certain equity
offerings at a redemption price
equal to 110.75% of the principal
amount of the notes, plus accrued
and unpaid interest, if any.
Change of Control........................ If we experience a change of
control, we may be required to
offer to purchase the exchange
notes at a purchase price equal to
101% of the principal amount, plus
accrued and unpaid interest, if
any. We might not be able to pay
you the required price for exchange
notes you present us at the time of
a change of control because our new
senior credit facilities or other
indebtedness may prohibit payment
or we might not have enough funds
at that time.
Ranking; Guarantees...................... The exchange notes will be
unsecured and will rank equal in
right of payment with all of our
existing and future unsecured and
unsubordinated obligations. C&A and
each of our existing wholly owned
domestic subsidiaries (other than
our receivables, insurance and
charitable subsidiaries) will
guarantee the exchange notes on a
senior basis. Future domestic
subsidiaries may also be required
to guarantee these notes. The
guarantee of the obligations under
the exchange notes will be general
unsecured obligations of the
guarantors and will rank equal in
right of payment with all of their
existing and future unsecured
-5-
and unsubordinated debt. Our
existing 11-1/2% senior
subordinated notes are guaranteed
on a senior subordinated basis by
the guarantors of the exchange
notes offered hereby.
Restrictive Covenants.................... The exchange notes will be issued
under an indenture with BNY Midwest
Trust Company, as trustee. The
indenture governing the exchange
notes will contain covenants that
will limit the ability of Products
and the ability of our restricted
subsidiaries to, among other
things:
o incur or guarantee additional
indebtedness;
o pay dividends or make other
distributions or repurchase or
redeem our stock;
o make investments;
o sell assets;
o create liens;
o enter into agreements restricting
our restricted subsidiaries'
ability to pay dividends;
o enter into transactions with
affiliates; and
o consolidate, merge or sell all or
substantially all of our assets.
These covenants are subject to
important exceptions and
qualifications, which are described
under the heading "Description of
the Notes" in this prospectus.
----------------------
Risk Factors
You should consider carefully the information set forth in the section of
this prospectus entitled "Risk Factors" and all the other information provided
to you in this prospectus in deciding whether to invest in the notes.
-6-
RISK FACTORS
You should carefully consider each of the risks described below, together
with all of the other information contained in this prospectus, before deciding
to invest in the notes.
Risks Related to Our Business
Demand in the automotive industry is significantly dependent on the U.S.
and the global economies and our business and profitability are exposed to
current and future uncertainties.
Our financial performance depends, in large part, on conditions in the
global automotive markets that we serve and, generally, on the U.S. and global
economies. Demand in the automotive industry fluctuates in response to overall
economic conditions and is particularly sensitive to changes in interest rate
levels, consumer confidence and fuel costs. In our largest market, the North
American automotive market, reported results from our customers in 2001 reflect
lower sales volumes and lower prices for new vehicles than for the comparable
periods of last year. This is reflected in our lower sales and operating margins
for 2001. The September 11th terrorist attacks, recession and other recent
developments have adversely affected consumer confidence throughout the U.S. and
much of the world. These developments have exacerbated the uncertainty in our
markets and their future impact on us is difficult to predict. Any sustained
weakness in demand or continued downturn in the economy generally would have a
material adverse effect on us.
Our sales are also impacted by retail inventory levels and our customers'
production schedules. In 2001, our OEM customers significantly reduced their
production and inventory levels and reduced their orders from us due to the
uncertain economic environment. We cannot predict when the OEMs will decide to
rebuild inventory levels or whether new inventory levels will approximate
historical levels. This may result in significant quarter-to-quarter variability
in our performance. In addition, we have historically experienced sales declines
during the OEMs' scheduled shut-downs, which usually occur during the third
calendar quarter. Continued uncertainty and other unexpected fluctuations may
have a material adverse effect on us.
The base of customers which we serve is concentrated, and the loss of
business from a major customer or the discontinuation of particular vehicle
models could reduce our sales and harm our profitability.
Because of the relative importance of a few large customers and the high
degree of concentration of OEMs in the automotive industry, our business is
exposed to a high degree of risk related to customer concentration.
DaimlerChrysler AG, General Motors Corporation and Ford Motor Company and their
respective affiliates were our three largest customers and they directly or
indirectly accounted for approximately 29%, 22% and 19% of our 2001 net sales,
respectively. A loss of significant business from, or adverse performance by,
any of these customers would be harmful to our profitability, thereby making it
more difficult for us to make payments on the notes. Although we receive
purchase orders from most of our customers, these purchase orders typically
provide for the supply of a customer's annual requirements for a particular
model or assembly plant, renewable on a year-to-year basis, rather than for the
purchase of a specific quantity of products. It is not possible for us to
predict the level of new production for 2002 car sales. The loss of business
with respect to significant vehicle models could also have a material adverse
effect on us.
There is substantial and continuing pressure from automotive manufacturers
to reduce costs, including costs associated with outside suppliers like us. For
example, OEM customers in the automotive industry attempted to impose price
decreases and givebacks throughout 2001. Such attempted price decreases are
generally in the 3% to 8% range. Several reductions have been agreed to, and
others are currently being negotiated with OEMs and pressures may increase if
overall economic and industry conditions do not improve. We attempt to resist
such downward pricing pressure, while trying to preserve our business
relationships with these customers,
-7-
but such pricing pressure may have a material adverse effect on us. At the same
time, it is difficult for us to offset these downward pricing pressures through
alternative, less costly sources of raw materials. In addition, throughout 2001,
suppliers engaged in supplying products in the automotive industry have
attempted to impose price increases on their customers. As a result, we have
experienced pricing pressure from our suppliers. We cannot assure you that we
will not be materially and adversely affected by these substantial and
continuing pricing pressures.
The prices that we can charge some of our customers are predetermined and
we bear the risk of costs in excess of our estimates.
Sales contracts with some of our customers require us to provide our
products at predetermined prices. In some cases, these prices decline over the
course of the contract. The costs that we incur in fulfilling these contracts
may vary substantially from our initial estimates. Unanticipated cost increases
may occur as a result of several factors, including increases in the costs of
labor, components or materials. In some cases, we may be permitted to pass on to
our customers the cost increases associated with specific materials. Cost
overruns that we cannot pass on to our customers could materially and adversely
affect us.
We may not be able to successfully integrate our acquired operations or
realize the intended benefits of our acquisitions.
Our future operations and cash flow will depend largely upon our ability to
integrate our Becker, Joan and TAC-Trim acquisitions, achieve the strategic
operating objectives for these acquisitions and realize significant synergies
and cost savings as a result. The Becker, Joan and TAC-Trim acquisitions account
for 49 of our over 120 plants and facilities and approximately 12,500 of our
approximately 25,000 employees. TAC-Trim individually accounts for 41 of our
plants and facilities and approximately 12,000 of our employees located across
seven different countries, including two countries where we did not previously
operate. We have not previously undertaken an integration process as large or
complex as the integration plans required by these three acquisitions
collectively or by the TAC-Trim acquisition individually. In order to succeed,
we will need to:
o realize projected synergies and cost savings on a timely basis;
o consolidate information technologies;
o capitalize on our increased purchasing power;
o effectively control the progress of our integration process and
associated costs;
o consolidate our program management, research and development and
engineering operations;
o capitalize on our prime contractor strategy and the opportunities
afforded by our broader products offering; and
o maintain strong relationships with Tier I integrators and OEMs.
To the extent we have misjudged the nature and extent of industry trends or
our competition, we may have difficulty in achieving our operating and strategic
objectives. In addition, our integration activities will place substantial
demands on our management, operational resources and financial and internal
control systems. Our future operating results will depend upon our ability to
implement and improve our operating and financial controls and to combine, train
and manage our employee base. There is a risk that the diversion of management
attention, particularly in a difficult operating environment, will affect our
sales and the attention
-8-
that our management can devote to this and other operational, financial and
strategic issues. In addition, in some of our past non-U.S. acquisitions, we
have encountered integration and systems difficulties typical of foreign
transactions which have given rise to material weaknesses that have been
resolved. See "Change in Accountants" in our Annual Report on Form 10-K for the
year ended December 31, 2001, which is incorporated herein by reference. Since
TAC-Trim involves significant foreign operations, we cannot assure you that we
will not encounter similar difficulties going forward. All statements concerning
the benefits, cost savings and synergies we expect to realize from the
Transactions are forward-looking statements.
Some of the benefits we expect to derive from our acquisitions include
contractual and other relationships with customers and suppliers. We may not be
able to preserve all of these relationships and some of our anticipated
contractual relationships may cease following the acquisitions.
We may pursue additional acquisitions that further our current strategies.
We may selectively identify and acquire other businesses with complementary
products, manufacturing capabilities or geographic markets and we expect to
continually evaluate such opportunities. We cannot assure you that any business
acquired by us will be successfully integrated with our operations or prove to
be complementary in the manner expected or profitable. We could incur further
indebtedness in connection with our acquisition strategy and increase our
leverage. We could acquire companies and operations in geographic markets,
including foreign markets, in which we do not currently operate. Acquisitions
outside of North America may present unique difficulties and increase our
exposure to those risks attendant to international operations. The process of
integrating acquired companies and operations into our existing operations may
result in unforeseen operating difficulties and may require significant
financial resources that would otherwise be available for the ongoing
development or expansion of existing operations. Any failure at successfully
executing an acquisition could materially and adversely affect us.
Our capital resources may be inadequate if we are unable to successfully
integrate our acquired businesses or if economic conditions worsen.
As of December 31, 2001, we had approximately $73.9 of cash and cash
equivalents, $134.5 million of unutilized borrowing capacity under our revolving
credit facility and approximately $118.6 million of unutilized capacity under
our receivables facility. As a substantially larger company with higher debt
levels, our liquidity requirements will exceed historical levels and we will
need to effectively manage our cash position and working capital levels. Since
we expect significantly greater sales of cockpit modules over the next several
years, we will need to make substantial capital and other investments to meet
our customer requirements. To the extent that the integration of our acquired
businesses is not accomplished in accordance with our expectations, economic
conditions in the automotive industry worsen, we utilize our revolving credit
capacity for acquisitions or otherwise or we are unable to renew our receivables
facility at its maturity, we may be faced with inadequate liquidity. Additional
sources of liquidity may include additional debt, but our debt instruments may
not permit us to incur additional debt, and we may be unable to secure equity or
other financing. This could have a material adverse effect on us.
We may incur unanticipated contingent liabilities as a result of the
Acquisitions and we may experience unanticipated liabilities associated with
former discontinued operations.
We may incur unforeseen environmental, tax, pension, litigation or other
liabilities in connection with the Acquisitions or we may underestimate the
known liabilities. If such liabilities materialize or are greater than we
estimate, they could have a material adverse effect on us. In addition, we have
significant responsibilities related to some of our formerly owned businesses,
or discontinued operations, such as those relating to post-retirement, casualty,
environmental, product liability, lease and other matters. Based upon the
information
-9-
presently available to us and our insurance coverage, we do not believe that any
of these liabilities will have a material adverse effect upon our financial
condition or results of operations, however, we could be incorrect in our
assumptions and the extent of those contingent liabilities of which we are aware
may exceed our expectations and there may be other such liabilities of which we
presently have no knowledge. See Item 1, "Business -- Environmental Matters" and
Item 3, "Legal Proceedings" in our Annual Report on Form 10-K for the year ended
December 31, 2001, which is incorporated herein by reference.
If we are unable to meet future capital requirements, our competitive
position may be adversely affected.
In securing new business, we are typically required to expend significant
amounts of capital for engineering, development, tooling and other costs.
Generally, we seek to recoup these costs through pricing over time, but we may
be unsuccessful due to competitive pressures and other market constraints or if
a customer ceases production of a particular vehicle. We believe that we will be
able to fund capital expenditures through cash flow from operations, borrowings
under our new credit facilities and sales of receivables under our new
receivables facility. We cannot assure you that we will have adequate funds to
make all the necessary capital expenditures or that the amount of future capital
expenditures will not be materially in excess of our anticipated expenditures.
If we are unable to make necessary capital expenditures, our business and our
competitive position will be materially and adversely affected.
Recent trends among our customers will increase competitive pressures in
our businesses.
In recent years, the competitive environment among suppliers to the vehicle
manufacturers in the automotive industry has changed significantly as these
manufacturers have sought to outsource more vehicular components, modules and
systems and to use on-line auctions in order to obtain further price reductions.
In addition, these sectors have experienced substantial consolidation as OEMs
have sought to lower costs, improve quality and increasingly purchase complete
systems and modules rather than separate components. This consolidation has
caused, and its continuation will continue to amplify, the pricing pressures
outlined above in the discussion of the concentration of our customers. Our
competitive strategy will be to position ourselves as the prime contractor of
choice to both Tier I integrators and OEM assembly plants by supplying a full
spectrum of integrated interior trim components. This strategy presents the risk
that some of our customers may be competitors of ours in certain products as
well. If our business strategy is unsuccessful or our new products fail to gain
acceptance with our targeted customers, it would have a material adverse effect
on us.
Furthermore, the trend toward consolidation among automotive parts
suppliers is resulting in a smaller number of large suppliers like us who
benefit from purchasing and distribution economies of scale. If we cannot
achieve the cost savings and operational improvements expected from our prime
contractor business strategy or such savings and improvements are not sufficient
to allow us to compete favorably in the future with other larger, consolidated
companies, we will be materially and adversely affected.
Our strategy may not succeed if anticipated outsourcing fails to occur due
to union considerations.
Because of the economic benefits inherent in outsourcing to suppliers and
the costs associated with reversing a decision to purchase automotive interior
systems and components from an outside supplier, automotive manufacturers'
commitments to purchasing automotive interior systems and components from
outside suppliers, particularly on a just-in-time basis, are contemplated to
increase. However, under the contracts currently in effect in the United States
and Canada between each of Ford, General Motors and DaimlerChrysler and the
United Auto Workers ("UAW") and the Canadian Auto Workers ("CAW"), in order for
any of such automotive manufacturers to obtain from external sources components
that it currently produces, it must first notify the UAW or the CAW of such
intention. If the UAW or the CAW objects to the proposed outsourcing, some
agreement will have
-10-
to be reached between the UAW or the CAW and the automotive manufacturer.
Factors that will normally be taken into account by the UAW, the CAW and the
automotive manufacturer include:
o whether the proposed new supplier is technologically more advanced
than the automotive manufacturer;
o whether the new supplier is unionized;
o whether cost benefits exist; and
o whether the automotive manufacturer will be able to reassign union
members whose jobs are being displaced to other jobs within the same
factories.
In the event that our predictions concerning such industry trends are not
accurate, it may have a material adverse effect on us.
Our products are subject to changing technology, which could place us at a
competitive disadvantage relative to alternative products introduced by
competitors.
We believe that our customers rigorously evaluate their suppliers on the
basis of product quality, price competitiveness, technical expertise and
development capability, new product innovation, reliability and timeliness of
delivery, product design capability, manufacturing expertise, operational
flexibility, customer service and overall management. Our success will depend on
our ability to continue to meet our customers' changing specifications with
respect to these criteria. We may, therefore, require significant ongoing and
recurring additional capital expenditures and investment in research and
development, manufacturing and other areas to remain competitive. We cannot
assure you that we will be able to achieve the technological advances or
introduce new products that may be necessary to remain competitive. Further, we
cannot assure you that any technology developed by us can be adequately
protected such that we can maintain a competitive advantage.
We depend on the services of other key individuals and relationships, the
loss of which would materially harm us.
Our success will depend, in part, on the efforts of our executive officers
and other key employees. In addition, our future success will depend on, among
other factors, our ability to attract and retain other qualified personnel. The
loss of the services of any of our key employees or the failure to attract or
retain employees could have a material adverse effect on us. Our largest
stockholder, Heartland Industrial Partners, provides us with valuable strategic,
operational and financial guidance. If, for any reason, such guidance ceased, it
could have a material adverse effect upon us as well.
We may be subject to work stoppages at our facilities or those of our
principal customers which could seriously impact the profitability of our
business.
As of April 1, 2002, approximately 55% of our global work force was
unionized. If our unionized workers were to engage in a strike, work stoppage or
other slowdown in the future, we could experience a significant disruption of
our operations, which could have a material adverse effect on us.
Many OEMs and their suppliers have unionized work forces. Work stoppages or
slowdowns experienced by OEMs or their suppliers could result in slowdowns or
closures of assembly plants where our products are included in assembled
vehicles. For example, over the past four years, there have been labor strikes
against General Motors that have resulted in work stoppages at General Motors.
Furthermore, organizations responsible
-11-
for shipping our customers' products may be impacted by occasional strikes
staged by the unions representing transportation employees. Any interruption in
the delivery of our customers' products would reduce demand for our products and
could have a material adverse effect on us.
A growing portion of our revenue may be derived from international sources,
which exposes us to additional uncertainty and may make it more difficult to
make payments on the notes.
Approximately 20.1% of our 2001 sales were derived from shipments to
destinations outside of the United States and Canada. As part of our business
strategy, we intend to expand our international operations and customer base.
Sales outside of the U.S. and Canada, particularly sales to emerging markets,
are subject to other various risks, including:
o governmental embargoes or foreign trade restrictions such as
antidumping duties,
o changes in U.S. and foreign governmental regulations,
o tariffs,
o fuel duties,
o other trade barriers,
o the potential for nationalization of enterprises,
o economic downturns,
o inflation,
o environmental laws and regulations,
o political, economic and social instability,
o foreign exchange risk, and
o difficulties in receivable collections and dependence on foreign
personnel and foreign unions.
In addition, there are tax inefficiencies in repatriating cash flow from
non-U.S. subsidiaries. To the extent such repatriation is necessary for us to
meet our debt service or other obligations, this will adversely affect us.
International operations are frequently conducted through joint venture
arrangements that can materially limit our operational and financial control of
the business. We acquired interests in two foreign joint ventures as part of the
TAC-Trim acquisition, one of which is 50% owned by us while the other one is
majority owned and publicly traded in Brazil. We do not expect to have the
ability to access the cash flow of these two joint ventures for the foreseeable
future.
We may incur material losses and costs as a result of product liability and
warranty claims that may be brought against us.
We face an inherent business risk of exposure to product liability claims
in the event that the use of our current and formerly manufactured or sold
products results, or is alleged to result, in bodily injury and/or property
damage. We cannot assure you that we will not experience any material product
liability losses in the future
-12-
or that we will not incur significant costs to defend such claims. We cannot
assure you that our product liability insurance coverage will be adequate for
any liabilities that may ultimately be incurred or that it will continue to be
available on terms acceptable to us. In addition, if any of our products are or
are alleged to be defective, we may be required to participate in a
government-required or OEM-instituted recall involving such products. Each
vehicle manufacturer has its own policy regarding product recalls and other
product liability actions relating to its suppliers. However, as suppliers
become more integrally involved in the vehicle design process and assume more of
the vehicle assembly functions, vehicle manufacturers are increasingly looking
to their suppliers for contribution when faced with product liability claims. A
successful claim brought against us in excess of our available insurance
coverage or a requirement to participate in a product recall may have a material
adverse effect on our business.
In the ordinary course of our business, contractual disputes over
warranties can arise. In the past five years or more, we have not been required
to make any material payments in respect of warranty claims. In most cases,
financial responsibility for warranty costs are contractually retained by our
customer so long as the customers' specifications are met, but we may
nonetheless be subjected to requests for cost sharing or pricing adjustments as
a part of our commercial relationship with the customer. Recently, an employee
of one OEM suggested that the OEM may seek significant cost sharing from us for
a warranty matter relating to an instrument panel manufactured by TAC-Trim that
has been subject to a collaborative process of problem resolution and management
between TAC-Trim and the customer since spring 2000. In this instance, the work
order explicitly excludes TAC-Trim from financial responsibility for warranty
matters. However, we cannot assure you that we will not be required to
financially address this issue or other significant warranty claims in the
future.
Our business may be materially and adversely affected by compliance
obligations and liabilities under environmental laws and regulations.
We are subject to federal, state, local and foreign environmental, and
health and safety, laws and regulations that:
o affect ongoing operations and may increase capital costs and operating
expenses in order to maintain compliance with such requirements; and
o impose liability relating to contamination at our facilities, and at
other locations such as former facilities, facilities where we have
sent wastes for treatment or disposal, and other properties to which
we (or a company or business for which we are responsible) are linked.
Such liability may include, for example, investigation and clean-up of
the contamination, personal injury and property damage caused by the
contamination, and damages to natural resources. Some of these
liabilities may be imposed without regard to fault, and may also be
joint and several (which can result in a liable party being held
responsible for the entire obligation, even where other parties are
also liable).
We are legally or contractually responsible or alleged to be responsible
for the investigation and remediation of contamination at various sites, and for
personal injury or property damages, if any, associated with such contamination.
At some of these sites we have been notified that we are a potentially
responsible party ("PRP") under the federal Superfund law or similar state laws.
Other sites at which we may be responsible for contamination may be identified
in the future, including with respect to divested and acquired businesses.
We have incurred, and expect to continue to incur, substantial costs to
satisfy our compliance obligations and discharge our liabilities under
environmental laws and regulations. While, based on the information presently
known to us, we do not expect environmental costs or contingencies to have a
material adverse effect on us, we may learn new information concerning existing
matters or discover new matters that could materially and ad-
-13-
versely affect us. In addition, evolving environmental, and health and safety,
laws and regulations may be adopted or imposed. We can give no assurance that we
will not incur material environmental costs or liabilities in the future. See
Item 1, "Business -- Environmental Matters" and Item 3, "Legal Proceedings" in
our Annual Report on Form 10-K for the year ended December 31, 2001, which is
incorporated herein by reference.
We are controlled by Heartland, whose interests in our business may be
different than yours.
As of March 31, 2002, Heartland and its affiliates beneficially own
approximately 43.5% of C&A's outstanding shares of common stock. By reason of
their share ownership and certain shareholders agreements, Heartland and its
affiliates are able to strongly influence or effectively control actions to be
taken by our stockholders or directors, including the election of at least seven
members of C&A's Board of Directors, amendments to C&A's certificate of
incorporation and by-laws and approval of significant corporate transactions,
including mergers and sales of substantially all of our assets.
Pursuant to one stockholders agreement, Heartland, Blackstone Capital
Partners L.P. ("Blackstone"), Wasserstein L.L.C. ("Wasserstein") and certain of
their various affiliates have agreed to vote their shares to ensure that seven
members of C&A's Board of Directors will be designated by Heartland, one by the
Wasserstein parties and one by the Blackstone parties, in each case so long as
each of Heartland, Wasserstein and Blackstone (together with their respective
affiliates) continues to beneficially own at least 25% of the common stock owned
by it as of the date of the stockholders agreement. Charles E. Becker and the
other former Becker stockholders are also party to a stockholders agreement
pursuant to which they have agreed to vote their shares for designees of
Heartland representing a majority of C&A's Board of Directors. Heartland
currently has seven designees on C&A's 15 member Board of Directors. The size
and composition of the Board is subject to change and may increase to 16, with a
Textron designee, as a result of the TAC-Trim acquisition. You should consider
that the interests of Heartland as an equity investor will likely differ from
yours in material respects. See "Certain Relationships and Related
Transactions," "Executive Officers of the Company" and "Security Ownership of
Management and Principal Stockholders" in the proxy statement for our annual
meeting to be held in 2002, which sections are incorporated herein by reference.
Risks Related to the Exchange Notes
We may not be able to manage our business as we might otherwise due to our
high degree of leverage.
We have indebtedness that is substantial in relation to our stockholders'
equity and cash flow. At December 31, 2001, we had $1,282.4 million of
outstanding long-term debt. Our percentage of total debt to total capitalization
was 75% at December 31, 2001. As of December 31, 2001, we had an additional
$134.5 million of unutilized borrowing capacity under our revolving credit
facility and lines of credit. The degree to which we are leveraged will have
important consequences, including the following:
o our ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions, business development
efforts or general corporate purposes may be impaired;
o a substantial portion of our cash flow from operations will be
dedicated to the payment of interest and principal on our
indebtedness, dividends on the Products preferred stock, and capital
and operating lease expense, thereby reducing the funds available to
us for other purposes;
o our operations are restricted by our debt instruments and the terms of
the Products preferred stock, which contain material financial and
operating covenants, and those restrictions will limit, among
-14-
other things, our ability to borrow money in the future for working
capital, capital expenditures, acquisitions or other purposes;
o indebtedness under our new senior credit facilities and the financing
cost associated with our receivables facility will be at variable
rates of interest, which makes us vulnerable to increases in interest
rates;
o our leverage may place us at a competitive disadvantage as compared
with our less leveraged competitors;
o our substantial degree of leverage will make us more vulnerable in the
event of a downturn in general economic conditions or in any of our
businesses; and
o our flexibility in planning for, or reacting to, changes in our
business and the industry in which we operate may be limited.
Our ability to service or refinance our debt when required (including the
exchange notes), preferred stock, lease and other obligations will depend
principally upon our future operating performance, which will be affected by
prevailing economic conditions and financial, business and other factors, many
of which are beyond our control. See the information under the headings
"Description of Our Other Debt" and "Description of Products Preferred Stock" in
this prospectus and "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources" in C&A's Annual
Report on Form 10-K for the year ended December 31, 2001, which is incorporated
herein by reference.
Restrictions in our new senior credit facilities and under the indenture
governing our 11-1/2% senior subordinated notes and the indenture governing the
exchange notes and the terms of the Products redeemable preferred stock limit
our ability to take certain actions.
Our new senior credit facilities, the indenture governing our 11-1/2%
senior subordinated notes and the indenture governing the exchange notes and the
terms of the Products redeemable preferred stock contain covenants that
restrict, among other things, our ability to:
o pay dividends or redeem or repurchase certain capital stock;
o incur additional indebtedness and grant liens;
o make acquisitions and joint venture investments;
o sell assets; and
o make capital expenditures.
Our new senior credit facilities also require us to comply with financial
covenants relating to, among other things, interest coverage and leverage. In
addition, our new accounts receivable facility contains certain covenants
similar to those in our new senior credit facilities and include requirements
regarding the purchase and sale of receivables. We cannot assure you, however,
that we will be able to satisfy these covenants in the future or that we will be
able to respond to difficult operating conditions or competitive conditions or
pursue our business strategies within the constraints of these covenants. If we
cannot comply, we will be in default and unable to access required liquidity
from our revolving credit and receivables facilities, with the potential adverse
consequences described below. In addition, the value of the exchange notes may
be materially and
-15-
adversely affected. Our new accounts receivable facility contains concentration
limits with respect to the percentage of receivables we can sell from any
particular customer as well. The concentration limits are based on the credit
ratings of such customer. While we will implement credit hedging strategies to
offset this risk, if one or more of our customers were to have their credit
ratings downgraded, the amount of receivables of such customers that we could
sell may be decreased and we could be materially and adversely affected.
Products' redeemable preferred stock also contains covenants that govern us and,
while there are no financial maintenance covenants and the consequences of
noncompliance do not require an early redemption of Products' redeemable
preferred stock, we would be materially and adversely affected financially and
otherwise by the terms of Products' redeemable preferred stock were we to be in
breach of its terms.
Our ability to comply with many of our covenants may be affected by events
beyond our control, including prevailing economic, financial and industry
conditions. The breach of our covenants could result in an event of default
under our new senior credit facilities, the indenture governing our 11-1/2%
senior subordinated notes or the indenture governing the exchange notes, which
could cause an event of default under our accounts receivable facility and our
capital and operating leases. Such a breach would permit the lenders under our
new senior credit facilities to declare all amounts borrowed thereunder to be
due and payable, and the commitments of the lenders to make further extensions
of credit could be terminated. In addition, such a breach may cause a
termination of our new accounts receivable facility. If we were unable to secure
a waiver or repay such indebtedness, our secured lenders could proceed against
their collateral. We also rent material operating assets under leases, including
assets used in the TAC-Trim business, which could be terminated in the event of
a payment default under our debt instruments, which could disrupt our business
and have a material adverse effect on us. We do not currently expect that
alternative sources of financing will be available to us under these
circumstances on attractive terms, or possibly at all.
Your right to enforce remedies is limited by the rights of secured
creditors and claims of holders of exchange notes will effectively rank junior
to claims of secured creditors.
The exchange notes will not be secured by any of our assets. Our
obligations under our new credit facilities are secured by substantially all the
assets of C&A and Products and each existing and subsequently acquired or
organized wholly owned domestic subsidiary (other than our receivables and
insurance subsidiaries). In addition, our Canadian subsidiaries will pledge
their assets to secure Canadian borrowings under our new revolving credit
facility. If we become insolvent or are liquidated, or if payment under our new
credit facilities is accelerated, the lenders under our new credit facilities
would be entitled to exercise the remedies available to a secured lender under
applicable law. Claims of note holders will effectively rank junior with respect
to those assets that are pledged to secure our new credit facilities and other
secured debt. At December 31, 2001, we had $400.0 million of debt at Products
and its Subsidiaries that was secured by assets under our senior credit
facilities, and our liabilities in respect of certain equipment operating leases
have been secured by other assets as well. The indenture governing the exchange
notes limits but does not prohibit further liens to secure senior debt.
Therefore, regardless of whether the exchange notes are subordinated, our bank
lenders or other secured creditors will have a claim on certain assets before
holders of the exchange notes.
Claims of noteholders will be structurally subordinate to claims of
creditors of our foreign subsidiaries and other non-guarantors since they will
not guarantee the exchange notes.
The exchange notes will not be guaranteed by any of our non-U.S.
subsidiaries or our non-wholly owned domestic subsidiaries or our receivables,
insurance or charitable subsidiaries. Claims of holders of the exchange notes
will be structurally subordinate to the claims of creditors of these
non-guarantors, including trade creditors. Without limiting the generality of
the foregoing, claims of holders of the exchange notes will be structurally
subordinate to claims of the lenders under our senior credit facility to the
extent of the guarantees by non-wholly owned domestic subsidiaries of the new
credit facilities. All obligations of our non-guarantor subsidiaries will
-16-
have to be satisfied before any of the assets of such subsidiaries would be
available for distribution, upon a liquidation or otherwise, to us or a
guarantor of the exchange notes. In addition, our future domestic subsidiaries
may not be required to guarantee our credit facilities and as such would not be
required to be guarantors in respect of the exchange notes, although their
ability to incur debt may depend upon us adding them as a guarantor. If we make
any additional subsidiaries guarantors in respect of the exchange notes, they
will likely be required to be made guarantors in respect of our existing 11-1/2%
senior subordinated notes.
As of December 31, 2001, non-guarantor subsidiaries had debt and current
liabilities of $238.9 million (excluding guarantees of our credit facilities).
While our obligations under our credit facilities are also not guaranteed by our
non-U.S. subsidiaries, our Canadian subsidiaries are permitted to directly
borrow up to the equivalent of approximately $75 million of revolving credit
borrowings under our credit facilities. The lenders under our senior credit
facility have guarantees from each of our domestic subsidiaries (other than
receivables, insurance and charitable subsidiaries), not only our wholly owned
domestic subsidiaries. We also have non-U.S. joint ventures and subsidiaries in
which we own less than 100% of the equity so that, in addition to the
structurally senior claims of creditors of those subsidiaries, claims of our
joint venture partners or other shareholders would need to be satisfied on a
proportionate basis with us. These non-U.S. joint ventures and less than wholly
owned subsidiaries are subject to restrictions on their ability to distribute
cash to us in their financing or other agreements and, as such, we may not be
able to access their cash flow to service our debt obligations, including in
respect of the exchange notes.
We may be prevented from financing, or may not have the ability to raise
funds necessary to finance, the change of control offer required by the
indenture governing our 11-1/2% senior subordinated notes and the indenture
governing the exchange notes.
Upon certain change of control events, each holder of exchange notes and
our existing 11-1/2% notes may require us to repurchase all or a portion of our
11-1/2% notes and the exchange notes at a purchase price equal to 101% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the date
of repurchase. Our ability to comply with these obligations upon a change of
control event will be prohibited by the terms of our new senior credit
facilities. Certain change of control events constitute events of default under
our new senior credit facilities and termination events under our new
receivables facility and, absent a consent or waiver, we would be required to
repay all amounts owed by us under our new senior credit facilities and wind
down our new receivables facility. We cannot assure you that we would be able to
repay amounts outstanding under our new credit facilities or replace our new
receivables facility. The source of funds for any purchase of notes would be our
available cash or cash generated from other sources, including borrowings, sales
of assets, sales of equity or funds provided by an existing or new controlling
person. We cannot assure you that any of these sources will be available. Any
requirement to offer to purchase any outstanding notes may result in our having
to refinance all or part of our outstanding debt or obtain necessary consents
under our other debt instruments to repurchase the notes, which we may not be
able to do. In such case, our failure to purchase notes following a change of
control could separately constitute an event of default under various debt
instruments, including the indenture governing the exchange notes. In addition,
even if we were able to refinance such debt, such financing may be on terms
unfavorable to us. Certain terms of Products' redeemable preferred stock may
make it more difficult to refinance our existing 11-1/2% senior subordinated
notes and the exchange notes, although the remedies of the holders thereof are
limited to the right to designate directors of Products and to increased
dividend rates. See "Description of Products Preferred Stock."
Federal and state statutes allow courts, under specific circumstances, to
void subsidiary guarantees and require noteholders to return payments received
from subsidiary guarantors.
-17-
Creditors of any business are protected by fraudulent conveyance laws which
differ among various jurisdictions, and these laws may apply to the issuance of
the guarantees by our subsidiaries. A guarantee may be voided by a court, or
subordinated to the claims of other creditors, if:
o that guarantee was incurred by a subsidiary with actual intent to
hinder, delay or defraud any present or future creditor of the
subsidiary, or
o that subsidiary did not receive fair consideration -- or reasonably
equivalent value -- for issuing its guarantee, and the subsidiary:
-- was insolvent or was rendered insolvent by reason of issuing the
guarantee,
-- was engaged or about to engage in a business or transaction for
which the remaining assets of the subsidiary constituted
unreasonably small capital, or
-- intended to incur, or believed that it would incur, debts beyond
its ability to pay as they matured.
We cannot be certain as to the standard that a court would use to determine
whether or not the guarantor subsidiaries were solvent upon issuance of the
guarantee or, regardless of the actual standard applied by the court, that the
issuance of the guarantee of the exchange notes would not be voided. If a
guarantee of a subsidiary was voided as a fraudulent conveyance or held
unenforceable for any other reason, holders of the exchange notes would be
solely our creditors and creditors of our other subsidiaries that have
guaranteed the exchange notes. The exchange notes then would be effectively
subordinated to all obligations of that subsidiary. To the extent that the
claims of the holders of the exchange notes against any subsidiary were
subordinated in favor of other creditors of such subsidiary, such other
creditors would be entitled to be paid in full before any payment could be made
on the exchange notes. If one or more of the guarantees are voided or
subordinated, we cannot assure you that after providing for all prior claims,
there would be sufficient assets remaining to satisfy the claims of holders of
the exchange notes.
Based upon financial and other information, we believe that the exchange
notes and the guarantees are being incurred for proper purposes and in good
faith and that we are and each subsidiary is solvent and will continue to be
solvent after this offering is completed, will have sufficient capital for
carrying on its business after such issuance and will be able to pay its debts
as they mature. We cannot assure you, however, that a court reviewing these
matters would agree with us. A legal challenge to a guarantee on fraudulent
conveyance grounds may focus on the benefits, if any, realized by the subsidiary
as a result of our issuance of the exchange notes.
Failure to exchange your outstanding notes will leave them subject to
transfer restrictions.
If you do not exchange your outstanding notes for exchange notes, you will
continue to be subject to the restrictions on transfer of your outstanding notes
set forth in their legend because the outstanding notes were issued pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. In general, outstanding notes may not be
offered or sold, unless registered under the Securities Act , except pursuant to
an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. We currently do not anticipate registering the
outstanding notes under the Securities Act. As outstanding notes are tendered
and accepted in the exchange offer, the aggregate principal amount of
outstanding notes will decrease, which will decrease their liquidity.
-18-
You cannot be sure an active trading market for the exchange notes will
develop. There is no established trading market for the exchange notes. Although
the initial purchasers have informed us that they currently intend to make a
market in the exchange notes, they have no obligation to do so and may
discontinue making a market at any time without notice.
The exchange notes have been designated as eligible for trading in the
PORTAL market. However, we do not intend to apply for listing or quotation of
the exchange notes on any securities exchange or through Nasdaq. The liquidity
of any market for the exchange notes will depend upon the number of holders of
the exchange notes, our performance, the market for similar securities, the
interest of securities dealers in making a market in the exchange notes and
other factors. A liquid trading market may not develop for the exchange notes.
If a market develops for the exchange notes, it may have limited or no
liquidity.
You must comply with the procedures for the exchange offer in order to
receive the exchange notes.
You are responsible for complying with all exchange offer procedures. You
will only receive exchange notes in exchange for your outstanding notes if,
prior to the expiration date, you deliver the following to the exchange agent:
o certificate for the outstanding notes or a book-entry
confirmation of a book-entry transfer of the outstanding notes
into the exchange agent's account with The Depository Trust
Company;
o the letter of transmittal (or facsimile thereof), properly
completed and duly executed by you, together with any required
signature guarantees; and
o other documents required by the letter of transmittal.
You should allow sufficient time to ensure that the exchange agent receives
all required documents before the expiration date. Neither we nor the exchange
agent has any duty to inform you of defects or irregularities with respect to
the tender of your outstanding notes for exchange notes. See "The Exchange
Offer."
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RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods indicated is
as follows:
Fiscal Year Ended(1)
--------------------------------------------------------------------------
December 31, December 31, December 25, December 26, December 27,
2001 2000 1999 1998 1997
------------ ------------ ------------ ------------ ------------
Ratio of earnings to fixed
charges(2)..................... * (3) 1.02x * (3) 1.05x 1.02x
- --------------------------------------
(1) Fiscal year 2000 was a 53-week year. All other years were 52 weeks.
(2) For purposes of calculating the ratio of earnings to fixed charges,
earnings represents income or loss from continuing operations before income
taxes, exclusive of income or loss from minority interest and equity method
investments, plus fixed charges, plus amortization of capitalized interest
and income distributions from equity method investments, less capitalized
interest. Fixed charges include interest expense (including amortization of
deferred financing costs), capitalized interest, and the portion of
operating rental expense which management believes is representative of the
interest component of rent expense (assumed to be 33%).
(3) For the fiscal year ended 1999, additional earnings of $1.7 million would
have been required to make the ratio 1.00x during the period. For the year
ended December 31, 2001, additional earnings of $68 million would have been
required to make the ratio 1.00x during the period.
-20-
THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
Exchange Offer Registration Statement. We issued the outstanding notes on
December 20, 2001. The initial purchasers have advised us that they subsequently
resold the outstanding notes to "qualified institutional buyers" in reliance on
Rule 144A under the Securities Act and to certain persons in offshore
transactions in reliance on Regulation S under the Securities Act. As a
condition to the offering of the outstanding notes, we entered into a
registration rights agreement dated December 20, 2001, pursuant to which we
agreed, for the benefit of all holders of the outstanding notes, at our own
expense, to use our reasonable best efforts to do the following:
(1) to file the registration statement of which this prospectus is a part
with the Commission,
(2) keep the registration statement effective until the closing of the
exchange offer, and
(3) complete the exchange offer not later than 60 days after the date on
which the exchange offer registration statement was declared effective
by the Commission.
We also agreed that promptly upon the registration statement being declared
effective, we would offer to all holders of the outstanding notes an opportunity
to exchange the outstanding notes for the exchange notes. Further, we agreed to
keep the exchange offer open for acceptance for not less than the minimum period
required under applicable federal and state securities laws. For each
outstanding note validly tendered pursuant to the exchange offer and not
withdrawn, the holder of the outstanding note will receive an exchange note
having a principal amount equal to that of the tendered outstanding note.
Interest on each exchange note will accrue from the last date on which interest
was paid on the tendered outstanding note in exchange therefor or, if no
interest was paid on such outstanding note, from the issue date.
Transferability. We issued the outstanding notes on December 20, 2001 in a
transaction exempt from the registration requirements of the Securities Act and
applicable state securities laws. Accordingly, the outstanding notes may not be
offered or sold in the United States unless registered or pursuant to an
applicable exemption under the Securities Act and applicable state securities
laws. Based on no-action letters issued by the staff of the Commission with
respect to similar transactions, we believe that the exchange notes issued
pursuant to the exchange offer in exchange for outstanding notes may be offered
for resale, resold and otherwise transferred by holders of notes who are not our
affiliates without further compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that:
(1) any exchange notes to be received by the holder were acquired in the
ordinary course of the holder's business;
(2) at the time of the commencement of the exchange offer the holder has
no arrangement or understanding with any person to participate in the
distribution (within the meaning of the Securities Act) of the
exchange notes; and
(3) the holder is not an "affiliate" of ours, as defined in Rule 405 under
the Securities Act, or, if it is an affiliate, that it will comply
with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable.
-21-
However, we have not sought a no-action letter with respect to the exchange
offer and we cannot assure you that the staff of the Commission would make a
similar determination with respect to the exchange offer. Any holder who tenders
his outstanding notes in the exchange offer with any intention of participating
in a distribution of exchange notes (1) cannot rely on the interpretation by the
staff of the Commission, (2) will not be able to validly tender outstanding
notes in the exchange offer and (3) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
secondary resale transactions.
In addition, each broker-dealer that receives exchange notes for its own
account pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. The letter of
transmittal accompanying this prospectus states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
acting in the capacity of an "underwriter" within the meaning of Section 2(11)
of the Securities Act. This prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with resales of
exchange notes received in exchange for outstanding notes where the outstanding
notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. Pursuant to the registration rights
agreement, we agreed to make this prospectus available to any such broker-dealer
for use in connection with any such resale.
Shelf Registration Statement. If applicable interpretations of the staff of
the SEC do not permit us to effect the exchange offer, we will use our
reasonable best efforts to cause to become effective a shelf registration
statement relating to resales of notes and to keep that shelf registration
statement effective until the expiration of the time period referred to in Rule
144(k) under the Securities Act, or such shorter period that will terminate when
all notes covered by the shelf registration statement have been sold. Products
will, in the event of such a shelf registration, provide to each noteholder
copies of a prospectus, notify each noteholder when the shelf registration
statement has become effective and take certain other actions to permit resales
of notes. A noteholder that sells notes under the shelf registration statement
generally will be required to be named as a selling security holder in the
related prospectus and to deliver a prospectus to purchasers, will be subject to
certain of the civil liability provisions under the Securities Act in connection
with those sales and will be bound by the provisions of the applicable
registration rights agreement that are applicable to such a noteholder
(including certain indemnification obligations).
This summary of the provisions of the registration rights agreement in the
preceding paragraphs does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the
registration rights agreement, a copy of which has been filed as an exhibit to
the registration statement of which this prospectus forms a part.
Terms of the Exchange Offer
Upon satisfaction or waiver of all the conditions of the exchange offer, we
will accept any and all outstanding notes properly tendered and not withdrawn
prior to the expiration date and will issue the exchange notes promptly after
acceptance of the outstanding notes. See "--Conditions to the Exchange Offer"
and "Procedures for Tendering Private Notes." We will issue $1,000 principal
amount of exchange notes in exchange for each $1,000 principal amount of
outstanding notes accepted in the exchange offer. As of the date of this
prospectus, $500,000,000 aggregate principal amount of the notes are
outstanding. Holders may tender some or all of their outstanding notes pursuant
to the exchange offer. However, outstanding notes may be tendered only in
integral multiples of $1,000.
The exchange notes are identical to the outstanding notes except for the
elimination of certain transfer restrictions, registration rights, restrictions
on holding notes in certificated form and liquidated damages provi-
-22-
sions. The exchange notes will evidence the same debt as the outstanding notes
and will be issued pursuant to, and entitled to the benefits of, the indenture
pursuant to which the outstanding notes were issued and will be deemed one issue
of notes, together with the outstanding notes.
This prospectus, together with the letter of transmittal, is being sent to
all registered holders and to others believed to have beneficial interests in
the outstanding notes. Holders of outstanding notes do not have any appraisal or
dissenters' rights under the indenture in connection with the exchange offer. We
intend to conduct the exchange offer in accordance with the applicable
requirements of the Securities Act, the Exchange Act and the rules and
regulations of the Commission promulgated thereunder.
For purposes of the exchange offer, we will be deemed to have accepted
validly tendered private notes when, and as if, we have given oral or written
notice thereof to the exchange agent. The exchange agent will act as our agent
for the purpose of distributing the exchange notes from us to the tendering
holders. If we do not accept any tendered outstanding notes because of an
invalid tender, the occurrence of certain other events set forth in this
prospectus or otherwise, we will return the unaccepted outstanding notes,
without expense, to the tendering holder thereof as promptly as practicable
after the expiration date.
Holders who tender private notes in the exchange offer will not be required
to pay brokerage commissions or fees or, except as set forth below under
"--Transfer Taxes," transfer taxes with respect to the exchange of outstanding
notes pursuant to the exchange offer. We will pay all charges and expenses,
other than certain applicable taxes, in connection with the exchange offer. See
"--Fees and Expenses."
Expiration Date; Extensions; Amendments
The term "expiration date" shall mean 5:00 p.m., New York City time, on ,
2002, unless we, in our sole discretion, extend the exchange offer, in which
case the term "expiration date" shall mean the latest date and time to which the
exchange offer is extended. In order to extend the exchange offer, we will
notify the exchange agent by oral or written notice and each registered holder
by means of press release or other public announcement of any extension, in each
case, prior to 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date. We reserve the right, in our sole
discretion, (1) to delay accepting any outstanding notes, (2) to extend the
exchange offer, (3) to terminate the exchange offer if the conditions set forth
below under "--Conditions" shall not have been satisfied, or (4) to amend the
terms of the exchange offer in any manner. We will notify the exchange agent of
any delay, extension, termination or amendment by oral or written notice. We
will additionally notify each registered holder of any amendment. We will give
to the exchange agent written confirmation of any oral notice.
Exchange Date
As soon as practicable after the close of the exchange offer we will accept
for exchange all outstanding notes properly tendered and not validly withdrawn
prior to 5:00 p.m., New York City time, on the expiration date in accordance
with the terms of this prospectus and the letters of transmittal.
Conditions to the Exchange Offer
Notwithstanding any other provisions of the exchange offer, and subject to
our obligations under the registration rights agreement, we (1) shall not be
required to accept any outstanding notes for exchange, (2) shall not be required
to issue exchange notes in exchange for any outstanding notes and (3) may
terminate or amend the exchange offer if, at any time before the acceptance of
such exchange notes for exchange, the exchange offer will violate any applicable
law or any applicable interpretation of the staff of the Commission.
-23-
The foregoing conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to any such condition or may be
waived by us in whole or in part at any time and from time to time in our sole
discretion. Our failure at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and such right shall be deemed an
ongoing right which may be asserted at any time and from time to time.
In addition, we will not accept for exchange any outstanding notes
tendered, and no exchange notes will be issued in exchange for any such
outstanding notes if at such time any stop order shall be threatened by the
Commission or be in effect with respect to the registration statement of which
this prospectus is a part or the qualification of the indenture under the Trust
Indenture Act of 1939, as amended.
The exchange offer is not conditioned on any minimum aggregate principal
amount of outstanding notes being tendered for exchange.
Consequences of Failure to Exchange
Any outstanding notes not tendered pursuant to the exchange offer will
remain outstanding and continue to accrue interest. The outstanding notes will
remain "restricted securities" within the meaning of the Securities Act.
Accordingly, prior to the date that is one year after the later of the issue
date and the last date on which we or any of our affiliates was the owner of the
outstanding notes, the outstanding notes may be resold only (1) to us, (2) to a
person who the seller reasonably believes is a "qualified institutional buyer"
purchasing for its own account or for the account of another "qualified
institutional buyer" in compliance with the resale limitations of Rule 144A, (3)
to an Institutional Accredited Investor that, prior to the transfer, furnishes
to the trustee a written certification containing certain representations and
agreements relating to the restrictions on transfer of the notes (the form of
this letter can be obtained from the trustee), (4) pursuant to the limitations
on resale provided by Rule 144 under the Securities Act, (5) pursuant to the
resale provisions of Rule 904 of Regulation S under the Securities Act, (6)
pursuant to an effective registration statement under the Securities Act, or (7)
pursuant to any other available exemption from the registration requirements of
the Securities Act, subject in each of the foregoing cases to compliance with
applicable state securities laws. As a result, the liquidity of the market for
non-tendered outstanding notes could be adversely affected upon completion of
the exchange offer. The foregoing restrictions on resale will no longer apply
after the first anniversary of the issue date of the outstanding note or the
purchase of the outstanding notes from us or an affiliate.
Fees and Expenses
We will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. The principal solicitation is being made by
mail; however, additional solicitations may be made in person or by telephone by
our officers and employees.
Expenses incurred in connection with the exchange offer will be paid by us.
Such expenses include, among others, the fees and expenses of the trustee and
the exchange agent, accounting and legal fees, printing costs and other
miscellaneous fees and expenses.
Accounting Treatment
We will not recognize any gain or loss for accounting purposes upon the
consummation of the exchange offer. We will amortize the expenses of the
exchange offer as additional interest expense over the term of the exchange
notes.
-24-
Procedures for Tendering Outstanding Notes
The tender of outstanding notes pursuant to any of the procedures set forth
in this prospectus and in the letter of transmittal will constitute a binding
agreement between the tendering holder and us in accordance with the terms and
subject to the conditions set forth in this prospectus and in the letter of
transmittal. The tender of outstanding notes will constitute an agreement to
deliver good and marketable title to all tendered outstanding notes prior to the
expiration date free and clear of all liens, charges, claims, encumbrances,
interests and restrictions of any kind.
Except as provided below under the heading "--Guaranteed Delivery
Procedures," unless the outstanding notes being tendered are deposited by you
with the exchange agent prior to the expiration date and are accompanied by a
properly completed and duly executed letter of transmittal, we may, at our
option, reject the tender. Issuance of exchange notes will be made only against
deposit of tendered outstanding notes and delivery of all other required
documents. Notwithstanding the foregoing, DTC participants tendering through its
Automated Tender Offer Program ("ATOP") will be deemed to have made valid
delivery where the exchange agent receives an agent's message prior to the
expiration date.
Accordingly, to properly tender outstanding notes, the following procedures
must be followed:
Notes held through a Custodian. Each beneficial owner holding outstanding
notes through a DTC participant must instruct the DTC participant to cause its
outstanding notes to be tendered in accordance with the procedures set forth in
this prospectus.
Notes held through DTC. Pursuant to an authorization given by DTC to the
DTC participants, each DTC participant holding outstanding notes through DTC
must (1) electronically transmit its acceptance through ATOP, and DTC will then
edit and verify the acceptance, execute a book-entry delivery to the exchange
agent's account at DTC and send an agent's message to the exchange agent for its
acceptance, or (2) comply with the guaranteed delivery procedures set forth
below and in a notice of guaranteed delivery. See "--Guaranteed Delivery
Procedures--Notes held through DTC."
The exchange agent will (promptly after the date of this prospectus)
establish accounts at DTC for purposes of the exchange offer with respect to
outstanding notes held through DTC. Any financial institution that is a DTC
participant may make book-entry delivery of interests in outstanding notes into
the exchange agent's account through ATOP. However, although delivery of
interests in the outstanding notes may be effected through book-entry transfer
into the exchange agent's account through ATOP, an agent's message in connection
with such book-entry transfer, and any other required documents, must be, in any
case, transmitted to and received by the exchange agent at its address set forth
under "--Exchange Agent," or the guaranteed delivery procedures set forth below
must be complied with, in each case, prior to the expiration date. Delivery of
documents to DTC does not constitute delivery to the exchange agent. The
confirmation of a book-entry transfer into the exchange agent's account at DTC
as described above is referred to herein as a "Book-Entry Confirmation."
The term "agent's message" means a message transmitted by DTC to, and
received by, the exchange agent and forming a part of the book-entry
confirmation, which states that DTC has received an express acknowledgment from
each DTC participant tendering through ATOP that such DTC participants have
received a letter of transmittal and agree to be bound by the terms of the
letter of transmittal and that we may enforce such agreement against such DTC
participants.
-25-
Cede & Co., as the holder of the global note, will tender a portion of the
global note equal to the aggregate principal amount due at the stated maturity
for which instructions to tender are given by DTC participants.
By tendering, each holder and each DTC participant will represent to us
that, among other things, (1) it is not an affiliate of ours, (2) it is not a
broker-dealer tendering outstanding notes acquired directly from us for its own
account, (3) it is acquiring the exchange notes in its ordinary course of
business and (4) it is not engaged in, and does not intend to engage in, and has
no arrangement or understanding with any person to participate in, a
distribution of the exchange notes.
We will not accept any alternative, conditional, irregular or contingent
tenders (unless waived by us). By executing a letter of transmittal or
transmitting an acceptance through ATOP, as the case may be, each tendering
holder waives any right to receive any notice of the acceptance for purchase of
its outstanding notes.
We will resolve all questions as to the validity, form, eligibility
(including time of receipt) and acceptance of tendered outstanding notes, and
such determination will be final and binding. We reserve the absolute right to
reject any or all tenders that are not in proper form or the acceptance of which
may, in the opinion of our counsel, be unlawful. We also reserve the absolute
right to waive any condition to the exchange offer and any irregularities or
conditions of tender as to particular outstanding notes. Our interpretation of
the terms and conditions of the exchange offer (including the instructions in
the letter of transmittal) will be final and binding. Unless waived, any
irregularities in connection with tenders must be cured within such time as we
shall determine. We, along with the exchange agent, shall be under no duty to
give notification of defects in such tenders and shall not incur liabilities for
failure to give such notification. Tenders of outstanding notes will not be
deemed to have been made until such irregularities have been cured or waived.
Any outstanding notes received by the exchange agent that are not properly
tendered and as to which the irregularities have not been cured or waived will
be returned by the exchange agent to the tendering holder, unless otherwise
provided in the letter of transmittal, as soon as practicable following the
expiration date.
LETTERS OF TRANSMITTAL AND OUTSTANDING NOTES MUST BE SENT ONLY TO THE
EXCHANGE AGENT. DO NOT SEND LETTERS OF TRANSMITTAL OR OUTSTANDING NOTES TO US OR
DTC.
The method of delivery of outstanding notes, letters of transmittal, any
required signature guaranties and all other required documents, including
delivery through DTC and any acceptance through ATOP, is at the election and
risk of the persons tendering and delivering acceptances or letters of
transmittal and, except as otherwise provided in the applicable letter of
transmittal, delivery will be deemed made only when actually received by the
exchange agent. If delivery is by mail, it is suggested that the holder use
properly insured, registered mail with return receipt requested, and that the
mailing be made sufficiently in advance of the expiration date to permit
delivery to the exchange agent prior to the expiration date.
Guaranteed Delivery Procedures
Notes held through DTC. DTC participants holding outstanding notes through
DTC who wish to cause their outstanding notes to be tendered, but who cannot
transmit their acceptances through ATOP prior to the expiration date, may cause
a tender to be effected if:
(1) guaranteed delivery is made by or through a firm or other entity
identified in Rule 17Ad-15 under the Exchange Act, including:
o a bank;
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o a broker, dealer, municipal securities dealer, municipal
securities broker, government securities dealer or government
securities broker;
o a credit union;
o a national securities exchange, registered securities association
or clearing agency; or
o a savings institution that is a participant in a Securities
Transfer Association recognized program;
(2) prior to the expiration date, the exchange agent receives from any of
the above institutions a properly completed and duly executed notice
of guaranteed delivery (by mail, hand delivery, facsimile transmission
or overnight courier) substantially in the form provided with this
prospectus; and
(3) book-entry confirmation and an agent's message in connection therewith
are received by the exchange agent within three NYSE trading days
after the date of the execution of the notice of guaranteed delivery.
Notes held by Holders. Holders who wish to tender their outstanding notes
but (1) whose outstanding notes are not immediately available and will not be
available for tendering prior to the expiration date, or (2) who cannot deliver
their outstanding notes, the letter of transmittal, or any other required
documents to the exchange agent prior to the expiration date, may effect a
tender if:
o the tender is made by or through any of the above-listed institutions;
o prior to the expiration date, the exchange agent receives from any
above-listed institution a properly completed and duly executed notice
of guaranteed delivery, whether by mail, hand delivery, facsimile
transmission or overnight courier, substantially in the form provided
with this prospectus; and
o a properly completed and executed letter of transmittal, as well as
the certificate(s) representing all tendered outstanding notes in
proper form for transfer, and all other documents required by the
letter of transmittal, are received by the exchange agent within three
NYSE trading days after the date of the execution of the notice of
guaranteed delivery.
Withdrawal Rights
You may withdraw tenders of outstanding notes, or any portion of your
outstanding notes, in integral multiples of $1,000 principal amount due at the
stated maturity, at any time prior to 5:00 p.m., New York City time, on the
expiration date. Any outstanding notes properly withdrawn will be deemed to be
not validly tendered for purposes of the exchange offer.
Notes held through DTC. DTC participants holding outstanding notes who have
transmitted their acceptances through ATOP may, prior to 5:00 p.m., New York
City time, on the expiration date, withdraw the instruction given thereby by
delivering to the exchange agent, at its address set forth under "--Exchange
Agent," a written, telegraphic or facsimile notice of withdrawal of such
instruction. Such notice of withdrawal must contain the name and number of the
DTC participant, the principal amount due at the stated ma-
-27-
turity of outstanding notes to which such withdrawal relates and the signature
of the DTC participant. Receipt of such written notice of withdrawal by the
exchange agent effectuates a withdrawal.
Notes held by Holders. Holders may withdraw their tender of outstanding
notes, prior to 5:00 p.m., New York City time, on the expiration date, by
delivering to the exchange agent, at its address set forth under "--Exchange
Agent," a written, telegraphic or facsimile notice of withdrawal. Any such
notice of withdrawal must (1) specify the name of the person who tendered the
outstanding notes to be withdrawn, (2) contain a description of the outstanding
notes to be withdrawn and identify the certificate number or numbers shown on
the particular certificates evidencing such outstanding notes and the aggregate
principal amount due at the stated maturity represented by such outstanding
notes and (3) be signed by the holder of such outstanding notes in the same
manner as the original signature on the letter of transmittal by which such
outstanding notes were tendered (including any required signature guaranties),
or be accompanied by (x) documents of transfer in a form acceptable to us, in
our sole discretion, and (y) a properly completed irrevocable proxy that
authorized such person to effect such revocation on behalf such holder. If the
outstanding notes to be withdrawn have been delivered or otherwise identified to
the exchange agent, a signed notice of withdrawal is effective immediately upon
written, telegraphic or facsimile notice of withdrawal even if physical release
is not yet effected.
All signatures on a notice of withdrawal must be guaranteed by a recognized
participant in the Securities Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Program or the Stock Exchange Medallion
Program; provided, however, that signatures on the notice of withdrawal need not
be guaranteed if the outstanding notes being withdrawn are held for the account
of any of the institutions listed above under the heading "--Guaranteed Delivery
Procedures."
A withdrawal of an instruction or a withdrawal of a tender must be executed
by a DTC participant or a holder of outstanding notes, as the case may be, in
the same manner as the person's name appears on its transmission through ATOP or
letter of transmittal, as the case may be, to which such withdrawal relates. If
a notice of withdrawal is signed by a trustee, partner, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, such person must so indicate
when signing and must submit with the revocation appropriate evidence of
authority to execute the notice of withdrawal. A DTC participant or a holder may
withdraw an instruction or a tender, as the case may be, only if such withdrawal
complies with the provisions of this prospectus.
A withdrawal of a tender of outstanding notes by a DTC participant or a
holder, as the case may be, may be rescinded only by a new transmission of an
acceptance through ATOP or execution and delivery of a new letter of
transmittal, as the case may be, in accordance with the procedures described
herein.
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Exchange Agent
The Bank of New York has been appointed as exchange agent for the exchange
offer. Questions, requests for assistance and requests for additional copies of
this prospectus or of the letter of transmittal should be directed to the
exchange agent addressed as follows:
By Registered or Certified Mail, By Hand or By Overnight Courier:
The Bank of New York
Reorganization Unit/Corporate Trust Department
15 Broad Street - 16th Floor
New York, New York 10007
Attention: Mr. Kin Lau
Telephone: (212) 235-2358
Fax: (212) 235-2261
The exchange agent also acts as trustee under the Indenture.
Transfer Taxes
Holders of outstanding notes who tender their outstanding notes for
exchange notes will not be obligated to pay any transfer taxes in connection
therewith, except that holders who instruct us to register exchange notes in the
name of, or request that outstanding notes not tendered or not accepted in the
exchange offer be returned to, a person other than the registered tendering
holder will be responsible for the payment of any applicable transfer tax
thereon.
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USE OF PROCEEDS
The exchange offer is intended to satisfy certain of our obligations under
the registration rights agreement. We will not receive any proceeds from the
issuance of the exchange notes or the closing of the exchange offer.
In consideration for issuing the exchange notes as contemplated in this
prospectus, we will receive, in exchange, an equal number of outstanding notes
in like principal amount. The form and terms of the exchange notes are identical
in all material respects to the form and terms of the outstanding notes, except
as otherwise described in "The Exchange Offer -- Terms of the Exchange Offer."
The outstanding notes surrendered in exchange for the exchange notes will be
retired and canceled and cannot be reissued.
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DESCRIPTION OF OUR OTHER DEBT
Senior Secured Credit Facilities
General
In connection with the TAC-Trim acquisition, we and our Canadian
Subsidiaries entered into new senior secured credit facilities (the "new senior
credit facilities") with JPMorgan Chase Bank ("JPMorgan Chase Bank"), as
administrative agent and collateral agent, JPMorgan Bank Canada, as Canadian
administrative agent and collateral agent ("Chase Canada"), Credit Suisse First
Boston ("CSFB"), as syndication agent, Deutsche Banc Alex. Brown Inc. ("DBAB"),
Merrill Lynch Capital Corporation ("Merrill," together with JPMorgan Chase Bank,
Chase Canada, CSFB and DBAB, the "agents"), as co-documentation agents and the
other lenders party thereto.
The new senior credit facilities consist of a senior secured revolving
credit facility and two senior secured term loan facilities. The revolving
credit facility is comprised of revolving loans in a total principal amount not
to exceed $175.0 million at any one time outstanding, of which approximately
$75.0 million is available to our Canadian Subsidiaries. The tranche A facility
is comprised of term loans in a total principal amount of $100.0 million. The
tranche B facility is comprised of term loans in a total principal amount of
$300.0 million.
The revolving credit facility, the tranche A facility and the tranche B
facility each will mature on December 31, 2005.
Security and Guarantees
Products' borrowings under the new senior credit facilities is secured by
all the assets of C&A and Products and certain subsidiaries of each, including
but not limited to:
o a first priority pledge of all of the capital stock (held by C&A,
Products or any domestic subsidiary of Products) of Products and each
existing and subsequently acquired or organized subsidiary of
Products, with limited exceptions for foreign subsidiaries; and
o a perfected first-priority security interest in substantially all
tangible and intangible assets of C&A, Products and each existing or
subsequently acquired or organized domestic subsidiary (other than the
receivables and insurance subsidiaries) of Products, with limited
exceptions.
Products' obligations under the new senior credit facilities is
unconditionally and irrevocably guaranteed jointly and severally by C&A and each
of our existing and subsequently acquired or organized domestic subsidiaries,
other than our receivables subsidiary (referred to below under the heading
"Receivables Purchase Facility").
Interest Rates and Fees
Borrowings bear interest, at our option, at either (a) adjusted LIBOR plus
a 3.75% margin in the case of the revolving credit and tranche A facilities and
4.00% margin in the case of the tranche B facilities, in all cases subject to a
minimum LIBOR of 3.00% or (b) the highest of (i) JPMorgan Chase Bank's prime
rate, (ii) the federal funds effective rate plus 1/2 of 1.00% and (iii) the base
CD rate plus 1.0%.
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The new senior credit facilities provide for the payment to the lenders of
a commitment fee on any unused commitments under the revolving credit facility
equal to 1% per annum payable quarterly in arrears. After an initial period of
about six months, this commitment fee (with respect to the revolving credit
facility) and the interest rates with respect to the revolving credit facility
and the tranche A facility will be subject to adjustment subject to our
attaining certain performance targets.
Scheduled Amortization
The schedule of amortization under the new senior credit facilities is set
forth in the table below.
Tranche A Term Tranche B Term
Date Loan Amortization Loan Amortization
-----------------------------------------------------------------------------------------------------
March 31, 2002 $3,750,000 $750,000
June 30, 2002 $3,750,000 $750,000
September 30, 2002 $3,750,000 $750,000
December 31, 2002 $3,750,000 $750,000
March 31, 2003 $5,000,000 $750,000
June 30, 2003 $5,000,000 $750,000
September 30, 2003 $5,000,000 $750,000
December 31, 2003 $5,000,000 $750,000
March 31, 2004 $6,250,000 $750,000
June 30, 2004 $6,250,000 $750,000
September 30, 2004 $6,250,000 $750,000
December 31, 2004 $6,250,000 $750,000
March 31, 2005 $10,000,000 $72,750,000
June 30, 2005 $10,000,000 $72,750,000
September 30, 2005 $10,000,000 $72,750,000
December 31, 2005 $10,000,000 $72,750,000
Total: $100,000,000 $300,000,000
Mandatory Prepayments
The new senior credit facilities require us to prepay outstanding term
loans with 75% (subject to step-downs based upon our attaining certain
performance targets) of excess cash flow, 100% of the net proceeds of asset
dispositions (subject to certain exceptions) and 100% of proceeds of the net
proceeds of debt issuances, other than certain permitted debt.
Voluntary Prepayments
The new senior credit facilities provide for voluntary prepayments of term
loans and voluntary reductions of the unutilized portion of the commitments
under the revolving credit facility, without penalty (except as set forth
below), subject to certain conditions and restrictions.
Prepayment Premium
The new senior credit facilities require us to pay a prepayment premium on
mandatory and certain voluntary prepayments of the tranche B facility made
within the first three years after the closing date. The prepayment premium is
3% of the amount prepaid during the first year after the closing date, 2% of the
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amount prepaid during the second year after the closing date, and 1% of the
amount prepaid during the third year after the closing date.
Covenants
Our new senior credit facilities require that we meet certain financial
tests, including, without limitation, the following tests: a maximum leverage
ratio, a minimum interest coverage ratio and certain prescribed limitations on
capital expenditures at levels to be agreed upon between us and the agents. Our
new senior credit facilities contain customary covenants and restrictions,
including, among others, limitations or prohibitions on declaring dividends and
other distributions, redeeming and repurchasing our capital stock, prepaying,
redeeming and repurchasing our other indebtedness, loans and investments,
additional indebtedness, liens, sale-leaseback transactions, preferred stock,
capital expenditures, recapitalizations, mergers, acquisitions and asset sales
and transactions with affiliates.
Events of Default
Our new senior credit facilities specify certain customary events of
default, including, among others:
o nonpayment of principal or interest by us,
o our breach of the affirmative or negative covenants,
o our material breach of the representations and warranties,
o cross-default and cross-acceleration to our other indebtedness
(including to the receivables facility),
o our bankruptcy or insolvency,
o material judgments entered against us,
o certain ERISA violations by us,
o actual or asserted invalidity of security documents or guarantees
associated with the new senior credit facilities, and
o a change in control.
Receivables Purchase Facility
In connection with the TAC-Trim acquisition, we entered into an agreement
to sell, on an ongoing basis, the trade accounts receivable of certain business
operations to a bankruptcy-remote, special purpose subsidiary, wholly owned by
us. The receivables subsidiary will, subject to certain conditions, from time to
time, sell an undivided fractional ownership interest in a pool of domestic and
certain Canadian receivables, up to $250 million, to various multi-seller
commercial paper conduits supported by a committed liquidity facility. Upon sale
to the conduit, the receivables subsidiary will hold a subordinated retained
interest in the receivables. Under the terms of the agreement, new receivables
are added to the pool as collections reduce previously sold receivables. We
expect to service, administer and collect the receivables on behalf of the
receivables subsidiary and the conduit. The proceeds of sale will be less than
the face amount of accounts receivable
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sold by an amount that approximates the purchaser's financing costs. The term of
the receivables facility will initially be 364 days, and may be extended for
additional 364-day periods with the agreement of all parties.
Existing 11-1/2% Senior Subordinated Notes due 2006
Products has outstanding $400 million in 11-1/2% Senior Subordinated notes
due 2006 (the "11-1/2% Notes"). In connection with the TAC-Trim acquisition, we
amended the indenture governing these 11-1/2% Notes to make each subsidiary
guarantor of the outstanding notes and the exchange notes a guarantor of the
11-1/2% Notes on a senior subordinated basis. The indenture governing the
11-1/2% Notes contains restrictive covenants (including, among others,
limitations on indebtedness, restricted payments, liens, asset dispositions,
change of control and transactions with affiliates) which are customary for such
securities.
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DESCRIPTION OF PRODUCTS PREFERRED STOCK
As part of the consideration payable to Textron in the TAC-Trim
acquisition, Products issued to Textron 182,700 shares of its Series A1
Redeemable Preferred Stock, 123,700 shares of its Series B1 Redeemable Preferred
Stock and 20,000 shares of its Series C1 Redeemable Preferred Stock. In
addition, if our debt instruments so require, we may issue additional shares of
a new series of redeemable preferred stock to satisfy any obligation to make an
earn-out payment based upon our performance for the five year period ended
December 31, 2006. Its terms will be identical to the series B preferred stock,
other than that Products will be required to mandatorily redeem such preferred
stock at its liquidation preference, with accrued and unpaid dividends, at such
time as, and to the extent that, Products is permitted to do so under material
debt instruments. In connection with an exchange offer referred to below under "
- -- Registration Rights," Products may exchange its Series A1 Redeemable
Preferred Stock, Series B1 Redeemable Preferred Stock and Series C1 Redeemable
Preferred Stock for its Series A2 Redeemable Preferred Stock, Series B2
Redeemable Preferred Stock and Series C2 Redeemable Preferred Stock,
respectively, in each case having identical rights and preferences to the
predecessor series. We refer to Series A1 and Series A2 Redeemable Preferred
Stock together as "Series A Preferred Stock," Series B1 and Series B2 Preferred
Stock together as "Series B Preferred Stock" and Series C1 and Series C2
Preferred Stock together as "Series C Preferred Stock," and we refer to all of
the foregoing series of preferred stock collectively as "Preferred Stock." As
discussed below under " -- Redemption; Exchange of Series C Preferred Stock," "
- -- Registration Rights" and " -- Liquidity Provisions Relating to the Textron
Shares," Products may issue additional shares of Preferred Stock from time to
time in accordance with the provisions of the certificate of designation.
Dividends. Holders of Preferred Stock are entitled to receive dividends
accruing on the liquidation preference thereof at a rate of 11% per annum, in
respect of dividend periods ending on or prior to July 1, 2003, and 15% per
annum, in respect of dividend periods ending after July 1, 2003, in the case of
the Series A Preferred Stock, 12% per annum, in respect of dividend periods
ending on or prior to July 1, 2003, and 16% per annum, in respect of dividend
periods ending after July 1, 2003, in the case of the Series B Preferred Stock,
12% per annum, in respect of dividend periods ending on or prior to July 1,
2003, and 16% per annum, in respect of dividend periods ending after July 1,
2003 and in the case of the Series C Preferred Stock, in each case payable
quarterly in arrears, commencing on April 1, 2002 and accumulating from the date
of issuance. Products may, at its option, elect to accrue up to an amount
equivalent to 7% per annum of the liquidation value on the Series A Preferred
Stock, an amount equivalent to 8% per annum of the liquidation value on the
Series B Preferred Stock and an amount equivalent to 8% per annum of the
liquidation value on the Series C Preferred Stock in lieu of cash payment of
such dividends and, in each case, any accrued dividends will be added to the
liquidation preference of the applicable series of Preferred Stock. Under
certain circumstances, Products may, at its option, at all times through and
including January 1, 2004 accrue up to the full amount of all dividends on the
Preferred Stock in lieu of cash payment of such dividends and, in each case, any
accrued dividends will be added to the liquidation preference of the applicable
series of Preferred Stock.
Liquidation Preference. Upon any voluntary or involuntary liquidation,
dissolution or winding-up of Products, holders of the Preferred Stock will be
entitled to be paid out of the assets of Products available for distribution to
stockholders in the amount of $1,000 per share plus the aggregate amount of
accrued dividends prior to any distribution to any holders of equity securities
which rank junior to the Preferred Stock. In addition, upon any voluntary or
involuntary liquidation, dissolution or winding-up of Products, the holders of
Series C Preferred Stock will be entitled to a participation in distributions to
Products' common equity tied to any appreciation in the value of Products'
common equity subsequent the issuance date, not to exceed an aggregate of $2
million for all Series C Preferred Stock outstanding.
Ranking. Upon issuance, the Preferred Stock will rank senior to all classes
of Products' capital stock with respect to dividend and liquidation rights.
Subject to certain conditions, the Preferred Stock will rank on
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a parity with any class of Products' capital stock established after the
issuance date of the Preferred Stock, the terms of which expressly provide that
such class or series ranks on a parity with the Preferred Stock, and junior to
any class of Products' capital stock established after the issuance date of the
Preferred Stock, the terms of which expressly provide that such class or series
ranks senior to the Preferred Stock.
Optional and Mandatory Redemption; Exchange of Series C Preferred Stock
Products is required to redeem all of the Series A and Series B Preferred Stock
outstanding on January 1, 2013 at a redemption price equal to 100% of the
liquidation preference thereof, plus accrued and unpaid dividends to the date of
redemption. Products is also required to redeem all of the Series C Preferred
Stock outstanding on February 1, 2022 at a redemption price equal to 100% of the
liquidation preference thereof, plus accrued and unpaid dividends to the date of
redemption, plus common equity participation.
The Series A and Series B Preferred Stock are redeemable, at Products'
option, in whole or in part, at any time on or after January 1 of the years set
forth below, at the redemption prices set forth below, plus, without
duplication, accumulated and unpaid dividends to the date of redemption.
Redemption Price
---------------------------------------
Series A Series B
Year Preferred Stock Preferred Stock
---- --------------- ----------------
2007......................... 107.500% 108.000%
2008......................... 105.000% 105.333%
2009......................... 102.500% 102.667%
2010 and thereafter.......... 100.000% 100.000%
The Series C Preferred Stock is not optionally redeemable.
At Products' option or at the option of the holders of a majority of
outstanding shares of Series C Preferred Stock, the Series C Preferred Stock is
exchangeable for Series B Preferred Stock at any time following the second
anniversary of its issuance date and prior to the third anniversary of its
issuance date. The rate of exchange will equal the liquidation preference of the
Series C Preferred Stock, plus accrued and unpaid dividends thereon, plus common
equity participation with respect thereto, divided by the liquidation preference
of the Series B Preferred Stock, plus accrued and unpaid dividends thereon.
Change of Control Offer If Products experiences a change of control (as
defined in the certificate of designation), Products must give holders of the
Preferred Stock the opportunity to sell to Products their Preferred Stock at
100% of the liquidation preference thereof, plus accrued and unpaid dividends to
the date of redemption, plus, in the case of the Series C Preferred Stock,
common equity participation. No such redemption may be effected until Products
has performed all of its obligations arising upon a change of control under any
of its debt instruments, including the notes. Products will not consummate a
transaction resulting in a change of control unless at the time of or prior to
the change of control, Products shall have entered into an arrangement which
permits the timely redemption of the Preferred Stock.
Asset Sale Proceeds If Products disposes of any assets it may either
reinvest the net cash proceeds therefrom in its business or repay outstanding
indebtedness. Any proceeds not so applied will be applied by Products towards
dividends in arrears on the Preferred Stock or an offer to purchase Preferred
Stock at a redemption price equal to 100% of the liquidation preference thereof,
plus accrued and unpaid dividends, plus, in the case of the Series C Preferred
Stock, common equity participation.
Certain Restrictive Provisions The provisions of the certificate of
designation will limit Products' and its restricted subsidiaries' ability to
incur more debt; pay dividends and make distributions; repurchase
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stock; make investments; merge or consolidate; transfer assets; enter into
transactions with affiliates; issue stock of subsidiaries; and amend or modify
the certificate of designation. These covenants are subject to a number of
important exceptions.
Liquidity Provisions Relating to the Textron Shares The provisions describe
in this paragraph apply solely to the holders of Series A Preferred Stock that
constitute Textron Shares. In the event that either (I) both (A) Products and
its restricted subsidiaries on a consolidated basis meet or exceed certain
financial criteria based on interest coverage, adjusted to exclude the effect of
certain acquisitions, at any time and (B) no Par Offer has been properly made on
or before the next succeeding dividend payment date and all Textron Shares
purchased pursuant thereto or (II) both (A) Products' Existing Notes are repaid
at or within 180 days their final stated maturity and (B) no Par Offer has been
properly made on or before such final repayment, the dividend rate applicable
solely to Textron Shares will increase by 1.00% per annum for the next full
dividend period and by an additional 0.50% per annum for each dividend period
thereafter; provided that (1) the dividend rate applicable to Textron Shares in
effect at any time shall not exceed 20% per annum and (2) the dividend rate will
return to the dividend rate otherwise applicable once a Par Offer has been
properly made and all Textron Shares purchased pursuant thereto. During any
period when an increased dividend rate in respect of Textron Shares shall be in
effect, Products and its restricted subsidiaries will be subject to additional
restrictions on their ability to incur additional indebtedness.
Products will not redeem more than $25 million aggregate principal amount
of its Existing Notes prior to their final stated maturity unless prior to or
concurrently therewith, a Par Offer shall have been made.
A "Par Offer" is an offer to purchase for cash any Textron Shares at a
purchase price per share equal to the liquidation preference thereof plus
accrued and unpaid dividends to the date of purchase.
"Textron Shares" means all shares of Series A Preferred Stock held
beneficially and of record solely by Textron and/or its subsidiaries to the
extent solely and continuously beneficially owned since the issuance date.
Upon transfer to any person other than Textron or its subsidiaries, Textron
Shares shall cease to be entitled to any of the benefits described above. If
Textron shares are transferred with cash dividends in arrears arising from the
provisions described above, such cash dividends in arrears shall cease to exist
upon transfer, and in lieu thereof, Products will issue to the transferee
additional shares of Series A Preferred Stock having an aggregate liquidation
preference plus accrued and unpaid dividends equal to the amount of cash
dividends in arrears that shall have ceased to exist.
Voting Rights Holders of the Preferred Stock shall be entitled to vote on
matters required or permitted to be voted upon by Products' common stockholders,
but the amount of such vote shall be limited to 2% of the outstanding voting
rights of all such voting stock in the aggregate. Preferred stockholders will
also be entitled to vote upon certain matters relating to the Preferred Stock
and as otherwise required under the laws of the State of Delaware and as set
forth below. If certain events occur, the holders of the majority of the then
outstanding affected series of Preferred Stock will be entitled to elect two
members of Products' Board of Directors, but in no event shall such holders be
entitled to elect more than two members. Such events include if, after January
1, 2003, there are any cash dividends in arrears which have been unpaid for any
two consecutive quarterly dividend periods; Products fails to redeem Preferred
Stock as required by the certificate of designation; Products fails to purchase
Textron Shares tendered in a Par Offer; certain breaches of the Certificate of
Designation occur; or certain bankruptcy, insolvency or debt accelerations
occur.
Exchange of Preferred Stock for Subordinated Notes Each series of Preferred
Stock is exchangeable on any dividend payment date, solely at Products' option,
for Products' subordinated exchange notes; if there are no cash dividends in
arrears at the time of the exchange. If for so long as Textron and its
subsidiaries are
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the holders of at least a majority of the aggregate liquidation preference of
any of the Preferred Stock, we must obtain the written consent of Textron prior
to initiating the exchange. The exchange rate shall be $1.00 principal amount of
exchange notes for each $1.00 of the aggregate liquidation preference of
Preferred Stock.
Registration and Other Rights Pursuant to a preferred stock registration
and other rights agreement, Products has agreed to provide marketing assistance
to Textron in connection with underwritten resales of Preferred Stock. Such
marketing assistance may occur up to a maximum of three times; provided that
Products will not be required to provide such assistance more than once in any
270-day period.
In connection with Products' resale assistance, Textron may require
Products to provide purchasers of Preferred Stock with customary exchange offer
style registration rights to have their Preferred Stock registered under the
Securities Act. Under certain circumstances, Products may also be required to
register such purchasers' Preferred Stock for resale pursuant to a shelf
registration statement. In addition, under certain circumstances, Textron may
require Products to register its Preferred Stock for resale pursuant to a shelf
registration statement.
If Products fails to comply with certain provisions in the preferred stock
registration and other rights agreement relating to marketing assistance, filing
exchange offer registration statements or shelf registration statements, or
achieving effectiveness of such exchange offer registration statements or shelf
registration statements, Products may be required to pay liquidated damages to
the affected holders in the event of such noncompliance, up to a maximum of
2.00% per annum of the aggregate liquidation preference. Any such liquidated
damages may be paid by Products, at its option, in cash or in kind by issuing
additional shares of Preferred Stock of the affected series having an aggregate
liquidation preference, accrued and unpaid dividends and, in the case of the
Series C Preferred Stock, common equity participation equal to the amount of
liquidated damages payable. Liquidated damages will cease to accrue and be
payable upon Products compliance with the applicable provisions of the preferred
stock registration and other rights agreement or (except in the case of a
failure relating to marketing assistance) upon the affected shares of Preferred
Stock becoming transferable without restriction under the Securities Act.
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DESCRIPTION OF THE EXCHANGE NOTES
The Company will issue the exchange notes offered hereby (together with the
outstanding notes, the "Notes") under the indenture for the outstanding notes
dated December 20, 2001 (the "Indenture") among itself, the Guarantors (as
defined below) and BNY Midwest Trust Company, as trustee (the "Trustee"). Any
outstanding notes that remain outstanding after the completion of the exchange
offer, together with the exchange notes issued in exchange for the outstanding
notes, will be treated as a single class of debt securities under the Indenture.
The terms of the Notes include those expressly set forth in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act. We
have filed a copy of the Indenture as an exhibit to the registration statement.
This Description of the Notes is intended to be a useful overview of the
material provisions of the Notes and the Indenture. Since this description is
only a summary, you should refer to the Indenture for a complete description of
the obligations of the Company and the Guarantors and your rights with respect
to the Notes. Copies of the Indenture can be obtained from the Company at its
address set forth elsewhere in this prospectus.
You will find the definitions of capitalized terms used in this description
under the heading "--Certain Definitions." For purposes of this description,
references to "the Company" refer only to Collins & Aikman Products Co. and not
to its subsidiaries or C&A.
General
The Notes:
o are general unsecured, senior obligations of the Company;
o mature on December 31, 2011;
o rank equally in right of payment to all existing and any future senior
indebtedness of the Company and senior in right of payment to all
existing and future Subordinated Indebtedness of the Company; and
o are unconditionally guaranteed on a senior basis by C&A (the "Parent
Guarantor") and by each wholly owned Domestic Subsidiary that is a
guarantor under our Bank Credit Facilities as of the Issue Date, being
all of the Company's wholly owned Domestic Subsidiaries other than its
receivables, insurance and charitable subsidiaries (together with all
Subsidiaries issuing a Guarantee with respect to the Notes after the
Issue Date, the "Subsidiary Guarantors" and, together with the Parent
Guarantor, the "Guarantors").
The Indenture allows the Company to issue additional Notes, subject to any
such issuance complying with the covenant described below under the heading
"Certain Covenants -- Limitation on Indebtedness."
Interest on the Notes will:
o accrue at the rate of 10-3/4% per annum;
o accrue from December 20, 2001 or the most recent interest payment
date;
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o be payable in cash semi-annually in arrears on June 30 and December 31
of each year, commencing on June 30, 2002;
o be payable to the holders of record on the June 15 and December 15
immediately preceding the related interest payment dates; and
o be computed on the basis of a 360-day year comprised of twelve 30-day
months.
Payments, Transfer and Exchange
The Trustee will initially be a paying agent and the registrar. Principal
of and premium, if any, and interest on the Notes will be payable, and the Notes
may be presented for registration of transfer and exchange, at the office of the
agency of the Company maintained for that purpose in the Borough of Manhattan,
the City of New York, provided that, at the option of the Company, payment of
interest on the Notes may be made by check mailed to the address of the Person
entitled thereto as it appears in the register; and provided, further, that all
payments of principal of, and premium, if any and interest on Notes, the holders
of which have given wire transfer instructions to the Company or its agent at
least 10 Business Days prior to the applicable payment date, will be required to
be made by wire transfer of immediately available funds to the accounts
specified by such holders in such instructions.
The Notes will be issued in fully registered form, without coupons. No
service charge will be made for any registration of transfer or exchange of
Notes, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith. The Company is not
required to transfer or exchange any Note selected for redemption. Also, the
Company is not required to transfer or exchange any Note for a period of 15 days
before a selection of Notes to be redeemed.
The registered holder of a Note will be treated as the owner of it for all
purposes.
Optional Redemption
Except as set forth in the next paragraph, the Notes will not be redeemable
prior to December 31, 2006.
The Notes will be redeemable from time to time prior to December 31, 2004
only in the event that the Company receives net cash proceeds from one or more
Equity Offerings, in which case the Company may, at its option, use all or a
portion of any such net cash proceeds to redeem up to an aggregate principal
amount of Notes equal to 35% of the original aggregate principal amount of the
Notes, provided, however, that Notes in an aggregate principal amount equal to
at least 65% of the original aggregate principal amount of the Notes remains
outstanding after each such redemption. Any such redemption must occur within
120 days of any such Equity Offering and upon not less than 30 nor more than 60
days' notice mailed to each holder of Notes to be redeemed at such holder's
address appearing in the register, in amounts of $1,000, or an integral multiple
of $1,000, at a redemption price of 110.75% of the principal amount of the
Notes, plus accrued and unpaid interest, if any, to but excluding the date of
redemption.
The Notes will be subject to redemption, at the option of the Company, in
whole or in part, at any time on or after December 31, 2006 and prior to
maturity, upon not less than 30 nor more than 60 days' notice mailed to each
holder of Notes to be redeemed at such holder's address appearing in the
register, in amounts of $1,000 or an integral multiple of $1,000 at the
following redemption prices (expressed as percentages of the principal amount)
plus accrued and unpaid interest, if any, to but excluding the date of
redemption, if redeemed during the 12-month period commencing on or after
December 31 of the years set forth below:
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Year Redemption Price
---- ----------------
2006............................................ 105.375%
2007............................................ 103.583%
2008............................................ 101.792%
2009 and thereafter............................. 100.000%
If the optional redemption date is on or after an interest record date and
on or before the related interest payment date, the accrued and unpaid interest,
if any, will be paid to the Person in whose name the Note is registered at the
close of business on such record date, and no additional interest will be
payable to holders whose Notes will be subject to redemption by the Company.
In the case of any partial redemption, the Trustee will select the Notes to
be redeemed in compliance with the requirements of the principal securities
exchange, if any, on which the Notes are listed or, if the Notes are not listed,
then on a pro rata basis, by lot or by such other method as the Trustee in its
sole discretion will deem to be fair and appropriate, although no Note of $1,000
in original principal amount or less will be redeemed in part. If any Note is to
be redeemed in part only, the notice of redemption relating to that Note will
state the portion of the principal amount thereof to be redeemed. A new Note in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the holder thereof upon cancellation of the original Note.
Guarantees
Parent Guarantee
The Parent Guarantor, as primary obligor and not as surety, will
irrevocably and unconditionally guarantee (the "Parent Guarantee") on an
unsecured senior basis the performance and punctual payment when due, whether at
stated maturity, by acceleration or otherwise, of all monetary obligations of
the Company under the Indenture and the Notes, whether for principal of, or
premium, if any, or interest on, the Notes, expenses, indemnification or
otherwise (all such obligations being herein called the "Guaranteed
Obligations"). The Parent Guarantor will agree to pay, in addition to the amount
stated above, on an unsecured senior basis, any and all expenses (including
reasonable counsel fees and expenses) incurred by the Trustee or holders of
Notes in enforcing any rights under the Parent Guarantee.
The Parent Guarantee will be limited in amount to an amount not to exceed
the maximum amount that can be guaranteed by the Parent Guarantor without
rendering the Parent Guarantee, as it relates to the Parent Guarantor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer.
The Parent Guarantor presently has no material assets other than the common
stock of the Company.
The Parent Guarantee will be a continuing guarantee and will (1) remain in
full force and effect until payment in full of all the Guaranteed Obligations,
(2) be binding upon the Parent Guarantor and (3) inure to the benefit of and be
enforceable by the Trustee and the holders of the Notes. Upon the failure of the
Company to pay any Guaranteed Obligation when and as due, whether at maturity,
by acceleration, by redemption or otherwise, the Parent Guarantor will, upon
receipt of written demand by the Trustee, pay or cause to be paid, in cash, to
the holders of the Notes or the Trustee all unpaid monetary Guaranteed
Obligations.
Subsidiary Guarantees
The Subsidiary Guarantors, as primary obligors and not as sureties, will,
jointly and severally, irrevocably and unconditionally guarantee (the
"Subsidiary Guarantees") on an unsecured senior basis the per-
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formance and punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all Guaranteed Obligations. Each Subsidiary
Guarantor will agree to pay, in addition to the amount stated above, on an
unsecured senior basis, any and all expenses (including reasonable counsel fees
and expenses) incurred by the Trustee or holders of Notes in enforcing any
rights under the Subsidiary Guarantee with respect to such Subsidiary Guarantor.
Each Subsidiary Guarantee made by each Subsidiary Guarantor will be limited
in amount to an amount not to exceed the maximum amount that can be guaranteed
by such Subsidiary Guarantor without rendering such Guarantee, as it relates to
such Subsidiary Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer.
Each Subsidiary Guarantee will be a continuing guarantee and will (1)
remain in full force and effect until payment in full of all the Guaranteed
Obligations, (2) be binding upon the Subsidiary Guarantors and (3) inure to the
benefit of and be enforceable by the Trustee and the holders of the Notes. Upon
the failure of the Company to pay any Guaranteed Obligation when and as due,
whether at maturity, by acceleration, by redemption or otherwise, each
Subsidiary Guarantor will, upon receipt of written demand by the Trustee, pay or
cause to be paid, in cash, to the holders of the Notes or the Trustee all unpaid
monetary Guaranteed Obligations.
In the event a Subsidiary Guarantor is sold or disposed of (whether by
merger, consolidation, the sale of its Capital Stock or the sale of all or
substantially all of its assets (other than by lease) and whether or not the
Subsidiary Guarantor is the surviving corporation in such transaction) to a
Person which is not the Company or a Restricted Subsidiary, such Subsidiary
Guarantor will be released from its obligations under its Subsidiary Guarantees
if:
(1) the sale or other disposition is in compliance with the Indenture,
including the covenant "-- Limitation on Asset Dispositions"; and
(2) all the obligations of such Subsidiary Guarantor under any other
Guarantees relating to any other Indebtedness of the Company or the
Restricted Subsidiaries terminate upon consummation of such
transaction.
In addition, a Subsidiary Guarantor will be released from its obligations under
the Indenture, Subsidiary Guarantee and Registration Rights Agreement if the
Company designates such Subsidiary as an Unrestricted Subsidiary and such
designation complies with the other applicable provisions of the Indenture.
Ranking
The Indebtedness evidenced by the Notes, the Parent Guarantees and the
Subsidiary Guarantees will be unsecured senior obligations of the Company, the
Parent Guarantor and the Subsidiary Guarantors, respectively, ranking senior in
right of payment to all existing and future Subordinated Indebtedness, including
the Existing Notes and the related Guarantees, and ranking pari passu with the
Company's, the Parent Guarantor's and each Subsidiary Guarantor's existing and
future unsecured and unsubordinated Indebtedness.
At December 31, 2001, the aggregate amount of outstanding Indebtedness of
the Company and its Subsidiaries was $1,301.9 million, of which $400.0 million
would have been subordinated in right of payment to the Notes and related
Guarantees, and $400.0 million would have been secured Indebtedness of the
Company, the Parent Guarantor or the Subsidiary Guarantors effectively ranking
senior to the Notes and related Guarantees to the extent of the assets securing
such Indebtedness.
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The Notes and the Guarantees will be structurally subordinate to the
liabilities, including trade payables, of the Company's Subsidiaries that are
not Subsidiary Guarantors.
Certain Covenants
Limitation on Indebtedness
The Company will not, and will not permit any Restricted Subsidiary to,
Incur any Indebtedness; provided, however, that the Company and the Subsidiary
Guarantors may Incur Indebtedness if, after giving pro forma effect to the
Incurrence of such Indebtedness and the receipt and application of the proceeds
thereof, the Consolidated Coverage Ratio would be greater than or equal to 2.25
to 1.00.
Notwithstanding the foregoing, the following Indebtedness may be Incurred
(collectively, "Permitted Indebtedness"):
(1) (a) Indebtedness of the Company or any Restricted Subsidiary under
the revolving facility component of the Bank Credit Facilities or one or
more other revolving credit facilities (including related Guarantees (as
defined below), notes, letters of credit and security documents) in an
aggregate principal amount which, when taken together with all other
Indebtedness Incurred pursuant to this clause (a) and then outstanding,
does not exceed $300.0 million,
(b) Indebtedness of the Company or any Restricted Subsidiary under the
term loan components of the Bank Credit Facilities (including related
Guarantees, notes, letters of credit and security documents) and under one
or more agreements or instruments effecting a Refinancing thereof in an
aggregate principal amount which, when taken together with all Indebtedness
Incurred pursuant to this clause (b) and then outstanding, does not exceed
an amount equal to (x) $400.0 million less (y) the aggregate amount of all
repayments of such Indebtedness resulting in the permanent reduction of the
commitments of the lenders of such Indebtedness with respect thereto prior
to the date of determination, and
(c) Indebtedness of the Company or any Restricted Subsidiary under one
or more receivables financing facilities pursuant to which the Company or
any Restricted Subsidiary pledges or otherwise borrows against its
Receivables in an aggregate principal amount which, when taken together
with all other Indebtedness Incurred pursuant to this clause (c) and then
outstanding, does not exceed 80% of the consolidated book value of the
Receivables of the Company and the Restricted Subsidiaries (to the extent
such Receivables are not then being financed pursuant to a Permitted
Receivables Financing Facility or as a basis for Indebtedness Incurred
pursuant to clause (10) of this paragraph);
(2) the original issuance by the Company of the Indebtedness
represented by the Notes and by the Subsidiary Guarantors of the Subsidiary
Guarantees;
(3) (a) any Indebtedness (other than Indebtedness described in another
clause of this paragraph) of the Company or any Restricted Subsidiary
outstanding on the Issue Date, including, without limitation, the Existing
Notes outstanding on the Issue Date and Indebtedness assumed connection
with the TAC-Trim acquisition; (b) Indebtedness in respect of any Italian
JV Letters of Credit, any Brazilian Credit Facility and any Overdraft
Facilities; and (c) Indebtedness of the Subsidiary Guarantors consisting of
senior subordinated guarantees of the Company's obligations under the
Existing Notes;
(4) Indebtedness owed by the Company to any Restricted Subsidiary or
Indebtedness owed by any Restricted Subsidiary to the Company or any other
Restricted Subsidiary; provided, however, that
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(a) any such Indebtedness owing by the Company to a Restricted
Subsidiary must be unsecured Indebtedness;
(b) upon either (1) the transfer or other disposition by a Restricted
Subsidiary or the Company of any Indebtedness so permitted to a Person
other than the Company or another Restricted Subsidiary or (2) the issuance
(other than directors' qualifying shares), sale, transfer or other
disposition of shares of Capital Stock (including by consolidation or
merger) of a Restricted Subsidiary to whom such Indebtedness is owing or
any other event which results in payments in respect of any such
Indebtedness being payable to a Person other than the Company or a
Restricted Subsidiary, the provisions of this clause (4) will no longer be
applicable to such Indebtedness and such Indebtedness will be deemed to
have been Incurred by the Company or the applicable Restricted Subsidiary
obligor at the time of such transfer or other disposition;
(5) Indebtedness of the Company or any Restricted Subsidiary
consisting of Permitted Interest Rate, Currency or Commodity Price
Agreements;
(6) Indebtedness which is exchanged for or the proceeds of which are
to be used to Refinance outstanding Indebtedness Incurred pursuant to the
first paragraph of this covenant or clauses (2), (3), (6), (7), (8) or (9)
of this paragraph in an aggregate principal amount (or, if issued with
original issue discount, an aggregate issue price) not to exceed the
principal amount (or, if issued with original issue discount, the aggregate
accreted value) then outstanding of the Indebtedness so Refinanced plus the
amount of any premium required to be paid in connection with such
Refinancing pursuant to the terms of the Indebtedness so Refinanced or the
amount of any premium reasonably determined by the Company as necessary to
accomplish such Refinancing by means of a tender offer or negotiated
repurchase, plus the expenses of C&A, the Company or any Restricted
Subsidiary, as the case may be, Incurred in connection with such
Refinancing; provided, however, that
(a) Indebtedness the proceeds of which are used to Refinance
Indebtedness which is subordinate in right of payment to the Notes shall
only be permitted if the Refinancing Indebtedness Incurred is subordinated
to the Notes to the same extent as the Indebtedness being refinanced;
(b) the Refinancing Indebtedness by its terms, or by the terms of any
agreement or instrument pursuant to which such Indebtedness is Incurred,
(i) provides that the Weighted Average Life to Maturity of such Refinancing
Indebtedness at the time such Refinancing Indebtedness is Incurred is equal
to or greater than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced and (ii) does not permit redemption or other
retirement (including pursuant to an offer to purchase) of such debt at the
option of the holder thereof prior to the earlier of 91 days after the
Stated Maturity of the Notes and the final stated maturity of the
Indebtedness being Refinanced, other than a redemption or other retirement
at the option of the holder of such Indebtedness (including pursuant to an
offer to purchase) which is conditioned upon provisions substantially
similar to those described under "--Change of Control" and "--Limitation on
Asset Dispositions;"
(c) in the case of any Refinancing of Indebtedness Incurred by the
Company or a Guarantor, the Refinancing Indebtedness may be Incurred only
by the Company or a Guarantor; and
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(d) Indebtedness Incurred pursuant to this clause (6) may not be
Incurred more than 60 days prior to the application of the proceeds to
repay the Indebtedness to be Refinanced;
(7) Indebtedness consisting of:
(a) Guarantees by the Company or any Restricted Subsidiary of
Indebtedness Incurred by a Restricted Subsidiary without violation of the
Indenture, and
(b) Guarantees by any Restricted Subsidiary (in addition to Guarantees
permitted by clause (a) above) of Indebtedness Incurred by the Company (so
long as such Restricted Subsidiary could have Incurred such Indebtedness
directly without violation of the Indenture) without violation of the
Indenture, so long as such Restricted Subsidiary (if it is not then a
Subsidiary Guarantor) provides an equal (or superior) and ratable Guarantee
for the benefit of the holders of the Notes; provided that if such
Indebtedness constitutes Subordinated Indebtedness, such Guarantee by a
Guarantor shall be subordinated to such Guarantor's Guarantee of the Notes
to the same extent as the Subordinated Indebtedness being Incurred;
(8) Indebtedness of the Company or any Restricted Subsidiary
represented by Capitalized Lease Obligations, mortgage financings or other
purchase money obligations or obligations under other financing
transactions relating to capital expenditures, in each case Incurred for
the purpose of financing all or any part of the purchase price or cost of
construction or improvement of property used in a Related Business
("Capital Spending") and Incurred no later than 270 days after the date of
such acquisition or the date of completion of such construction or
improvement, provided, that the principal amount of any Indebtedness
Incurred pursuant to this clause (8) (other than Indebtedness Incurred to
Refinance other Indebtedness) at any time during a single fiscal year shall
not exceed 40% of the total Capital Spending of the Company and the
Restricted Subsidiaries made during the period of the most recently
completed four consecutive fiscal quarters prior to the date of such
Incurrence;
(9) Indebtedness of any Restricted Subsidiary Incurred prior to the
time
(a) such Person became a Restricted Subsidiary,
(b) such Person merged into or was consolidated with a Restricted
Subsidiary, or
(c) another Restricted Subsidiary merged into or was consolidated with
such Person (in a transaction in which such Person became a Restricted
Subsidiary);
provided, that such Indebtedness was not Incurred in anticipation of such
transaction and was outstanding prior to such transaction; provided,
further, that to the extent the principal amount of such Indebtedness in
any single transaction or series of related transactions to be Incurred
under this clause (9) exceeds $10.0 million at the time such Person became
a Restricted Subsidiary in any such manner, the Company would have been
able to Incur $1.00 of additional Indebtedness pursuant to the first
paragraph of this covenant after giving effect to the Incurrence of such
Indebtedness pursuant to this clause (9);
(10) Indebtedness of Foreign Subsidiaries Incurred for working capital
purposes if, at the time of Incurrence of such Indebtedness, and after
giving effect thereto, the aggregate principal amount of all Indebtedness
of the Foreign Subsidiaries Incurred pursuant to this clause (10) and then
outstanding does not exceed the amount (the "Borrowing Base") equal to the
sum of (x) 80% the consolidated book
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value of the accounts receivable of the Foreign Subsidiaries and (y) 60%
the consolidated book value of the inventories of the Foreign Subsidiaries;
(11) Indebtedness of any Restricted Subsidiary in an aggregate
principal amount which, together with any other Indebtedness Incurred
pursuant to this clause (11) and then outstanding, does not exceed the sum
of $25.0 million plus, if at the time such Indebtedness is Incurred, the
Company would have been able to Incur $1.00 of additional Indebtedness
pursuant to the first paragraph of this covenant after giving effect to the
Incurrence of such Indebtedness pursuant to this clause (11), 3% of the
Company's Consolidated Assets as of the date of such Incurrence;
(12) Indebtedness Incurred in respect of (a) workers' compensation
claims, self-insurance obligations, bankers' acceptances, performance,
surety and similar bonds and completion guarantees provided by the Company
or a Restricted Subsidiary in the ordinary course of business, (b) in
respect of performance bonds or similar obligations of the Company or any
of the Restricted Subsidiaries for or in connection with pledges, deposits
or payments made or given in the ordinary course of business and not for
money borrowed in connection with or to secure statutory, regulatory or
similar obligations, including obligations under health, safety or
environmental obligations, and (c) arising from guarantees to suppliers,
lessors, licensees, contractors, franchises or customers of obligations
incurred in the ordinary course of business and not for money borrowed;
(13) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, Incurred or assumed in
connection with the disposition of any business, assets or Capital Stock of
a Restricted Subsidiary, provided, that the maximum aggregate liability in
respect of all such Indebtedness shall at no time exceed the gross proceeds
actually received by the Company and the Restricted Subsidiaries in
connection with such disposition;
(14) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument (except in
the case of daylight overdrafts) drawn against insufficient funds in the
ordinary course of business, provided, however, that such Indebtedness is
extinguished within five Business Days of Incurrence;
(15) the issuance and sale of Preferred Stock (a) by a Foreign
Subsidiary, (b) by a Restricted Subsidiary which is a joint venture with a
third party which is not an Affiliate of the Company or a Restricted
Subsidiary, and (c) by a Restricted Subsidiary pursuant to obligations with
respect to the issuance or sale of Preferred Stock which exist at the time
such Person becomes a Restricted Subsidiary and which were not created in
connection with or in contemplation of such Person becoming a Restricted
Subsidiary; and
(16) Indebtedness of the Company or any Restricted Subsidiary, in
addition to any Indebtedness Incurred pursuant to clauses (1) through (15)
above, which, together with any other Indebtedness Incurred pursuant to
this clause (16) and then outstanding, has an aggregate principal amount
not in excess of $50.0 million.
For purposes of determining compliance with, and the outstanding principal
amount of any particular Indebtedness incurred pursuant to and in compliance
with, this covenant:
(1) in the event that Indebtedness meets the criteria of more than one
of the types of Indebtedness described in the first and second paragraphs
of this covenant, the Company, in its sole discretion, will classify or
reclassify such item of Indebtedness in any manner that complies with this
cove-
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nant and such item of Indebtedness will be treated as having been Incurred
pursuant to only one of the clauses of the second paragraph of this
covenant or pursuant to the first paragraph of this covenant; and
(2) an item of Indebtedness may be divided and classified among more
than one of the types of Indebtedness described hereunder.
Accrual of interest, accrual of dividends, the accretion of accreted value,
the payment of interest in the form of additional Indebtedness and the payment
of dividends in the form of additional shares of Preferred Stock will not be
deemed to be an Incurrence of Indebtedness for purposes of this covenant. The
"amount" or "principal amount" of Indebtedness at any time of determination as
used herein represented by (a) any contingent Indebtedness, will be, without
duplication, the maximum principal amount thereof, (b) any Indebtedness issued
at a price that is less than the principal amount at maturity thereof, will be
the amount of the liability in respect thereof determined in accordance with
GAAP; provided that the accretion of any such Indebtedness shall not be deemed
an Incurrence thereof, (c) any Redeemable Stock, will be the maximum fixed
redemption or repurchase price in respect thereof, and (d) any Preferred Stock,
will be the maximum voluntary or involuntary liquidation preference, in each
case as of such time of determination.
If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary,
any Indebtedness of such Subsidiary shall be deemed to be Incurred by a
Restricted Subsidiary of the Company as of such date (and, if such Indebtedness
is not permitted to be Incurred as of such date under this "Limitation on
Indebtedness" covenant, the Company shall be in Default of this covenant).
For purposes of determining compliance with any U.S. dollar-denominated
restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent
principal amount of Indebtedness denominated in a foreign currency shall be
calculated based on the relevant currency exchange rate in effect on the date
such Indebtedness was Incurred, in the case of term Indebtedness, or first
committed, in the case of revolving credit Indebtedness; provided, that if such
Indebtedness is Incurred to Refinance other Indebtedness denominated in a
foreign currency, and such Refinancing would cause the applicable U.S.
dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such Refinancing, such U.S.
dollar-denominated restriction shall be deemed not to have been exceeded so long
as the principal amount of such Refinancing Indebtedness does not exceed the
principal amount of such Indebtedness being Refinanced. Notwithstanding any
other provision of this covenant, the maximum amount of Indebtedness that the
Company may Incur pursuant to this covenant shall not be deemed to be exceeded
solely as a result of fluctuations in the exchange rate of currencies. The
principal amount of any Indebtedness Incurred to Refinance other Indebtedness,
if Incurred in a different currency from the Indebtedness being Refinanced,
shall be calculated based on the currency exchange rate applicable to the
currencies in which such Refinancing Indebtedness is denominated that is in
effect on the date of such Refinancing.
Limitation on Liens
The Company may not, and may not permit any Restricted Subsidiary to,
directly or indirectly, Incur or suffer to exist any Lien (other than Permitted
Liens) on or with respect to any property or assets (including Capital Stock)
now owned or hereafter acquired to secure any Indebtedness without making, or
causing such Subsidiary to make, effective provision for securing the Notes or,
in respect of Liens on any Subsidiary Guarantor's property or assets, any
Subsidiary Guarantee of such Subsidiary Guarantor, (x) equally and ratably with
such Indebtedness as to such property or assets for so long as such Indebtedness
will be so secured or (y) in the event such Indebtedness is Subordinated
Indebtedness, prior to such Indebtedness as to such property or assets for so
long as such Indebtedness will be so secured.
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Limitation on Restricted Payments and Restricted Investments
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly:
(1) declare or pay any dividend or make any distribution on or in
respect of the Capital Stock of the Company (including any payment in
connection with any merger or consolidation involving the Company) other
than dividends, distributions or payments payable solely in Capital Stock
of the Company or C&A (other than Redeemable Stock of the Company),
(2) purchase, redeem or otherwise retire or acquire for value any
Capital Stock of the Company or C&A (other than Capital Stock of the
Company held by a Restricted Subsidiary or in exchange for Capital Stock of
the Company or C&A (other than Redeemable Stock of the Company)),
(3) purchase, repurchase, redeem, defease or otherwise acquire or
retire for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment any Subordinated Indebtedness of the Company
or any Subsidiary Guarantor (other than the purchase, repurchase or other
acquisition of Subordinated Indebtedness in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in each
case due within one year of the date of acquisition), or
(4) make any Investment in any Person (other than Permitted
Investments)
(each of clauses (1) through (4) being a "Restricted Payment") if:
(a) a Default or an Event of Default shall have occurred and is
continuing or would result from such Restricted Payment, or
(b) after giving pro forma effect to such Restricted Payment as if
such Restricted Payment had been made at the beginning of the applicable
four fiscal quarter period, the Company could not Incur at least $1.00 of
additional Indebtedness pursuant to the first paragraph of the covenant
described under "--Limitation on Indebtedness" above, or
(c) upon giving effect to such Restricted Payment, the aggregate of
all Restricted Payments declared or made subsequent to the Issue Date
exceeds the sum of:
(i) 50% of cumulative Consolidated Net Income (or, in the case
Consolidated Net Income shall be negative, less 100% of such deficit)
of the Company from January 1, 2002 through the last day of the last
fiscal quarter ending immediately preceding the date of such
Restricted Payment for which quarterly or annual financial statements
are available (taken as a single accounting period); plus
(ii) 100% of the aggregate net proceeds received by the Company
after the Issue Date, including the fair market value of property
other than cash (determined in good faith by the Board of Directors),
from contributions of capital or the issuance and sale (other than to
a Subsidiary of the Company) of Capital Stock (other than Redeemable
Stock) of the Company, provided, that any such net proceeds received,
directly or indirectly, by the Company from an employee stock
ownership plan financed by loans from the Company or a Subsidiary of
the Company shall be included only to the extent such loans have been
repaid with cash on or prior to the date of determination; plus
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(iii) the amount by which Indebtedness of the Company or any
Restricted Subsidiary is reduced on the Company's balance sheet upon
the conversion or exchange (other than by a Restricted Subsidiary)
subsequent to the Issue Date of any Indebtedness of the Company or any
Restricted Subsidiary convertible or exchangeable for Capital Stock
(other than Redeemable Stock) of the Company or Capital Stock of C&A
(less the amount of any cash or other property (other than such
Capital Stock) distributed by the Company or any Restricted Subsidiary
upon such conversion or exchange); plus
(iv) to the extent not included in Consolidated Net Income, the
net reduction (received by the Company or any Restricted Subsidiary in
cash) in Investments (other than Permitted Investments) made by the
Company and the Restricted Subsidiaries since the Issue Date
(including if such reduction occurs by reason of the return of equity
capital, the repayment of the principal of loans or advances or other
transferred assets or the redesignation of Unrestricted Subsidiaries
as Restricted Subsidiaries), not to exceed, in the case of any
Investments in any Person, the amount of Investments (other than
Permitted Investments) made by the Company and the Restricted
Subsidiaries in such Person since the Issue Date.
So long as no Default or Event of Default shall have occurred and is
continuing or would result therefrom (except as to clauses (i) through (v),
(vii) and (ix) below), the foregoing will not prohibit:
(i) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this covenant;
(ii) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Indebtedness made by
the exchange for, or out of the proceeds of the substantially concurrent
sale of, Indebtedness Incurred pursuant to the first paragraph of, or
Subordinated Indebtedness meeting the criteria of subclauses (a) and (b) of
clause (6) of the second paragraph of "--Limitation on Indebtedness" above
or in exchange for or out of the net proceeds of the substantially
concurrent issuance or sale (other than to a Subsidiary of the Company or
to an employee stock ownership plan financed by loans from the Company or a
Subsidiary of the Company) of shares of Capital Stock (other than
Redeemable Stock of the Company) of the Company or Capital Stock of C&A, to
the extent the net cash proceeds of any issuance or sale are received by
the Company as a capital contribution, provided, that the amount of such
purchase or redemption and the amount of net proceeds from such exchange or
sale shall be excluded from the calculation of the amount available for
Restricted Payments pursuant to the preceding paragraph;
(iii) the purchase, redemption, acquisition or retirement of any
shares of Capital Stock of the Company or C&A solely in exchange for or out
of the net proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company or to an employee stock ownership plan financed
by loans from the Company or a Subsidiary of the Company) of shares of
Capital Stock (other than Redeemable Stock of the Company) of the Company
or Capital Stock of C&A to the extent the net cash proceeds thereof are
received by the Company as a capital contribution, provided, that the
amount of such purchase, redemption, acquisition or retirement and the
amount of net proceeds from such exchange or sale shall be excluded from
the calculation of the amount available for Restricted Payments pursuant to
the preceding paragraph;
(iv) the purchase, redemption, acquisition or retirement of any
Subordinated Indebtedness from Net Available Proceeds to the extent
permitted under "--Limitation on Asset Dispositions," provided, that such
purchase or redemption shall be excluded from the calculation of the amount
available for Restricted Payments pursuant to the preceding paragraph;
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(v) the purchase, redemption, acquisition or retirement of any
Subordinated Indebtedness following a Change of Control after the Company
shall have complied with the provisions under "-- Change of Control" below,
including payment of the applicable Purchase Price;
(vi) payments (including through dividends or distributions to C&A to
enable it to make payments) (A) of amounts necessary and when necessary to
purchase, redeem, acquire, cancel or otherwise retire for value Capital
Stock of C&A, in each case held by full time officers, directors or
employees of C&A, the Company or any of the Company's Subsidiaries, upon,
in connection with or following death, disability, retirement, severance or
termination of employment or service or pursuant to any agreement or plan
under which such Capital Stock was issued or which was otherwise approved
by the Board of Directors of C&A or pursuant to an obligation on the part
of C&A or the Company with respect to the Company's Capital Stock of the
type contemplated by this subclause (A), (B) to redeem or repurchase stock
purchase or similar rights in respect of Capital Stock of C&A or the
Company or (C) to make cash payments to holders of Capital Stock of C&A or
the Company in lieu of the issuance of fractional shares of such Capital
Stock; provided, however, that the aggregate amount of payments pursuant to
subclauses (A), (B) and (C) of this clause (vi) after the Issue Date does
not exceed $5.0 million in any fiscal year plus any unutilized portion of
such amount in any prior fiscal year;
(vii) dividends or other Restricted Payments (including tax sharing
payments) to C&A to the extent used by C&A to pay its operating and
administrative expenses incurred in the ordinary course of its business,
including directors' fees, legal and audit expenses, listing fees,
judgments, awards or settlements payable by C&A arising from a Related
Business or C&A's status as a public company, SEC compliance expenses and
corporate franchise and other taxes;
(viii) so long as immediately before and immediately after giving
effect thereto, the Company would have been permitted to Incur at least
$1.00 of additional Indebtedness pursuant to the first paragraph under the
"Limitation on Indebtedness" covenant, payments of cash dividends on the
Textron Preferred Stock, or payments of cash dividends to C&A in an amount
sufficient to enable C&A to pay dividends on the Textron Preferred Stock,
equal to the minimum cash dividends required pursuant to the terms of the
certificate of designations of the Textron Preferred Stock in effect on the
Issue Date, provided, that such dividends are applied directly to the
payment of dividends on the Textron Preferred Stock;
(ix) the payment of dividends or distributions to C&A in amounts and
at the times necessary to permit C&A to pay amounts, if any, owing by C&A
in connection with the TAC-Trim acquisition, the Bank Credit Facilities,
the Permitted Receivables Financing Facility, the offering of the Notes and
fees and expenses related to any of the foregoing; and
(x) any Investment made by the exchange for, or out of the proceeds
of, a capital contribution in respect of or the substantially concurrent
sale of, Capital Stock (other than Redeemable Stock) of the Company or
Capital Stock of C&A to the extent the net cash proceeds thereof are
received by the Company or are paid or contributed to the Company by C&A as
a capital contribution, provided, that the amount of such capital
contribution or proceeds used to make such Investment shall be excluded
from the calculation of the amount available for Restricted Payments
pursuant to the preceding paragraph; and
(xi) Restricted Payments (other than Investments and other Restricted
Payments otherwise permitted hereunder) in an aggregate amount not to
exceed $25.0 million.
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Any payment made pursuant to clause (i), (v), (vi) (to the extent not
deducted in calculating Consolidated Net Income), (vii) (to the extent not
deducted in calculating Consolidated Net Income), (viii) or (xi) of the
preceding paragraph will, without duplication, be a Restricted Payment for
purposes of calculating aggregate Restricted Payments pursuant to the second
preceding paragraph and any payment made pursuant to clause (ii), (iii), (iv),
(ix) or (x) will be excluded for purposes of calculating aggregate Restricted
Payments pursuant to the second preceding paragraph.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of such Restricted Payment of the asset(s) or
securities proposed to be paid, transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment.
The fair market value of any cash Restricted Payment shall be its face amount
and any non-cash Restricted Payment shall be determined conclusively by the
Board of Directors acting in good faith.
Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries
The Company may not, and may not permit any Restricted Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends (in cash or otherwise) or make any other
distributions in respect of its Capital Stock owned by the Company or any
other Restricted Subsidiary or pay any Indebtedness or other obligation
owed to the Company or any other Restricted Subsidiary;
(2) make loans or advances to the Company or any other Restricted
Subsidiary; or
(3) transfer any of its property or assets to the Company or any other
Restricted Subsidiary.
Notwithstanding the foregoing, the Company may, and may permit any
Restricted Subsidiary to, create or otherwise cause or suffer to exist or become
effective any such encumbrance or restriction:
(a) pursuant to any agreement in effect on the Issue Date;
(b) pursuant to the Bank Credit Facilities, the Permitted Receivables
Financing Facility, Permitted Interest Rate, Currency or Commodity Price
Agreements, the Indenture, the Existing Notes Indenture and the Brazilian
Credit Facility (provided, that any such encumbrances or restrictions
contained in the Brazilian Credit Facility are not applicable to any
Person, or properties or assets of any Person, other than the Company's
Brazilian Subsidiaries);
(c) pursuant to an agreement relating to any Indebtedness or Liens
Incurred by a Person (other than a Subsidiary of the Company that is a
Subsidiary of the Company on the Issue Date or any Subsidiary carrying on
any of the businesses of any such Subsidiary) prior to the date on which
such Person became a Subsidiary of the Company and outstanding on such date
and not Incurred in anticipation of becoming a Subsidiary and not Incurred
to provide all or any portion of the funds utilized to consummate such
acquisition, which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person so
acquired;
(d) pursuant to an agreement effecting a Refinancing of Indebtedness
Incurred pursuant to an agreement referred to in clause (a), (b) or (c)
above or this clause (d), provided, however, that the provisions contained
in such Refinancing agreement relating to such encumbrance or restriction
are
-51-
not, in the aggregate, more restrictive in any material respect than the
provisions contained in the agreement being Refinanced, as determined in
good faith by and in the reasonable judgment of the Board of Directors and
evidenced by a resolution of the Board of Directors filed with the Trustee;
(e) in the case of clause (3) of the preceding paragraph, restrictions
contained in any mortgage, security or lease agreement (including a capital
or operating lease) securing Indebtedness of a Subsidiary otherwise
permitted under the Indenture, but only to the extent such restrictions
restrict the transfer of the property subject to such mortgage, security
agreement or lease agreement;
(f) in the case of clause (3) of the preceding paragraph, customary
nonassignment provisions entered into in the ordinary course of business
consistent with past practice in leases and other contracts to the extent
such provisions restrict the transfer or subletting of any such lease or
the assignment of rights under such contract;
(g) purchase money obligations for property acquired in the ordinary
course of business that impose encumbrances or restrictions of the nature
described in clause (3) of the preceding paragraph on the property so
acquired;
(h) any restriction with respect to a Subsidiary of the Company
imposed pursuant to an agreement which has been entered into for the sale
or disposition of all or substantially all the Capital Stock or assets of
such Subsidiary, provided, that consummation of such transaction would not
result in a Default or an Event of Default and such restriction terminates
if such transaction is closed or abandoned;
(i) any encumbrance or restriction with respect to a Foreign
Subsidiary pursuant to an agreement relating to Indebtedness which is
permitted under the covenant described under "--Limitation on Indebtedness"
or Liens Incurred by such Foreign Subsidiary; and
(j) any encumbrance or restriction which by its terms permits the
payment of dividends and the making of other distributions, the making of
loans and advances and the transfer of property or assets to or by the
Company and to Restricted Subsidiaries to the extent needed to pay
principal, premium, if any and interest on the Notes as and when required
by the terms of the Indenture.
Limitation on Asset Dispositions
The Company may not, and may not permit any Restricted Subsidiary to, make
any Asset Disposition in one or more related transactions unless:
(1) the Company or the Restricted Subsidiary, as the case may be,
receives consideration for such disposition at least equal to the fair
market value for the assets sold or disposed of as determined by the Board
of Directors (including as to the value of all non-cash consideration) in
good faith and evidenced by a resolution of the Board of Directors filed
with the Trustee;
(2) either (a) at least 75% of the consideration for such disposition
consists of cash or Cash Equivalents or the assumption of Indebtedness of
the Company or any Restricted Subsidiary (other than Subordinated
Indebtedness) relating to such assets and release of the Company and the
Restricted Subsidiaries from all liability on the Indebtedness assumed or
(b) the aggregate non-cash consideration for all Asset Dispositions not
meeting the criteria set forth in the preceding clause (a) does not exceed
a fair market value in excess of $25.0 million; and
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(3) all Net Available Proceeds, less any amounts invested within 365
days of such disposition in assets of the Company or a Restricted
Subsidiary used or usable in a Related Business, are applied within 365
days of such disposition:
(a) first, to the permanent repayment or reduction of Indebtedness
(other than Subordinated Indebtedness) of the Company or a Restricted
Subsidiary;
(b) second, to the extent any such amounts remain after application in
accordance with clause (1) above, to make an Offer to Purchase outstanding
Notes at 100% of their principal amount plus accrued and unpaid interest,
if any, to but excluding the date of purchase and, to the extent the
Company elects or is otherwise required by the terms thereof, to make an
offer to purchase any other Indebtedness of the Company or a Subsidiary
Guarantor that is pari passu with the Notes or the Subsidiary Guarantees at
a price no greater than 100% of the principal amount thereof plus accrued
and unpaid interest, if any, to but excluding the date of purchase, and
(c) third, to the extent any such amounts remain after application in
accordance with clauses (a) and (b) above, to any other use as determined
by the Company which is not otherwise prohibited by the Indenture.
The Company shall not be required to make an Offer to Purchase Notes
pursuant to this covenant if the Net Available Proceeds less invested amounts
pursuant to clause (3) of the preceding paragraph available therefor (after
application of the proceeds as provided in clause (a) of the preceding
paragraph) are less than $25.0 million for any particular Asset Disposition
(which lesser amounts shall be carried forward for purposes of determining
whether an Offer to Purchase is required with respect to the Net Available
Proceeds from any subsequent Asset Disposition). The Company may apply as a
credit in satisfaction of all or any part of the Company's obligation to make an
Offer to Purchase Notes pursuant to clause (b) of the preceding paragraph the
aggregate principal amount of the Notes purchased by the Company in open-market
transactions (i.e., excluding Notes optionally redeemed, or required to be
purchased by the Company, pursuant to the terms of the Indenture) within the
previous 24 consecutive months.
If the aggregate principal amount of the Notes surrendered by holders
thereof and other pari passu Indebtedness surrendered by holders or lenders,
collectively, pursuant to clause (b) of the second preceding paragraph exceeds
the amount of Net Available Proceeds, the Trustee shall select the portion of
the Notes and such other Indebtedness to be purchased on a pro rata basis on the
basis of the aggregate principal amount of the Notes tendered or surrendered
Notes and such other Indebtedness; provided, that Notes shall be purchased only
in increments of $1,000.
If the date of the closing of the Offer to Purchase is on or after an
interest record date and on or before the related interest payment date, any
accrued and unpaid interest will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to holders of the Notes whose tendered Notes are
purchased pursuant to the Offer of Purchase.
The Company will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations
in connection with the repurchase of Notes pursuant to the Indenture. To the
extent that the provisions of any securities laws or regulations conflict with
provisions of this covenant, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Indenture by virtue of any such conflict.
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Transactions With Affiliates
The Company may not, and may not permit any Restricted Subsidiary to, enter
into any transaction (or series of related transactions) with an Affiliate of
the Company (other the Company or a Restricted Subsidiary), including any
Investment, either directly or indirectly, unless:
(1) such transaction is on terms no less favorable to the Company or
such Restricted Subsidiary than those that could be obtained in a
comparable arm's-length transaction with an entity that is not an
Affiliate;
(2) for any transaction that involves in excess of $5.0 million, a
majority of the disinterested members of the Board of Directors of the
Company or C&A shall determine that the transaction satisfies the above
criteria in clause (1) above and shall evidence such a determination by a
Board Resolution; and
(3) for any transaction that involves in excess of $25.0 million, the
Company shall also obtain an opinion from a nationally recognized
independent investment banking firm or other expert with experience in
evaluating or appraising the terms and conditions of the type of
transaction (or series of related transactions) for which the opinion is
required stating in substance that such transaction (or series of related
transactions) is on terms not materially less favorable to the Company or
such Restricted Subsidiary than those that could be obtained in a
comparable arm's-length transaction with an entity that is not an Affiliate
of the Company (or on terms that are otherwise fair to the Company or such
Restricted Subsidiary from a financial point of view), which shall be
deemed to satisfy the requirements in clauses (1) and (2) of this
paragraph.
The foregoing provisions will not apply to:
(a) any Permitted Investment or any Restricted Payment permitted to be
paid pursuant to "--Limitation on Restricted Payments and Restricted
Investments" above;
(b) any issuance of securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment,
compensation or indemnification arrangements, stock options and stock
ownership plans in the ordinary course of business to or with officers,
directors or employees of C&A or the Company and its Restricted
Subsidiaries, or approved by the Board of Directors;
(c) loans or advances to employees, indemnification agreements with
and the payment of fees and indemnities to directors, officers and
full-time employees of C&A or the Company and its Restricted Subsidiaries
and employment, noncompetition or confidentiality agreements entered into
with any such person in the ordinary course of business;
(d) the issuance of Capital Stock (other than Redeemable Stock) of the
Company or the receipt of capital contributions by the Company;
(e) transactions pursuant to agreements as in existence on the Issue
Date;
(f) payments contemplated by the Advisory Agreement and payments in
connection with the TAC-Trim acquisition, including the reimbursement of
out-of-pocket expenses incurred in connection with the TAC-Trim
acquisition;
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(g) transactions with any of C&A, the Becker Entities, the Joan
Entities, the Textron Entities or a Permitted Holder (as defined under
"--Change of Control") in the ordinary course of business so long as the
Company determines in good faith (which determination shall be conclusive)
that any such agreement is on terms no less favorable to the Company or the
applicable Restricted Subsidiary than those that could be obtained in a
comparable arm's-length transaction with an entity that is not an
Affiliate;
(h) any management, service, purchase, supply or similar agreement
relating to the operations of a Related Business entered into in the
ordinary course of the Company's business between the Company or any
Restricted Subsidiary and any Unrestricted Subsidiary, in each case
primarily engaged in a Related Business, so long as the Company determines
in good faith (which determination shall be conclusive) that any such
agreement is on terms no less favorable to the Company or such Restricted
Subsidiary than those that could be obtained in a comparable arm's-length
transaction with an entity that is not an Affiliate; and
(i) transactions of the type described in clause (ii) of the
definition of Receivables Financing.
Change of Control
Within 30 days of the occurrence of a Change of Control, unless the Company
has mailed a redemption notice with respect to all of the outstanding Notes, the
Company will be required to make an Offer to Purchase all outstanding Notes at a
purchase price equal to 101% of their principal amount plus accrued and unpaid
interest to the date of purchase.
A "Change in Control" shall be deemed to have occurred if
(1) (a) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than one or more Permitted Holders, is or
becomes the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, of more than 35% of the total voting
power of the Voting Stock of C&A or the Company, and
(b) the Permitted Holders beneficially own (as so defined), directly
or indirectly, in the aggregate a lesser percentage of the total voting
power of the Voting Stock of C&A or the Company, as the case may be, than
such other person and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of the
Board of Directors of C&A or the Company, as the case may be (for the
purposes of this clause (1), such other person shall be deemed to
beneficially own any Voting Stock of a corporation (the "specified
corporation") held by another corporation (the "parent corporation"), if
such other person beneficially owns, directly or indirectly, more than 35%
of the voting power of the Voting Stock of such parent corporation and the
Permitted Holders beneficially own, directly or indirectly, in the
aggregate a lesser percentage of the voting power of the Voting Stock of
such parent corporation and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a majority
of the board of directors of such parent corporation); or
(2) during any period of two consecutive years (or, in the case this
event occurs within the first two years after the Issue Date, such shorter
period as shall have begun on such date), individuals who at the beginning
of such period constituted the Board of Directors of C&A or the Company
(together with any new directors whose election by such Board of Directors
or whose nomination for election by the shareholders of C&A or the Company
was approved by a vote of 66 2/3% of
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the directors of C&A or the Company then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved or, in the case of the Company's
Board of Directors only, were approved by C&A if C&A shall beneficially own
a majority of the Company's Voting Stock) cease for any reason to
constitute a majority of the Board of Directors of C&A or the Company then
in office;
provided, that a Change of Control shall not be deemed to have occurred solely
as a consequence of a merger or consolidation between C&A and the Company, in
which case all references in the preceding clauses (1) and (2) to "C&A or the
Company" shall henceforth be deemed to refer only to the surviving entity of
such merger or consolidation.
The term "Permitted Holder" shall mean Heartland and any of its Affiliates
and, with respect to the Company only, C&A. For purposes of clause (1) of the
definition of "Change of Control", no "person" other than Heartland and its
Affiliates shall be deemed to be a beneficial owner of Voting Stock of the
Company by reason of being a party to any of the Stockholders Agreements and for
the purposes of clause (1) (b) of the definition of "Change of Control", the
term "Permitted Holders" shall be deemed to include any other holder or holders
of shares of the Company or a parent corporation having ordinary voting power if
Heartland or any of its Affiliates shall hold the irrevocable general proxy of
each such holder in respect of the shares held by such holder.
The Bank Credit Facilities will prohibit the Company from purchasing any
Notes prior to repayment in full of the Bank Credit Facilities and will also
provide that certain change of control events with respect to the Company would
constitute a default thereunder. In the event that at the time of such Change of
Control the terms of the Bank Credit Facilities restrict or prohibit the
repurchase of Notes pursuant to this covenant, then prior to the mailing of the
Offer to Purchase but in any event within 30 days following any Change of
Control, the Company would need to (i) repay in full all Indebtedness under the
Bank Credit Facilities or offer to repay in full all such Indebtedness and repay
the Indebtedness of each lender who has accepted such offer or (ii) obtain the
requisite consent under the Bank Credit Facilities to permit the repurchase of
the Notes as provided for in this covenant.
Future Indebtedness of the Company and the Restricted Subsidiaries may
contain prohibitions of certain events that would constitute a Change of Control
or require such Indebtedness to be repurchased upon a Change of Control.
Moreover, the exercise by the holders of Notes of their right to require the
Company to repurchase the Notes could cause a default under such Indebtedness,
even if the Change of Control itself does not, due to the financial effect of
such repurchase. Finally, the Company's ability to pay cash to the holders of
Notes upon a repurchase may be limited by the Company's then existing financial
resources. There can be no assurance that sufficient funds will be available
when necessary to make any required repurchases.
The Company will not be required to make an Offer to Purchase upon the
occurrence of a Change of Control if a third party makes the Offer to Purchase
in the manner, at the times and otherwise in compliance with the requirements
set forth in the Indenture applicable to an Offer to Purchase made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Offer to Purchase.
The Company will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations
in connection with the repurchase of Notes pursuant to this covenant. To the
extent that the provisions of any securities laws or regulations conflict with
provisions of the Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations described in the Indenture by virtue of the conflict.
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Provision of Financial Information
Whether or not C&A or the Company is required to be subject to Section
13(a) or 15(d) of the Exchange Act, or any successor provision thereto, C&A or
the Company shall file with the SEC the annual reports, quarterly reports and
other documents which C&A or the Company would have been required to file with
the SEC pursuant to such Section 13(a) or 15(d) or any successor provision
thereto if C&A or the Company were so required, such documents to be filed with
the SEC on or prior to the respective dates (the "Required Filing Dates") by
which C&A or the Company would have been required so to file such documents if
C&A or the Company were so required. C&A or the Company shall also in any event
(i) within 15 days of each Required Filing Date (a) transmit by mail to all
holders of Notes, as their names and addresses appear in the Security Register,
without cost to such holders of Notes, and (b) file with the Trustee, copies of
the annual reports, quarterly reports and other documents which C&A or the
Company files with the SEC pursuant to such Section 13(a) or 15(d) or any
successor provision thereto or would have been required to file with the SEC
pursuant to such Section 13(a) or 15(d) or any successor provisions thereto if
C&A or the Company were required to be subject to such Sections and (ii) if
filing such documents by C&A or the Company with the SEC is not permitted under
the Exchange Act, promptly upon written request of a holder of Notes supply
copies of such documents to any prospective holder of Notes. In addition, unless
the Notes have been previously registered under the Securities Act, if C&A or
the Company are not subject to Section 13(a) or 15(d) of the Exchange Act, C&A
and the Company shall furnish to holders and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
Future Subsidiary Guarantors
After the Issue Date, the Company will cause each Restricted Subsidiary,
other than a Foreign Subsidiary or a Subsidiary which is a Subsidiary Guarantor,
that becomes a guarantor under the Bank Credit Facilities to execute and deliver
to the Trustee a Subsidiary Guarantee pursuant to which such Subsidiary
Guarantor will unconditionally Guarantee, on a joint and several basis, the full
and prompt payment of the principal of, premium, if any, and interest on the
Notes on a senior basis. Limitation on Investments by C&A
C&A shall not make any direct Investments (other than Investments in Cash
Equivalents or of a de minimis nature (but not more than $1,000)) in any Person
other than the Company; provided, however, that this restriction shall cease to
have effect upon (i) the occurrence of a Change of Control of C&A or (ii) any
merger or consolidation between C&A and the Company.
Unrestricted Subsidiaries
The Company may designate any Subsidiary of the Company to be an
"Unrestricted Subsidiary" as provided below in which event such Subsidiary and
each other Person that is then or thereafter becomes a Subsidiary of such
Subsidiary will be deemed to be an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, any other Subsidiary of the Company which is not a
Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted
Subsidiary, provided, that either
(1) the Subsidiary to be so designated has total assets of $1,000 or less
or
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(2) if such Subsidiary has assets greater than $1,000, the Investment
resulting from such designation would be permitted either as a
Permitted Investment or in compliance with the covenant entitled "--
Certain Covenants -- Limitation on Restricted Payments and Restricted
Investments."
In addition, without further designation, as of the Issue Date, the Company's
Receivables Subsidiary, Carcorp, Inc., will be an Unrestricted Subsidiary.
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) the Company could Incur $1.00 of additional Indebtedness
under the first paragraph of the covenant described under "-- Certain Covenants
- -- Limitation on Indebtedness" and (y) no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence thereof. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the board resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
Mergers, Consolidations and Certain Sales of Assets
The Company may not (1) consolidate with or merge into any other Person or
permit any other Person to consolidate with or merge into the Company or (2)
directly or indirectly, transfer, sell, lease or otherwise dispose of the
Company's assets substantially as an entirety to any Person (a "Fundamental
Transaction"), unless:
(a) in a Fundamental Transaction in which the Company does not survive
or in which the Company sells, leases or otherwise disposes of its assets
substantially as an entirety, the successor entity to the Company is
organized under the laws of the United States of America or any State
thereof or the District of Columbia and shall expressly assume, by a
supplemental indenture executed and delivered to the Trustee in form
satisfactory to the Trustee, all of the Company's obligations under the
Indenture;
(b) immediately before and after giving effect to such Fundamental
Transaction and treating any Indebtedness which becomes an obligation of
the Company or a Subsidiary as a result of such Fundamental Transaction as
having been Incurred by the Company or such Subsidiary at the time of the
Fundamental Transaction, no Default or Event of Default shall have occurred
and be continuing;
(c) immediately after giving effect to such Fundamental Transaction
(other than a Fundamental Transaction solely involving (i) the Company and
a Restricted Subsidiary of the Company or (ii) the Company and C&A) and
treating any Indebtedness which becomes an obligation of the Company or a
Subsidiary as a result of such transaction as having been incurred by the
Company or such Subsidiary at the time of such transaction, the Company
(including any successor entity to the Company) could Incur at least $1.00
of additional Indebtedness pursuant to the provisions of the first
paragraph of the covenant under "--Certain Covenants -- Limitation on
Indebtedness" above;
(d) each Subsidiary Guarantor (unless it is the other party to the
transactions above, in which case clause (a) shall apply) shall have by
supplemental indenture confirmed that its Subsidiary Guarantee shall apply
to such Person's obligations in respect of the Indenture and the Notes and
its obligations under the Registration Rights Agreement shall continue to
be in effect; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indentures (if any)
comply with the Indenture.
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Subject to the fourth paragraph of the covenant under "--Certain Covenants
- -- Guarantees -- Subsidiary Guarantees," a Guarantor may not (i) consolidate
with or merge into any other Person or (ii) directly or indirectly, transfer,
sell, lease or otherwise dispose of such Guarantor's assets substantially as an
entirety to any Person, unless:
(a) in a transaction in which the Guarantor does not survive or in
which the Guarantor sells or otherwise disposes of its assets substantially
as an entirety, the successor entity to the Guarantor is organized under
the laws of the United States of America or any State thereof or the
District of Columbia and shall expressly assume, by a supplemental
indenture executed and delivered to the Trustee in form satisfactory to the
Trustee, all of the Guarantor's obligations under the Indenture;
(b) immediately before and after giving effect to such transaction and
treating any Indebtedness which becomes an obligation of the Guarantor at
the time of the transaction as having been Incurred by the Guarantor at the
time of the transaction, no Default or Event of Default shall have occurred
and be continuing; and
(c) the Guarantor shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with the Indenture.
In the event of any transaction described in and complying with the
conditions listed in the immediately preceding paragraphs in which the Company
or a Guarantor is not the continuing corporation, the successor Person formed or
remaining will succeed to, and be substituted for, and may exercise every right
and power of, the Company or such Guarantor, as the case may be, and the Company
or such Guarantor, as the case may be, will be released and discharged from all
obligations and covenants under the Indenture.
Certain Definitions
In addition to the definitions set forth elsewhere in this prospectus, the
following is a summary of certain of the defined terms used in the Indenture.
Reference is made to the Indenture for the full definition of all such terms, as
well as any other terms used herein for which no definition is provided.
"Advisory Agreement" means the Services Agreement dated as of February 23,
2001, as amended through the Issue Date, among C&A, the Company and Heartland
(or any other Affiliate thereof), as the same may be amended or modified from
time to time; but without giving effect to any amendment or modification after
the Issue Date that would increase the net fees payable thereunder to Heartland
Industrial Partners, L.P. and its Affiliates that have not been made subject to
compliance with the "Transactions With Affiliates" covenant.
"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person. 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 specified 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; provided, that none of
Textron Automotive Holdings (Italy) S.r.l. or its Subsidiaries shall be deemed
to be an Affiliate of the Company or any Restricted Subsidiary unless such
Person shall become a direct or indirect Subsidiary of the Company.
"Asset Disposition" means any transfer, conveyance, sale, lease or other
disposition (including a consolidation or merger or other sale of a Restricted
Subsidiary with, into or to another Person in a transaction in
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which such Restricted Subsidiary ceases to be a Restricted Subsidiary, but
excluding Receivables Sales and a disposition by a Restricted Subsidiary to the
Company or another Restricted Subsidiary or by the Company to a Restricted
Subsidiary) of:
(a) shares of Capital Stock (other than directors' qualifying shares)
or other ownership interests of a Restricted Subsidiary,
(b) substantially all of the assets of the Company or any of its
Restricted Subsidiaries representing a division or line of business, or
(c) other assets or rights of the Company or any of its Restricted
Subsidiaries outside of the ordinary course of business,
provided in each case that the aggregate consideration for such transfer,
conveyance, sale, lease or other disposition or any related series of such
transactions is equal to $25.0 million or more; provided, however, that (a) for
purposes of the covenant described under "-- Certain Covenants -- Limitation on
Asset Dispositions," the term "Asset Disposition" shall exclude any disposition
permitted by the covenant described under the heading "Certain Covenants
- --Limitation on Restricted Payments" and (b) the term "Asset Disposition" shall
exclude transactions permitted under "-- Certain Covenants -- Mergers,
Consolidations and Certain Sales of Assets" above.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Dispositions:
(1) the sale of Cash Equivalents in the ordinary course of business;
(2) a disposition of inventory in the ordinary course of business;
(3) the surrender or waiver of contract rights or the settlement,
release or surrender of contract, tort or other claims of any kind;
(4) the grant in the ordinary course of business of licenses of
patents, trademarks and similar intellectual property;
(5) the sale or disposition of any Restricted Investment or Permitted
Investment of the type described in clauses (10), (11) or (12) of the
definition thereof;
(6) a disposition of obsolete or worn out equipment or equipment that
is no longer useful in the conduct of the business of the Company and its
Restricted Subsidiaries and that is disposed of in each case in the
ordinary course of business; and
(7) Receivables Sales in connection with a Receivables Financing.
"Bank Credit Facilities" means those certain senior credit facilities, by
and among the Company, the Company's Canadian Subsidiaries, JPMorgan Chase Bank,
as administrative agent and collateral agent, J.P. Morgan Bank Canada, as
Canadian administrative agent and collateral agent, Credit Suisse First Boston,
as syndication agent, Deutsche Banc Alex. Brown Inc. and Merrill Lynch Capital
Corporation, as co-documentation agents and the other lenders party thereto,
including any related notes, guarantees, collateral documents, letters of
credit, instruments and agreements executed in connection therewith (and any
appendices, exhibits or schedules to any of the foregoing), and in each case as
amended, modified, supplemented, restated, renewed, refunded, replaced,
restructured, repaid or refinanced from time to time (whether with the
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original agents and lenders or other agents and lenders or otherwise, and
whether provided under the original credit facilities or other credit facilities
or otherwise).
"Becker Entities" means Charles E. Becker (or any of his immediate family
members, related family trusts, heirs and descendants), Becker Group LLC and any
other Affiliate of Charles E. Becker.
"Brazilian Credit Facility" means one or more credit facilities entered
into by Plascar Industria e Comerico Ltda and its Subsidiaries, together with
any credit support provided by the Company or any other Restricted Subsidiary,
providing for availability in an aggregate amount not to exceed $30.0 million at
any time outstanding.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banking institutions are authorized or required by law to close
in New York.
"Capital Lease Obligation" of any Person means the obligation to pay rent
or other payment amounts under a lease of (or other Indebtedness arrangements
conveying the right to use) real or personal property of such Person which is
required to be classified and accounted for as a capital lease or a liability on
the face of a balance sheet of such Person in accordance with GAAP. The stated
maturity of such obligation 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. The principal
amount of such obligation shall be the capitalized amount thereof that would
appear on the face of a balance sheet of such Person in accordance with GAAP.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) the equity, including Preferred Stock and
partnership interests, whether general or limited, of such Person.
"Cash Equivalents" means, at any time:
(1) any evidence of Indebtedness issued or directly and fully
guaranteed or insured by the United States of America, the United Kingdom,
Canada, France, Germany, Italy or Japan, or, in the case of an Asset Sale
in Brazil or an Investment of cash flow from the operations of the Company
and its Subsidiaries in Brazil, Brazil, or any agency or instrumentality
thereof (provided, that the full faith and credit of such country is
pledged in support thereof),
(2) certificates of deposit, money market deposit accounts and
acceptances with a maturity of 180 days or less from the date of
acquisition of any financial institution that is a member of the Federal
Reserve System or organized under the laws of the United Kingdom, Canada,
France, Germany, Italy or Japan or, in the case of an Asset Sale in Brazil
or an Investment of cash flow from the operations of the Company and its
Subsidiaries in Brazil, Brazil, having combined capital and surplus and
undivided profits of not less than $250.0 million,
(3) commercial paper with a maturity of 180 days or less from the date
of acquisition issued by a corporation organized under the laws of any
state of the United States of America or the District of Columbia or any
foreign country recognized by the United States of America whose debt
rating, at the time as of which such investment is made, is at least "A-1"
by Standard & Poor's Corporation or at least "P-1" by Moody's Investors
Service, Inc. or rated at least an equivalent rating category of another
nationally recognized securities rating agency,
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(4) repurchase agreements and reverse repurchase agreements having a
term of not more than 30 days for underlying securities of the types
described in clause (1) above entered into with a financial institution
meeting the qualifications described in clause (2) above,
(5) any security, maturing not more than 180 days after the date of
acquisition, backed by standby or direct pay letters of credit issued by a
bank meeting the qualifications described in clause (2) above and
(6) any security, maturing not more than 180 days after the date of
acquisition, issued or fully guaranteed by any state, commonwealth, or
territory of the United States of America, or by any political subdivision
thereof, and rated at least "A" by Standard & Poor's Corporation or at
least "A" by Moody's Investors Service, Inc. or rated at least an
equivalent rating category of another nationally recognized securities
rating agency.
"Common Stock" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Consolidated Assets" of any Person as of any date of determination means
the total assets of such Person as reflected on the most recently prepared
balance sheet of such Person, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Cash Flow Available for Fixed Charges" for any period means
the Consolidated Net Income for such period increased by the sum of:
(1) Consolidated Interest Expense for such period, plus
(2) Consolidated Income Tax Expense for such period, plus
(3) the consolidated depreciation and amortization expense included in
the income statement of the Company and its Subsidiaries for such period
plus
(4) all other expenses reducing Consolidated Net Income for such
period that do not represent cash disbursements for such period (excluding
any expense to the extent it represents an accrual of or reserve for cash
disbursements for any subsequent period prior to the Stated Maturity of the
Notes) less, to the extent included in the calculation of Consolidated Net
Income, items of income increasing Consolidated Net Income for such period
that do not represent cash receipts for such period (excluding any expense
to the extent it represents an accrual for cash receipts reasonably
expected to be received prior to the Stated Maturity of the Notes) in each
case for such period;
provided, however, that the provision for taxes based on the income or profits
of, the consolidated depreciation and amortization expense and such items of
expense or income attributable to, a Restricted Subsidiary shall be added to or
subtracted from Consolidated Net Income to compute Consolidated Cash Flow
Available for Fixed Charges only to the extent (and in the same proportion) that
the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income; provided, further, however, that the contribution to
Consolidated Cash Flow Available for Fixed Charges of a Restricted Subsidiary
which is restricted in its ability to pay dividends to the Company for any
period shall not exceed the amount that would have been permitted to be
distributed to the Company by such Restricted Subsidiary as a dividend or other
distribution during such period.
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"Consolidated Coverage Ratio" as of any date of determination means the
ratio of (1) Consolidated Cash Flow Available for Fixed Charges for the period
of the most recently completed four consecutive fiscal quarters for which
quarterly or annual financial statements are available to (2) Consolidated
Interest Expense for such period; provided, however, that:
(a) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding
(other than Indebtedness to finance seasonal fluctuations in working
capital needs Incurred under a revolving credit (or similar arrangement) to
the extent of the commitment thereunder in effect on the last day of such
period unless any portion of such Indebtedness is projected in the
reasonable judgment of senior management of the Company to remain
outstanding for a period in excess of 12 months from the date of Incurrence
of such Indebtedness) or if the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness,
or both, Consolidated Cash Flow Available for Fixed Charges and
Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to (i) such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period and (ii) the
discharge of any other Indebtedness repaid, repurchased, defeased or
otherwise discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period,
(b) if since the beginning of such period any Indebtedness of the
Company or any Restricted Subsidiary has been repaid, repurchased, defeased
or otherwise discharged (other than Indebtedness under a revolving credit
or similar arrangement unless such revolving credit Indebtedness has been
permanently repaid and has not been replaced), Consolidated Interest
Expense for such period shall be calculated after giving effect on a pro
forma basis as if such Indebtedness had been repaid, repurchased, defeased
or otherwise discharged on the first day of such period,
(c) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition (including, for
these purposes, a disposition of the type described in clause (5) of the
definition of "Asset Disposition") or if the transaction giving rise to the
need to calculate the Consolidated Coverage Ratio is an Asset Disposition,
the Consolidated Cash Flow Available for Fixed Charges for such period
shall be reduced by an amount equal to the Consolidated Cash Flow Available
for Fixed Charges (if positive) attributable to the assets which are the
subject of such Asset Disposition (including, for these purposes, a
disposition of the type described in clause (5) of the definition of "Asset
Disposition") for such period or increased by an amount equal to the
Consolidated Cash Flow Available for Fixed Charges (if negative)
attributable thereto for such period, and Consolidated Interest Expense for
such period shall be reduced by an amount equal to the Consolidated
Interest Expense attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged
with respect to the Company and its continuing Restricted Subsidiaries in
connection with such Asset Disposition (including, for these purposes, a
disposition of the type described in clause (5) of the definition of "Asset
Disposition") for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted Subsidiary to
the extent the Company and its continuing Restricted Subsidiaries are no
longer liable for such Indebtedness after such sale),
(d) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any
Investment in a Restricted Subsidiary or any acquisition of assets
occurring in connection with a transaction causing a calculation to be made
hereunder, which constitutes all or substantially all of a line of
business, Con-
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solidated Cash Flow Available for Fixed Charges and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period and
(e) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition (including, for these purposes, a
disposition of the type described in clause (5) of the definition of "Asset
Disposition"), Investment or acquisition of assets that would have required
an adjustment pursuant to clause (c) or (d) above if made by the Company or
a Restricted Subsidiary during such period, Consolidated Cash Flow
Available for Fixed Charges and Consolidated Interest Expense for such
period shall be calculated after giving pro forma effect thereto as if such
Asset Disposition (including, for these purposes, a disposition of the type
described in clause (5) of the definition of "Asset Disposition"),
Investment or acquisition occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition or disposition of assets, the amount of income or earnings relating
thereto and the amount of Consolidated Interest Expense associated with any
Indebtedness Incurred or repaid in connection therewith, the pro forma
calculations will be determined in good faith by a responsible financial or
accounting officer of the Company and such calculations may include such pro
forma adjustments for non-recurring items that the Company considers reasonable
in order to reflect the ongoing impact of any such transaction on the Company's
results of operations. If the Indebtedness to be Incurred bears a floating rate
of interest, 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, Currency or Commodity
Price Agreement applicable to such Indebtedness if such Interest Rate, Currency
or Commodity Price Agreement has a remaining term in excess of 12 months).
"Consolidated Income Tax Expense" for any period means the consolidated
provision for income taxes of the Company and the Restricted Subsidiaries for
such period calculated on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means for any period the consolidated
interest expense included in a consolidated income statement (without deduction
of interest income) of the Company and the Restricted Subsidiaries for such
period calculated on a consolidated basis in accordance with GAAP, including
without limitation or duplication (or, to the extent not so included, with the
addition of):
(1) the amortization of debt discounts;
(2) to the extent included in the calculation of net income under
GAAP, any payments or fees with respect to letters of credit, bankers'
acceptances or similar facilities;
(3) to the extent included in the calculation of net income under
GAAP, net costs with respect to interest rate swap or similar agreements
or, to the extent related to non-U.S. dollar denominated Indebtedness,
foreign currency hedge, exchange or similar agreements;
(4) Preferred Dividends in respect of all Preferred Stock of
Restricted Subsidiaries and Redeemable Stock of the Company held by Persons
other than the Company or a Wholly Owned Subsidiary whether or not declared
or paid;
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(5) interest on Indebtedness guaranteed by the Company and the
Restricted Subsidiaries and actually paid by the Company or the Restricted
Subsidiaries;
(6) capitalized interest;
(7) the portion of any rental obligation attributable to Capital Lease
Obligations allocable to interest expense and
(8) the loss on Receivables Sales, and excluding, to the extent
included in such consolidated interest expense, interest expense of any
Person acquired by the Company or a Subsidiary of the Company in a
pooling-of-interests transaction for any period prior to the date of such
transaction.
Notwithstanding the foregoing, the Consolidated Interest Expense with respect to
any Restricted Subsidiary, not all the net income of which was included in
calculating Consolidated Net Income by reason of the fact that such Restricted
Subsidiary was not a Wholly Owned Subsidiary, will be included only to the
extent (and in the same proportion) that the net income of such Restricted
Subsidiary was included in calculating Consolidated Net Income.
"Consolidated Net Income" for any period means the consolidated net income
(or loss) of the Company and its Subsidiaries before payment of dividends in
respect of any Capital Stock of the Company for such period determined on a
consolidated basis in accordance with GAAP; provided, that there will be
excluded therefrom:
(1) the net income (or loss) of any Person acquired by the Company or
a Subsidiary of the Company in a pooling-of-interests transaction for any
period prior to the date of such transaction,
(2) the net income (or loss) of any Person that is not a Restricted
Subsidiary except to the extent of the amount of dividends or other
distributions actually paid to the Company or a Restricted Subsidiary by
such Person during such period (subject, in the case of a dividend or
distribution to a Restricted Subsidiary, to the limitations contained in
clause (3) below),
(3) any net income of any Restricted Subsidiary to the extent such
Restricted Subsidiary is subject to restrictions, directly or indirectly,
on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company, except that
the Company's equity in a net loss of any such Restricted Subsidiary for
such period shall be included in determining such Consolidated Net Income,
(4) gains or losses on Asset Dispositions by the Company or its
Subsidiaries,
(5) all extraordinary gains and extraordinary losses,
(6) the cumulative effect of changes in accounting principles,
(7) non-cash gains or losses resulting from fluctuations in currency
exchange rates, and
(8) the tax effect of any of the items described in clauses (1)
through (7) above.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
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"Domestic Subsidiary" means a Restricted Subsidiary other than a Foreign
Subsidiary.
"Earn-Out Amount" has the meaning provided in the Purchase Agreement.
"Equity Offering" means a primary sale of Common Stock of the Company or,
to the extent the net cash proceeds thereof are paid to the Company as a capital
contribution, Common Stock or Preferred Stock (other than Redeemable Stock) of
C&A, for cash to a Person or Persons other than a Subsidiary of the Company.
"Existing Notes" means the Company's 11-1/2% Senior Subordinated Notes due
2006, issued under the Existing Notes Indenture.
"Existing Notes Indenture" means the Indenture, dated as of June 1, 1996
among the Company, C&A and First Union National Bank of North Carolina as
Trustee, as supplemented by the First, Second and Third Supplemental Indentures
thereto, as further amended, supplemented and modified from time to time.
"Foreign Subsidiary" means a Restricted Subsidiary that is organized under
the laws of any country other than the United States and substantially all the
assets of which are located outside the United States.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect 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, contingent or otherwise, of such Person (1) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (2)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, however, that the term
"Guarantee" will not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Heartland" means Heartland Industrial Partners, L.P., a Delaware limited
partnership, and its successors.
"Incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Indebtedness or other
obligation (including by acquisition of Subsidiaries if such Indebtedness
directly or indirectly becomes an obligation of such Person) or the recording,
as required pursuant to GAAP or otherwise, of any such Indebtedness or other
obligation on the balance sheet of such Person (and "Incurrence," "Incurred,"
and "Incurring" shall have meanings correlative to the foregoing); provided,
however, that a change in GAAP that results in an obligation of such Person that
exists at such time becoming Indebtedness will not be deemed an Incurrence of
such Indebtedness.
"Indebtedness" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent:
(1) the principal of and premium, if any, in respect of any
indebtedness of such Person for money borrowed,
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(2) the principal of and premium, if any, with respect to obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations Incurred in connection with the
acquisition of property, assets or businesses,
(3) the principal component of all obligations of such Person in
respect of letters of credit, bankers' acceptances or other similar
instruments (including reimbursement obligations with respect thereto)
(other than obligations with respect to letters of credit securing
obligations (other than obligations described in (1), (2), and (5)) entered
into in the ordinary course of business of such Person to the extent that
such letters of credit are not drawn upon or, if and to the extent drawn
upon, such drawing is reimbursed no later than the third business day
following receipt by such Person of a demand for reimbursement following
payment on the letter of credit),
(4) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business which are not overdue or which
are being contested in good faith), which purchase price is due more than
six months after the date of placing such property in service or taking
delivery and title thereto or the completion of such services; provided,
that the Company's obligations under the Purchase Agreement with respect to
the satisfaction of the Earn-Out Amount shall not be deemed Indebtedness;
provided, further, that any Indebtedness Incurred to pay or otherwise
discharge such obligations shall constitute Indebtedness,
(5) every Capital Lease Obligation of such Person,
(6) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Redeemable Stock or, with
respect to any Subsidiary, any Preferred Stock (but excluding, in each
case, any accrued dividends) but only to the extent such obligations arise
on or prior to the Stated Maturity of the notes; provided, that any
obligations to acquire Capital Stock of Textron Automotive Holdings (Italy)
S.r.l. or its successors pursuant to the arrangements contemplated by the
Purchase Agreement shall not be deemed to be Indebtedness; but that any
Indebtedness Incurred to pay or otherwise discharge such obligations shall
constitute Indebtedness,
(7) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the amount of such Indebtedness shall be the lesser
of (a) the fair market value of such asset at such date of determination
and (b) the amount of such Indebtedness of such other Persons,
(8) every obligation under Interest Rate, Currency or Commodity Price
Agreements of such Person, and
(9) every obligation of the type referred to in clauses (1) through
(8) of another Person the payment of which, in any case, such Person has
Guaranteed or is responsible or liable, directly or indirectly, as obligor,
Guarantor or otherwise.
"Interest Rate, Currency or Commodity Price Agreement" of any Person means
any forward contract, futures contract, swap, option or other financial
agreement or arrangement (including caps, floors, collars and similar
agreements) relating to, or the value of which is dependent upon, interest
rates, currency exchange rates or commodity prices or indices (excluding
contracts for the purchase or sale of goods in the ordinary course of business).
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"Investment" by any Person means any direct or indirect loan, advance or
other extension of credit (including by way of Guarantee) or capital
contribution (by means of transfers of cash or other property to others or
payments for property or services for the account or use of others, or
otherwise) to, or purchase or acquisition of Capital Stock, bonds, notes,
debentures or other securities or evidence of Indebtedness issued by, any other
Person, including any payment on a Guarantee of any such obligation of such
other Person, but does not include trade accounts receivable in the ordinary
course of business.
For purposes of the provisions described under "-- Unrestricted Subsidiary"
and "-- Certain Covenants -- Limitation on Restricted Payments" and the
definition of "Permitted Investments," (1) with respect to a Restricted
Subsidiary that is designated as an Unrestricted Subsidiary, "Investment" will
include the portion (proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets of such Subsidiary at the
time that such Subsidiary is designated an Unrestricted Subsidiary and with
respect to a Person that is designated as an Unrestricted Subsidiary
simultaneously with its becoming a Subsidiary of the Company, "Investment" will
mean the Investment made by the Company and the Restricted Subsidiaries to
acquire such Subsidiary; provided, however, that in either case upon a
redesignation of such Subsidiary as a Restricted Subsidiary, or upon the
acquisition of the Capital Stock of a Person such that such Person becomes a
Restricted Subsidiary, the Company shall be deemed to continue to have a
permanent "Investment" in an Unrestricted Subsidiary or such other Person in an
amount (if positive) equal to (a) the Company's "Investment" in such Subsidiary
at the time of such redesignation or in such Person immediately prior to such
acquisition less (b) the portion (proportionate to the Company's interest in
such Subsidiary after such redesignation or acquisition) of the fair market
value of the net assets of such Subsidiary at the time that such Subsidiary is
so redesignated a Restricted Subsidiary or of such Person immediately following
such acquisition; and (2) any property transferred to or from an Unrestricted
Subsidiary will be valued at its fair market value at the time of such transfer,
in each case as determined in good faith by the Board of Directors.
"Issue Date" means the date on which the Notes are originally issued.
"Italian JV Letters of Credit" means one or more letters of credit issued
to provide credit support for Textron Automotive Holdings (Italy) S.r.l. and its
Subsidiaries; provided, that the aggregate reimbursement obligation of the
Company and the Restricted Subsidiaries in respect thereof does not exceed $10.0
million at any time.
"Joan Entities" means Elkin McCallum, Joan Fabrics Corporation, Western
Avenue Dyers L.P., Tyng Textiles LLC and any other Affiliate of Elkin McCallum
(or any of his immediate family members, related family trusts, heirs and
descendants).
"Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such property or assets (including, without
limitation, any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).
"Net Available Proceeds" from any Asset Disposition by any Person means
cash or Cash Equivalents received (including by way of sale or discounting of a
note, installment receivable or other receivable, but excluding any other
consideration received in the form of assumption by the acquiror of Indebtedness
or other obligations relating to such properties or assets) therefrom by such
Person, net of:
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(1) all legal, accounting, financial advisory, title and recording tax
expenses, commissions and other fees and expenses Incurred and all federal,
state, provincial, foreign and local taxes required to be accrued as a
liability as a consequence of such Asset Disposition,
(2) all payments made by such Person or its Subsidiaries on any
Indebtedness which is secured by such assets in accordance with the terms
of any Lien upon or with respect to such assets or which must by the terms
of such Lien, or in order to obtain a necessary consent to such Asset
Disposition or by applicable law, be repaid out of the proceeds from such
Asset Disposition,
(3) all distributions and other payments made to minority interest
holders in Subsidiaries of such Person or joint ventures as a result of
such Asset Disposition,
(4) appropriate amounts to be provided by such Person or any
Subsidiary thereof, as the case may be, as a reserve in accordance with
GAAP against any liabilities associated with such assets and retained by
such Person or any Subsidiary thereof, as the case may be, after such Asset
Disposition, in each case as determined by the Board of Directors as
evidenced by a resolution of the Board filed with the Trustee; provided,
however, that any reduction in such reserve within 12 months following the
consummation of such Asset Disposition will be treated for all purposes of
the Indenture and the Notes as a new Asset Disposition at the time of such
reduction with Net Available Proceeds equal to the amount of such reduction
and
(5) any amount needed to effect a reduction of the amount outstanding
under a Permitted Receivables Financing Facility as a result of such Asset
Disposition.
"Obligor" shall mean, with respect to any Receivable, the party obligated
to make payments with respect to such Receivable, including any guarantor
thereof.
"Offer to Purchase" means a written offer (the "Offer") sent by the Company
by first class mail, postage prepaid, to each holder of Notes at its address
appearing in the Security Register on the date of the Offer offering to purchase
up to the principal amount of Notes specified in such Offer at the purchase
price specified in such Offer (as determined pursuant to the Indenture). Unless
otherwise required by applicable law, the Offer shall specify an expiration date
(the "Expiration Date") of the Offer to Purchase which shall be, subject to any
contrary requirements of applicable law, not less than 30 days or more than 60
days after the date of such Offer and a settlement date (the "Purchase Date")
for purchase of Notes within five Business Days after the Expiration Date. The
Company shall notify the Trustee at least 15 Business Days (or such shorter
period as is acceptable to the Trustee) prior to the mailing of the Offer of the
Company's obligation to make an Offer to Purchase, and the Offer shall be mailed
by the Company or, at the Company's request, by the Trustee in the name and at
the expense of the Company. The Offer shall contain information concerning the
business of the Company and its Subsidiaries which the Company in good faith
believes will enable such holders of Notes to make an informed decision with
respect to the Offer to Purchase, which at a minimum will include:
(1) the most recent annual and quarterly financial statements and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in the documents required to be filed with the
Trustee pursuant to the Indenture (which requirements may be satisfied by
delivery of such documents together with the Offer),
(2) a description of material developments, if any, in the Company's
business subsequent to the date of the latest of such financial statements
referred to in clause (i) (including a description of the events requiring
the Company to make the Offer to Purchase),
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(3) if applicable, appropriate pro forma financial information
concerning the Offer to Purchase and the events requiring the Company to
make the Offer to Purchase and
(4) any other information required by applicable law to be included
therein.
The Offer shall contain all instructions and materials necessary to enable
holders of the Notes to tender their Notes pursuant to the Offer to Purchase.
The Offer shall also state:
(a) the Section of the Indenture pursuant to which the Offer to
Purchase is being made;
(b) the Expiration Date and the Purchase Date;
(c) the aggregate principal amount of such outstanding Notes offered
to be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which such has been determined
pursuant to the Section of the Indenture requiring the Offer to Purchase)
(the "Purchase Amount");
(d) the purchase price to be paid by the Company for each $1,000
aggregate principal amount of Notes accepted for payment (as specified
pursuant to the Indenture) (the "Purchase Price");
(e) that the holder of Notes may tender all or any portion of Notes
registered in the name of such holder and that any portion of a Note
tendered must be tendered in an integral multiple of $1,000 principal
amount;
(f) the place where Notes are to be surrendered for tender pursuant to
the Offer to Purchase;
(g) that interest on any Note not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will continue to
accrue;
(h) that on the Purchase Date the Purchase Price will become due and
payable upon each Note being accepted for payment pursuant to the Offer to
Purchase and that interest thereon will cease to accrue on and after the
Purchase Date;
(i) that each holder of Notes electing to tender its Notes pursuant to
the Offer to Purchase will be required to surrender its Notes at the place
or places specified in the Offer prior to the close of business on the
Expiration Date (such Notes being, if the Company or the Trustee so
requires, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed
by, the holder thereof or his attorney duly authorized in writing);
(j) that holders of Notes will be entitled to withdraw all or any
portion of Notes tendered if the Company (or the Paying Agent) receives,
not later than the close of business on the Expiration Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
holder, the principal amount of the Notes the holder tendered, the
certificate numbers of the Notes the holder tendered and a statement that
such holder of Notes is withdrawing all or a portion of his tender;
(k) that (i) if Notes in an aggregate principal amount less than or
equal to the Purchase Amount are duly tendered and not withdrawn pursuant
to the Offer to Purchase, the Company will purchase all such Notes and (ii)
if Notes in an aggregate principal amount in excess of the Purchase
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Amount are tendered and not withdrawn pursuant to the Offer to Purchase,
the Company will purchase Notes having an aggregate principal amount equal
to the Purchase Amount on a pro rata basis (with such adjustments as may be
deemed appropriate so that only Notes in denominations of $1,000 or
integral multiples thereof shall be purchased); and
(l) that in the case of any holder of Notes whose Notes are purchased
only in part, the Company will execute, and the Trustee shall authenticate
and deliver to the holder without service charge, a new Note, of any
authorized denomination as requested by such holder, in an aggregate
principal amount equal to and in exchange for the unpurchased portion of
the Notes so tendered.
Any Offer to Purchase will be governed by and effected in accordance with
the Offer for such Offer to Purchase.
"Overdraft Facilities" means local lines of credit of the Company's Foreign
Subsidiaries, together with any credit support provided by the Company or any
Restricted Subsidiary, providing for availability in an aggregate amount not to
exceed $25.0 million at any time outstanding.
"Permitted Acquired Investment" means any Investment by any Person (the
"Subject Person") in another Person made prior to the time
(1) the Subject Person became a Restricted Subsidiary,
(2) the Subject Person merged into or consolidated with a Restricted
Subsidiary, or
(3) another Restricted Subsidiary merged into or was consolidated with
the Subject Person (in a transaction in which the Subject Person became a
Restricted Subsidiary)
provided, that such Investment was not made in anticipation of any such
transaction and was outstanding prior to such transaction; provided, further,
that the book value of such Investments (excluding all Permitted Investments
(other than those referred to in clause (13) of the definition thereof)) do not
exceed 5% of the Consolidated Assets of the Subject Person immediately prior to
the Subject Person becoming a Restricted Subsidiary.
"Permitted Interest Rate, Currency or Commodity Price Agreement" of any
Person means any Interest Rate, Currency or Commodity Price Agreement entered
into with one or more financial institutions that is designed to protect such
Person (1) against fluctuations in interest rates or currency exchange rates
with respect to Indebtedness of the Company and its Restricted Subsidiaries and
which will have a notional amount no greater than the principal payments due
with respect to the Indebtedness being hedged thereby, or (2) in the case of
currency or commodity protection agreements, against currency exchange rate or
commodity price fluctuations in the ordinary course of the Company's and the
Restricted Subsidiaries' respective businesses relating to then existing
financial obligations or then existing or sold production and, in the case of
both (1) and (2), not for purposes of speculation.
"Permitted Investments" means:
(1) Investments in Cash Equivalents,
(2) Investments in existence on the Issue Date,
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(3) Investments in any Restricted Subsidiary by the Company or any
Restricted Subsidiary, including any Investment made to acquire such
Restricted Subsidiary,
(4) Investments in the Company by any Restricted Subsidiary,
(5) sales of goods or services on trade credit terms consistent with
the Company's and its Subsidiaries' past practices or otherwise consistent
with trade credit terms in common use in the industry and recorded as
accounts receivable on the balance sheet of the Person making such sale,
(6) loans or advances to employees for purposes of purchasing Common
Stock of C&A in an aggregate amount outstanding at any one time not to
exceed $5.0 million and other loans and advances to employees of the
Company in the ordinary course of business and on terms consistent with the
Company's practices in effect prior to the Issue Date, including travel,
moving and other like advances,
(7) loans or advances to vendors or contractors of the Company in the
ordinary course of a Related Business,
(8) lease, utility and other similar deposits in the ordinary course
of business,
(9) stock, obligations or securities received in the ordinary course
of business in settlement of debts owing to the Company or a Subsidiary
thereof as a result of foreclosure, perfection, enforcement of any Lien or
in a bankruptcy proceeding,
(10) Investments in Unrestricted Subsidiaries, partnerships or joint
ventures involving the Company or its Restricted Subsidiaries, primarily
engaged in a Related Business, if the amount of such Investment (after
taking into account the amount of all other Investments made pursuant to
this clause (10), less any return of capital realized or any repayment of
principal received on such Permitted Investments, or any release or other
cancellation of any Guarantee constituting such Permitted Investment, which
has not at such time been reinvested in Permitted Investments made pursuant
to this clause (10)), does not exceed 1.5% of the Company's Consolidated
Assets,
(11) Investments in Persons to the extent any such Investment
represents the non-cash consideration otherwise permitted to be received by
the Company or its Restricted Subsidiaries in connection with an Asset
Disposition,
(12) any Investment included in clauses (3)(b), (5), (9) and (16) of
the definition of "Permitted Indebtedness",
(13) Permitted Acquired Investments, and
(14) Investments constituting "Permitted Investments" as defined in
the Bank Credit Facilities on the Issue Date.
"Permitted Liens" means:
(1) Liens existing on the Issue Date;
(2) Liens existing on property or assets at the time of acquisition by
the Company or a Restricted Subsidiary which secure Indebtedness that is
not incurred in contemplation of such property or
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assets being so acquired, provided, that such Liens do not extend to other
property or assets of the Company or any Restricted Subsidiary;
(3) Liens securing Indebtedness of the type described in clauses (8),
(9), and (15) of the "Limitation on Indebtedness" covenant;
(4) Liens securing the Bank Credit Facilities, provided, that such
Liens shall not secure more than an aggregate of $700.0 million of
Indebtedness thereunder (plus, without duplication, such amount of
Indebtedness which may otherwise be subject to a Lien pursuant to clause
(10) below), Liens securing the Brazilian Credit Facility, the Overdraft
Facilities, Liens securing Indebtedness Incurred by Foreign Subsidiaries
and Permitted Interest Rate, Currency or Commodity Price Agreements;
(5) Liens replacing any of the items set forth in clauses (1) through
(4) above, provided, that (A) the principal amount of the Indebtedness
secured by such Liens shall not be increased (except premiums or other
payments paid in connection with a concurrent Refinancing of such
Indebtedness and the expenses Incurred in connection therewith), (B) the
principal amount of the Indebtedness secured by such Liens, determined as
of the date of Incurrence, has a Weighted Average Life to Maturity at least
equal to the remaining Weighted Average Life to Maturity of the
Indebtedness being Refinanced or repaid, (C) the maturity of the
Indebtedness secured by such Liens is not earlier than that of the
Indebtedness to be Refinanced, (D) such Liens have the same or a lower
ranking and priority as the Liens being replaced, and (E) such Liens shall
be limited to the property or assets encumbered by the Lien so replaced;
(6) Liens encumbering cash proceeds (or securities purchased
therewith) from Indebtedness permitted to be Incurred pursuant to the
"Limitation on Indebtedness" covenant which are set aside at the time of
such Incurrence in order to secure an escrow arrangement pursuant to which
such cash proceeds (or securities purchased therewith) are contemplated to
ultimately be released to the Company or a Restricted Subsidiary or
returned to the lenders of such Indebtedness, provided, that such Liens are
automatically released concurrently with the release of such cash proceeds
(or securities purchased therewith) from such escrow arrangement;
(7) Liens (including extensions, renewals and replacements thereof)
upon property or assets created for the purpose of securing Indebtedness
Incurred to finance or Refinance the cost (including the cost of
construction) of such property or assets, provided, that (A) the principal
amount of the Indebtedness secured by such Lien does not exceed 100% of the
cost of such property or assets, (B) such Lien does not extend to or cover
any property or assets other than the property or assets being financed or
Refinanced by such Indebtedness and any improvements thereon, and (C) the
Incurrence of such Indebtedness is permitted by the "Limitation on
Indebtedness" covenant;
(8) Liens in favor of the Company or a Restricted Subsidiary;
(9) Liens securing Indebtedness of Foreign Subsidiaries permitted to
be Incurred under the "Limitation on Indebtedness" covenant;
(10) Liens (other than Liens securing Subordinated Indebtedness)
which, when the Indebtedness relating to those Liens is added to all other
then outstanding Indebtedness of the Company and its Restricted
Subsidiaries secured by Liens and not listed in clauses (1) through (9)
above or (11) through (25) below, does not exceed 5% of the Consolidated
Assets of the Company;
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(11) Liens to secure the performance of statutory obligations, surety
or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(12) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings;
(13) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent for
a period of more than 60 days or being contested in good faith;
(14) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security or similar obligations, including any
Lien securing letters of credit issued in the ordinary course of business
consistent with past practice in connection therewith, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-of-money bonds
and other similar obligations (exclusive of obligations for the payment of
borrowed money);
(15) judgment Liens not accompanied by an Event of Default of the type
described in clause (8) under "Events of Default" arising from such
judgment;
(16) easements, rights-of-way, zoning restrictions, minor defects or
irregularities in title and other similar charges or encumbrances in
respect of real property not interfering in any material respect with the
ordinary conduct of business of the Company or any of its Restricted
Subsidiaries;
(17) any interest or title of a lessor under any lease, whether or not
characterized as capital or operating; provided, that such Liens do not
extend to any property or assets which is not leased property subject to
such lease;
(18) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(19) Liens securing reimbursement obligations with respect to letters
of credit which encumber documents and other property relating to such
letters of credit and products and proceeds thereof;
(20) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
Company or any of the Restricted Subsidiaries, including rights of offset
and set-off;
(21) leases or subleases granted to others not interfering in any
material respect with the business of the Company or the Restricted
Subsidiaries;
(22) Liens upon Receivables pursuant to one or more receivables
financing facilities to the extent that the Indebtedness thereunder could
be Incurred pursuant to clause 1(c) of second paragraph of the "Limitation
on Indebtedness" covenant;
(23) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of custom duties in connection with
importation of goods;
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(24) Liens encumbering initial deposits and margin deposits, and other
Liens incurred in the ordinary course of business and that are within the
general parameters customary in the industry; and
(25) Liens arising from filing Uniform Commercial Code financing
statements regarding leases.
"Permitted Receivables Financing Facility" means the receivables financing
facility established pursuant to the Amended and Restated Receivables Sales
Agreement to be entered into, as amended from time to time, among the Company,
as master servicer, the Sellers parties thereto and Carcorp, Inc. (or any
successor thereto or replacement thereof) and one or more receivables financing
facilities pursuant to which the Company or any of its Subsidiaries sells,
transfers, assigns or pledges its Receivables to a special purpose entity or a
trust and in connection therewith such entity or trust Incurs Indebtedness
secured by such Receivables or otherwise finances Receivables with customary
limited repurchase obligations for breaches of certain representations,
warranties or covenants or limited recourse based upon the collectibility of the
Receivables sold.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company, government or any agency or political subdivision hereof or
any other entity.
"Preferred Dividends" for any Person means for any period the quotient
determined by dividing the amount of dividends and distributions paid or accrued
(whether or not declared) on Preferred Stock of such Person during such period
calculated in accordance with GAAP, by 1 minus the actual combined Federal,
state, local and foreign income tax rate of the Company on a consolidated basis
(expressed as a decimal) for such period.
"Preferred Stock" of any Person means Capital Stock of such Person of any
class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class of such Person.
"Purchase Agreement" means the Purchase Agreement dated August 7, 2001
among Textron, Inc., C&A and the Company, as amended and restated to the Issue
Date.
"Receivables" means receivables, chattel paper, instruments, documents or
intangibles evidencing or relating to the right to payment of money.
"Receivables" shall include the indebtedness and payment obligations of any
Person to the Company or a Subsidiary arising from a sale of merchandise or
services by the Company or such Subsidiary in the ordinary course of its
business, including any right to payment for goods sold or for services
rendered, and including the right to payment of any interest, finance charges,
returned check or late charges and other obligations of such Person with respect
thereto. Receivables shall also include (a) all of the Company's or such
Subsidiary's interest in the merchandise (including returned merchandise), if
any, relating to the sale which gave rise to such Receivable, (b) all other
security interests or Liens and property subject thereto from time to time
purporting to secure payment of such Receivable, whether pursuant to the
contract related to such Receivable or otherwise, together with all financing
statements signed by an Obligor describing any collateral securing such
Receivable, and (c) all guarantees, insurance, letters of credit and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Receivable whether pursuant to the contract related to
such Receivable or otherwise.
"Receivables Financing" means (1) the sale or other disposition of
Receivables arising in the ordinary course of business or (2) the sale or other
disposition of Receivables that arise in the ordinary course of busi-
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ness to a Receivables Subsidiary followed by, or in connection with, a financing
transaction in connection with such sale or disposition of such Receivables.
"Receivables Sale" of any Person means any sale, transfer, assignment or
pledge of Receivables by such Person (pursuant to a Permitted Receivables
Financing Facility, a purchase facility or otherwise), other than (1) in
connection with a disposition of the business operations of such Person relating
thereto or (2) a disposition of defaulted Receivables for purpose of collection
and not as a financing arrangement.
"Receivables Subsidiary" means an Unrestricted Subsidiary of the Company or
any other corporation, trust or entity that is exclusively engaged in
Receivables Financing, and activities reasonably related thereto.
"Redeemable Stock" of any Person means any Capital Stock of such Person
that by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or otherwise (including upon the occurrence of
an event) (i) matures or (ii) is required to be redeemed (pursuant to any
sinking fund obligation or otherwise) or (iii) is convertible into or
exchangeable for Indebtedness or Redeemable Stock or is redeemable at the option
of the holder thereof, in whole or in part, in each case in whole or in part, at
any time prior to 91 days after the final Stated Maturity of the Notes.
Notwithstanding the preceding sentence, (1) any Capital Stock that would
constitute Redeemable Stock solely because the holders of the Capital Stock have
the right to require the Company to repurchase such Capital Stock upon the
occurrence of a change of control or asset sale shall not constitute Redeemable
Stock if the terms of such Capital Stock provide that the Company may not
repurchase or redeem any such Capital Stock if prohibited by the terms hereof
and (2) Capital Stock in respect of which the Company may have an obligation of
the type referred to in clause (vi) of the second paragraph of the "Limitation
on Restricted Payments and Restricted Investments" covenant and Textron
Preferred Stock shall not constitute Redeemable Stock.
"Refinancing" means, with respect to any Indebtedness, a renewal,
extension, refinancing, replacement, amendment, restatement or refunding of such
Indebtedness, and shall include any successive Refinancing of any of the
foregoing.
"Related Business" means the businesses of the Company and the Restricted
Subsidiaries on the Issue Date and any business related, ancillary or
complementary to any of the businesses of the Company and the Restricted
Subsidiaries on the Issue Date, as determined conclusively and in good faith by
the Company's Board of Directors.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means an arrangement by any Person with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such Person of any property or asset of such Person which has
been or is being sold or transferred by such Person not more than 270 days after
the acquisition thereof or the completion of construction or commencement of
operation thereof to such lender or investor or to any Person to whom funds have
been or are to be advanced by such lender or investor on the security of such
property or asset. The stated maturity of such arrangement will be the date of
the last payment of rent or any other amount due under such arrangement prior to
the first date on which such arrangement may be terminated by the lessee without
payment of a penalty.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the Commission.
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"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision.
"Stockholders Agreements" means the Stockholders Agreement, dated July 3,
2001, by and among Heartland Industrial Partners, L.P. and the other Heartland
entities named therein, the Becker Stockholders named therein, Joan Stockholders
named therein and C&A, as amended, and the Stockholders Agreement, dated
February 23, 2001, by and among C&A, Heartland Industrial Partners I, L.P. and
the other Investor Stockholders listed on Schedule I thereto, Blackstone Capital
Company II, L.L.C., Blackstone Family Investment Partnership I, L.P., Blackstone
Advisory Directors Partnership L.P., Blackstone Capital Partners L.P., and
Wasserstein/C&A Holdings L.L.C., as amended.
"Subordinated Indebtedness" means Indebtedness as to which the payment of
principal (and premium, if any) and interest and other payment obligations is
subordinate by its terms to the prior payment in full of the Notes or the
Guarantees of the Company or a Guarantor, as applicable.
"Subsidiary" of any Person means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interest (including partnership interest)
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or by one or more
Subsidiaries of such Person, or by such Person and one or more Subsidiaries of
such Person.
"Subsidiary Guarantee" means, individually, any Guarantee of payment of the
Notes by a Subsidiary Guarantor pursuant to the terms of the Indenture, and,
collectively, all the Guarantees of the Notes. Each such Subsidiary Guarantee
will be in the form prescribed by the Indenture.
"TAC-Trim acquisition" means the acquisition by the Company of the Bison
Subsidiaries (as defined in the Purchase Agreement) pursuant to the Purchase
Agreement and the related transactions.
"Textron Entities" means Textron Inc. and its controlled Affiliates.
"Textron Preferred Stock" shall mean collectively, (1) the Company's Series
A1 Redeemable Preferred Stock, Series A2 Redeemable Preferred Stock, Series B1
Redeemable Preferred Stock, Series B2 Redeemable Preferred Stock, Series C1
Redeemable Preferred Stock and Series C2 Redeemable Preferred Stock, (2) any
substantially similar redeemable Preferred Stock of C&A issued in lieu of or in
exchange for Preferred Stock of the type described in the preceding clause (1)
pursuant to the terms of the Purchase Agreement or the Textron Preferred Stock
as in effect on the Issue Date and (3) any Series D Redeemable Preferred Stock
issued in satisfaction of the Earn-Out Amount.
"Unrestricted Subsidiary" means any Subsidiary designated as such by the
Board of Directors as set forth under "-- Unrestricted Subsidiaries" and any
Subsidiary of Unrestricted Subsidiary.
"U.S. Government Obligation" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or
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only so long as no senior class of securities has such voting power by reason of
any contingency; provided, that the Textron Preferred Stock shall not be deemed
to be Voting Stock for any purpose.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
or Redeemable Stock, as the case may be at any date, the number of years
obtained by dividing (i) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment,
by (ii) the then outstanding principal amount or liquidation preference, as
applicable, of such Indebtedness or Redeemable Stock, as the case may be.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of C&A or the
Company, as such, shall have any liability for any obligations of the Company
under the Notes, the Indenture or the Subsidiary Guarantees or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the Commission that such a waiver is against public
policy.
Concerning The Trustee
BNY Midwest Trust Company is the Trustee under the Indenture and has been
appointed by the Company as registrar and paying agent with regard to the Notes.
Governing Law
The Indenture provides that it and the Notes will be governed by, and
construed in accordance with, the laws of the State of New York.
Events of Default
The following will be Events of Default under the Indenture:
(1) failure to pay principal of (or premium, if any, on) any such Note
when due;
(2) failure to pay any interest or additional interest (as required by
the Registration Rights Agreement) on any such Note when due, continued for
30 days;
(3) default in the payment of principal and interest on Notes required
to be purchased pursuant to an Offer to Purchase as described under "--
Certain Covenants -- Change of Control" when due and payable;
(4) failure to perform or comply with the provisions described under
"Mergers, Consolidations and Certain Sales of Assets" by the Company or any
Guarantor;
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(5) failure to perform or comply with any other covenant or agreement
of the Company under the Indenture or the Notes continued for 60 days after
written notice to the Company by the Trustee or the holders of at least 25%
in aggregate principal amount of the outstanding Notes;
(6) default under the terms of any instrument or instruments
evidencing or securing Indebtedness for money borrowed by the Company or
any Significant Subsidiary having an outstanding principal amount of $20
million individually or in the aggregate which default results in the
acceleration of the payment of such Indebtedness or constitutes the failure
to pay such Indebtedness when due at final maturity after the lapse of any
applicable grace period;
(7) the Parent Guarantee of the Notes or any Subsidiary Guarantee of
the Notes shall for any reason cease to be, or shall be asserted in writing
by the Parent Guarantor, the Company or the Subsidiary Guarantor not to be,
in full force and effect and enforceable in accordance with its terms;
(8) the rendering of a final judgment or judgments (not subject to
appeal) against the Company or any Significant Subsidiary in an amount in
excess of $20 million (calculated net of any insurance available to pay
such judgment) which remains undischarged or unstayed for a period of 60
days after the date on which the right to appeal has expired; and
(9) certain events of bankruptcy, insolvency or reorganization
affecting the Company, any Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statement for the Company and the Restricted
Subsidiaries) would constitute a Significant Subsidiary of the Company.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the holders of Notes, unless
such holders of the Notes shall have offered to the Trustee reasonable
indemnity. Subject to such provisions for the indemnification of Trustee, the
holders of a majority in aggregate principal amount of the outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee.
If an Event of Default (other than an Event of Default described in clause
(9) above with respect to the Company) shall occur and be continuing, either the
Trustee or the holders of at least 25% in aggregate principal amount of the
outstanding Notes may accelerate the maturity of all Notes; provided, however,
that after such acceleration, but before a judgment or decree based on
acceleration, the holders of a majority in aggregate principal amount of
outstanding Notes may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than the non-payment of accelerated
principal, have been cured or waived as provided in the Indenture. In the event
of a declaration of acceleration of the Notes because an Event of Default
described in clause (6) under "Events of Default" has occurred and is
continuing, the declaration of acceleration of the Notes shall be automatically
annulled if the event of default or payment default triggering such Event of
Default pursuant to clause (6) shall be remedied or cured by the Company or a
Restricted Subsidiary or waived by the holders of the relevant Indebtedness
within 60 days after the declaration of acceleration with respect thereto and if
(a) the annulment of the acceleration of the Notes would not conflict with any
judgment or decree of a court of competent jurisdiction and (b) all existing
Events of Default, except nonpayment of principal, premium or interest on the
Notes that became due solely because of the acceleration of the Notes, have been
cured or waived. If an Event of Default specified in clause (9) above occurs
with respect to the Company, the outstanding Notes will ipso facto become
immediately due and payable without any declaration or other act on the part of
the Trustee or any holder of Notes. For information as to waiver of defaults,
see "-- Modification and Waiver."
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No holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and unless also the holders of at least 25% in aggregate principal
amount of the outstanding Notes shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as trustee,
and such Trustee shall not have received from the holders of a majority in
aggregate principal amount of the outstanding Notes a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days. However, such limitations do not apply to a suit instituted by a holder of
a Note for enforcement of payment of the principal of and premium, if any, or
interest on such Note on or after the respective due dates and grace period
expressed in such Note and the Indenture.
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.
Modification and Waiver
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the holders of a majority in aggregate
principal amount of outstanding Notes; provided, however, that no such
modification or amendment may, without the consent of the holder of each Note
affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of interest on, such Note,
(2) reduce the principal amount of, or the premium or interest on,
such Note,
(3) change the place or currency of payment of principal of, or
premium or interest on, such Note,
(4) modify or change any provision of the Indenture or the related
definitions affecting the ranking of such Note or any Guarantee thereof in
any manner adverse in any material respect to the holder of such Note,
(5) reduce the premium payable upon the redemption or repurchase of
any Note,
(6) reduce the time before which such Note may be redeemed,
(7) impair the right to institute suit for the enforcement of any
payment on or with respect to such Note,
(8) reduce the above-stated percentage of outstanding Notes necessary
to modify or amend the Indenture,
(9) reduce the percentage of outstanding Notes necessary for waiver of
compliance with certain provisions of the Indenture or for waiver of
certain defaults,
(10) modify any provisions of the Indenture relating to the
modification and amendment of the Indenture or the waiver of past defaults
or covenants, except as otherwise specified, or
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(11) following the mailing of any Offer to Purchase, modify any Offer
to Purchase required under "-- Certain Covenants -- Limitation on Asset
Dispositions" and "-- Certain Covenants -- Change of Control" in a manner
materially adverse to the holder of such Note.
Without the consent of any holder, the Company and the Trustee may amend
the Indenture to:
(a) cure any ambiguity, omission, defect or inconsistency;
(b) provide for the assumption by a successor corporation or other
Person of the obligations of the Company or any Guarantor under the
Indenture;
(c) add Guarantees with respect to the Notes or release a Subsidiary
Guarantor; provided, however, that any such release is in accordance with
the provisions of the Indenture;
(d) secure the Notes;
(e) add to the covenants of the Company for the benefit of the holders
of Notes or surrender any right or power conferred upon the Company;
(f) comply with any requirement of the SEC in connection with the
qualification of the Indenture under the Trust Indenture Act;
(g) provide for the acceptance of appointment under the Indenture of a
successor Trustee and to add or change provisions of the Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
by more than one Trustee; or
(h) make any other change that does not adversely affect the rights of
any holder of Notes.
The holders of a majority in aggregate principal amount of the Notes, on
behalf of all holders of the Notes, may waive compliance by the Company with
certain restrictive provisions of the Indenture. Subject to certain rights of
the Trustee, as provided in the Indenture, the holders of a majority in
aggregate principal amount of outstanding Notes, on behalf of all holders of
Notes, may waive any past default under the Indenture, except a default in the
payment of principal, premium or interest or a default arising from failure to
purchase any Note tendered pursuant to an Offer to Purchase.
Defeasance and Discharge
The Company at any time may terminate all its obligations under the Notes
and the related obligations under the Indenture ("legal defeasance"), except for
certain obligations, including those respecting the defeasance trust and
obligations to register the transfer or exchange of the Notes, to replace
mutilated, destroyed, lost or stolen Notes and to maintain a registrar and
paying agent in respect of the Notes. If the Company exercises its legal
defeasance option, the Guarantees with respect to Notes in effect at such time
will terminate.
The Company at any time may terminate its obligations with respect to the
Notes under the covenants described under "Certain Covenants", the operation of
the "Events of Default" above other than Events of Default contained in clauses
(1), (2) and (9) (with respect to the Company only) and the limitations
contained in clause (c) of the first paragraph under "Mergers, Consolidations,
and Certain Sales of Assets" above ("covenant defeasance").
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The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, payment of the Notes may not be accelerated because of
an Event of Default with respect thereto. If the Company exercises its covenant
defeasance option, payment of the Notes may not be accelerated because of an
Event of Default specified in clause (3), (4), (5), (6), (8) or (9) (with
respect only to Significant Subsidiaries), under "Events of Default" above.
In order to exercise either defeasance option, the Company must irrevocably
deposit in trust (the "defeasance trust") with the Trustee money or, U.S.
Government Obligations for the payment of principal, premium (if any) and
interest on the Notes to redemption or maturity, as the case may be, and must
comply with certain other conditions, including delivery to the Trustee of an
Opinion of Counsel to the effect that holders of the Notes will not recognize
income, gain or loss for Federal income tax purposes as a result of such deposit
and defeasance and will be subject to Federal income tax on the same amount and
in the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred (and, in the case of legal defeasance
only, such Opinion of Counsel must be based on a ruling of the Internal Revenue
Service or other change in applicable Federal income tax law).
The Company may satisfy and discharge all obligations under the Indenture
by delivering to the Trustee for cancellation all outstanding Notes or
depositing with the Trustee, after the outstanding Notes have become due and
payable or are called for redemption in accordance with the Indenture, cash
sufficient to pay at Stated Maturity or the Redemption Date all of the
outstanding Notes and paying all other sums payable under the Indenture with
respect to the Notes.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes the material U.S. federal income tax
consequences resulting from acquisition, beneficial ownership and disposition of
a registered note acquired in exchange for an outstanding note. Except where
otherwise noted, it deals only with purchasers of notes who purchased their
notes in the original offering at the offering price and who hold the notes as
capital assets. This summary does not deal with special classes of holders such
as dealers in securities, partnerships or other pass-through entities, financial
institutions, life insurance companies, certain expatriates, persons holding the
notes as part of a straddle or hedging or conversion transaction or persons
whose functional currency is not the U.S. dollar. Moreover, this summary is
based upon the provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), and regulations, rulings and judicial decisions thereunder as now in
effect, and such authorities may be repealed, revoked or modified (possibly on a
retroactive basis) so as to result in federal income tax consequences different
from those discussed below.
As used herein, a "U.S. holder" is a beneficial owner of the notes that for
U.S. Federal income tax purposes is:
o a citizen or resident of the U.S.,
o a corporation (or an entity treated as a corporation) which is
organized under the laws of the U.S. or any political subdivision
thereof,
o an estate, the income of which is subject to U.S. federal income tax
without regard to its source, or
o a trust if a court within the U.S. is able to exercise primary
supervision over the administration of the trust and one or more U.S.
persons have the authority to control all substantial decisions of the
trust, or if the trust has made a valid election to be treated as a
United States person.
A Non-U.S. holder is a beneficial owner that is for U.S. federal income tax
purposes either a nonresident alien or a corporation, estate or trust that is
not a U.S. holder.
If a partnership holds the notes, the tax treatment of a partner will
generally depend upon the status of the partner and the activities of the
partnership. If you are a partner of a partnership holding the notes, you should
consult your tax advisors.
Exchange of Notes
Your exchange of an outstanding note for a registered note pursuant to the
exchange offer should not be a taxable event for U.S. federal income tax
purposes. Accordingly, you should have the same acquisition date, adjusted
basis, holding period, original issue discount, issue price, adjusted issue
price, stated redemption price at maturity, yield and accrual periods for a
registered note acquired pursuant to the exchange offer as you had for the
outstanding note immediately before the exchange. The tax consequences of
ownership and disposition of a registered note should be the same as the tax
consequences of the ownership and disposition of the outstanding note
surrendered in exchange for it.
Accordingly, in the following discussion, the U.S. federal income tax
consequences with respect to a registered note assume that the registered note
is treated, for U.S. federal income tax purposes, as the same note as the
outstanding note for which it was issued and that the registered note has the
same acquisition date, adjusted basis, holding period, original issue discount,
issue price, adjusted issue price, stated redemption price at maturity, yield
and accrual periods as the outstanding note had in your hands immediately before
the exchange, and that
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any amounts that accrue or are paid or payable on an outstanding note are
treated as accruing or as paid or payable on the registered note.
U.S. Holders
The following is a summary of the material U.S. federal tax consequences
that will apply to you if you are a U.S. holder of the notes. Material
consequences to Non-U.S. holders of the notes are described under "Non-U.S.
Holders" below.
Payments of Interest
Except as set forth below, payments of stated interest and additional
interest, if any, on a note will generally be taxable to a U.S. holder as
ordinary income at the time it is paid or accrued, depending on the U.S.
holder's method of accounting for tax purposes.
Sale, Exchange and Retirement of Notes
Upon a sale, exchange (other than an exchange of notes for registered
notes) or retirement of a note, a U.S. holder generally will recognize gain or
loss equal to the difference between the amount received upon the sale, exchange
or retirement (less any amount attributable to accrued interest which will be
taxable as ordinary income, if not previously taken into income) and the
holder's tax basis in the note at that time.
Gain or loss, gain or loss realized on the sale, exchange or retirement of
a note will be capital gain or loss and will be long-term capital gain or loss
if at the time of sale, exchange or retirement the note has been held for more
than one year. Under current law, long-term capital gains of certain
non-corporate holders are generally taxed at lower rates than items of ordinary
income. The use of capital losses is subject to limitations.
Non-U.S. Holders
The following is a summary of the material U.S. federal tax consequences
that will apply to you if you are a Non-U.S. holder of the notes. This summary
does not present a detailed description of the U.S. federal tax consequences to
you in light of your particular circumstances. In addition, it does not deal
with Non-U.S. holders subject to special treatment under U.S. federal tax laws
(including if you are a controlled foreign corporation, a passive foreign
investment company, a foreign personal holding company, a corporation that
accumulates earnings to avoid U.S. federal income tax, or, in certain
circumstances, a United States expatriate).
Under present U.S. federal income tax law and subject to the discussion of
information reporting and backup withholding below, payments of interest on the
notes to or on behalf of any Non-U.S. holder who is not engaged in a trade or
business within the U.S. with which interest on the notes is effectively
connected will not be subject to U.S. federal income or withholding tax,
provided that
o such beneficial owner does not actually or constructively own ten
percent or more of the total combined voting power of all classes of
our voting stock within the meaning of the Code and applicable U.S.
Treasury regulations,
o such beneficial owner is not a controlled foreign corporation for U.S.
federal income tax purposes (generally, a foreign corporation
controlled by U.S. shareholders) that is related to us through stock
ownership, and
o certain certification requirements are met.
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A Non-U.S. holder will not be exempt from U.S. withholding tax, however, if
the withholding agent or intermediary knows or has reason to know the Non-U.S.
holder should not be exempt. If a Non-U.S. holder does not qualify for the
foregoing exemption, interest payments to the Non-U.S. holder generally will be
subject to a 30% withholding tax (unless reduced or eliminated by an applicable
treaty and certain certification requirements are met).
Any capital gain realized upon a sale, exchange or retirement of a note by
or on behalf of a Non-U.S. holder ordinarily will not be subject to a U.S.
federal withholding or income tax unless (i) such gain is effectively connected
with a U.S. trade or business of the holder or (ii) in the case of an
individual, such beneficial owner is present in the U.S. for 183 days or more
during the taxable year of the sale, exchange or retirement and certain other
requirements are met. As noted above, an exchange of a note for an exchange note
pursuant to the registered offer will not constitute a taxable exchange.
If interest and other payments received by a Non-U.S. holder with respect
to the notes (including proceeds from the disposition of the notes) are
effectively connected with the conduct by the Non-U.S. holder of a trade or
business within the U.S. (or the Non-U.S. holder is otherwise subject to U.S.
federal income taxation on a net basis with respect to such holder's ownership
of the notes), such Non-U.S. holder will generally not be subject to withholding
tax (provided certain certification requirements are met), but instead will
generally be subject to the rules described above for a U.S. holder (subject to
any modification provided under an applicable income tax treaty). Such Non-U.S.
holder may also be subject to the "branch profits tax" if such Non-U.S. holder
is a corporation.
Information Reporting and Backup Withholding
In general, information reporting requirement will apply to payments of
principal, premium, if any, and interest on a note and the proceeds of the sale
of a note with respect to U.S. holders. Backup withholding at a rate of 30%
(subject to periodic reductions through 2006) will apply to such payments if a
U.S. holder fails to provide a taxpayer identification number to certify that
such U.S. holder is not subject to backup withholding, or otherwise to comply
with the applicable requirements of the backup withholding rules. Certain U.S.
holders (including, among others, corporations) are not subject to the backup
withholding and reporting requirements.
We must report annually to the IRS and to each Non-U.S. holder on Form
1042-S the amount of interest paid on a note, regardless of whether withholding
was required, and any tax withheld with respect to the interest. Under the
provisions of an income tax treaty and other applicable agreements, copies of
these information returns may be made available to the tax authorities of the
country in which the Non-U.S. holder resides.
Backup withholding generally will not apply to payments made by us or our
paying agent to a Non-U.S. holder of a note who provides the requisite
certification (on an IRS form W-8BEN or other applicable form) or otherwise
establishes that it qualifies for an exemption from backup withholding. Payments
of the proceeds of a disposition of the notes by or through a U.S. office of a
broker generally will be subject to backup withholding and information reporting
unless the Non-U.S. holder certifies that it is a Non-U.S. holder under
penalties of perjury or otherwise establishes that it qualifies for an
exemption. Payments of principal or premium or the proceeds of a disposition of
the notes by or through a foreign office of a U.S. broker or foreign broker with
certain relationships to the United States generally will be subject to
information reporting, but not backup withholding, unless such broker has
documentary evidence in its records that the holder is a Non-U.S. holder and
certain other conditions are met, or the exemption is otherwise established.
Backup withholding is not an additional tax; any amounts withheld under the
backup withholding rules will be allowed as a refund or a credit against such
holder's U.S. federal income tax liability provided the required information is
furnished to the IRS.
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THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF U.S. FEDERAL INCOME
TAXATION THAT MAY BE RELEVANT TO A PARTICULAR HOLDER IN LIGHT OF ITS PARTICULAR
CIRCUMSTANCES AND TAX SITUATION. EACH POTENTIAL INVESTOR SHOULD CONSULT SUCH
HOLDER'S TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO SUCH HOLDER OF THE
OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE APPLICATION AND EFFECT OF
STATE, LOCAL, FOREIGN, AND OTHER TAX LAWS OR SUBSEQUENT VERSIONS THEREOF.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of exchange notes received in
exchange for outstanding notes where such outstanding notes were acquired by
such brokerdealer as a result of market-making activities or other trading
activities. We have agreed that for a period of 180 days after effectiveness of
the exchange offer registration statement, we will make this prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale.
We will not receive any proceeds from any sale of exchange notes by
broker-dealers. Exchange notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the exchange notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such exchange notes. Any
broker-dealer that resells exchange notes that were received by it for its own
account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such exchange notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of exchange notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The letter of transmittal states that, by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act. By
acceptance of the exchange offer, each broker-dealer that receives exchange
notes pursuant to the exchange offer hereby agrees to notify us prior to using
this prospectus in connection with the sale or transfer of exchange notes, and
acknowledges and agrees that, upon receipt of notice from us of the happening of
any event which makes any statement in this prospectus untrue in any material
respect or which requires the making of any changes in this prospectus in order
to make the statements herein not misleading (which notice we agree to deliver
promptly to such broker-dealer), such broker-dealer will suspend use of this
prospectus until we have amended or supplemented the prospectus to correct such
misstatement or omission and have furnished copies of the amended or
supplemented prospectus to such broker-dealer.
For a period of 30 days after effectiveness of the exchange offer
registration statement, we will promptly upon request send additional copies of
this prospectus and any amendment or supplement thereto to any broker-dealer
that requests such documents in the letter of transmittal. We have agreed to pay
all expenses incident to the exchange offer (including the expenses of any one
special counsel for the Holders of the Notes) other than taxes you may incur in
connection with the exchange offer and commissions or concessions of any brokers
or dealers and will indemnify the Holders of the Notes participating in the
exchange offer (including any brokerdealers) against certain liabilities,
including liabilities under the Securities Act.
LEGAL MATTERS
Certain legal matters will be passed upon for us by Cahill Gordon &
Reindel, New York, New York.
EXPERTS
The consolidated financial statements of C&A Corporation and its
subsidiaries for the year ended December 31, 2001, incorporated in this
prospectus by reference to the Annual Report on Form 10-K for the year ended
December 31, 2001, have been so incorporated in
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reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
The consolidated financial statements of Collins & Aikman Corporation and
its subsidiaries for the years ended December 31, 2000 and December 25, 1999,
included in the Annual Report on Form 10-K for the year ended December 31, 2001
and incorporated by reference into this prospectus, to the extent and for the
periods indicated in their report, have been audited by Arthur Andersen LLP,
independent public accountants, and are included herein upon the authority of
said firm as experts in giving said report.
The combined financial statements of TAC-Trim, included in the Current
Report on Form 8-K filed on January 4, 2002 (as amended on January 14, 2002) and
incorporated by reference into this prospectus, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in auditing and accounting, to the extent and
for the periods indicated in their report with respect to such financial
statements.
The combined financial statements of Becker, included in the Current Report
on Form 8-K filed on April 17, 2001 and incorporated by reference into this
prospectus, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
auditing and accounting, to the extent and for the periods indicated in their
report with respect to such financial statements.
The combined financial statements of Joan, included in the Current Report
on Form 8-K filed on October 10, 2001 incorporated by reference into this
prospectus, have been audited by KPMG LLP, independent auditors, given on the
authority of said firm as experts in auditing and accounting, to the extent and
for the periods indicated in their report with respect to such financial
statements.
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$500,000,000
COLLINS & AIKMAN PRODUCTS CO.
Exchange Offer for $500,000,000 Aggregate Principal Amount
of 10-3/4% Senior Subordinated Notes due 2011
--------------
PROSPECTUS
--------------
, 2002
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We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You must not
rely on unauthorized information. This prospectus is not an offer to sell or buy
any securities in any jurisdiction where it is unlawful. The information in this
prospectus is current as of , 2002.
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================================================================================
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL") makes
provision for the indemnification of officers and directors of corporations in
terms sufficiently broad to indemnify the officers and directors of the
registrant under certain circumstances for liabilities (including reimbursement
of expenses incurred) arising under the Securities Act.
The Company's Restated Certificate of Incorporation (the "Certificate")
provides that to the fullest extent permitted by Delaware law or another
applicable law, a director of the Company shall not be liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director. Under current Delaware law, liability of a director may not be limited
(i) for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or repurchases and (iv)
for any transaction from which the director derives an improper personal
benefit. The effect of the provision of the Certificate is to eliminate the
rights of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of the fiduciary duty of care as a director (including breaches
resulting from negligent or grossly negligent behavior) except in the situations
described in clauses (i) through (iv) above. This provision does not limit or
eliminate the rights of the Company or any stockholder to seek nonmonetary
relief such as an injunction or rescission in the event of a breach of a
director's duty of care. In addition, the Company's Restated Bylaws (the
"Bylaws") provide that the Company shall indemnify its directors, officers and
employees to the fullest extent permitted by applicable law.
The Bylaws provide that the Company may indemnify any person who is or was
involved in any manner or is threatened to be made so involved in any
threatened, pending or completed investigation, claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
any action, suit or proceeding by or in the right of the registrant to procure a
judgment in its town), by reason of the fact that he is or was or had agreed to
become a director, officer or employee of the registrant or is or was or had
agreed to become at the request of the board or an officer of the registrant a
director, officer or employee of another corporation, partnership, joint
venture, trust or other entity against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such Proceeding.
II-1
ITEM 21. EXHIBITS AND FINANCIAL STATEMENTS INDEX.
See Exhibit Index immediately preceding the Exhibits.
ITEM 22. UNDERTAKINGS.
The undersigned Registrants hereby undertake that:
(a) 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 that is
incorporated by reference in this 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 offering thereof.
(b) To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Securities Exchange Act of 1934; and, where interim
financial information required to be presented by Article 3 of Regulation
S-X are not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the
latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(c) 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 Securities 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 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.
(d) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This undertaking includes information contained in documents filed
subsequent to the effective date of this registration statement through the
date of responding to the request.
(e) To supply by means of a post-effective amendment all information
concerning a transaction and the company being acquired involved therein,
that was not the subject of and included in this registration statement
when it became effective.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on the 16th day of April, 2002.
COLLINS & AIKMAN PRODUCTS CO.
By: /s/ Thomas E. Evans
-----------------------------------------------
Name: Thomas E. Evans
Title: Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Thomas E. Evans or, failing him, Ronald T. Lindsay and each acting alone, his
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Thomas E. Evans Chairman of the Board and Chief April 16, 2002
---------------------------------- Executive Officer (Principal Executive
Thomas E. Evans Officer)
/s/ J. Michael Stepp Interim Chief Financial Officer and April 16, 2002
---------------------------------- Director (Principal Financial Officer)
J. Michael Stepp
/s/ James L. Murawski Vice President, Finance and Controller April 16, 2002
---------------------------------- (Principal Accounting Officer)
James L. Murawski
/s/ Samuel Valenti Director April 12, 2002
----------------------------------
Samuel Valenti
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on the 16th day of April, 2002.
COLLINS & AIKMAN CORPORATION
By: /s/ Thomas E. Evans
------------------------------------------------
Name: Thomas E. Evans
Title: Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Thomas E. Evans or, failing him, Ronald T. Lindsay and each acting alone, his
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement of Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Thomas E. Evans Chairman of the Board and Chief April 16, 2002
---------------------------------- Executive Officer (Principal Executive
Thomas E. Evans Officer)
/s/ J. Michael Stepp Interim Chief Financial Officer and April 16, 2002
---------------------------------- Director (Principal Financial Officer)
J. Michael Stepp
/s/ James L. Murawski Vice President, Finance and Controller April 16, 2002
---------------------------------- (Principal Accounting Officer)
James L. Murawski
/s/ Charles E. Becker Vice Chairman of the Board April 16, 2002
----------------------------------
Charles E. Becker
/s/ Robert C. Clark Director April 16, 2002
----------------------------------
Robert C. Clark
/s/ Marshall A. Cohen Director April 16, 2002
----------------------------------
Marshall A. Cohen
/s/ Cynthia Hess Director April 15, 2002
----------------------------------
Cynthia Hess
/s/ Timothy D. Leuliette Director April 17, 2002
----------------------------------
Timothy D. Leuliette
/s/ Elkin McCallum Director April 12, 2002
----------------------------------
Elkin McCallum
/s/ W. Gerald McConnell Director April 16, 2002
----------------------------------
W. Gerald McConnell
/s/ Warren B. Rudman Director April 12, 2002
----------------------------------
Warren B. Rudman
/s/ David A. Stockman Director April 16, 2002
----------------------------------
David A. Stockman
/s/ Daniel P. Tredwell Director April 16, 2002
----------------------------------
Daniel P. Tredwell
/s/ Samuel Valenti Director April 12, 2002
----------------------------------
Samuel Valenti
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on the 16th day of April 2002.
AKRO MATS, LLC
COLLINS & AIKMAN AUTOMOTIVE MATS, LLC
By: /s/ Thomas E. Evans
--------------------------------------------
Name: Thomas E. Evans
Title: Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas E.
Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Thomas E. Evans Chief Executive Officer April 16, 2002
---------------------------------- (Principal Executive Officer)
Thomas E. Evans
/s/ J. Michael Stepp Executive Vice President and Chief April 16, 2002
---------------------------------- Financial Officer
J. Michael Stepp (Principal Financial Officer and
Principal Accounting Officer)
/s/ Michael Geaghan Manager April 15, 2002
- ------------------------------------
Michael Geaghan
/s/ Millard King Manager April 16, 2002
- ------------------------------------
Millard King
/s/ Jeffrey Kies Manager April 16, 2002
- ------------------------------------
Jeffrey Kies
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on the 16th day of April 2002.
AMCO CONVERTIBLE FABRICS, INC.
DURA CONVERTIBLE SYSTEMS, INC.
By: /s/ Thomas E. Evans
---------------------------------------------
Name: Thomas E. Evans
Title: Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas E.
Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Thomas E. Evans Chief Executive Officer April 16, 2002
- ------------------------------------ (Principal Executive Officer)
Thomas E. Evans
/s/ J. Michael Stepp Executive Vice President and Chief April 16, 2002
- ------------------------------------ Financial Officer
J. Michael Stepp (Principal Financial Officer)
/s/ Jeffrey Johnson Controller April 16, 2002
- ------------------------------------
Jeffrey Johnson
/s/ Thomas E. Evans Director April 15, 2002
- ------------------------------------
Thomas E. Evans
/s/ Ronald T. Lindsay Director April 16, 2002
- ------------------------------------
Ronald T. Lindsay
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on the 15th day of April 2002.
BECKER GROUP, LLC
By: /s/ Lou Gasperut
-------------------------------------------
Name: Lou Gasperut
Title: President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas E.
Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Lou Gasperut President April 15, 2002
- ------------------------------------ (Principal Executive Officer)
Lou Gasperut
/s/ James Babiasz Controller April 15, 2002
- ------------------------------------ (Principal Financial Officer)
James Babiasz
/s/ Ronald T. Lindsay April 16, 2002
- ------------------------------------
Ronald T. Lindsay Managing Director
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on the 15th day of April 2002.
BRUT PLASTICS, INC.
By: /s/ Lou Gasperut
--------------------------------------------
Name: Lou Gasperut
Title: President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas E.
Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Lou Gasperut President April 15, 2002
- ------------------------------------ (Principal Executive Officer)
Lou Gasperut
/s/ James Babiasz Controller April 15, 2002
- ------------------------------------ (Principal Financial Officer)
James Babiasz
/s/ Lou Gasperut Director April 16, 2002
- ------------------------------------
Lou Gasperut
/s/ Ronald T. Lindsay Director April 16, 2002
- ------------------------------------
Ronald T. Lindsay
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of New York,
State of New York, on the 16th day of April 2002.
COLLINS & AIKMAN ACCESSORY MATS, INC.
By: /s/ Thomas E. Evans
---------------------------------------
Name: Thomas E. Evans
Title: Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas
E. Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Thomas E. Evans Chief Executive Officer April 16, 2002
- ------------------------------------ (Principal Executive Officer)
Thomas E. Evans
/s/ J. Michael Stepp Executive Vice President and Chief April 16, 2002
- ------------------------------------ Financial Officer
J. Michael Stepp (Principal Financial Officer and
Principal Accounting Officer)
/s/ Michael Geaghan Director April 15, 2002
- ------------------------------------
Michael Geaghan
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement t+o be signed on its
behalf by the undersigned, thereunto duly authorized in the City of New York,
State of New York, on the 16th day of April 2002.
COLLINS & AIKMAN ADVANCED PROCESSES, INC.
COLLINS & AIKMAN AUTOMOTIVE INTERNATIONAL, INC.
COLLINS & AIKMAN CANADA DOMESTIC HOLDING COMPANY
COLLINS & AIKMAN DEVELOPMENT COMPANY
COLLINS & AIKMAN EUROPE, INC.
COLLINS & AIKMAN INTERIORS, INC.
By: /s/ Thomas E. Evans
------------------------------------------------------
Name: Thomas E. Evans
Title: Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas
E. Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Thomas E. Evans Chief Executive Officer April 16, 2002
- ------------------------------------ (Principal Executive Officer)
Thomas E. Evans
/s/ J. Michael Stepp Chief Financial Officer April 16, 2002
- ------------------------------------ (Principal Financial Officer)
J. Michael Stepp
/s/ James L. Murawski Controller April 16, 2002
- ------------------------------------
James L. Murawski
/s/ Thomas E. Evans Director April 16, 2002
- ------------------------------------
Thomas E. Evans
/s/ Ronald T. Lindsay Director April 16, 2002
- ------------------------------------
Ronald T. Lindsay
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of New York,
State of New York, on the 16th day of April 2002.
COLLINS & AIKMAN ASSET SERVICES, INC.
By: /s/ Ronald T. Lindsay
--------------------------------------------------
Name: Ronald T. Lindsay
Title: Senior Vice President, General Counsel and
Secretary
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas
E. Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Ronald T. Lindsay Senior, Vice President, General Counsel April 16, 2002
- ------------------------------------ and Secretary
Ronald T. Lindsay (Principal Executive Officer)
/s/ James L. Murawski Controller April 16, 2002
- ------------------------------------ (Principal Financial Officer)
James L. Murawski
/s/ Ronald T. Lindsay Director April 16, 2002
- ------------------------------------
Ronald T. Lindsay
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of New York,
State of New York, on the 16thday of April 2002.
COLLINS & AIKMAN CARPET & ACOUSTICS (MI), INC.
COLLINS & AIKMAN CARPET & ACOUSTICS (TN), INC.
By: /s/ Thomas E. Evans
--------------------------------------------------
Name: Thomas E. Evans
Title: Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas
E. Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Thomas E. Evans Chief Executive Officer April 16, 2002
- ------------------------------------ (Principal Executive Officer)
Thomas E. Evans
/s/ J. Michael Stepp Executive Vice President and Chief April 16, 2002
- ------------------------------------ Financial Officer
J. Michael Stepp (Principal Financial Officer and
Principal Accounting Officer)
/s/ Thomas E. Evans Director April 16, 2002
- ------------------------------------
Thomas E. Evans
/s/ Ronald T. Lindsay Director April 16, 2002
- ------------------------------------
Ronald T. Lindsay
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of New York,
State of New York, on the 15th day of April 2002.
COLLINS & AIKMAN FABRICS, INC.
By: /s/ Gerald Jones
-------------------------------------------------
Name: Gerald Jones
Title: President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas
E. Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Gerald Jones President April 15, 2002
- ------------------------------------ (Principal Executive Officer)
Gerald Jones
/s/ James L. Murawski Vice President of Finance April 16, 2002
- ------------------------------------ (Principal Financial Officer)
James L. Murawski
/s/ Robert J. Cardin Controller April 15, 2002
- ------------------------------------
Robert J. Cardin
/s/ Gerald Jones Director April 15, 2002
- ------------------------------------
Gerald Jones
/s/ Thomas E. Evans Director April 16, 2002
- ------------------------------------
Thomas E. Evans
/s/ James L. Murawski Director April 16, 2002
- ------------------------------------
James L. Murawski
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of New York,
State of New York, on the 16th day of April 2002.
COLLINS & AIKMAN PLASTICS, INC.
By: /s/ Thomas E. Evans
--------------------------------------------------
Name: Thomas E. Evans
Title: Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas
E. Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Thomas E. Evans Chief Executive Officer April 16, 2002
- ------------------------------------ (Principal Executive Officer)
Thomas E. Evans
/s/ J. Michael Stepp Executive Vice President and Chief April 16, 2002
- ------------------------------------ Financial Officer
J. Michael Stepp (Principal Financial Officer and
Principal Accounting Officer)
/s/ Thomas E. Evans Director April 16, 2002
- ------------------------------------
Thomas E. Evans
/s/ Ronald T. Lindsay Director April 16, 2002
- ------------------------------------
Ronald T. Lindsay
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of New York,
State of New York, on the 16th day of April 2002.
COMET ACOUSTICS, INC.
By: /s/ Graham Tompson
-----------------------------------------
Name: Graham Tompson
Title: President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas
E. Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Graham Tompson President April 16, 2002
- ------------------------------------ (Principal Executive Officer)
Graham Tompson
/s/ James L. Murawski Vice President of Finance and Corporate April 16, 2002
- ------------------------------------ Controller
James L. Murawski (Principal Financial Officer)
/s/ Kenneth J. Arndorfer Director April 16, 2002
- ------------------------------------
Kenneth J. Arndorfer
/s/ James L. Murawski Director April 16, 2002
- ------------------------------------
James L. Murawski
/s/ Graham Tompson Director April 16, 2002
- ------------------------------------
Graham Tompson
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of New York,
State of New York, on the 16th day of April 2002.
JPS AUTOMOTIVE, INC.
By: /s/ Thomas E. Evans
-----------------------------------------------
Name: Thomas E. Evans
Title: Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas
E. Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Thomas E. Evans Chief Executive Officer April 16, 2002
- ------------------------------------ (Principal Executive Officer)
Thomas E. Evans
/s/ J. Michael Stepp Executive Vice President and April 16, 2002
- ------------------------------------ Chief Financial Officer
J. Michael Stepp (Principal Financial Officer)
/s/ James L. Murawski Controller April 16, 2002
- ------------------------------------
James L. Murawski
/s/ Ronald T. Lindsay Director April 16, 2002
- ------------------------------------
Ronald T. Lindsay
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of New York,
State of New York, on the 16th day of April 2002.
COLLINS & AIKMAN INTERNATIONAL CORPORATION
By: /s/ Monte L. Miller
---------------------------------------------------
Name: Monte L. Miller
Title: President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas
E. Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Monte L. Miller President April 16, 2002
- ------------------------------------ (Principal Executive Officer)
Monte L. Miller
/s/ James L. Murawski Vice President of Finance April 16, 2002
- ------------------------------------ (Principal Financial Officer and
James L. Murawski Principal Account Officer)
/s/ Monte L. Miller Director April 16, 2002
- ------------------------------------
Monte L. Miller
/s/ James L. Murawski Director April 16, 2002
- ------------------------------------
James L. Murawski
/s/ Robert S. Fenton Director April 16, 2002
- ------------------------------------
Robert S. Fenton
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of New York,
State of New York, on the 16th day of April 2002.
COLLINS & AIKMAN PROPERTIES, INC.
By: /s/ Monte L. Miller
----------------------------------------------------
Name: Monte L. Miller
Title: President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas
E. Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Fornm S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Monte L. Miller President April 16, 2002
- ------------------------------------ (Principal Executive Officer)
Monte L. Miller
/s/ James L. Murawski Vice President of Finance April 16, 2002
- ------------------------------------ (Principal Financial Officer and
James L. Murawski Principal Accounting Officer)
/s/ Monte L. Miller Director April 16, 2002
- ------------------------------------
Monte L. Miller
/s/ James L. Murawski Director April 16, 2002
- ------------------------------------
James L. Murawski
/s/ Robert S. Fenton Director April 16, 2002
- ------------------------------------
Robert S. Fenton
/s/ Jonathan L. Peisner Director April 17, 2002
- ------------------------------------
Jonathan L. Peisner
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of New York,
State of New York, on the 16th day of April 2002.
GAMBLE DEVELOPMENT COMPANY
WICKES ASSET MANAGEMENT, INC.
WICKES MANUFACTURING COMPANY
By: /s/ Thomas E. Evans
--------------------------------------------------
Name: Thomas E. Evans
Title: President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas
E. Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Thomas E. Evans President and Chief Executive Officer April 16, 2002
- ------------------------------------ (Principal Executive Officer)
Thomas E. Evans
/s/ J. Michael Stepp Executive Vice President and April 16, 2002
- ------------------------------------ Chief Financial Officer
J. Michael Stepp (Principal Financial Officer)
/s/ James L. Murawski Controller April 16, 2002
- ------------------------------------
James L. Murawski
/s/ Eugene A. White Director April 16, 2002
- ------------------------------------
Eugene A. White
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of New York,
State of New York, on the 16th day of April 2002.
M&C ADVANCED PROCESSES, INC.
TEXTRON AUTOMOTIVE EXTERIORS INC.
TEXTRON AUTOMOTIVE (ASIA) INC.
TEXTRON AUTOMOTIVE (ARGENTINA) INC.
TEXTRON AUTOMOTIVE INTERIORS INC.
TEXTRON AUTOMOTIVE OVERSEAS INVESTMENT INC.
TEXTRON AUTOMOTIVE INTERNATIONAL SERVICES INC.
TEXTRON PROPERTIES INC.
By: /s/ Thomas E. Evans
-----------------------------------------------------
Name: Thomas E. Evans
Title: Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and Thomas
E. Evans and Ronald T. Lindsay, and each acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments or supplements to this Registration
Statement on Form S-4 and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with this Registration Statement and any amendments or supplements hereto, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully 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/ Thomas E. Evans Chief Executive Officer April 16, 2002
- ------------------------------------ (Principal Executive Officer)
Thomas E. Evans
/s/ J. Michael Stepp Executive Vice President and April 16, 2002
- ------------------------------------ Chief Financial Officer
J. Michael Stepp (Principal Financial Officer)
/s/ James L. Murawski Controller April 16, 2002
- ------------------------------------
James L. Murawski
/s/ Thomas E. Evans Director April 16, 2002
- ------------------------------------
Thomas E. Evans
/s/ Ronald T. Lindsay Director April 16, 2002
- ------------------------------------
Ronald T. Lindsay
/s/ J. Michael Stepp Director April 16, 2002
- ------------------------------------
J. Michael Stepp
EXHIBITS
Please note that in the following description of exhibits, the title of
any document entered into, or filing made, prior to July 7, 1994 reflects the
name of the entity, a party thereto or filing, as the case may be, at such time.
Accordingly, documents and filings described below may refer to Collins & Aikman
Holdings Corporation, Collins & Aikman Group, Inc. or Wickes Companies, Inc., if
such documents and filings were made prior to July 7, 1994.
Exhibit
Number Description
2.1 Agreement and Plan of Merger dated May 14, 2001 by and among Collins &
Aikman Corporation, Collins & Aikman Products Co., Becker Group, L.L.C., CE
Becker Inc., ME McInerney Inc., J Hoehnel Inc. and the individuals party
thereto as sellers is hereby incorporated by reference to Exhibit 2.1 of
Collins & Aikman Corporation's Current Report on Form 8-K dated July 13,
2001.
2.2 Agreement and Plan of Merger dated as of August 17, 2001 by and among
Collins & Aikman Corporation, Collins & Aikman Products Co., JAII
Acquisition Co., Elkin McCallum, Joan Fabrics Corporation and Joan
Automotive Industries, Inc is hereby incorporated by reference to Exhibit
2.1 of Collins & Aikman Corporation's Current Report on Form 8-K dated
September 21, 2001.
2.3 First Amendment to Agreement and Plan of Merger by and among Collins &
Aikman Corporation, Collins & Aikman Products Co., JAII Acquisition Co.,
Elkin McCallum, Joan Fabrics Corporation and Joan Automotive Industries,
Inc dated as of September 21, 2001 is hereby incorporated by reference to
Exhibit 2.2 of Collins & Aikman Corporation's Current Report on Form 8-K
dated September 21, 2001.
2.4 Purchase Agreement dated as of August 7, 2001, as amended and restated as
of November 30, 2001, by and among Textron Inc., Collins & Aikman
Corporation and Collins & Aikman Products Co., including Exhibit 1
(Certificate of Designation of the 15% Series A Redeemable Preferred Stock,
the 16% Series B Redeemable Preferred Stock and the 16% Series C Redeemable
Preferred Stock) and Exhibit 7 (Asset Purchase Agreement dated as of August
7 by and between Textron Automotive Exteriors Inc. and JPS Automotive,
Inc.), which is incorporated by reference to Collins and Aikman Corporation
Current Report on Form 8-k dated December 20, 2001 and filed on January 4,
2002. The Table of Contents of the Purchase Agreement listed as Exhibit 2.4
contains a list briefly identifying the contents of all omitted schedules
and exhibits. Collins & Aikman Corporation will supplementally furnish a
copy of any omitted schedule or Exhibit to the Commission upon request.
2.5 Asset Purchase Agreement dated as of August 7, 2001, as amended and
restated as of November 30, 2001, by and between Textron Automotive
Exteriors Inc. and JPS Automotive, Inc., which is incorporated herein by
reference to Exhibit 2.2 of Collins & Aikman Corporation's Current Report
on Form 8-K dated December 20, 2001 and filed on January 4, 2002.
2.6 Asset Purchase Agreement dated as of August 17, 2001 by and among Collins &
Aikman Products Co., Western Avenue Dyers, L.P., Elkin McCallum, Kerry
McCallum, Penny Richards and Tyng Textiles LLC, which is incorporated by
reference to Exhibit 2.3 to Collins & Aikman Corporation's Current Report
on Form 8-K filed on October 4, 2001.
Exhibit
Number Description
2.7 First Amendment to Asset Purchase Agreement dated as of September 21, 2001,
which is incorporated by reference to Exhibit 2.4 to Collins & Aikman
Corporation's Current Report on Form 8-K filed on October 4, 2001.
3.1 Restated Certificate of Incorporation of Collins & Aikman Corporation is
hereby incorporated by reference to Exhibit 3.1 of Collins & Aikman
Corporation's Report on Form 10-Q for the fiscal quarter ended June 26,
1999.
3.2 Certificate of Amendment to the Restated Certificate of Incorporation of
Collins & Aikman Corporation, which is incorporated by reference to Exhibit
3.2 of Collins & Aikman Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 2000.
3.3 By-laws of Collins & Aikman Corporation, as amended, are hereby
incorporated by reference to Exhibit 3.2 of Collins & Aikman Corporation's
Report on Form 10-K for the fiscal year ended January 27, 1996.
3.4 Certificate of Elimination of Cumulative Exchangeable Redeemable Preferred
Stock of Collins & Aikman Corporation is hereby incorporated by reference
to Exhibit 3.3 of Collins & Aikman Corporation's Report on Form 10-Q for
the fiscal quarter ended October 28, 1995.
4.1 Specimen Stock Certificate for the Common Stock is hereby incorporated by
reference to Exhibit 4.3 of Amendment No. 3 to Collins & Aikman Holdings
Corporation's Registration Statement on Form S-2 (Registration No.
33-53179) filed June 21, 1994.
4.2 Indenture, dated as of June 1, 1996, between Collins & Aikman Products Co.,
Collins & Aikman Corporation and First Union National Bank of North
Carolina, as Trustee, is hereby incorporated by reference to Exhibit 4.2 of
Collins & Aikman Corporation's Report on Form 10-Q for the fiscal quarter
ended April 27, 1996.
4.3 First Supplemental Indenture dated as of June 1, 1996, between Collins &
Aikman Products Co., Collins & Aikman Corporation and First Union National
Bank of North Carolina, as Trustee, is hereby incorporated by reference to
Exhibit 4.3 of Collins & Aikman Corporation's Report on Form 10-Q for the
fiscal quarter ended April 27, 1996.
4.4 Waiver dated as of October 27, 1998 under the Credit Agreement dated as of
May 28, 1998, among Collins & Aikman Products Co., Collins & Aikman Canada,
Inc. and Collins & Aikman Plastics, Ltd., as Canadian Borrowers, Collins &
Aikman Corporation, as Guarantor, the Lender Parties thereto, Bank of
America, N.T.S.A., as Documentation Agent, The Chase Manhattan Bank, as
Administrative Agent, and The Chase Manhattan Bank of Canada, as Canadian
Administrative Agent is hereby incorporated by reference to Exhibit 4.5 of
Collins & Aikman Corporation's Report on Form 10-Q for the fiscal quarter
ended September 26, 1998.
4.5 Waiver dated as of December 22, 1998 under the Credit Agreement dated as of
May 28, 1998, among Collins & Aikman Products Co., Collins & Aikman Canada,
Inc. and Collins & Aikman Corporation, as Guarantor, the Lender Parties
thereto, Bank of America, N.T.S.A., as Documentation Agent, The Chase
Manhattan Bank, as Administrative Agent, and The Chase Manhattan Bank of
Canada, as Canadian Administrative Agent is hereby incorporated by
reference to Exhibit 4.6 of Collins & Aikman Corporation's Report on Form
10-K for the year
Exhibit
Number Description
ended December 26, 1998.
4.6 Amendment and Waiver dated as of March 8, 1999, among Collins & Aikman
Products Co., Collins & Aikman Canada, Inc., Collins & Aikman Plastics
Ltd., Collins & Aikman Corporation, as Guarantor, the Lender Parties
thereto, Bank of America N.T.S.A., as Documentation Agent, The Chase
Manhattan Bank, as Administrative Agent, and The Chase Manhattan Bank of
Canada, as Canadian Administrative Agent is hereby incorporated by
reference to Exhibit 4.7 of Collins & Aikman Corporation's Report on Form
10-K for the year ended December 26, 1998.
4.7 Tranche C Term Loan Supplement dated as of May 12, 1999 to the Credit
Agreement dated as of May 28, 1998 among Collins & Aikman Products Co.,
Collins & Aikman Canada, Inc., Collins & Aikman Plastics, Ltd., Collins &
Aikman Corporation, the Financial Institutions parties thereto, Bank of
America N.T.S.A., as Documentation Agent, The Chase Manhattan Bank, as
Administrative Agent, and The Chase Manhattan Bank of Canada, as Canadian
Administrative Agent is hereby incorporated by reference to Exhibit 4.1 of
Collins & Aikman Corporation's Report on Form 10-Q for the fiscal quarter
ended June 26, 1999.
4.8 Indenture dated as of June 28, 1994, between JPS Automotive Products Corp.,
as Issuer, JPS Automotive L.P., as Guarantor and Shawmut Bank Connecticut,
N.A., as Trustee, is hereby incorporated by reference to Exhibit 4.2 of JPS
Automotive Corp.'s Registration Statement on Form S-1, Registration No.
33-75510.
4.9 First Supplemental Indenture, dated as of October 5, 1994, between JPS
Automotive Products Corp. and JPS Automotive L.P., as Co-Obligors, and
Shawmut Bank Connecticut, N.A., as Trustee is hereby incorporated by
reference to Exhibit 4.48A of JPS Automotive L.P.'s and JPS Automotive
Products Corp.'s Report on Form 10-Q for the fiscal quarter ended October
2, 1994.
4.10 Second Supplemental Indenture, dated as of February 8, 2001, by and among
Collins & Aikman Products Co., as Issuer, Collins & Aikman Corporation, as
Guarantor, and First Union National Bank, as Trustee, which is incorporated
by reference to Exhibit 4.11 of Collins & Aikman Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31, 2000.
4.11 Form of Warrant is hereby incorporated by reference to Exhibit 4.1 of
Collins & Aikman Corporation's Current Report on Form 8-K dated July 13,
2001.
4.12 Certificate of Designation of Series A Redeemable Preferred Stock, Series B
Redeemable Preferred Stock and Series C Redeemable Preferred Stock, which
is incorporated herein by reference to Exhibit 4.1 of Collins & Aikman
Corporation's Current Report of Form 8-K dated December 20, 2001 and filed
on January 4, 2002.
4.13 Indenture dated as of December 20, 2001 by and among Collins & Aikman
Products Co., as Issuer, the Guarantors parties thereto, and BNY Midwest
Trust Company, as Trustee, which is incorporated herein by reference to
Exhibit 4.2 of Collins & Aikman Corporation's Current Report on Form 8-K
dated December 20, 2001 and filed on January 4, 2002.
Exhibit
Number Description
4.14 Receivables Transfer Agreement dated as of December 20, 2001 by and among
Carcorp, Inc., as Transferor, Collins & Aikman Products Co., individually
and as Collection Agent, the persons parties thereto, as CP Conduit
Purchasers, Committed Purchasers and Funding Agents and JPMorgan Chase
Bank, as Administrative Agent, which is incorporated herein by reference to
Exhibit 4.3 of Collins & Aikman Corporation's Current Report on Form 8-K
dated December 20, 2001 and filed on January 4, 2002.
4.15 Amended and Restated Receivables Purchase Agreement dated as of December
20, 2001 among Collins & Aikman Products Co. and its wholly-owned direct
and indirect subsidiaries named therein, as Sellers, and Carcorp, Inc., as
Purchaser, and the other Sellers from time to time named therein, which is
incorporated herein by reference to Exhibit 4.4 of Collins & Aikman
Corporation's Current Report on Form 8-K dated December 20, 2001 and filed
on January 4, 2002.
4.16 Credit Agreement dated as of December 20, 2001 among Collins & Aikman
Products Co., as Borrower, Collins & Aikman Canada Inc., as a Canadian
Borrower, Collins & Aikman Plastics, Ltd., as a Canadian Borrower, Collins
& Aikman Corporation, the Lenders named therein, Deutsche Banc Alex. Brown
Inc. and Merrill Lynch Capital Corporation, as Co-Documentation Agents,
Credit Suisse First Boston Corporation, as Syndication Agent, JPMorgan
Chase Bank, as Administrative Agent, and J.P.Morgan Bank Canada, as
Canadian Administrative Agent, which is incorporated herein by reference to
Exhibit 4.5 of Collins & Aikman Corporation's Current Report on Form 8-K
dated December 20, 2001 and filed on January 4, 2002.
4.17 Guarantee and Collateral Agreement dated as of December 20, 2001 by and
among Collins & Aikman Corporation, Collins & Aikman Products Co. and
certain of their subsidiaries and JPMorgan Chase Bank, as Collateral Agent,
which is incorporated herein by reference to Exhibit 4.6 of Collins &
Aikman Corporation's Current Report on Form 8-K dated December 20, 2001 and
filed on January 4, 2002.
4.18 Third Supplemental Indenture, dated as of December 20, 2001, among Collins
& Aikman Products Co., Collins & Aikman Corporation, the Subsidiary
Guarantors listed on the signature page thereto, and First Union National
Bank (as successor in interest to First Union National Bank of North
Carolina), which is incorporated herein by reference to Exhibit 4.7 of
Collins & Aikman Corporation's Current Report on Form 8-K dated December
20, 2001 and filed on January 4, 2002.
5.1 Opinion of Cahill Gordon & Reindel.
10.89 Registration Rights Agreement, dated December 20, 2001, by and among
Collins & Aikman Products Co., Collins & Aikman Corporation, and each of
the subsidiaries listed on the signature pages thereof, and J.P. Morgan
Securities Inc., Credit Suisse First Boston Corporation, Deutsche Banc
Alex. Brown Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated and
the other several initial purchasers parties to the Purchase Agreement.
12.1 Statement regarding Computation of Earnings to Fixed Charges for Collins &
Aikman Products Co., incorporated by reference to Exhibit 12.3 to Collins &
Aikman Corporation's and Collins & Aikman Products Co.'s Registration
Statement on Form S-3 filed on April 17, 2002.
Exhibit
Number Description
23.1 Consent of Cahill Gordon & Reindel (included as part of Exhibit 5.1).
23.2* Consent of PricewaterhouseCoopers LLP, independent accountants.
23.3* Consent of Arthur Andersen LLP, independent accountants.
23.4* Consent of Ernst & Young LLP, independent accountants.
23.5* Consent of Ernst & Young LLP, independent accountants.
23.6* Consent of KPMG LLP, independent accountants.
24* Power of Attorney (set forth on the signature pages to this Registration
Statement).
25* Statement regarding eligibility of Trustee on Form T-1.
99.1** Form of Letter of Transmittal.
99.2** Form of Notice of Guaranteed Delivery.
- --------------------
* Filed Herewith
** To be filed by Amendment