-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GyqjBQey7OF0WTMKEAJBpnqF6vSLBNi4jU/wbZnijZe/h7alWWeCwo1tWBgXYkTh ZXxKv1TsxNbdRvQ7OP5XNg== 0000895345-00-000767.txt : 20001229 0000895345-00-000767.hdr.sgml : 20001229 ACCESSION NUMBER: 0000895345-00-000767 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 26 FILED AS OF DATE: 20001228 GROUP MEMBERS: GOLDMAN SACHS GROUP INC GROUP MEMBERS: GOLDMAN SACHS MANAGEMENT GP GMBH GROUP MEMBERS: GOLDMAN, SACHS & CO. GROUP MEMBERS: GOLDMAN, SACHS & CO. OHG GROUP MEMBERS: GS ADVISORS 2000, L.L.C. GROUP MEMBERS: GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P. GROUP MEMBERS: GS CAPITAL PARTNERS 2000 GMBH & CO. BETEILIGUNGS KG GROUP MEMBERS: GS CAPITAL PARTNERS 2000 OFFSHORE, L.P. GROUP MEMBERS: GS CAPITAL PARTNERS 2000, L.P. GROUP MEMBERS: GS EMPLOYEE FUNDS 2000, G.P., L.L.C. GROUP MEMBERS: LXH HOLDINGS CORP. GROUP MEMBERS: LXH HOLDINGS, L.P. GROUP MEMBERS: LXH II, L.L.C. GROUP MEMBERS: LXH, L.L.C. GROUP MEMBERS: STONE STREET 2000, L.L.C. GROUP MEMBERS: STONE STREET FUND 2000, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HEXCEL CORP /DE/ CENTRAL INDEX KEY: 0000717605 STANDARD INDUSTRIAL CLASSIFICATION: METAL FORGING & STAMPINGS [3460] IRS NUMBER: 941109521 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-14306 FILM NUMBER: 797329 BUSINESS ADDRESS: STREET 1: 281 TRESSER BLVD STREET 2: TWO STAMFORD PLZ CITY: STAMFORD STATE: CT ZIP: 06901 BUSINESS PHONE: 2039690666 MAIL ADDRESS: STREET 1: 281 TRESSER BLVD. STREET 2: TWO STAMFORD PLAZA, 16TH FLOOR CITY: STAMFORD STATE: CT ZIP: 06901-8781 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOLDMAN SACHS GROUP INC CENTRAL INDEX KEY: 0000886982 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 133501777 STATE OF INCORPORATION: DE FISCAL YEAR END: 1126 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 85 BROAD ST CITY: NEW YORK STATE: NY ZIP: 10004 BUSINESS PHONE: 2129021000 MAIL ADDRESS: STREET 1: 85 BROAD ST CITY: NEW YORK STATE: NY ZIP: 10004 SC 13D 1 0001.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934* Hexcel Corporation - --------------------------------------------------------------------------- (Name of Issuer) Common Stock (Par Value $ 0.01 Per Share) - --------------------------------------------------------------------------- (Title of Class of Securities) 428290 10 0 - --------------------------------------------------------------------------- (CUSIP Number) Robert C. Schwenkel, Esq. David J. Greenwald, Esq. Fried, Frank, Harris, Shriver & Jacobson Goldman, Sachs & Co. One New York Plaza 85 Broad Street New York, NY 10004 New York, NY 10004 (212) 859-8000 (212) 902-1000 - --------------------------------------------------------------------------- (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications) December 19, 2000 - --------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. *The remainder of this cover page will be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page will not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but will be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP No. 428290 10 0 Page 2 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON THE GOLDMAN SACHS GROUP, INC. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF, OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 6,666.6 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 14,525,000 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 6,666.6 10 SHARED DISPOSITIVE POWER 14,525,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 14,531,666.6 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 39.3% 14 TYPE OF REPORTING PERSON HC-CO SCHEDULE 13D CUSIP No. 428290 10 0 Page 3 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GOLDMAN, SACHS & CO. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [X] 6 CITIZENSHIP OR PLACE OF ORGANIZATION NEW YORK NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 14,525,000 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 14,525,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 14,525,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 39.3% 14 TYPE OF REPORTING PERSON BD-PN-IA SCHEDULE 13D CUSIP No. 428290 10 0 Page 4 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GS ADVISORS 2000, L.L.C. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 11,278,155 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 11,278,155 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11,278,155 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 30.5% 14 TYPE OF REPORTING PERSON OO SCHEDULE 13D CUSIP No. 428290 10 0 Page 5 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GOLDMAN, SACHS & CO. oHG 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION GERMANY NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 345,764 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 345,764 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 345,764 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.9% 14 TYPE OF REPORTING PERSON PN SCHEDULE 13D CUSIP No. 428290 10 0 Page 6 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GOLDMAN SACHS MANAGEMENT GP GmbH 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION GERMANY NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 345,764 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 345,764 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 345,764 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.9% 14 TYPE OF REPORTING PERSON PN SCHEDULE 13D CUSIP No. 428290 10 0 Page 7 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GS EMPLOYEE FUNDS 2000, G.P., L.L.C. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 2,628,354 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 2,628,354 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,628,354 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.1% 14 TYPE OF REPORTING PERSON OO SCHEDULE 13D CUSIP No. 428290 10 0 Page 8 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON STONE STREET 2000, L.L.C. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 272,727 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 272,727 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 272,727 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7% 14 TYPE OF REPORTING PERSON OO SCHEDULE 13D CUSIP No. 428290 10 0 Page 9 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GS CAPITAL PARTNERS 2000, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 8,272,312 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 8,272,312 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,272,312 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 22.4% 14 TYPE OF REPORTING PERSON PN SCHEDULE 13D CUSIP No. 428290 10 0 Page 10 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GS CAPITAL PARTNERS 2000 OFFSHORE, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION CAYMAN ISLANDS NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 3,005,843 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 3,005,843 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,005,843 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.1% 14 TYPE OF REPORTING PERSON PN SCHEDULE 13D CUSIP No. 428290 10 0 Page 11 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GS CAPITAL PARTNERS 2000 GmbH & CO. BETEILIGUNGS KG 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION GERMANY NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 345,764 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 345,764 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 345,764 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.9% 14 TYPE OF REPORTING PERSON PN SCHEDULE 13D CUSIP No. 428290 10 0 Page 12 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 2,628,354 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 2,628,354 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,628,354 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.1% 14 TYPE OF REPORTING PERSON PN SCHEDULE 13D CUSIP No. 428290 10 0 Page 13 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON STONE STREET FUND 2000, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 272,727 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 272,727 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 272,727 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7% 14 TYPE OF REPORTING PERSON PN SCHEDULE 13D CUSIP No. 428290 10 0 Page 14 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON LXH HOLDINGS CORP. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 221,325.7 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 221,325.7 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 221,325.7 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.6% 14 TYPE OF REPORTING PERSON CO SCHEDULE 13D CUSIP No. 428290 10 0 Page 15 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON LXH HOLDINGS, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 257,299.2 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 257,299.2 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 257,299.2 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7% 14 TYPE OF REPORTING PERSON PN SCHEDULE 13D CUSIP No. 428290 10 0 Page 16 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON LXH, L.L.C. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF, WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 8,272,312 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 8,272,312 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,272,312 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 22.4% 14 TYPE OF REPORTING PERSON OO SCHEDULE 13D CUSIP No. 428290 10 0 Page 17 of 69 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON LXH II, L.L.C. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF, WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 6,252,688 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 10 SHARED DISPOSITIVE POWER 6,252,688 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,252,688 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 16.9% 14 TYPE OF REPORTING PERSON OO ITEM 1. SECURITY AND ISSUER. ------------------- This statement on Schedule 13D relates to the common stock, par value $.01 per share (the "Common Stock"), of Hexcel Corporation, a Delaware corporation (the "Company"). The principal executive offices of the Company are at 281 Tresser Boulevard, Two Stamford Plaza City, Stamford, Connecticut 06901. ITEM 2. IDENTITY AND BACKGROUND. ----------------------- This statement is being filed by The Goldman Sachs Group, Inc. ("GS Group"), Goldman, Sachs & Co. ("Goldman Sachs"), GS Advisors 2000, L.L.C. ("GS Advisors"), Goldman, Sachs & Co. oHG ("GS oHG"), Goldman Sachs Management GP GmbH ("GS GmbH"), GS Employee Funds 2000, G.P., L.L.C. ("GS Employee 2000"), Stone Street 2000, L.L.C. ("Stone 2000"), GS Capital Partners 2000, L.P. ("GS Capital"), GS Capital Partners 2000 Offshore, L.P. ("GS Offshore"), GS Capital Partners 2000 GmbH & Co. Beteiligungs KG ("GS Germany"), GS Capital Partners 2000 Employee Fund, L.P. ("GS Employee"), Stone Street Fund 2000, L.P. ("Stone Street" and, together with GS Capital, GS Offshore, GS Germany and GS Employee, the "Limited Partnerships"), LXH Holdings Corp. ("LXH Corp."), LXH Holdings, L.P. ("LXH L.P."), LXH, L.L.C. ("LXH"), and LXH II, L.L.C. ("LXH II" and, together with LXH, the "Purchasers") (GS Group, Goldman Sachs, GS Advisors, GS oHG, GS GmbH, GS Employee 2000, Stone 2000, the Limited Partnerships, LXH Corp., LXH L.P., and the Purchasers, collectively, the "Filing Persons"). [FN1] FN1 Neither the present filing nor anything contained herein will be construed as an admission that any Filing Person constitutes a "person" for any purpose other than for compliance with Section 13(d) of the Securities Exchange Act of 1934. Each Purchaser was formed for the purpose of purchasing shares of Common Stock in the transactions described in Items 3 through 6 of this Schedule 13D. GS Group is a Delaware corporation and holding company that (directly and indirectly through subsidiaries or affiliated companies or both) is a leading investment banking organization. Goldman Sachs, a New York limited partnership, is an investment banking firm and a member of the New York Stock Exchange, Inc. and other national exchanges. Goldman Sachs also serves as the manager for GS Advisors, GS Employee 2000 and Stone 2000 and the investment manager for GS Capital, GS Offshore, GS Germany, GS Employee and Stone Street. Goldman Sachs is wholly owned, directly and indirectly, by GS Group. GS Advisors, a Delaware limited liability company, is the sole general partner of GS Capital and GS Offshore. GS oHG, a German partnership, is the sole managing partner of GS GmbH. GS GmbH, a German partnership, is the sole managing partner of GS Germany. GS Employee 2000, a Delaware limited liability company, is the sole general partner of GS Employee. Stone 2000, a Delaware limited liability company, is the sole general partner of Stone Street. Each of GS Capital, a Delaware limited partnership, GS Offshore, a Cayman Islands exempted limited partnership, GS Germany, a German civil law partnership, GS Employee, a Delaware limited partnership, and Stone Street, a Delaware limited partnership, was formed for the purpose of investing in equity and equity-related securities primarily acquired or issued in leveraged acquisitions, reorganizations and other private equity transactions. LXH Corp., a Delaware holding company, is a direct wholly owned subsidiary of GS Capital. LXH L.P., a Delaware limited partnership, is an indirect wholly owned subsidiary of GS Capital. GS Capital is the sole managing general partner of LXH L.P. GS Capital is the managing and sole member of LXH. GS Offshore is the sole managing member of LXH II. The other members of LXH II are GS Germany, GS Employee and Stone Street. The principal business address of each Filing Person (other than GS oHG, GS Offshore and GS Germany) is 85 Broad Street, New York, NY 10004. The principal business address for GS Offshore is c/o Maples and Calder, P.O. Box 309, Grand Cayman, Cayman Islands. The principal business address for each of GS Germany, GS GmbH and GS oHG is MesseTurm, 60308 Frankfurt am Main, Germany. The name, business address, present principal occupation or employment and citizenship of each director of GS Group are set forth in Schedule I hereto and are incorporated herein by reference. The name, business address, present principal occupation or employment and citizenship of each executive officer of GS Advisors are set forth in Schedule II-A-i hereto and are incorporated herein by reference. The name, business address, present principal occupation or employment and citizenship of each member of the Principal Investment Area Investment Committee of Goldman Sachs, which is responsible for making all investment and management decisions for GS Advisors on behalf of Goldman Sachs, are set forth in Schedule II-A-ii hereto and are incorporated herein by reference. The name, business address, present principal occupation or employment and citizenship of each executive officer and director of Goldman, Sachs & Co. Finanz GmbH, the sole managing general partner of GS oHG, are set forth in Schedule II-B-i hereto and are incorporated herein by reference. The name, business address, present principal occupation or employment and citizenship of each executive officer of the GS GmbH, the sole managing member of GS Germany, are set forth in Schedule II-B-ii hereto and are incorporated herein by reference. The name, business address, present principal occupation or employment and citizenship of each executive officer of Stone 2000 are set forth in Schedule II-C-i hereto and are incorporated herein by reference. The name, business address, present principal occupation or employment and citizenship of each member of the Stone Street Investment Committee of Goldman Sachs, which is responsible for making all investment and management decisions for Stone 2000 on behalf of Goldman Sachs, are set forth in Schedule II-C-ii hereto and are incorporated herein by reference. The name, business address, present principal occupation or employment and citizenship of each executive officer of GS Employee 2000 are set forth in Schedule II-D-i hereto and are incorporated herein by reference. The name, business address, present principal occupation or employment and citizenship of each member of the GS Employee Investment Committee of Goldman Sachs, which is responsible for making all investment and management decisions for GS Employee 2000 on behalf of Goldman Sachs, are set forth in Schedule II-D-ii hereto and are incorporated herein by reference. During the last five years, none of the Filing Persons, nor, to the knowledge of each of the Filing Persons, any of the persons listed on Schedules I, II-A-i, II-A-ii, II-B-i, II-B-ii, II-C-i, II-C-ii, II-D-i or II-D-ii hereto, (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) except as set forth on Schedule III hereto, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to federal or state securities laws or finding any violation with respect to such laws. The Filing Persons have entered into a Joint Filing Agreement, dated as of December 28, 2000, a copy of which is attached hereto as Exhibit 1. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. ------------------------------------------------- As more fully described herein, on December 19, 2000 (the "Closing Date"), pursuant to a Stock Purchase Agreement, dated as of October 11, 2000 (the "Stock Purchase Agreement"), by and among the Purchasers, Ciba Specialty Chemicals Holding Inc., a corporation organized under the laws of Switzerland ("Ciba"), Ciba Specialty Chemicals Inc., a corporation organized under the laws of Switzerland and wholly-owned subsidiary of Ciba ("Ciba SCI"), and Ciba Specialty Chemicals Corporation, a corporation organized under the laws of Delaware and wholly-owned subsidiary of Ciba ("Ciba SCC", and together with Ciba SCI, the "Sellers"), the Purchasers purchased (the "Purchase") 14,525,000 shares of Common Stock beneficially owned by the Sellers for an aggregate purchase price of $159,775,000, consisting of (a) $123,462,500 in cash and (b) (i) a $20,680,780 7.5% Recourse Secured Pay-In-Kind Promissory Note, due 2004, issued by LXH to Ciba SCC (the "LXH Note") and (ii) a $15,631,720 7.5% Recourse Secured Pay-In-Kind Promissory Note, due 2004, issued by LXH II to Ciba SCC (the "LXH II Note", and together with the LXH Note and all additional promissory notes issued as payment of interest on the principal amount of each of the LXH Note and the LXH II Note, the "Notes"). The Stock Purchase Agreement (together with all Exhibits thereto) is filed as Exhibit 2 hereto and is incorporated herein by reference. The LXH Note is filed as Exhibit 3 hereto and is incorporated herein by reference. The LXH II Note is filed as Exhibit 4 hereto and is incorporated herein by reference. The Purchasers obtained the cash portion of the purchase price from capital contributions by their members. The Purchasers funded the non-cash portion of the purchase price by issuing the Notes to Ciba SCC. The Notes are secured by the shares of Common Stock purchased by the Purchasers from the Sellers pursuant to the Stock Purchase Agreement. None of the individuals listed on Schedules I, II-A-i, II-A-ii, II-B-i, II-B-ii, II-C-i, II-C-ii, II-D-i or II-D-ii hereto has contributed any funds or other consideration towards the purchase of the securities of the Company except insofar as they may have partnership interests in any of the Filing Persons and have made capital contributions to any of the Filing Persons, as the case may be. ITEM 4. PURPOSE OF TRANSACTION. ---------------------- General - ------- The purpose of the acquisition of the shares of Common Stock by the Purchasers pursuant to the Stock Purchase Agreement is to acquire a significant equity interest in the Company. Pursuant to an Agreement, dated as of October 11, 2000 (the "Hexcel Agreement"), by and between the Purchasers and the Company, which is attached as Exhibit 5 hereto and is incorporated herein by reference, the Company and the Purchasers executed and delivered a Governance Agreement, dated as of the Closing Date (the "Governance Agreement"), simultaneously with the consummation of the transactions contemplated by the Stock Purchase Agreement. The Governance Agreement is attached as Exhibit 6 hereto and incorporated herein by reference. The Hexcel Agreement contains certain representations, warranties, covenants, agreements, conditions and indemnification provisions and was executed and delivered by the Company and the Purchasers (i) in connection with the execution and delivery by the Purchasers of the Stock Purchase Agreement and such other documents and transactions contemplated thereby and (ii) in order to induce the Purchasers and their Affiliates (as defined in Rule 12b-2 under the Securities Exchange Act of 1934 (as amended, the "Exchange Act")) to execute and deliver the Governance Agreement and the Registration Rights Agreement (as defined below in Item 6) and to consummate the transactions contemplated thereby. Governance Agreement - -------------------- Board Representation; Voting Rights Upon consummation of the transactions contemplated by the Stock Purchase Agreement, the number of directors constituting the entire board of directors of the Company (the "Board") was fixed at ten and simultaneously therewith, pursuant to the Consent and Termination Agreement, dated as of October 11, 2000, by and between the Company and Ciba, Ciba caused its three directors on the Board to resign from the Board and any committees thereof in order to permit the appointment of the initial Investors' (as defined below) Nominees to fill such vacancies. The initial Investors' Nominees are Sanjeev K. Mehra, Peter M. Sacerdote, and James J. Gaffney. In addition, for so long as the Purchasers and certain of their affiliates (collectively, the "Investors") Beneficially Own (defined in the Governance Agreement to be determined within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) 20% or more of the total number of votes that may be cast in the election of directors of the Company if all shares of Common Stock and any other securities of the Company or any of its subsidiaries entitled to vote generally in the election of directors of the Company or such subsidiary (such securities, "Voting Securities") outstanding or treated as outstanding were present and voted at a meeting held for such purpose (such total, the "Total Voting Power of Hexcel"), the Company and the Investors have agreed to cause any slate of directors presented to stockholders for election (the "Board Slate") to the Board to consist of such nominees that, if elected, would result in the Board consisting of two directors designated by GS Capital, one director designated by LXH II, the Chairman of the Board (the "Chairman") and six additional Independent Directors (as defined in the Governance Agreement); provided, however, that if the Investors sell, transfer or otherwise dispose of Beneficial Ownership of such number of shares representing 33 1/3% or more of the shares of Common Stock being purchased by the Purchasers pursuant to the Stock Purchase Agreement (such purchased shares, the "Initial Shares") to persons that are not Investors, then the Company and the Investors have agreed to cause any Board Slate to consist of such nominees that, if elected, would result in the Board consisting of one director designated by GS Capital, one director designated by LXH II, the Chairman and seven additional Independent Directors. For so long as the Investors Beneficially Own less than 20% but at least 15% of the Total Voting Power of Hexcel, the Company and the Investors have agreed to cause any Board Slate to consist of such nominees that, if elected, would result in the Board consisting of one director designated by GS Capital and one director designated by LXH II, the Chairman and seven additional Independent Directors; provided, however, that if the Investors sell, transfer or otherwise dispose of Beneficial Ownership of such number of shares of Common Stock representing 66 2/3% of the Initial Shares to persons that are not Investors, then the Company and the Investors have agreed to cause any Board Slate to consist of such nominees that, if elected, would result in the Board consisting of one director designated by GS Capital, the Chairman and eight additional Independent Directors. For so long as the Investors Beneficially Own less than 15% but at least 10% of the Total Voting Power of Hexcel, the Company and the Investors have agreed to cause any Board Slate to consist of such nominees that, if elected, would result in the Board consisting of one director designated by GS Capital, the Chairman and eight additional Independent Directors. In order to determine the number of directors that GS Capital and the Investors may designate to any Board Slate, the Investors are deemed to Beneficially Own a percentage of the Total Voting Power of Hexcel that is no more than 39.3% of the Total Voting Power of Hexcel less the percentage of the Total Voting Power of Hexcel represented by any Voting Securities disposed of, directly or indirectly, by the Investors to persons that are not Investors. So long as GS Capital and the Investors are entitled to designate two or more directors for election to the Board, each committee of the Board, including the finance, audit, nominating, and compensation committees, will consist of at least one director designated by either GS Capital or the Investors; provided, however, that if no director designated by either GS Capital or the Investors is "independent" as defined by the listing standards of the New York Stock Exchange, then the audit committee will consist solely of Independent Directors. If, for any reason, all of the directors designated by GS Capital are not elected to the Board by stockholders, then the Company has agreed to exercise all authority under applicable law to cause any person designated by GS Capital to be elected to the Board, and during any such absence of membership on the Board, the Company has agreed that it will permit a representative of GS Capital to attend all Board meetings (other than meetings solely of the Independent Directors) and all committees thereof (to the extent any director designated by GS Capital would be entitled to attend such committee meetings) as an observer. If at any time the number of directors that GS Capital and the Investors are entitled to designate decreases pursuant to the terms of the Governance Agreement, within 10 days thereafter GS Capital and the Investors have agreed to cause a sufficient number of such directors to resign from the Board so that the number of such directors on the Board after such resignation(s) equals the number of directors that GS Capital and the Investors have the right to designate. GS Capital and the Investors also have agreed to cause a sufficient number of directors to resign from any relevant committees of the Board so that such committees are comprised in the manner contemplated by the Governance Agreement after giving effect to such resignation(s). Any vacancies created by these resignations will be filled by Independent Directors. Right to Maintain Level of Board Representation Upon Certain Issuances If at any time the percentage of the Total Voting Power of Hexcel Beneficially Owned by the Investors decreases as a result of an issuance of Voting Securities by the Company (other than certain issuances described in the Governance Agreement), the Investors may notify the Company that the Investors intend to acquire a sufficient amount of additional Voting Securities necessary to maintain their then current level of Board representation within 90 days. In such event, until the end of such period, the Board will continue to have the number of directors designated by GS Capital and the Investors that corresponds to the percentage of the Total Voting Power of Hexcel Beneficially Owned by the Investors prior to any such issuance of Voting Securities by the Company. Approval Rights Pursuant to the Governance Agreement, the Company agreed that the Board will not authorize, approve or ratify any of the following actions without the approval of a majority of the directors designated by GS Capital and the Investors for so long as the Investors Beneficially Own 15% or more of the Total Voting Power of Hexcel: (i) any merger, consolidation, acquisition or other business combination involving the Company or any subsidiary of the Company (other than a tender offer, merger or similar transaction that offers holders of Voting Securities the opportunity to dispose of the Voting Securities Beneficially Owned by such holders or otherwise contemplates the acquisition by any person or Group (as defined in the Governance Agreement) of Voting Securities that would result in Beneficial Ownership by such person or Group of a majority of the Voting Securities outstanding or a sale of all or substantially all of the Company's assets (such transaction, a "Buyout Transaction")) if the value of the consideration to be paid or received by the Company and/or its stockholders in any such individual transaction or in such transaction when added to the aggregate value of the consideration paid or received by the Company and/or its stockholders in all other such transactions approved by the Board during the immediately preceding 12 months exceeds the greater of (x) $150 million or (y) 11% of the Company's total consolidated assets; (ii) any Buyout Transaction; provided, however, that this approval right only applies for the 18 month period following the Closing Date; (iii) any sale, transfer, assignment, conveyance, lease or other disposition or any series of related dispositions of any assets, business or operations of the Company or any of its subsidiaries (other than a Buyout Transaction) if the value of the assets, business or operations so disposed during the immediately preceding 12 months exceeds the greater of (x) $150 million or (y) 11% of the Company's total consolidated assets; and (iv) any issuance by the Company or any Significant Subsidiary (as defined in the Governance Agreement) of the Company of equity or equity-related securities (other than (1) pursuant to customary employee or director stock option or incentive compensation or similar plans approved by the Board or a duly authorized committee of the Board, (2) pursuant to transactions solely among the Company and its wholly owned subsidiaries, (3) upon conversion of convertible securities or upon exercise of warrants or options, which convertible securities, warrants or options are either outstanding on the Closing Date or approved by the Board or a duly authorized committee of the Board after the Closing Date, or (4) in connection with any mergers, consolidations, acquisitions or other business combinations involving the Company or any subsidiary of the Company which are approved by the Board or a duly authorized committee of the Board) for which the consideration received by the Company for such transactions during the immediately preceding 12 months exceeds the greater of (x) $150 million or (y) 11% of the Company's total consolidated assets; provided, however, that during the 12 month period following the Closing Date, neither the Company nor any subsidiary of the Company may issue shares of Common Stock in a registered public offering under the Securities Act, in a private placement or otherwise without the approval of a majority of the directors designated by GS Capital and the Investors unless the aggregate number of shares issued during this 12 month period does not exceed 6,900,000 and the offering price of such shares is unanimously approved by a pricing committee of the Board, such committee to consist solely of one director designated by GS Capital or the Investors, the Chairman and one additional Independent Director. Third Party Offers and Investor Buyout Transactions Pursuant to the Governance Agreement, in the event that the Company becomes the subject of (i) a bona fide offer to enter into a Buyout Transaction by a person other than an Investor or an Affiliate (as defined in the Governance Agreement) thereof, any other person acting on behalf of an Investor or an Affiliate thereof, or any person who is part of a Group with the Investors or any of their Affiliates, that does not treat the Investors or their Affiliates differently than holders of Voting Securities not Beneficially Owned by the Investors (such holders, "Other Holders") (such offer, a "Third Party Offer") or (ii) a Buyout Transaction by the Investors or their Affiliates, any other person acting on behalf of the Investors or their Affiliates, or any person who is part of a Group with the Investors, involving the acquisition of all Voting Securities held by the Other Holders such that all of the Other Holders are entitled to receive Requisite Consideration (as defined in the Governance Agreement) upon consummation of such Buyout Transaction (such Buyout Transaction, an "Investor Buyout Transaction") that is made during the term of the Governance Agreement and such Third Party Offer or Investor Buyout Transaction is approved by (x) a majority of the Board and (y) a majority of the Independent Directors acting solely in the interest of the Other Holders, the Investors have the right to act at their sole discretion with respect to such Third Party Offer or Investor Buyout Transaction. In the event that the Company becomes the subject of a Third Party Offer that is made prior to December 19, 2003 and such Third Party Offer is approved by a majority of the Board but not by a majority of the Independent Directors acting solely in the interests of the Other Holders, none of the Investors nor any of their Affiliates (other than with respect to (a) Ordinary Course Broker Dealer Shares (as defined in the Governance Agreement) and (b) up to 255,381 shares of Common Stock (as equitably adjusted to reflect any stock split, combination, reorganization, recapitalization, reclassification or other similar event involving the Common Stock, the "Additional Shares"), (i) the Beneficial Ownership of which may be acquired inadvertently from time to time by GS Group or any of its Affiliates acting in connection with its activities as a broker or dealer registered under Section 15 of the Exchange Act or as an asset manager (excluding Affiliates formed for the purpose of effecting principal transactions) or (ii) the Beneficial Ownership of which may be acquired by the Investors pursuant to grants of stock options or other stock-based awards to the Investors' Nominees who are elected or appointed to serve as members of the Board by the Company pursuant to any stock option or stock incentive plan approved by the Board, including without limitation the Hexcel Incentive Stock Plan (as defined in the Governance Agreement); provided, that if and for so long as GS Group and its Affiliates collectively beneficially own less than 30% of the Total Voting Power of Hexcel, the maximum number of Additional Shares shall be 400,000) may support such Third Party Offer, vote in favor of such Third Party Offer or tender or sell their Voting Securities to the person making such Third Party Offer. In the event that the Company becomes the subject of a Third Party Offer or Investor Buyout Transaction that is made after December 19, 2003 and such Third Party Offer or Investor Buyout Transaction is approved by a majority of the Board but not by a majority of the Independent Directors acting solely in the interests of the Other Holders, the Investors and each of their Affiliates (other than with respect to Ordinary Course Broker Dealer Shares and Additional Shares) must vote all of their Voting Securities against such Third Party Offer or Investor Buyout Transaction in proportion to the votes cast against such Third Party Offer or Investor Buyout Transaction with respect to the Voting Securities not Beneficially Owned by the Investors and may not tender or sell their Voting Securities to the person making such Third Party Offer or Investor Buyout Transaction in a proportion greater than the tenders or sales made by the Other Holders to the person making such Third Party Offer or Investor Buyout Transaction. Preemptive Rights Pursuant to the Governance Agreement, at any time after the Closing Date and for so long as the Investors are entitled to designate one or more directors for election to the Board, if the Company issues for cash any additional Voting Securities (except for certain issuances described in the Governance Agreement), then the Company will notify the Investors of such issuance and the price and terms thereof, and the Investors will have the option, for a period of 45 days after receipt of such notice, to purchase from the Company such number of securities that would allow the Investors to Beneficially Own the same percentage of the Total Voting Power of Hexcel as the Investors Beneficially Owned immediately prior to such issuance for the same consideration per security and on the same terms as were applicable to such issuance by the Company. Standstill Agreement Pursuant to the Governance Agreement, except as otherwise expressly provided in the Governance Agreement or as specifically approved by a majority of the Independent Directors, none of the Investors or any of their Affiliates may, directly or indirectly, (i) by purchase or otherwise, Beneficially Own, acquire, agree to acquire or offer to acquire any Voting Securities or direct or indirect rights or options to acquire Voting Securities (including any voting trust certificates representing such securities) other than the Initial Shares, Ordinary Course Broker Dealer Shares and Additional Shares, (ii) enter, propose to enter into, solicit or support any merger or business combination or similar transaction involving the Company or any of its subsidiaries, or purchase, acquire, propose to purchase or acquire or solicit or support the purchase or acquisition of any portion of the business or assets of the Company or any of its subsidiaries (except for proposals to purchase or acquire a non-material portion of the assets of the Company or any of its subsidiaries that are not required to be publicly disclosed), (iii) initiate or propose any securityholder proposal without the approval of the Board or make, or in any way participate in, any solicitation of proxies to vote, or seek to advise or influence any person with respect to the voting of, any Voting Securities or request or take any action to obtain any list of securityholders for such purposes with respect to any matter other than those upon which the Investors may vote in their sole discretion pursuant to the terms of the Governance Agreement (or, as to such matters, solicit any person in a manner that would require the filing of a proxy statement under Regulation 14A of the Exchange Act), (iv) form, join or in any way participate in a Group (other than a Group consisting solely of the Investors) formed for the purpose of acquiring, holding, voting or disposing of or taking any other action with respect to Voting Securities that would be required under Section 13(d) of the Exchange Act to file a Statement on Schedule 13D with respect to such Voting Securities, (v) deposit any Voting Securities in a voting trust or enter into any voting agreement or arrangement with respect thereto (other than the Governance Agreement), (vi) seek representation on the Board, the removal of any directors from the Board or a change in the size or composition of the Board, (vii) make any request to amend or waive any provision of the standstill provisions in the Governance Agreement, which request would require public disclosure under applicable law, rule or regulation, (viii) disclose any intent, purpose, plan, arrangement or proposal inconsistent with the foregoing (including any such intent, purpose, plan, arrangement or proposal that is conditioned on or would require the waiver, amendment, nullification or invalidation of any of the foregoing) or take any action that would require public disclosure of any such intent, purpose, plan, arrangement or proposal, (ix) take any action challenging the validity or enforceability of the foregoing or (x) assist, advise, encourage or negotiate with any person with respect to, or seek to do, any of the foregoing. Nothing in the Governance Agreement (i) prohibits or restricts the Investors from responding to any inquiries from any shareholders of the Company as to the Investors' intention with respect to the voting of any Voting Securities Beneficially Owned by the Investors so long as such response is consistent with the terms of the Governance Agreement, (ii) restricts the right of any director designated by the Investors on the Board or any committee thereof to vote on any matter as such individual believes appropriate in light of his or her duties as a director or committee member or the manner in which such director may participate in his or her capacity as a director in deliberations or discussions at meetings of the Board or as a member of any committee thereof, (iii) prohibits the Investors from Beneficially Owning Voting Securities issued as dividends or distributions in respect of, or issued upon conversion, exchange or exercise of, securities which the Investors are permitted to Beneficially Own under the Governance Agreement, (iv) prohibits any officer, director, employee or agent of the Investors from purchasing or otherwise acquiring Voting Securities so long as he or she is not a member of a Group that includes the Investors or is not otherwise acting on behalf of the Investors, (v) prohibits the Investors from disclosing in accordance with their obligations, if any, under the federal securities laws or other applicable law their desire, if any, that the Company become the subject of a Buyout Transaction, or (vi) restricts the ability of Goldman Sachs and its Affiliates who are not Investors, solely as agent, to engage in brokerage, investment advisory, anti-raid advisory, merger advisory, financing, asset management, trading, arbitrage and other similar activities, in each case on behalf of clients. Nothing in the Governance Agreement prohibits or restricts the Investors, after December 19, 2003, from proposing, participating in, supporting or causing the consummation of a Third Party Offer or an Investor Buyout Transaction, subject to the voting requirements set forth in the Governance Agreement with respect to Third Party Offers (as described above in "Third Party Offers and Investor Buyout Transactions"). Transfer Restrictions Pursuant to the Governance Agreement, other than sales, transfers, or other dispositions to the Investors and other than sales, transfers or other dispositions of Additional Shares by persons holding such Additional Shares, none of the Investors or their Affiliates, directly or indirectly, may sell, transfer or otherwise dispose of Beneficial Ownership of Voting Securities for a period of one year after the Closing Date. During the period commencing one year after the Closing Date, the Investors, directly or indirectly, may sell, transfer or otherwise dispose of Beneficial Ownership of Voting Securities (i) to another Investor (provided that such Investor is a signatory to the Governance Agreement or has executed, at the time of such sale, transfer or other disposition, a joinder in which it agrees to be bound by the provisions of the Governance Agreement to the same extent as the Investors signatory thereto), (ii) in accordance with Rule 144 under the Securities Act (including the volume and manner-of-sale limitations of Rule 144 regardless of whether such limitations are applicable) and otherwise subject to compliance with the Securities Act, (iii) in a registered public offering or a non-registered offering subject to an applicable exemption from the registration requirements of the Securities Act in a manner calculated to achieve a distribution of Voting Securities that, to the knowledge, after due inquiry, of the person on whose behalf such distribution is being made, will not result in the acquisition by any other person of Beneficial Ownership of any such Voting Securities to the extent that, after giving effect to such acquisition, such acquiring person would Beneficially Own more than 5% of the Total Voting Power of Hexcel (such distribution, a "Broad Distribution"), (iv) in a Third Party Offer if and to the extent otherwise permitted by the Governance Agreement or (v) which are Additional Shares. If, during the 18 month period following the Closing Date, any of the Investors proposes to sell, transfer or otherwise dispose of Beneficial Ownership of any Voting Securities (other than transfers (i) to another Investor, (ii) in accordance with Rule 144 under the Securities Act (including the volume and manner-of-sale limitations of Rule 144 regardless of whether such limitations are applicable), (iii) in a manner calculated to achieve a Broad Distribution or in a Third Party Offer if and to the extent otherwise permitted pursuant to the provisions of this Agreement and (iv) of Additional Shares), such Investor must notify the Company of such proposed transfer and the price thereof, and the Company has the option for a period of 90 days after receipt of such notice, to purchase or cause its designee to purchase from such party all of such Voting Securities. None of the Investors or their affiliates may acquire, sell, transfer or otherwise dispose of Beneficial Ownership of Voting Securities if such acquisition, sale, transfer or other disposition would result in a default or acceleration of amounts outstanding under (i) the Company's Second Amended and Restated Credit Agreement, dated as of September 15, 1998, as amended from time to time, or any replacement thereof (the "Credit Agreement") and (ii) the Indenture, dated as of January 21, 1999 (the "Indenture"), relating to Hexcel's 9-3/4% Senior Subordinated Notes Due 2009 (the Credit Agreement and the Indenture collectively referred to herein as the "Debt Instruments"), unless prior to the consummation of such acquisition, sale, transfer or other disposition, any consents under the Debt Instruments required to effect such acquisition, sale, transfer or disposition are obtained. Other Plans and Proposals - ------------------------- Except as described above or otherwise described in this Schedule 13D, the Filing Persons currently have no plans or proposals which relate to or would result in any transaction, event or action enumerated in paragraphs (a) through (j) of Item 4 of the form of Schedule 13D promulgated under the Act. Each of the Filing Persons reserves the right, in light of its ongoing evaluation of the Company's financial condition, business, operations and prospects, the market price of the Common Stock, conditions in the securities markets generally, general economic and industry conditions, its business objectives and other relevant factors, to change its plans and intentions at any time, as it deems appropriate. In particular, any one or more of the Filing Persons (and their respective affiliates) reserves the right, in each case subject to (a) the restrictions contained in the Governance Agreement, the Notes and the Pledge Agreement (as defined below in Item 6 - "Pledge Agreement") and (b) any applicable limitations imposed on the sale of any of their Company securities by the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the "Securities Act") or other applicable law, to (i) purchase additional shares of Common Stock or other securities of the Company, (ii) sell or transfer shares of Common Stock beneficially owned by them from time to time in public or private transactions, and (iii) cause any of the Limited Partnerships to distribute in kind to their respective partners or members, as the case may be, shares of Common Stock or other securities owned by such Limited Partnerships. To the knowledge of each Filing Person, each of the persons listed on Schedules I, II-A-i, II-A-ii, II-B-i, II-B-ii, II-C-i, II-C-ii, II-D-i or II-D-ii hereto may make similar evaluations from time to time or on an ongoing basis. ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER. ------------------------------------- (a) Pursuant to a capitalization certificate delivered on the Closing Date by the Company to the Purchasers in accordance with the Hexcel Agreement, Stephen C. Forsyth, the Chief Financial Officer of the Company, certified that, as of December 15, 2000, there were 36,957,770 shares of Common Stock outstanding. As of the Closing Date, GS Group may be deemed to beneficially own an aggregate of 14,531,666.6 shares of Common Stock, consisting of (i) 14,525,000 shares of Common Stock that may be deemed to be beneficially owned by the Purchasers, as described below, and (ii) (a) 10,000 options granted to Sanjeev K. Mehra (the "Mehra Director Options") pursuant to the Hexcel Incentive Stock Plan, of which one-third of such options are currently exercisable and convertible into 3,333.3 shares of Common Stock (Sanjeev K. Mehra has an understanding with GS Group pursuant to which he holds such options for the benefit of GS Group), and (b) 10,000 options granted to Peter M. Sacerdote (the "Sacerdote Director Options") pursuant to the Hexcel Incentive Stock Plan, of which one-third of such options are currently exercisable and convertible into 3,333.3 shares of Common Stock (Peter M. Sacerdote has an understanding with GS Group pursuant to which he holds such options for the benefit of GS Group), representing in the aggregate approximately 39.3% of the outstanding shares of Common Stock. Upon the first anniversary of the Closing Date, an additional one-third of (a) the Mehra Director Options and (b) the Sacerdote Director Options will vest and become exercisable. Upon the second anniversary of the Closing Date, the remaining one-third of (a) the Mehra Director Options and (b) the Sacerdote Director Options will vest and become exercisable. As of the Closing Date, Goldman Sachs may be deemed to beneficially own an aggregate of 14,525,000 shares of Common Stock, consisting of 14,525,000 shares of Common Stock that may be deemed to be beneficially owned by the Purchasers, as described below, representing approximately 39.3% of the outstanding shares of Common Stock. GS Group and Goldman Sachs disclaim beneficial ownership of the shares of Common Stock beneficially owned by the Purchasers and the Limited Partnerships to the extent that partnership or membership interests, as the case may be, in the Limited Partnerships are held by persons other than Goldman Sachs or its affiliates. In accordance with Securities and Exchange Commission Release No. 34-39538 (January 12, 1998), this filing reflects the fact that GS Group and Goldman Sachs will no longer report the beneficial ownership of securities beneficially owned by the asset management unit of Goldman Sachs (the "Asset Management Unit") and certain other separate operating units of Goldman Sachs. The Asset Management Unit and certain other separate operating units will separately report, to the extent required, their beneficial ownership of securities. As of the Closing Date, GS Advisors may be deemed to beneficially own the aggregate of 11,278,155 shares of Common Stock that may be deemed to be beneficially owned by GS Capital and GS Offshore, representing, in the aggregate, approximately 30.5% of the outstanding shares of Common Stock. As of the Closing Date, each of GS oHG and GS GmbH may be deemed to beneficially own the 345,764 shares of Common Stock that may be deemed to be beneficially owned by GS Germany, representing 0.9% of the outstanding shares of Common Stock. As of the Closing Date, GS Employee 2000 may be deemed to beneficially own the 2,628,354 shares of Common Stock that may be deemed to be beneficially owned by GS Employee, representing 7.1% of the outstanding shares of Common Stock. As of the Closing Date, Stone 2000 may be deemed to beneficially own the 272,727 shares of Common Stock that may be deemed to be beneficially owned by Stone Street, representing 0.7% of the outstanding shares of Common Stock. As of the Closing Date, GS Capital may be deemed to beneficially own the 8,272,312 shares of Common Stock that may be deemed to be beneficially owned by LXH representing 22.4% of the outstanding shares of Common Stock. As of the Closing Date, GS Offshore may be deemed to beneficially own the 3,005,843 shares of Common Stock that may be deemed to be beneficially owned by LXH II, representing 8.1% of the outstanding shares of Common Stock. As of the Closing Date, LXH Corp. may be deemed to beneficially own 221,325.7 shares of Common Stock, that also may be deemed to be beneficially owned by LXH, LXH L.P. and GS Capital, representing 0.6% of the outstanding shares of Common Stock. As of the Closing Date, LXH L.P. may be deemed to beneficially own 257,299.2 shares of Common Stock, that also may be deemed to be beneficially owned by LXH and GS Capital, representing 0.7% of the outstanding shares of Common Stock. As of the Closing Date, LXH may be deemed to beneficially own 8,272,312 shares of Common Stock, representing 22.4% of the outstanding shares of Common Stock. As of the Closing Date, LXH II may be deemed to beneficially own 6,252,688 shares of Common Stock, representing 16.9% of the outstanding shares of Common Stock. None of the Filing Persons or, to the knowledge of the Filing Persons, the persons listed on Schedules I, II-A-i, II-A-ii, II-B-i, II-B-ii, II-C-i, II-C-ii, II-D-i or II-D-ii hereto beneficially owns any shares of Common Stock other than as set forth herein. (b) Each Filing Person shares the power to vote or direct the vote and to dispose or to direct the disposition of shares of Common Stock beneficially owned by such Filing Person as indicated above. (c) Except as described above, no transactions in the shares of Common Stock were effected by the Filing Persons, or, to their knowledge, any of the persons listed on Schedules I, II-A-i, II-A-ii, II-B-i, II-B-ii, II-C-i, II-C-ii, II-D-i or II-D-ii hereto, during the past sixty days. (d) Except for clients of Goldman Sachs who may have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any shares of Common Stock held in Managed Accounts, no other person is known by any Filing Person to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any shares of Common Stock that will be beneficially owned by any Filing Person after the Purchase. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. ---------------------------------------- The responses set forth in Items 3 and 4 of this Schedule 13D are incorporated herein by reference in their entirety. Registration Rights Agreement - ----------------------------- Pursuant to the Hexcel Agreement, the Company and the Purchasers entered into a Registration Rights Agreement, dated as of the Closing Date (the "Registration Rights Agreement"). The Registration Rights Agreement is attached as Exhibit 7 hereto and incorporated herein by reference. Pursuant to the Registration Rights Agreement, the Company granted the Purchasers the right, subject to certain limitations and restrictions, (i) to require the Company at the request of the Purchasers on three separate occasions to effect a registration of shares of Common Stock held by the Purchasers, and (ii) to require the Company to include shares of Common Stock then held by the Purchasers in any other registration by the Company of its equity securities under the Securities Act. The Company has agreed to pay certain expenses of the Purchasers in connection with such registrations as provided in the Registration Rights Agreement. Notes - ----- Pursuant to the Stock Purchase Agreement, (i) LXH issued to Ciba SCC a 7.5% Recourse Secured Pay-In-Kind Promissory Note, dated as of the Closing Date, having an aggregate principal amount of $20,680,780, as partial payment for the purchase of 8,272,312 shares of Common Stock beneficially owned by the Sellers and (ii) LXH II issued to Ciba SCC a 7.5% Recourse Secured Pay-In-Kind Promissory Note, dated as of the Closing Date, having an aggregate principal amount of $15,631,720, as partial payment for the purchase of 6,252,688 shares of Common Stock beneficially owned by the Sellers. Transfer of Securities For so long as no Event of Default (as defined below) has occurred and is continuing, each Purchaser has the right to effect a Collateral Sale (as defined below in "Pledge Agreement - Disposition of Collateral") or transfer Collateral (as defined below in "Pledge Agreement - - Grant of Security Interest") to a Permitted Transferee (as defined below in "Pledge Agreement - Disposition of Collateral"). Optional Prepayment/Redemption Each Purchaser, at its option, may prepay all or any portion of the principal amount of its Notes in cash at any time, by paying to Ciba SCC an amount equal to the outstanding principal amount being prepaid together with any accrued and unpaid interest on such amount. Events of Default An Event of Default under the Notes occurs if: (i) the Purchaser defaults in the payment of the principal of its Notes, when and as the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by acceleration or otherwise; (ii) the Purchaser defaults in the payment of principal of or interest on any indebtedness for money borrowed of the Purchaser (other than its Notes) having an aggregate principal amount of at least $500,000; (iii) an involuntary proceeding is commenced or an involuntary petition is filed in a court of competent jurisdiction (and such proceeding or petition continues undismissed for 60 days, or an order or decree approving or ordering any of the following is entered) seeking (a) relief in respect of the Purchaser, or of a substantial part of its property or assets, under Title 11 of the United States Code (as now constituted or hereafter amended, "Title 11"), or any other federal or state bankruptcy, insolvency, receivership or similar law, (b) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Purchaser, or for a substantial part of its property or assets, or (c) the winding up or liquidation of the Purchaser; or (iv) the Purchaser (a) voluntarily commences any proceeding or files any petition seeking relief under Title 11 or any other Federal or state bankruptcy, insolvency, receivership or similar law, (b) consents to the institution of, or fails to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in paragraph (iii) above, (c) applies for or consents to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Purchaser, or for a substantial part of its property or assets, (d) files an answer admitting the material allegations of a petition filed against it in any such proceeding, (e) makes a general assignment for the benefit of creditors, (f) admits in writing its inability or fails generally to pay its debts as they become due or (g) takes any action for the purpose of effecting any of the foregoing. If an Event of Default described in paragraph (iii) or (iv) above occurs, then the outstanding principal of and all accrued interest on such Purchaser's Notes automatically becomes immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived. If any other Event of Default occurs and is continuing, Ciba SCC, by written notice to the Purchaser, may declare the principal of and accrued interest on such Purchaser's Notes to be immediately due and payable and such principal and interest becomes immediately due and payable. Ciba SCC may rescind an acceleration and its consequences if all existing Events of Default have been cured or waived, except nonpayment of principal or interest that has become due solely because of the acceleration, and if the rescission would not conflict with any judgment or decree. Pledge Agreement - ---------------- Pursuant to the Stock Purchase Agreement, (a) LXH and Ciba SCC entered into a Pledge Agreement, dated as of the Closing Date (the "LXH Pledge Agreement"), and (b) LXH II and Ciba SCC entered into a Pledge Agreement, dated as of the Closing Date (together with the LXH Pledge Agreement, the "Pledge Agreements"). The LXH Pledge Agreement is attached as Exhibit 8 hereto and incorporated herein by reference. The LXH II Pledge Agreement is attached as Exhibit 9 hereto and incorporated herein by reference. Grant of Security Interest Upon the terms and conditions set forth in the Pledge Agreements and as collateral security for the prompt payment in full when due of all obligations of each Purchaser arising under or in connection with each Pledge Agreement and the Notes (such obligations, the "Secured Obligations"), each Purchaser pledged and granted to Ciba SCC a continuing security interest in all of such Purchaser's right, title and interest in and to the following property: (a) all issued and outstanding shares of Common Stock owned by such Purchaser (the "Pledged Shares"); (b) subject to the occurrence of an Event of Default (as defined in the Notes), all Dividends (as defined in the Pledge Agreements) and Distributions (as defined in the Pledge Agreements) and other payments and rights with respect to any Pledged Shares; and (c) all proceeds of any of the foregoing (such property, the "Collateral"). Disposition of Collateral So long as no Event of Default (as defined above in "Notes - Events of Default") has occurred and is continuing, each Purchaser has the right to effect a sale, transfer or other disposition of Collateral (i) to any person other than a Permitted Transferee (as defined below) in an arm's-length transaction (such transfer, a "Collateral Sale") or (ii) to itself, the other Purchaser, each Purchasers' respective members, GS Group or any direct or indirect subsidiary of GS Group formed for the purpose of effecting principal transactions, and, subject to certain conditions, one other person designated by either of the Purchasers within 90 days following the Closing Date as a proposed transferee of up to 2,200,000 shares of Common Stock (such transferee, a "Permitted Transferee"). In the event of a Collateral Sale in exchange for cash by either of the Purchasers, such Purchaser must apply the Minimum Amount (as defined below in "Application of Prepayments") to the prepayment of the Notes in the manner set forth below in "Application of Prepayments". In the event of a Collateral Sale in exchange for non-cash proceeds, such Purchaser must deliver or assign to Ciba SCC, as Collateral for the Secured Obligations, all such non-cash proceeds. Except as described above, each Purchaser may not sell, assign, transfer, pledge or encumber the Collateral except in favor of Ciba SCC. Release Upon (i) the payment in full of the Notes, the security interest granted pursuant to such Pledge Agreement automatically terminates and rights to the Collateral revert to such Purchaser or (ii) any permitted transfer of the Collateral, the security interest granted pursuant to such Pledge Agreement with respect to the Collateral subject thereto automatically terminates and all rights to such Collateral revert to such Purchaser. Application of Prepayments In the event of a Collateral Sale for cash by any Purchaser, such Purchaser must apply the Minimum Amount to the prepayment of the Notes first to all accrued and unpaid interest on the Notes calculated up to and including the date of payment thereof and then pro-rata to the outstanding principal amount of all Notes then outstanding. The Minimum Amount means, with respect to the total cash proceeds received by a Purchaser upon any transfer of Collateral, less certain federal and state taxes and any expenses reasonably incurred in connection with such sale, (i) an amount thereof (but not less than 20%) which, after giving effect to the application thereof to the prepayment of the Notes as described above, would result in the ratio of (x) the Fair Market Value (as defined in the Pledge Agreements) of all Collateral on the date of such transfer to (y) the outstanding principal amount of, and accrued interest on, the Notes outstanding on such date (such ratio, the "Collateral Coverage Ratio") being equal to or greater than 3:1, or (ii) an amount equal to 100% thereof to the extent that the Collateral Coverage Ratio is or, after giving effect to the application thereof to the prepayment of the Notes as described above, would be less than 3:1. Voting Rights Until and unless an Event of Default has occurred and is continuing, each of the Pledgors has the exclusive voting power with respect to any shares of capital stock (including any of the Pledged Shares) constituting Collateral pledged by such Pledgor under such Pledge Agreement and the Pledgee must, upon the written request of a Pledgor, promptly deliver such proxies and other documents, if any, as are requested by such Pledgor that are necessary to allow such Pledgor to exercise voting power with respect to any such shares of capital stock (including any of the Pledged Shares) constituting Collateral. After any Event of Default has occurred and for so long as it is continuing, the Pledgee may exercise (to the exclusion of each of the Pledgors) the voting power and all other incidental rights of ownership with respect to any Pledged Shares or other shares of capital stock constituting Collateral and each of the Pledgors agrees to grant the Pledgee an irrevocable proxy, exercisable under such circumstances, to vote the Pledged Shares and such other Collateral. Other than as set forth in this Item 6 and Items 3, 4, and 5 above, none of the Filing Persons is a party to any contract, arrangement, understanding or relationship with respect to any securities of the issuer, and none of the securities as to which this Schedule 13D relates is pledged or is otherwise subject to a contingency the occurrence of which would give another person voting power or investment power over such securities. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. -------------------------------- Exhibit 1 Joint Filing Agreement, dated as of December 28, 2000. Exhibit 2 Stock Purchase Agreement, dated as of October 11, 2000, by and among the Purchasers, Ciba and the Sellers. Exhibit 3 $20,680,780 7.5% Recourse Secured Pay-In-Kind Promissory Note, due December 31, 2004, issued by LXH to Ciba SCC. Exhibit 4 $15,631,720 7.5% Recourse Secured Pay-In-Kind Promissory Note, due December 31, 2004, issued by LXH II to Ciba SCC. Exhibit 5 Hexcel Agreement, dated as of October 11, 2000, by and between the Purchasers and the Company. Exhibit 6 Governance Agreement, dated as of December 19, 2000, by and among the Purchasers, the Company and the other parties listed on the signature pages thereto. Exhibit 7 Registration Rights Agreement, dated as of December 19, 2000, by and between the Company and the Purchasers. Exhibit 8 Pledge Agreement, dated as of December 19, 2000, by LXH in favor of Ciba SCC. Exhibit 9 Pledge Agreement, dated as of December 19, 2000, by LXH II in favor of Ciba SCC. Exhibit 10 Power of Attorney, dated as of December 8, 2000, relating to The Goldman Sachs Group, Inc. Exhibit 11 Power of Attorney, dated as of December 8, 2000, relating to Goldman, Sachs & Co. Exhibit 12 Power of Attorney, dated as of December 20, 2000, relating to GS Advisors 2000, L.L.C. Exhibit 13 Power of Attorney, dated as of March 28, 2000, relating to Goldman, Sachs & Co. oHG. Exhibit 14 Power of Attorney, dated as of December 20, 2000, relating to Goldman Sachs Management GP GmbH. Exhibit 15 Power of Attorney, dated as of December 20, 2000, relating to GS Employee Funds 2000, G.P., L.L.C. Exhibit 16 Power of Attorney, dated as of March 20, 2000, relating to Stone Street 2000, L.L.C. Exhibit 17 Power of Attorney, dated as of December 20, 2000, relating to GS Capital Partners 2000, L.P. Exhibit 18 Power of Attorney, dated as of December 20, 2000, relating to GS Capital Partners 2000 Offshore, L.P. Exhibit 19 Power of Attorney, dated as of December 20, 2000, relating to GS Capital Partners 2000 GmbH & Co. Beteiligungs KG. Exhibit 20 Power of Attorney, dated as of December 20, 2000, relating to GS Capital Partners 2000 Employee Fund, L.P. Exhibit 21 Power of Attorney, dated as of March 20, 2000, relating to Stone Street Fund 2000, L.P. Exhibit 22 Power of Attorney, dated as of December 20, 2000, relating to LXH Holdings Corp. Exhibit 23 Power of Attorney, dated as of December 20, 2000, relating to LXH Holdings, L.P. Exhibit 24 Power of Attorney, dated as of December 20, 2000, relating to LXH, L.L.C. Exhibit 25 Power of Attorney, dated as of December 20, 2000, relating to LXH II, L.L.C. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. December 28, 2000 THE GOLDMAN SACHS GROUP, INC. By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact GOLDMAN, SACHS & CO. By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact GS ADVISORS 2000, L.L.C. By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact GOLDMAN, SACHS & CO. OHG By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact GOLDMAN SACHS MANAGEMENT GP GmbH By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact GS EMPLOYEE FUNDS 2000, G.P., L.L.C. By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact STONE STREET 2000, L.L.C. By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact GS CAPITAL PARTNERS 2000, L.P. By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact GS CAPITAL PARTNERS 2000 OFFSHORE, L.P. By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact GS CAPITAL PARTNERS 2000 GmbH & CO. BETEILIGUNGS KG By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P. By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact STONE STREET FUND 2000, L.P. By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact LXH HOLDINGS CORP. By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact LXH HOLDINGS, L.P. By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact LXH, L.L.C. By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact LXH II, L.L.C. By: /s/ Roger S. Begelman ------------------------------------ Name: Roger S. Begelman Title: Attorney-in-fact EXHIBITS Exhibit 1 Joint Filing Agreement, dated as of December 28, 2000. Exhibit 2 Stock Purchase Agreement, dated as of October 11, 2000, by and among the Purchasers, Ciba and the Sellers. Exhibit 3 $20,680,780 7.5% Recourse Secured Pay-In-Kind Promissory Note, due December 31, 2004, issued by LXH to Ciba SCC. Exhibit 4 $15,631,720 7.5% Recourse Secured Pay-In-Kind Promissory Note, due December 31, 2004, issued by LXH II to Ciba SCC. Exhibit 5 Hexcel Agreement, dated as of October 11, 2000, by and between the Purchasers and the Company. Exhibit 6 Governance Agreement, dated as of December 19, 2000, by and among the Purchasers, the Company and the other parties listed on the signature pages thereto. Exhibit 7 Registration Rights Agreement, dated as of December 19, 2000, by and between the Company and the Purchasers. Exhibit 8 Pledge Agreement, dated as of December 19, 2000, by LXH in favor of Ciba SCC. Exhibit 9 Pledge Agreement, dated as of December 19, 2000, by LXH II in favor of Ciba SCC. Exhibit 10 Power of Attorney, dated as of December 8, 2000, relating to The Goldman Sachs Group, Inc. Exhibit 11 Power of Attorney, dated as of December 8, 2000, relating to Goldman, Sachs & Co. Exhibit 12 Power of Attorney, dated as of December 20, 2000, relating to GS Advisors 2000, L.L.C. Exhibit 13 Power of Attorney, dated as of March 28, 2000, relating to Goldman, Sachs & Co. oHG. Exhibit 14 Power of Attorney, dated as of December 20, 2000, relating to Goldman Sachs Management GP GmbH. Exhibit 15 Power of Attorney, dated as of December 20, 2000, relating to GS Employee Funds 2000, G.P., L.L.C. Exhibit 16 Power of Attorney, dated as of March 20, 2000, relating to Stone Street 2000, L.L.C. Exhibit 17 Power of Attorney, dated as of December 20, 2000, relating to GS Capital Partners 2000, L.P. Exhibit 18 Power of Attorney, dated as of December 20, 2000, relating to GS Capital Partners 2000 Offshore, L.P. Exhibit 19 Power of Attorney, dated as of December 20, 2000, relating to GS Capital Partners 2000 GmbH & Co. Beteiligungs KG. Exhibit 20 Power of Attorney, dated as of December 20, 2000, relating to GS Capital Partners 2000 Employee Fund, L.P. Exhibit 21 Power of Attorney, dated as of March 20, 2000, relating to Stone Street Fund 2000, L.P. Exhibit 22 Power of Attorney, dated as of December 20, 2000, relating to LXH Holdings Corp. Exhibit 23 Power of Attorney, dated as of December 20, 2000, relating to LXH Holdings, L.P. Exhibit 24 Power of Attorney, dated as of December 20, 2000, relating to LXH, L.L.C. Exhibit 25 Power of Attorney, dated as of December 20, 2000, relating to LXH II, L.L.C. SCHEDULE I ---------- The name of each director of The Goldman Sachs Group, Inc. is set forth below. The business address of each person listed below except John L. Thornton, Sir John Browne, James A. Johnson, John H. Bryan and Ruth J. Simmons is 85 Broad Street, New York, NY 10004. The business address of John L. Thornton is 133 Fleet Street, London EC4A 2BB, England. The business address of Sir John Browne is BP Amoco plc, Brittanic House, 1 Finsbury Circus, London EC2M, England. The business address of James A. Johnson is Johnson Capital Partners, 600 New Hampshire Avenue, NW, Suite 620, Washington, D.C. 20037. The business address of John H. Bryan is Three First National Plaza, Chicago, IL 60602-4260. The business address of Ruth J. Simmons is Office of the President, Smith College, College Hall Room 20, Northhampton, MA 01063. Each person is a citizen of the United States of America except for Sir John Browne, who is a citizen of the United Kingdom. The present principal occupation or employment of each of the listed persons is set forth below.
- -------------------------------------------------------------------------------------------------------- Name Present Principal Occupation - -------------------------------------------------------------------------------------------------------- Henry M. Paulson, Jr. Chairman and Chief Executive Officer of The Goldman Sachs Group, Inc. Robert J. Hurst Vice Chairman of The Goldman Sachs Group, Inc. John A. Thain President and Co-Chief Operating Officer of The Goldman Sachs Group, Inc. John L. Thornton President and Co-Chief Operating Officer of The Goldman Sachs Group, Inc. Sir John Browne Group Chief Executive of BP Amoco plc James A. Johnson Chairman and Chief Executive Officer of Johnson Capital Partners John H. Bryan Chairman and Chief Executive Officer of Sara Lee Corporation Ruth J. Simmons President of Smith College John L. Weinberg Senior Chairman of The Goldman Sachs Group, Inc.
SCHEDULE II-A-i --------------- The name, position and present principal occupation of each executive officer of GS Advisors 2000, L.L.C., the sole general partner of GS Capital Partners 2000, L.P. and GS Capital Partners 2000 Offshore, L.P., are set forth below. The business address for all the executive officers listed below except Gene T. Sykes, Richard S. Sharp, Barry S. Volpert, Antoine L. Schwartz, Hughes B. Lepic, Randall A. Blumenthal, Syaru (Shirley) Lin, Stephen S. Trevor, Xiang-Dong Yang, Peter Schiefer, Atul Kapur, Michel A. Plantevin, Mary Nee and Ulrika Werdelin is 85 Broad Street, New York, New York 10004. The business address of Richard S. Sharp, Barry S. Volpert, Antoine L. Schwartz, Hughes B. Lepic, Stephen S. Trevor, Peter Schiefer, Atul Kapur, Michel A. Plantevin and Ulrika Werdelin is 133 Fleet Street, London EC4A 2BB, England. The business address of Syaru (Shirley) Lin, Xiang-Dong Yang and Mary Nee is Cheung Kong Center, 68th Floor, 2 Queens Road, Central, Hong Kong. The business address of Gene T. Sykes and Randall A. Blumenthal is 2765 Sand Hill Road, Menlo Park, CA 94025. All executive officers listed below are United States citizens except Richard S. Sharp, Sanjeev K. Mehra, Antoine L. Schwartz, Patrick E. Mulvihill, Hughes B. Lepic, Peter Schiefer, Atul Kapur, Michel A. Plantevin and Ulrika Werdelin. Richard S. Sharp is a citizen of the United Kingdom. Sanjeev K. Mehra is a citizen of India. Atul Kapur is a citizen of Singapore. Antoine L. Schwartz, Hughes B. Lepic and Michel A. Plantevin are citizens of France. Patrick E. Mulvihill is a citizen of Ireland. Peter Schiefer is a citizen of Germany. Ulrika Werdelin is a citizen of Sweden.
- ------------------------------------------------------------------------------------------------------------- Name Position Present Principal Occupation - ------------------------------------------------------------------------------------------------------------- Richard A. Friedman President Managing Director of Goldman, Sachs & Co. Joseph H. Gleberman Vice President Managing Director of Goldman, Sachs & Co. Terence M. O'Toole Vice President Managing Director of Goldman, Sachs & Co. Gene T. Sykes Vice President Managing Director of Goldman, Sachs & Co. David A. Viniar Assistant Treasurer Managing Director of Goldman, Sachs & Co. Henry Cornell Vice President Managing Director of Goldman, Sachs & Co. Richard S. Sharp Vice President Managing Director of Goldman Sachs International Esta E. Stecher Assistant Secretary Managing Director of Goldman, Sachs & Co. Barry S. Volpert Vice President Managing Director of Goldman Sachs International Sanjeev K. Mehra Vice President Managing Director of Goldman, Sachs & Co. Muneer A. Satter Vice President Managing Director of Goldman, Sachs & Co. Antoine L. Schwartz Vice President Managing Director of Goldman Sachs International Steven M. Bunson Assistant Secretary Managing Director of Goldman, Sachs & Co. Elizabeth S. Fascitelli Treasurer Managing Director of Goldman, Sachs & Co. Patrick E. Mulvihill Assistant Treasurer Managing Director of Goldman, Sachs & Co. David J. Greenwald Assistant Secretary Managing Director of Goldman, Sachs & Co. Dan H. Jester Assistant Treasurer Managing Director of Goldman, Sachs & Co. Hughes B. Lepic Vice President Managing Director of Goldman Sachs International Russell E. Makowsky Assistant Secretary Managing Director of Goldman, Sachs & Co. Sarah G. Smith Assistant Treasurer Managing Director of Goldman, Sachs & Co. Randall A. Blumenthal Vice President Managing Director of Goldman, Sachs & Co. Syaru (Shirley) Lin Vice President Managing Director of Goldman Sachs (Asia) L.L.C. Douglas F. Londal Vice President Managing Director of Goldman, Sachs & Co. Stephen S. Trevor Vice President Managing Director of Goldman Sachs International Xiang-Dong Yang Vice President Managing Director of Goldman Sachs (Asia) L.L.C. Peter Schiefer Vice President Managing Director of Goldman Sachs International Abraham Bleiberg Vice President Managing Director of Goldman, Sachs & Co. Joseph P. DiSabato Vice President Managing Director of Goldman, Sachs & Co. Robert R. Gheewalla Vice President Managing Director of Goldman, Sachs & Co. Ronald H. Jacobe Vice President Managing Director of Goldman, Sachs & Co. Atul Kapur Vice President Managing Director of Goldman Sachs International Michel A. Plantevin Vice President Managing Director of Goldman Sachs International John E. Bowman Vice President Vice President of Goldman, Sachs & Co. Katherine B. Enquist Vice President/Secretary Vice President of Goldman, Sachs & Co. James B. McHugh Assistant Secretary Vice President of Goldman, Sachs & Co. Mary Nee Vice President Vice President of Goldman Sachs (Asia) L.L.C. Katherine L. Nissenbaum Vice President/Assistant Vice President of Goldman, Sachs & Co. Secretary Ulrika Werdelin Vice President Vice President of Goldman Sachs International
SCHEDULE II-A-ii The name and principal occupation of each member of the Principal Investment Area Investment Committee of Goldman, Sachs & Co., which exercises the authority of Goldman, Sachs & Co. in managing GS Advisors 2000, L.L.C., are set forth below. The business address for each member listed below except Gene T. Sykes, Richard S. Sharp, Barry S. Volpert, Scott B. Kapnick and Antoine L. Schwartz is 85 Broad Street, New York, New York 10004. The business address of Gene T. Sykes is 2765 Sand Hill Road, Menlo Park, CA 94025. The business address of Richard S. Sharp, Barry S. Volpert, Scott B. Kapnick and Antoine L. Schwartz is 133 Fleet Street, London EC4A 2BB, England. All members listed below except Richard S. Sharp, Sanjeev K. Mehra and Antoine L. Schwartz are United States citizens. Richard S. Sharp is a citizen of the United Kingdom, Sanjeev K. Mehra is a citizen of India and Antoine L. Schwartz is a citizen of France. - ------------------------------------------------------------------------------ Name Present Principal Occupation - ------------------------------------------------------------------------------ Peter M. Sacerdote Advisory Director of Goldman, Sachs & Co. Richard A. Friedman Managing Director of Goldman, Sachs & Co. Joseph H. Gleberman Managing Director of Goldman, Sachs & Co. Robin Neustein Managing Director of Goldman, Sachs & Co. Terence M. O'Toole Managing Director of Goldman, Sachs & Co. Gene T. Sykes Managing Director of Goldman, Sachs & Co. Henry Cornell Managing Director of Goldman, Sachs & Co. Robert V. Delaney Managing Director of Goldman, Sachs & Co. Richard S. Sharp Managing Director of Goldman Sachs International Barry S. Volpert Managing Director of Goldman Sachs International Sanjeev K. Mehra Managing Director of Goldman, Sachs & Co. Muneer A. Satter Managing Director of Goldman, Sachs & Co. Scott B. Kapnick Managing Director of Goldman Sachs International Peter G. Sachs Senior Director of The Goldman Sachs Group, Inc. Antoine L. Schwartz Managing Director of Goldman Sachs International SCHEDULE II-B-i The name, position and present principal occupation of each executive officer and director of Goldman, Sachs & Co. Finanz GmbH, which is the sole managing general partner of Goldman, Sachs & Co. oHG, are set forth below. The business address for each of the executive officers and directors listed below is MesseTurm, 60308 Frankfurt am Main, Germany. Of the directors and executive officers listed below, Stefan J. Jentzsch, Timothy C. Plaut and Alexander C. Dibelius are citizens of Germany, Daniel W. Stanton is a citizen of the United States and Jonathan S. King is a citizen of the United Kingdom.
- ---------------------------------------------------------------------------------------------------- Name Position Present Principal Occupation - ---------------------------------------------------------------------------------------------------- Stefan J. Jentzsch Managing Director Managing Director of Goldman, Sachs & Co. oHG Jonathan S. King Managing Director Managing Director of Goldman, Sachs & Co. oHG Timothy C. Plaut Managing Director Managing Director of Goldman, Sachs & Co. oHG Daniel W. Stanton Managing Director Managing Director of Goldman, Sachs & Co. oHG Alexander C. Dibelius Managing Director Managing Director of Goldman, Sachs & Co. oHG
SCHEDULE II-B-ii The name, position and present principal occupation of each executive officer of Goldman Sachs Management GP GmbH, the sole managing partner of GS Capital Partners 2000 GmbH & Co. Beteiligungs KG, are set forth below. The business address for each of the executive officers listed below except Barry S. Volpert is 85 Broad Street, New York, New York 10004. The business address of Barry S. Volpert is 133 Fleet Street, London EC4A 2BB, England. All of the executive officers listed below are citizens of the United States except Patrick E. Mulvihill, who is a citizen of Ireland.
- -------------------------------------------------------------------------------------------------------------- Name Position Present Principal Occupation - -------------------------------------------------------------------------------------------------------------- Richard A. Friedman Managing Director Managing Director of Goldman, Sachs & Co. Joseph H. Gleberman Managing Director Managing Director of Goldman, Sachs & Co. Terence M. O'Toole Managing Director Managing Director of Goldman, Sachs & Co. David A. Viniar Managing Director Managing Director of Goldman, Sachs & Co. Henry Cornell Managing Director Managing Director of Goldman, Sachs & Co. Esta E. Stecher Managing Director Managing Director of Goldman, Sachs & Co. Barry S. Volpert Managing Director Managing Director of Goldman Sachs International Elizabeth S. Fascitelli Managing Director Managing Director of Goldman, Sachs & Co. Patrick E. Mulvihill Managing Director Managing Director of Goldman, Sachs & Co. David J. Greenwald Managing Director Managing Director of Goldman, Sachs & Co. Dan H. Jester Managing Director Managing Director of Goldman, Sachs & Co. Sarah G. Smith Managing Director Managing Director of Goldman, Sachs & Co. James B. McHugh Managing Director Vice President of Goldman, Sachs & Co. Katherine B. Enquist Managing Director Vice President of Goldman, Sachs & Co. John E. Bowman Managing Director Vice President of Goldman, Sachs & Co. Katherine L. Nissenbaum Managing Director Vice President of Goldman, Sachs & Co.
SCHEDULE II-C-i The name, position and present principal occupation of each executive officer of Stone Street 2000, L.L.C., the sole general partner of Stone Street Fund 2000, L.P., are set forth below. The business address for all of the executive officers listed below except Gene T. Sykes, Richard S. Sharp, Barry S. Volpert, Antoine L. Schwartz, Hughes B. Lepic, Randall A. Blumenthal, Syaru (Shirley) Lin, Stephen S. Trevor, Xiang-Dong Yang, Peter Schiefer, Atul Kapur, Michel A. Plantevin, Mary Nee and Ulrika Werdelin is 85 Broad Street, New York, New York 10004. The business address of Richard S. Sharp, Barry S. Volpert, Antoine L. Schwartz, Hughes B. Lepic, Stephen S. Trevor, Peter Schiefer, Atul Kapur, Michel A. Plantevin and Ulrika Werdelin is 133 Fleet Street, London EC4A 2BB, England. The business address of Syaru (Shirley) Lin, Xiang-Dong Yang and Mary Nee is Cheung Kong Center, 68th Floor, 2 Queens Road, Central, Hong Kong. The business address of Gene T. Sykes and Randall A. Blumenthal is 2765 Sand Hill Road, Menlo Park, CA 94025. All executive officers listed below are United States citizens except Richard S. Sharp, Sanjeev K. Mehra, Antoine L. Schwartz, Patrick E. Mulvihill, Hughes B. Lepic, Peter Schiefer, Atul Kapur, Michel A. Plantevin and Ulrika Werdelin. Richard S. Sharp is a citizen of the United Kingdom. Sanjeev K. Mehra is a citizen of India. Atul Kapur is a citizen of Singapore. Antoine L. Schwartz, Hughes B. Lepic and Michel A. Plantevin are citizens of France. Patrick E. Mulvihill is a citizen of Ireland. Peter Schiefer is a citizen of Germany. Ulrika Werdelin is a citizen of Sweden.
- ------------------------------------------------------------------------------------------------------------ Name Position Present Principal Occupation - ------------------------------------------------------------------------------------------------------------ Peter M. Sacerdote Chairman/President Advisory Director of Goldman, Sachs & Co. Peter G. Sachs Vice President Senior Director of The Goldman Sachs Group, Inc. Richard A. Friedman Vice President Managing Director of Goldman, Sachs & Co. Joseph H. Gleberman Vice President Managing Director of Goldman, Sachs & Co. Terence M. O'Toole Vice President Managing Director of Goldman, Sachs & Co. Gene T. Sykes Vice President Managing Director of Goldman, Sachs & Co. David A. Viniar Assistant Treasurer Managing Director of Goldman, Sachs & Co. Henry Cornell Vice President Managing Director of Goldman, Sachs & Co. Richard S. Sharp Vice President Managing Director of Goldman Sachs International Esta E. Stecher Vice President/Assistant Managing Director of Goldman, Sachs & Co. Secretary Barry S. Volpert Vice President Managing Director of Goldman Sachs International Sanjeev K. Mehra Vice President/Treasurer Managing Director of Goldman, Sachs & Co. Muneer A. Satter Vice President Managing Director of Goldman, Sachs & Co. Antoine L. Schwartz Vice President Managing Director of Goldman Sachs International Steven M. Bunson Assistant Secretary Managing Director of Goldman, Sachs & Co. Elizabeth S. Fascitelli Vice President Managing Director of Goldman, Sachs & Co. Patrick E. Mulvihill Assistant Treasurer Managing Director of Goldman, Sachs & Co. David J. Greenwald Vice President/Assistant Managing Director of Goldman, Sachs & Co. Secretary Hughes B. Lepic Vice President Managing Director of Goldman Sachs International Russell E. Makowsky Assistant Secretary Managing Director of Goldman, Sachs & Co. Sarah G. Smith Assistant Treasurer Managing Director of Goldman, Sachs & Co. Randall A. Blumenthal Vice President Managing Director of Goldman, Sachs & Co. Syaru (Shirley) Lin Vice President Managing Director of Goldman Sachs (Asia) L.L.C. Douglas F. Londal Vice President Managing Director of Goldman, Sachs & Co. Stephen S. Trevor Vice President Managing Director of Goldman Sachs International Xiang-Dong Yang Vice President Managing Director of Goldman Sachs (Asia) L.L.C. Peter Schiefer Vice President Managing Director of Goldman Sachs International Abraham Bleiberg Vice President Managing Director of Goldman, Sachs & Co. Joseph P. DiSabato Vice President Managing Director of Goldman, Sachs & Co. Robert R. Gheewalla Vice President Managing Director of Goldman, Sachs & Co. Ronald H. Jacobe Vice President Managing Director of Goldman, Sachs & Co. Atul Kapur Vice President Managing Director of Goldman Sachs International Michel A. Plantevin Vice President Managing Director of Goldman Sachs International John E. Bowman Vice President Vice President of Goldman, Sachs & Co. Katherine B. Enquist Vice President/Secretary Vice President of Goldman, Sachs & Co. James B. McHugh Assistant Secretary Vice President of Goldman, Sachs & Co. Mary Nee Vice President Vice President of Goldman Sachs (Asia) L.L.C. Katherine L. Nissenbaum Vice President/Assistant Vice President of Goldman, Sachs & Co. Secretary Richard J. Stingi Vice President Vice President of Goldman, Sachs & Co. Ulrika Werdelin Vice President Vice President of Goldman Sachs International
SCHEDULE II-C-ii The name and principal occupation of each member of the Stone Street Investment Committee of Goldman, Sachs & Co., which exercises the authority of Goldman, Sachs & Co. in managing Stone Street 2000, L.L.C., are set forth below. The business address for each member listed below is 85 Broad Street, New York, New York 10004. All members listed below except Sanjeev K. Mehra are United States citizens. Sanjeev K. Mehra is a citizen of India. - ----------------------------------------------------------------------------- Name Present Principal Occupation - ----------------------------------------------------------------------------- Peter M. Sacerdote Advisory Director of Goldman, Sachs & Co. Peter G. Sachs Senior Director of The Goldman Sachs Group, Inc. Richard A. Friedman Managing Director of Goldman, Sachs & Co. Joseph H. Gleberman Managing Director of Goldman, Sachs & Co. Terence M. O'Toole Managing Director of Goldman, Sachs & Co. Sanjeev K. Mehra Managing Director of Goldman, Sachs & Co. SCHEDULE II-D-i The name, position and principal occupation of each executive officer of GS Employee Funds 2000, G.P., L.L.C., the sole general partner of GS Capital Partners 2000 Employee Fund, L.P., are set forth below. The business address for all of the executive officers listed below except Gene T. Sykes, Richard S. Sharp, Barry S. Volpert, Antoine L. Schwartz, Hughes B. Lepic, Randall A. Blumenthal, Syaru (Shirley) Lin, Stephen S. Trevor, Xiang-Dong Yang, Peter Schiefer, Atul Kapur, Michel A. Plantevin, Mary Nee and Ulrika Werdelin is 85 Broad Street, New York, New York 10004. The business address of Richard S. Sharp, Barry S. Volpert, Antoine L. Schwartz, Hughes B. Lepic, Stephen S. Trevor, Peter Schiefer, Atul Kapur, Michel A. Plantevin and Ulrika Werdelin is 133 Fleet Street, London EC4A 2BB, England. The business address of Syaru (Shirley) Lin, Xiang-Dong Yang and Mary Nee is Cheung Kong Center, 68th Floor, 2 Queens Road, Central, Hong Kong. The business address of Gene T. Sykes and Randall A. Blumenthal is 2765 Sand Hill Road, Menlo Park, CA 94025. All executive officers listed below are United States citizens except Richard S. Sharp, Sanjeev K. Mehra, Antoine L. Schwartz, Patrick E. Mulvihill, Hughes B. Lepic, Peter Schiefer, Atul Kapur, Michel A. Plantevin and Ulrika Werdelin. Richard S. Sharp is a citizen of the United Kingdom. Sanjeev K. Mehra is a citizen of India. Atul Kapur is a citizen of Singapore. Antoine L. Schwartz, Hughes B. Lepic and Michel A. Plantevin are citizens of France. Patrick E. Mulvihill is a citizen of Ireland. Peter Schiefer is a citizen of Germany. Ulrika Werdelin is a citizen of Sweden.
- ----------------------------------------------------------------------------------------------------------- Name Position Present Principal Occupation - ----------------------------------------------------------------------------------------------------------- Richard A. Friedman President Managing Director of Goldman, Sachs & Co. Joseph H. Gleberman Vice President Managing Director of Goldman, Sachs & Co. Terence M. O'Toole Vice President Managing Director of Goldman, Sachs & Co. Gene T. Sykes Vice President Managing Director of Goldman, Sachs & Co. David A. Viniar Assistant Treasurer Managing Director of Goldman, Sachs & Co. Henry Cornell Vice President Managing Director of Goldman, Sachs & Co. Richard S. Sharp Vice President Managing Director of Goldman Sachs International Esta E. Stecher Vice President/Assistant Managing Director of Goldman, Sachs & Co. Secretary Barry S. Volpert Vice President Managing Director of Goldman Sachs International Sanjeev K. Mehra Vice President/Treasurer Managing Director of Goldman, Sachs & Co. Muneer A. Satter Vice President Managing Director of Goldman, Sachs & Co. Antoine L. Schwartz Vice President Managing Director of Goldman Sachs International Steven M. Bunson Assistant Secretary Managing Director of Goldman, Sachs & Co. Elizabeth S. Fascitelli Vice President Managing Director of Goldman, Sachs & Co. Patrick E. Mulvihill Assistant Treasurer Managing Director of Goldman, Sachs & Co. David J. Greenwald Vice President/Assistant Managing Director of Goldman, Sachs & Co. Secretary Hughes B. Lepic Vice President Managing Director of Goldman Sachs International Russell E. Makowsky Assistant Secretary Managing Director of Goldman, Sachs & Co. Sarah G. Smith Assistant Treasurer Managing Director of Goldman, Sachs & Co. Randall A. Blumenthal Vice President Managing Director of Goldman, Sachs & Co. Syaru (Shirley) Lin Vice President Managing Director of Goldman Sachs (Asia) L.L.C. Douglas F. Londal Vice President Managing Director of Goldman, Sachs & Co. Stephen S. Trevor Vice President Managing Director of Goldman Sachs International Xiang-Dong Yang Vice President Managing Director of Goldman Sachs (Asia) L.L.C. Peter Schiefer Vice President Managing Director of Goldman Sachs International Abraham Bleiberg Vice President Managing Director of Goldman, Sachs & Co. Joseph P. DiSabato Vice President Managing Director of Goldman, Sachs & Co. Robert R. Gheewalla Vice President Managing Director of Goldman, Sachs & Co. Ronald H. Jacobe Vice President Managing Director of Goldman, Sachs & Co. Atul Kapur Vice President Managing Director of Goldman Sachs International Michel A. Plantevin Vice President Managing Director of Goldman Sachs International John E. Bowman Vice President Vice President of Goldman, Sachs & Co. Katherine B. Enquist Vice President/Secretary Vice President of Goldman, Sachs & Co. James B. McHugh Assistant Secretary Vice President of Goldman, Sachs & Co. Mary Nee Vice President Vice President of Goldman Sachs (Asia) L.L.C. Katherine L. Nissenbaum Vice President/Assistant Vice President of Goldman, Sachs & Co. Secretary Richard J. Stingi Vice President Vice President of Goldman, Sachs & Co. Ulrika Werdelin Vice President Vice President of Goldman Sachs International
SCHEDULE II-D-ii The name and principal occupation of each member of the GS Employee Funds Investment Committee of Goldman, Sachs & Co., which exercises the authority of Goldman, Sachs & Co. in managing GS Employee Funds 2000, G.P., L.L.C., are set forth below. The business address for each member listed below except Gene T. Sykes, Richard S. Sharp, Barry S. Volpert, Scott B. Kapnick and Antoine L. Schwartz is 85 Broad Street, New York, New York 10004. The business address of Gene T. Sykes is 2765 Sand Hill Road, Menlo Park, CA 94025. The business address of Richard S. Sharp, Barry S. Volpert, Scott B. Kapnick and Antoine L. Schwartz is 133 Fleet Street, London EC4A 2BB, England. All members listed below except Richard S. Sharp, Sanjeev K. Mehra and Antoine L. Schwartz are United States citizens. Richard S. Sharp is a citizen of the United Kingdom, Sanjeev K. Mehra is a citizen of India and Antoine L. Schwartz is a citizen of France. - ----------------------------------------------------------------------------- Name Present Principal Occupation - ----------------------------------------------------------------------------- Peter M. Sacerdote Advisory Director of Goldman, Sachs & Co. Richard A. Friedman Managing Director of Goldman, Sachs & Co. Joseph H. Gleberman Managing Director of Goldman, Sachs & Co. Robin Neustein Managing Director of Goldman, Sachs & Co. Terence M. O'Toole Managing Director of Goldman, Sachs & Co. Gene T. Sykes Managing Director of Goldman, Sachs & Co. Henry Cornell Managing Director of Goldman, Sachs & Co. Robert V. Delaney Managing Director of Goldman, Sachs & Co. Richard S. Sharp Managing Director of Goldman Sachs International Barry S. Volpert Managing Director of Goldman Sachs International Sanjeev K. Mehra Managing Director of Goldman, Sachs & Co. Muneer A. Satter Managing Director of Goldman, Sachs & Co. Scott B. Kapnick Managing Director of Goldman Sachs International Peter G. Sachs Senior Director of The Goldman Sachs Group, Inc. Antoine L. Schwartz Managing Director of Goldman Sachs International SCHEDULE III ------------ On April 6, 2000, in connection with an industry-wide investigation by the Securities and Exchange Commission (the "SEC") relating to the pricing of government securities in advance refunding transactions, Goldman, Sachs & Co. (the "Firm") joined in a global settlement resolving the SEC investigation as well as a related qui tam lawsuit purportedly brought on behalf of the United States entitled United States ex rel. Lissack v. Goldman, Sachs & Co., et al., 95 Civ. 1363 (S.D.N.Y.)(BSJ). Pursuant to the settlement, without admitting or denying the findings, the Firm consented to the issuance of an SEC administrative order (SEA Rel. No. 42640) which, among other things, found that the Firm had violated Sections 17(a)(2) and (3) of the Securities Act of 1933 in connection with such pricing of government securities, required the Firm to cease and desist from violating such provisions, and ordered the Firm to make payments totaling approximately $5.1 Million to the U.S. Treasury and $104,000 to two municipalities. Under the global settlement, the qui tam lawsuit was dismissed with prejudice, and the Internal Revenue Service agreed not to challenge the tax-free nature of the refundings by virtue of the pricing of such securities. EX-99.1 2 0002.txt EXHIBIT 1 - JOINT FILING AGREEMENT Joint Filing Agreement The undersigned hereby agree that the Statement on Schedule 13D filed herewith (and any amendments thereto), relating to the common stock, par value $0.01 per share, of Hexcel Corporation, is being filed jointly with the Securities and Exchange Commission pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, on behalf of each such person. December 28, 2000 THE GOLDMAN SACHS GROUP, INC. By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact GOLDMAN, SACHS & CO. By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact GS ADVISORS 2000, L.L.C. By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact GOLDMAN, SACHS & CO. oHG By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact GOLDMAN SACHS MANAGEMENT GP GmbH By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact GS EMPLOYEE FUNDS 2000, G.P., L.L.C. By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact STONE STREET 2000, L.L.C. By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact GS CAPITAL PARTNERS 2000, L.P. By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact GS CAPITAL PARTNERS 2000 OFFSHORE, L.P. By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact GS CAPITAL PARTNERS 2000 GmbH & CO. BETEILIGUNGS KG By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P. By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact STONE STREET FUND 2000, L.P. By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact LXH HOLDINGS CORP. By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact LXH HOLDINGS, L.P. By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact LXH, L.L.C. By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact LXH II, L.L.C. By: /s/ Roger S. Begelman ---------------------------------- Name: Roger S. Begelman Title: Attorney-in-fact EX-99.2 3 0003.txt EXHIBIT 2 STOCK PURCHASE AGREEMENT DATED AS OF OCTOBER 11, 2000 BY AND AMONG LXH, L.L.C., LXH II, L.L.C., CIBA SPECIALTY CHEMICALS HOLDING INC., CIBA SPECIALTY CHEMICALS INC. and CIBA SPECIALTY CHEMICALS CORPORATION STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of October 11, 2000, by and between LXH, L.L.C., a Delaware limited liability company ("LXH"), LXH II, L.L.C., a Delaware limited liability company (together with LXH, the "Purchasers"), Ciba Specialty Chemicals Holding Inc., a corporation organized under the laws of Switzerland ("Ciba"), Ciba Specialty Chemicals Inc., a corporation organized under the laws of Switzerland and wholly-owned subsidiary of Ciba ("Ciba SCI") and Ciba Specialty Chemicals Corporation, a corporation organized under the laws of Delaware and wholly-owned subsidiary of Ciba (together with Ciba SCI, the "Sellers"). W I T N E S S E T H : WHEREAS, the Sellers beneficially own an aggregate of 18,021,748 shares of common stock, par value $0.01 per share (the "Common Stock"), of Hexcel Corporation (the "Company"); WHEREAS, the Company and Ciba are parties to a governance agreement, dated as of February 29, 1996, pursuant to which, among other things, Ciba may sell all or a portion of the shares of Common Stock beneficially owned by it with the approval and consent of certain directors of the Company; WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, the Sellers wish to sell to the Purchasers and the Purchasers wish to purchase from the Sellers a number of shares of Common Stock beneficially owned by the Sellers determined in accordance with Section 1.1 hereof (the "Shares"); WHEREAS, the Independent Directors have approved and consented to the sale of the Shares by the Sellers to the Purchasers on the terms set forth herein; and WHEREAS, the Purchasers and the Sellers desire to provide for the purchase and sale of the Shares and to establish certain rights and obligations in connection therewith. NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements set forth in this Agreement, the parties hereto agree as follows: ARTICLE I ISSUANCE AND SALE OF SHARES 1.1. Purchase and Sale. Upon the terms and subject to the conditions set forth herein, at the Closing (as defined below) the Sellers shall sell to each Purchaser and such Purchaser shall purchase from the Sellers the number of Shares set forth opposite such Purchaser's name on Schedule 1.1 for a price per Share equal to $11.00 or an aggregate purchase price of $159,775,000, (the "Purchase Price"). Each Purchaser shall pay such Purchaser's portion of the Purchase Price to the Sellers by delivering to the Sellers (x) cash and (y) a secured promissory note, in the form of Exhibit A hereto (the "Notes"), in each case in the aggregate amounts set forth opposite such Purchaser's name on Schedule 1.1; provided, however, that the Purchasers shall have the right to reallocate between the Purchasers the Shares to be purchased by each Purchaser by delivering written notice of such reallocation to Ciba and the Sellers not less than three days prior to the Closing, so long as such reallocation does not change the total number of Shares being acquired hereunder or the Purchase Price. At least three days prior to the Closing, the Sellers shall deliver to the Purchasers a schedule (which schedule shall be binding on the Purchasers) which shall set forth the number of Shares being sold by each Seller hereunder, the portion of the Purchase Price payable to each such Seller and the allocation of cash and the principal amount of Notes payable to each such Seller; provided, however, that such schedule shall not change the total number of Shares being acquired by each Purchaser, the portion of the Purchase Price being paid by each Purchaser or the total cash amount or aggregate principal amount of Notes being delivered hereunder. Notwithstanding anything to the contrary set forth above, the aggregate number of Shares purchased by the Purchasers hereunder shall be reduced to the extent required to prevent the Purchasers from Beneficially Owning in excess of 39.3% of the outstanding shares of Common Stock immediately following the Closing and, in such event, the Purchase Price (and the amount of cash and the aggregate principal amount of Notes issued by the Purchasers) shall be appropriately reduced based on the per Share price set forth above. 1.2. The Closing; Deliveries. (a) The closing of the purchase and sale of the Shares hereunder (the "Closing") shall take place at the offices of Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New York, New York 10004 at 9:00 a.m. as promptly as practicable following the satisfaction or waiver of the conditions set forth in Article V (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions), but no earlier than twenty days after the date hereof and no later than the Termination Date (as defined below), or at such other place, time and/or date as shall be mutually agreed by Ciba, the Sellers and the Purchasers (the date of the Closing, the "Closing Date"). (b) At the Closing, each Seller shall deliver to each Purchaser one or more certificates representing the Shares being sold by such Seller to such Purchaser duly endorsed for transfer in blank or accompanied by stock powers duly endorsed in blank, with any required stock transfer stamps attached, in an aggregate amount equal to the number of Shares being purchased by such Purchaser hereunder. Delivery of such certificates shall be made against receipt by such Seller of the portion of the Purchase Price payable therefor to such Seller. The cash portion of the Purchase Price shall be paid by wire transfer to an account or accounts designated by the Sellers at least three business days prior to the Closing Date. (c) The Sellers shall be responsible for and shall pay any sales, use, transfer, documentary or other similar taxes that relate to the purchase and sale of the Shares hereunder. 1.3. Capitalized Terms. Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in Section 8.1. ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLERS Ciba and each Seller hereby represents and warrants to each Purchaser, as of the date hereof and as of the Closing, as follows: 2.1. Title to Shares. Such Seller has good and valid title to the Shares being sold by such Seller to each Purchaser hereunder, free and clear of all liens, charges, claims, security interests, restrictions, options, proxies, voting trusts or other encumbrances ("Encumbrances") other than Encumbrances that will be released prior to or simultaneously with the Closing. Assuming each Purchaser has the requisite power and authority to be the lawful owner of such Shares, upon delivery to each Purchaser at the Closing of certificates representing such Shares, and upon such Seller's receipt of the Purchase Price for such Shares, each Purchaser will acquire all of such Seller's right, title and interest in and to the Shares being sold to each Purchaser and will receive good and valid title to such Shares, free and clear of any and all Encumbrances created by such Seller. 2.2. Organization. Each of Ciba and such Seller is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization or incorporation and has the requisite corporate power and authority to carry on its business as it is now being conducted. 2.3. Due Authorization. Each of Ciba and such Seller has all right, power and authority to enter into this Agreement and each of the other Transaction Documents to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery by each of Ciba and such Seller of this Agreement and each of the other Transaction Documents to which it is a party, the sale and delivery of the Shares being sold by such Seller to each Purchaser hereunder and the compliance by each of Ciba and such Seller with each of the provisions of this Agreement and each of the other Transaction Documents to which it is a party have been duly authorized by all necessary corporate action of such party. This Agreement has been, and each of the other Transaction Documents to which each of Ciba and such Seller is a party when executed and delivered by each of Ciba and such Seller will be, duly and validly executed and delivered by such party, and this Agreement constitutes, and each of such other Transaction Documents when executed and delivered by each of Ciba and such Seller will constitute, a valid and binding agreement of such party enforceable against such party in accordance with its terms except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors' rights generally and for limitations imposed by general principles of equity. 2.4. Consents, No Violations. Neither the execution, delivery or performance by either Ciba or such Seller of this Agreement or any of the other Transaction Documents to which it is a party nor the consummation of the transactions contemplated hereby or thereby will (a) conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation or by-laws or other organizational documents of either Ciba or such Seller, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create an Encumbrance, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under (i) any Law or (ii) any provision of any material agreement or other instrument to which either Ciba or such Seller is a party or pursuant to which either Ciba or such Seller or any of its assets or properties is subject, or (c) except for any required filing under the HSR Act and those consents waived or obtained prior to or at the Closing, require any consent, approval or authorization of, notification to, filing with, or exemption or waiver by, any Governmental Entity or any other Person on the part of either Ciba or such Seller. 2.5. Brokers or Finders. Except for Deutsche Bank, whose fees will be paid by Ciba and the Sellers, upon the consummation of the transactions contemplated by this Agreement, no agent, broker, investment banker or other Person is or will be entitled to any broker's or finder's fee or any other commission or similar fee from Ciba or such Seller in connection with any of the transactions contemplated by this Agreement or the other Transaction Documents. 2.6. Disclosure. There is no fact or information relating to the Company or any of its subsidiaries, actually known to Ciba or such Seller, that would reasonably be expected to have a Material Adverse Effect and that has not been disclosed to the Purchasers by Ciba or such Seller. 2.7. Qualified Purchaser Status. Such Seller is a "qualified purchaser" as defined in Section 2(51)(A)(iv) of the Investment Company Act. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS Each Purchaser hereby represents and warrants to Ciba and each Seller, severally and not jointly, as of the date hereof and as of the Closing, as follows: 3.1. Organization. Such Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite power and authority to carry on its business as it is now being conducted. 3.2. Due Authorization. Such Purchaser has all right, power and authority to enter into this Agreement and each of the other Transaction Documents to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery by such Purchaser of this Agreement and each of the other Transaction Documents to which it is a party, the purchase of the Shares being purchased by such Purchaser and the compliance by such Purchaser with each of the provisions of this Agreement and each of the Transaction Documents to which it is a party (a) are within the power and authority of such Purchaser and (b) have been duly authorized by all necessary action on the part of such Purchaser. This Agreement has been, and each of the other Transaction Documents to which it is a party when executed and delivered by such Purchaser will be, duly and validly executed and delivered by such Purchaser, and this Agreement constitutes, and each of such other Transaction Documents when executed and delivered by such Purchaser will constitute, a valid and binding agreement of such Purchaser enforceable against such Purchaser in accordance with its respective terms except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors' rights generally and for limitations imposed by general principles of equity. 3.3. Consents, No Violations. Neither the execution, delivery or performance by such Purchaser of this Agreement or any of the other Transaction Documents to which it is a party nor the consummation of the transactions contemplated hereby or thereby will (a) conflict with, or result in a breach or a violation of, any provision of the organizational documents of such Purchaser, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create an Encumbrance, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under (i) any Law, or (ii) any provision of any material agreement or other instrument to which such Purchaser is a party or pursuant to which such Purchaser or its assets or properties is subject, or (c) except for any required filing under the HSR Act, the German Act Against Restraints of Competition, and any other foreign governmental and regulatory filings, notices and approvals required to be made or obtained as contemplated by Section 5.1(d) hereof, and those consents waived or obtained, require any consent, approval or authorization of, notification to, filing with, or exemption or waiver by, any Governmental Entity or any other Person on the part of such Purchaser. 3.4. No Brokers or Finders. No agent, broker, investment banker or other Person is or will be entitled to any broker's or finder's fee or any other commission or similar fee from such Purchaser in connection with the transactions contemplated by this Agreement or the other Transaction Documents. 3.5. Availability of Funds. Such Purchaser has, or will have prior to the Closing, available sufficient funds to pay such Purchaser's cash portion of the Purchase Price. 3.6. Restricted Securities. Such Purchaser is purchasing the Shares being purchased by it for investment and not with a view to any public resale or other distribution thereof, except in compliance with applicable securities laws. ARTICLE IV PRE-CLOSING COVENANTS 4.1. Ownership of Shares. Ciba and the Sellers shall retain beneficial and record ownership of the Shares during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing. Other than in connection with the transactions contemplated by this Agreement, Ciba and the Sellers shall not, and shall not authorize any of their affiliates, officers or directors (other than such officers and directors acting in their capacities as officers or directors of the Company) or any other Person on its behalf to, directly or indirectly, (i) sell, assign, transfer, encumber or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to the direct or indirect sale, assignment, transfer, encumbrance or other disposition of, any of the Shares or any economic interest therein or (ii) seek, solicit, propose, facilitate, participate in any discussions or negotiations regarding, or furnish any information with respect to any transaction or arrangement described in clause (i). Ciba and the Sellers will notify each Purchaser promptly (and provide all details reasonably requested by such Purchaser) if any of Ciba or the Sellers is approached or solicited, directly or indirectly, by any person with respect to any of the foregoing. 4.2. HSR Act; German Filing; Cooperation. The Purchasers shall make or cause to be made all necessary filings under the HSR Act and the German Act Against Restraints of Competition and shall use their reasonable best efforts to take, or cause to be taken, all actions necessary, proper or advisable in connection therewith to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement. The Purchasers, Ciba and the Sellers agree to use their reasonable best efforts to take, or cause to be taken, all such further actions as shall be necessary, proper or advisable to make effective and consummate as promptly as practicable the transactions contemplated by this Agreement. 4.3. Consents; Approvals. Ciba and each of the Sellers shall use their reasonable best efforts to obtain, or to assist the Company in obtaining, all consents, waivers, exemptions, approvals, authorizations or orders (collectively, "Consents") (including, without limitation (i) Consents required to avoid any breach, violation, default, encumbrance or right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration of any material agreement or instrument to which Ciba or such Seller is a party or its properties or assets are bound, (ii) all Consents pursuant to the Company's financing documents, including without limitation, all indentures and credit agreements of the Company, and (iii) all United States and foreign governmental and regulatory rulings and approvals). 4.4. FIRPTA Certificate. Prior to the Closing, the Sellers shall cause to be delivered to the Purchasers the certificate described in Treas. Reg. Section 1.1445-2(c)(3), duly executed and acknowledged, certifying that the stock being sold is not a United States real property interest under Section 897 of the Internal Revenue Code of 1986, as amended. 4.5. Indenture. Prior to or simultaneously with the Closing, Ciba shall execute and deliver the Consent and Termination Agreement and shall consent in writing to the amendment to the Indenture in the manner provided in Section 3.02 of the Consent and Termination Agreement. ARTICLE V CONDITIONS 5.1. Conditions to Obligations of the Purchasers, Ciba and the Sellers. The respective obligations of the Purchasers, Ciba and the Sellers to consummate the transactions contemplated hereby are subject to the satisfaction or waiver at or prior to the Closing of each of the following conditions: (a) No statute, rule or regulation or order of any court or administrative agency shall be in effect which prohibits the consummation of the transactions contemplated hereby; (b) Any waiting period (and any extension thereof) under the HSR Act applicable to this Agreement and the transactions contemplated hereby shall have expired or been terminated; (c) The German Federal Cartel Office shall have approved the transactions contemplated hereby; and (d) The Company and/or the Investors shall have made any other material foreign governmental and regulatory filings, given all material notices and obtained any material approvals that the Company and the Purchasers reasonably agree are required in connection with the consummation of the transactions contemplated by this Agreement, the Governance Agreement, the Registration Rights Agreement and the Hexcel Agreement. 5.2. Conditions to Obligations of the Purchasers. The obligations of each Purchaser to consummate the transactions contemplated hereby shall be subject to the satisfaction or waiver at or prior to the Closing of each of the following conditions: (a) Each of the representations and warranties of Ciba and the Sellers contained in this Agreement shall be true and correct in all material respects when made and as of the Closing (except to the extent such representations and warranties are made as of a particular date, in which case such representations and warranties shall have been true and correct in all material respects as of such date); (b) Each of Ciba and the Sellers shall have performed, satisfied and complied in all material respects with all of its covenants and agreements set forth in this Agreement to be performed, satisfied and complied with prior to or at the Closing; (c) Each of Ciba and the Sellers shall have delivered to each Purchaser an officer's certificate certifying as to Ciba and such Seller's compliance with the conditions set forth in clauses (a) and (b) of this Section 5.2; (d) The transactions contemplated by the Hexcel Agreement shall be consummated simultaneously with the transactions contemplated hereby and the Purchasers and the Company shall have executed and delivered the governance agreement in the form of Exhibit B hereto (the "Governance Agreement"), the registration rights agreement in the form of Exhibit C hereto (the "Registration Rights Agreement"), and all other agreements, documents and instruments required to be delivered in connection therewith; (e) Each Purchaser and Ciba shall have executed and delivered a Pledge Agreement in the form of Exhibit D hereto (the "Pledge Agreement"); (f) Such Purchaser shall have received the opinions substantially in the form set forth on Exhibit E from either Cravath, Swaine & Moore, John J . McGraw, Esq. or Switzerland counsel for Ciba and the Sellers; (g) (i) The Majority Lenders (as defined in the Credit Agreement) shall have executed an agreement, in form and substance satisfactory to the Purchasers, consenting to the transactions contemplated hereby and (ii) the agreements, each dated as of the date hereof, from the Company's employees set forth on Exhibit F hereto shall be in full force and effect as of the Closing; (i) Mr. John J. Lee's employment agreement attached hereto as Exhibit G and all other agreements contemplated thereby shall be in full force and effect as of the Closing; (j) The Consent and Termination Agreement in the form attached as Exhibit H (the "Consent and Termination Agreement") shall have been executed and delivered by Ciba and the Company and the Indenture shall have been amended in the manner set forth in Section 3.02 of the Consent and Termination Agreement; and (k) Neither the Company nor any of its subsidiaries shall have suffered any change, event, or development or series of changes, events or developments which individually or in the aggregate has had or would reasonably be expected to have a Material Adverse Effect. 5.3. Conditions to Obligations of Ciba and the Sellers. The obligations of Ciba and the Sellers to consummate the transactions contemplated hereby shall be subject to the satisfaction or waiver at or prior to the Closing of each of the following conditions: (a) Each of the representations and warranties of the Purchasers contained in this Agreement shall be true and correct when made and as of the Closing (except to the extent such representations and warranties are made as of a particular date, in which case such representations and warranties shall have been true and correct in all material respects as of such date); (b) The Purchasers shall have performed, satisfied and complied with all of its covenants and agreements set forth in this Agreement to be performed, satisfied and complied with prior to or at the Closing Date; (c) The Purchasers shall have delivered to each of Ciba and the Sellers an officer's certificate certifying as to the Purchasers' compliance with the conditions set forth in clauses (a) and (b) of this Section 5.3; (d) The Purchasers shall have executed and delivered the Pledge Agreement and the Purchasers shall have delivered to Ciba, as collateral agent, the Shares to be held as collateral security thereunder; and (e) Ciba and the Sellers shall have received an opinion from Fried, Frank, Harris, Shriver & Jacobson substantially in the form of Exhibit I hereto. ARTICLE VI TERMINATION 6.1. Termination. (a) This Agreement may be terminated at any time prior to the Closing: (i) by mutual written agreement of (x) Ciba and the Sellers and (y) the Purchasers; (ii) by (x) the Purchasers or (y) Ciba and the Sellers, if the Closing shall not have occurred by the latest of (A) November 9, 2000, (B) November 27, 2000, if the condition set forth in Section 5.2(g)(i) shall not have been satisfied on or prior to November 9, 2000, (C) two business days after the satisfaction of the conditions set forth in Sections 5.1(b), 5.1(c) and 5.1(d) hereof (the latest of such dates, the "Drop Dead Date") (provided that the right to terminate this Agreement under this Section 6.1(a)(ii) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such date); provided, however, that notwithstanding the foregoing, if the Company, by a vote of the Independent Directors terminates the Hexcel Agreement pursuant to Section 6.1 thereof in connection with the execution of a definitive agreement relating to an Acquisition Proposal, the Drop Dead Date shall be automatically extended to the earlier of (1) the business day following the consummation of the transactions contemplated by the Acquisition Proposal and (2) the date that is 21 business days following the date such Acquisition Proposal is abandoned or terminated; provided, however that the Drop Dead Date shall not, in any case, be extended past the date that is 21 business days following the first anniversary of the date hereof; or (iii) by (x) the Purchasers or (y) Ciba and the Sellers, if a court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued a nonappealable final order, decree or ruling or taken any other action having the effect of permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement. (b) The date of any termination of this Agreement pursuant to Section 6.1(a) is referred to herein as the "Termination Date". 6.2. Effect of Termination. In the event of the termination of this Agreement pursuant to Section 6.1(a), this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto (or any stockholder, director, officer, partner, employee, agent, consultant or representative of such party) except as set forth in this Section 6.2, provided that nothing contained in this Agreement shall relieve any party from liability for any breach of this Agreement and provided further that this Section 6.2 and Sections 7.1, 7.2, 7.3, 8.3, 8.12, 8.13 and 8.14 shall survive termination of this Agreement and Section 8.2 shall survive termination of this Agreement to the extent provided therein. ARTICLE VII INDEMNIFICATION 7.1. Survival. The representations and warranties of the parties hereto contained in this Agreement or in any of the other Transaction Documents shall survive the Closing and the delivery of the Transaction Documents. In the case of the representations and warranties made by Ciba, any Seller or any Purchaser in this Agreement or in any of the other Transaction Documents, such representations and warranties are being made severally and not jointly by Ciba and the Sellers or by the Purchasers, as the case may be. The covenants and agreements of the parties hereto contained in this Agreement or in any of the other Transaction Documents shall survive the Closing until performed in accordance with their terms. 7.2. Indemnification. (a) Ciba and the Sellers jointly and severally shall indemnify, defend and hold harmless the Purchasers, their Affiliates, and their respective officers, directors, partners, members, employees, agents, representatives, successors and assigns (each a "Purchaser Indemnified Person") from and against (I) all Losses incurred or suffered by a Purchaser Indemnified Person arising from (i) the breach of any of the representations or warranties made by Ciba or the Sellers in this Agreement or any other Transaction Document or (ii) the breach of any covenant or agreement made by Ciba or the Sellers in this Agreement or any other Transaction Document and (II) one-third of all Losses in respect of which an Investor Indemnified Person would be entitled to indemnification under the Hexcel Agreement pursuant to Section 7.2(a)(i) thereof after giving effect to the limitations on such indemnification contained in the Hexcel Agreement other than the limitation set forth in Section 7.2(c) thereof that limits the Company's liability thereunder to one-third of all Losses incurred by the Investor Indemnified Person; provided, that, the maximum amount recoverable under this Section 7.2(a)(II) shall be $10,000,000. (b) Each Purchaser, severally and not jointly, shall indemnify, defend and hold harmless Ciba and the Sellers, their Affiliates, and their respective officers, directors, partners, members, employees, agents, representatives, successors and assigns (each a "Sellers Indemnified Person") from and against all Losses incurred or suffered by a Sellers Indemnified Person arising from (i) the breach of any of the representations or warranties made by such Purchaser in this Agreement or any other Transaction Document or (ii) the breach of any covenant or agreement made by such Purchaser in this Agreement or any other Transaction Document. 7.3. Procedure for Indemnification. (a) If a Purchaser Indemnified Party or a Sellers Indemnified Person (such Person being referred to as the "Indemnitee") shall receive notice or otherwise learn of the assertion by a Person who is not a party to this Agreement of any claim or of the commencement by any such Person of any action (a "Claim") with respect to which the other party (the "Indemnifying Party") may be obligated to provide indemnification, such Indemnitee shall give such Indemnifying Party written notice thereof promptly after becoming aware of such Claim; provided, that the failure of any Indemnitee to give notice as provided in this Section 7.3 shall not relieve the applicable Indemnifying Party of its obligations under this Article VII, except to the extent that such Indemnifying Party is prejudiced by such failure to give notice; provided, further, that the applicable Indemnifying Party shall have no obligations under this Article VII unless such written notice is received by the Indemnifying Party within the survival periods set forth in Section 7.1. Such notice shall describe the Claim in reasonable detail, and shall indicate the amount (estimated if necessary) of the Loss that has been or may be sustained by or is claimed against such Indemnitee. Such notice shall be a condition precedent to any liability of any Indemnifying Party for any Claim under the provisions for indemnification contained in this Agreement. (b) An Indemnifying Party may elect to compromise, settle or defend, at such Indemnifying Party's own expense and by such Indemnifying Party's own counsel, any Claim; provided, however, that the Indemnifying Party shall not compromise, settle or defend a Claim without the consent of the Indemnitee (which consent shall not be unreasonably withheld). If an Indemnifying Party elects to compromise, settle or defend a Claim, it shall, within 30 days of the receipt of notice from an Indemnitee pursuant to Section 7.3(a) (or sooner, if the nature of such Claim so requires), notify the applicable Indemnitee of its intent to do so, and such Indemnitee shall cooperate in the compromise or settlement of, or defense against, such Claim. After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Claim, such Indemnifying Party shall not be liable to such Indemnitee under this Article VII for any legal or other expenses subsequently incurred by such Indemnitee in connection with the defense thereof (except expenses approved in advance by the Indemnitee); provided, that such Indemnitee shall have the right to employ one separate counsel reasonably satisfactory to the Indemnifying Party to represent such Indemnitee if the defendants in any such claim included both the Indemnifying Party and the Indemnitee and, in such Indemnitee's reasonable judgment, a conflict of interest between such Indemnitee and such Indemnifying Party exists in respect of such claim, and in that event the reasonable fees and expenses of such separate counsel shall be paid by such Indemnifying Party. If an Indemnifying Party elects not to compromise, settle or defend against a Claim, or fails to notify an Indemnitee of its election as provided in this Section 7.3 within 30 days of notice from the Indemnitee pursuant to Section 7.3(a), such Indemnitee may compromise, settle or defend such Claim. (c) If an Indemnifying Party chooses to defend any claim, the applicable Indemnitee shall make available to such Indemnifying Party any personnel or any books, records or other documents within its control that are necessary or appropriate for such defense. (d) If the amount of any Loss shall, at any time subsequent to payment pursuant to this Agreement, be reduced by recovery, settlement or otherwise, the amount of such reduction, less any expenses incurred in connection therewith, shall promptly be repaid by the applicable Indemnitee to the applicable Indemnifying Party. (e) In the event of payment by an Indemnifying Party to any Indemnitee in connection with any Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right or claim relating to such Claim. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and, at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right or claim. ARTICLE VIII MISCELLANEOUS 8.1. Defined Terms; Interpretations. The following terms, as used herein, shall have the following meanings: "Acquisition Proposal" shall have the meaning ascribed to such term in the Hexcel Agreement. "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. "Aggregate Consideration Per Share" shall have the meaning ascribed thereto in Section 8.2(b)(i). "Agreement" shall have the meaning ascribed thereto in the preamble. "Alternative Transaction" shall have the meaning ascribed thereto in Section 8.2(b)(ii). "Beneficially Owning" shall have the meaning ascribed thereto in the Governance Agreement. "Ciba" shall have the meaning ascribed thereto in the recitals. "Claim" shall have the meaning ascribed thereto in Section 7.3. "Closing" shall have the meaning ascribed thereto in Section 1.2(a). "Closing Date" shall have the meaning ascribed thereto in Section 1.2(a). "Common Stock" shall have the meaning ascribed thereto in the recitals. "Company" shall have the meaning ascribed thereto in the recitals. "Consent and Termination Agreement" shall have the meaning ascribed thereto in Section 5.2(j). "Consents" shall have the meaning ascribed thereto in Section 4.3. "Credit Agreement" shall mean the Second Amended and Restated Credit Agreement, dated as of September 15, 1998, among the Company, certain of its subsidiaries, the Lenders parties thereto, Citibank N.A. and Credit Suisse First Boston. "DGCL" shall mean the Delaware General Corporation Law. "Drop Dead Date" shall have the meaning ascribed thereto in Section 6.1(a)(ii). "Encumbrances" shall have the meaning ascribed thereto in Section 2.1. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time. Reference to a particular section of the Securities Exchange Act of 1934, as amended, shall include reference to the comparable section, if any, of any such successor federal statute. "Fair Market Value" shall have the meaning ascribed thereto in Section 8.2(b)(iii). "Governance Agreement" shall have the meaning ascribed thereto in Section 5.2(d). "Governmental Entity" shall mean any supernational, national, foreign, federal, state or local judicial, legislative, executive, administrative or regulatory body or authority. "Hexcel Agreement" shall mean the agreement, dated as of the date hereof, among each of the Purchasers and the Company, attached as Exhibit J hereto. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder. "Indemnifying Party" shall have the meaning ascribed thereto in Section 7.3. "Indemnitee" shall have the meaning ascribed thereto in Section 7.3. "Indenture" shall have the meaning ascribed thereto in the Consent and Termination Agreement. "Independent Directors" shall have the meaning ascribed thereto in the Hexcel Agreement. "Investment Company Act" shall mean the Investment Company Act of 1940, as amended, and the rules and regulations thereunder. "Investor Indemnified Person" shall have the meaning ascribed thereto in Section 7.2(a) of the Hexcel Agreement. "Laws" shall include all foreign, federal, state, and local laws, statutes, ordinances, rules, regulations, orders, judgments, decrees and bodies of law. "Litigation" shall have the meaning ascribed thereto in Section 8.13. "Losses" shall mean each and all of the following items: claims, losses, liabilities, obligations, payments, damages, charges, judgments, fines, penalties, amounts paid in settlement, costs and expenses (including, without limitation, interest which may be imposed in connection therewith, costs and expenses of investigation, actions, suits, proceedings, demands, assessments and fees, expenses and disbursements of counsel, consultants and other experts). "Material Adverse Effect" shall mean a material adverse effect on the properties, business, operations, results of operations, earnings, assets, liabilities or condition (financial or otherwise) of the Company and its subsidiaries taken as a whole; provided, however, that changes relating to United States or foreign economies in general or the Company's and its subsidiaries' industries in general and not specifically relating to the Company or its subsidiaries shall not constitute a Material Adverse Effect for purposes of this Agreement. "Notes" shall have the meaning ascribed thereto in Section 1.1. "Person" shall mean any individual, firm, corporation, limited liability company, partnership, company or other entity, and shall include any successor (by merger or otherwise) of such entity. "Pledge Agreement" shall have the meaning ascribed thereto in Section 5.2(e). "Purchase Price" shall have the meaning ascribed thereto in Section 1.1. "Purchasers" shall have the meaning ascribed thereto in the preamble. "Purchaser Indemnified Person" shall have the meaning ascribed thereto in Section 7.2(a). "Registration Rights Agreement" shall have the meaning ascribed thereto in Section 5.2(d). "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time. Reference to a particular section of the Securities Act shall include reference to the comparable section, if any, of such successor federal statute. "Sellers" shall have the meaning ascribed thereto in the preamble. "Sellers Indemnified Person" shall have the meaning ascribed thereto in Section 7.2(b). "Shares" shall have the meaning ascribed thereto in the recitals. "Step-Down Date" shall have the meaning ascribed thereto in Section 8.2(a). "Termination Date" shall have the meaning ascribed thereto in Section 6.1(b). "Third Party Purchaser" shall have the meaning ascribed thereto in Section 8.2(b)(iv). "Transaction Documents" shall mean this Agreement, the Notes, the Pledge Agreement and all other contracts, agreements, schedules, certificates and other documents being delivered pursuant to or in connection with this Agreement or such other documents or the transactions contemplated hereby or thereby. 8.2. Fees and Expenses. (a) Except as provided in this Section 8.2, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such costs or expense. At the Closing, Ciba and the Sellers shall reimburse the Purchasers for their reasonable costs and expenses (including the fees and expenses of its counsel) incurred in connection with this Agreement and the transactions contemplated hereby, in an amount not to exceed $500,000. In addition, if the transactions contemplated by this Agreement are not consummated by reason of the failure of Ciba or any Seller to perform its obligations hereunder, then (i) on the Termination Date, Ciba and the Sellers shall pay to the Purchasers an amount in cash equal to the Purchasers' reasonable costs and expenses (including the fees and expenses of its counsel) incurred in connection with this Agreement and the transactions contemplated hereby in an amount not to exceed $1,000,000 in the aggregate and (ii) (A) if any Alternative Transaction is consummated on or prior to March 1, 2001 (the "Step-Down Date") or thereafter pursuant to a definitive agreement executed on or prior to the Step-Down Date, Ciba and the Sellers shall pay the Purchasers an amount in cash equal to the product of (x) the number of Shares sold, transferred or otherwise disposed of in such Alternative Transaction, multiplied by (y) 25% of the Aggregate Consideration Per Share in excess of $11.00, or (B) if any Alternative Transaction is consummated after the Step-Down Date and on or prior to June 1, 2001 (in a transaction to which clause (A) does not apply), or thereafter pursuant to a definitive agreement executed after the Step-Down Date and on or prior to June 1, 2001, Ciba and the Sellers shall pay the Purchasers an amount in cash equal to the product of (x) the number of shares sold, transferred or otherwise disposed of in such Alternative Transaction, multiplied by (y) 10% of the Aggregate Consideration Per Share in excess of $11.00. Any amounts payable by Ciba and the Sellers to the Purchasers pursuant to clause (ii) above shall be paid to the Purchasers no later than the first business day after the closing of each Alternative Transaction to which such clause (ii) applies; provided, however, that in no event shall any amounts be paid pursuant to clause (ii) above if any Alternative Transaction to which clause (ii) applies does not close. (b) Notwithstanding anything to the contrary contained herein, if (i) the Hexcel Agreement is terminated by the Company by a vote of the Independent Directors pursuant to Section 6.1 thereof upon execution of a definitive agreement with respect to an Acquisition Proposal, and (ii) the transactions contemplated by such Acquisition Proposal are consummated on or prior to the date that is 21 business days following the first anniversary of the date hereof without the Closing hereunder having occurred, then Ciba and the Sellers shall pay the Purchasers no later than the first business day after the closing of such transactions, an amount in cash equal to the product of (i) the lesser of (A) the number of Shares sold, transferred or otherwise disposed of in such Acquisition Proposal and (B) the number of Shares being purchased by the Purchasers hereunder, multiplied by (ii) 100% of the Aggregate Consideration Per Share in excess of $11.00. (c) For purposes of this Section 8.2: (i) "Aggregate Consideration Per Share" shall mean the amount per Share payable to any Seller and/or any of its Affiliates pursuant to any Alternative Transaction or Acquisition Proposal. The amount per Share payable with respect to any Alternative Transaction or Acquisition Proposal shall be determined by dividing (A) the sum of (x) all cash amounts payable to any Seller and/or any of its Affiliates and (y) the Fair Market Value of all securities, property or other consideration payable to any Seller and/or any of its Affiliates, in each case pursuant to such Alternative Transaction or Acquisition Proposal by (B) the number of Shares sold, transferred or otherwise disposed of pursuant to such Alternative Transaction or Acquisition Proposal. (ii) "Alternative Transaction" shall mean any sale, transfer or other disposition of all or any portion of the Shares by any Seller and/or any of its Affiliates to a Third Party Purchaser. (iii) "Fair Market Value" shall mean (a) with respect to securities (i) listed for trading on a national securities exchange or admitted for trading on a national market system, either (x) the closing price quoted on the principal securities exchange on which such securities are listed for trading or (y) if not so listed, the average of the closing bid and asked prices for such securities quoted on the national market system on which such securities are admitted for trading, each as published in the Eastern Edition of The Wall Street Journal, in each case for the ten (10) trading days prior to the date such securities are delivered to Ciba or the Sellers or (ii) not listed for trading on a national securities exchange or admitted for trading on a national market system, the fair market value of such securities as determined in good faith from time to time according to the mutual agreement of the Purchasers, Ciba and the Sellers; provided, however, in the event that Ciba, the Purchasers and the Sellers are unable to reach an agreement as to the fair market value of such securities, the fair market value of such securities will be determined by a neutral third party mutually agreed upon by the Purchasers, Ciba and the Sellers, with such determination by the neutral third party being binding on the Purchasers, Ciba and the Sellers and not subject to any recourse or appeal or (b) with respect to any other property, the fair market value of such property as determined in good faith from time to time according to the mutual agreement of the Purchasers, Ciba and the Sellers; provided, however, in the event that the Purchasers, Ciba and the Sellers are unable to reach an agreement as to the fair market value of such property, the fair market value of such property will be determined by a neutral third party mutually agreed upon by the Purchasers, Ciba and the Sellers, with such determination by the neutral third party being binding on the Purchasers, Ciba and the Sellers and not subject to any recourse or appeal. (iv) "Third Party Purchaser" shall mean any Person other than Ciba, any Seller or any Affiliates of Ciba or any Seller. 8.3. Public Announcements. The Purchasers, Ciba and the Sellers shall consult with each other before issuing any press release with respect to this Agreement or the transactions contemplated hereby and neither shall issue any such press release, make any such public statement or make any filings required by Law without the prior consent of the other, which consent shall not be unreasonably withheld or delayed; provided, however, that a party may, without the prior consent of the other party, issue such press release, make such public statement or make such required filing as may upon the advice of counsel be required by Law or any exchange on which Ciba or the Sellers' securities are listed and, to the extent time permits, it has used all reasonable efforts to consult with the other party prior thereto. 8.4. Further Assurances. At any time or from time to time after the Closing, Ciba and the Sellers, on the one hand, and the Purchasers, on the other hand, agree to cooperate with each other, and at the request of the other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby or by the other Transaction Documents and to otherwise carry out the intent of the parties hereunder or thereunder. 8.5. Successors and Assigns. This Agreement shall bind and inure to the benefit of Ciba, the Sellers and the Purchasers and the respective successors, permitted assigns, heirs and personal representatives of Ciba, the Sellers and the Purchasers, provided that prior to the Closing none of Ciba or the Sellers may assign its rights or obligations under this Agreement to any Person without the prior written consent of the Purchasers, and provided further that the Purchasers may not assign their rights or obligations under this Agreement to any Person (other than an Affiliate of such Purchaser) without the prior written consent of Ciba and the Sellers. In addition, and whether or not any express assignment has been made, the provisions of this Agreement which are for the Purchasers' benefit as Purchasers or holders of the Shares are also for the benefit of, and enforceable by, any Affiliates of the Purchasers who hold such Shares and received such Shares in accordance with the terms of this Agreement. 8.6. Entire Agreement. This Agreement and the other Transaction Documents contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior and contemporaneous arrangements or understandings with respect thereto, including, without limitation, the Letter Agreement, dated September 1, 2000, between GS Capital Partners 2000, L.P. and Ciba Specialty Chemicals Holding Inc. and Ciba Specialty Chemicals Corporation, as amended prior to the date hereof. 8.7. Notices. All notices, requests, consents and other communications hereunder to any party shall be deemed to be sufficient if contained in a written instrument delivered in person or sent by telecopy, nationally recognized overnight courier or first class registered or certified mail, return receipt requested, postage prepaid, addressed to such party at the address set forth below or such other address as may hereafter be designated in writing by such party to the other parties: (i) if to Ciba and the Sellers, to each of the following addresses: Ciba Specialty Chemicals Holding Inc. Klybeckstrasse 141 CH - 4002, Basel Switzerland Telecopy No.: 41-61-636-4728 Attention: Oliver Strub, Esq. Ciba Specialty Chemicals Inc. Klybeckstrasse 141 CH - 4002, Basel Switzerland Telecopy No.: 41-61-636-4728 Attention: Oliver Strub, Esq. Ciba Specialty Chemicals Corporation P.O. Box 2005 560 White Plains Road Tarrytown, New York 10591 Telecopy No.: (914) 785-3622 Attention: Mr. Stanley Sherman John J. McGraw, Esq. with a copy to (which shall not constitute notice): Cravath, Swaine & Moore Worldwide Plaza 825 Eighth Avenue New York, New York 10019-7475 Telecopy No.: (212) 859-4000 Attention: Philip A. Gelston, Esq. (ii) if to the Purchasers, to: c/o Goldman Sachs Capital Partners 2000, L.P. 85 Broad Street New York, New York 10004 Telecopy No.: (212) 357-5505 Attention: Mr. Sanjeev Mehra with a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Telecopy No.: (212) 859-8587 Attention: Robert C. Schwenkel, Esq. All such notices, requests, consents and other communications shall be deemed to have been given or made if and when delivered personally or by overnight courier to the parties at the above addresses or sent by electronic transmission, with confirmation received, to the telecopy numbers specified above (or at such other address or telecopy number for a party as shall be specified by like notice). 8.8. Amendments. The terms and provisions of this Agreement may be modified or amended, or any of the provisions hereof waived, temporarily or permanently, in a writing executed and delivered by Ciba, the Sellers and the Purchasers. No waiver of any of the provisions of this Agreement shall be deemed to or shall constitute a waiver of any other provision hereof (whether or not similar). No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof. 8.9. Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. 8.10. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement. 8.11. Nouns and Pronouns. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice versa. 8.12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW. 8.13. Submission to Jurisdiction. Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of New York and of the United States of America, in each case located in the County of New York, for any claim, action, suit, investigation or proceeding ("Litigation") arising out of or relating to this Agreement or the other Transaction Documents and the transactions contemplated hereby and thereby (and agrees not to commence any Litigation relating hereto or thereto except in such courts), and further agrees that service of any process, summons, notice or document by U.S. registered mail to its respective address set forth in this Agreement shall be effective service of process for any Litigation brought against it in any such court. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any Litigation arising out of this Agreement or the transactions contemplated hereby in the courts of the State of New York or the United States of America, in each case located in the County of New York, hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Litigation brought in any such court has been brought in an inconvenient forum. 8.14. WAIVER OF JURY TRIAL. CIBA, THE SELLERS AND THE PURCHASERS HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTION DOCUMENTS. 8.15. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid, but if any provision of this Agreement is held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not render invalid or unenforceable any other provision of this Agreement. IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date first above written. LXH, L.L.C. By: GS Capital Partners 2000, L.P., its managing member By: GS Advisors 2000, L.L.C., its general partner By: /s/ Katherine L. Nissenbaum ------------------------------ Name: Katherine L. Nissenbaum Title: Vice President LXH II, L.L.C. By: GS Capital Partners 2000, L.P., its managing member By: GS Advisors 2000, L.L.C., its general partner By: /s/ Katherine L. Nissenbaum ------------------------------ Name: Katherine L. Nissenbaum Title: Vice President CIBA SPECIALTY CHEMICALS HOLDING INC. By:/s/ Hans-Ulrich Muller ---------------------------- Name: Hans-Ulrich Muller Title: General Counsel By:/s/ Peter Sidler ---------------------------- Name: Peter Sidler Title: Senior Tax and Corporate Counsel CIBA SPECIALTY CHEMICALS INC. By:/s/ Hans-Ulrich Muller ---------------------------- Name: Hans-Ulrich Muller Title: General Counsel By:/s/ Peter Sidler ---------------------------- Name: Peter Sidler Title: Senior Tax and Corporate Counsel CIBA SPECIALTY CHEMICALS CORPORATION By:/s/ Stanley Sherman ---------------------------- Name: Stanley Sherman Title: President and Chief Executive Officer SCHEDULE 1.1 SHARE AND PURCHASE PRICE ALLOCATION PURCHASER SHARES PURCHASED CASH PROMISSORY NOTES - --------- ---------------- ---- ---------------- LXH, L.L.C. 8,272,312 $70,314,652 $20,680,780 LXH II, L.L.C. 6,252,688 $53,147,848 $15,631,720 EX-99.3 4 0004.txt EXHIBIT 3 PROMISSORY NOTE --------------- THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT. FOR INFORMATION REGARDING THE ISSUE PRICE OF THE NOTE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE, THE ISSUE DATE OF THE NOTE OR THE YIELD TO MATURITY OF THE NOTE, CONTACT BEN ADLER AT 85 BROAD STREET, NEW YORK, NEW YORK 10004. THIS NOTE IS SUBJECT TO TRANSFER RESTRICTIONS SET FORTH IN SECTION 10 LXH, L.L.C. 7.5% RECOURSE SECURED PAY-IN-KIND PROMISSORY NOTE DUE DECEMBER 31, 2004 $20,680,780.00 New York, New York December 19, 2000 FOR VALUE RECEIVED, the undersigned, LXH, L.L.C. ("BORROWER"), a Delaware limited liability company, hereby promises to pay to the order of Ciba Specialty Chemicals Corporation ("CIBA"), a corporation organized under the laws of Delaware, or its registered assigns (the "HOLDER"), the principal sum of TWENTY MILLION SIX HUNDRED EIGHTY THOUSAND SEVEN HUNDRED EIGHTY DOLLARS AND ZERO CENTS ($20,680,780.00) on December 31, 2004 (the "MATURITY DATE"), with interest thereon from time to time as provided herein. Capitalized terms used but not defined herein shall have the meanings set forth in the Stock Pledge Agreement, dated as of the date hereof, between the Borrower and Ciba (the "PLEDGE AGREEMENT"). 1. Purchase Agreement. This Recourse Secured Pay-In-Kind Promissory Note (this "NOTE") is issued by the Borrower, on the date hereof, as partial payment for the purchase by the Borrower of shares of Common Stock, par value $.01 per share, of Hexcel Corporation pursuant to a Stock Purchase Agreement, dated as of the date hereof, by and among the Borrower, Ciba and certain affiliates of Ciba (the "PURCHASE AGREEMENT"). This Note and all promissory notes issued pursuant to paragraph 2 hereof are hereinafter referred to as the "NOTES." The Holder is entitled to the benefits of this Note and the Purchase Agreement, as it relates to this Note, and may enforce the agreements of the Borrower contained herein and therein and exercise the remedies provided for hereby and thereby or otherwise available in respect hereto and thereto. 2. Interest. The Borrower promises to pay interest ("INTEREST") on the unpaid principal amount of this Note at the rate of 7.5% per annum (the "INTEREST RATE") in the manner set forth in Section 2(a). Interest shall be due and payable on the unpaid principal amount hereof from and after the date of this Note annually, commencing on December 31, 2001 and thereafter on December 31 of each year (each, an "INTEREST PAYMENT DATE") until the entire principal amount has been paid in full and upon payment (including prepayment) of the principal amount hereof. Interest on this Note shall accrue from and including the date of issuance through and until repayment of the principal amount of this Note and payment of all Interest in full, and shall be computed on the basis of a 360-day year of twelve 30-day months. a. PIK Notes. The Borrower shall pay interest on the principal amount of this Note at the Interest Rate, by delivery to the Holder, by a date no later than each Interest Payment Date, of an additional promissory note (each a "PIK NOTE") having an aggregate principal amount equal to the accrued but unpaid Interest on this Note (and the amount of accrued but unpaid Interest on any previously delivered PIK Notes) and otherwise having substantially identical terms to this Note. If for any reason one or more PIK Notes shall not be delivered in accordance herewith, Interest on the unpaid principal of each PIK Note shall accrue from the Interest Payment Date in respect of which such PIK Note should have been issued until repayment in cash of the principal and payment in cash of all accrued Interest in full. Interest shall accrue on this Note such that the aggregate Interest due and payable on the Maturity Date and on each Interest Payment Date would be the same as if all PIK Notes not issued had been issued in accordance with the terms of this Note, and the principal payable on the Maturity Date with respect to this Note shall be an amount equal to the sum of the principal outstanding hereunder and the aggregate principal which would be outstanding if the PIK Notes not issued had been issued in accordance with the terms of this Note. b. No Usurious Interest. In the event that any interest rate provided for in this Section 2 shall be determined to be unlawful, this Note shall bear interest at the highest rate permitted by applicable law. Any payment by the Borrower of any interest amount in excess of that permitted by law shall be considered a mistake, with the excess being applied to the principal amount of this Note without prepayment premium or penalty; if no such principal amount is outstanding, such excess shall be returned to Borrower. c. Federal Income Tax Withholding. All interest due and payable hereunder shall be subject to applicable U.S. federal income tax withholding requirements, unless the Holder delivers to the Borrower proof of exemption from withholding in form and substance satisfactory to the Borrower. 3. Security. -------- a. Pledge Agreement. Payment of the principal of and Interest on this Note is secured pursuant to the Pledge Agreement, reference to which is made for a description of the Collateral provided thereby and the rights of Ciba and the Holder in respect of such Collateral. b. Transfer of Securities. Subject to the Borrower's compliance with Section 4 hereof and Section 2.6 of the Pledge Agreement, so long as no Event of Default has occurred and is continuing, the Borrower shall have the right to Transfer Collateral to a Third Party (a "COLLATERAL SALE"), or to a Permitted Transferee. 4. Mandatory Prepayment on Sale of Collateral and Payment of Cash Distributions. In the event of a Collateral Sale in exchange for Cash, the Borrower shall apply the Minimum Amount to the prepayment of the Notes as provided in Section 2.6 of the Pledge Agreement. If at any time the Borrower receives any Cash Distributions, the Borrower shall promptly apply such Cash Distributions to the prepayment of the outstanding principal amount of this Note, together with accrued and unpaid interest on the principal amount being prepaid, as provided in Section 2.3 of the Pledge Agreement. Pursuant to Section 2.6 of the Pledge Agreement, any Non-Cash Proceeds received by the Borrower in any Collateral Sale shall be delivered by the Borrower to the Holder as Collateral for the Secured Obligations. Concurrently with any prepayment of any portion of the principal amount of this Note pursuant to Section 4 hereof, the Holder shall make a notation of such payment hereon. If full payment in cash of all unpaid principal of and accrued and unpaid Interest on this Note is made, this Note shall be surrendered for cancellation and delivered to the Borrower. 5. Optional Prepayment/Redemption. The Borrower, at its option, may prepay all or any portion of the principal amount of this Note in cash at any time, by paying to the Holder an amount equal to the outstanding principal amount being prepaid together with any accrued and unpaid Interest on the principal amount being prepaid, and if accrued interest does not accompany such payment, the Holder shall deem a portion of such payment to be the payment of accrued interest with the remainder of such payment reflecting principal repayment. Concurrently with any prepayment of any portion of the principal amount of this Note pursuant to Section 5 hereof, the Holder shall make a notation of such payment hereon. If full payment in cash of all unpaid principal and accrued and unpaid Interest on this Note is made, this Note shall be surrendered for cancellation and delivered to the Borrower. 6. Defaults and Remedies. --------------------- a. Events of Default. An "EVENT OF DEFAULT" shall occur if: i. the Borrower shall default in the payment of the principal of this Note or any PIK Note, when and as the same shall become due and payable, whether at maturity or at a date fixed for prepayment or by acceleration or otherwise; or ii. the Borrower shall default in the payment of principal of or interest on any indebtedness for money borrowed of the Borrower (other than the Notes) having an aggregate principal amount of at least $500,000; or iii. an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (a) relief in respect of the Borrower, or of a substantial part of its property or assets, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other federal or state bankruptcy, insolvency, receivership or similar law, (b) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower, or for a substantial part of its property or assets, or (c) the winding up or liquidation of the Borrower; and such proceeding or petition shall continue undismissed for 60 days, or an order or decree approving or ordering any of the foregoing shall be entered; or iv. the Borrower shall (a) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency, receivership or similar law, (b) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in paragraph (iii) of this Section 6(a), (c) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower, or for a substantial part of its property or assets, (d) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (e) make a general assignment for the benefit of creditors, (f) admit in writing its inability or fail generally to pay its debts as they become due or (g) take any action for the purpose of effecting any of the foregoing. b. Acceleration. If an Event of Default occurs under Section 6(a)(iii) or (iv), then the outstanding principal of and all accrued Interest on this Note shall automatically become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived. If any other Event of Default occurs and is continuing, the Holder, by written notice to the Borrower, may declare the principal of and accrued Interest on this Note to be immediately due and payable. Upon such declaration, such principal and Interest shall become immediately due and payable. The Holder may rescind an acceleration and its consequences if all existing Events of Default have been cured or waived, except nonpayment of principal or Interest that has become due solely because of the acceleration, and if the rescission would not conflict with any judgment or decree. 7. Suits for Enforcement. Upon the occurrence of any one or more Events of Default, the Holder may proceed to protect and enforce its rights hereunder by suit in equity, action at law or by other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in the Purchase Agreement or this Note or in aid of the exercise of any power granted in the Purchase Agreement or this Note, or may proceed to enforce the payment of this Note, or to enforce any other legal or equitable right of the Holder. 8. Remedies Cumulative. No remedy herein conferred upon the Holder is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise. 9. Remedies Not Waived. No course of dealing between the Borrower and the Holder or any delay on the part of the Holder in exercising any rights hereunder shall operate as a waiver of any right. 10. Transfer. -------- a. Transfer Restrictions. The term "HOLDER" as used herein shall also include any transferee of this Note who acquires this Note in accordance with Section 10 and whose name has been recorded by the Borrower in the Note Register. Each transferee of this Note acknowledges that this Note has not been registered under the Securities Act, and may be transferred only pursuant to an effective registration under the Securities Act or pursuant to an applicable exemption from the registration requirements of the Securities Act. b. Register. The Borrower shall maintain a register (the "NOTE REGISTER") in its principal offices for the purpose of registering this Note and any transfer or partial transfer thereof, which register shall reflect and identify, at all times, the ownership of record of any interest in this Note. Upon the issuance of this Note, the Borrower shall record the name and address of the initial purchaser of this Note in the Note Register as the first Holder. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the Holder thereof for all purposes hereof, and the Borrower shall not be affected by any notice or knowledge to the contrary. Subject to Section 10(c), upon surrender for registration of transfer or exchange of this Note at the principal offices of the Borrower, the Borrower shall, at the expense of the party requesting such transfer or exchange, execute and deliver one or more new Notes of like tenor and of like aggregate principal amount, registered in the name of the Holder or a transferee or transferees, which Note or Notes shall bear (i) any applicable legend required by Treasury Regulations Section 1.1275-3 and (ii) any legends that appear on the face of the surrendered Note. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by written instrument of transfer duly executed by the Holder of such Note or such holder's attorney duly authorized in writing. The Borrower may require payment of a sum sufficient to cover any stamp tax of governmental charge imposed in respect of any such transfer of Notes. Each new Note shall be dated, and bear Interest from the date as to which Interest shall have been indefeasibly paid in full with respect to the surrendered Note, or if such Interest shall not have been so paid, such new Note shall be dated the date of the surrendered Note. c. Transfer Restrictions. This Note may not be transferred or assigned, in whole or in part, to any other Person without the prior written consent of the Borrower, except that this Note may be transferred or assigned, in whole or in part, by the Holder at any time to one or more Affiliates of the Holder. 11. Replacement of Note. On receipt by the Borrower of an affidavit of an authorized representative of the Holder stating the circumstances of the loss, theft, destruction or mutilation of this Note (and in the case of any such mutilation, on surrender and cancellation of such Note), the Borrower, at the expense of the Holder, will promptly execute and deliver, in lieu thereof, a new Note of like tenor. If required by the Borrower, such Holder must provide indemnity sufficient in the reasonable judgment of the Borrower to protect the Borrower from any loss which they may suffer if a lost, stolen or destroyed Note is replaced. 12. Covenants Bind Successors and Assigns. All the covenants, stipulations, promises and agreements in this Note contained by or on behalf of the Borrower shall bind its successors and assigns, whether so expressed or not. 13. Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier (with receipt confirmed), courier service or personal delivery at the addresses specified in Section 8.7 of the Purchase Agreement. All such notices and communications shall be deemed to have been duly given when: delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial overnight courier service; if mailed, five business days after being deposited in the mail, postage prepaid; or if telecopied, when receipt is acknowledged. 14. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW. 15. WAIVER OF JURY TRIAL. THE BORROWER AND THE HOLDER HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE. 16. FORUM SELECTION AND CONSENT TO JURISDICTION. THE BORROWER AND THE HOLDER HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENT TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, FOR ANY CLAIM, ACTION, SUIT, INVESTIGATION OR PROCEEDING ("LITIGATION") ARISING OUT OF OR RELATING TO THIS NOTE (AND AGREES NOT TO COMMENCE ANY LITIGATION RELATING HERETO EXCEPT IN SUCH COURTS), AND FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO ITS RESPECTIVE ADDRESS SET FORTH IN SECTION 8.7 OF THE PURCHASE AGREEMENT SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY LITIGATION BROUGHT AGAINST IT IN ANY SUCH COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF THIS NOTE IN THE COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. 17. Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof. 18. Headings. The headings in this Note are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. LXH, L.L.C. By: GS Capital Partners 2000, L.P., its managing member By: GS Advisors 2000, L.L.C., its general partner By:/s/ John E. Bowman ---------------------- Name: John E. Bowman Title: Vice President EX-99.4 5 0005.txt EXHIBIT 4 PROMISSORY NOTE --------------- THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT. FOR INFORMATION REGARDING THE ISSUE PRICE OF THE NOTE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE, THE ISSUE DATE OF THE NOTE OR THE YIELD TO MATURITY OF THE NOTE, CONTACT BEN ADLER AT 85 BROAD STREET, NEW YORK, NEW YORK 10004. THIS NOTE IS SUBJECT TO TRANSFER RESTRICTIONS SET FORTH IN SECTION 10 LXH II, L.L.C. 7.5% RECOURSE SECURED PAY-IN-KIND PROMISSORY NOTE DUE DECEMBER 31, 2004 $15,631,720.00 New York, New York December 19, 2000 FOR VALUE RECEIVED, the undersigned, LXH II, L.L.C. ("BORROWER"), a Delaware limited liability company, hereby promises to pay to the order of Ciba Specialty Chemicals Corporation ("CIBA"), a corporation organized under the laws of Delaware, or its registered assigns (the "HOLDER"), the principal sum of FIFTEEN MILLION SIX HUNDRED THIRTY-ONE THOUSAND SEVEN HUNDRED TWENTY DOLLARS AND ZERO CENTS ($15,631,720.00) on December 31, 2004 (the "MATURITY DATE"), with interest thereon from time to time as provided herein. Capitalized terms used but not defined herein shall have the meanings set forth in the Stock Pledge Agreement, dated as of the date hereof, between the Borrower and Ciba (the "PLEDGE AGREEMENT"). 1. Purchase Agreement. This Recourse Secured Pay-In-Kind Promissory Note (this "NOTE") is issued by the Borrower, on the date hereof, as partial payment for the purchase by the Borrower of shares of Common Stock, par value $.01 per share, of Hexcel Corporation pursuant to a Stock Purchase Agreement, dated as of the date hereof, by and among the Borrower, Ciba and certain affiliates of Ciba (the "PURCHASE AGREEMENT"). This Note and all promissory notes issued pursuant to paragraph 2 hereof are hereinafter referred to as the "NOTES." The Holder is entitled to the benefits of this Note and the Purchase Agreement, as it relates to this Note, and may enforce the agreements of the Borrower contained herein and therein and exercise the remedies provided for hereby and thereby or otherwise available in respect hereto and thereto. 2. Interest. The Borrower promises to pay interest ("INTEREST") on the unpaid principal amount of this Note at the rate of 7.5% per annum (the "INTEREST RATE") in the manner set forth in Section 2(a). Interest shall be due and payable on the unpaid principal amount hereof from and after the date of this Note annually, commencing on December 31, 2001 and thereafter on December 31 of each year (each, an "INTEREST PAYMENT DATE") until the entire principal amount has been paid in full and upon payment (including prepayment) of the principal amount hereof. Interest on this Note shall accrue from and including the date of issuance through and until repayment of the principal amount of this Note and payment of all Interest in full, and shall be computed on the basis of a 360-day year of twelve 30-day months. a. PIK Notes. The Borrower shall pay interest on the principal amount of this Note at the Interest Rate, by delivery to the Holder, by a date no later than each Interest Payment Date, of an additional promissory note (each a "PIK NOTE") having an aggregate principal amount equal to the accrued but unpaid Interest on this Note (and the amount of accrued but unpaid Interest on any previously delivered PIK Notes) and otherwise having substantially identical terms to this Note. If for any reason one or more PIK Notes shall not be delivered in accordance herewith, Interest on the unpaid principal of each PIK Note shall accrue from the Interest Payment Date in respect of which such PIK Note should have been issued until repayment in cash of the principal and payment in cash of all accrued Interest in full. Interest shall accrue on this Note such that the aggregate Interest due and payable on the Maturity Date and on each Interest Payment Date would be the same as if all PIK Notes not issued had been issued in accordance with the terms of this Note, and the principal payable on the Maturity Date with respect to this Note shall be an amount equal to the sum of the principal outstanding hereunder and the aggregate principal which would be outstanding if the PIK Notes not issued had been issued in accordance with the terms of this Note. b. No Usurious Interest. In the event that any interest rate provided for in this Section 2 shall be determined to be unlawful, this Note shall bear interest at the highest rate permitted by applicable law. Any payment by the Borrower of any interest amount in excess of that permitted by law shall be considered a mistake, with the excess being applied to the principal amount of this Note without prepayment premium or penalty; if no such principal amount is outstanding, such excess shall be returned to Borrower. c. Federal Income Tax Withholding. All interest due and payable hereunder shall be subject to applicable U.S. federal income tax withholding requirements, unless the Holder delivers to the Borrower proof of exemption from withholding in form and substance satisfactory to the Borrower. 3. Security. -------- a. Pledge Agreement. Payment of the principal of and Interest on this Note is secured pursuant to the Pledge Agreement, reference to which is made for a description of the Collateral provided thereby and the rights of Ciba and the Holder in respect of such Collateral. b. Transfer of Securities. Subject to the Borrower's compliance with Section 4 hereof and Section 2.6 of the Pledge Agreement, so long as no Event of Default has occurred and is continuing, the Borrower shall have the right to Transfer Collateral to a Third Party (a "COLLATERAL SALE"), or to a Permitted Transferee. 4. Mandatory Prepayment on Sale of Collateral and Payment of Cash Distributions. In the event of a Collateral Sale in exchange for Cash, the Borrower shall apply the Minimum Amount to the prepayment of the Notes as provided in Section 2.6 of the Pledge Agreement. If at any time the Borrower receives any Cash Distributions, the Borrower shall promptly apply such Cash Distributions to the prepayment of the outstanding principal amount of this Note, together with accrued and unpaid interest on the principal amount being prepaid, as provided in Section 2.3 of the Pledge Agreement. Pursuant to Section 2.6 of the Pledge Agreement, any Non-Cash Proceeds received by the Borrower in any Collateral Sale shall be delivered by the Borrower to the Holder as Collateral for the Secured Obligations. Concurrently with any prepayment of any portion of the principal amount of this Note pursuant to Section 4 hereof, the Holder shall make a notation of such payment hereon. If full payment in cash of all unpaid principal of and accrued and unpaid Interest on this Note is made, this Note shall be surrendered for cancellation and delivered to the Borrower. 5. Optional Prepayment/Redemption. The Borrower, at its option, may prepay all or any portion of the principal amount of this Note in cash at any time, by paying to the Holder an amount equal to the outstanding principal amount being prepaid together with any accrued and unpaid Interest on the principal amount being prepaid, and if accrued interest does not accompany such payment, the Holder shall deem a portion of such payment to be the payment of accrued interest with the remainder of such payment reflecting principal repayment. Concurrently with any prepayment of any portion of the principal amount of this Note pursuant to Section 5 hereof, the Holder shall make a notation of such payment hereon. If full payment in cash of all unpaid principal and accrued and unpaid Interest on this Note is made, this Note shall be surrendered for cancellation and delivered to the Borrower. 6. Defaults and Remedies. --------------------- a. Events of Default. An "EVENT OF DEFAULT" shall occur if: i. the Borrower shall default in the payment of the principal of this Note or any PIK Note, when and as the same shall become due and payable, whether at maturity or at a date fixed for prepayment or by acceleration or otherwise; or ii. the Borrower shall default in the payment of principal of or interest on any indebtedness for money borrowed of the Borrower (other than the Notes) having an aggregate principal amount of at least $500,000; or iii. an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (a) relief in respect of the Borrower, or of a substantial part of its property or assets, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other federal or state bankruptcy, insolvency, receivership or similar law, (b) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower, or for a substantial part of its property or assets, or (c) the winding up or liquidation of the Borrower; and such proceeding or petition shall continue undismissed for 60 days, or an order or decree approving or ordering any of the foregoing shall be entered; or iv. the Borrower shall (a) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency, receivership or similar law, (b) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in paragraph (iii) of this Section 6(a), (c) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower, or for a substantial part of its property or assets, (d) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (e) make a general assignment for the benefit of creditors, (f) admit in writing its inability or fail generally to pay its debts as they become due or (g) take any action for the purpose of effecting any of the foregoing. b. Acceleration. If an Event of Default occurs under Section 6(a)(iii) or (iv), then the outstanding principal of and all accrued Interest on this Note shall automatically become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived. If any other Event of Default occurs and is continuing, the Holder, by written notice to the Borrower, may declare the principal of and accrued Interest on this Note to be immediately due and payable. Upon such declaration, such principal and Interest shall become immediately due and payable. The Holder may rescind an acceleration and its consequences if all existing Events of Default have been cured or waived, except nonpayment of principal or Interest that has become due solely because of the acceleration, and if the rescission would not conflict with any judgment or decree. 7. Suits for Enforcement. Upon the occurrence of any one or more Events of Default, the Holder may proceed to protect and enforce its rights hereunder by suit in equity, action at law or by other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in the Purchase Agreement or this Note or in aid of the exercise of any power granted in the Purchase Agreement or this Note, or may proceed to enforce the payment of this Note, or to enforce any other legal or equitable right of the Holder. 8. Remedies Cumulative. No remedy herein conferred upon the Holder is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise. 9. Remedies Not Waived. No course of dealing between the Borrower and the Holder or any delay on the part of the Holder in exercising any rights hereunder shall operate as a waiver of any right. 10. Transfer. -------- a. Transfer Restrictions. The term "HOLDER" as used herein shall also include any transferee of this Note who acquires this Note in accordance with Section 10 and whose name has been recorded by the Borrower in the Note Register. Each transferee of this Note acknowledges that this Note has not been registered under the Securities Act, and may be transferred only pursuant to an effective registration under the Securities Act or pursuant to an applicable exemption from the registration requirements of the Securities Act. b. Register. The Borrower shall maintain a register (the "NOTE REGISTER") in its principal offices for the purpose of registering this Note and any transfer or partial transfer thereof, which register shall reflect and identify, at all times, the ownership of record of any interest in this Note. Upon the issuance of this Note, the Borrower shall record the name and address of the initial purchaser of this Note in the Note Register as the first Holder. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the Holder thereof for all purposes hereof, and the Borrower shall not be affected by any notice or knowledge to the contrary. Subject to Section 10(c), upon surrender for registration of transfer or exchange of this Note at the principal offices of the Borrower, the Borrower shall, at the expense of the party requesting such transfer or exchange, execute and deliver one or more new Notes of like tenor and of like aggregate principal amount, registered in the name of the Holder or a transferee or transferees, which Note or Notes shall bear (i) any applicable legend required by Treasury Regulations Section 1.1275-3 and (ii) any legends that appear on the face of the surrendered Note. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by written instrument of transfer duly executed by the Holder of such Note or such holder's attorney duly authorized in writing. The Borrower may require payment of a sum sufficient to cover any stamp tax of governmental charge imposed in respect of any such transfer of Notes. Each new Note shall be dated, and bear Interest from the date as to which Interest shall have been indefeasibly paid in full with respect to the surrendered Note, or if such Interest shall not have been so paid, such new Note shall be dated the date of the surrendered Note. c. Transfer Restrictions. This Note may not be transferred or assigned, in whole or in part, to any other Person without the prior written consent of the Borrower, except that this Note may be transferred or assigned, in whole or in part, by the Holder at any time to one or more Affiliates of the Holder. 11. Replacement of Note. On receipt by the Borrower of an affidavit of an authorized representative of the Holder stating the circumstances of the loss, theft, destruction or mutilation of this Note (and in the case of any such mutilation, on surrender and cancellation of such Note), the Borrower, at the expense of the Holder, will promptly execute and deliver, in lieu thereof, a new Note of like tenor. If required by the Borrower, such Holder must provide indemnity sufficient in the reasonable judgment of the Borrower to protect the Borrower from any loss which they may suffer if a lost, stolen or destroyed Note is replaced. 12. Covenants Bind Successors and Assigns. All the covenants, stipulations, promises and agreements in this Note contained by or on behalf of the Borrower shall bind its successors and assigns, whether so expressed or not. 13. Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier (with receipt confirmed), courier service or personal delivery at the addresses specified in Section 8.7 of the Purchase Agreement. All such notices and communications shall be deemed to have been duly given when: delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial overnight courier service; if mailed, five business days after being deposited in the mail, postage prepaid; or if telecopied, when receipt is acknowledged. 14. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW. 15. WAIVER OF JURY TRIAL. THE BORROWER AND THE HOLDER HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE. 16. FORUM SELECTION AND CONSENT TO JURISDICTION. THE BORROWER AND THE HOLDER HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENT TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, FOR ANY CLAIM, ACTION, SUIT, INVESTIGATION OR PROCEEDING ("LITIGATION") ARISING OUT OF OR RELATING TO THIS NOTE (AND AGREES NOT TO COMMENCE ANY LITIGATION RELATING HERETO EXCEPT IN SUCH COURTS), AND FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO ITS RESPECTIVE ADDRESS SET FORTH IN SECTION 8.7 OF THE PURCHASE AGREEMENT SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY LITIGATION BROUGHT AGAINST IT IN ANY SUCH COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF THIS NOTE IN THE COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. 17. Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof. 18. Headings. The headings in this Note are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. LXH II, L.L.C. By: GS Capital Partners 2000 Offshore, L.P., its managing member By: GS Advisors 2000, L.L.C., its general partner By:/s/ John E. Bowman -------------------------- Name: John E. Bowman Title: Vice President EX-99.5 6 0006.txt EXHIBIT 5 AGREEMENT dated as of October 11, 2000 by and among Hexcel Corporation, LXH, L.L.C. and LXH II, L.L.C. AGREEMENT AGREEMENT (this "Agreement"), dated as of October 11, 2000, by and among Hexcel Corporation, a Delaware corporation (the "Company"), LXH, L.L.C., a Delaware limited liability company ("LXH") and LXH II, L.L.C., a Delaware limited liability company (together with LXH, the "Investors"). W I T N E S S E T H : WHEREAS, Ciba Specialty Chemicals Holding Inc., a corporation organized under the laws of Switzerland ("Ciba SCH"), Ciba Specialty Chemicals Inc., a corporation organized under the laws of Switzerland and wholly-owned subsidiary of Ciba SCH ("Ciba SCI") and Ciba Specialty Chemicals Corporation, a corporation organized under the laws of Delaware and wholly-owned subsidiary of Ciba SCH (collectively with Ciba SCH and Ciba SCI, "Ciba"), own beneficially and of record an aggregate of 18,021,748 shares of common stock, par value $0.01 per share (the "Common Stock"), of the Company; WHEREAS, simultaneously herewith, the Investors and Ciba are entering into a stock purchase agreement attached as Exhibit A hereto (the "Stock Purchase Agreement"), pursuant to which Ciba has agreed to sell to the Investors and the Investors have agreed to purchase from Ciba up to a number of shares of Common Stock owned beneficially and of record by Ciba (the "Shares") constituting not more than 39.3% of the issued and outstanding shares of Common Stock; WHEREAS, certain independent directors of the board of directors of the Company (the "Board") have approved and consented to the sale of the Shares by Ciba to the Investors on the terms set forth in the Stock Purchase Agreement; WHEREAS, in connection with the transactions contemplated by the Stock Purchase Agreement, the Company and the Investors will enter into (i) a governance agreement in the form of Exhibit B hereto (the "Governance Agreement") and (ii) a registration rights agreement in the form of Exhibit C hereto (the "Registration Rights Agreement"); and WHEREAS, in connection with the execution by the Investors of the Stock Purchase Agreement, the Notes (as defined in the Stock Purchase Agreement), the Pledge Agreements (as defined in the Stock Purchase Agreement) and all other contracts, agreements, schedules, certificates and other documents being delivered pursuant to or in connection with the Stock Purchase Agreement or such other documents or the transactions contemplated thereby (the "Stock Purchase Transaction Documents"), and in order to induce the Investors and their Affiliates to execute and deliver the Governance Agreement and the Registration Rights Agreement, the Company is hereby making certain representations and warranties and entering into certain agreements. NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements set forth in this Agreement, the parties hereto agree as follows: ARTICLE I PURPOSE OF AGREEMENTS 1.1. Purpose. The Company acknowledges and agrees that it is executing and delivering this Agreement (i) in connection with the execution and delivery by the Investors of the Stock Purchase Transaction Documents and the consummation of the transactions contemplated thereby, and (ii) to induce the Investors and their Affiliates to execute and deliver the Governance Agreement and the Registration Rights Agreement and to consummate the transactions contemplated thereby. 1.2. Closing. The closing of the transactions contemplated hereby shall take place at the offices of Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New York, New York 10004 simultaneously with the Closing under the Stock Purchase Transaction Documents, or at such other place, time and/or date as shall be mutually agreed by the Company and the Investors. 1.3. Capitalized Terms. Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in Section 8.1. ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to the Investors, as of the date hereof and as of the Closing, as follows: 2.1. Organization; Subsidiaries. (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to carry on its business as it is now being conducted. The Company is duly qualified and licensed as a foreign corporation to do business, and is in good standing (and has paid all relevant franchise or analogous taxes), in each jurisdiction where the character of its assets owned or held under lease or the nature of its business makes such qualification necessary, except where the failure to so qualify or be licensed would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. A correct and complete copy of the bylaws of the Company as shall be in effect as of the Closing is attached hereto as Exhibit D (the "By-Laws"). (b) Each Significant Subsidiary is a corporation, limited liability company, limited partnership or other business entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the power and authority to carry on its business as it is now being conducted except where the failure to be in good standing or to have such power and authority would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth on Schedule 2.1(b), (i) the Company owns, either directly or indirectly through one or more Subsidiaries, all of the capital stock or other equity interests of the Significant Subsidiaries free and clear of all liens, charges, claims, security interests, restrictions, options, proxies, voting trusts or other encumbrances ("Encumbrances") and (ii) there are no outstanding subscription rights, options, warrants, convertible or exchangeable securities or other rights of any character whatsoever relating to issued or unissued capital stock or other equity interests of any Significant Subsidiary, or any contract, agreement or other commitment of any character whatsoever relating to issued or unissued capital stock or other equity interests of any Significant Subsidiary or pursuant to which any Significant Subsidiary is or may become bound to issue or grant additional shares of its capital stock or other equity interests or related subscription rights, options, warrants, convertible or exchangeable securities or other rights, or to grant preemptive rights. Except for the Subsidiaries and except as set forth on Schedule 2.1(b), the Company does not own, directly or indirectly, any interest in any corporation, limited liability company, partnership, business association or other Person. 2.2. Due Authorization. The Company has all right, corporate power and authority to enter into this Agreement, the Ciba Documents, the Governance Agreement and the Registration Rights Agreement and to consummate the transactions contemplated hereby and thereby. The execution and delivery by the Company of this Agreement, the Ciba Documents, the Governance Agreement and the Registration Rights Agreement, and the compliance by the Company with each of the provisions of this Agreement, the Ciba Documents, the Governance Agreement and the Registration Rights Agreement (a) are within the corporate power and authority of the Company, and (b) have been duly authorized by all necessary corporate action of the Company. This Agreement and the Consent and Termination Agreement have been, and each of the Governance Agreement, the Registration Rights Agreement and the Supplemental Indenture when executed and delivered by the Company will be, duly and validly executed and delivered by the Company, and each of this Agreement and each Ciba Document constitutes, and each of such other agreements when executed and delivered by the Company will constitute, a valid and binding agreement of the Company enforceable against the Company in accordance with its terms except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors' rights generally and for limitations imposed by general principles of equity. The By-Laws have been duly adopted by the Board and will be effective upon the Closing. 2.3. Capitalization. As of the date hereof, the authorized capital stock of the Company consists of (i) 100,000,000 shares of Common Stock, of which as of October 6, 2000, 36,950,954 shares were issued and outstanding excluding 859,497 shares of Common Stock held in the Company's treasury as of such date and (ii) 20,000,000 shares of Preferred Stock, no par value per share, of which no shares are issued and outstanding. All of the issued and outstanding shares of Common Stock, including the Shares, have been duly authorized and are validly issued, fully paid and nonassessable and not subject to the preemptive or other similar rights of the stockholders of the Company other than such rights held by Ciba. As of the date hereof, there is outstanding (i) $114,435,000 in aggregate principal amount of the Company's 7.0% Convertible Subordinated Notes, due 2003, which notes are convertible into 7,238,140 shares of Common Stock and (ii) $25,625,000 in aggregate principal amount of the Company's 7.0% Convertible Subordinated Debentures, due 2011, which notes are convertible into 834,147 shares of Common Stock. Except as described in the SEC Reports (as defined below) and other than pursuant to stock incentive plans approved by the Board, there are no outstanding subscription rights, options, warrants, convertible or exchangeable securities or other rights of any character whatsoever relating to issued or unissued capital stock of the Company, or any contract or agreement of any character whatsoever relating to issued or unissued capital stock of the Company or pursuant to which the Company is or may become bound to issue or grant additional shares of its capital stock or related subscription rights, options, warrants, convertible or exchangeable securities or other rights, or to grant preemptive rights. Except as set forth on Schedule 2.3, and other than with respect to Ciba, (i) the Company has not agreed to register any securities under the Securities Act or under any state securities law or granted registration rights to any Person or entity and (ii) there are no voting trusts, stockholders agreements, proxies or other contracts or agreements or understandings in effect to which the Company is a party or of which it has Knowledge with respect to the voting or transfer of any of the outstanding shares of Common Stock. 2.4. SEC Reports. The Company has timely filed all proxy statements, reports and other documents required to be filed by it under the Exchange Act since January 1, 1997 and made available to the Investors complete copies of all annual reports, proxy statements and other reports filed by the Company under the Exchange Act, each as filed with the SEC (collectively, the "SEC Reports"). Each SEC Report was, on the date of its filing, in compliance in all material respects with the requirements of its respective report form and the Exchange Act and did not, on the date of its filing, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 2.5. Financial Statements. The consolidated financial statements of the Company (including any related schedules and/or notes) included in the SEC Reports have been prepared in accordance with United States generally accepted accounting principles ("GAAP") consistently followed throughout the periods involved (except as may be indicated in the notes thereto) and fairly present in accordance with GAAP the consolidated financial condition, results of operations, stockholders' equity, comprehensive income and cash flows of the Company and the Subsidiaries as of the respective dates thereof and for the respective periods then ended (except as may be indicated in the notes thereto and except, in the case of interim statements, for the absence of footnotes and as permitted by Form 10-Q and subject to changes resulting from year-end adjustments, none of which are material in amount or effect). Except as disclosed in the SEC Reports, neither the Company nor any Subsidiary has any liability or obligation (whether accrued, absolute, contingent, unliquidated or otherwise, whether known or unknown, whether due or to become due and regardless of when asserted), except (i) liabilities and obligations reflected or disclosed in the audited consolidated balance sheet of the Company and the Subsidiaries as of December 31, 1999 or the unaudited balance sheet as of June 30, 2000 and the footnotes thereto, (ii) liabilities and obligations incurred in the ordinary course of business since June 30, 2000 or (iii) liabilities and obligations which would not, individually or in the aggregate, reasonably be expected to have or result in a Material Adverse Effect. 2.6. Consents, No Violations. Except with respect to the Governance Agreement, dated February 29, 1996, between the Company and Ciba (the "Existing Governance Agreement"), the Credit Agreement, the Indenture, dated February 29, 1996, between the Company and First Trust of California, National Association, as amended through the date hereof (the "Ciba Indenture") and the Company's or any of its Subsidiary's employee or director benefit plans, arrangements or agreements, the execution, delivery or performance (i) by the Company of this Agreement, the Ciba Documents, the Governance Agreement and the Registration Rights Agreement and the consummation of the transactions contemplated hereby and thereby, and (ii) by Ciba and the Investors of the Stock Purchase Agreement and the consummation of the transactions contemplated thereby, do not and will not (a) conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation or by-laws or other organizational documents of the Company or any of the Subsidiaries, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create an Encumbrance, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under (A) any Law or (B) any provision of any agreement or other instrument to which the Company or any of the Subsidiaries is a party or pursuant to which any of them or any of their assets or properties is subject, except where such breach, violation or default, creation of an Encumbrance, or right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or (c) except for any required filing under the HSR Act, the German Act Against Restraints of Competition and any other foreign governmental and regulatory filings, notices and approvals required to be made or obtained as contemplated by Section 5.1(f), and filings, consents, approvals or authorizations of, notifications to, or exemptions or waivers by any Governmental Entity or any other Person which are not, individually or in the aggregate material to the consummation of the transactions contemplated hereby or thereby, require any consent, approval or authorization of, notification to, filing with, or exemption or waiver by, any Governmental Entity or any other Person on the part of the Company or any of its Subsidiaries. 2.7. Compliance with Laws. Except as disclosed in the SEC Reports, the Company and its Subsidiaries are, and since January 1, 1993, have been, in compliance in all material respects with all Laws and the Company and its Subsidiaries possess all material licenses, franchise permits, consents, registrations, certificates, and other governmental or regulatory permits, authorizations or approvals required for the operation of the business as presently conducted and for the ownership, lease or operation of the Company's and its Subsidiaries' properties (collectively, "Licenses"), except where such noncompliance or failure to possess would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. All of such Licenses are valid and in full force and effect, and the Company and its Subsidiaries have duly performed and are in compliance in all material respects with all of their obligations under such Licenses except where such suspension or cancellation of such Licenses or the noncompliance with such Licenses would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 2.8. Absence of Certain Changes. Except as disclosed in the SEC Reports, since June 30, 2000 neither the Company nor any of the Subsidiaries has suffered any change, event or development or series of changes, events or developments which individually or in the aggregate has had or would reasonably be expected to have a Material Adverse Effect. 2.9. Litigation. (a) Except as set forth on Schedule 2.9(a) or as disclosed in the SEC Reports, there is no claim, action, suit, investigation or proceeding ("Litigation") pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries or involving any of their respective properties or assets by or before any court, arbitrator or other Governmental Entity which (i) in any manner challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement or (ii) if resolved adversely to the Company or a Subsidiary would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. (b) Except as disclosed in the SEC Reports, neither the Company nor any of its Subsidiaries is in default under or in breach of any order, judgment or decree of any court, arbitrator or other Governmental Entity, except for defaults or breaches, which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 2.10. Employee Matters; ERISA. (a) All (i) "employee benefit plans, as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") other than any "multiemployer plan" as defined in Section 3(37)(A) of ERISA, maintained or contributed to by the Company or any of its Subsidiaries and (ii) other plans, agreements or arrangements relating to compensation or employee benefits pursuant to which the Company or any of its Subsidiaries may have any material liability (collectively, the "Plans"), are in compliance with all applicable provisions of ERISA and the Code, and the Company and its Subsidiaries do not have any liabilities or obligations (other than liabilities and obligations for benefits payable in the ordinary course) with respect to any Plan, whether or not accrued, contingent or otherwise, except (a) as described in any of the SEC Reports or previously disclosed in writing to the Investors and (b) for instances of noncompliance or liabilities or obligations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as any of the following either individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect, (x) neither the Company nor any trade or business, whether or not incorporated (an "ERISA Affiliate"), which together with the Company would be deemed a "single employer" within the meaning of Section 414 of the Code or Section 4001(b) of ERISA, has incurred any unsatisfied liability under Title IV of ERISA and no conditions exists that could reasonably be expected to present a risk to the Company or any ERISA Affiliate of incurring any such liability (other than liability for premiums to the Pension Benefit Guaranty Corporation arising in the ordinary course), and (y) no "employee benefit plan," maintained or contributed to by the Company or any ERISA Affiliate, other than a "multiemployer plan" as defined in Section 3(37)(A) of ERISA, has incurred an "accumulated funding deficiency" (within the meaning of Section 302 of ERISA or Section 412 of the Code) whether or not waived. As to any "multiemployer plan" maintained or contributed to by the Company or any of its Subsidiaries or ERISA Affiliate of the Company, neither the Company nor any ERISA Affiliate has any knowledge (a) that such plan is not in substantial compliance with the applicable provisions of ERISA and the Code; or (b) that such plan has incurred an "accumulated funding deficiency" (within the meaning of Section 302 of ERISA or Section 412 of the Code) whether or not waived. (b) Each Plan which is intended to be qualified under Section 401(a) of the Code is the subject of a favorable determination letter from the IRS, and, to the Company's Knowledge, nothing has occurred which may reasonably be expected to result in the revocation of such determination. (c) Except as set forth on Schedule 2.10(c), the execution and delivery of, and performance of the transactions contemplated in, this Agreement will not (either alone or upon the occurrence of any additional or subsequent events) (i) constitute an event under any Plan (or related trust), trust or loan that will or may result in any material payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any current or former employee or director of the Company or any subsidiary of the Company, or (ii) result in the triggering or imposition of any material restrictions or limitations on the right of the Company or any Subsidiary to amend or terminate any Plan. 2.11 Existing Governance Agreement; Section 203 of the DGCL; Takeover Statute. The Independent Directors (as defined in the Existing Governance Agreement) have taken all actions necessary or advisable under the Existing Governance Agreement to approve and consent to the transactions contemplated hereby (including the purchase of the Shares by the Investors) and by the Ciba Documents. The Board has taken all actions necessary or advisable so that the restrictions contained in Section 203 of the DGCL applicable to a "business combination" (as defined in such Section) will not apply to the execution by the Investors of the Stock Purchase Agreement or the consummation of any of the transactions contemplated by the Stock Purchase Agreement. The execution, delivery and performance of the Stock Purchase Agreement will not cause to be applicable to the Company any "fair price," "moratorium," "control share acquisition" or other similar antitakeover statute or regulation enacted under state or federal laws. 2.12 Real Property Holding Corporation. The Company is not, and has not been at any time during the past 5 years, a "United States real property holding corporation" within the meaning of Section 897(c)(2) of the Internal Revenue Code of 1986, as amended. 2.13 Negotiations with Third Parties. Except in connection with the transactions contemplated by the Stock Purchase Transaction Documents, the Company is not currently, and since September 24, 2000 has not been, directly or indirectly, negotiating, seeking to negotiate or otherwise engaging in discussions with any Person relating to (a) an acquisition of greater than 20% of the Common Stock (including the Shares), (b) a tender or exchange offer, (c) a merger, consolidation or other business combination involving the Company or any of its Subsidiaries, or (d) an offer to acquire in any manner a greater than 20% equity interest in the Company, or more than 20% of the assets of the Company and its Subsidiaries taken as a whole. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE INVESTORS Each Investor hereby represents and warrants to the Company, severally and not jointly, as of the date hereof and as of the Closing, as follows: 3.1. Organization. Such Investor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite power and authority to carry on its business as it is now being conducted. 3.2. Due Authorization. Such Investor has all right, power and authority to enter into this Agreement, the Governance Agreement, the Stock Purchase Transaction Documents to which it is a party and the Registration Rights Agreement and to consummate the transactions contemplated hereby and thereby. The execution and delivery by such Investor of this Agreement, the Governance Agreement, the Stock Purchase Transaction Documents to which it is a party and the Registration Rights Agreement, and the compliance by such Investor with each of the provisions of this Agreement and each of the Governance Agreement, the Stock Purchase Transaction Documents to which it is a party and the Registration Rights Agreement (a) are within the power and authority of such Investor and (b) have been duly authorized by all necessary action on the part of such Investor. This Agreement has been, and each of such other agreements when executed and delivered by such Investor will be, duly and validly executed and delivered by such Investor, and this Agreement constitutes, and each of such other agreements when executed and delivered by such Investor will constitute, a valid and binding agreement of such Investor enforceable against such Investor in accordance with its respective terms except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors' rights generally and for limitations imposed by general principles of equity. 3.3. Consents, No Violations. Neither the execution, delivery or performance by such Investor of this Agreement, the Stock Purchase Agreement, the Governance Agreement or the Registration Rights Agreement nor the consummation of the transactions contemplated hereby or thereby will (a) conflict with, or result in a breach or a violation of, any provision of the organizational documents of such Investor, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create an Encumbrance, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under (i) any Law, or (ii) any provision of any agreement or other instrument to which such Investor is a party or pursuant to which such Investor or its assets or properties is subject, or (c) except for any required filing under the HSR Act, the German Act Against Restraints of Competition, and any other foreign governmental and regulatory filings, notices and approvals required to be made or obtained as contemplated by Section 5.1(f) hereof, and filings, consents, approvals or authorizations of, notifications to, or exemptions or waivers by any Governmental Entity or any other Persons which are not, individually or in the aggregate, material to the consummation of the transactions contemplated hereby or thereby, require any consent, approval or authorization of, notification to, filing with, or exemption or waiver by, any Governmental Entity or any other Person on the part of such Investor. 3.4. Ownership of Capital Stock. Neither Investor nor any of their respective subsidiaries, directors, officers or members beneficially owns, directly or indirectly, any capital stock of the Company or is party to any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any capital stock of the Company or any security convertible into capital stock of the Company, other than as contemplated by this Agreement. ARTICLE IV COVENANTS 4.1. Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing, unless the Investors otherwise agree in writing, the Company shall, and shall cause each of its Significant Subsidiaries to, (i) conduct its business only in the ordinary course and consistent with past practice; (ii) use reasonable best efforts to preserve and maintain its assets and properties and its relationships with its customers, suppliers, advertisers, distributors, agents, officers and employees and other Persons with which it has significant business relationships; (iii) use reasonable best efforts to maintain all of the material assets it owns or uses in the ordinary course of business consistent with past practice; (iv) use reasonable best efforts to preserve the goodwill and ongoing operations of its business; (v) maintain its books and records in the usual, regular and ordinary manner, on a basis consistent with past practice; and (vi) comply in all material respects with applicable Laws; provided, however, that during such period the Company and its Significant Subsidiaries shall be permitted to take all actions as set forth in Section 2.06 of the Governance Agreement which would not require the approval of a majority of the directors appointed by the Investors to the Board; provided, however, that the Company shall not issue any shares of Common Stock unless the Investors consent in writing to the offering price for such shares of Common Stock. Except as expressly contemplated by this Agreement or as set forth on Schedule 4.1, between the date of this Agreement and the Closing, the Company shall not, and shall cause each of its Significant Subsidiaries not to, do any of the following without the prior written consent of the Investors, which consent shall not be unreasonably withheld or delayed: (a) amend the Company's certificate of incorporation or bylaws or other organizational documents except pursuant to Section 4.2 of this Agreement; (b) take any action that is reasonably likely to result in (i) any of the representations and warranties set forth in Article II becoming false or inaccurate in any material respect as of the Closing Date or (ii) any of the conditions to the obligations of the Investors set forth in Section 5.2 not being satisfied; or (c) agree to take any of the actions restricted by this Section 4.1. 4.2. Amendment of By-Laws of the Company. Simultaneously with the Closing, the By-Laws shall be in full force and effect and following the Closing, the Company shall use its reasonable best efforts to ensure that the By-Laws will not be inconsistent, at any time, with any of the terms and provisions contained in the Governance Agreement. 4.3. HSR Act; Other Filings. Each of the Investors and the Company shall cooperate in making required filings under the HSR Act, the German Act Against Restraints of Competition and any other foreign governmental and regulatory filings, notices and approvals required to be made or obtained as contemplated by Section 5.1(f) hereof, and shall use its commercially reasonable efforts to take, or cause to be taken, all actions necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement. 4.4. Consents; Approvals. Except as set forth in Schedule 4.4, the Company shall use its commercially reasonable efforts to obtain, as promptly as practicable, all consents, waivers, exemptions, approvals, authorizations or orders (collectively, "Consents") (including, without limitation (i) all Consents required to avoid any breach, violation, default, encumbrance or right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration of any material agreement or instrument to which the Company is a party or its properties or assets are bound, (ii) all Consents pursuant to the Company's or any of the Subsidiaries' financing documents, including all indentures and credit agreements of the Company or any of the Subsidiaries and the Consent of the Majority Lenders under the Credit Agreement, and (iii) all United States and foreign governmental and regulatory rulings and approvals), required in connection with the consummation of the transactions contemplated by the Stock Purchase Agreement, the Governance Agreement and the Registration Rights Agreement, in each case as promptly as practicable, except where the failure to obtain such Consents would not, individually or in the aggregate, have a Material Adverse Effect. 4.5. Listing. The Company shall use its commercially reasonable efforts to continue to have its Common Stock listed on the New York Stock Exchange or a national securities exchange for so long as the Investors own any Shares. 4.6. No Solicitation. The Company agrees that, from the date hereof until the earlier of (x) the Closing and (y) termination of this Agreement, (i) it shall not, and it shall cause its agents, affiliates, representatives, and any other person acting on its behalf, not to, directly or indirectly, (a) provide any information concerning the Company or Ciba to any third party (other than the Investors and their Affiliates, representatives and agents) expressing an interest in acquiring all or a portion of the Shares or (b) solicit, negotiate with respect to, facilitate, or approve any sale or offer for the purchase of all or any portion of the Shares, or options or warrants to purchase all or any portion of the Shares or any securities convertible into or exchangeable for all or any portion of the Shares, and it shall terminate any existing activities or discussions with any party other than the Investors with respect to the foregoing and (ii) it shall promptly advise the Investors of any inquiry, request or proposal relating thereto that may be received, including the terms of such inquiry, request or proposal and the identity of the inquirer, requestor or offeror; provided, that the Company may (I) at any time prior to the Closing Date, if the Company is not otherwise in violation of this Section 4.6, provide information to, and negotiate or otherwise engage in discussions with, any party who delivers a written proposal relating to (a) an acquisition of all or a portion of the Common Stock (including the Shares), (b) a tender or exchange offer, (c) a merger, consolidation or other business combination involving the Company or any of its Subsidiaries, or (d) an offer to acquire in any manner a greater than 20% equity interest in, or more than 20% of the assets of, the Company or any of its Subsidiaries, if and so long as the Board determines in good faith by a majority vote, based upon advice of its outside legal counsel, that failing to take such action would reasonably be expected to constitute a breach of the fiduciary duties of the Board; and (II) take a position with respect to such proposal, or amend or withdraw such position, as required by Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act. 4.7. Cooperation. Subject to Section 4.6, each of the Investors and the Company agrees to use its commercially reasonable efforts to take, or cause to be taken, all such further actions as shall be necessary to make effective and consummate the transactions contemplated by this Agreement. 4.8. Capitalization Certificate. After the close of business on the business day immediately prior to the Closing, the Company shall deliver to the Investors and Ciba a certificate executed by the Company's Chief Financial Officer which certificate shall specify the number of shares of Common Stock issued and outstanding as of the close of business on such date. 4.9. Execution and Delivery of Agreements by the Company. Subject to Section 4.6, prior to or simultaneously with the Closing, the Company shall execute and deliver (i) the Governance Agreement and the Registration Rights Agreement (in each case upon satisfaction or waiver of the conditions set forth in Sections 5.1 and 5.3 hereto) and (ii) the Supplemental Indenture. 4.10. Execution and Delivery of Agreements by the Investors. Prior to or simultaneously with the Closing, upon satisfaction or waiver of the conditions set forth in Sections 5.1 and 5.2, the Investors shall execute and deliver the Governance Agreement and the Registration Rights Agreement. ARTICLE V CONDITIONS 5.1. Conditions to Obligations of the Investors and the Company. The respective obligations of the Investors and the Company to execute and deliver the Governance Agreement and the Registration Rights Agreement are subject to the satisfaction or waiver at or prior to the Closing of each of the following conditions: (a) No statute, rule or regulation or order of any court or administrative agency shall be in effect which prohibits the consummation of the transactions contemplated hereby; (b) The transactions contemplated by the Stock Purchase Transaction Documents shall have been consummated simultaneously with the closing hereunder; (c) The Company shall have received the Consent of the Majority Lenders under the Credit Agreement, which Consent shall be reasonably acceptable to the Investors and the Company; (d) Any waiting period (and any extension thereof) under the HSR Act applicable to this Agreement and the transactions contemplated hereby shall have expired or been terminated; (e) The German Federal Cartel Office shall have approved the transactions contemplated hereby; and (f) The Company and/or the Investors shall have made any other material foreign governmental and regulatory filings, given all material notices and obtained any material approvals that the Company and the Investors reasonably agree are required in connection with the consummation of the transactions contemplated by the Stock Purchase Agreement, this Agreement, the Governance Agreement, the Registration Rights Agreement and the Ciba Documents. 5.2. Conditions to Obligations of the Investors. The obligations of the Investors to execute and deliver the Governance Agreement and the Registration Rights Agreement shall be subject to the satisfaction or waiver at or prior to the Closing of each of the following conditions: (a) Each of the representations and warranties of the Company contained in this Agreement shall be true and correct when made and as of the Closing (except to the extent such representations and warranties are made as of a particular date, in which case such representations and warranties shall have been true and correct in all material respects as of such date); (b) The Company shall have performed, satisfied and complied in all material respects with all of their covenants and agreements set forth in this Agreement to be performed, satisfied and complied with prior to or at the Closing; (c) The Company shall have delivered to the Investors an officer's certificate certifying as to the Company's compliance with the conditions set forth in clause (a) of Section 5.1 and clauses (a) and (b) of this Section 5.2; (d) The Investors shall have received a reasonably acceptable opinion from Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Company, addressing the due authorization and enforceability of this Agreement with respect to the Company and the representations and warranties made by the Company in Section 2.6 of this Agreement; (e) The Ciba Documents shall be in full force and effect; (f) The agreements, each dated as of the date hereof, from the Company's employees set forth on Exhibit F to the Stock Purchase Agreement shall be in full force and effect as of the Closing; and (g) Mr. John J. Lee's employment agreement attached hereto as Exhibit E and all other agreements contemplated thereby shall be in full force and effect as of the Closing; 5.3. Conditions to Obligations of the Company. The obligations of the Company to execute and deliver the Governance Agreement and the Registration Rights Agreement shall be subject to the satisfaction or waiver at or prior to the Closing of each of the following conditions: (a) Each of the representations and warranties of the Investors contained in this Agreement shall be true and correct when made and as of the Closing (except to the extent such representations and warranties are made as of a particular date, in which case such representations and warranties shall have been true and correct in all material respects as of such date); (b) The Investors shall have performed, satisfied and complied in all material respects with all of its covenants and agreements set forth in this Agreement to be performed, satisfied and complied with prior to or at the Closing Date; (c) The Investors shall have delivered to the Company an officer's certificate certifying as to the Investors' compliance with the conditions set forth in clause (a) of Section 5.1 and clauses (a) and (b) of this Section 5.3; (d) The trustee under the Indenture shall have executed and delivered the Supplemental Indenture; and (e) The Company shall have received a reasonably acceptable opinion from Fried, Frank, Harris, Shriver & Jacobson, counsel to the Investors, addressing the due authorization and enforceability of this Agreement with respect to the Investors and the representations and warranties made by the Investors in Section 3.3 of this Agreement. ARTICLE VI TERMINATION 6.1. Termination. This Agreement shall terminate automatically, without any further action required by the parties hereto, upon the earlier of (i) the termination of the Stock Purchase Agreement, or (ii) the latest of (A) November 9, 2000, if the Closing shall not have occurred by such date, (B) November 27, 2000, if the Closing shall not have occurred by such date and if the condition set forth in Section 5.1(c) shall not have been satisfied on or prior to November 27, 2000, (C) two business days after the satisfaction of the conditions set forth in Sections 5.1(d), 5.1(e) and 5.1(f) hereof (the earlier of such dates referred to in (i) and (ii) above, the "Termination Date"); provided, however, that if the Company receives an Acquisition Proposal with respect to which the Board has made a determination pursuant to Section 4.6 hereof, and the Company executes a definitive agreement with respect to such Acquisition Proposal prior to the Termination Date, the Company, by a vote of a majority of the Independent Directors, can elect to terminate this Agreement prior to the Termination Date by delivering written notice of such termination to the Investors. Notwithstanding the foregoing, if the Company terminates this Agreement upon execution of a definitive agreement with respect to an Acquisition Proposal, then upon the earlier of (x) the date such Acquisition Proposal is abandoned or terminated and (y) 120 days after execution of such definitive agreement, if the transactions contemplated by such Acquisition Proposal are not consummated within such 120 day period, this Agreement shall be automatically reinstated and the "Termination Date" shall be deemed to be the earlier of (i) the termination of the Stock Purchase Agreement, or (ii) 21 business days after the date of such reinstatement if the Closing shall not have occurred by such date. 6.2. Effect of Termination. In the event of the termination of this Agreement pursuant to Section 6.1, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto (or any stockholder, director, officer, partner, employee, agent, consultant or representative of such party) except as set forth in this Section 6.2, provided that nothing contained in this Agreement shall relieve any party from liability for any breach of the representations and warranties set forth in Articles II and III of this Agreement (subject to Section 7.4) or of the covenants set forth in Article IV of this Agreement and provided further that this Section 6.2 and Sections 7.1, 7.2, 7.3, 7.4, 8.2, 8.3, 8.7, 8.12, 8.13 and 8.14 shall survive termination of this Agreement. ARTICLE VII INDEMNIFICATION 7.1. Survival. The representations and warranties of the parties hereto contained in this Agreement shall expire twelve months after the Closing Date, except that the representations and warranties set forth in Sections 2.1(a), 2.2 and 2.3 shall survive until the expiration of the applicable statute of limitations (including any extensions thereof). After the expiration of such periods, any claim by a party hereto based upon any such representation or warranty shall be of no further force and effect, except to the extent a party has asserted a claim in accordance with this Article VII for breach of any such representation or warranty prior to the expiration of such period, in which event any representation or warranty to which such claim relates shall survive with respect to such claim until such claim is resolved as provided in this Article VII. The covenants and agreements of the parties hereto contained in this Agreement shall survive the Closing until performed in accordance with their terms. 7.2. Indemnification. (a) The Company shall indemnify, defend and hold harmless the Investors, their Affiliates, and their respective officers, directors, partners, members, employees, agents, representatives, successors and assigns (each an "Investor Indemnified Person") from and against all Losses incurred or suffered by an Investor Indemnified Person arising from (i) the breach of any of the representations or warranties made by the Company in this Agreement or (ii) the breach of any covenant or agreement made by the Company in this Agreement. (b) The Investors shall indemnify, defend and hold harmless the Company, its Affiliates, and their respective officers, directors, partners, members, employees, agents, representatives, successors and assigns (each a "Company Indemnified Person") from and against all Losses incurred or suffered by a Company Indemnified Person arising from (i) the breach of any of the representations or warranties made by the Investors in this Agreement or (ii) the breach of any covenant or agreement made by the Investors in this Agreement. . (c) No claim may be made against the Company for indemnification with respect to breaches of representations and warranties pursuant to Section 7.2(a)(i) above with respect to any Losses unless the aggregate amount of Losses incurred by the Investor Indemnified Persons thereunder exceeds $1,597,750, and the Company shall then only be liable for one-third of such Losses that exceed $1,597,750. The maximum amount recoverable under Section 7.2(a)(i) shall be $10,000,000. No claim may be made against the Investors for indemnification with respect to breaches of representations and warranties pursuant to Section 7.2(b)(i) above with respect to any Losses unless the aggregate amount of Losses incurred by the Company Indemnified Persons thereunder exceeds $1,597,750, and the Investors shall then only be liable for one-third of such Losses that exceed $1,597,750. The maximum amount recoverable under Section 7.2(b)(i) shall be $10,000,000. (d) No Investor Indemnified Person may pursue a claim for indemnification under Section 7.2(a)(i) after the first anniversary of the Closing Date unless prior to such anniversary such Investor Indemnified Person submits a good faith, reasonably detailed claim in writing that such Investor Indemnified Person reasonably believes is based on factual contentions that have evidentiary support and that such Investor Indemnified Person has incurred or will incur a Loss, which in the case of claims related to Sections 2.5 and 2.7 of this Agreement may be based upon facts that such Investor Indemnified Person had knowledge of at or prior to the Closing Date only if such claim also relies upon a materially adverse occurrence or development that occurs after the Closing Date. In no case shall any payment be made (A) in the case of an indemnification claim under Section 7.2(a)(i) or 7.2(a)(ii) until a Loss occurs or (B) in the case of an indemnification claim under Section 7.2(a)(i) for any Loss incurred after the date that is 30 months after the Closing Date. No Person shall have any liability to any Investor Indemnified Person under Section 7.2(a)(i) for any breach of a representation or warranty to the extent that a claim for indemnification is based upon facts of which any Investor Indemnified Person had knowledge on or prior to the Closing Date, unless such claim also relies upon a materially adverse occurrence or development that occurs after the Closing Date. For purposes of this Section 7.2(d), (i) the Investors shall only be deemed to have knowledge of a fact if any of the Persons listed on Schedule 7.2 has knowledge of the particular fact and (ii) such individual shall be deemed to have knowledge only to the extent of his knowledge of such fact. 7.3. Procedure for Indemnification. (a) If an Investor Indemnified Person or a Company Indemnified Person (such Person being referred to as the "Indemnitee") shall receive notice or otherwise learn of the assertion by a Person who is not a party to this Agreement of any claim or of the commencement by any such Person of any action (a "Claim") with respect to which the other party (the "Indemnifying Party") may be obligated to provide indemnification, such Indemnitee shall give such Indemnifying Party written notice thereof promptly after becoming aware of such Claim; provided, that the failure of any Indemnitee to give notice as provided in this Section 7.3 shall not relieve the applicable Indemnifying Party of its obligations under this Article VII, except to the extent that such Indemnifying Party is prejudiced by such failure to give notice; provided, further, that the applicable Indemnifying Party shall have no obligations under this Article VII unless such written notice is received by the Indemnifying Party within the survival periods set forth in Section 7.1. Such notice shall describe the Claim in reasonable detail, and shall indicate the amount (estimated if necessary) of the Loss that has been or may be sustained by or is claimed against such Indemnitee. Such notice shall be a condition precedent to any liability of any Indemnifying Party for any Claim under the provisions for indemnification contained in this Agreement. (b) An Indemnifying Party may elect to compromise, settle or defend, at such Indemnifying Party's own expense and by such Indemnifying Party's own counsel, any Claim; provided, however, that the Indemnifying Party shall not compromise, settle or defend a Claim without the consent of the Indemnitee (which consent shall not be unreasonably withheld). If an Indemnifying Party elects to compromise, settle or defend a Claim, it shall, within 30 days of the receipt of notice from an Indemnitee pursuant to Section 7.3(a) (or sooner, if the nature of such Claim so requires), notify the applicable Indemnitee of its intent to do so, and such Indemnitee shall cooperate in the compromise or settlement of, or defense against, such Claim. After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Claim, such Indemnifying Party shall not be liable to such Indemnitee under this Article VII for any legal or other expenses subsequently incurred by such Indemnitee in connection with the defense thereof (except expenses approved in advance by the Indemnitee); provided, that such Indemnitee shall have the right to employ one separate counsel reasonably satisfactory to the Indemnifying Party to represent such Indemnitee if the defendants in any such claim included both the Indemnifying Party and the Indemnitee and, in such Indemnitee's reasonable judgment, a conflict of interest between such Indemnitee and such Indemnifying Party exists in respect of such claim, and in that event the reasonable fees and expenses of such separate counsel shall be paid by such Indemnifying Party. If an Indemnifying Party elects not to compromise, settle or defend against a Claim, or fails to notify an Indemnitee of its election as provided in this Section 7.3 within 30 days of notice from the Indemnitee pursuant to Section 7.3(a), such Indemnitee may compromise, settle or defend such Claim. (c) If an Indemnifying Party chooses to defend any claim, the applicable Indemnitee shall make available to such Indemnifying Party any personnel or any books, records or other documents within its control that are necessary or appropriate for such defense. (d) If the amount of any Loss shall, at any time subsequent to payment pursuant to this Agreement, be reduced by recovery, settlement or otherwise, the amount of such reduction, less any expenses incurred in connection therewith, shall promptly be repaid by the applicable Indemnitee to the applicable Indemnifying Party. (e) In the event of payment by an Indemnifying Party to any Indemnitee in connection with any Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right or claim relating to such Claim. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and, at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right or claim. 7.4. Sole Remedy. Except in the case of fraud, the rights to indemnification provided for in this Article VII for a breach of representations or warranties by the Investors (in the case of indemnification pursuant to Section 7.2(b)(i)) or the Company (in the case of indemnification pursuant to Section 7.2(a)(i)) shall constitute the sole remedy of the Company and the Investors, respectively, for such breach, and the Company and the Investors shall have no other liability or damages to the other party resulting from any such breach. ARTICLE VIII MISCELLANEOUS 8.1. Defined Terms; Interpretations. The following terms, as used herein, shall have the following meanings: "Acquisition Proposal" shall mean a bona-fide written offer by any Person not affiliated with the Company relating to (a) a merger, consolidation or other business combination involving the Company, or (b) an offer to acquire in any manner a greater than 50% equity interest in, or more than 50% of the assets of, the Company and its Subsidiaries taken as a whole. "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. "Agreement" shall have the meaning ascribed thereto in the preamble. "Board" shall have the meaning ascribed thereto in the recitals. "Ciba" shall have the meaning ascribed thereto in the recitals. "Ciba SCH" shall have the meaning ascribed thereto in the recitals. "Ciba SCI" shall have the meaning ascribed thereto in the recitals. "Ciba Documents" shall mean the Consent and Termination Agreement and the Supplemental Indenture. "Ciba Indenture" shall have the meaning ascribed thereto in Section 2.6. "Claim" shall have the meaning ascribed thereto in Section 7.3(a). "Closing" shall have the meaning ascribed thereto in the Stock Purchase Agreement. "Closing Date" shall mean have the meaning ascribed thereto in the Stock Purchase Agreement. "Common Stock" shall have the meaning ascribed thereto in the recitals. "Company" shall have the meaning ascribed thereto in the preamble. "Company Indemnified Person" shall have the meaning ascribed thereto in Section 7.2(b). "Consent and Termination Agreement" shall mean the Consent and Termination Agreement, dated the date hereof, between the Company and Ciba SCH. "Consents" shall have the meaning ascribed thereto in Section 4.4. "Credit Agreement" shall mean the Second Amended and Restated Credit Agreement, dated as of September 15, 1998, as amended, among the Company, certain of its subsidiaries, the Lenders parties thereto, Citibank N.A. and Credit Suisse First Boston. "DGCL" shall mean the Delaware General Corporation Law. "Encumbrances" shall have the meaning ascribed thereto in Section 2.1(b). "ERISA" shall have the meaning ascribed thereto in Section 2.10(a). "ERISA Affiliate" shall have the meaning ascribed thereto in Section 2.10(a). "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time. Reference to a particular section of the Securities Exchange Act of 1934, as amended, shall include reference to the comparable section, if any, of any such successor federal statute. "Existing Governance Agreement" shall have the meaning ascribed thereto in Section 2.6. "GAAP" shall have the meaning ascribed thereto in Section 2.5. "Governance Agreement" shall have the meaning ascribed thereto in the recitals. "Governmental Entity" shall mean any supernational, national, foreign, federal, state or local judicial, legislative, executive, administrative or regulatory body or authority. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder. "Indemnifying Party" shall have the meaning ascribed thereto in Section 7.3(a). "Indemnitee" shall have the meaning ascribed thereto in Section 7.3(a). "Independent Director" shall mean any director of the Company who was not nominated to the Board by Ciba and who (i) is not and has never been an officer, employee or director of Ciba or any affiliate (other than the Company) or associate of Ciba and (ii) has no affiliation or compensation, consulting or contractual relationship with Ciba or any of its affiliates (other than the Company) such that a reasonable person would regard such director as likely to be unduly influenced by Ciba or any of its affiliate (other than the Company). "Investors" shall have the meaning ascribed thereto in the preamble. "Investor Indemnified Person" shall have the meaning ascribed thereto in Section 7.2(a). "Knowledge" shall mean, with respect to the Company, the knowledge of William D. Bennison, James N. Burns, Kirk G. Forbeck, Stephen C. Forsyth, William Hunt, John J. Lee, Ira J. Krakower, Harold E. Kinne, Joseph H. Shaulson, Justin P.S. Taylor and David R. Tanonis. "Laws" shall include all foreign, federal, state, and local laws, statutes, ordinances, rules, regulations, orders, judgments, decrees and bodies of law. "Licenses" shall have the meaning ascribed thereto in Section 2.7. "Litigation" shall have the meaning ascribed thereto in Section 2.9(a). "Losses" shall mean each and all of the following items: claims, losses, liabilities, obligations, payments, damages (actual or punitive), charges, judgments, fines, penalties, amounts paid in settlement, costs and expenses (including, without limitation, interest which may be imposed in connection therewith, costs and expenses of investigation, actions, suits, proceedings, demands, assessments and fees, expenses and disbursements of counsel, consultants and other experts). "Majority Lenders" shall have the meaning ascribed thereto in the Credit Agreement. "Material Adverse Effect" shall mean a material adverse effect on the properties, business, prospects (but only with respect to the representations and warranties contained in Sections 2.5 and 2.7), operations, results of operations, earnings, assets, liabilities or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole. "Person" shall mean any individual, firm, corporation, limited liability company, partnership, company or other entity, and shall include any successor (by merger or otherwise) of such entity. "Plans" shall have the meaning ascribed thereto in Section 2.10(a). "Registration Rights Agreement" shall have the meaning ascribed thereto in the recitals. "SEC" shall mean the Securities and Exchange Commission. "SEC Reports" shall have the meaning ascribed thereto in Section 2.4. "Securities Act" shall mean the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time. Reference to a particular section of the Securities Act shall include reference to the comparable section, if any, of such successor federal statute. "Shares" shall have the meaning ascribed thereto in the recitals. "Significant Subsidiaries" shall have the meaning ascribed thereto in Rule 1-02 of Regulation S-X (17 CFR 210). "Stock Purchase Agreement" shall have the meaning ascribed thereto in the recitals. "Stock Purchase Transaction Documents" shall have the meaning ascribed thereto in the recitals. "Subsidiary" shall mean as to any Person, each corporation, partnership or other entity of which shares of capital stock or other equity interests having ordinary voting power (other than capital stock or other equity interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, directly or indirectly, or the management of which is otherwise controlled, directly or indirectly, or both, by such Person. "Supplemental Indenture" shall mean the Supplemental Indenture, as contemplated by Section 3.02 of the Consent and Termination Agreement, between the Company and First Trust of California, National Association. 8.2. Fees and Expenses. All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such costs or expense. 8.3. Public Announcements. The Investors and the Company shall consult with each other before issuing any press release with respect to this Agreement or the transactions contemplated hereby and neither shall issue any such press release or make any such public statement without the prior consent of the other, which consent shall not be unreasonably withheld or delayed; provided, however, that a party may, without the prior consent of the other party, issue such press release or make such public statement as may upon the advice of counsel be required by Law or any exchange on which the Company's securities are listed and, to the extent time permits, it has used all reasonable efforts to consult with the other party prior thereto. 8.4. Further Assurances. Subject to Section 4.6, at any time or from time to time after the Closing, the Company, on the one hand, and the Investors, on the other hand, agree to cooperate with each other, and at the request of the other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby or by the Governance Agreement or the Registration Rights Agreement and to otherwise carry out the intent of the parties hereunder or thereunder. 8.5. Successors and Assigns. This Agreement shall bind and inure to the benefit of the Company and the Investors and their respective successors, permitted assigns, heirs and personal representatives, provided that prior to the Closing the Company may not assign its rights or obligations under this Agreement to any Person without the prior written consent of the Investors, and provided further that the Investors may not assign their rights or obligations under this Agreement to any Person (other than an "Investor" (as defined in the Governance Agreement)) without the prior written consent of the Company. In addition, and whether or not any express assignment has been made, the provisions of this Agreement which are for each Investor's benefit as purchaser and holder of Shares are also for the benefit of, and enforceable by, any "Investor" (as defined in the Governance Agreement). 8.6. Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersede all prior and contemporaneous arrangements or understandings with respect thereto including the Letter Agreement, dated September 15, 2000, between GS Capital Partners 2000, L.P. and the Company, as amended prior to the date hereof and the Confidentiality Agreement, dated June 19, 2000 between Goldman, Sachs & Co. and the Company. 8.7. Notices. All notices, requests, consents and other communications hereunder to any party shall be deemed to be sufficient if contained in a written instrument delivered in person or sent by telecopy, nationally recognized overnight courier or first class registered or certified mail, return receipt requested, postage prepaid, addressed to such party at the address set forth below or such other address as may hereafter be designated in writing by such party to the other parties: (i) if to the Company, to: Hexcel Corporation Two Stamford Plaza 281 Tresser Boulevard 16th Floor Stamford, Connecticut 06901-3238 Telecopy No.: (203) 358-3972 Attention: Ira J. Krakower, Esq. Vice President, General Counsel and Secretary with a copy to each of the following (which shall not constitute notice): Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 Telecopy No.: (212) 735-2000 Attention: Joseph A. Coco, Esq. Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, New York 10019-6064 Telecopy No.: (212) 757-3990 Attention: Judith R. Thoyer, Esq. (ii) if to the Investors, to: c/o Goldman Sachs Capital Partners 2000, L.P. 85 Broad Street New York, New York 10004 Telecopy No.: (212) 357-5505 Attention: Mr. Sanjeev Mehra with a copy to (which shall not constitute notice): Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Telecopy No.: (212) 859-8587 Attention: Robert C. Schwenkel, Esq. All such notices, requests, consents and other communications shall be deemed to have been given or made if and when delivered personally or by overnight courier to the parties at the above addresses or sent by electronic transmission, with confirmation received, to the telecopy numbers specified above (or at such other address or telecopy number for a party as shall be specified by like notice). 8.8. Amendments. The terms and provisions of this Agreement may be modified or amended, or any of the provisions hereof waived, temporarily or permanently, in a writing executed and delivered by the Company and the Investors. No waiver of any of the provisions of this Agreement shall be deemed to or shall constitute a waiver of any other provision hereof (whether or not similar). No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof. 8.9. Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. 8.10. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement. 8.11. Nouns and Pronouns. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice versa. 8.12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW. 8.13. Submission to Jurisdiction. Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of New York and of the United States of America, in each case located in the County of New York, for any Litigation arising out of or relating to this Agreement or the other Transaction Documents and the transactions contemplated hereby and thereby (and agrees not to commence any Litigation relating hereto or thereto except in such courts), and further agrees that service of any process, summons, notice or document by U.S. registered mail to its respective address set forth in this Agreement shall be effective service of process for any Litigation brought against it in any such court. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any Litigation arising out of this Agreement or the transactions contemplated hereby in the courts of the State of New York or the United States of America, in each case located in the County of New York, hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Litigation brought in any such court has been brought in an inconvenient forum. 8.14. WAIVER OF JURY TRIAL. THE COMPANY AND THE INVESTORS HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTION DOCUMENTS. 8.15. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid, but if any provision of this Agreement is held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not render invalid or unenforceable any other provision of this Agreement. IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date first above written. HEXCEL CORPORATION By:/s/ John J. Lee -------------------- Name: John J. Lee Title: Chairman and Chief Executive Officer LXH, L.L.C. By: GS Capital Partners 2000, L.P., its Managing Member By: GS Advisors 2000, LLC, its general partner By:/s/ Katherine L. Nissenbaum --------------------------- Name: Katherine L. Nissenbaum Title: Vice President LXH II, L.L.C. By: GS Capital Partners 2000 Offshore, L.P., its Managing Member By: GS Advisors 2000, LLC, its general partner By:/s/ Katherine L. Nissenbaum --------------------------- Name: Katherine L. Nissenbaum Title: Vice President EX-99.6 7 0007.txt EXHIBIT 6 GOVERNANCE AGREEMENT dated as of December 19, 2000 among LXH, L.L.C., LXH II, L.L.C., Hexcel Corporation and The Other Parties Listed on the Signature Pages Hereto GOVERNANCE AGREEMENT dated as of December 19, 2000, among LXH, L.L.C., a Delaware limited liability company ("LXH"), LXH II, L.L.C., a Delaware limited liability company ("LXH II"), HEXCEL CORPORATION, a Delaware corporation ("Hexcel"), and the other parties listed on the signature pages hereto (the "Limited Partnerships"). WHEREAS, LXH, LXH II, Ciba Specialty Chemicals Holding Inc., Ciba Specialty Chemicals Inc. and Ciba Specialty Chemicals Corporation are parties to a Stock Purchase Agreement dated as of October 11, 2000 (the "Purchase Agreement"), and have consummated the transactions contemplated therein (the "Transactions"), whereby the Investors (as such term is defined below) now Beneficially Own approximately 39.3% of the Total Voting Power of Hexcel (as such terms are defined below); and WHEREAS the parties hereto wish to further establish the nature of their relationship and set forth their agreement concerning the governance of Hexcel following consummation of the Transactions as well as certain matters relating to the Investors' ownership of Voting Securities (as such term is defined below). NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE 1 DEFINITIONS SECTION 1.01 DEFINITIONS. As used in this Agreement, the following terms shall have the following meanings: "ADDITIONAL SHARES" means, as of any date of determination, up to 255,381 shares of Hexcel Common Stock (as equitably adjusted to reflect any stock split, combination, reorganization, recapitalization, reclassification or other similar event involving the Hexcel Common Stock), in the aggregate, (i) the Beneficial Ownership of which may be acquired inadvertently from time to time by The Goldman Sachs Group, Inc. or its Affiliates acting in connection with their activities as a broker or dealer registered under Section 15 of the Exchange Act or as an asset manager (excluding Affiliates formed for the purpose of effecting principal transactions) or (ii) the Beneficial Ownership of which may be acquired by the Investors pursuant to grants of stock options or other stock-based awards to the Investors' Directors by Hexcel pursuant to any stock option or stock incentive plan approved by the Board of Directors of Hexcel, including without limitation the Hexcel Incentive Stock Plan; provided, that if and for so long as The Goldman Sachs Group, Inc. and its Affiliates collectively Beneficially Own less than 30% of the Total Voting Power of Hexcel, the maximum number of Additional Shares shall be 400,000 (as equitably adjusted to reflect any stock split, combination, reorganization, recapitalization, reclassification or other similar event involving the Hexcel Common Stock). An "AFFILIATE" of any Person means any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person. "CONTROL" has the meaning specified in Rule 12b-2 under the Exchange Act as in effect on the date of this Agreement. Any Person shall be deemed to "BENEFICIALLY OWN", to have "BENEFICIAL OWNERSHIP" of, or to be "BENEFICIALLY OWNING" any securities (which securities shall also be deemed "BENEFICIALLY OWNED" by such Person) that such Person is deemed to "beneficially own" within the meaning of Rule 13d-3 and 13d-5 under the Exchange Act as in effect on the date of this Agreement; provided that, except for the rights set forth in Section 3.02 hereof, any Person shall be deemed to Beneficially Own any securities that such Person has the right to acquire, whether or not such right is exercisable immediately. "BOARD" means the board of directors of Hexcel. "BROAD DISTRIBUTION" with respect to Voting Securities, means a distribution of Voting Securities that, to the knowledge, after due inquiry, of the Person on whose behalf such distribution is being made, will not result in the acquisition by any other Person of Beneficial Ownership of any such Voting Securities to the extent that, after giving effect to such acquisition, such acquiring Person (other than any Investor and other than any underwriter acting in such capacity in an underwritten public offering of Hexcel Common Stock) would Beneficially Own in excess of 5% of the Total Voting Power of Hexcel. "BUYOUT TRANSACTION" means a tender offer, merger or any similar transaction that offers holders of Voting Securities (other than, if applicable, the Person proposing such transaction) the opportunity to dispose of the Voting Securities Beneficially Owned by such holders or otherwise contemplates the acquisition by any Person or Group of Voting Securities that would result in Beneficial Ownership by such Person or Group of a majority of the Voting Securities outstanding, or a sale of all or substantially all of Hexcel's assets. "CHAIRMAN" means the Chairman of the Board and Chief Executive Officer of Hexcel. "CLOSING DATE" means the date of the closing of the Transactions. "CUSTOMARY ACQUISITION/CONTROL PREMIUM" means the aggregate realizable value for all Voting Securities (including Voting Securities owned by the Investors), assuming a sale of Hexcel in its entirety in a transaction or series of related transactions to a third party or parties on an arm's length basis in a controlled auction process designed to maximize shareholder value by attracting all possible bidders, including the Investors and their Affiliates. "DEBT INSTRUMENTS" shall mean (i) Hexcel's Second Amended and Restated Credit Agreement, dated as of September 15, 1998, as amended from time to time, or any replacement thereof and (ii) the Indenture, dated as of January 21, 1999, relating to Hexcel's 9-3/4% Senior Subordinated Notes Due 2009. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. "GOVERNMENTAL ENTITY" means any court, administrative agency, regulatory body, commission or other governmental authority, board, bureau or instrumentality, domestic or foreign and any subdivision thereof. "GROUP" has the meaning set forth in Section 13(d) of the Exchange Act as in effect on the date of this Agreement. "GS CAPITAL" shall mean GS Capital Partners 2000 L.P., a Delaware limited partnership. "HEXCEL" has the meaning set forth in the recitals to this Agreement. "HEXCEL COMMON STOCK" means the common stock of Hexcel, par value $0.01 per share, and any equity securities issued or issuable in exchange for or with respect to the Common Stock by way of a stock dividend, stock split or combination of shares or in connection with a reclassification, recapitalization, merger, consolidation or other reorganization. "HEXCEL INCENTIVE STOCK PLAN" means the Hexcel Corporation Incentive Stock Plan, as amended and restated as of February 3, 2000 and any subsequent amendment thereto approved by the Board of Directors of Hexcel. "HEXCEL OPTION PERIOD" means the 6 month period following the first anniversary of the Closing Date. "INDEMNIFIED INDIVIDUALS" means each of the individuals who at any time were officers and directors of Hexcel and their respective heirs and personal and legal representatives. "INDEPENDENT DIRECTOR" means a director of Hexcel who is not an Investors' Director and who (i) is not and has never been an officer, employee or director of any of the Investors or their Affiliates or associates (as defined in Rule 12b-2 under the Exchange Act), in each case other than Hexcel, and (ii) has no affiliation or compensation, consulting or contractual relationship with any of the Investors or their Affiliates or associates (in each case other than Hexcel) such that a reasonable person would regard such director as likely to be unduly influenced by any of such Persons or any of their Affiliates or associates (in each case other than Hexcel). "INITIAL INVESTORS' SHARES" means the 14,525,000 shares of Hexcel Common Stock initially sold by Ciba Specialty Chemicals Inc. and Ciba Specialty Chemicals Corporation pursuant to the Purchase Agreement (as equitably adjusted to reflect any stock split, combination, reorganization, recapitalization, reclassification or other similar event involving the Initial Investors' shares). "INVESTOR BUYOUT TRANSACTION" means a Buyout Transaction by the Investors or their Affiliates or any other Person acting on behalf of the Investors or their Affiliates, or any Person who is part of a Group with the Investors, involving the acquisition of all (but not less than all) Voting Securities held by the Other Holders, provided that all Other Holders are entitled to receive Requisite Consideration upon consummation of such Buyout Transaction. "INVESTORS" means (i) LXH, (ii) LXH II, (iii) each of the Limited Partnerships, (iv) The Goldman Sachs Group, Inc., or any direct or indirect Subsidiary of The Goldman Sachs Group, Inc. formed for the purpose of effecting principal transactions, and (v) subject to the approval of a majority of the Independent Directors, one other Person designated within 90 days following the Closing Date by LXH or LXH II as a proposed transferee of up to 2,200,000 shares of Hexcel Common Stock; provided, that any of the foregoing Persons shall be an Investor only for so long as it Beneficially Owns Voting Securities subject to the provisions of this Agreement or is a transferee of Voting Securities pursuant to Section 4.01(a)(i); provided, further, that any such Person specified in clause (iv) or (v) that acquires Voting Securities in accordance with this Agreement shall execute a joinder in which it shall agree to be bound by the provisions of this Agreement to the same extent as the Investors and shall thereafter be deemed to be an "Investor" for all purposes of this Agreement. "INVESTORS' DIRECTORS" means Investors' Nominees who are elected or appointed to serve as members of the Board in accordance with this Agreement. "INVESTORS' NOMINEES" means such Persons as are so designated by GS Capital or LXH II, as such designations may change from time to time in accordance with this Agreement, to serve as members of the Board pursuant to Section 2.03 hereof. "ORDINARY COURSE BROKER DEALER SHARES" means those shares of Hexcel Common Stock which are acquired by any Person solely in connection with the activities of a broker or dealer registered under Section 15 of the Exchange Act (i) as a result of underwriting activities in connection with a registration statement filed by Hexcel (including any shares acquired for the investment account of a broker or dealer in connection with such underwriting activities), (ii) as a result of the exercise of investment or voting discretion authority with respect to any of such Person's customer accounts, or (iii) in good faith in connection with a debt previously contracted; provided, in each case, that the Person engaging in such activities does not Beneficially Own such shares of Hexcel Common Stock. "OTHER HOLDERS" means the holders of the Other Shares. "OTHER SHARES" means Voting Securities not Beneficially Owned by the Investors. "PERSON" means any individual, Group, corporation, firm, partnership, joint venture, trust, business association, organization, Governmental Entity or other entity. "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement dated as of the date hereof between LXH, LXH II and Hexcel. "REQUISITE CONSIDERATION" means consideration that is (i) approved by (x) a majority of the Independent Directors acting solely in the interests of the Other Holders, after the receipt of an opinion of an independent nationally recognized investment banking firm retained by them or (y) a majority in interest of the Other Holders by means of a Stockholder Vote solicited pursuant to a proxy statement containing the information required by Schedule 14A under the Exchange Act (it being understood that the Independent Directors shall, consistent with their fiduciary duties, be free to include in such proxy statement, if applicable, the reasons underlying any failure by them to approve a Buyout Transaction by the requisite vote, including whether a fairness opinion was sought by the Independent Directors and any opinions or recommendations expressed in connection therewith) and (ii) in the opinion of an independent nationally recognized investment banking firm (including such a firm retained by the Investor), fair to the Other Holders from a financial point of view. In connection with the retention of any investment banking firm referred to herein, the Independent Directors shall instruct such investment banking firm, unless the Independent Directors conclude, after consultation with their outside legal and financial advisors, that such instructions are not appropriate, to (a) value Hexcel's businesses taking into account a premium for control and (b) assume for purposes of such opinion that the Other Holders are entitled to their proportionate part of a Customary Acquisition/Control Premium. "SEC" means the Securities and Exchange Commission or any successor Governmental Entity. "SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. "SIGNIFICANT SUBSIDIARY" has the meaning set forth in Rule 1-02 of Regulation S-X under the Securities Act as in effect on the date of this Agreement. "STANDSTILL PERIOD" means the three-year period commencing on the Closing Date. "STOCKHOLDER VOTE" means as to any matter to be presented to holders of Voting Securities, a vote at a duly called and held annual or special meeting of the holders of Voting Securities entitled to vote on such matter. "SUBSIDIARY" means, with respect to any Person, as of any date of determination, any other Person as to which such Person owns, directly or indirectly, or otherwise controls, more than 50% of the voting shares or other similar interests. "THIRD PARTY OFFER" means a bona fide offer to enter into a Buyout Transaction by a Person other than the Investors or any of their Affiliates, any other Person acting on behalf of the Investors or any of their Affiliates, or any Person who is part of a Group with the Investors or any of their Affiliates, that does not treat the Investors or their Affiliates differently than the Other Holders. "TOTAL VOTING POWER OF HEXCEL" means the total number of votes that may be cast in the election of directors of Hexcel if all Voting Securities outstanding or treated as outstanding pursuant to the final sentence of this definition were present and voted at a meeting held for such purpose. The percentage of the Total Voting Power of Hexcel Beneficially Owned by any Person is the percentage of the Total Voting Power of Hexcel that is represented by the total number of votes that may be cast in the election of directors of Hexcel by Voting Securities Beneficially Owned by such Person. In calculating such percentage, the Voting Securities Beneficially Owned by any Person that are not outstanding but are subject to issuance upon exercise or exchange of rights of conversion or any options, warrants or other rights Beneficially Owned by such Person shall be deemed to be outstanding for the purpose of computing the percentage of the Total Voting Power represented by Voting Securities Beneficially Owned by such Person, but shall not be deemed to be outstanding for the purpose of computing the percentage of the Total Voting Power represented by Voting Securities Beneficially Owned by any other Person. "TRANSACTIONS" has the meaning set forth in the recitals to this Agreement. "VOTING SECURITIES" means Hexcel Common Stock and any other securities of Hexcel or any Subsidiary of Hexcel entitled to vote generally in the election of directors of Hexcel or such Subsidiary of Hexcel. ARTICLE II CORPORATE GOVERNANCE SECTION 2.01 BOARD OF DIRECTORS. The Board shall consist of ten members, one of whom shall be the Chairman. SECTION 2.02 INVESTORS BOARD REPRESENTATION. (a) Subject to Section 2.05(c), for so long as the Investors Beneficially Own 20% or more of the Total Voting Power of Hexcel, the parties hereto shall exercise all authority under applicable law to cause any slate of directors presented to stockholders for election to the Board to consist of such nominees that, if elected, would result in the Board consisting of three Investors' Directors, the Chairman and six additional Independent Directors; provided, however, that if the Investors, directly or indirectly, during the term of this Agreement shall have sold, transferred or otherwise disposed of, on a cumulative basis, Beneficial Ownership of such number of shares of Hexcel Common Stock representing 33 1/3% or more of the Initial Investors' Shares to Persons that are not Investors, then the parties hereto shall exercise all authority under applicable law to cause any slate of directors presented to stockholders for election to the Board to consist of such nominees that, if elected, would result in the Board consisting of two Investors' Directors, the Chairman and seven additional Independent Directors. (b) Subject to Section 2.05(c), for so long as the Investors Beneficially Own less than 20% but at least 15% of the Total Voting Power of Hexcel, the parties hereto shall exercise all authority under applicable law to cause any slate of directors presented to stockholders for election to the Board to consist of such nominees that, if elected, would result in the Board consisting of two Investors' Directors, the Chairman and seven additional Independent Directors; provided, however, that if the Investors, directly or indirectly, during the term of this Agreement shall have sold, transferred or otherwise disposed of, on a cumulative basis, Beneficial Ownership of such number of shares of Hexcel Common Stock representing 66 2/3% or more of the Initial Investors' Shares to Persons that are not Investors, then the parties hereto shall exercise all authority under applicable law to cause any slate of directors presented to stockholders for election to the Board to consist of such nominees that, if elected, would result in the Board consisting of one Investors' Director, the Chairman and eight additional Independent Directors. (c) Subject to Section 2.05(c), for so long as the Investors Beneficially Own less than 15% but at least 10% of the Total Voting Power of Hexcel, the parties hereto shall exercise all authority under applicable law to cause any slate of directors presented to stockholders for election to the Board to consist of such nominees that, if elected, would result in the Board consisting of one Investors' Director, the Chairman and eight additional Independent Directors. (d) In order to determine (x) the number of Investors' Nominees to be included in any slate of directors to be presented to stockholders for election to the Board and (y) the percentage of the Total Voting Power of Hexcel Beneficially Owned by the Investors for purposes of Section 2.06, the Investors shall be deemed to Beneficially Own a percentage of the Total Voting Power of Hexcel that is no more than (1) 39.3% of the Total Voting Power of Hexcel less (2) the percentage of the Total Voting Power of Hexcel represented by any Voting Securities disposed of, directly or indirectly, by the Investors to Persons that are not Investors since the Closing Date. (e) The Additional Shares shall not be included in any calculation of the Investors' Beneficial Ownership of the Total Voting Power of Hexcel under this Agreement. SECTION 2.03 DESIGNATION OF SLATE. (a) Any Investors' Nominees that are included in a slate of directors pursuant to Section 2.02 shall be designated as provided in this Section 2.03, and any Independent Director nominees who are to be included in any slate of directors pursuant to Section 2.02 shall be designated by majority vote by the then incumbent Independent Directors (including the Chairman if he or she is an Independent Director). Hexcel's nominating committee, if any (or if there is no such nominating committee, the Board or any other duly authorized committee thereof), shall nominate each person so designated. The initial Investors' Nominees shall be Sanjeev Mehra (appointed by GS Capital), and Peter Sacerdote (appointed by GS Capital) and James J. Gaffney (appointed by LXH II). The initial Chairman shall be John J. Lee. Upon consummation of the Transactions, the number of directors constituting the entire Board will be fixed at ten and simultaneously herewith a sufficient number of the then serving members of the Board will resign in order to permit the appointment of the initial Investors' Nominees to fill the vacancies thereby created. The remaining members of the Board shall be Robert S. Evans, Marshall S. Gellar, Lewis Rubin, Martin L. Solomon, Harold E. Kinne and H. Arthur Bellows, Jr. (b) The parties hereby agree that for so long as (i) the Investors are permitted to designate three Investors' Directors pursuant to this Agreement, two directors shall be designated by GS Capital and one director shall be designated by LXH II, (ii) the Investors are permitted to designate two Investors' Directors pursuant to this Agreement, one director shall be designated by GS Capital and one director shall be designated by LXH II and (iii) the Investors are permitted to designate one Investors' Director pursuant to this Agreement, that director shall be designated by GS Capital. (c) If, for any reason, all of the Investors' Directors designated by GS Capital pursuant to Section 2.02 and this Section 2.03 are not elected to the Board by stockholders, then Hexcel shall exercise all authority under applicable law to cause any person designated by GS Capital to be elected to the Board, and during any such absence of membership on the Board, Hexcel shall, after receiving notice from GS Capital as to the identity of a representative of GS Capital, (i) permit such representative to attend all Board meetings (other than meetings solely of the Independent Directors) and to the extent contemplated by Section 2.04 all committees thereof as an observer; (ii) provide such representative advance notice of each such meeting, including such meeting's time and place, at the same time and in the same manner as such notice is provided to the members of the Board (or such committee thereof); (iii) provide such representative with copies of all materials, including notices, minutes and consents, distributed to the members of the Board (or such committee thereof) at the same time as such materials are distributed to such Board (or such committee thereof) and shall permit such representative to have the same access to information concerning the business and operations of Hexcel as such representative would have had as an Investors' Director; and (iv) on a basis consistent with the members of the Board, permit such representative to discuss the affairs, finances and accounts of Hexcel with, and to make proposals and furnish advice with respect thereto, the Board, without voting; provided, in each case, that such representative agrees in writing to maintain the confidentiality of all materials and information provided to him pursuant to this Section 2.03(c) and to return to Hexcel all such materials and information at such time as such representative ceases to act as a representative pursuant to this Section 2.03(c). SECTION 2.04 COMMITTEE MEMBERSHIP. So long as the Investors shall be entitled to designate two or more Investors' Directors for election to the Board, each committee of the Board, including the finance, audit, nominating, and compensation committees shall consist of at least one Investors' Director; provided, however, that if no Investors' Director is "independent" as defined by the listing standards of the New York Stock Exchange, then the audit committee of the Board shall consist solely of Independent Directors. SECTION 2.05 RESIGNATIONS AND REPLACEMENTS. (a) If at any time a member of the Board resigns (pursuant to this Section 2.05 or otherwise) or is removed in accordance with applicable law or Hexcel's by-laws, a new member shall be designated to replace such member until the next election of directors. If consistent with Section 2.02 the replacement director is to be an Investors' Director, the party that designated such Investors' Director shall designate the replacement Investors' Director. If the former member was the Chairman, the replacement Chairman shall be the replacement. Except as set forth in paragraph (c) below, if consistent with Section 2.02, the replacement director is to be an Independent Director (other than the Chairman), the remaining Independent Directors (including the Chairman if he or she is an Independent Director) shall designate the replacement Independent Director. (b) Subject to paragraph (c) below, if at any time the number of Investors' Nominees entitled to be nominated to the Board in accordance with this Agreement in an election of directors presented to stockholders would decrease, within 10 days thereafter GS Capital and the Investors shall cause a sufficient number of Investors' Directors to resign from the Board so that the number of Investors' Directors on the Board after such resignation(s) equals the number of Investors' Nominees that GS Capital and the Investors would have been entitled to designate had an election of directors taken place at such time. GS Capital and the Investors shall also cause a sufficient number of Investors' Directors to resign from any relevant committees of the Board so that such committees are comprised in the manner contemplated by Section 2.04 after giving effect to such resignations. Any vacancies created by the resignations required by this Section 2.05(b) shall be filled by Independent Directors. (c) If at any time the percentage of the Total Voting Power of Hexcel Beneficially Owned by the Investors decreases as a result of an issuance of Voting Securities by Hexcel (other than any of the issuances described in the last sentence of this Section 2.05(c)), the Investors may notify Hexcel that the Investors intend to acquire a sufficient amount of additional Voting Securities in accordance with this Agreement necessary to maintain their then current level of Board representation within 90 days. In such event, until the end of such period (and thereafter if the Investors in fact restore their percentage of the Total Voting Power of Hexcel during such period and provided that the Investors continue to maintain the requisite level of Beneficial Ownership of Voting Securities in accordance with Section 2.02) the Board shall continue to have the number of Investors' Directors that corresponds to the percentage of the Total Voting Power of Hexcel Beneficially Owned by the Investors prior to such issuance of Voting Securities by Hexcel. Notwithstanding any provision herein to the contrary, the provisions of this Section 2.05(c) shall not apply to any issuance of Voting Securities (x) in connection with the registered public offering of up to 6,900,000 shares of Hexcel Common Stock permitted by Section 2.06(iv) of this Agreement, (y) upon conversion of any convertible securities which are either outstanding on the date hereof or approved by the Board or a duly authorized committee of the Board after the date hereof in accordance with Section 2.06 hereof, or (z) pursuant to employee or director stock option or incentive compensation or similar plans outstanding as of the date hereof or, subsequent to the date hereof, approved by the Board or a duly authorized committee of the Board. SECTION 2.06 APPROVALS. The Board shall not authorize, approve or ratify any of the following actions without the approval of a majority of the Investors' Directors for so long as (subject to the provisions of Section 2.02(d)) the Investors Beneficially Own 15% or more of the Total Voting Power of Hexcel and, if the Investors' collective percentage Beneficial Ownership of the Total Voting Power of Hexcel is reduced below 15% by an issuance of Voting Securities by Hexcel, until (x) 10 business days after Hexcel notifies the Investors in writing of such issuance, and (y) if the Investors shall have notified Hexcel within 10 business days after their receipt of a written notification of such issuance that the Investors, pursuant to the option granted to the Investors by Section 3.02 of this Agreement, intend to acquire a sufficient amount of Voting Securities within such 90-day period referred to therein, so that the Investors will collectively Beneficially Own at least 15% of the Total Voting Power of Hexcel by the end of such 90-day period, subject to Section 2.05(c), during the 90-day period following an issuance of Voting Securities by Hexcel that causes the Investors to collectively Beneficially Own less than 15% of the Total Voting Power of Hexcel: (i) any merger, consolidation, acquisition or other business combination involving Hexcel or any Subsidiary of Hexcel (other than a Buyout Transaction) if the value of the consideration to be paid or received by Hexcel and/or its stockholders in any such individual transaction or in such transaction when added to the aggregate value of the consideration paid or received by Hexcel and/or its stockholders in all other such transactions approved by the Board during the immediately preceding 12 months exceeds the greater of (x) $150 million or (y) 11% of Hexcel's total consolidated assets; (ii) any Buyout Transaction; provided, however, that the Investors' Directors approval rights pursuant to this clause (ii) shall apply only for the 18 month period following the Closing Date; (iii) any sale, transfer, assignment, conveyance, lease or other disposition or any series of related dispositions of any assets, business or operations of Hexcel or any of its Subsidiaries (other than a Buyout Transaction) if the value of the assets, business or operations so disposed during the immediately preceding 12 months exceeds the greater of (x) $150 million or (y) 11% of Hexcel's total consolidated assets; (iv) any issuance by Hexcel or any Significant Subsidiary of Hexcel of equity or equity-related securities (other than (1) pursuant to customary employee or director stock option or incentive compensation or similar plans approved by the Board or a duly authorized committee of the Board, (2) pursuant to transactions solely among Hexcel and its wholly owned Subsidiaries (including any Subsidiaries which would be wholly owned by Hexcel but for the issuance of directors' or shareholders' qualifying shares), (3) upon conversion of convertible securities or upon exercise of warrants or options, which convertible securities, warrants or options are either outstanding on the date of this Agreement or approved by the Board or a duly authorized committee of the Board after the date of this Agreement in accordance with this Section 2.06, or (4) in connection with any mergers, consolidations, acquisitions or other business combinations involving Hexcel or any Subsidiary of Hexcel which are approved by the Board or a duly authorized committee of the Board in accordance with this Section 2.06 (if applicable)) for which the consideration received by Hexcel for such transactions during the immediately preceding 12 months exceeds the greater of (x) $150 million or (y) 11% of Hexcel's total consolidated assets; provided, however, that during the 12 month period following the Closing Date, neither Hexcel nor any Subsidiary of Hexcel may issue shares of Hexcel Common Stock in a registered public offering under the Securities Act, in a private placement or otherwise without the approval of a majority of the Investors' Directors unless the aggregate number of shares issued during this 12 month period does not exceed 6,900,000 and the offering price of such shares is unanimously approved by a pricing committee of the Board, such committee consisting solely of one Investors' Director, the Chairman and one additional Independent Director (selected by the Independent Directors). SECTION 2.07 SOLICITATION AND VOTING OF SHARES. (a) Hexcel shall use commercially reasonable efforts to solicit from the stockholders of Hexcel eligible to vote for the election of directors proxies in favor of the Board nominees selected in accordance with Section 2.02. (b) In any election of directors or at any meeting of the stockholders of Hexcel called expressly for the removal of directors, for so long as the Board includes (and will include after any such removal) the Investors' Directors contemplated by Section 2.02, the Investors shall be present for purposes of establishing a quorum and shall vote all their Voting Securities entitled to vote (1) in favor of any nominee or director selected in accordance with Section 2.02 and (2) against the removal of any director designated in accordance with Section 2.02. Except as provided above and in Section 3.03, the Investors shall be free to vote in their sole discretion all their Voting Securities entitled to vote on any other matter submitted to or acted upon by stockholders; provided, however, that the Investors shall vote against any amendment to Hexcel's certificate of incorporation with respect to the directors' and officers' indemnification provisions contained therein which would adversely affect the rights thereunder of the Indemnified Individuals at any time prior to such vote, except for such modifications as are required by applicable law. SECTION 2.08 BY-LAWS; RESTRICTIONS ON COMPANY ACTION; ANTI-TAKEOVER MEASURES. (a) Hexcel shall cause the amendment of its by-laws to reflect the provisions of Article II of this Agreement and such other matters as the parties may reasonably agree. The form of such amended by-laws is attached hereto as Exhibit A. Those by-laws reflecting the provisions of Article II of this Agreement shall not thereafter be amended during the term of this Agreement except with the Investor's written consent. Hexcel and the Investors shall each take or cause to be taken all lawful action necessary to ensure at all times that Hexcel's certificate of incorporation and by-laws are not at any time inconsistent with the provisions of this Agreement. (b) Except as required by applicable law, rule or regulation, Hexcel shall not approve or recommend to its stockholders any transaction or approve, recommend or take any other action (other than those expressly contemplated by this Agreement and other than those that affect the Investors and each Other Holder or each director at the same time in the same manner) that would (1) materially adversely discriminate against the Investors as stockholders of Hexcel or (2) restrict the right of any Investors' Director to vote on any matter as such director believes appropriate in light of his or her duties as a director or the manner in which an Investors' Director may participate in his or her capacity as a director in deliberations or discussions at meetings of the Board or any committee thereof, except with respect to (i) entering into contractual or other business relationships with the Investors or any of their Affiliates (other than in their capacity as stockholders of Hexcel), (ii) disputes with the Investors or any of their Affiliates (including disputes under this Agreement), (iii) interpretation or enforcement of this Agreement or any other agreement with the Investors or any of their Affiliates or (iv) any other matter involving an actual or potential conflict of interest due to such director's relationship with the Investors or any of their Affiliates. Notwithstanding the foregoing, Hexcel may adopt or implement any takeover defense measures applicable to the Investors or any of their Affiliates, including the institution or amendment by Hexcel or any of its Subsidiaries of any stockholders rights plan or similar plan or device, or any change of control matters (including provisions in future agreements or collaborations), provided, that such takeover defense measures shall not restrict the rights of the Investors to acquire any Voting Securities pursuant to the provisions of this Agreement. ARTICLE III STANDSTILL SECTION 3.01 STANDSTILL. (a) Except as otherwise expressly provided in this Agreement (including Section 2.05(c), this Section 3.01, Section 3.02 or Section 3.03) or as specifically approved by a majority of the Independent Directors (so long as such approval was not obtained by the Investors in violation of this Agreement), none of the Investors or any of their Affiliates shall, directly or indirectly, (i) by purchase or otherwise, Beneficially Own, acquire, agree to acquire or offer to acquire any Voting Securities or direct or indirect rights or options to acquire Voting Securities (including any voting trust certificates representing such securities) other than the Initial Investors' Shares, Ordinary Course Broker Dealer Shares and, subject to Section 4.01(d), the Additional Shares, (ii) enter, propose to enter into, solicit or support any merger or business combination or similar transaction involving Hexcel or any of its Subsidiaries, or purchase, acquire, propose to purchase or acquire or solicit or support the purchase or acquisition of any portion of the business or assets of Hexcel or any of its Subsidiaries (except for proposals to purchase or acquire a non-material portion of the assets of Hexcel or any of its Subsidiaries that are not required to be publicly disclosed), (iii) initiate or propose any securityholder proposal without the approval of the Board granted in accordance with this Agreement or make, or in any way participate in, any "solicitation" of "proxies" (as such terms are used in the proxy rules promulgated by the SEC under the Exchange Act) to vote, or seek to advise or influence any Person with respect to the voting of, any Voting Securities or request or take any action to obtain any list of securityholders for such purposes with respect to any matter other than those upon which the Investors may vote in their sole discretion pursuant to Section 2.07 (or, as to such matters, solicit any Person in a manner that would require the filing of a proxy statement under Regulation 14A of the Exchange Act), (iv) form, join or in any way participate in a Group (other than a Group consisting solely of the Investors) formed for the purpose of acquiring, holding, voting or disposing of or taking any other action with respect to Voting Securities that would be required under Section 13(d) of the Exchange Act to file a Statement on Schedule 13D with respect to such Voting Securities, (v) deposit any Voting Securities in a voting trust or enter into any voting agreement or arrangement with respect thereto (other than this Agreement), (vi) seek representation on the Board (other than as provided in this Agreement), the removal of any directors from the Board or a change in the size or composition of the Board, (vii) make any request to amend or waive any provision of this Section 3.01, which request would require public disclosure under applicable law, rule or regulation, (viii) disclose any intent, purpose, plan, arrangement or proposal inconsistent with the foregoing (including any such intent, purpose, plan, arrangement or proposal that is conditioned on or would require the waiver, amendment, nullification or invalidation of any of the foregoing) or take any action that would require public disclosure of any such intent, purpose, plan, arrangement or proposal, (ix) take any action challenging the validity or enforceability of the foregoing or (x) assist, advise, encourage or negotiate with any Person with respect to, or seek to do, any of the foregoing. (b) Nothing in this Section 3.01 shall (i) prohibit or restrict the Investors from responding to any inquiries from any shareholders of Hexcel as to the Investors' intention with respect to the voting of any Voting Securities Beneficially Owned by the Investors so long as such response is consistent with the terms of this Agreement; (ii) restrict the right of each Investors' Director on the Board or any committee thereof to vote on any matter as such individual believes appropriate in light of his or her duties as a director or committee member or the manner in which an Investors' Director may participate in his or her capacity as a director in deliberations or discussions at meetings of the Board or as a member of any committee thereof; (iii) prohibit the Investors from Beneficially Owning Voting Securities issued as dividends or distributions in respect of, or issued upon conversion, exchange or exercise of, securities which the Investors are permitted to Beneficially Own under this Agreement; (iv) prohibit any officer, director, employee or agent of the Investors from purchasing or otherwise acquiring Voting Securities so long as he or she is not a member of a Group that includes the Investors or is not otherwise acting on behalf of the Investors; (v) prohibit the Investors from disclosing in accordance with their obligations (if any) under the federal securities laws or other applicable law their desire (if any) that Hexcel become the subject of a Buyout Transaction; or (vi) restrict the ability of Goldman, Sachs & Co. and its Affiliates who are not Investors, solely as agent, to engage in brokerage, investment advisory, anti-raid advisory, merger advisory, financing, asset management, trading, arbitrage and other similar activities, in each case on behalf of clients, provided in the case of this clause (vi) that (A) no Person engaged in such activities shall be acting, directly or indirectly, at the direction of any other Person at Goldman, Sachs & Co. or any of its Affiliates which either is formed for the purpose of effecting principal transactions or has access to confidential information of Hexcel, and (B) appropriate protective arrangements prohibiting disclosure of confidential information are put in place between the Investors and the Persons who are engaging in such activities. (c) After the Standstill Period, nothing in this Section 3.01 shall prohibit or restrict the Investors from proposing, participating in, supporting or causing the consummation of a Third Party Offer or an Investor Buyout Transaction, subject to Section 3.03. (d) Notwithstanding anything to the contrary set forth in this Section 3.01, if, at any time following the consummation of a bankruptcy proceeding involving Hexcel, any Person (other than Hexcel) is permitted by law or the bankruptcy court in which the proceeding is pending to propose a plan of reorganization for Hexcel, the Investors shall be permitted to propose a plan of reorganization for Hexcel; provided, that no plan of reorganization shall be proposed by the Investors prior to the expiration or termination of the exclusivity period for Hexcel's filing of a plan of reorganization, as such exclusivity period may be extended from time to time (it being understood and agreed that the Investors shall not object to any extension of Hexcel's exclusivity period and shall not initiate or otherwise support any proceeding to terminate or shorten the length of Hexcel's exclusivity period). SECTION 3.02 INVESTORS RIGHT TO MAINTAIN POSITION. Hexcel hereby grants to the Investors the following irrevocable option: If, at any time after the Closing Date for so long as the Investors shall be entitled to designate one or more Investors' Nominees for election to the Board, Hexcel shall issue for cash any additional Voting Securities (except for any issuances described in the following sentence), then Hexcel shall notify the Investors of such issuance and the price and terms thereof, and the Investors shall have the option, for a period of 45 days after receipt of such notice, to purchase from Hexcel an Amount (as defined below) of such Voting Securities for the same consideration per security and on the same terms as were applicable to such issuance by Hexcel. The foregoing option shall not apply to any issuance of Voting Securities (x) in connection with the registered public offering of up to 6,900,000 shares of Hexcel Common Stock permitted by Section 2.06(iv) of this Agreement, (y) upon conversion of any convertible securities which are either outstanding as of the date hereof or approved by the Board or a duly authorized committee of the Board after the date of this Agreement in accordance with Section 2.06, or (z) pursuant to employee or director stock option or incentive compensation or similar plans outstanding as of the date hereof or, subsequent to the date hereof, approved by the Board or a duly authorized committee of the Board. An "Amount" shall mean such number of securities that would allow the Investors to Beneficially Own the same percentage of the Total Voting Power of Hexcel as the Investors Beneficially Owned immediately prior to such issuance. SECTION 3.03 THIRD PARTY OFFERS; INVESTOR BUYOUT TRANSACTIONS. (a) In the event that Hexcel becomes the subject of (i) a Third Party Offer or (ii) an Investor Buyout Transaction that is made during the term of this Agreement and such Third Party Offer or Investor Buyout Transaction is approved by (x) a majority of the Board and (y) a majority of the Independent Directors acting solely in the interest of the Other Holders, the Investors may act at their sole discretion with respect to such Third Party Offer or Investor Buyout Transaction. (b) In the event that Hexcel becomes the subject of a Third Party Offer that is made prior to the third anniversary of the Closing Date and such Third Party Offer is approved by a majority of the Board but not by a majority of the Independent Directors acting solely in the interests of the Other Holders, none of the Investors nor any of their Affiliates (other than with respect to Ordinary Course Broker Dealer Shares and Additional Shares) may support such Third Party Offer, vote in favor of such Third Party Offer or tender or sell their Voting Securities to the Person making such Third Party Offer. (c) In the event that Hexcel becomes the subject of a Third Party Offer or Investor Buyout Transaction that is made after the third anniversary of the Closing and such Third Party Offer or Investor Buyout Transaction is approved by a majority of the Board but not by a majority of the Independent Directors acting solely in the interests of the Other Holders, the Investors and each of their Affiliates (other than with respect to Ordinary Course Broker Dealer Shares and Additional Shares) must vote all of their Voting Securities against such Third Party Offer or Investor Buyout Transaction in proportion to the votes cast against such Third Party Offer or Investor Buyout Transaction with respect to Other Shares and may not tender or sell their Voting Securities to the Person making such Third Party Offer or Investor Buyout Transaction in a proportion greater than the tenders or sales made by the Other Holders to the Person making such Third Party Offer or Investor Buyout Transaction; it being understood that the Investors may enter into agreements to tender or sell Voting Securities to any such Person conditioned upon final determination of the number of Voting Securities permitted to be so tendered or sold under this Section 3.03 and Section 3.01. ARTICLE IV TRANSFER RESTRICTIONS SECTION 4.01 RESTRICTIONS. (a) Other than sales, transfers, or other dispositions to the Investors and other than sales, transfers or other dispositions of the Additional Shares by the Persons holding such Additional Shares, none of the Investors or their Affiliates, directly or indirectly, may sell, transfer or otherwise dispose of Beneficial Ownership of Voting Securities for a period of one year after the Closing Date. During the period commencing one year from the Closing Date, the Investors, directly or indirectly, may sell, transfer or otherwise dispose of Beneficial Ownership of Voting Securities (i) to another Investor (provided that such Investor is a signatory to this Agreement or has executed, at the time of such sale, transfer or other disposition, a joinder in which it shall agree to be bound by the provisions of this Agreement to the same extent as the Investors signatory hereto), (ii) in accordance with Rule 144 under the Securities Act (including the volume and manner-of-sale limitations of Rule 144 regardless of whether such limitations are applicable) and otherwise subject to compliance with the Securities Act, (iii) in a registered public offering or a non-registered offering subject to an applicable exemption from the registration requirements of the Securities Act in a manner calculated to achieve a Broad Distribution, (iv) in a Third Party Offer if and to the extent permitted under Section 3.03 or (v) which are Additional Shares. (b) If, during the Hexcel Option Period, any of the Investors proposes to sell, transfer or otherwise dispose of Beneficial Ownership of any Voting Securities in accordance with this Section 4.01 (other than transfers (i) to another Investor, (ii) in accordance with Rule 144 under the Securities Act (including the volume and manner-of-sale limitations of Rule 144 regardless of whether such limitations are applicable), (iii) in a manner calculated to achieve a Broad Distribution or in a Third Party Offer if and to the extent otherwise permitted pursuant to the provisions of this Agreement or (iv) of Additional Shares), the applicable Investor shall notify Hexcel of such proposed transfer and the price thereof, and Hexcel shall have the option for a period of 90 days after receipt of such notice, to purchase or cause its designee to purchase from such party all of such Voting Securities. If Hexcel or its designee does not exercise its option prior to the expiration of such 90 day period or if the offer does not result in a purchase by Hexcel or its designee, then the applicable Investor shall have 90 days from the earlier of receipt of a notice from Hexcel, on behalf of itself and any designee, stating its intention not to exercise its option pursuant to this Section 4.01, or the expiration of the 90 days from the receipt by Hexcel of the original notice, to consummate the proposed transaction with any other Person solely at a price that is no less than the price as stated in its notice to Hexcel pursuant to this Section 4.01, subject to the terms of this Agreement. Upon any downward change in the price per security of the proposed transfer subsequent to the receipt by Hexcel of the original notice, the applicable Investor shall notify Hexcel of such change and Hexcel shall have the option for a period of 90 days after receipt of such notice, to purchase or cause its designee to purchase from such Investor such Voting Securities for the same consideration per security and on the same terms as are stated in such notice. The closing of any purchase of Voting Securities by Hexcel or its designee pursuant to this Section 4.01(b) shall take place as soon as practicable following the delivery by Hexcel of written notice to the applicable Investor of its intent to exercise the option pursuant to this Section 4.01(b) or, if later, the expiration of any prohibition referred to in the proviso to the first sentence of this Section 4.01(b), or at such other time and place as the parties to the transaction may agree. At such closing, the applicable Investor shall deliver certificates representing the Voting Securities to be transferred, duly endorsed for transfer and accompanied by all requisite stock transfer taxes, if any, and such Voting Securities shall be free and clear of any liens, claims or encumbrances (other than restrictions imposed pursuant to applicable federal and state securities laws) and the applicable Investor shall so represent and warrant that it is the record and beneficial owner of such Voting Securities. (c) If Hexcel or its designee does not exercise its option in accordance with this Section 4.01 or if the offer does not result in a purchase by Hexcel or its designee, or if any of the Investors proposes to sell, transfer or otherwise dispose of Beneficial Ownership of any Voting Securities after the Hexcel Option Period (other than transfers to another Investor), then, prior to any such transfer, the applicable Investor shall cause any proposed transferee of Beneficial Ownership of Voting Securities, that together with their Affiliates, to their knowledge after due inquiry, would Beneficially Own more than 5% of the then outstanding Voting Securities upon consummation of the proposed transfer, to agree in writing with Hexcel, for a period of three years from the consummation of the proposed transfer, to be bound by provisions substantially equivalent to, or more favorable to Hexcel than, those contained in (i) Section 2.07(b), and (ii) Section 3.01(a) of this Agreement, to the same extent that the Investors would be bound if they Beneficially Owned the Voting Securities Beneficially Owned by such transferee. (d) Notwithstanding anything to the contrary in this Agreement, none of the Investors or their Affiliates may, directly or indirectly, acquire, sell, transfer or otherwise dispose of Beneficial Ownership of Voting Securities if such acquisition, sale, transfer or other disposition would result in a default or acceleration of amounts outstanding under the Debt Instruments, unless prior to the consummation of such acquisition, sale, transfer or other disposition, any required consents under the Debt Instruments to effect such acquisition, sale, transfer or disposition shall have been obtained. SECTION 4.02 LEGENDS. (a) Except as set forth in paragraph (b) below, during the term of this Agreement all certificates representing Voting Securities Beneficially Owned by the Investors shall bear an appropriate restrictive legend indicating that such Voting Securities are subject to restrictions pursuant to this Agreement and that such Voting Securities were not issued pursuant to a public offering registered pursuant to the Securities Act. (b) Upon any transfer or proposed transfer of Beneficial Ownership by the Investors of any Voting Securities to any Person other than the Investors that is permitted pursuant to this Agreement, Hexcel shall, upon receipt of timely notice and such certificates, opinions and other documentation as shall be reasonably requested by Hexcel, cause certificates representing such transferred Voting Securities to be issued not later than the time needed to effect such transfer (x) without any restrictive legend if upon consummation of such transfer such Voting Securities are no longer "restricted securities" as defined in Rule 144 under the Securities Act or (y) without any reference to this Agreement (except with respect to the limitations contained in Section 4.01(c), if applicable). SECTION 4.03 EFFECT. Any purported transfer of Voting Securities that is inconsistent with the provisions of this Article IV shall be null and void and of no force or effect. SECTION 4.04 CONTROL OF THE INVESTORS. Each of the Investors (other than the Investor identified in clause (v) of the definition of the term "Investors") represents and warrants to Hexcel, for so long as each such Investor holds Voting Securities pursuant to this Agreement, that it is Controlled, directly or indirectly, by The Goldman Sachs Group, Inc., and covenants that during the term of this Agreement, such Investor shall not, without the prior written consent of Hexcel, take or permit any action which would result in the direct or indirect transfer of Control of such Investor from The Goldman Sachs Group, Inc. to any other Person. On the date hereof, the Limited Partnerships own all of the membership interests of LXH and LXH II. ARTICLE V TERMINATION SECTION 5.01 TERM. (a) This Agreement shall automatically terminate upon the earlier of: (i) the tenth anniversary of the Closing Date; or (ii) the occurrence of any event in accordance with this Agreement which causes the percentage of the Total Voting Power of Hexcel Beneficially Owned by the Investors to be either (x) less than 10% or (y) 90% or more. (b) If any party to this Agreement is in breach of or violates any material obligation under this Agreement and fails to cure such breach or violation within 60 days after delivery of written notice from the other party specifying such breach or violation and requesting its cure, such other party may terminate its obligations under this Agreement by written notice to the other parties hereto. ARTICLE VI MISCELLANEOUS SECTION 6.01 NOTICES. All notices, requests and other communications hereunder shall be in writing (including fax) and shall be sent, delivered or mailed, addressed, or faxed: (a) if to Hexcel, to: Hexcel Corporation 2 Stamford Plaza 281 Tresser Boulevard Stamford, Connecticut 06901 (T) (203) 969-0666 (F) (203) 358-3972 Attention: Ira J. Krakower, Esq. with a copy to: Joseph A. Coco, Esq. Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, New York 10036 (T) (212) 735-3000 (F) (212) 735-2000 (b) if to the Investors, to: c/o Goldman Sachs Capital Partners 2000, L.P. 85 Broad Street New York, New York 10004 (T) (212) 902-1000 (F) (212) 357-5505 Attention: Mr. Sanjeev Mehra with a copy to: Robert C. Schwenkel, Esq. Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 (T) (212) 859-8000 (F) (212) 859-4000 Each such notice, request or other communication shall be given (i) by hand delivery, (ii) by nationally recognized courier service or (iii) by fax, receipt confirmed. Each such notice, request or communication shall be effective (A) if delivered by hand or by nationally recognized courier service, when delivered at the address specified in this Section 6.01 (or in accordance with the latest unrevoked written direction from such party) and (B) if given by fax, when such fax is transmitted to the fax number specified in this Section 6.01 (or in accordance with the latest unrevoked written direction from such party), and the appropriate confirmation is received. SECTION 6.02 INTERPRETATION. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "included", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". SECTION 6.03 SEVERABILITY. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. SECTION 6.04 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall, taken together, be considered one and the same agreement, it being understood that both parties need not sign the same counterpart. SECTION 6.05 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement, together with the Agreement, dated as of October 11, 2000, among Hexcel, LXH and LXH II, and the Registration Rights Agreement (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (b) is not intended to confer upon any Person, other than the parties hereto and, solely with respect to the proviso in Section 2.07(b), the Indemnified Individuals, any rights or remedies hereunder. SECTION 6.06 FURTHER ASSURANCES. Each party shall execute, deliver, acknowledge and file such other documents and take such further actions as may be reasonably requested from time to time by the other party hereto to give effect to and carry out the transactions contemplated herein. SECTION 6.07 GOVERNING LAW; EQUITABLE REMEDIES. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties hereto shall be entitled to equitable relief, including in the form of injunctions, in order to enforce specifically the provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity. SECTION 6.08 CONSENT TO JURISDICTION. Each party hereto irrevocably submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York located in the borough of Manhattan in the City of New York, or if such court does not have jurisdiction, the Supreme Court of the State of New York, New York County, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby. Each party hereto further agrees that service of any process, summons, notice or document by U.S. registered mail to such party's respective address set forth in Section 6.01 shall be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction as set forth above in the immediately preceding sentence. Each party hereto irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (a) the United States District Court for the Southern District of New York or (b) the Supreme Court of the State of New York, New York County, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. SECTION 6.09 AMENDMENTS; WAIVERS. (a) No provision of this Agreement may be amended or waived unless such amendment or waiver is in writing and signed, in the case of an amendment, by the parties hereto, or in the case of a waiver, by the party against whom the waiver is to be effective; provided that no such amendment or waiver by Hexcel shall be effective without the approval of a majority of the Independent Directors. Notwithstanding any provision herein to the contrary, if a majority of the Independent Directors determine in good faith to do so, such Independent Directors may seek to enforce, in the name and on behalf of Hexcel, the terms of this Agreement against the Investors. (b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. SECTION 6.10 ASSIGNMENT. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered, all as of the date first set forth above. GS CAPITAL PARTNERS 2000 L.P. By:/s/ John E. Bowman -------------------------------- Name: John E. Bowman Title: Vice President GS CAPITAL PARTNERS 2000 OFFSHORE, L.P. By:/s/ John E. Bowman -------------------------------- Name: John E. Bowman Title: Vice President GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P. By:/s/ John E. Bowman -------------------------------- Name: John E. Bowman Title: Vice President GS CAPITAL PARTNERS 2000 GMBH & CO. BETEILIGUNGS KG By:/s/ John E. Bowman -------------------------------- Name: John E. Bowman Title: Managing Director STONE STREET FUND 2000, L.P. By:/s/ John E. Bowman -------------------------------- Name: John E. Bowman Title: Vice President LXH, L.L.C. By: GS Capital Partners 2000, L.P., its managing member By: GS Advisors 2000, L.L.C., its general partner By:/s/ John E. Bowman -------------------------------- Name: John E. Bowman Title: Vice President LXH II, L.L.C. By: GS Capital Partners 2000 Offshore, L.P., its managing member By: GS Advisors 2000, L.L.C., its general partner By:/s/ John E. Bowman -------------------------------- Name: John E. Bowman Title: Vice President HEXCEL CORPORATION By:/s/ Ira J. Krakower -------------------------------- Name: Ira J. Krakower Title: Senior Vice President EX-99.7 8 0008.txt EXHIBIT 7 REGISTRATION RIGHTS AGREEMENT between HEXCEL CORPORATION, LXH, L.L.C., and LXH II, L.L.C. Dated as of December 19, 2000 REGISTRATION RIGHTS AGREEMENT ----------------------------- This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made as of December 19, 2000, between HEXCEL CORPORATION, a Delaware corporation (the "Company"), LXH, L.L.C., a Delaware limited liability company ("LXH") and LXH II, L.L.C., a Delaware limited liability company (together with LXH, the "Investors"). WHEREAS, the Investors have entered into a Stock Purchase Agreement (the "Stock Purchase Agreement"), dated as of October 11, 2000, with Ciba Specialty Chemicals Holding Inc., a corporation organized under the laws of Switzerland ("Ciba Holdings"), Ciba Specialty Chemicals Inc., a corporation organized under the laws of Switzerland and wholly-owned subsidiary of Ciba Holdings ("Ciba SCI") and Ciba Specialty Chemicals Corporation, a corporation organized under the laws of Delaware and a wholly-owned subsidiary of Ciba Holdings (together with Ciba Holdings and Ciba SCI, "Ciba") pursuant to which, upon the terms and subject to the conditions contained therein, the Investors have agreed to acquire shares of Common Stock of the Company; and WHEREAS, simultaneously herewith, the Investors and the Company are executing and delivering a Governance Agreement (the "Governance Agreement") providing, among other things, for certain rights and obligations with respect to the ownership of the shares of Common Stock acquired by the Investors; and WHEREAS, (i) in connection with the execution and delivery by the Investors of the Stock Purchase Agreement and the consummation of the transactions contemplated hereby and (ii) to induce the Investors and their Affiliates to execute and deliver the Governance Agreement and to consummate the transactions contemplated thereby, the Company has agreed to provide the Investors with the registration rights set forth in this Agreement. ACCORDINGLY, the parties hereto agree as follows: 1. Certain Definitions. ------------------- As used in this Agreement, capitalized terms not otherwise defined herein shall have the meanings ascribed to them below: "Affiliate" means (i) with respect to any Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person or (ii) with respect to any individual, shall also mean the spouse or child of such individual; provided, that neither the Company nor any Person controlled by the Company shall be deemed to be an Affiliate of any Holder. "Certificate of Incorporation" means the Certificate of Incorporation of the Company, as amended and in effect on the date hereof. "Ciba Registrable Securities" means (a) any shares of Common Stock held by Ciba after giving effect to the consummation of the transactions contemplated by the Stock Purchase Agreement and (b) any shares of Common Stock issued or issuable, directly or indirectly, in exchange for or with respect to the Common Stock referenced in clause (a) above by way of stock dividend, stock split or combination of shares or in connection with a reclassification, recapitalization, merger, consolidation or other reorganization. As to any particular Ciba Registrable Securities, such securities shall cease to be Ciba Registrable Securities when (A) a registration statement with respect to the sale of such securities shall have been declared effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, or (B) such securities shall have been sold (other than in a privately negotiated sale) pursuant to Rule 144 (or any successor provision) under the Securities Act and in compliance with the requirements of paragraphs (f) and (g) of Rule 144 (notwithstanding the provisions of paragraph (k) of such Rule). "Common Stock" means the common stock, par value $.01 per share, of the Company and any equity securities issued or issuable in exchange for or with respect to the Common Stock by way of a stock dividend, stock split or combination of shares or in connection with a reclassification, recapitalization, merger, consolidation or other reorganization. "Common Stock Equivalents" shall mean all options, warrants and other securities convertible into, or exchangeable or exercisable for, (at any time or upon the occurrence of any event or contingency and without regard to any vesting or other conditions to which such securities may be subject), Common Stock. "Expenses" shall mean any and all fees and expenses incurred in connection with the Company's performance of or compliance with Article 2, including, without limitation: (i) SEC, stock exchange or NASD registration and filing fees and all listing fees and fees with respect to the inclusion of securities on the New York Stock Exchange or on any securities market on which the Common Stock is listed or quoted, (ii) fees and expenses of compliance with state securities or "blue sky" laws and in connection with the preparation of a "blue sky" survey, including without limitation, reasonable fees and expenses of blue sky counsel, (iii) printing and copying expenses, (iv) messenger and delivery expenses, (v) expenses incurred in connection with any road show, (vi) fees and disbursements of counsel for the Company, (vii) with respect to each registration, the fees and disbursements (which shall not exceed $50,000 per registration) of one counsel for the selling Holder(s) (selected by the Initiating Holders, in the case of a registration pursuant to Section 2.1, and selected by the underwriter, in the case of a registration pursuant to Section 2.2), (viii) fees and disbursements of all independent public accountants (including the expenses of any audit and/or "cold comfort" letter) and fees and expenses of other persons, including special experts, retained by the Company, (ix) fees and expenses payable to a Qualified Independent Underwriter (as such term is defined in Schedule E to the By-Laws of the NASD) and (x) any other fees and disbursements of underwriters, if any, customarily paid by issuers of securities (collectively, "Expenses"). "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Holder" or "Holders" means any Person who is a signatory to this Agreement and any Person who shall hereafter acquire and hold Registrable Securities in accordance with the terms of the Governance Agreement. "Person" means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivisions thereof. "Registrable Securities" means (a) any shares of Common Stock held by the Holders and (b) any shares of Common Stock issued or issuable, directly or indirectly, in exchange for or with respect to the Common Stock referenced in clause (a) above by way of stock dividend, stock split or combination of shares or in connection with a reclassification, recapitalization, merger, consolidation or other reorganization. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (A) a registration statement with respect to the sale of such securities shall have been declared effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, or (B) such securities shall have been sold (other than in a privately negotiated sale) pursuant to Rule 144 (or any successor provision) under the Securities Act and in compliance with the requirements of paragraphs (f) and (g) of Rule 144 (notwithstanding the provisions of paragraph (k) of such Rule). "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended. 2. Registration Rights. ------------------- 2.1. Demand Registrations. -------------------- (a) (i) Subject to Section 2.1(b) below, at any time after the first anniversary of the date hereof, the Holders shall have the right to require the Company to file a registration statement under the Securities Act covering such aggregate number of Registrable Securities which represents 20% or greater of the then outstanding Registrable Securities, by delivering a written request therefor to the Company specifying the number of Registrable Securities to be included in such registration by such Holders and the intended method of distribution thereof. All such requests by any Holder pursuant to this Section 2.1(a)(i) are referred to herein as "Demand Registration Requests," and the registrations so requested are referred to herein as "Demand Registrations" (with respect to any Demand Registration, the Holders making such demand for registration being referred to as the "Initiating Holders"). As promptly as practicable, but no later than ten days after receipt of a Demand Registration Request, the Company shall give written notice (the "Demand Exercise Notice") of such Demand Registration Request to all Holders of record of Registrable Securities. (ii) The Company, subject to Sections 2.3 and 2.6, shall include in a Demand Registration (x) the Registrable Securities of the Initiating Holders and (y) the Registrable Securities of any other Holder of Registrable Securities which shall have made a written request to the Company for inclusion in such registration (which request shall specify the maximum number of Registrable Securities intended to be disposed of by such Holders) within 30 days after the receipt of the Demand Exercise Notice (or, 15 days if, at the request of the Initiating Holders, the Company states in such written notice or gives telephonic notice to all Holders, with written confirmation to follow promptly thereafter, that such registration will be on a Form S-3). (iii) The Company shall, as expeditiously as possible but subject to Section 2.1(b), use its commercially reasonable efforts to (x) effect such registration under the Securities Act of the Registrable Securities which the Company has been so requested to register, for distribution in accordance with such intended method of distribution, and (y) if requested by the Initiating Holders, obtain acceleration of the effective date of the registration statement relating to such registration. (b) Notwithstanding anything to the contrary in Section 2.1(a), the Demand Registration rights granted in Section 2.1(a) to the Investors are subject to the following limitations: (i) the Company shall not be required to cause a registration pursuant to Section 2.1(a)(i) to be declared effective within a period of 180 days after the effective date of any other registration statement of the Company filed pursuant to the Securities Act; (ii) if the Board of Directors of the Company, in its good faith judgment, determines that any registration of Registrable Securities should not be made or continued because it would materially interfere with any material financing, acquisition, corporate reorganization or merger or other transaction or event involving the Company or any of its subsidiaries (a "Valid Business Reason"), the Company may postpone filing a registration statement relating to a Demand Registration Request until such Valid Business Reason no longer exists, but in no event for more than three months (such period of postponement or withdrawal under this clause (ii), the "Postponement Period"); and the Company shall give written notice of its determination to postpone or withdraw a registration statement and of the fact that the Valid Business Reason for such postponement or withdrawal no longer exists, in each case, promptly after the occurrence thereof; provided, however, the Company shall not be permitted to postpone or withdraw a registration statement after the expiration of any Postponement Period until twelve months after the expiration of such Postponement Period; (iii) the Company shall not, be obligated to effect more than three Demand Registrations under Section 2.1(a) and (iv) the Company shall not be required to effect a Demand Registration unless the Registrable Securities to be included in such registration have an aggregate anticipated offering price of at least $25,000,000 (based on the then-current market price of the Common Stock). If the Company shall give any notice of postponement or withdrawal of any registration statement pursuant to clause (ii) above, the Company shall not, during the period of postponement or withdrawal, register any Common Stock, other than pursuant to a registration statement on Form S-4 or S-8 (or an equivalent registration form then in effect). Each Holder of Registrable Securities agrees that, upon receipt of any notice from the Company that the Company has determined to withdraw any registration statement pursuant to clause (ii) above, such Holder will discontinue its disposition of Registrable Securities pursuant to such registration statement and, if so directed by the Company, will deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such Holder's possession of the prospectus covering such Registrable Securities that was in effect at the time of receipt of such notice. If the Company shall have withdrawn or prematurely terminated a registration statement filed under Section 2.1(a)(i) (whether pursuant to clause (ii) above or as a result of any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court), the Company shall not be considered to have effected an effective registration for the purposes of this Agreement until the Company shall have filed a new registration statement covering the Registrable Securities covered by the withdrawn registration statement and such registration statement shall have been declared effective and shall not have been withdrawn. If the Company shall give any notice of withdrawal or postponement of a registration statement, the Company shall, at such time as the Valid Business Reason that caused such withdrawal or postponement no longer exists (but in no event later than three months after the date of the postponement or withdrawal), use its commercially reasonable best efforts to effect the registration under the Securities Act of the Registrable Securities covered by the withdrawn or postponed registration statement in accordance with this Section 2.1 (unless the Initiating Holders shall have withdrawn such request, in which case the Company shall not be considered to have effected an effective registration for the purposes of this Agreement). (c) The Company, subject to Sections 2.3 and 2.6, may elect to include in any registration statement and offering made pursuant to Section 2.1(a)(i), (i) authorized but unissued shares of Common Stock or shares of Common Stock held by the Company as treasury shares and (ii) any other shares of Common Stock which are requested to be included in such registration pursuant to the exercise of piggyback rights granted by the Company which are not inconsistent with the rights granted in, or otherwise conflict with the terms of, this Agreement ("Additional Piggyback Rights") provided, however, that such inclusion shall be permitted only to the extent that it is pursuant to and subject to the terms of the underwriting agreement or arrangements, if any, entered into by the Initiating Holders. (d) In connection with any Demand Registration, the Company shall have the right to designate the lead managing underwriter in connection with such registration and each other managing underwriter for such registration, provided that in each case, each such underwriter is reasonably satisfactory to the Initiating Holders. 2.2. Piggyback Registrations. ----------------------- (a) If, at any time, the Company proposes or is required to register any of its equity securities under the Securities Act (other than pursuant to (i) registrations on such form or similar form(s) solely for registration of securities in connection with an employee benefit plan or dividend reinvestment plan or a merger or consolidation or (ii) a Demand Registration under Section 2.1) on a registration statement on Form S-1, Form S-2 or Form S-3 (or an equivalent general registration form then in effect), whether or not for its own account, the Company shall give prompt written notice of its intention to do so to each of the Holders of record of Registrable Securities. Upon the written request of any such Holder, made within 15 days following the receipt of any such written notice (which request shall specify the maximum number of Registrable Securities intended to be disposed of by such Holder and the intended method of distribution thereof), the Company shall, subject to Sections 2.2(b), 2.3 and 2.6 hereof, use its commercially reasonable efforts to cause all such Registrable Securities, the Holders of which have so requested the registration thereof, to be included in the registration statement with the securities which the Company at the time proposes to register to permit the sale or other disposition by the Holders (in accordance with the intended method of distribution thereof) of the Registrable Securities to be so registered. No registration of Registrable Securities effected under this Section 2.2(a) shall relieve the Company of its obligations to effect Demand Registrations under Section 2.1 hereof. (b) If, at any time after giving written notice of its intention to register any equity securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such equity securities, the Company may, at its election, give written notice of such determination to all Holders of record of Registrable Securities and (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such abandoned registration, without prejudice, however, to the rights of Holders under Section 2.1, and (ii) in the case of a determination to delay such registration of its equity securities, shall be permitted to delay the registration of such Registrable Securities for the same period as the delay in registering such other equity securities. (c) Any Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any registration statement pursuant to this Section 2.2 by giving written notice to the Company of its request to withdraw; provided, however, that (i) such request must be made in writing prior to the earlier of the execution of the underwriting agreement or the execution of the custody agreement with respect to such registration and (ii) such withdrawal shall be irrevocable and, after making such withdrawal, a Holder shall no longer have any right to include Registrable Securities in the registration as to which such withdrawal was made. 2.3. Allocation of Securities Included in Registration Statement. ----------------------------------------------------------- (a) If any requested registration made prior to 18 months after the date hereof pursuant to Section 2.1 involves an underwritten offering and the lead managing underwriter of such offering (the "Manager") shall advise the Company that, in its view, the number of securities requested to be included in such registration by the Holders of Registrable Securities or any other persons (including those shares of Common Stock requested by the Company to be included in such registration) exceeds the largest number (the "Section 2.3(a) Sale Number") that can be sold in an orderly manner in such offering within a price range acceptable to the Initiating Holders, the Company shall use its commercially reasonable efforts to include in such registration: (i) first, all Registrable Securities and Ciba Registrable Securities requested to be included in such registration by the holders thereof; provided, however, that, if the number of such Registrable Securities and Ciba Registrable Securities exceeds the Section 2.3(a) Sale Number, the number of such Registrable Securities and Ciba Registrable Securities (not to exceed the Section 2.3(a) Sale Number) to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Registrable Securities and Ciba Registrable Securities be included in such registration, based on the number of Registrable Securities and Ciba Registrable Securities then owned by each such holder requesting inclusion in relation to the number of Registrable Securities and Ciba Registrable Securities owned by all holders requesting inclusion; (ii) second, to the extent that the number of Registrable Securities to be included pursuant to clause (i) of this Section 2.3(a) is less than the Section 2.3(a) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all holders requesting that securities be included in such registration pursuant to the exercise of Additional Piggyback Rights ("Piggyback Shares"), based on the aggregate number of Piggyback Shares then owned by each holder requesting inclusion in relation to the aggregate number of Piggyback Shares owned by all holders requesting inclusion, up to the Section 2.3(a) Sale Number; and (iii) third, to the extent that the number of securities to be included pursuant to clauses (i) and (ii) of this Section 2.3(a) is less than the Section 2.3(a) Sale Number, any securities that the Company proposes to register, up to the Section 2.3(a) Sale Number. If, as a result of the proration provisions of this Section 2.3(a), any Holder shall not be entitled to include all Registrable Securities in a registration that such Holder has requested be included, such Holder may elect to withdraw his request to include Registrable Securities in such registration or may reduce the number requested to be included; provided, however, that (x) such request must be made in writing prior to the earlier of the execution of the underwriting agreement or the execution of the custody agreement with respect to such registration and (y) such withdrawal shall be irrevocable and, after making such withdrawal, such Holder shall no longer have any right to include Registrable Securities in the registration as to which such withdrawal was made. (b) If any requested registration made at any time after 18 months following the date hereof pursuant to Section 2.1 involves an underwritten offering and the Manager shall advise the Company that, in its view, the number of securities requested to be included in such registration by the Holders of Registrable Securities or any other persons (including those shares of Common Stock requested by the Company to be included in such registration) exceeds the largest number (the "Section 2.3(b) Sale Number") that can be sold in an orderly manner in such offering within a price range acceptable to the Initiating Holders, the Company shall use its commercially reasonable efforts to include in such registration: (i) first, all Registrable Securities requested to be included in such registration by the Holders; provided, however, that, if the number of such Registrable Securities exceeds the Section 2.3(b) Sale Number, the number of such Registrable Securities (not to exceed the Section 2.3(b) Sale Number) to be included in such registration shall be allocated on a pro rata basis among all Holders requesting that Registrable Securities be included in such registration, based on the number of Registrable Securities then owned by each such Holder requesting inclusion in relation to the number of Registrable Securities owned by all Holders requesting inclusion; (ii) second, to the extent that the number of securities to be included pursuant to clause (i) of this Section 2.3(b) is less than the Section 2.3(b) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Piggyback Shares (including Ciba Registrable Securities) be included in such registration pursuant to the exercise of Additional Piggyback Rights, based on the aggregate number of Piggyback Shares then owned by each holder requesting inclusion in relation to the aggregate number of Piggyback Shares owned by all holders requesting inclusion, up to the Section 2.3(b) Sale Number; and (iii) third, to the extent that the number of securities to be included pursuant to clauses (i) and (ii) of this Section 2.3(b) is less than the Section 2.3(b) Sale Number, any securities that the Company proposes to register, up to the Section 2.3(b) Sale Number. If, as a result of the proration provisions of this Section 2.3(b), any Holder shall not be entitled to include all Registrable Securities in a registration that such Holder has requested be included, such Holder may elect to withdraw his request to include Registrable Securities in such registration or may reduce the number requested to be included; provided, however, that (x) such request must be made in writing prior to the earlier of the execution of the underwriting agreement or the execution of the custody agreement with respect to such registration and (y) such withdrawal shall be irrevocable and, after making such withdrawal, such Holder shall no longer have any right to include Registrable Securities in the registration as to which such withdrawal was made. (c) If any registration pursuant to Section 2.2 involves an underwritten offering that was initially proposed by the Company prior to the first anniversary of the date hereof as a primary registration of its securities and the Manager shall advise the Company that, in its view, the number of securities requested to be included in such registration exceeds the number (the "Section 2.3(c) Sale Number") that can be sold in an orderly manner in such registration within a price range acceptable to the Company, the Company shall include in such registration: (i) first, all Ciba Registrable Securities requested to be included in such registration by the holders of such securities; provided, however, that, if the number of such Ciba Registrable Securities exceeds the Section 2.3(c) Sale Number, the number of such Ciba Registrable Securities (not to exceed the Section 2.3(c) Sale Number) to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Ciba Registrable Securities be included in such registration, based on the number of Ciba Registrable Securities then owned by each such holder requesting inclusion in relation to the number of Ciba Registrable Securities owned by all holders requesting inclusion; (ii) second, to the extent that the number of securities to be included pursuant to clause (i) of this Section 2.3(c) is less than the Section 2.3(c) Sale Number, any securities that the Company proposes to register, up to the Section 2.3(c) Sale Number (the "Company Securities"); (iii) third, to the extent that the number of securities to be included pursuant to clauses (i) and (ii) of this Section 2.3(c) is less than the Section 2.3(c) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all Holders requesting that Registrable Securities be included in such registration, based on the aggregate number of Registrable Securities then owned by each holder requesting inclusion in relation to the aggregate number of Registrable Securities owned by all holders requesting inclusion, up to the Section 2.3(c) Sale Number; and (iv) fourth, to the extent that the number of securities to be included pursuant to clauses (i), (ii) and (iii) of this Section 2.3(c) is less than the Section 2.3(c) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Piggyback Shares be included in such registration pursuant to the exercise of Additional Piggyback Rights, based on the aggregate number of Piggyback Shares then owned by each holder requesting inclusion in relation to the aggregate number of Piggyback Shares owned by all holders requesting inclusion, up to the Section 2.3(c) Sale Number. (d) If any registration pursuant to Section 2.2 involves an underwritten offering that was initially proposed by the Company after the first anniversary of the date hereof but prior to 18 months after the date hereof as a primary registration of its securities and the Manager shall advise the Company that, in its view, the number of securities requested to be included in such registration exceeds the number (the "Section 2.3(d) Sale Number") that can be sold in an orderly manner in such registration within a price range acceptable to the Company, the Company shall include in such registration: (i) first, all Common Stock that the Company proposes to register for its own account; (ii) second, to the extent that the number of securities to be included pursuant to clause (i) of this Section 2.3(d) is less than the Section 2.3(d) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Ciba Registrable Securities be included in such registration, based on the aggregate number of Ciba Registrable Securities then owned by each holder requesting inclusion in relation to the aggregate number of Ciba Registrable Securities owned by all holders requesting inclusion, up to the Section 2.3(d) Sale Number; (iii) third, to the extent that the number of securities to be included pursuant to clauses (i) and (ii) of this Section 2.3(d) is less than the Section 2.3(d) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all Holders requesting that Registrable Securities be included in such registration, based on the aggregate number of Registrable Securities then owned by each holder requesting inclusion in relation to the aggregate number of Registrable Securities owned by all holders requesting inclusion, up to the Section 2.3(d) Sale Number; and (iv) fourth, to the extent the number of securities to be included pursuant to clauses (i), (ii) and (iii) of this Section 2.3(d) is less than the Section 2.3(d) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Piggyback Shares be included in such registration pursuant to the exercise of Additional Piggyback Rights, based on the aggregate number of Piggyback Shares then owned by each holder requesting inclusion in relation to the aggregate number of Piggyback Shares owned by all holders requesting inclusion, up to the Section 2.3(d) Sale Number. (e) If any registration pursuant to Section 2.2 involves an underwritten offering that was initially proposed by the Company at any time after 18 months following the date hereof as a primary registration of its securities and the Manager shall advise the Company that, in its view, the number of securities requested to be included in such registration exceeds the number (the "Section 2.3(e) Sale Number") that can be sold in an orderly manner in such registration within a price range acceptable to the Company, the Company shall include in such registration: (i) first, all Common Stock that the Company proposes to register for its own account; (ii) second, to the extent that the number of securities to be included pursuant to clause (i) of this Section 2.3(e) is less than the Section 2.3(e) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Registrable Securities or Ciba Registrable Securities be included in such registration, based on the aggregate number of Registrable Securities and Ciba Registrable Securities then owned by each holder requesting inclusion in relation to the aggregate number of Registrable Securities and Ciba Registrable Securities owned by all holders requesting inclusion, up to the Section 2.3(e) Sale Number; and (iii) third, to the extent the number of securities to be included pursuant to clauses (i) and (ii) of this Section 2.3(e) is less than the Section 2.3(e) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Piggyback Shares be included in such registration pursuant to the exercise of Additional Piggyback Rights, based on the aggregate number of Piggyback Shares then owned by each holder requesting inclusion in relation to the aggregate number of Piggyback Shares owned by all holders requesting inclusion, up to the Section 2.3(e) Sale Number. (f) If any registration pursuant to Section 2.2 involves an underwritten offering that was initially proposed prior to 18 months after the date hereof by holders of securities of the Company that have the right to require such registration ("Additional Demand Rights") and the Manager shall advise the Company that, in its view, the number of securities requested to be included in such registration exceeds the number (the "Section 2.3(f) Sale Number") that can be sold in an orderly manner in such registration within a price range acceptable to the Company, the Company shall include in such registration: (i) first, all Ciba Registrable Securities requested to be included in such registration by the holders of such securities; provided, however, that, if the number of such Ciba Registrable Securities exceeds the Section 2.3(f) Sale Number, the number of such Ciba Registrable Securities (not to exceed the Section 2.3(f) Sale Number) to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Ciba Registrable Securities be included in such registration, based on the number of Ciba Registrable Securities then owned by each such holder requesting inclusion in relation to the number of Ciba Registrable Securities owned by all holders requesting inclusion; (ii) second, to the extent that the number of securities to be included pursuant to clause (i) of this Section 2.3(f) is less than the Section 2.3(f) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among holders requesting that securities be included in such registration pursuant to Additional Demand Rights ("Additional Registrable Securities"), based on the aggregate number of Additional Registrable Securities then owned by each holder requesting inclusion in relation to the aggregate number of Additional Registrable Securities owned by all holders requesting inclusion, up to the Section 2.3(f) Sale Number; (iii) third, to the extent that the number of securities to be included pursuant to clauses (i) and (ii) of this Section 2.3(f) is less than the Section 2.3(f) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all Holders requesting that Registrable Securities be included in such registration, based on the aggregate number of Registrable Securities then owned by each holder requesting inclusion in relation to the aggregate number of Registrable Securities owned by all holders requesting inclusion, up to the Section 2.3(f) Sale Number; (iv) fourth, to the extent the number of securities to be included pursuant to clauses (i), (ii) and (iii) of this Section 2.3(f) is less than the Section 2.3(f) Sale Number, any Common Stock that the Company proposes to register for its own account, up to the Section 2.3(f) Sale Number; and (v) five, to the extent that the number of securities to be included pursuant to clauses (i), (ii), (iii) and (iv) of this Section 2.3(f) is less than the Section 2.3(f) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Piggyback Shares be included in such registration pursuant to the exercise of Additional Piggyback Rights, based on the aggregate number of Piggyback Shares then owned by each holder requesting inclusion in relation to the aggregate number of Piggyback Shares owned by all holders requesting inclusion, up to the Section 2.3(f) Sale Number. (g) If any registration pursuant to Section 2.2 involves an underwritten offering that was initially proposed after 18 months following the date hereof by holders of securities of the Company that have Additional Demand Rights and the Manager shall advise the Company that, in its view, the number of securities requested to be included in such registration exceeds the number (the "Section 2.3(g) Sale Number") that can be sold in an orderly manner in such registration within a price range acceptable to the Company, the Company shall include in such registration: (i) first, all securities requested to be included in such registration by the holders of Additional Demand Rights ("Additional Registrable Securities"); provided, however, that, if the number of such Additional Registrable Securities exceeds the Section 2.3(g) Sale Number, the number of such Additional Registrable Securities (not to exceed the Section 2.3(g) Sale Number) to be included in such registration shall be allocated on a pro rata basis among all holders of Additional Registrable Securities requesting that Additional Registrable Securities be included in such registration, based on the number of Additional Registrable Securities then owned by each such holders requesting inclusion in relation to the number of Additional Registrable Securities owned by all of such holders requesting inclusion; (ii) second, to the extent that the number of securities to be included pursuant to clause (i) of this Section 2.3(g) is less than the Section 2.3(g) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Registrable Securities or Ciba Registrable Securities be included in such registration, based on the aggregate number of Registrable Securities and Ciba Registrable Securities then owned by each holder requesting inclusion in relation to the aggregate number of Registrable Securities and Ciba Registrable Securities owned by all holders requesting inclusion, up to the Section 2.3(g) Sale Number; (iii) third, to the extent the number of securities to be included pursuant to clauses (i) and (ii) of this Section 2.3(g) is less than the Section 2.3(g) Sale Number, any Common Stock that the Company proposes to register for its own account, up to the Section 2.3(g) Sale Number; and (iv) fourth, to the extent that the number of securities to be included pursuant to clauses (i), (ii), and (iii) of this Section 2.3(g) is less than the Section 2.3(g) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Piggyback Shares be included in such registration pursuant to the exercise of Additional Piggyback Rights, based on the aggregate number of Piggyback Shares then owned by each holder requesting inclusion in relation to the aggregate number of Piggyback Shares owned by all holders requesting inclusion, up to the Section 2.3(g) Sale Number. 2.4. Registration Procedures. If and whenever the Company is required by the provisions of this Agreement to use its commercially reasonable efforts to effect or cause the registration of any Registrable Securities under the Securities Act as provided in this Agreement, the Company shall, as expeditiously as possible: (a) prepare and file with the SEC a registration statement on an appropriate registration form of the SEC for the disposition of such Registrable Securities in accordance with the intended method of disposition thereof, which form shall be selected by the Company and shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith, and the Company shall use its commercially reasonable efforts to cause such registration statement to become and remain effective (provided, however, that before filing a registration statement or prospectus or any amendments or supplements thereto, or comparable statements under securities or blue sky laws of any jurisdiction, the Company will furnish to one counsel for the Holders participating in the planned offering (selected by the Initiating Holders, in the case of a registration pursuant to Section 2.1, and selected by the lead managing underwriter, in the case of a registration pursuant to Section 2.2) and the lead managing underwriter, if any, copies of all such documents proposed to be filed (including all exhibits thereto), which documents will be subject to the reasonable review and reasonable comment of such counsel, and the Company shall not file any registration statement or amendment thereto or any prospectus or supplement thereto to which the Holders of a majority of the Registrable Securities covered by such registration statement or the underwriters, if any, shall reasonably object); (b) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for such period as any seller of Registrable Securities pursuant to such registration statement shall request and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all Registrable Securities covered by such registration statement in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement; (c) furnish, without charge, to each seller of such Registrable Securities and each underwriter, if any, of the securities covered by such registration statement such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits), and the prospectus included in such registration statement (including each preliminary prospectus) in conformity with the requirements of the Securities Act, and other documents, as such seller and underwriter may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such seller (the Company hereby consenting to the use in accordance with all applicable law of each such registration statement (or amendment or post-effective amendment thereto) and each such prospectus (or preliminary prospectus or supplement thereto) by each such seller of Registrable Securities and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such registration statement or prospectus); (d) use its commercially reasonable efforts to register or qualify the Registrable Securities covered by such registration statement under such other securities or "blue sky" laws of such jurisdictions as any sellers of Registrable Securities or any managing underwriter, if any, shall reasonably request in writing, and do any and all other acts and things which may be reasonably necessary or advisable to enable such sellers or underwriter, if any, to consummate the disposition of the Registrable Securities in such jurisdictions, except that in no event shall the Company be required to qualify to do business as a foreign corporation in any jurisdiction where it would not, but for the requirements of this paragraph (d), be required to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service of process in any such jurisdiction; (e) promptly notify each Holder selling Registrable Securities covered by such registration statement and each managing underwriter, if any: (i) when the registration statement, any pre-effective amendment, the prospectus or any prospectus supplement related thereto or post-effective amendment to the registration statement has been filed and, with respect to the registration statement or any post-effective amendment, when the same has become effective; (ii) of any request by the SEC or state securities authority for amendments or supplements to the registration statement or the prospectus related thereto or for additional information; (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or blue sky laws of any jurisdiction or the initiation of any proceeding for such purpose; (v) of the existence of any fact of which the Company becomes aware which results in the registration statement, the prospectus related thereto or any document incorporated therein by reference containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make any statement therein not misleading; and (vi) if at any time the representations and warranties contemplated by any underwriting agreement, securities sale agreement, or other similar agreement, relating to the offering shall cease to be true and correct in all material respects; and, if the notification relates to an event described in clause (v), the Company shall promptly prepare and furnish to each such seller and each underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances under which they were made not misleading; (f) comply with all applicable rules and regulations of the SEC, and make generally available to its security holders, as soon as reasonably practicable after the effective date of the registration statement (and in any event within 16 months thereafter), an earnings statement (which need not be audited) covering the period of at least twelve consecutive months beginning with the first day of the Company's first calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; (g) (i) cause all such Registrable Securities covered by such registration statement to be listed on the New York Stock Exchange or the principal securities exchange on which similar securities issued by the Company are then listed (if any), if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) if no similar securities are then so listed, to either cause all such Registrable Securities to be listed on a national securities exchange or to secure designation of all such Registrable Securities as a Nasdaq National Market "national market system security" within the meaning of Rule 11Aa2-1 of the Exchange Act or, failing that, secure Nasdaq National Market authorization for such shares and, without limiting the generality of the foregoing, take all actions that may be required by the Company as the issuer of such Registrable Securities in order to facilitate the managing underwriter's arranging for the registration of at least two market makers as such with respect to such shares with the National Association of Securities Dealers, Inc. (the "NASD"); (h) provide and cause to be maintained a transfer agent and registrar for all such Registrable Securities covered by such registration statement not later than the effective date of such registration statement; (i) enter into such customary agreements (including, if applicable, an underwriting agreement) and take such other actions as the Holders of a majority of the Registrable Securities participating in such offering shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (it being understood that the Holders of the Registrable Securities which are to be distributed by any underwriters shall be parties to any such underwriting agreement and may, at their option, require that the Company make to and for the benefit of such Holders the representations, warranties and covenants of the Company which are being made to and for the benefit of such underwriters); (j) use its commercially reasonable efforts to obtain an opinion from the Company's counsel and a "cold comfort" letter from the Company's independent public accountants in customary form and covering such matters as are customarily covered by such opinions and "cold comfort" letters delivered to underwriters in underwritten public offerings, which opinion and letter shall be reasonably satisfactory to the underwriter, if any, and furnish to each Holder participating in the offering and to each underwriter, if any, a copy of such opinion and letter addressed to such Holder or underwriter; (k) deliver promptly to each Holder participating in the offering and each underwriter, if any, copies of all correspondence between the SEC and the Company, its counsel or auditors and all memoranda relating to discussions with the SEC or its staff with respect to the registration statement, other than those portions of any such memoranda which contain information subject to attorney-client privilege with respect to the Company, and, upon receipt of such confidentiality agreements as the Company may reasonably request, make reasonably available for inspection by any seller of such Registrable Securities covered by such registration statement, by any underwriter, if any, participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by any such seller or any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company's officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement; (l) use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of the registration statement; (m) provide a CUSIP number for all Registrable Securities, not later than the effective date of the registration statement; (n) make reasonably available its employees and personnel for participation in "road shows" an other marketing efforts and otherwise provide reasonable assistance to the underwriters (taking into account the needs of the Company's businesses and the requirements of the marketing process) in the marketing of Registrable Securities in any underwritten offering; (o) promptly prior to the filing of any document which is to be incorporated by reference into the registration statement or the prospectus (after the initial filing of such registration statement) provide copies of such document to counsel for the selling holders of Registrable Securities and to each managing underwriter, if any, and make the Company's representatives reasonably available for discussion of such document and make such changes in such document concerning the selling holders prior to the filing thereof as counsel for such selling holders or underwriters may reasonably request; (p) furnish to the Holder participating in the offering and the managing underwriter, without charge, at least one signed copy, and to each other Holder participating in the offering, without charge, at least one photocopy of a signed copy, of the registration statement and any post-effective amendments thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference); (q) cooperate with the sellers of Registrable Securities and the managing underwriter, if any, to facilitate the timely preparation and delivery of certificates not bearing any restrictive legends representing the Registrable Securities to be sold, and cause such Registrable Securities to be issued in such denominations and registered in such names in accordance with the underwriting agreement prior to any sale of Registrable Securities to the underwriters or, if not an underwritten offering, in accordance with the instructions of the sellers of Registrable Securities at least three business days prior to any sale of Registrable Securities and instruct any transfer agent and registrar of Registrable Securities to release any stop transfer orders in respect thereof; (r) take all such other commercially reasonable actions as are necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities; and (s) take no direct or indirect action prohibited by Regulation M under the Exchange Act; provided, however, that to the extent that any prohibition is applicable to the Company, the Company will take such action as is necessary to make any such prohibition inapplicable. The Company may require as a condition precedent to the Company's obligations under this Section 2.4 that each seller of Registrable Securities as to which any registration is being effected furnish the Company such information in writing regarding such seller and the distribution of such Registrable Securities as the Company may from time to time reasonably request provided that such information is necessary for the Company to consummate such registration and shall be used only in connection with such registration. Each seller of Registrable Securities agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in clause (v) of paragraph (e) of this Section 2.4, such Holder will discontinue such Holder's disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Holder's receipt of the copies of the supplemented or amended prospectus contemplated by paragraph (e) of this Section 2.4 and, if so directed by the Company, will deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such Holder's possession of the prospectus covering such Registrable Securities that was in effect at the time of receipt of such notice. In the event the Company shall give any such notice, the applicable period mentioned in paragraph (b) of this Section 2.4 shall be extended by the number of days during such period from and including the date of the giving of such notice to and including the date when each seller of any Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by paragraph (e) of this Section 2.4. If any such registration statement or comparable statement under "blue sky" laws refers to any Holder by name or otherwise as the Holder of any securities of the Company, then such Holder shall have the right to require (i) the insertion therein of language, in form and substance reasonably satisfactory to such Holder and the Company, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the Company's securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company, or (ii) in the event that such reference to such Holder by name or otherwise is not in the judgment of the Company, as advised by counsel, required by the Securities Act or any similar federal statute or any state "blue sky" or securities law then in force, the deletion of the reference to such Holder. 2.5. Registration Expenses. --------------------- (a) The Company shall pay all Expenses (x) with respect to any Demand Registration whether or not it becomes effective or remains effective for the period contemplated by Section 2.4(b) and (y) with respect to any registration effected under Section 2.2. (b) Notwithstanding the foregoing, (x) the provisions of this Section 2.5 shall be deemed amended to the extent necessary to cause these expense provisions to comply with "blue sky" laws of each state in which the offering is made and (y) in connection with any registration hereunder, each Holder of Registrable Securities being registered shall pay all underwriting discounts and commissions and any transfer taxes, if any, attributable to the sale of such Registrable Securities, pro rata with respect to payments of discounts and commissions in accordance with the number of shares sold in the offering by such Holder, and (z) the Company shall, in the case of all registrations under this Article 2, be responsible for all its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties). 2.6. Certain Limitations on Registration Rights. In the case of any registration under Section 2.1 pursuant to an underwritten offering, or, in the case of a registration under Section 2.2, if the Company has determined to enter into an underwriting agreement in connection therewith, all securities to be included in such registration shall be subject to an underwriting agreement and no Person may participate in such registration unless such Person agrees to sell such Person's securities on the basis provided therein and, subject to Section 3.1 hereof, completes and executes all reasonable questionnaires, and other documents (including custody agreements and powers of attorney) which must be executed in connection therewith, and provides such other information to the Company or the underwriter as may be necessary to register such Person's securities. 2.7. Limitations on Sale or Distribution of Other Securities. (a) Each seller of Registrable Securities agrees that, (i) to the extent requested in writing by a managing underwriter, if any, of any registration effected pursuant to Section 2.1, not to sell, transfer or otherwise dispose of, including any sale pursuant to Rule 144 under the Securities Act, any Common Stock, or any other equity security of the Company or any security convertible into or exchangeable or exercisable for any equity security of the Company (other than as part of such underwritten public offering) during the time period reasonably requested by the managing underwriter, not to exceed 90 days (and the Company hereby also so agrees (except that the Company may effect any sale or distribution of any such securities pursuant to a registration on Form S-4 (if reasonably acceptable to such managing underwriter) or Form S-8, or any successor or similar form which is then in effect or upon the conversion, exchange or exercise of any then outstanding Common Stock Equivalent) to use its commercially reasonable efforts to cause each holder of any equity security or any security convertible into or exchangeable or exercisable for any equity security of the Company purchased from the Company at any time other than in a public offering so to agree), and (ii) to the extent requested in writing by a managing underwriter of any underwritten public offering effected by the Company for its own account (it will not sell any Common Stock (other than as part of such underwritten public offering) during the time period reasonably requested by the managing underwriter, which period shall not exceed 90 days). (b) The Company hereby agrees that, if it shall previously have received a request for registration pursuant to Section 2.1 or 2.2, and if such previous registration shall not have been withdrawn or abandoned, the Company shall not sell, transfer, or otherwise dispose of, any Common Stock, or any other equity security of the Company or any security convertible into or exchangeable or exercisable for any equity security of the Company (other than as part of such underwritten public offering, a registration on Form S-4 or Form S-8 or any successor or similar form which is then in effect or upon the conversion, exchange or exercise of any then outstanding Common Stock Equivalent), until a period of 90 days shall have elapsed from the effective date of such previous registration; and the Company shall so provide in any registration rights agreements hereafter entered into with respect to any of its securities. 2.8. No Required Sale. Nothing in this Agreement shall be deemed to create an independent obligation on the part of any Holder to sell any Registrable Securities pursuant to any effective registration statement. 2.9. Indemnification. (a) In the event of any registration of any securities of the Company under the Securities Act pursuant to this Article 2, the Company will, and hereby agrees to, indemnify and hold harmless, to the fullest extent permitted by law, each Holder of Registrable Securities, its directors, officers, fiduciaries, employees, stockholders, members or general and limited partners (and the directors, officers, employees and stockholders thereof), each other Person who participates as an underwriter or a Qualified Independent Underwriter, if any, in the offering or sale of such securities, each officer, director, employee, stockholder, fiduciary, managing director, agent, affiliates, consultants, representatives, successors, assigns or partner of such underwriter or Qualified Independent Underwriter, and each other Person, if any, who controls such Holder or any such underwriter within the meaning of the Securities Act, from and against any and all losses, claims, damages or liabilities, joint or several, actions or proceedings (whether commenced or threatened) and expenses (including reasonable fees of counsel and any amounts paid in any settlement effected with the Company's consent, which consent shall not be unreasonably withheld or delayed) to which each such indemnified party may become subject under the Securities Act or otherwise in respect thereof (collectively, "Claims"), insofar as such Claims arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement under which such securities were registered under the Securities Act or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary, final or summary prospectus or any amendment or supplement thereto, together with the documents incorporated by reference therein, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company and relating to action required of or inaction by the Company in connection with any such registration, and the Company will reimburse any such indemnified party for any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such Claim as such expenses are incurred; provided, however, that the Company shall not be liable to any such indemnified party in any such case to the extent such Claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact made in such registration statement or amendment thereof or supplement thereto or in any such prospectus or any preliminary, final or summary prospectus in reliance upon and in conformity with written information furnished to the Company by or on behalf of such indemnified party specifically for use therein. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by as on behalf of such indemnified party and shall survive the transfer of such securities by such Holder. (b) Each Holder of Registrable Securities that are included in the securities as to which any registration under Section 2.1 or 2.2 is being effected shall, severally and not jointly, indemnify and hold harmless (in the same manner and to the same extent as set forth in paragraph (a) of this Section 2.9) to the extent permitted by law the Company, its officers and directors, each Person controlling the Company within the meaning of the Securities Act and all other prospective sellers and their respective directors, officers, fiduciaries, managing directors, employees, agents, affiliates, consultants, representatives, successors, assigns, general and limited partners, stockholders and respective controlling Persons with respect to any untrue statement or alleged untrue statement of any material fact in, or omission or alleged omission of any material fact from, such registration statement, any preliminary, final or summary prospectus contained therein, or any amendment or supplement thereto, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company or its representatives by or on behalf of such Holder specifically for use therein and reimburse such indemnified party for any legal or other expenses reasonably incurred in connection with investigating or defending any such Claim as such expenses are incurred; provided, however, that the aggregate amount which any such Holder shall be required to pay pursuant to this Section 2.9(b) and Sections 2.9(c), (e) and (f) shall in no case be greater than the amount of the net proceeds received by such Holder upon the sale of the Registrable Securities pursuant to the registration statement giving rise to such claim. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party and shall survive the transfer of such securities by such Holder. (c) Indemnification similar to that specified in the preceding paragraphs (a) and (b) of this Section 2.9 (with appropriate modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or other qualification of securities under any state securities and "blue sky" laws. (d) Any Person entitled to indemnification under this Agreement shall notify promptly the indemnifying party in writing of the commencement of any action or proceeding with respect to which a claim for indemnification may be made pursuant to this Section 2.9, but the failure of any such Person to provide such notice shall not relieve the indemnifying party of its obligations under the preceding paragraphs of this Section 2.9, except to the extent the indemnifying party is materially prejudiced thereby and shall not relieve the indemnifying party from any liability which it may have to any such Person otherwise than under this Article 2. In case any action or proceeding is brought against an indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, unless in the reasonable opinion of outside counsel to the indemnified party a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, to assume the defense thereof jointly with any other indemnifying party similarly notified, to the extent that it chooses, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party that it so chooses, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that (i) if the indemnifying party fails to take reasonable steps necessary to defend diligently the action or proceeding within 20 days after receiving notice from such indemnified party; or (ii) if such indemnified party who is a defendant in any action or proceeding which is also brought against the indemnifying party reasonably shall have concluded that there may be one or more legal defenses available to such indemnified party which are not available to the indemnifying party; or (iii) if representation of both parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct, then, in any such case, the indemnified party shall have the right to assume or continue its own defense as set forth above (but with no more than one firm of counsel for all indemnified parties in each jurisdiction, except to the extent any indemnified party or parties reasonably shall have concluded that there may be legal defenses available to such party or parties which are not available to the other indemnified parties or to the extent representation of all indemnified parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct) and the indemnifying party shall be liable for any expenses therefor. No indemnifying party shall, without the written consent of the indemnified party, which consent shall not be unreasonably withheld, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (A) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (B) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party. (e) If for any reason the foregoing indemnity is unavailable or is insufficient to hold harmless an indemnified party under Section 2.9(a), (b) or (c), then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of any Claim in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and the indemnified party, on the other hand, with respect to such offering of securities. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. If, however, the allocation provided in the second preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative faults but also the relative benefits of the indemnifying party and the indemnified party as well as any other relevant equitable considerations. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 2.9(e) were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the preceding sentences of this Section 2.9(e). The amount paid or payable in respect of any Claim shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such Claim. No Person guilty of fraudulent misrepresentation (within the meaning of section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Notwithstanding anything in this Section 2.9(e) to the contrary, no indemnifying party (other than the Company) shall be required pursuant to this Section 2.9(e) to contribute any amount in excess of the net proceeds received by such indemnifying party from the sale of Registrable Securities in the offering to which the losses, claims, damages or liabilities of the indemnified parties relate, less the amount of any indemnification payment made by such indemnifying party pursuant to Sections 2.9(b) and (c). (f) The indemnity and contribution agreements contained herein shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and shall remain operative and in full force and effect regardless of any investigation made or omitted by or on behalf of any indemnified party and shall survive the transfer of the Registrable Securities by any such party. (g) The indemnification and contribution required by this Section 2.9 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred. 3. Underwritten Offerings. ---------------------- 3.1. Requested Underwritten Offerings. If requested by the underwriters for any underwritten offering by the Investors pursuant to a registration requested under Section 2.1, the Company shall enter into a customary underwriting agreement with the underwriters. Such underwriting agreement shall be satisfactory in form and substance to the Initiating Holders and shall contain such representations and warranties by, and such other agreements on the part of, the Company and such other terms as are generally prevailing in agreements of that type, including, without limitation, indemnities and contribution agreements on substantially the same terms as those contained herein. Any Holder participating in the offering shall be a party to such underwriting agreement and may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such Holder and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of such Holder; provided, however, that the Company shall not be required to make any representations or warranties with respect to written information specifically provided by a selling Holder for inclusion in the registration statement. Each such Holder shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Holder, its ownership of and title to the Registrable Securities, and its intended method of distribution; and any liability of such Holder to any underwriter or other Person under such underwriting agreement shall be limited to liability arising from breach of its representations and warranties and shall be limited to an amount equal to the proceeds (net of expenses and underwriting discounts and commissions) that it derives from such registration. 3.2. Piggyback Underwritten Offerings. In the case of a registration pursuant to Section 2.2 hereof, if the Company shall have determined to enter into an underwriting agreement in connection therewith, any Registrable Securities to be included in such registration shall be subject to such underwriting agreement. Any Holder participating in such registration may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such Holder and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of such Holder. Each such Holder shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Holder, its ownership of and title to the Registrable Securities, and its intended method of distribution; and any liability of such Holder to any underwriter or other Person under such underwriting agreement shall be limited to liability arising from breach of its representations and warranties and shall be limited to an amount equal to the proceeds (net of expenses and underwriting discounts and commissions) that it derives from such registration. 4. General. ------- 4.1. Adjustments Affecting Registrable Securities. The Company agrees that it shall not effect or permit to occur any combination or subdivision of shares of Common Stock which would adversely affect the ability of any Holder of any Registrable Securities to include such Registrable Securities in any registration contemplated by this Agreement or the marketability of such Registrable Securities in any such registration. The Company agrees that it will take all reasonable steps necessary to effect a subdivision of shares if in the reasonable judgment of (a) the Initiating Holders or (b) the managing underwriter for the offering in respect of such Demand Registration Request, such subdivision would enhance the marketability of the Registrable Securities. Each Holder agrees to vote all of its shares of capital stock in a manner, and to take all other actions necessary, to permit the Company to carry out the intent of the preceding sentence including, without limitation, voting in favor of an amendment to the Company's Certificate of Incorporation in order to increase the number of authorized shares of capital stock of the Company. 4.2. Rule 144. The Company covenants that (i) so long as it remains subject to the reporting provisions of the Exchange Act, it will timely file the reports required to be filed by it under the Securities Act or the Exchange Act (including, but not limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 under the Securities Act), and (ii) will take such further action as any Holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (A) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (B) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. 4.3. Nominees for Beneficial Owners. If Registrable Securities are held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its option, be treated as the Holder of such Registrable Securities for purposes of any request or other action by any Holder or Holders of Registrable Securities pursuant to this Agreement (or any determination of any number or percentage of shares constituting Registrable Securities held by any Holder or Holders of Registrable Securities contemplated by this Agreement), provided that the Company shall have received assurances reasonably satisfactory to it of such beneficial ownership. 4.4 Amendments and Waivers. The terms and provisions of this Agreement may be modified or amended, or any of the provisions hereof waived, temporarily or permanently, in a writing executed and delivered by the Company and the Investors. No waiver of any of the provisions of this Agreement shall be deemed to or shall constitute a waiver of any other provision hereof (whether or not similar). No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof. 4.5. Notices. Except as otherwise provided in this Agreement, all notices, requests, consents and other communications hereunder to any party shall be deemed to be sufficient if contained in a written instrument delivered in person or by telecopy (with a confirmatory copy sent by a different means within three business days of such notice), nationally recognized overnight courier or first class registered or certified mail, return receipt requested, postage prepaid, addressed to such party at the address set forth below or such other address as may hereafter be designated in writing by such party to the other parties: (i) if to the Company, to: Hexcel Corporation Two Stamford Plaza 281 Tresser Boulevard 16th Floor Stamford, Connecticut 06901-3238 Telecopy No.: (203) 358-3972 Attention: Ira J. Krakower, Esq. Senior Vice President, General Counsel and Secretary with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 Telecopy No.: (212) 735-2000 Attention: Joseph A. Coco, Esq. and Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, New York 10019-6064 Telecopy No.: (212) 757-3990 Attention: Judith R. Thoyer, Esq. (ii) if to the Holders: c/o GS Capital Partners 2000, L.P. 85 Broad Street New York, New York 10004 Telecopy: (212) 357-5505 Attention: Mr. Sanjeev Mehra with a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Telecopy: (212) 859-8587 Attention: Robert C. Schwenkel, Esq. All such notices, requests, consents and other communications shall be deemed to have been given when received. 4.6. Miscellaneous. ------------- (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the respective successors, personal representatives and assigns of the parties hereto, whether so expressed or not. If any Person shall acquire Registrable Securities from any Holder, in any manner, whether by operation of law or otherwise, but in compliance with the Governance Agreement, such Person shall promptly notify the Company and such Registrable Securities acquired from such Holder shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be entitled to receive the benefits of and be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement. Any such successor or assign shall agree in writing to acquire and hold the Registrable Securities acquired from such Holder subject to all of the terms hereof. If any Holder shall acquire additional Registrable Securities, such Registrable Securities shall be subject to all of the terms, and entitled to all the benefits, of this Agreement. (b) This Agreement (with the documents referred to herein or delivered pursuant hereto), together with the Agreement, dated as of October 11, 2000, between the Company and the Investors, and the Governance Agreement, embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. (c) This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of New York without giving effect to the conflicts of law principles thereof other than Sections 5-1401 and 5-1402 of the New York General Obligations Law. (d) Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of New York and of the United States of America, in each case located in the County of New York, for any claim, action, suit, or proceeding ("Litigation") arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any Litigation relating hereto or thereto except in such courts), and further agrees that service of any process, summons, notice or document by U.S. registered mail to its respective address set forth in this Agreement shall be effective service of process for any Litigation brought against it in any such court. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any Litigation arising out of this Agreement or the transactions contemplated hereby in the courts of the State of New York or the United States of America, in each case located in the County of New York, hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Litigation brought in any such court has been brought in an inconvenient forum. (e) The Company and the Investors hereby waive any right they may have to a trial by jury in respect of any action, proceeding or litigation directly or indirectly arising out of, under or in connection with this agreement or the transaction documents. (f) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. All section references are to this Agreement unless otherwise expressly provided. (g) This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. (h) Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. (i) The parties hereto acknowledge that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder, and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to injunctive relief, including specific performance, to enforce such obligations without the posting of any bond, and, if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law. (h) Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 4.7. No Inconsistent Agreements. The rights granted to the Holders of Registrable Securities hereunder do not in any way conflict with and are not inconsistent with any other agreements to which the Company is a party or by which it is bound. Without the prior written consent of Holders of a majority of the then outstanding Registrable Securities, the Company will not, on or after the date of this Agreement, enter into any agreement with respect to its securities which is inconsistent with the rights granted in this Agreement or otherwise conflicts with the provisions hereof, other than any lock-up agreement with the underwriters in connection with any registered offering effected hereunder, pursuant to which the Company shall agree not to register for sale, and the Company shall agree not to sell or otherwise dispose of, Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, for a specified period following the registered offering. The Company further agrees that if any other registration rights agreement entered into after the date of this Agreement with respect to any of its securities contains terms which are more favorable to, or less restrictive on, the other party thereto than the terms and conditions contained in this Agreement are (insofar as they are applicable) to the Holders, then the terms and conditions of this Agreement shall immediately be deemed to have been amended without further action by the Company or any of the Holders of Registrable Securities so that the Holders shall each be entitled to the benefit of any such more favorable or less restrictive terms or conditions. IN WITNESS WHEREOF, the parties hereto have duly executed this agreement as of the date first above written. HEXCEL CORPORATION By: /s/ Ira J. Krakower -------------------------------------- Name: Ira J. Krakower Title: Senior Vice President LXH, L.L.C. By: GS Capital Partners 2000, L.P., its managing member By: GS Advisors 2000, L.L.C., its general partner By: /s/ John E. Bowman -------------------------------------- Name: John E. Bowman Title: Vice President LXH II, L.L.C. By: GS Capital Partners 2000 Offshore, L.P., its managing member By: GS Advisors 2000, L.L.C., its general partner By: /s/ John E. Bowman -------------------------------------- Name: John E. Bowman Title: Vice President EX-99.8 9 0009.txt EXHIBIT 8 PLEDGE AGREEMENT THIS PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of December 19, 2000, made by LXH, L.L.C. (the "Pledgor") in favor of Ciba Specialty Chemicals Corporation (the "Pledgee"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Pledgee, the Pledgor and certain Affiliates of the Pledgee entered into a Stock Purchase Agreement, dated as of October 11, 2000 (the "Stock Purchase Agreement"), providing for, among other things, the sale by the Pledgee and such Affiliates to the Pledgor of certain shares of Common Stock, par value $.01 per share (the "Common Stock") of Hexcel Corporation, a Delaware corporation (the "Company"); and WHEREAS, simultaneously herewith, the Pledgor is executing and delivering to the Pledgee and certain Affiliates of the Pledgee the Pledgor's 7.5% Recourse Secured Pay-in-Kind Promissory Notes, dated the date hereof (each, a "Note", and, collectively with all additional notes issued under each such Note, the "Notes"), as payment of the purchase price for a portion of the shares of Common Stock purchased by the Pledgor pursuant to the Stock Purchase Agreement; and WHEREAS, as a condition precedent to the purchase and sale of the shares of the Common Stock to the Pledgor and the acceptance of the Notes by the Pledgee and certain of its Affiliates, the Pledgor is required to enter into this Pledge Agreement to secure the obligations of the Pledgor under the Notes; NOW, THEREFORE, for good and valuable consideration the receipt of which is hereby acknowledged, and in order to induce the Pledgee to consummate the transactions contemplated by the Stock Purchase Agreement, the Pledgor agrees, for the benefit of the Pledgee, as follows: ARTICLE I DEFINITIONS SECTION 1.1. Certain Terms. The following terms (whether or not underscored) when used in this Pledge Agreement, including its preamble and recitals, shall have the following meanings (such definitions to be equally applicable to the singular and plural forms thereof): "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. "Cash" means cash and Cash Equivalents. "Cash Equivalents" means (i) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within 180 days from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor's Rating Services or Moody's Investors Service, Inc.; (iii) commercial paper maturing no more than 90 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from Standard & Poor's Rating Services or at least P-1 from Moody's Investors Service, Inc.; and (iv) certificates of deposit or bankers' acceptances (or with respect to foreign banks, similar instruments) maturing within 180 days from the date of acquisition thereof issued by any bank organized under the laws of the United States of America or any state thereof or the District of Columbia or any member of the European Union or any United States branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of no less than $200 million (or the foreign currency equivalent thereof) and having outstanding debt which is rated "A" (or such equivalent rating) or higher by at least one nationally recognized statistical rating organization. "Collateral" is defined in Section 2.1. "Collateral Sale" is defined in Section 2.6. "Collateral Coverage Ratio" shall mean, as at any date, the ratio of (x) the Fair Market Value of all Collateral on such date to (y) the outstanding principal amount of, and accrued interest on, the Notes outstanding on such date. "Distributions" means all stock dividends, liquidating dividends, shares of stock resulting from (or in connection with the exercise of) stock splits, cash dividends other than Dividends, reclassifications, warrants, options, non-cash dividends, mergers or consolidations, and all other distributions (whether similar or dissimilar to the foregoing) on or with respect to any Pledged Shares, but shall not include Dividends. "Dividends" means regular cash dividends and regular cash distributions with respect to any Pledged Shares. "Documents" collectively, means this Pledge Agreement, the Stock Purchase Agreement, the Notes and each other agreement, certificate, document or instrument delivered in connection with this Pledge Agreement, and such other agreements, whether or not specifically mentioned herein or therein. "Events of Default" shall have the meaning ascribed thereto in the Notes. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Fair Market Value" shall mean (a) with respect to securities (i) listed for trading on a national securities exchange or admitted for trading on a national market system, either (x) the closing price quoted on the principal securities exchange on which such securities are listed for trading or (y) if not so listed, the average of the closing bid and asked prices for such securities quoted on the national market system on which such securities are admitted for trading, each as published in the Eastern Edition of The Wall Street Journal, in each case for the ten (10) trading days prior to the date of determination or (ii) not listed for trading on a national securities exchange or admitted for trading on a national market system, the fair market value of such securities as determined in good faith from time to time according to the mutual agreement of the Pledgor and the Pledgee; provided, however, in the event that the Pledgor and the Pledgee are unable to reach an agreement as to the fair market value of such securities, the fair market value of such securities will be determined by a neutral third party mutually agreed upon by the Pledgor and the Pledgee, with such determination by the neutral third party being binding on the Pledgor and the Pledgee and not subject to any recourse or appeal or (b) with respect to any other property, the fair market value of such property as determined in good faith from time to time according to the mutual agreement of the Pledgor and the Pledgee; provided, however, in the event that the Pledgor and the Pledgee are unable to reach an agreement as to the fair market value of such property, the fair market value of such property will be determined by a neutral third party mutually agreed upon by the Pledgor and the Pledgee, with such determination by the neutral third party being binding on the Pledgor and the Pledgee and not subject to any recourse or appeal. "Governance Agreement" shall mean the Governance Agreement, dated as of the date hereof, among the Pledgor, LXH II, L.L.C., the Company and the other parties listed on the signature pages thereto. "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including, without limitation, any conditional sale or other title retention agreement or lease in the nature thereof), any sale of receivables with recourse against the Pledgor or any affiliate thereof, any filing or agreement to file a financing statement as debtor under the U.C.C. or any similar statute other than to reflect ownership by a third party of property leased to the Pledgor under a lease which is not in the nature of a conditional sale or title retention agreement, or any subordination arrangement in favor of another Person (other than any subordination arising in the ordinary course of business). "Minimum Amount" means, with respect to Net Cash Proceeds, (i) an amount thereof (but not less than 20%) which, after giving effect to the application thereof to the prepayment of the Notes as provided in Section 2.6 hereof, would result in the Collateral Coverage Ratio being equal to or greater than 3:1, or (ii) an amount equal to 100% thereof to the extent that the Collateral Coverage Ratio is or, after giving effect to the application thereof to the prepayment of the Notes as provided in Section 2.6 hereof, would be less than 3:1. "Net Cash Proceeds" shall mean the total Cash proceeds received by the Pledgor upon any Transfer of Collateral, less an amount equal to the sum of (i) the federal income tax liability payable in respect of the gain recognized upon such sale, assuming a tax rate equal to the maximum federal income tax rate on capital gains in effect at the time of sale, (ii) any state and local income tax liability that would be payable in respect of such gain, assuming the maximum state income tax rate applicable on capital gains of an individual resident in, or corporation fully subject to tax in, New York City, New York (whichever is applicable), and (iii) any expenses (including legal fees and brokers' and underwriters' commissions) reasonably incurred in connection with such sale. "Non-Cash Proceeds" means any non-Cash proceeds received by the Pledgor upon any Transfer of Collateral. "Note" and "Notes" are defined in the second recital. "Permitted Transferee" shall mean (i) the Pledgor, (ii) LXH II, L.L.C., a Delaware limited liability company, (iii) each of their respective members, (iv) The Goldman Sachs Group, Inc., a Delaware corporation, or any direct or indirect subsidiaries of The Goldman Sachs Group, Inc. formed for the purpose of effecting principal transactions and (v) subject to the approval of the Independent Directors (as defined in the Governance Agreement), one other Person designated within 90 days of the date hereof by the Pledgor or LXH II, L.L.C. as a proposed transferee of up to 2,200,000 shares of Common Stock. "Person" shall mean any individual, firm, corporation, limited liability company, partnership, company or other entity, and shall include any successor (by merger or otherwise) of such entity. "Pledged Shares" is defined in Section 2.1(a). "Pledgee" is defined in the preamble. "Pledgor" is defined in the preamble. "Secured Obligations" means all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured, direct or indirect, choate or inchoate, sole, joint, several or joint and several, due or to become due, heretofore or hereafter contracted or acquired) of the Pledgor arising under or in connection with this Pledge Agreement and the Notes including (i) all obligations for principal or interest under the Notes, whether incurred on the date hereof, and (ii) following the occurrence and during the continuance of an Event of Default, all costs (including reasonable attorneys' fees) incurred in connection with the enforcement of the Notes or this Pledge Agreement and all advances made by the Pledgee for the maintenance, protection, preservation or enforcement of, or realization upon, the Collateral. "Stock Purchase Agreement" is defined in the first recital. "Subsidiary" means any corporation, association or other organization whether incorporated or unincorporated of which at least 25% of the securities or interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is at the time directly or indirectly owned or controlled by another corporation, association or other organization, or by any one or more Subsidiaries of such other corporation, association or other organization, or by such other corporation, association or other organization and one or more of its Subsidiaries. "Third Party" shall mean any Person other than a Permitted Transferee. "Transfer" means any sale, transfer or other disposition of Collateral to a Third Party in an arms-length transaction. "U.C.C." means the Uniform Commercial Code as in effect in the State of New York or, as the context may require, in any other jurisdiction the laws of which may apply to all or a portion of the Collateral in which a security interest is granted hereunder. ARTICLE II PLEDGE SECTION 2.1. Grant of Security Interest. Upon the terms and subject to the conditions set forth in this Pledge Agreement, as collateral security for the prompt payment in full when due of the Secured Obligations, the Pledgor hereby pledges, and grants to the Pledgee a continuing security interest in all of Pledgor's right, title and interest in and to all of the following property (the "Collateral"): (a) all issued and outstanding shares of Common Stock owned by the Pledgor identified on Attachment I hereto (the "Pledged Shares"); (b) subject to Section 2.4, all Dividends and Distributions and other payments and rights with respect to any Pledged Shares; and (c) all proceeds of any of the foregoing. SECTION 2.2. Security for Obligations. This Pledge Agreement and the Collateral granted herewith secure the payment and performance in full of the Secured Obligations. SECTION 2.3. Delivery of Collateral. All certificates or instruments representing or evidencing any Collateral, including all Pledged Shares shall be delivered to the Pledgee and held by or on behalf of the Pledgee pursuant hereto, shall be in suitable form for transfer by delivery, and shall be accompanied by all necessary instruments of transfer or assignment, duly executed in blank, all in form and substance satisfactory to the Pledgee. Except as otherwise provided herein, the Pledgor shall be entitled to exercise all rights incident to the ownership of the Pledged Shares, including voting rights, and the Pledgor shall be the record holder of such Pledged Shares on the books and records of the Company. The Pledgor agrees that the Pledgee shall be entitled to receive and retain, and the Pledgor shall be deemed to have delivered, in pledge hereunder to the Pledgee, any and all non-Cash Distributions that are issued, distributed or otherwise delivered to the Pledgor in respect of the Pledged Shares. Cash Distributions shall be applied to the prepayment of the outstanding principal and interest on the Notes in the manner provided in Section 2.6(c) hereof and in the Notes. SECTION 2.4. Dividends on Pledged Shares. In the event that any Dividend is to be paid on any Pledged Share at a time when no Event of Default has occurred and is continuing, such Dividend shall be paid directly to the Pledgor and after such payment will not be deemed Collateral. If any such Event of Default has occurred and is continuing, then any such Dividend shall be retained by the Pledgee as Collateral to be held and applied in accordance with Section 2.6 and 5.3 of this Pledge Agreement. SECTION 2.5. Continuing Security Interest; Transfer of Note. Subject to Section 2.6, this Pledge Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until payment or satisfaction in full of all Secured Obligations; (ii) be binding upon the Pledgor and its successors, transferees and assigns; and (iii) inure, together with the rights and remedies of the Pledgee hereunder, to the benefit of the Pledgee. Without limiting the foregoing clause (iii), subject to the provisions of Section 10 of the Notes, the Pledgee may assign or otherwise transfer (in whole or in part) the Notes held by it to any other person or entity, and such other person or entity shall thereupon become vested with all the rights and benefits in respect thereof granted to the Pledgee under this Pledge Agreement, subject, however, to any contrary provisions in such assignment or transfer. SECTION 2.6. Disposition of Collateral; Release; Application of Prepayments (a) Subject to the provisions of this Section 2.6, so long as no Event of Default has occurred and is continuing, the Pledgor shall have the right to effect a Transfer to a Third Party (a "Collateral Sale") or to a Permitted Transferee. In the event of a Collateral Sale, the Pledgor shall (i) in the case of a Collateral Sale in exchange for Cash, apply the Minimum Amount to the prepayment of the Notes in the manner provided in paragraph (c) below, and (ii) in the case of a Collateral Sale in exchange for Non-Cash Proceeds, deliver or assign to the Pledgee, as Collateral for the Secured Obligations, all such Non-Cash Proceeds. Any Non-Cash Proceeds delivered or assigned to the Pledgee pursuant to the preceding sentence shall be "Collateral" for all purposes of this Pledge Agreement and, if requested by the Pledgee, the Pledgor shall deliver to the Pledgee such additional documents in connection therewith, including U.C.C. financing statements, required to perfect the Pledgor's security interest in such Collateral. (b) Subject to the Pledgor's compliance with the terms of this Section 2.6, upon (i) the payment in full of all Secured Obligations, the security interest granted herein shall automatically terminate and rights to the Collateral shall revert to the Pledgor, or (ii) any Collateral Sale, the security interest granted herein with respect to the Collateral subject thereto, shall automatically terminate and all rights to such Collateral shall revert to the Pledgor. Upon any such termination, the Pledgee will, at the sole expense of the Pledgor, deliver to the Pledgor, without any representations, warranties or recourse of any kind whatsoever, all certificates and instruments representing or evidencing the Pledged Shares or shares of stock with respect to which the security interest herein has terminated, together with all other Collateral of the Pledgor with respect to which the security interest herein has terminated which is held by the Pledgee hereunder, and execute and deliver to the Pledgor such documents as the Pledgor shall reasonably request to evidence such termination. (c) Any prepayment of Notes, whether made at the option of the Pledgor, in connection with a Collateral Sale or in connection with a Dividend or Distribution, shall be applied first to all accrued and unpaid interest on the Notes calculated up to and including the date of payment thereof and then pro-rata to the outstanding principal amount of all Notes then outstanding. (d) Notwithstanding paragraph (a) above, no Transfer to a Permitted Transferee shall be effective unless such Permitted Transferee shall have executed and delivered to the Pledgee a joinder to this Pledge Agreement in form reasonably acceptable to the Pledgee pursuant to which such Permitted Transferee agrees to be bound by the terms of this Pledge Agreement as a "Pledgor" hereunder. SECTION 2.7. Security Interest Absolute. All rights of the Pledgee and the security interests granted to the Pledgee hereunder, and all obligations of the Pledgor hereunder, shall be absolute and unconditional, irrespective of (a) any lack of validity or enforceability of the Notes or any other Document or any instrument or document relating thereto; (b) the failure of the Pledgee: (i) to assert any claim or demand or to enforce any right or remedy against the Pledgor or any other Person under the provisions of the Notes or otherwise; or (ii) to exercise any right or remedy against any other guarantor of, or collateral securing, any of the Secured Obligations; (c) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations or any other extension, compromise or renewal of any of the Secured Obligations; (d) any reduction, limitation, impairment or termination of any of the Secured Obligations for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and the Pledgor hereby waive any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any of the Secured Obligations or otherwise; (e) any amendment to, rescission, waiver, or other modification of, or any consent to departure from, any of the terms of the Notes or any other Document or any instrument or document relating thereto; (f) any addition, exchange, release, surrender or nonperfection of any collateral (including the Collateral), or any amendment to or waiver or release of or addition to or consent to departure from any guaranty, for any of the Secured Obligations; or (g) any other circumstances which might otherwise constitute a defense (other than the defense of payment in full of the Secured Obligations) available to, or a legal or equitable discharge of, the Pledgor, any surety or any guarantor. ARTICLE III REPRESENTATIONS AND WARRANTIES SECTION 3.1. Warranties, etc. The Pledgor represents and warrants to the Pledgee, as at the date of each pledge and delivery hereunder, by the Pledgor to the Pledgee of any Collateral, as set forth in this Article: (a) The Pledgor is the legal and beneficial owner of, and has good and valid title to (and has full right and authority to pledge and assign) such Collateral, free and clear of all Liens, except the Lien granted pursuant hereto in favor of the Pledgee; and (b) The delivery by the Pledgor of such Pledged Shares to the Pledgee is effective to create a valid, perfected, first priority security interest in such Collateral under the U.C.C. and all proceeds thereof securing the Secured Obligations, and, except as contemplated by Section 2.6(a) hereof, no filing or other action will be necessary to perfect or protect such security interest. ARTICLE IV COVENANTS SECTION 4.1. Protect Collateral; Further Assurances, etc. Except as provided in Section 2.6 hereof, the Pledgor will not sell, assign, transfer, pledge, or encumber in any other manner the Collateral except in favor of the Pledgee hereunder. The Pledgor agrees that at any time, and from time to time, at the expense of the Pledgor, the Pledgor will promptly execute and deliver all further instruments, and take all further action, that may be necessary or desirable, or that the Pledgee may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Pledgee to exercise and enforce its rights and remedies hereunder with respect to any Collateral. SECTION 4.2. Stock Powers, etc. The Pledgor agrees that (a) all Pledged Shares delivered by the Pledgor pursuant to this Pledge Agreement will be accompanied by duly executed, undated blank stock powers, or other equivalent instruments of transfer acceptable to the Pledgee and (b) in the event that any capital stock or other securities constituting Collateral is deemed pursuant to Section 2.3 to be delivered to the Pledgee, such Pledgor shall duly execute, upon the request of the Pledgee, undated blank stock powers or other equivalent instruments of transfer acceptable to the Pledgee. The Pledgor will, from time to time upon the request of the Pledgee, promptly deliver to the Pledgee such stock powers, instruments, and similar documents, satisfactory in form and substance to the Pledgee, with respect to the Collateral as the Pledgee may reasonably request and will, from time to time upon the request of the Pledgee after the occurrence and during the continuance of any Event of Default, promptly transfer any Pledged Shares or other shares of capital stock constituting Collateral into the name of the Pledgee or its nominee. SECTION 4.3. Continuous Pledge. Subject to Sections 2.4 and 2.6, the Pledgor will, at all times, keep pledged to the Pledgee pursuant hereto all Pledged Shares and all other shares of capital stock constituting Collateral, all Dividends and Distributions with respect thereto, and all other Collateral and other securities, instruments, proceeds, and rights from time to time received by or distributable to the Pledgor in respect of any Collateral. SECTION 4.4. Voting Rights; Dividends, etc. The Pledgor agrees after any Event of Default shall have occurred and so long as it shall be continuing and the Pledgee has notified the Pledgor of the Pledgee's intention to exercise its voting power under this Section 4.4, (i) the Pledgee may exercise (to the exclusion of the Pledgor) the voting power and all other incidental rights of ownership with respect to any Pledged Shares or other shares of capital stock constituting Collateral and the Pledgor hereby grants the Pledgee an irrevocable proxy, exercisable under such circumstances, to vote the Pledged Shares and such other Collateral; and (ii) the Pledgor agrees promptly to deliver to the Pledgee such additional proxies and other documents as may be necessary to allow the Pledgee to exercise such voting power. In the event that any Dividends or Distributions, cash payments or proceeds constituting Collateral, at any time and from time to time are held by the Pledgor but which the Pledgee is then entitled to receive and retain, shall, until delivery to the Pledgee, be held by the Pledgor separate and apart from its other property in trust for the Pledgee. The Pledgee agrees that unless an Event of Default shall have occurred and be continuing and the Pledgee shall have given the notice referred to in this Section 4.4, the Pledgor shall have the exclusive voting power with respect to any shares of capital stock (including any of the Pledged Shares) constituting Collateral pledged by the Pledgor hereunder and the Pledgee shall, upon the written request of the Pledgor, promptly deliver such proxies and other documents, if any, as shall be requested by the Pledgor which are necessary to allow the Pledgor to exercise voting power with respect to any such share of capital stock (including any of the Pledged Shares) constituting Collateral. ARTICLE V REMEDIES SECTION 5.1. Certain Remedies. If any Event of Default shall have occurred and be continuing, notwithstanding any other provision herein or in any other instrument, agreement or other document to the contrary, the Pledgee may proceed against the Collateral as provided herein, subject to the foregoing: (a) Subject to compliance with any applicable securities laws, the Pledgee may exercise all the rights and remedies of a secured party on default under the U.C.C. (whether or not the U.C.C. applies to the affected Collateral) and also may, without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Pledgee's offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Pledgee may deem commercially reasonable. The Pledgee may, to the extent permitted by Section 9-504 of the U.C.C., be the purchaser of any of the Collateral so sold and the obligations of the Pledgor to the Pledgee may be applied as a credit against the purchase price. The Pledgor agrees that at least 10 days' prior notice to the Pledgor (or such longer period as may be required by law) of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Pledgee shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Pledgee may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Upon any such sale the Pledgee shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold. (b) The Pledgee may: (i) transfer all or any part of the Collateral in the name of the Pledgee or its nominee, with or without disclosing that such Collateral is subject to the lien and security interest hereunder; (ii) notify the parties obligated on any of the Collateral to make payment to the Pledgee of any amount due or to become due thereunder; (iii) enforce collection of any of the Collateral by suit or otherwise, and surrender, release or exchange all or any part thereof, or compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any nature of any party with respect thereto; (iv) endorse any checks, drafts, or other writings in the name of the Pledgor constituting Collateral; (v) take control of any proceeds of the Collateral; and (vi) execute (in the name, place and stead of the Pledgor) endorsements, assignments, stock powers and other instruments of conveyance or transfer with respect to all or any of the Collateral. SECTION 5.2. Compliance with Restrictions. The Pledgor agrees that in any sale of any of the Collateral whenever any Event of Default shall have occurred and be continuing, the Pledgee is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary to avoid any violation of applicable law (including compliance with such procedures as may restrict the number of prospective bidders and purchasers, require that such prospective bidders and purchasers have certain qualifications, and restrict such prospective bidders and purchasers to persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Collateral), or to obtain any required approval of the sale or of the purchaser by any governmental regulatory authority or official, and the Pledgor further agrees that such compliance shall not result in such sale being considered or deemed not to have been made in a commercially reasonable manner, nor shall the Pledgee be liable nor accountable to the Pledgor for any discount allowed by the reason of the fact that such Collateral is sold in compliance with any such limitation or restriction. SECTION 5.3. Application of Collateral Proceeds. If any Event of Default shall have occurred and be continuing, all cash proceeds received by the Pledgee in respect of any sale of, collection from, or other realization upon, all or any part of the Collateral shall promptly be applied (after payment of any amounts payable to the Pledgee pursuant to Section 5.4) by the Pledgee against the Secured Obligations. Any surplus of such cash or cash proceeds held by the Pledgee and remaining after payment in full of all the Secured Obligations, shall be promptly paid over to the Pledgor or to whomsoever may be lawfully entitled to receive such surplus. SECTION 5.4. Indemnity and Expenses. The Pledgee shall be entitled to be indemnified and held harmless from and against any and all claims, losses, and liabilities arising out of or resulting from this Pledge Agreement (including enforcement of this Pledge Agreement), except claims, losses, or liabilities resulting from the Pledgee's gross negligence or willful misconduct. The Pledgee shall be entitled to the amount of any and all reasonable expenses, including the reasonable fees and disbursements of its counsel and of any experts and agents, which the Pledgee may incur in connection with: (a) the exercise or enforcement of any of the rights of the Pledgee hereunder; or (b) the failure by the Pledgor to perform or observe any of the provisions hereof. ARTICLE VI MISCELLANEOUS PROVISIONS SECTION 6.1. Amendments, etc. No amendment to or waiver of any provision of this Pledge Agreement nor consent to any departure by the Pledgor here from shall in any event be effective unless the same shall be in writing and signed by the Pledgee, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it is given. SECTION 6.2. Protection of Collateral. The Pledgee may from time to time, at its option, perform any act which the Pledgor agrees hereunder to perform and which the Pledgor shall fail to perform after being requested in writing so to perform (it being understood that no such request need be given after the occurrence and during the continuance of any Event of Default) and the Pledgee may from time to time take any other action which the Pledgee reasonably deems necessary for the maintenance, preservation or protection of any of the Collateral or of its security interest therein. SECTION 6.3. Collateral Agent. The Pledgee shall act as the agent of the Affiliates with respect to the Collateral and shall hold the Collateral for the benefit of the Affiliates in accordance with the terms of this Pledge Agreement. SECTION 6.4. Addresses for Notices. All notices and other communications provided for hereunder shall be in writing and mailed or delivered to the Pledgor or the Pledgee at their respective addresses, and with copies to such additional parties, as specified in the Stock Purchase Agreement or, with respect to the Pledgor or the Pledgee, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section. Any notice so delivered shall be deemed given when received. SECTION 6.5. Section Captions. Section captions used in this Pledge Agreement are for convenience of reference only, and shall not affect the construction of this Pledge Agreement. SECTION 6.6. Counterparts. This Pledge Agreement may be executed by the parties hereto in several counterparts, and additional Persons may become Pledgor under this Pledge Agreement by executing a counterpart of this Pledge Agreement, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. SECTION 6.7. GOVERNING LAW. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. SECTION 6.8. WAIVER OF JURY TRIAL. THE PLEDGOR AND THE PLEDGEE HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS PLEDGE AGREEMENT. SECTION 6.9. FORUM SELECTION AND CONSENT TO JURISDICTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, FOR ANY CLAIM, ACTION, SUIT, INVESTIGATION OR PROCEEDING ("LITIGATION") ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT (AND AGREES NOT TO COMMENCE ANY LITIGATION RELATING HERETO EXCEPT IN SUCH COURTS), AND FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO ITS RESPECTIVE ADDRESS SET FORTH IN THIS PLEDGE AGREEMENT SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY LITIGATION BROUGHT AGAINST IT IN ANY SUCH COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF THIS PLEDGE AGREEMENT IN THE COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Pledge Agreement as of the day and year first above written. LXH, L.L.C. By: GS Capital Partners 2000, L.P., its managing member By: GS Advisors 2000, L.L.C., its general partner By:/s/ John E. Bowman ---------------------------------- Name: John E. Bowman Title: Vice President CIBA SPECIALTY CHEMICALS CORPORATION By:/s/ Stanley Sherman ---------------------------------- Name: Stanley Sherman Title: President and Chief Executive Officer
ATTACHMENT I to Pledge Agreement Pledged Shares Common Stock Issuer No. of Shares Pledged Certificate Number Date Pledged - ----------------------------- ---------------------------- ---------------------------- ------------------------- Hexcel Corporation 8,272,312 HC 51737 December 19, 2000
EX-99.9 10 0010.txt EXHIBIT 9 PLEDGE AGREEMENT THIS PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of December 19, 2000, made by LXH II, L.L.C. (the "Pledgor") in favor of Ciba Specialty Chemicals Corporation (the "Pledgee"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Pledgee, the Pledgor and certain Affiliates of the Pledgee entered into a Stock Purchase Agreement, dated as of October 11, 2000 (the "Stock Purchase Agreement"), providing for, among other things, the sale by the Pledgee and such Affiliates to the Pledgor of certain shares of Common Stock, par value $.01 per share (the "Common Stock") of Hexcel Corporation, a Delaware corporation (the "Company"); and WHEREAS, simultaneously herewith, the Pledgor is executing and delivering to the Pledgee and certain Affiliates of the Pledgee the Pledgor's 7.5% Recourse Secured Pay-in-Kind Promissory Notes, dated the date hereof (each, a "Note", and, collectively with all additional notes issued under each such Note, the "Notes"), as payment of the purchase price for a portion of the shares of Common Stock purchased by the Pledgor pursuant to the Stock Purchase Agreement; and WHEREAS, as a condition precedent to the purchase and sale of the shares of the Common Stock to the Pledgor and the acceptance of the Notes by the Pledgee and certain of its Affiliates, the Pledgor is required to enter into this Pledge Agreement to secure the obligations of the Pledgor under the Notes; NOW, THEREFORE, for good and valuable consideration the receipt of which is hereby acknowledged, and in order to induce the Pledgee to consummate the transactions contemplated by the Stock Purchase Agreement, the Pledgor agrees, for the benefit of the Pledgee, as follows: ARTICLE I DEFINITIONS SECTION 1.1. Certain Terms. The following terms (whether or not underscored) when used in this Pledge Agreement, including its preamble and recitals, shall have the following meanings (such definitions to be equally applicable to the singular and plural forms thereof): "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. "Cash" means cash and Cash Equivalents. "Cash Equivalents" means (i) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within 180 days from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor's Rating Services or Moody's Investors Service, Inc.; (iii) commercial paper maturing no more than 90 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from Standard & Poor's Rating Services or at least P-1 from Moody's Investors Service, Inc.; and (iv) certificates of deposit or bankers' acceptances (or with respect to foreign banks, similar instruments) maturing within 180 days from the date of acquisition thereof issued by any bank organized under the laws of the United States of America or any state thereof or the District of Columbia or any member of the European Union or any United States branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of no less than $200 million (or the foreign currency equivalent thereof) and having outstanding debt which is rated "A" (or such equivalent rating) or higher by at least one nationally recognized statistical rating organization. "Collateral" is defined in Section 2.1. "Collateral Sale" is defined in Section 2.6. "Collateral Coverage Ratio" shall mean, as at any date, the ratio of (x) the Fair Market Value of all Collateral on such date to (y) the outstanding principal amount of, and accrued interest on, the Notes outstanding on such date. "Distributions" means all stock dividends, liquidating dividends, shares of stock resulting from (or in connection with the exercise of) stock splits, cash dividends other than Dividends, reclassifications, warrants, options, non-cash dividends, mergers or consolidations, and all other distributions (whether similar or dissimilar to the foregoing) on or with respect to any Pledged Shares, but shall not include Dividends. "Dividends" means regular cash dividends and regular cash distributions with respect to any Pledged Shares. "Documents" collectively, means this Pledge Agreement, the Stock Purchase Agreement, the Notes and each other agreement, certificate, document or instrument delivered in connection with this Pledge Agreement, and such other agreements, whether or not specifically mentioned herein or therein. "Events of Default" shall have the meaning ascribed thereto in the Notes. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Fair Market Value" shall mean (a) with respect to securities (i) listed for trading on a national securities exchange or admitted for trading on a national market system, either (x) the closing price quoted on the principal securities exchange on which such securities are listed for trading or (y) if not so listed, the average of the closing bid and asked prices for such securities quoted on the national market system on which such securities are admitted for trading, each as published in the Eastern Edition of The Wall Street Journal, in each case for the ten (10) trading days prior to the date of determination or (ii) not listed for trading on a national securities exchange or admitted for trading on a national market system, the fair market value of such securities as determined in good faith from time to time according to the mutual agreement of the Pledgor and the Pledgee; provided, however, in the event that the Pledgor and the Pledgee are unable to reach an agreement as to the fair market value of such securities, the fair market value of such securities will be determined by a neutral third party mutually agreed upon by the Pledgor and the Pledgee, with such determination by the neutral third party being binding on the Pledgor and the Pledgee and not subject to any recourse or appeal or (b) with respect to any other property, the fair market value of such property as determined in good faith from time to time according to the mutual agreement of the Pledgor and the Pledgee; provided, however, in the event that the Pledgor and the Pledgee are unable to reach an agreement as to the fair market value of such property, the fair market value of such property will be determined by a neutral third party mutually agreed upon by the Pledgor and the Pledgee, with such determination by the neutral third party being binding on the Pledgor and the Pledgee and not subject to any recourse or appeal. "Governance Agreement" shall mean the Governance Agreement, dated as of the date hereof, among the Pledgor, LXH, L.L.C., the Company and the other parties listed on the signature pages thereto. "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including, without limitation, any conditional sale or other title retention agreement or lease in the nature thereof), any sale of receivables with recourse against the Pledgor or any affiliate thereof, any filing or agreement to file a financing statement as debtor under the U.C.C. or any similar statute other than to reflect ownership by a third party of property leased to the Pledgor under a lease which is not in the nature of a conditional sale or title retention agreement, or any subordination arrangement in favor of another Person (other than any subordination arising in the ordinary course of business). "Minimum Amount" means, with respect to Net Cash Proceeds, (i) an amount thereof (but not less than 20%) which, after giving effect to the application thereof to the prepayment of the Notes as provided in Section 2.6 hereof, would result in the Collateral Coverage Ratio being equal to or greater than 3:1, or (ii) an amount equal to 100% thereof to the extent that the Collateral Coverage Ratio is or, after giving effect to the application thereof to the prepayment of the Notes as provided in Section 2.6 hereof, would be less than 3:1. "Net Cash Proceeds" shall mean the total Cash proceeds received by the Pledgor upon any Transfer of Collateral, less an amount equal to the sum of (i) the federal income tax liability payable in respect of the gain recognized upon such sale, assuming a tax rate equal to the maximum federal income tax rate on capital gains in effect at the time of sale, (ii) any state and local income tax liability that would be payable in respect of such gain, assuming the maximum state income tax rate applicable on capital gains of an individual resident in, or corporation fully subject to tax in, New York City, New York (whichever is applicable), and (iii) any expenses (including legal fees and brokers' and underwriters' commissions) reasonably incurred in connection with such sale. "Non-Cash Proceeds" means any non-Cash proceeds received by the Pledgor upon any Transfer of Collateral. "Note" and "Notes" are defined in the second recital. "Permitted Transferee" shall mean (i) the Pledgor, (ii) LXH, L.L.C., a Delaware limited liability company, (iii) each of their respective members, (iv) The Goldman Sachs Group, Inc., a Delaware corporation, or any direct or indirect subsidiaries of The Goldman Sachs Group, Inc. formed for the purpose of effecting principal transactions and (v) subject to the approval of the Independent Directors (as defined in the Governance Agreement), one other Person designated within 90 days of the date hereof by the Pledgor or LXH, L.L.C. as a proposed transferee of up to 2,200,000 shares of Common Stock. "Person" shall mean any individual, firm, corporation, limited liability company, partnership, company or other entity, and shall include any successor (by merger or otherwise) of such entity. "Pledged Shares" is defined in Section 2.1(a). "Pledgee" is defined in the preamble. "Pledgor" is defined in the preamble. "Secured Obligations" means all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured, direct or indirect, choate or inchoate, sole, joint, several or joint and several, due or to become due, heretofore or hereafter contracted or acquired) of the Pledgor arising under or in connection with this Pledge Agreement and the Notes including (i) all obligations for principal or interest under the Notes, whether incurred on the date hereof, and (ii) following the occurrence and during the continuance of an Event of Default, all costs (including reasonable attorneys' fees) incurred in connection with the enforcement of the Notes or this Pledge Agreement and all advances made by the Pledgee for the maintenance, protection, preservation or enforcement of, or realization upon, the Collateral. "Stock Purchase Agreement" is defined in the first recital. "Subsidiary" means any corporation, association or other organization whether incorporated or unincorporated of which at least 25% of the securities or interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is at the time directly or indirectly owned or controlled by another corporation, association or other organization, or by any one or more Subsidiaries of such other corporation, association or other organization, or by such other corporation, association or other organization and one or more of its Subsidiaries. "Third Party" shall mean any Person other than a Permitted Transferee. "Transfer" means any sale, transfer or other disposition of Collateral to a Third Party in an arms-length transaction. "U.C.C." means the Uniform Commercial Code as in effect in the State of New York or, as the context may require, in any other jurisdiction the laws of which may apply to all or a portion of the Collateral in which a security interest is granted hereunder. ARTICLE II PLEDGE SECTION 2.1. Grant of Security Interest. Upon the terms and subject to the conditions set forth in this Pledge Agreement, as collateral security for the prompt payment in full when due of the Secured Obligations, the Pledgor hereby pledges, and grants to the Pledgee a continuing security interest in all of Pledgor's right, title and interest in and to all of the following property (the "Collateral"): (a) all issued and outstanding shares of Common Stock owned by the Pledgor identified on Attachment I hereto (the "Pledged Shares"); (b) subject to Section 2.4, all Dividends and Distributions and other payments and rights with respect to any Pledged Shares; and (c) all proceeds of any of the foregoing. SECTION 2.2. Security for Obligations. This Pledge Agreement and the Collateral granted herewith secure the payment and performance in full of the Secured Obligations. SECTION 2.3. Delivery of Collateral. All certificates or instruments representing or evidencing any Collateral, including all Pledged Shares shall be delivered to the Pledgee and held by or on behalf of the Pledgee pursuant hereto, shall be in suitable form for transfer by delivery, and shall be accompanied by all necessary instruments of transfer or assignment, duly executed in blank, all in form and substance satisfactory to the Pledgee. Except as otherwise provided herein, the Pledgor shall be entitled to exercise all rights incident to the ownership of the Pledged Shares, including voting rights, and the Pledgor shall be the record holder of such Pledged Shares on the books and records of the Company. The Pledgor agrees that the Pledgee shall be entitled to receive and retain, and the Pledgor shall be deemed to have delivered, in pledge hereunder to the Pledgee, any and all non-Cash Distributions that are issued, distributed or otherwise delivered to the Pledgor in respect of the Pledged Shares. Cash Distributions shall be applied to the prepayment of the outstanding principal and interest on the Notes in the manner provided in Section 2.6(c) hereof and in the Notes. SECTION 2.4. Dividends on Pledged Shares. In the event that any Dividend is to be paid on any Pledged Share at a time when no Event of Default has occurred and is continuing, such Dividend shall be paid directly to the Pledgor and after such payment will not be deemed Collateral. If any such Event of Default has occurred and is continuing, then any such Dividend shall be retained by the Pledgee as Collateral to be held and applied in accordance with Section 2.6 and 5.3 of this Pledge Agreement. SECTION 2.5. Continuing Security Interest; Transfer of Note. Subject to Section 2.6, this Pledge Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until payment or satisfaction in full of all Secured Obligations; (ii) be binding upon the Pledgor and its successors, transferees and assigns; and (iii) inure, together with the rights and remedies of the Pledgee hereunder, to the benefit of the Pledgee. Without limiting the foregoing clause (iii), subject to the provisions of Section 10 of the Notes, the Pledgee may assign or otherwise transfer (in whole or in part) the Notes held by it to any other person or entity, and such other person or entity shall thereupon become vested with all the rights and benefits in respect thereof granted to the Pledgee under this Pledge Agreement, subject, however, to any contrary provisions in such assignment or transfer. SECTION 2.6. Disposition of Collateral; Release; Application of Prepayments. (a) Subject to the provisions of this Section 2.6, so long as no Event of Default has occurred and is continuing, the Pledgor shall have the right to effect a Transfer to a Third Party (a "Collateral Sale") or to a Permitted Transferee. In the event of a Collateral Sale, the Pledgor shall (i) in the case of a Collateral Sale in exchange for Cash, apply the Minimum Amount to the prepayment of the Notes in the manner provided in paragraph (c) below, and (ii) in the case of a Collateral Sale in exchange for Non-Cash Proceeds, deliver or assign to the Pledgee, as Collateral for the Secured Obligations, all such Non-Cash Proceeds. Any Non-Cash Proceeds delivered or assigned to the Pledgee pursuant to the preceding sentence shall be "Collateral" for all purposes of this Pledge Agreement and, if requested by the Pledgee, the Pledgor shall deliver to the Pledgee such additional documents in connection therewith, including U.C.C. financing statements, required to perfect the Pledgor's security interest in such Collateral. (b) Subject to the Pledgor's compliance with the terms of this Section 2.6, upon (i) the payment in full of all Secured Obligations, the security interest granted herein shall automatically terminate and rights to the Collateral shall revert to the Pledgor, or (ii) any Collateral Sale, the security interest granted herein with respect to the Collateral subject thereto, shall automatically terminate and all rights to such Collateral shall revert to the Pledgor. Upon any such termination, the Pledgee will, at the sole expense of the Pledgor, deliver to the Pledgor, without any representations, warranties or recourse of any kind whatsoever, all certificates and instruments representing or evidencing the Pledged Shares or shares of stock with respect to which the security interest herein has terminated, together with all other Collateral of the Pledgor with respect to which the security interest herein has terminated which is held by the Pledgee hereunder, and execute and deliver to the Pledgor such documents as the Pledgor shall reasonably request to evidence such termination. (c) Any prepayment of Notes, whether made at the option of the Pledgor, in connection with a Collateral Sale or in connection with a Dividend or Distribution, shall be applied first to all accrued and unpaid interest on the Notes calculated up to and including the date of payment thereof and then pro-rata to the outstanding principal amount of all Notes then outstanding. (d) Notwithstanding paragraph (a) above, no Transfer to a Permitted Transferee shall be effective unless such Permitted Transferee shall have executed and delivered to the Pledgee a joinder to this Pledge Agreement in form reasonably acceptable to the Pledgee pursuant to which such Permitted Transferee agrees to be bound by the terms of this Pledge Agreement as a "Pledgor" hereunder. SECTION 2.7. Security Interest Absolute. All rights of the Pledgee and the security interests granted to the Pledgee hereunder, and all obligations of the Pledgor hereunder, shall be absolute and unconditional, irrespective of (a) any lack of validity or enforceability of the Notes or any other Document or any instrument or document relating thereto; (b) the failure of the Pledgee: (i) to assert any claim or demand or to enforce any right or remedy against the Pledgor or any other Person under the provisions of the Notes or otherwise; or (ii) to exercise any right or remedy against any other guarantor of, or collateral securing, any of the Secured Obligations; (c) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations or any other extension, compromise or renewal of any of the Secured Obligations; (d) any reduction, limitation, impairment or termination of any of the Secured Obligations for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and the Pledgor hereby waive any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any of the Secured Obligations or otherwise; (e) any amendment to, rescission, waiver, or other modification of, or any consent to departure from, any of the terms of the Notes or any other Document or any instrument or document relating thereto; (f) any addition, exchange, release, surrender or nonperfection of any collateral (including the Collateral), or any amendment to or waiver or release of or addition to or consent to departure from any guaranty, for any of the Secured Obligations; or (g) any other circumstances which might otherwise constitute a defense (other than the defense of payment in full of the Secured Obligations) available to, or a legal or equitable discharge of, the Pledgor, any surety or any guarantor. ARTICLE III REPRESENTATIONS AND WARRANTIES SECTION 3.1. Warranties, etc. The Pledgor represents and warrants to the Pledgee, as at the date of each pledge and delivery hereunder, by the Pledgor to the Pledgee of any Collateral, as set forth in this Article: (a) The Pledgor is the legal and beneficial owner of, and has good and valid title to (and has full right and authority to pledge and assign) such Collateral, free and clear of all Liens, except the Lien granted pursuant hereto in favor of the Pledgee; and (b) The delivery by the Pledgor of such Pledged Shares to the Pledgee is effective to create a valid, perfected, first priority security interest in such Collateral under the U.C.C. and all proceeds thereof securing the Secured Obligations, and, except as contemplated by Section 2.6(a) hereof, no filing or other action will be necessary to perfect or protect such security interest. ARTICLE IV COVENANTS SECTION 4.1. Protect Collateral; Further Assurances, etc. Except as provided in Section 2.6 hereof, the Pledgor will not sell, assign, transfer, pledge, or encumber in any other manner the Collateral except in favor of the Pledgee hereunder. The Pledgor agrees that at any time, and from time to time, at the expense of the Pledgor, the Pledgor will promptly execute and deliver all further instruments, and take all further action, that may be necessary or desirable, or that the Pledgee may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Pledgee to exercise and enforce its rights and remedies hereunder with respect to any Collateral. SECTION 4.2. Stock Powers, etc. The Pledgor agrees that (a) all Pledged Shares delivered by the Pledgor pursuant to this Pledge Agreement will be accompanied by duly executed, undated blank stock powers, or other equivalent instruments of transfer acceptable to the Pledgee and (b) in the event that any capital stock or other securities constituting Collateral is deemed pursuant to Section 2.3 to be delivered to the Pledgee, such Pledgor shall duly execute, upon the request of the Pledgee, undated blank stock powers or other equivalent instruments of transfer acceptable to the Pledgee. The Pledgor will, from time to time upon the request of the Pledgee, promptly deliver to the Pledgee such stock powers, instruments, and similar documents, satisfactory in form and substance to the Pledgee, with respect to the Collateral as the Pledgee may reasonably request and will, from time to time upon the request of the Pledgee after the occurrence and during the continuance of any Event of Default, promptly transfer any Pledged Shares or other shares of capital stock constituting Collateral into the name of the Pledgee or its nominee. SECTION 4.3. Continuous Pledge. Subject to Sections 2.4 and 2.6, the Pledgor will, at all times, keep pledged to the Pledgee pursuant hereto all Pledged Shares and all other shares of capital stock constituting Collateral, all Dividends and Distributions with respect thereto, and all other Collateral and other securities, instruments, proceeds, and rights from time to time received by or distributable to the Pledgor in respect of any Collateral. SECTION 4.4. Voting Rights; Dividends, etc. The Pledgor agrees after any Event of Default shall have occurred and so long as it shall be continuing and the Pledgee has notified the Pledgor of the Pledgee's intention to exercise its voting power under this Section 4.4, (i) the Pledgee may exercise (to the exclusion of the Pledgor) the voting power and all other incidental rights of ownership with respect to any Pledged Shares or other shares of capital stock constituting Collateral and the Pledgor hereby grants the Pledgee an irrevocable proxy, exercisable under such circumstances, to vote the Pledged Shares and such other Collateral; and (ii) the Pledgor agrees promptly to deliver to the Pledgee such additional proxies and other documents as may be necessary to allow the Pledgee to exercise such voting power. In the event that any Dividends or Distributions, cash payments or proceeds constituting Collateral, at any time and from time to time are held by the Pledgor but which the Pledgee is then entitled to receive and retain, shall, until delivery to the Pledgee, be held by the Pledgor separate and apart from its other property in trust for the Pledgee. The Pledgee agrees that unless an Event of Default shall have occurred and be continuing and the Pledgee shall have given the notice referred to in this Section 4.4, the Pledgor shall have the exclusive voting power with respect to any shares of capital stock (including any of the Pledged Shares) constituting Collateral pledged by the Pledgor hereunder and the Pledgee shall, upon the written request of the Pledgor, promptly deliver such proxies and other documents, if any, as shall be requested by the Pledgor which are necessary to allow the Pledgor to exercise voting power with respect to any such share of capital stock (including any of the Pledged Shares) constituting Collateral. ARTICLE V REMEDIES SECTION 5.1. Certain Remedies. If any Event of Default shall have occurred and be continuing, notwithstanding any other provision herein or in any other instrument, agreement or other document to the contrary, the Pledgee may proceed against the Collateral as provided herein, subject to the foregoing: (a) Subject to compliance with any applicable securities laws, the Pledgee may exercise all the rights and remedies of a secured party on default under the U.C.C. (whether or not the U.C.C. applies to the affected Collateral) and also may, without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Pledgee's offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Pledgee may deem commercially reasonable. The Pledgee may, to the extent permitted by Section 9-504 of the U.C.C., be the purchaser of any of the Collateral so sold and the obligations of the Pledgor to the Pledgee may be applied as a credit against the purchase price. The Pledgor agrees that at least 10 days' prior notice to the Pledgor (or such longer period as may be required by law) of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Pledgee shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Pledgee may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Upon any such sale the Pledgee shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold. (b) The Pledgee may: (i) transfer all or any part of the Collateral in the name of the Pledgee or its nominee, with or without disclosing that such Collateral is subject to the lien and security interest hereunder; (ii) notify the parties obligated on any of the Collateral to make payment to the Pledgee of any amount due or to become due thereunder; (iii) enforce collection of any of the Collateral by suit or otherwise, and surrender, release or exchange all or any part thereof, or compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any nature of any party with respect thereto; (iv) endorse any checks, drafts, or other writings in the name of the Pledgor constituting Collateral; (v) take control of any proceeds of the Collateral; and (vi) execute (in the name, place and stead of the Pledgor) endorsements, assignments, stock powers and other instruments of conveyance or transfer with respect to all or any of the Collateral. SECTION 5.2. Compliance with Restrictions. The Pledgor agrees that in any sale of any of the Collateral whenever any Event of Default shall have occurred and be continuing, the Pledgee is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary to avoid any violation of applicable law (including compliance with such procedures as may restrict the number of prospective bidders and purchasers, require that such prospective bidders and purchasers have certain qualifications, and restrict such prospective bidders and purchasers to persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Collateral), or to obtain any required approval of the sale or of the purchaser by any governmental regulatory authority or official, and the Pledgor further agrees that such compliance shall not result in such sale being considered or deemed not to have been made in a commercially reasonable manner, nor shall the Pledgee be liable nor accountable to the Pledgor for any discount allowed by the reason of the fact that such Collateral is sold in compliance with any such limitation or restriction. SECTION 5.3. Application of Collateral Proceeds. If any Event of Default shall have occurred and be continuing, all cash proceeds received by the Pledgee in respect of any sale of, collection from, or other realization upon, all or any part of the Collateral shall promptly be applied (after payment of any amounts payable to the Pledgee pursuant to Section 5.4) by the Pledgee against the Secured Obligations. Any surplus of such cash or cash proceeds held by the Pledgee and remaining after payment in full of all the Secured Obligations, shall be promptly paid over to the Pledgor or to whomsoever may be lawfully entitled to receive such surplus. SECTION 5.4. Indemnity and Expenses. The Pledgee shall be entitled to be indemnified and held harmless from and against any and all claims, losses, and liabilities arising out of or resulting from this Pledge Agreement (including enforcement of this Pledge Agreement), except claims, losses, or liabilities resulting from the Pledgee's gross negligence or willful misconduct. The Pledgee shall be entitled to the amount of any and all reasonable expenses, including the reasonable fees and disbursements of its counsel and of any experts and agents, which the Pledgee may incur in connection with: (a) the exercise or enforcement of any of the rights of the Pledgee hereunder; or (b) the failure by the Pledgor to perform or observe any of the provisions hereof. ARTICLE VI MISCELLANEOUS PROVISIONS SECTION 6.1. Amendments, etc. No amendment to or waiver of any provision of this Pledge Agreement nor consent to any departure by the Pledgor here from shall in any event be effective unless the same shall be in writing and signed by the Pledgee, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it is given. SECTION 6.2. Protection of Collateral. The Pledgee may from time to time, at its option, perform any act which the Pledgor agrees hereunder to perform and which the Pledgor shall fail to perform after being requested in writing so to perform (it being understood that no such request need be given after the occurrence and during the continuance of any Event of Default) and the Pledgee may from time to time take any other action which the Pledgee reasonably deems necessary for the maintenance, preservation or protection of any of the Collateral or of its security interest therein. SECTION 6.3. Collateral Agent. The Pledgee shall act as the agent of the Affiliates with respect to the Collateral and shall hold the Collateral for the benefit of the Affiliates in accordance with the terms of this Pledge Agreement. SECTION 6.4. Addresses for Notices. All notices and other communications provided for hereunder shall be in writing and mailed or delivered to the Pledgor or the Pledgee at their respective addresses, and with copies to such additional parties, as specified in the Stock Purchase Agreement or, with respect to the Pledgor or the Pledgee, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section. Any notice so delivered shall be deemed given when received. SECTION 6.5. Section Captions. Section captions used in this Pledge Agreement are for convenience of reference only, and shall not affect the construction of this Pledge Agreement. SECTION 6.6. Counterparts. This Pledge Agreement may be executed by the parties hereto in several counterparts, and additional Persons may become Pledgor under this Pledge Agreement by executing a counterpart of this Pledge Agreement, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. SECTION 6.7. GOVERNING LAW. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. SECTION 6.8. WAIVER OF JURY TRIAL. THE PLEDGOR AND THE PLEDGEE HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS PLEDGE AGREEMENT. SECTION 6.9. FORUM SELECTION AND CONSENT TO JURISDICTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, FOR ANY CLAIM, ACTION, SUIT, INVESTIGATION OR PROCEEDING ("LITIGATION") ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT (AND AGREES NOT TO COMMENCE ANY LITIGATION RELATING HERETO EXCEPT IN SUCH COURTS), AND FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO ITS RESPECTIVE ADDRESS SET FORTH IN THIS PLEDGE AGREEMENT SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY LITIGATION BROUGHT AGAINST IT IN ANY SUCH COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF THIS PLEDGE AGREEMENT IN THE COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Pledge Agreement as of the day and year first above written. LXH II, L.L.C. By: GS Capital Partners 2000 Offshore, L.P., its managing member By: GS Advisors 2000, L.L.C., its general partner By:/s/ John E. Bowman ---------------------------------- Name: John E. Bowman Title: Vice President CIBA SPECIALTY CHEMICALS CORPORATION By:/s/ Stanley Sherman ---------------------------------- Name: Stanley Sherman Title: President and Chief Executive Officer
ATTACHMENT I to Pledge Agreement Pledged Shares -------------- Common Stock ------------ Issuer No. of Shares Pledged Certificate Number Date Pledged - ------------------------------ --------------------------- --------------------------- ------------------------- Hexcel Corporation 6,252,688 HC 51738 December 19, 2000
EX-99.10 11 0011.txt EXHIBIT 10 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that THE GOLDMAN SACHS GROUP, INC. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934 (as amended, the "Act"), with respect to securities which may be deemed to be beneficially owned by the Company under the Act, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 8, 2000. THE GOLDMAN SACHS GROUP, INC. By: /s/ Gregory K. Palm - ------------------------------- Name: Gregory K. Palm Title: Executive Vice President and General Counsel EX-99.11 12 0012.txt EXHIBIT 11 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that GOLDMAN, SACHS & CO. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934 (as amended, the "Act"), with respect to securities which may be deemed to be beneficially owned by the Company under the Act, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 8, 2000. GOLDMAN, SACHS & CO. By: The Goldman, Sachs & Co. L.L.C. By: /s/ Gregory K. Palm - ---------------------------- Name: Gregory K. Palm Title: Managing Director EX-99.12 13 0013.txt EXHIBIT 12 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that GS ADVISORS 2000, L.L.C. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 20, 2000. GS ADVISORS 2000, L.L.C. By: /s/ John E. Bowman - ----------------------------- Name: John E. Bowman Title: Vice President EX-99.13 14 0014.txt EXHIBIT 13 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that GOLDMAN, SACHS & CO. oHG (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of March 28, 2000. GOLDMAN, SACHS & CO. oHG By: /s/ Andreas Kornlein By: /s/ Sabine Mock - ---------------------------- --------------------------------- Name: Andreas Kornlein Name: Sabine Mock Title: Executive Director Title: Executive Director EX-99.14 15 0015.txt EXHIBIT 14 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that GOLDMAN SACHS MANAGEMENT GP GmbH (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 20, 2000. GOLDMAN SACHS MANAGEMENT GP GmbH By: /s/ John E. Bowman - ----------------------------- Name: John E. Bowman Title: Managing Director EX-99.15 16 0016.txt EXHIBIT 15 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that GS EMPLOYEE FUNDS 2000, G.P., L.L.C. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 20, 2000. GS EMPLOYEE FUNDS 2000, G.P., L.L.C. By: /s/ John E. Bowman - ----------------------------- Name: John E. Bowman Title: Vice President EX-99.16 17 0017.txt EXHIBIT 16 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that STONE STREET 2000, L.L.C. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of March 20, 2000. STONE STREET 2000, L.L.C. By: /s/ Kaca B. Enquist - ------------------------------ Name: Kaca B. Enquist Title: Vice President EX-99.17 18 0018.txt EXHIBIT 17 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that GS CAPITAL PARTNERS 2000, L.P. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 20, 2000. GS CAPITAL PARTNERS 2000, L.P. By: GS Advisors 2000, L.L.C. By: /s/ John E. Bowman - ----------------------------- Name: John E. Bowman Title: Vice President EX-99.18 19 0019.txt EXHIBIT 18 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that GS CAPITAL PARTNERS 2000 OFFSHORE, L.P. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 20, 2000. GS CAPITAL PARTNERS 2000 OFFSHORE, L.P. By: GS Advisors 2000, L.L.C. By: /s/ John E. Bowman - ----------------------------- Name: John E. Bowman Title: Vice President EX-99.19 20 0020.txt EXHIBIT 19 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that GS CAPITAL PARTNERS 2000 GmbH & CO. BETEILIGUNGS KG (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 20, 2000. GS CAPITAL PARTNERS 2000 GMBH & CO. BETEILIGUNGS KG By: Goldman Sachs Management GP GmbH By: /s/ John E. Bowman - ---------------------------- Name: John E. Bowman Title: Managing Director EX-99.20 21 0021.txt EXHIBIT 20 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 20, 2000. GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P. By: GS Employee Funds 2000 G.P., L.L.C. By: /s/ John E. Bowman - ---------------------------- Name: John E. Bowman Title: Vice President EX-99.21 22 0022.txt EXHIBIT 21 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that STONE STREET FUND 2000, L.P. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of March 20, 2000. STONE STREET FUND 2000, L.P. By: Stone Street 2000, L.L.C. By: /s/ Kaca B. Enquist - ----------------------------- Name: Kaca B. Enquist Title: Vice President EX-99.22 23 0023.txt EXHIBIT 22 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that LXH HOLDINGS CORP. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 20, 2000. LXH HOLDINGS CORP. By: /s/ John E. Bowman - ----------------------------- Name: John E. Bowman Title: Assistant Treasurer EX-99.23 24 0024.txt EXHIBIT 23 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that LXH HOLDINGS, L.P. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 20, 2000. LXH HOLDINGS L.P. By: GS Capital Partners 2000, L.P. By: GS Advisors 2000, L.L.C. By: /s/ John E. Bowman - ------------------------------ Name: John E. Bowman Title: Vice President EX-99.24 25 0025.txt EXHIBIT 24 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that LXH, L.L.C. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 20, 2000. LXH, L.L.C. By: GS Capital Partners 2000, L.P. By: GS Advisors 2000, L.L.C. By: /s/ John E. Bowman - ------------------------------ Name: John E. Bowman Title: Vice President EX-99.25 26 0026.txt EXHIBIT 25 - POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that LXH II, L.L.C. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, as amended, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 20, 2000. LXH II, L.L.C. By: GS Capital Partners 2000 Offshore, L.P. By: GS Advisors 2000, L.L.C. By: /s/ John E. Bowman - -------------------------- Name: John E. Bowman Title: Vice President -----END PRIVACY-ENHANCED MESSAGE-----