-----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, UgKbAYT9EMUbknwyIq9r4cQ2FzxDrMbZjKux14+tYeHPtJ/zEfnqdZp/Ex6Tu1WQ fVquovYcfA1bMLR9vaEYbQ== 0000950117-97-000709.txt : 19970425 0000950117-97-000709.hdr.sgml : 19970425 ACCESSION NUMBER: 0000950117-97-000709 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19970424 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST BRANDS CORP CENTRAL INDEX KEY: 0000797320 STANDARD INDUSTRIAL CLASSIFICATION: UNSUPPORTED PLASTICS FILM & SHEET [3081] IRS NUMBER: 061171404 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-25773 FILM NUMBER: 97586583 BUSINESS ADDRESS: STREET 1: 83 WOOSTER HEIGHTS RD BLDG 301 STREET 2: PO BOX 1911 CITY: DANBURY STATE: CT ZIP: 06813-1911 BUSINESS PHONE: 2037312300 MAIL ADDRESS: STREET 1: P.O. BOX 1911 CITY: DANBURY STATE: CT ZIP: 06813-1911 S-4 1 FIRST BRANDS CORP. S-4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 24, 1997 REGISTRATION NO. 333- ________________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ FIRST BRANDS CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 2673 06-1171404 (STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
------------------------ 83 WOOSTER HEIGHTS ROAD BUILDING 301, P.O. BOX 1911 DANBURY, CONNECTICUT 06813-1911 TELEPHONE: (203) 731-2300 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ EINAR M. ROD 83 WOOSTER HEIGHTS ROAD BUILDING 301, P.O. BOX 1911 DANBURY, CONNECTICUT 06813-1911 TELEPHONE: (203) 731-2300 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) COPY TO: CHARLES B. FROMM KIRKLAND & ELLIS 153 EAST 53RD STREET NEW YORK, NEW YORK 10022-4675 TELEPHONE: (212) 446-4800 ------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] ------------------------
CALCULATION OF REGISTRATION FEE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE 7.25% Senior Notes due 2007, Series B........... $ 150,000,000 100% $150,000,000 $ 45,454.55
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. ________________________________________________________________________________ SUBJECT TO COMPLETION, DATED APRIL 24, 1997 PROSPECTUS FIRST BRANDS CORPORATION OFFER TO EXCHANGE ITS SERIES B 7.25% SENIOR NOTES DUE 2007 FOR ANY AND ALL OF ITS OUTSTANDING 7.25% SENIOR NOTES DUE 2007 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED. First Brands Corporation, a Delaware corporation (the 'Company'), hereby offers (the 'Exchange Offer'), upon the terms and conditions set forth in this Prospectus (as the same may be amended or supplemented from time to time, the 'Prospectus') and the accompanying Letter of Transmittal (the 'Letter of Transmittal'), to exchange $1,000 principal amount of its Series B 7.25% Senior Notes due 2007 (the 'Exchange Notes'), which will have been registered under the Securities Act of 1933, as amended (the 'Securities Act') pursuant to a Registration Statement of which this prospectus is a part, for each $1,000 principal amount of its outstanding 7.25% Senior Notes due 2007 (the 'Notes'), of which $150,000,000 aggregate principal amount is outstanding. The form and terms of the Exchange Notes are identical in all material respects to the form and term of the Notes (which they replace) except that (i) the Exchange Notes will bear a Series B designation and will have been registered under the Securities Act and therefore will not be subject to certain restrictions on transfer applicable to the Notes and will not be entitled to registration rights, (ii) the Exchange Notes are issuable in minimum denominations of $1,000 compared to minimum denominations of $250,000 for the Notes, and (iii) the Exchange Notes will not bear legends restricting their transfer and will not contain certain provisions relating to an increase in the interest rate which were included in the terms of the Notes in certain circumstances relating to the timing of the Exchange Offer. The Exchange Notes will evidence the same debt as the Notes (which they replace) and will be issued under and be entitled to the benefits of the Indenture dated March 1, 1997 between the Company and The Bank of New York (the 'Indenture') governing the Notes. See 'The Exchange Offer' and 'Description of Exchange Notes.' The Company will accept for exchange any and all Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on , 1997, unless extended by the Company in its sole discretion (the 'Expiration Date'). Notwithstanding the foregoing, the Company will not extend the Expiration Date beyond August 7, 1997. Tenders of Notes may be withdrawn at any time prior to 5:00 p.m. on the Expiration Date. The Exchange Offer is subject to certain customary conditions. The Notes were sold by the Company on March 10, 1997 to the Initial Purchasers (as defined) in a transaction not registered under the Securities Act in reliance upon an exemption under the Securities Act. The Initial Purchasers subsequently placed the Notes with qualified institutional buyers that agreed to comply with certain transfer restrictions and other conditions in reliance upon Rule 144A under the Securities Act. Accordingly, the Notes may not be reoffered, resold or otherwise transferred in the United States unless registered under the Securities Act or unless an applicable exemption from the registration requirements of the Securities Act is available. The Exchange Notes are being offered hereunder in order to satisfy the obligations of the Company under the Registration Rights Agreement (as defined) entered into by the Company in connection with the offering of the Notes. See 'The Exchange Offer.' Based on no-action letters issued by the staff of the Securities and Exchange Commission (the 'Commission') to third parties, the Company believes the Exchange Notes issued pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by any holder thereof (other than any such holder that is an 'affiliate' of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Notes are acquired in the ordinary course of such holder's business and such holder has no arrangement or understanding with any person to participate in the distribution of such Exchange Notes. See 'The Exchange Offer -- Purpose and Effect of the Exchange Offer' and 'The Exchange Offer -- Resale of the Exchange Notes.' Each broker-dealer (a 'Participating Broker-Dealer') that receives Exchange Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a participating Broker-Dealer will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with resales of Exchange Notes received in exchange for Notes where such Notes were acquired by such Participating Broker-Dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this Prospectus available to any participating Broker-Dealer for use in connection with any such resale. See 'Plan of Distribution.' Holders of Notes not tendered and accepted in the Exchange Offer will continue to hold such Notes and will be entitled to all the rights and benefits and will be subject to the limitations applicable thereto under the Indenture and with respect to transfer under the Securities Act. The Company will pay all the expenses incurred by it incident to the Exchange Offer. See 'The Exchange Offer.' THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE DATE OF THIS PROSPECTUS IS , 1997 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. Prior to the Exchange Offer, there has been only a limited secondary market and no public market for the Notes. The Exchange Notes will be a new issue of securities for which there currently is no market. Although the Initial Purchasers have informed the Company that they each currently intend to make a market in the Exchange Notes, they are not obligated to do so, and any such market making may be discontinued at any time without notice. Accordingly, there can be no assurance as to the development or liquidity of any market for the Exchange Notes. The Company currently does not intend to apply for listing of the Exchange Notes on any securities exchange or for quotation through the National Association of Securities Dealers Automated Quotation System. Any Notes not tendered and accepted in the Exchange Offer will remain outstanding and will be entitled to all the same rights and will be subject to the same limitations applicable thereto under the Indenture (except for those rights which terminate upon consummation of the Exchange Offer). Following consummation of the Exchange Offer, the holders of Notes will continue to be subject to the existing restrictions upon transfer thereof and the Company will have no further obligation to such holders (other than under certain limited circumstances) to provide for registration under the Securities Act of the Notes held by them. To the extent that Notes are tendered and accepted in the Exchange Offer, a holder's ability to sell untendered Notes could be adversely affected. See 'The Exchange Offer -- Consequences of Failure to Exchange.' THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION. HOLDERS OF NOTES ARE URGED TO READ THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR NOTES PURSUANT TO THE EXCHANGE OFFER. The Exchange Notes will be available initially only in book-entry form. The Company expects that the Exchange Notes issued pursuant to this Exchange Offer will be issued in the form of a Global Certificate (as defined), which will be deposited with, or on behalf of, The Depository Trust Company (the 'Depositary') and registered in its name or in the name of Cede & Co., its nominee. Beneficial interests in the Global Certificate representing the Exchange Notes will be shown on, and transfers thereof to qualified institutional buyers will be effected through, records maintained by the Depositary and its participants. After the initial issuance of the Global Certificate, Exchange Notes in certified form will be issued in exchange for the Global Certificate only on the terms set forth in the Indenture. See 'Description of Exchange Notes -- Book-Entry; Delivery and Form.' NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE AFFAIRS OF THE COMPANY OR ITS SUBSIDIARIES SINCE THE DATE HEREOF. 2 AVAILABLE INFORMATION The Company has filed with the Commission a Registration Statement on Form S-4 (the 'Exchange Offer Registration Statement,' which term shall encompass all amendments, exhibits, annexes and schedules thereto) pursuant to the Securities Act, and the rules and regulations promulgated thereunder, covering the Exchange Notes being offered hereby. This Prospectus does not contain all the information set forth in the Exchange Offer Registration Statement. For further information with respect to the Company and the Exchange Offer, reference is made to the Exchange Offer Registration Statement. Statements made in this Prospectus as to the contents of any contract, agreement or other document referred to are not necessarily complete. With respect to each such contract, agreement or other document filed as an exhibit to the Exchange Offer Registration Statement, reference is made to the exhibit for a more complete description of the document or matter involved, and each such statement shall be deemed qualified in its entirety by such reference. The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the 'Exchange Act'), and in accordance therewith is required to file periodic reports, proxy statements and other information with the Commission. The Exchange Offer Registration Statement, including the exhibits thereto, together with reports, proxy statements and other information filed by the Company may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, at the Regional Offices of the commission at 7 World Trade Center, New York, New York 10048 and at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 6066-2511. Copies of such materials can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such information may also be accessed electronically by means of the Commission's home page on the Internet (http://www.sec.gov). Such reports, proxy statements and other information can also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005 on which the Company's common stock is listed. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission are incorporated in this Prospectus by reference: (i) the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1996; and (ii) the Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended September 30, 1996 and December 31,1996. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the Exchange Offer shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from and after the respective dates of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein modified or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. As used herein, the terms 'Prospectus' and 'herein' mean this Prospectus, including the documents incorporated or deemed to be incorporated herein by reference, as the same may be amended, supplemented or otherwise modified from time to time. The Company hereby undertakes to provide without charge to each person (including any beneficial owner) to whom a copy of this Prospectus has been delivered, on the written or oral request of such person, a copy of any or all of the documents which have been or may be incorporated in this Prospectus by reference (other than exhibits to such documents unless such exhibits are specifically incorporated by reference in any such documents). Requests for such copies should be directed to Joseph B. Furey, Vice President and Secretary, First Brands Corporation, 83 Wooster Heights Road, Danbury, Connecticut 06813-1911, telephone (203) 731-2300. 3 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS THIS PROSPECTUS INCLUDES 'FORWARD-LOOKING STATEMENTS' WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACTS INCLUDED IN THIS PROSPECTUS, INCLUDING WITHOUT LIMITATION, CERTAIN STATEMENTS UNDER THE 'PROSPECTUS SUMMARY,' 'THE COMPANY,' 'MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS' AND 'BUSINESS' AND LOCATED ELSEWHERE HEREIN REGARDING THE COMPANY'S FINANCIAL POSITION AND BUSINESS STRATEGY, MAY CONSTITUTE FORWARD-LOOKING STATEMENTS. ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, IT CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE COMPANY'S EXPECTATIONS ('CAUTIONARY STATEMENTS') ARE DISCLOSED IN THIS PROSPECTUS, INCLUDING WITHOUT LIMITATION IN CONJUNCTION WITH THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PROSPECTUS. ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY OR PERSONS ACTING ON ITS BEHALF ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS. 4 PROSPECTUS SUMMARY The following summary is qualified in its entirety by the more detailed information and audited consolidated financial statements of the Company, including the notes thereto (the 'Consolidated Financial Statements'), and the unaudited condensed financial statements of the Company, including the notes thereto (the 'Consolidated Condensed Financial Statements'), appearing elsewhere in this Prospectus or incorporated by reference herein. Unless the context otherwise requires, references in this Prospectus to 'First Brands' and the 'Company' are to First Brands Corporation and its subsidiaries. Conversions in this Prospectus from Australian dollars (A$) into United States dollars ($) are approximate and are calculated at an assumed rate of A$1.00=$.775. THE COMPANY The Company develops, manufactures, markets and sells branded and private label consumer products for the household and automotive markets. Consumers have been purchasing products under the STP, GLAD, JONNY CAT, SCOOP AWAY, STARTERLOGG and HEARTHSIDE brand names for over 42, 33, 31, 7, 7 and 4 years, respectively. The Company's products can be found in large mass merchandise stores and chain supermarkets as well as other retail outlets, including automotive supply stores, grocery stores and warehouse clubs. The Company believes that the significant market positions occupied by its products are attributable to superior brand name recognition, comprehensive product offerings, continued product innovation, strong emphasis on vendor support programs and aggressive advertising and promotion. Through research and development and plant operating and capital expenditure programs, management is committed to developing process technologies and introducing new products which are fundamental to the Company's objective of providing high quality, innovative consumer products at costs which the Company believes are equal to or less than those of its competitors. The Company has operations in the United States, Canada, South Africa, the United Kingdom, Spain, Hong Kong, China, Mexico, Puerto Rico, the Philippines and Australia and New Zealand as a result of the acquisition of the NationalPak Business referenced below. On March 14, 1997, the Company purchased the NationalPak business in Australia and New Zealand (the 'NationalPak Business') from National Foods Ltd. for A$206 million ($160 million) plus approximately $8 million of tax and other transaction expenses. The NationalPak Business manufactures and markets consumer products such as plastic wrap and bags, aluminum foil and wiping cloths under the GLAD, CHUX, MONO, OSO and ROTA brand names. See 'Recent Developments -- Recent Acquisition.' The Company continually strives for product innovations and improvements to improve market share and facilitate growth. During fiscal 1996, the Company introduced the new GLAD-LOCK Snack Bag and increased the distribution and selection of GLAD Trash Bags with Quick-Tie Flaps. The Company's selection of litter products was expanded during fiscal 1996 through the introduction of a new premium clay brand called EVER FRESH and the roll-out of innovative pet accessory products such as a Self-Scooping Litter Box. In the automotive business, the Company introduced six new products in fiscal 1996, including the well-received STP Complete Fuel System Cleaner. The Company's principal executive office is located at 83 Wooster Heights Road, Danbury, Connecticut 06813-1911; its telephone number is (203) 731-2300. 5 THE NOTES OFFERING Notes........................................ The Notes were sold by the Company on March 10, 1997 to Bear, Stearns & Co. Inc., TD Securities (USA) Inc., Credit Lyonnais Securities (USA) Inc. and First Union Capital Markets Corp. (collectively, the 'Initial Purchasers') pursuant to a Purchase Agreement dated March 5, 1997 (the 'Purchase Agreement'). The Initial Purchasers subsequently resold the Notes to qualified institutional buyers that agreed to comply with certain transfer restrictions and other conditions pursuant to Rule 144A under the Securities Act. Registration Rights Agreement................ Pursuant to the Purchase Agreement, the Company and the Initial Purchasers entered into a Registration Rights Agreement dated March 5, 1997 (the 'Registration Rights Agreement'), which grants the holder of the Notes certain exchange and registration rights. The Exchange Offer is intended to satisfy such exchange rights which terminate upon the consummation of the Exchange Offer.
THE EXCHANGE OFFER Securities Offered........................... $150,000,000 aggregate principal amount of Series B 7.25% Senior Notes due 2007 (the 'Exchange Notes'). The Exchange Offer........................... $1,000 principal amount of the Exchange Notes in exchange for each $1,000 principal amount of Notes. As of the date hereof, $150,000,000 aggregate principal amount of Notes are outstanding. The Company will issue the Exchange Notes to holders on or promptly after the Expiration Date. Based on an interpretation by the staff of the Commission set forth in no-action letters issued to third parties, the Company believes that Exchange Notes issued pursuant to the Exchange Offer in exchange for Notes may be offered for resale, resold and otherwise transferred by any holder thereof (other than any such holder which is an 'affiliate' of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Notes are acquired in the ordinary course of such holder's business and that such holder does not intend to participate and has no arrangement or understanding with any person to participate in the distribution of such Exchange Notes. Each Participating Broker-Dealer that receives Exchange Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with resales of Exchange Notes received in exchange for Notes where such Notes were acquired by such Participating Broker-Dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this Prospectus available to any Participating Broker-Dealer for use in
6 connection with any such resale. See 'Plan of Distribution.' Any holder who tenders in the Exchange Offer with the intention to participate, or for the purpose of participating, in a distribution of the Exchange Notes could not rely on the position of the staff of the Commission enunciated in no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Failure to comply with such requirements in such instance may result in such holder incurring liability under the Securities Act for which the holder is not indemnified by the Company. Expiration Date.............................. 5:00 p.m., New York City time, on , 1997 unless the Exchange Offer is extended, in which case the term 'Expiration Date' means the latest date and time to which the Exchange Offer is extended. Accrued Interest on the Exchange Notes and the Notes.................................. Each Exchange Note will bear interest from its issuance date. Holders of Notes that are accepted for exchange will receive, in cash, accrued interest thereon to, but not including, the issuance date of the Exchange Notes. Such interest will be paid with the first interest payment on the Exchange Notes. Interest on the Notes accepted for exchange will cease to accrue upon issuance of the Exchange Notes. Conditions to the Exchange Offer............. The Exchange Offer is subject to certain customary conditions, which may be waived by the Company. See 'The Exchange Offer -- Conditions.' Procedures for Tendering Notes............... Each holder of Notes wishing to accept the Exchange Offer must complete, sign and date the accompanying Letter of Transmittal, or a facsimile thereof, in accordance with the instructions contained herein and therein, and mail or otherwise deliver such Letter of Transmittal, or such facsimile, together with the Notes and any other required documentation to the Exchange Agent (as defined) at the address set forth herein. By executing the Letter of Transmittal, each holder will represent to the Company that, among other things, the Exchange Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such Exchange Notes, whether or not such person is the holder, that neither the holder nor any such other person has any arrangement or understanding with any person to participate in the distribution of such Exchange Notes and that neither the holder nor any such other person is an 'affiliate,' as defined under Rule 405 of the Securities Act, of the Company. See 'The Exchange Offer -- Purpose and Effect of the Exchange Offer' and ' -- Procedures for Tendering.' Untendered Notes............................. Following the consummation of the Exchange Offer, holders of Notes eligible to participate but who do not tender their Notes will not have any further exchange rights and such Notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for such Notes could be adversely affected. Consequences of Failure to Exchange.......... The Notes that are not exchanged pursuant to the Exchange Offer will remain restricted securities. Accordingly, such Notes may be resold only (i) to the Company, (ii) pursuant to Rule 144A or Rule 144 under the Securities Act or pursuant to some other exemption under the
7 Securities Act, (iii) outside the United States to a foreign person pursuant to the requirements of Rule 904 under the Securities Act, or (iv) pursuant to an effective registration statement under the Securities Act. See 'The Exchange Offer -- Consequences of Failure to Exchange.' Shelf Registration Statement................. If any holder of the Notes (other than any such holder which is an 'affiliate' of the Company within the meaning of Rule 405 under the Securities Act) is not eligible under applicable securities laws to participate in the Exchange Offer, and such holder has provided information regarding such holder and the distribution of such holder's Notes to the Company for use therein, the Company has agreed to register the Notes on a shelf registration statement (the 'Shelf Registration Statement') and use its best efforts to cause it to be declared effective by the Commission as promptly as practical on or after the consummation of the Exchange Offer. The Company has agreed to maintain the effectiveness of the Shelf Registration Statement for, under certain circumstances, a maximum of two years, to cover resales of the Notes held by any such holders. Special Procedures for Beneficial Owners..... Any beneficial owner whose Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered holder promptly and instruct such registered holder to tender on such beneficial owner's behalf. If such beneficial owner wishes to tender on such owner's own behalf, such owner must, prior to completing and executing the Letter of Transmittal and delivering its Notes, either make appropriate arrangements to register ownership of the Notes in such owner's name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time. The Company will keep the Exchange Offer open for not less than twenty days in order to provide for the transfer of registered ownership. Guaranteed Delivery Procedures............... Holders of Notes who wish to tender their Notes and whose Notes are not immediately available or who cannot deliver their Notes, the Letter of Transmittal or any other documents required by the Letter of Transmittal to the Exchange Agent (or comply with the procedures for book-entry transfer) prior to the Expiration Date must tender their Notes according to the guaranteed delivery procedures set forth in 'The Exchange Offer Guaranteed -- Delivery Procedures.' Withdrawal Rights............................ Tenders may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. Acceptance of Notes and Delivery of Exchange Notes...................................... The Company will accept for exchange any and all Notes which are properly tendered in the Exchange Offer prior to 5:00 p.m., New York City time, on the Expiration Date. The Exchange Notes issued pursuant to the Exchange Offer will be delivered promptly following the Expiration Date. See 'The Exchange Offer -- Terms of the Exchange Offer.' Use of Proceeds.............................. There will be no cash proceeds to the Company from the exchange pursuant to the Exchange Offer. Exchange Agent............................... The Bank of New York.
8 THE EXCHANGE NOTES General...................................... The form and terms of the Exchange Notes are the same as the form and terms of the Notes (which they replace) except that (i) the Exchange Notes bear a Series B designation, (ii) the Exchange Notes have been registered under the Securities Act and, therefore, will not bear legends restricting the transfer thereof, (iii) the holders of Exchange Notes will not be entitled to certain rights under the Registration Rights Agreement, including the provisions providing for an increase in the interest rate on the Notes in certain circumstances relating to the timing of the Exchange Offer, which rights will terminate when the Exchange Offer is consummated and (iv) the Exchange Notes will be issuable in minimum denominations of $1,000 compared to minimum denominations of $250,000 for the Notes. See 'The Exchange Offer -- Purpose and Effect of the Exchange Offer.' The Exchange Notes will evidence the same debt as the Notes and will be entitled to the benefits of the Indenture. See 'Description of Exchange Notes.' The Notes and the Exchange Notes are referred to herein collectively as the 'Senior Notes.' Securities Offered........................... $150,000,000 aggregate principal amount of Series B 7.25% Senior Notes due 2007 of the Company. Maturity Date................................ March 1, 2007. Interest Payment Dates....................... March 1 and September 1, commencing September 1, 1997. Record Dates................................. Each February 15 and August 15. Denominations................................ The Notes will be issued in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof. Sinking Fund................................. None. Ranking...................................... The Exchange Notes will constitute unsecured unsubordinated indebtedness of the Company and will rank pari passu with all other unsecured and unsubordinated indebtedness of the Company for borrowed money. The Exchange Notes will be effectively subordinated to all existing and future indebtedness, trade payables, guarantees, lease obligations, letters of credit obligations and other obligations of the Company's subsidiaries. Absence of Market for the Exchange Notes..... The Exchange Notes will be a new issue of securities for which there currently is no market. Although the Initial Purchasers have informed the Company that they currently intend to make a market in the Exchange Notes, the Initial Purchasers are not obligated to do so, and any such market-making may be discontinued at any time without notice. Accordingly, there can be no assurance as to the development or liquidity of any market for the Exchange Notes. The Company does not intend to apply for listing of the Exchange Notes, on any securities exchange or for quotation through the NASD Automated Quotation System. See 'Plan of Distribution.' Modification of the Indenture................ The Company and the Trustee, without the consent of the holders of the Senior Notes, may amend the Indenture, if in the opinion of the Trustee, such change does not adversely affect the rights of the holders in any material respect. Other modifications to the Indenture may be
9 made with the consent of holders of a majority of the principal amount of the Senior Notes then outstanding except that consent is required from all holders of Senior Notes in instances such as reductions in the amount or timing of interest payments, reductions in the principal and changes in the maturity, redemption or repurchase dates of the Senior Notes. See 'Description of Exchange Notes -- Modification of the Indenture.'
For additional information regarding the Exchange Notes, see 'Description of Exchange Notes.' 10 RECENT DEVELOPMENTS RECENT ACQUISITION On March 14, 1997, the Company purchased the NationalPak Business in Australia and New Zealand from National Foods Ltd. for A$206 million ($160 million) plus approximately $8 million of tax and other transaction expenses. Management of the NationalPak Business intends to purchase a minor equity interest in the NationalPak Business by June 30, 1997. The NationalPak Business manufactures and markets consumer products such as plastic wrap and bags, aluminum foil and wiping cloths under the GLAD, CHUX, MONO, OSO and ROTA brand names. Sales for these businesses during their fiscal year ended June 30, 1996 were approximately A$159 million ($123 million). In addition to acquiring the GLAD brand in the only major commercial market where it was not owned by the Company, the Company believes it can share technology and marketing information with NationalPak in Australia and New Zealand, as well as introduce and market in Australia and New Zealand other household products of the Company through NationalPak's strong distribution network. Although the Company regularly engages in discussions with companies regarding potential acquisitions, the Company is currently not a party to any agreement with respect to any other pending acquisition that management believes is probable and material. NEW BANK FACILITIES The Company has amended and restated its domestic credit agreement effective February 28, 1997 (the 'Credit Agreement' and, as amended, the 'Amended Credit Agreement'). The amendments to the Credit Agreement, among other things, (i) generally provide the Company with more favorable borrowing rates, (ii) extend the maturity date of the facility (the 'Revolving Credit Facility') from December 31, 1999 to February 28, 2002, (iii) permit a greater amount of restricted payments, such as dividends and stock repurchases, (iv) grant more flexibility to foreign subsidiaries to borrow money and (v) in certain circumstances, exclude certain foreign subsidiaries from financial covenant calculations. In addition, the requirement in the Revolving Credit Facility that the Company maintain a ratio of consolidated total senior liabilities to consolidated net worth plus subordinated debt of not more than 0.75 to 1.0 was amended to require the Company to maintain a ratio of consolidated total indebtedness to consolidated total capitalization of not more than 0.6 to 1.0. The Amended Credit Agreement is guaranteed by the material domestic subsidiaries of the Company, and provides for maximum borrowings of $300 million. As of December 31, 1996, the Company had drawn down approximately $140 million under the Revolving Credit Facility and had approximately $160 million in availability thereunder. The Company has received an A$100 million ($77.5 million) seven-year acquisition and working capital credit facility in Australia and New Zealand related to the acquisition of the NationalPak Business. The credit facility, which is fully secured by the assets of the NationalPak Business, was entered into at the closing of such acquisition. Approximately A$80 million ($62 million) of the acquisition cost was financed through such facility. USE OF PROCEEDS The Exchange Offer is intended to satisfy certain of the Company's obligations under the Registration Rights Agreement. The Company will not receive any cash proceeds from the issuance of the Exchange Notes in the Exchange Offer. The net proceeds of approximately $148.1 million from the issuance of the Notes were used to redeem all of the Company's outstanding 9 1/8% Senior Subordinated Notes due April 1, 1999 (the 'Senior Subordinated Notes') and to reduce borrowings under the Amended Credit Agreement. 11 CAPITALIZATION The following table sets forth the capitalization of the Company as of December 31, 1996 and as adjusted to reflect the sale of the Notes, the redemption of the Senior Subordinated Notes and the expected borrowings under the Revolving Credit Facility and long-term credit facilities in Australia, New Zealand and Canada in connection with the consummation of the acquisition of the NationalPak Business. The table should be read in conjunction with the Company's Consolidated Financial Statements and Consolidated Condensed Financial Statements incorporated by reference herein.
DECEMBER 31, 1996 ----------------------- ACTUAL AS ADJUSTED -------- ----------- (IN THOUSANDS) SENIOR DEBT: Revolving Credit Facility(a)....................................................... $140,000 $ 183,000 Other debt, net of current maturities(b)........................................... 4,726 80,726 7.25% Senior Notes due 2007........................................................ -- 150,000 -------- ----------- Total senior debt............................................................. 144,726 413,726 SUBORDINATED DEBT: 9 1/8% Senior Subordinated Notes due 1999(c)....................................... 100,000 -- -------- ----------- Total long-term debt(d)....................................................... 244,726 413,726 Total stockholders' equity.................................................... 404,661 404,661 -------- ----------- Total capitalization.......................................................... $649,387 $ 818,387 -------- ----------- -------- -----------
- ------------ (a) The Company has amended and restated its Revolving Credit Facility. The Revolving Credit Facility, as amended, (i) has a maximum availability of $300 million, (ii) has a five-year term expiring February 28, 2002, (iii) based upon the current rating of the Senior Subordinated Notes and the Notes, has interest at the prime rate, LIBOR plus 0.275% or the CD rate plus 0.40% and (iv) has a facility fee of 0.15%. See 'Recent Developments -- New Bank Facilities.' (b) Approximately $76 million of the 'as adjusted' amount was drawn against long-term credit facilities in Australia, New Zealand and Canada on or about the closing of the NationalPak Business acquisition. (c) The Company redeemed all of its 9 1/8% Senior Subordinated Notes on April 9, 1997. (d) Total long-term debt excludes other long-term obligations of $16.8 million (which is comprised primarily of pension and retiree medical plan obligations) and long-term operating lease commitments. See Notes 6 and 7 to the Company's Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended June 30, 1996 and Notes 2 and 4 to the Company's Consolidated Condensed Financial Statements in the Company's Report on Form 10-Q for the period ended December 31, 1996. See 'Available Information.' 12 SELECTED CONSOLIDATED FINANCIAL DATA The selected data presented below as of and for the fiscal years ended June 30, 1996, 1995, 1994, 1993 and 1992 are derived from the Company's Consolidated Financial Statements which have been audited by KPMG Peat Marwick LLP, independent certified public accountants. The Consolidated Financial Statements as of June 30, 1996 and 1995 and for each of the years in the three-year period ended June 30, 1996 and the independent auditors' report thereon are incorporated by reference herein. The selected data presented below for the six months ended December 31, 1996 and 1995 and as of December 31, 1996 are derived from the Company's unaudited Consolidated Condensed Financial Statements to which KPMG Peat Marwick LLP has applied limited procedures in accordance with professional standards for a review of such information. The unaudited Consolidated Condensed Financial Statements as of December 31, 1996 and for the six month period ended December 31, 1996 and 1995, and the independent auditors' review report thereon, are incorporated by reference herein and such statements, in the opinion of management, include all adjustments (all of which were of a normal recurring nature) necessary to fairly present the financial information for such periods.
SIX MONTHS ENDED DECEMBER 31, FISCAL YEAR ENDED JUNE 30,(a) ------------------ ----------------------------------------------- 1996 1995 1996 1995 1994 1993 1992 -------- -------- -------- -------- -------- -------- ------- (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) STATEMENT OF OPERATIONS DATA: Net sales............................................ $535.5 $513.9 $1,073.0 $1,036.5 $1,086.3 $1,041.9 $ 988.5 Cost of goods sold(b)................................ 345.6 339.2 687.1 645.9 666.0 646.3 599.7 Selling, general and administrative expenses......... 118.1 105.7 241.7 255.3 269.2 257.8 259.5 Amortization and other depreciation.................. 6.3 7.8 15.6 16.5 20.8 19.1 22.4 -------- -------- -------- -------- -------- -------- ------- Earnings before interest expense, other income (expense), net, provision for income taxes and extraordinary items................................ 65.5 61.2 128.6 118.8 130.3 118.7 106.9 Interest expense and discount on sales of accounts receivable(c)...................................... 11.0 11.0 21.5 22.8 26.7 29.7 40.4 Other income (expense), net(d)....................... 0.9 1.7 1.8 (21.2) (0.1) 0.1 -- -------- -------- -------- -------- -------- -------- ------- Income before provision for income taxes and extraordinary items................................ 55.4 51.9 108.9 74.8 103.7 89.1 66.5 Extraordinary items(e)............................... -- -- -- (4.5) -- -- (15.7) Net income........................................... 33.4 30.2 65.1 38.7 60.2 52.7 23.5 Net income per common share and common equivalent share(f)........................................... $ 0.80 $ 0.71 $ 1.53 $ 0.91 $ 1.36 $ 1.21 $ 0.54 Cash dividends declared per share(f)................. $ 0.14 $ 0.11 $ 0.24 $ 0.19 $ 0.15 $ 0.09 $ 0.02 OTHER FINANCIAL DATA: Earnings before interest, taxes, depreciation and amortization (EBITDA).............................. $ 86.7 $ 81.5 $ 168.7 $ 134.1 $ 172.1 $ 156.4 $ 146.4 Total depreciation and amortization.................. 20.3 18.6 38.3 36.5 41.7 37.6 39.5 Capital expenditures................................. 14.0 16.8 42.3 47.0 39.8 39.1 47.8 Ratio of EBITDA to interest expense.................. 7.9x 7.4x 7.8x 5.9x 6.4x 5.3x 3.6x Ratio of earnings to fixed charges(g)................ 4.5x 4.3x 4.5x 3.3x 3.8x 3.2x 2.2x BALANCE SHEET DATA (AS OF THE END OF THE PERIOD): Working capital...................................... $158.5 $ 125.0 $ 72.5 $ 52.8 $ 59.0 $ 25.4 Total assets......................................... 853.1 860.9 839.9 814.0 830.2 828.2 Long-term debt (including current maturities)(h)..... 244.7 199.4 166.3 153.4 226.3 282.3 Stockholders' equity................................. 404.7 398.8 352.2 360.7 305.4 256.7 Total long-term debt, including current maturities, as a percentage of total capitalization(i)......... 37.7% 33.3% 32.1% 29.8% 42.6% 52.4%
(footnotes on next page) 13 (footnotes from previous page) (a) Financial data for fiscal years 1992 through 1995 include the operations of the Prestone antifreeze and car care products business (the 'Prestone Business') which was sold in August, 1994. Net sales for the Prestone Business were $32.0 million for the eight-week period ended August 26, 1994, $190.6 million for fiscal 1994, $191.4 million for fiscal 1993 and $187.1 million for fiscal 1992. The data also include the operations of the following subsidiaries: A&M Products, Inc. acquired May, 1992; Excel Mineral Inc. acquired July, 1994; Multifoil (Pty) Ltd. (South Africa) acquired April, 1995; and Forest Technology Corporation acquired March, 1996. (b) Cost of goods sold includes a portion of the Company's depreciation expense. (c) The Company entered into an agreement to sell without recourse up to $100 million in fractional ownership interests in a defined pool of eligible trade accounts receivable. As of December 31, 1996, the Company had sold $80 million in such fractional ownership interests. The costs associated with this program are reported as 'discount on sales of accounts receivable.' (d) Other income (expense), net for fiscal 1995, primarily reflects settled litigation costs relating to the Company's formerly operated mobile antifreeze recycling business as well as a gain on the sale of the Prestone Business and a loss on the disposal of the Company's automotive service centers. (e) Extraordinary items include, in fiscal 1995, the premium paid and the write-off of unamortized issuance costs, net of taxes, related to the purchase of the remaining $45 million of the Company's 13 1/4% Subordinated Notes, and in fiscal 1992, the costs incurred including premiums paid and write-off of unamortized issuance costs, net of taxes, relating to the purchase of the Company's 12 1/2% Senior Subordinated Debentures and a portion of the 13 1/4% Subordinated Notes. (f) Net income per common share and common equivalent share and cash dividends declared per share have been computed using the weighted average number of common shares and common share equivalents outstanding for each period. The computations have been adjusted for the February, 1996 2-for-1 stock split. (g) The ratio of earnings to fixed charges is calculated as follows: income before provision for income taxes plus fixed charges (excluding capitalized interest), divided by fixed charges. Fixed charges are defined as interest incurred (expended or capitalized) plus amortization of debt financing costs plus one third of rent expense incurred on operating leases. (h) Long-term debt excludes other long-term obligations and long-term operating lease commitments. See Notes 6 and 7 to the Company's Consolidated Financial Statements incorporated by reference herein. (i) Total long-term debt as a percentage of total capitalization is calculated as follows: long-term debt (including current maturities but excluding other long-term obligations and long-term operating lease commitments) divided by total capitalization. Total capitalization is defined as follows: long-term debt (including current maturities but excluding other long-term obligations and long-term operating lease commitments) plus stockholders' equity. 14 BUSINESS First Brands is primarily engaged in the development, manufacture, marketing and sale of branded and private label consumer products for the household and automotive markets. The Company's products can be found in large merchandise and chain supermarkets and other retail outlets. The Company believes that the significant market positions occupied by its products are attributable to superior brand name recognition, comprehensive product offerings, continued product innovation, strong emphasis on vendor support programs and aggressive advertising and promotion. Household products include the most complete line of branded plastic wrap, bags and drinking straws in the United States and Canada, which are sold under the GLAD and GLAD-LOCK brands. Plastic bags are also sold in Canada under the SURTEC brand. Cat litter products are sold under the SCOOP AWAY, EVER CLEAN, JONNY CAT and EVER FRESH brands. Automotive performance and appearance products are sold under the STP brand. Consumers have been purchasing products under the STP, GLAD, JONNY CAT, SCOOP AWAY, STARTERLOGG and HEARTHSIDE brand names for over 42, 33, 31, 7, 7 and 4 years, respectively. Through research and development and plant operating and capital expenditure programs, management is committed to developing process technologies and introducing new products which are fundamental to the Company's objective of providing high quality, innovative consumer products at costs which the Company believes are equal to or less than those of its competitors. The Company spent $4.8 million, $4.9 million and $6.3 million on research and development during fiscal 1996, 1995 and 1994, respectively. Included in these figures were expenditures relating to the divested Prestone Business of $0.5 million and $2.1 million for fiscal 1995 and 1994, respectively. In addition to operating state-of-the-art equipment and facilities, each of the household, litter and automotive businesses has its own Research and Development Director and research staff to focus on its business opportunities. The Company continually strives for product innovations and improvements to improve market share and facilitate growth. In the household products business, the Company emphasizes improved product value, convenience and performance. During fiscal 1996, the Company introduced the new GLAD-LOCK Snack Bag and increased the distribution and selection of GLAD Trash Bags with Quick-Tie Flaps. The Company's selection of litter products was expanded during fiscal 1996 through the introduction of a new premium clay brand called EVER FRESH and the roll-out of innovative pet accessory products such as a Self-Scooping Litter Box. In the automotive business, the Company introduced six new products in fiscal 1996, including the well-received STP Complete Fuel System Cleaner. Through its subsidiary, Himolene Incorporated ('Himolene'), the Company is the leading producer in the United States of high molecular weight, high density polyethylene plastic trash can liners for use in the institutional and industrial markets. A&M Products, Inc. ('A&M'), a wholly owned subsidiary of the Company, manufactures and markets SCOOP AWAY and EVER CLEAN cat litter, the leading brands of clumping cat litter in the United States. During fiscal 1995, A&M acquired the cat litter and absorbent mineral assets of Excel Mineral Inc. and Excel International Inc. ('Excel'). The assets acquired from Excel included the JONNY CAT brand of pet care products. On March 19, 1996, the Company purchased substantially all of the assets and assumed the liabilities of Forest Technology Corporation ('Forest Technology'). Forest Technology manufactures and markets STARTERLOGG, the leading brand of wood starter fire products, and HEARTHSIDE firelogs. In April, 1995, the Company also acquired a 79% equity interest in Multifoil (Pty) Ltd., a South African manufacturer of consumer and commercial plastic products. First Brands operates in foreign countries through subsidiaries in Canada, South Africa, the United Kingdom, Spain, Hong Kong, China, Mexico, Puerto Rico, the Philippines and Australia and New Zealand as a result of the acquisition the NationalPak Business. See 'Recent Developments -- Recent Acquisition.' Through its Hong Kong subsidiary, First Brands holds a 51% interest in a joint venture in China which is engaged in the manufacture and sale of plastic wrap and bags and automotive products. During fiscal 1996 and 1997, the Company acquired an additional 14% of its South African subsidiary, 15 bringing the Company's total investment to 93% of that company's outstanding capital stock. In addition to its foreign operations, First Brands exports products to over 100 countries. The Company's products are sold directly to retailers and wholesalers and can be found in large mass merchandise stores and chain supermarkets as well as other retail outlets, including automotive supply stores, grocery stores and price clubs. While the Company's sales are not dependent upon a single customer, in fiscal 1996 its top 25 customers accounted for approximately 46% of total net sales, and net sales to its largest customer, the Wal-Mart and Sams Wholesale Club stores, accounted for approximately 12% of total net sales. Sales to food outlets, which in fiscal 1996 accounted for approximately 69% of domestic sales of plastic wrap and bags as well as cat litter, are handled through a network of brokers. Sales to mass merchandisers, which accounted for the approximate 31% balance of such sales, are handled by First Brands' direct sales force. Sales of automotive products are primarily handled through First Brands' direct sales force and sold to mass merchandisers. Sales by Himolene to the institutional and industrial markets are handled by that subsidiary's direct sales force as well as through distributors. Sales of the Company's products in Canada are generally handled in the same manner as domestic sales. Other international sales are handled primarily through distributors. The Company believes its manufacturing facilities employ state-of-the-art technology. The plastic wrap and bag manufacturing process employs advanced extrusion and conversion technologies. The Company's strategy is to continue to update and expand its manufacturing facilities with internally developed technologies (some of which are patented) and state-of-the-art technology acquired from third-party sources. Through improvements in existing process technologies and the acquisition of additional equipment, the Company continually strives to increase its production capacity and efficiency. Through the use of its high molecular weight, high density polyethylene technology, First Brands and Himolene produce stronger plastic bags with less raw material, resulting in a conservation of resources and a reduction of materials that eventually are sent to landfills. The Company currently purchases a substantial portion of the raw materials for its plastic wrap and bags under a long-term contract with Union Carbide. The contract with Union Carbide satisfies a substantial portion of the Company's expected polyethylene resin requirements through December 31, 1999. Union Carbide is the Company's largest single supplier and the Company believes that it is also Union Carbide's largest customer for polyethylene resin. The Company also has contracts for the purchase of certain raw materials, including polyethylene resin, from other suppliers, and makes purchases on the open market as well. The pricing provisions in the Company's present supply contracts are designed to be responsive to market conditions and the cost of relevant raw materials. For additional discussion of the Company's business, see 'Item 1 -- Business' of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1996. 16 DESCRIPTION OF EXCHANGE NOTES The Series B 7.25% Senior Notes due 2007 (the 'Exchange Notes') will be issued under an indenture (the 'Indenture'), dated as of March 1, 1997 by and between the Company and The Bank of New York, as Trustee (the 'Trustee'). The following summary of certain provisions of the Indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the Trust Indenture Act of 1939, as amended (the 'TIA'), and to all of the provisions of the Indenture, including the definitions of certain terms therein and those terms made a part of the Indenture by reference to the TIA as in effect on the date of the Indenture. A copy of the Indenture may be obtained from the Company or the Initial Purchasers. The definitions of certain capitalized terms used in the following summary are set forth below under 'Certain Definitions.' For purposes of this section, references to the 'Company' include only the Company and not its subsidiaries and references to the 'Senior Notes' include the Notes and the Exchange Notes. The Exchange Notes will be issued in fully registered form only, without coupons, in denominations of $1,000 and integral multiples thereof. The Senior Notes may be presented for registration or transfer and exchange at the offices of the Registrar, which initially will be the Trustee's corporate trust office. The Company may change any Paying Agent and Registrar without notice to holders of the Senior Notes (the 'Holders'). The Company will pay principal (and premium, if any) on the Senior Notes at the Trustee's corporate office in New York, New York. At the Company's option, interest may be paid at the Trustee's corporate trust office or by check mailed to the registered address of Holders. The form and terms of the Exchange Notes are the same as the form and terms of the Notes (which they replace) except that (i) the Exchange notes bear a Series B designation, (ii) the Exchange Notes have been registered under the Securities Act and, therefore, will not bear legends restricting the transfer thereof, (iii) the holders of Exchange Notes will not be entitled to certain rights under the Registration Rights Agreement, including the provisions providing for an increase in the interest rate on the Notes in certain circumstances relating to the timing of the Exchange Offer, which rights will terminate when the Exchange Offer is consummated and (iv) the Exchange Notes will be issued in minimum denominations of $1,000 compared to minimum denominations of $250,000 for the Notes. No service charge will be made for any registration of transfer, exchange or redemption of Exchange Notes, except in certain circumstances for any tax or other governmental charge that may be imposed in connection therewith. The Notes and the Exchange Notes shall be treated as one class for all purposes under the Indenture, including amendments, waivers and redemptions. PRINCIPAL, MATURITY AND INTEREST The Senior Notes will mature on March 1, 2007, will be limited to $150 million aggregate principal amount at any one time outstanding (including any Exchange Notes that may be issued from time to time in exchange for the Notes) and will be unsecured unsubordinated obligations of the Company. Each Senior Note will bear interest at the rate set forth on the cover page hereof from March 1, 1997 or from the most recent interest payment date to which interest has been paid, payable semiannually on March 1 and September 1 in each year, commencing September 1, 1997, to the person in whose name the Senior Note (or any predecessor Senior Note) is registered at the close of business on the February 15 or the August 15 next preceding such interest payment date. The Senior Notes will not be subject to redemption by the Company prior to maturity and will not be entitled to the benefit of any sinking fund or other mandatory redemption obligation prior to maturity. RANKING; SUBSIDIARIES The Senior Notes will be unsecured unsubordinated obligations of the Company and will rank on a parity in right of payment with all other unsecured and unsubordinated indebtedness of the Company for borrowed money. The Senior Notes are obligations exclusively of the Company. Some of the Company's consolidated assets are held by its subsidiaries. Accordingly, the cash flow of the Company and the consequent ability to service its debt, including the Senior Notes, are in part dependent upon the earnings of such subsidiaries. The Senior Notes will be effectively subordinated to all existing and 17 future indebtedness, trade payables, guarantees, lease obligations, letter of credit obligations and other obligations of the Company's subsidiaries. The Company's material domestic subsidiaries have guaranteed the Company's obligations under the Amended Credit Agreement. RESTRICTIVE COVENANTS Limitations on Secured Debt. The Indenture provides that the Company will not itself, and will not permit any Restricted Subsidiary (defined below) to, incur, issue, assume or guarantee any notes, bonds, debentures or other similar evidences of indebtedness for money borrowed (herein called 'debt'), secured by a pledge of, or mortgage or other lien on, any Principal Property (defined below), now owned or hereafter owned by the Company or any Restricted Subsidiary, or any shares of stock or debt of any Restricted Subsidiary (herein called 'liens'), without effectively providing that the Notes (together with, if the Company shall so determine, any other debt of the Company or such Restricted Subsidiary then existing or thereafter created which is not subordinate to the Notes) shall be secured equally and ratably with such secured debt. The foregoing restrictions do not apply, however, to (a) liens on any Principal Property acquired (whether by merger, consolidation, purchase, lease or otherwise), constructed or improved by the Company or any Restricted Subsidiary after the date of the Indenture which are created or assumed prior to, contemporaneously with, or within 270 days after, such acquisition, construction or improvement, to secure or provide for the payment of all or any part of the cost of such acquisition, construction or improvement; (b) liens on property, shares of capital stock or debt existing at the time of acquisition thereof, whether by merger, consolidation, purchase, lease or otherwise (including liens on property, shares of capital stock or debt of a corporation existing at the time such corporation becomes a Restricted Subsidiary); (c) liens in favor of, or which secure debt owing to, the Company or any Restricted Subsidiary; (d) liens in favor of the United States of America or any State thereof, or any department, agency, or instrumentality or political subdivision thereof, or political entity affiliated therewith, or in favor of any other country, or any political subdivision thereof, to secure partial, progress, advance or other payments or to secure any debt incurred for the purpose of financing all or any part of the purchase price or the cost of constructing or improving the property subject to such liens, including liens to secure pollution control, internal revenue or other types of bonds; (e) certain liens imposed by law, such as mechanics', workmen's, repairmen's, materialmen's, carriers', warehousemen's, vendors' or other similar liens arising in the ordinary course of business; (f) certain pledges or deposits under workmen's compensation or similar legislation or in certain other circumstances; (g) certain liens in connection with legal proceedings, including certain liens arising out of judgments or awards; (h) liens for certain taxes or assessments; (i) certain liens consisting of restrictions on the use of real property which do not interfere materially with the property's use; (j) liens existing on the first date on which the Senior Notes are authenticated; or (k) any extension, renewal or replacement (or successive extensions, removals or replacements) as a whole or in part, of any lien referred to in the foregoing clauses (a) to (j), inclusive. Notwithstanding the restrictions described above, the Company or any Restricted Subsidiary may incur, issue, assume or guarantee debt secured by liens without equally and ratably securing the Senior Notes, provided that at the time of such incurrence, issuance, assumption or guarantee, after giving effect thereto and to the retirement of any debt which is concurrently being retired, the aggregate amount of all outstanding debt secured by liens so incurred (other than liens permitted as described in clauses (a) through (k) above), together with the aggregate amount of Attributable Debt incurred pursuant to the second paragraph under the caption ' -- Limitations on Sale and Leaseback Transactions' below, does not at such time exceed the greater of (i) $100 million or (ii) 25% of Consolidated Net Tangible Assets (defined below) of the Company. Limitations on Sale and Leaseback Transactions. Sale and leaseback transactions by the Company or any Restricted Subsidiary involving a Principal Property are prohibited unless either (a) the Company or such Restricted Subsidiary would be entitled, without equally and ratably securing the Senior Notes, to incur debt secured by a lien on such property, pursuant to the provisions described in clauses (a) through (k) above under ' -- Limitations on Secured Debt'; or (b) the Company, within 270 days after such transaction, applies an amount not less than the greater of (i) the net proceeds of the sale of the Principal Property leased pursuant to such arrangement or (ii) the fair market value of the 18 Principal Property so leased to (x) the retirement of its Funded Debt (defined below) (subject to credits for certain voluntary retirements of Funded Debt) or (y) the purchase, construction or development of other property, facilities or equipment used or useful in the Company's or its Restricted Subsidiaries' business. This restriction will not apply to a sale and leaseback transaction between the Company and a Restricted Subsidiary or between Restricted Subsidiaries or involving the taking back of a lease for a period of less than three years. Notwithstanding the restrictions described above, the Company or any Restricted Subsidiary may enter into a sale and leaseback transaction, provided that at the time of such transaction, after giving effect thereto and to the retirement of any Funded Debt which is concurrently being retired, the aggregate amount of all Attributable Debt (defined below) in respect of sale and leaseback transactions existing at such time (other than sale and leaseback transactions permitted as described in the preceding paragraph), together with the aggregate amount of all outstanding debt incurred pursuant to the second paragraph under the caption ' -- Limitations on Secured Debt' above, does not at such time exceed the greater of (i) $100 million or (ii) 25% of Consolidated Net Tangible Assets of the Company. Certain Definitions. The term 'Attributable Debt' means, at any time, the total net amount of rent (discounted at the rate of interest implicit in the terms of the lease) required to be paid during the then remaining term of any lease. The term 'Consolidated Net Tangible Assets' means, at any time, the aggregate amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (a) all current liabilities (excluding any indebtedness for money borrowed having a maturity of less than 12 months from the date of the then most recent consolidated balance sheet of the Company publicly available but which by its terms is renewable or extendable beyond 12 months from such date at the option of the borrower) and (b) all goodwill, trade names, patents, unamortized debt discount and expense and any other like intangibles, all as set forth on the then most recent consolidated balance sheet of the Company publicly available and computed in accordance with generally accepted accounting principles. The term 'Funded Debt' means debt which by its terms matures at or is extendible or renewable at the option of the obligor to a date more than 12 months after the date of the creation of such debt. The term 'Principal Property' means any plant, office facility, warehouse, distribution center or equipment located within the United States of America (other than its territories or possessions) and owned by the Company or any subsidiary, the gross book value (without deduction of any depreciation reserves) of which on the date as of which the determination is being made exceeds 1% of Consolidated Net Tangible Assets except any such property which the Company's Board of Directors, in its good faith opinion, determines not to be of material importance to the business conducted by the Company and its subsidiaries, taken as a whole, as evidenced by a board resolution. The term 'Restricted Subsidiary' means any subsidiary of the Company which owns or leases a Principal Property. EVENTS OF DEFAULT The following events are defined in the Indenture as 'Events of Default' with respect to the Senior Notes: (1) failure to pay any interest on any Senior Note when due and payable, continued for 30 days; (2) failure to pay principal of or any premium on any Senior Note at its maturity; (3) failure to perform any other covenant of the Company in the Indenture, continued for 60 days after written notice as provided in the Indenture; (4) default under any indenture or instrument (other than the Indenture or any Senior Note) under which the Company or any Restricted Subsidiary shall have outstanding or shall have guaranteed the payment of at least $10 million aggregate principal amount of indebtedness for money borrowed which default (a) is caused by failure to pay the principal of or premium, if any, or interest on such indebtedness prior to the expiration of the grace period provided in such indebtedness on the date of such default or (b) results in acceleration of such indebtedness prior to its express maturity and such acceleration has not been annulled within 10 days after written notice as provided in the Indenture; and (5) certain events in bankruptcy, insolvency or reorganization involving the Company. 19 If an Event of Default occurs and is continuing, then either the Trustee or the Holders of at least 25% in aggregate principal amount of the Outstanding Notes by notice as provided in the Indenture may declare the principal amount of all of the Senior Notes to be due and payable immediately. At any time after a declaration of acceleration with respect to Senior Notes has been made, but before a judgment or decree for payment of money has been obtained by the Trustee, the Holders of a majority in aggregate principal amount of the Outstanding Notes may, under certain circumstances, rescind and annul such acceleration. The Indenture provides that, subject to the duty of the Trustee during default to act with the required standard of care, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the Holders, unless such Holders shall have offered to the Trustee reasonable indemnity. Subject to such provisions for the indemnification of the Trustee, the Holders of a majority in aggregate principal amount of the Outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Senior Notes. The Company is required to furnish to the Trustee annually a statement as to the performance by the Company of certain of its obligations under the Indenture and as to any default in such performance. MODIFICATION AND WAIVER Modifications and amendments of the Indenture may be made by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Notes; provided, however, that no such modification or amendment may, without the consent of the Holder of each Senior Note affected thereby, change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Senior Note, reduce the principal amount of, or premium or interest on, any Senior Note, change the place of payment where or coin or currency in which the principal of, or any premium or interest on, any Senior Note is payable, impair the right to institute suit for the enforcement of any payment on or with respect to any Senior Note, reduce the percentage in principal amount of outstanding Senior Notes, the consent of the Holders of which is required for modification or amendment of the Indenture or for waiver of compliance with certain provisions of the Indenture or for waiver of certain defaults or modify any of the above provisions. The Holders of not less than a majority in aggregate principal amount of the Outstanding Notes may, on behalf of the Holders of all Senior Notes, waive compliance by the Company with certain restrictive provisions of the Indenture. The Holders of not less than a majority in aggregate principal amount of the Outstanding Notes may, on behalf of the Holders of all Senior Notes, waive any past default under the Indenture, except a default (1) in the payment of principal of, or any premium or interest on, any Senior Note, or (2) in respect of a covenant or provision of the Indenture which cannot be modified or amended without the consent of the Holder of each Senior Note. CONSOLIDATION, MERGER AND SALE OF ASSETS The Company, without the consent of the Holders of any of the Outstanding Notes, may consolidate or merge with or into, or convey, transfer or lease its properties and assets substantially as an entirety to any Person which is a corporation, partnership or trust organized and validly existing under the laws of any domestic jurisdiction, provided that (1) any successor Person assumes by supplemental indenture the Company's obligations on the Senior Notes and under the Indenture, (2) after giving effect to the transaction no Event of Default, and no event which, after notice or lapse of time, would become an Event of Default, shall have occurred and be continuing under the Indenture, (3) as a result of such transaction the properties or assets of the Company are not subject to any encumbrance which would not be permitted under the Indenture, and (4) the Company shall have delivered an Officers' Certificate and an Opinion of Counsel, each stating that such transaction or supplemental indenture, complies with the Indenture. 20 DEFEASANCE PROVISIONS Defeasance and Discharge. The Indenture provides that the Company will be discharged from any and all obligations in respect of the Senior Notes (except for certain obligations to register the transfer or exchange of Senior Notes, to replace stolen, lost or mutilated Senior Notes, to maintain paying agencies and to hold moneys for payment in trust) upon the deposit with the Trustee, in trust, of money, U.S. Government Obligations (as defined) or a combination thereof, which through the payment of interest and principal thereof in accordance with their terms will provide money in an amount sufficient to pay any installment of principal of (and premium, if any) and interest on the Stated Maturity of such payments in accordance with the terms of the Indenture and the Senior Notes. Such discharge may only occur if there has been a change in applicable Federal law or the Company has received from, or there has been published by, the United States Internal Revenue Service a ruling to the effect that such a discharge will not be deemed, or result in, a taxable event with respect to holders of the Senior Notes. The term 'U.S. Government Obligations' is defined to mean direct obligations of the United States of America, backed by its full faith and credit. Defeasance of Certain Covenants and Events of Default. The Company may omit to comply with the restrictive covenants described in ' -- Restrictive Covenants -- Limitations on Secured Debt' and ' -- Restrictive Covenants -- Limitations on Sale and Leaseback Transactions' and the omission with respect thereof shall not be an Event of Default. To exercise such option, the Company must deposit with the Trustee money, U.S. Government Obligations or a combination thereof, which through the payment of interest and principal thereof in accordance with their terms will provide money in an amount sufficient to pay any installment of principal of (and premium, if any) and interest on the Stated Maturity of such payments in accordance with the terms of the Indenture and the Senior Notes. The Company will also be required to deliver to the Trustee an opinion of counsel to the effect that the deposit and related covenant defeasance will not cause the holders of the Senior Notes to recognize income, gain or loss for Federal income tax purposes. Defeasance and Events of Default. In the event the Company exercises its option to omit compliance with certain covenants of the Indenture and the Senior Notes are declared due and payable because of the occurrence of an Event of Default, the amount of money and U.S. Government Obligations on deposit with the Trustee will be sufficient to pay amounts due on the Senior Notes at the time of their Stated Maturity, but may not be sufficient to pay amounts due on the Senior Notes at the time of the acceleration resulting from such Event of Default. However, the Company shall remain liable for such payments. GOVERNING LAW The Indenture and the Senior Notes will be governed by and construed in accordance with the laws of the State of New York, without giving effect to the conflicts of law principles thereof. BOOK-ENTRY; DELIVERY AND FORM The certificates representing the Exchange Notes will be issued in fully registered form, without coupons. Except as described below, the Exchange Notes will be deposited with, or on behalf of, The Depository Trust Company ('DTC'), New York, New York, as depository (the 'Depository'), and registered in the name of Cede & Co., as DTC's nominee, in the form of one or more global Exchange Note certificates (the 'Global Certificate'). Global Certificates. Ownership of beneficial interests in a Global Certificate will be limited to persons who have accounts with DTC ('participants') or persons who hold interests through participants. Ownership of beneficial interests in the Global Certificates will be shown on, and the transfer of these ownership interests will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). So long as DTC, or its nominee, is the registered owner or holder of a Global Certificate, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the Exchange Notes represented by such Global Certificate for all purposes under the Indenture and the Notes. In addition, 21 no beneficial owner of an interest in a Global Certificate will be able to transfer that interest except in accordance with DTC's applicable procedures (in addition to those under the Indenture referred to herein). Payments on Global Certificates will be made to DTC, or its nominee, as the registered owner thereof. Neither the Company, the Trustee nor any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Certificates or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. The Company expects that DTC, or its nominee, upon receipt of any payment in respect of a Global Certificate representing any Exchange Notes held by it or its nominee, will immediately credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Certificate for such Exchange Notes as shown on the records of DTC or its nominee. The Company also expects that payments by participants to owners of beneficial interests in such Global Certificate held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such participants. Transfers between participants in DTC will be effected in the ordinary way in accordance with DTC rules. The laws of some states require that certain persons take physical delivery of securities in definitive form. Consequently, the ability to transfer beneficial interests in a Global Certificate to such persons may be limited. Because DTC can only act on behalf of participants, who in turn act on behalf of indirect participants (defined below) and certain banks, the ability of a person having a beneficial interest in a Global Certificate to pledge such interest to persons or entities that do not participate in the DTC system or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate of such interest. The Company believes that it is the policy of DTC that it will take any action permitted to be taken by a holder of Exchange Notes only at the direction of one or more participants to whose account interests in the Global Certificates are credited and only in respect of such portion of the aggregate principal amount of the Exchange Notes as to which such participant or participants has or have given such direction. The Indenture provides that if (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository, or if the Depository ceases to be eligible under the Indenture and a successor depository is not appointed by the Company within 90 days, (ii) the Company determines that the Exchange Notes shall no longer be represented by Global Certificates and executes and delivers to the Trustee a Company Order to such effect or (iii) an Event of Default or event which, with notice or lapse of time or both, would constitute an Event of Default with respect to the Exchange Notes shall have occurred and be continuing, the Global Certificates will be exchanged for Exchange Notes in definitive form of like tenor and of an equal aggregate principal amount, in authorized denominations. Such definitive Exchange Notes shall be registered in such name or names as the Depository shall instruct the Trustee. It is expected that such instructions may be based upon directions received by the Depository from participants with respect to ownership of beneficial interests in Global Certificates. DTC has advised the Company as follows: DTC is a limited-purpose trust company organized under the New York Banking Law, a 'banking organization' within the meaning of the New York Banking Law, a member of the Federal Reserve System, a 'clearing corporation' within the meaning of the New York Uniform Commercial Code and a 'clearing agency' registered pursuant to the provisions of section 17A of the Exchange Act. DTC holds securities that its participants deposit with DTC and facilitates the settlement among participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a direct 22 participant, either directly or indirectly ('indirect participants'). The rules applicable to DTC and its participants are on file with the Commission. Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Certificates among participants of DTC, it is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither the Company nor the Trustee will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations. In case any Exchange Note shall become mutilated, defaced, destroyed, lost or stolen, the Company will execute and, upon the Company's request, the Trustee will authenticate and deliver a new Exchange Note, of like tenor and equal principal amount in exchange and substitution for such Exchange Note (upon surrender and cancellation thereof) or in lieu of and substitution for such Exchange Note. In case such Exchange Note is destroyed, lost or stolen, the applicant for a substituted Exchange Note shall furnish to the Company and the Trustee such security or indemnity as may be required by them to hold each of them harmless, and, in every case of destruction, loss or theft of such Exchange Note, the applicant shall also furnish to the Company or the Trustee satisfactory evidence of the destruction, loss or theft of such Exchange Note and of the ownership thereof. Upon the issuance of any substituted Exchange Note, the Company may require the payment by the registered holder thereof of a sum sufficient to cover fees and expenses connected therewith. REGARDING THE TRUSTEE The Trust Indenture Act contains limitations on the rights of the Trustee, should it become a creditor of the Company, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claims, as security or otherwise. The Trustee is permitted to engage in other transactions with the Company and its subsidiaries from time to time, provided that if the Trustee acquires any conflicting interest it must eliminate such conflict upon the occurrence of an Event of Default, or else resign. The Trustee is a lender under the Amended Credit Agreement. 23 THE EXCHANGE OFFER PURPOSE AND EFFECT OF THE EXCHANGE OFFER The Notes were originally sold by the Company on March 10, 1997 to the Initial Purchasers pursuant to the Purchase Agreement. The Initial Purchasers subsequently resold the Notes to qualified institutional buyers in reliance on Rule 144A under the Securities Act and to a limited number of institutional accredited investors that agreed to comply with certain transfer restrictions and other conditions. As a condition to the Purchase Agreement, the Company entered into the Registration Rights Agreement with the Initial Purchasers (the 'Registration Rights Agreement') pursuant to which the Company has agreed, for the benefit of the holders of the Notes, at the Company's cost, to use its best efforts to (i) file the Exchange Offer Registration Statement within 45 calendar days after the date of the original issue of the Notes with the Commission with respect to the Exchange Offer for the Exchange Notes, and (ii) cause the Exchange Offer Registration Statement to be declared effective under the Securities Act within 120 calendar days after the date of original issuance of the Notes. Upon the Exchange Offer Registration Statement being declared effective, the Company will offer the Exchange Notes in exchange for surrender of the Notes. The Company will keep the Exchange Offer open for not less than 30 calendar days (or longer if required by applicable law) after the date on which notice of the Exchange Offer is mailed to the holders of the Notes. For each Note surrendered to the Company pursuant to the Exchange Offer, the holder of such Note will receive an Exchange Note having a principal amount equal to that of the surrendered Note. Interest on each Exchange Note will accrue from the date of its original issue. Based on existing interpretations of the Securities Act by the staff of the Commission set forth in several no-action letters to third parties, and subject to the immediately following sentence, the Company believes that the Exchange Notes issued pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by the holders thereof (other than holders who are broker-dealers) without further compliance with the registration and prospectus delivery provisions of the Securities Act. However, any purchaser of Notes who is an affiliate of the Company or who intends to participate in the Exchange Offer for the purpose of distributing the Exchange Notes, or any broker-dealer who purchased the Notes from the Company to resell pursuant to Rule 144A or any other available exemption under the Securities Act, (i) will not be able to rely on the interpretation of the Staff set forth in the above-mentioned no-action letters, (ii) will not be entitled to tender its Notes in the Exchange Offer and (iii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or transfer of the Notes unless such sale or transfer is made pursuant to an exemption from such requirements. The Company does not intend to seek its own no-action letter and there can be no assurance that the Staff would make a similar determination with respect to the Exchange Notes as it has in such no-action letters to third parties. Each holder of the Notes (other than certain specified holders) who wishes to exchange the Notes for Exchange Notes in the Exchange Offer will be required to represent that (i) it is not an affiliate of the Company, (ii) the Exchange Notes to be received by it were acquired in the ordinary course of its business and (iii) at the time of the Exchange Offer, it has no arrangement with any person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Notes. In addition, in connection with any resales of Exchange Notes, any broker-dealer (a 'Participating Broker-Dealer') who acquired the Notes for its own account as a result of market-making or other trading activities must deliver a prospectus meeting the requirements of the Securities Act. The staff of the Commission has taken the position in the above-mentioned no-action letters that Participating Broker-Dealers may fulfill their prospectus delivery requirements with respect to the Exchange Notes (other than a resale of an unsold allotment from the original sale of the Notes) with the prospectus contained in the Exchange Offer Registration Statement. Under the Registration Rights Agreement, the Company is required to allow Participating Broker-Dealers and other persons, if any, subject to similar prospectus delivery requirements to use the prospectus contained in the Exchange Offer Registration Statement in connection with the resale of such Exchange Notes. If, (i) because of any change in law or in currently prevailing interpretations of the Staff, the Company is not permitted to effect the Exchange Offer, (ii) the Exchange Offer is not consummated within 150 calendar days of the Issue Date, (iii) in certain circumstances, certain holders of unregistered 24 Exchange Notes so request, or (iv) in the case of any Holder that participates in the Exchange Offer, such holder does not receive Exchange Notes on the date of the exchange that may be sold without restriction under federal securities laws (other than due solely to the status of such holder as an affiliate of the Company within the meaning of the Securities Act), then in each case, the Company will (x) promptly deliver to the holders and the Trustee written notice thereof and (y) at its sole expense, (a) as promptly as practicable, file a shelf registration covering resales of the Notes or such Exchange Notes (the 'Shelf Registration Statement'), (b) use its best efforts to cause the Shelf Registration Statement to be declared effective under Securities Act and (c) use its best efforts to keep effective the Shelf Registration Statement until the earlier of two years after its effective date or such time as all of the applicable Notes or Exchange Notes have been sold thereunder. The Company will, in the event that a Shelf Registration Statement is filed, provide to each holder copies of the prospectus that is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement for the Notes has become effective and take certain other actions as are required to permit unrestricted resales of the Notes or Exchange Notes. A holder that sells Notes or Exchange Notes pursuant to the Shelf Registration Statement will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement that are applicable to such a holder (including certain indemnification rights and obligations). Each Note contains a legend to the effect that the holder of such Notes by its acceptance thereof, will be deemed to have agreed to be bound by the provisions of the Registration Rights Agreement. In that regard, each holder will be deemed to have agreed that, upon its receipt of notice from the Company of the occurrence of any event which makes any statement in the prospectus which is part of the Shelf Registration Statement (or, in the case of Participating Broker-Dealers, the prospectus which is a part of the Exchange Offer Registration Statement) untrue in any material respect or which requires the making of any changes in such prospectus in order to make the statements therein not misleading or of certain other events specified in the Registration Rights Agreement, such holder (or Participating Broker-Dealer, as the case may be) will suspend the sale of Notes or Exchange Notes, if applicable, pursuant to such prospectus until the Company has amended or supplemented such prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented prospectus to such holder (or Participating Broker-Dealer, as the case may be) or the Company has given notice that the sale of the Notes or Exchange Notes, if applicable, may be resumed, as the case may be. If the Company shall give such notice to suspend the sale of the Notes or Exchange Notes, if applicable, it shall extend the relevant period referred to above during which it is required to keep effective the Shelf Registration Statement (or the period during which Participating Broker-Dealers are entitled to use the prospectus included in the Exchange Offer Registration Statement in connection with the resale of Exchange Notes, as the case may be) by the number of days during the period from and including the date of the giving of such notice to and including the date when holders shall have received copies of the supplemented or amended prospectus necessary to permit resales of the Notes or Exchange Notes, if applicable, or to and including the date on which the Company has given notice that the sale of Notes or Exchange Notes, if applicable, may be resumed, as the case may be. If the Company fails to comply with the above provisions or if the Exchange Offer Registration Statement or the Shelf Registration Statement fails to become effective, then, as liquidated damages, additional interest (the 'Additional Interest') shall become payable in respect of the Notes as follows: (i) if (A) neither the Exchange Offer Registration Statement nor Shelf Registration Statement is filed with the Commission on or prior to the 45th calendar day after the Issue Date or (B) notwithstanding that the Company has consummated or will consummate an Exchange Offer, the Company is required to file a Shelf Registration Statement and such Shelf Registration Statement is not filed on or prior to the date required by the Registration Rights Agreement, then commencing on the day after either such required filing date, Additional Interest shall accrue on the principal amount of the Notes at a rate of 0.50% per annum; or 25 (ii) if (A) neither the Exchange Offer Registration Statement nor a Shelf Registration Statement is declared effective by the Commission on or prior to the 75th calendar day after the applicable required filing date or (B) notwithstanding that the Company has consummated or will consummate an Exchange Offer, the Company is required to file a Shelf Registration Statement and such Shelf Registration Statement is not declared effective by the Commission on or prior to the 75th calendar day after the date such Shelf Registration Statement was required to be filed, then, commencing on the 76th calendar day after the applicable required filing date, Additional Interest shall accrue on the principal amount of the Notes at a rate of 0.50% per annum; or (iii) if (A) the Company has not exchanged Exchange Notes for all Notes validly tendered in accordance with the terms of the Exchange Offer on or prior to the 150th calendar day after the Issue Date or (B) if applicable, the Shelf Registration Statement has been declared effective and such Shelf Registration Statement ceases to be effective at any time prior to the second anniversary of its effective date (other than after such time as all Notes have been disposed of thereunder), then Additional Interest shall accrue on the principal amount of the Notes at a rate of 0.50% per annum commencing on (x) the 151st calendar day after such Issue Date, in the case of (A) above, or (y) the day such Shelf Registration Statement ceases to be effective in the case of (B) above; provided, however, that the Additional Interest rate on the Notes may not exceed in the aggregate 0.50% per annum; provided further, however, that (1) upon the filing of the Exchange Offer Registration Statement or a Shelf Registration Statement (in the case of clause (i) above), (2) upon the effectiveness of the Exchange Offer Registration Statement or a Shelf Registration Statement (in the case of clause (ii) above), or (3) upon the exchange of Exchange Notes for all Notes tendered (in the case of clause (iii)(A) above), or upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective (in the case of clause (iii)(B) above), Additional Interest on the Notes as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to accrue. The summary herein of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, all the provisions of the Registration Rights Agreement, a copy of which is filed as an exhibit to the Exchange Offer Registration Statement of which this Prospectus is a part. In addition, the information set forth above concerning certain interpretations of and positions taken by the Commission is not intended to constitute legal advice, and perspective investors should consult their own legal advisors with respect to such matters. Following the consummation of the Exchange Offer, holders of the Notes who were eligible to participate in the Exchange Offer but who did not tender their Notes will not have any further registration rights and such Notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for such Notes could be adversely affected. TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions set forth in this Prospectus and in the Letter of Transmittal, the Company will accept any and all Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date. The Company will issue $1,000 principal amount of Exchange Notes in exchange for each $1,000 principal amount of outstanding Notes accepted in the Exchange Offer. Holders may tender some or all of their Notes pursuant to the Exchange Offer. However, Notes may be tendered only in integral multiples of $1,000. The form and terms of the Exchange Notes are the same as the form and terms of the Notes except that (i) the Exchange Notes bear a Series B designation and a different CUSIP Number from the Notes, (ii) the Exchange Notes have been registered under the Securities Act and hence will not bear legends restricting the transfer thereof, (iii) the holders of the Exchange Notes will not be entitled to certain rights under the Registration Rights Agreement, including the provisions providing for an increase in the interest rate on the Notes in certain circumstances relating to the timing of the Exchange Offer, all of which rights will terminate when the Exchange Offer is terminated and (iv) the Exchange Notes will be issued in minimum denominations of $1,000 compared to minimum denominations of $250,000 for the Notes. The Exchange Notes will evidence the same debt as the Notes and will be entitled to the benefits of the Indenture. 26 As of the date of this Prospectus, $150,000,000 aggregate principal amount of Notes were outstanding. The Company has fixed the close of business on , 1997 as the record date for the Exchange Offer for purposes of determining the persons to whom this Prospectus and the Letter of Transmittal will be mailed initially. Holders of Notes do not have any appraisal or dissenters' rights under the General Corporation Law of Delaware or the Indenture in connection with the Exchange Offer. The Company intends to conduct the Exchange Offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the Commission thereunder. The Company shall be deemed to have accepted validly tendered Notes when, as and if the Company has given oral or written notice thereof to the Exchange Agent. The Exchange Agent will act as agent for the tendering holders for the purpose of receiving the Exchange Notes from the Company. If any tendered Notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, the certificates for any such unaccepted Notes will be returned, without expense, to the tendering holder thereof as promptly as practicable after the Expiration Date. Holders who tender Notes in the Exchange Offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letter of Transmittal, transfer taxes with respect to the exchange of Notes pursuant to the Exchange Offer. The Company will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the Exchange Offer. See ' -- Fees and Expenses.' NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR THE COMPANY MAKES ANY RECOMMENDATION TO HOLDERS OF NOTES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR NOTES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF NOTES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF NOTES TO TENDER AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION AND REQUIREMENTS. EXPIRATION DATE; EXTENSIONS; AMENDMENTS The term 'Expiration Date' shall mean 5:00 p.m., New York City time, on , 1997, unless the Company, in its sole discretion, extends the Exchange Offer, in which case the term 'Expiration Date' shall mean the latest date and time to which the Exchange Offer is extended. Notwithstanding the foregoing, the Company will not extend the Expiration Date beyond August 7, 1997. In order to extend the Exchange Offer, the Company will notify the Exchange Agent of any extension by oral or written notice and will mail to the registered holders an announcement thereof, each prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. The Company reserves the right, in its sole discretion, (i) to delay accepting any Notes, to extend the Exchange Offer or to terminate the Exchange Offer if any of the conditions set forth below under ' -- Conditions' shall not have been satisfied, by giving oral or written notice of such delay, extension or termination to the Exchange Agent or (ii) to amend the terms of the Exchange Offer in any manner. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice thereof to the registered holders. INTEREST ON THE EXCHANGE NOTES The Exchange Notes will bear interest at a rate of 7.25% per annum from the most recent date to which interest has been paid or duly provided for on the Note surrendered in exchange for such 27 Exchange Note or, if no interest has been paid or duly provided for on such Note, from March 1, 1997. Interest on the Exchange Notes is payable semi-annually on each March 1, and September 1, commencing on the first such date following the original issuance date of the Exchange Notes. Holders of Notes whose Notes are accepted for exchange will not receive accrued interest on such Notes for any period from and after the last Interest Payment Date to which interest has been paid or duly provided for on such Notes prior to the original issue date of the Exchange Notes or, if no such interest has been paid or duly provided for, will not receive any accrued interest on such Notes, and will be deemed to have waived the right to receive any interest on such Notes accrued from and after such Interest Payment Date or, if no such interest has been paid or duly provided for, from and after March 1, 1997. PROCEDURES FOR TENDERING Only a holder of Notes may tender such Notes in the Exchange Offer. To tender in the Exchange Offer, a holder must complete, sign and date the Letter of Transmittal, or a facsimile thereof, have the signatures thereon guaranteed if required by the Letter of Transmittal, and mail or otherwise deliver such Letter of Transmittal or such facsimile, together with the Notes and any other required documents, to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. To be tendered effectively, the Notes, Letter of Transmittal and other required documents must be completed and received by the Exchange Agent at the address set forth below under 'Exchange Agent' prior to 5:00 p.m., New York City time, on the Expiration Date. Delivery of the Notes may be made by book-entry transfer in accordance with the procedures described below. Confirmation of such book-entry transfer must be received by the Exchange Agent prior to the Expiration Date. By executing the Letter of Transmittal, each holder will make to the Company the representations set forth above in the third paragraph under the heading ' -- Purpose and Effect of the Exchange Offer.' The tender by a holder and the acceptance thereof by the Company will constitute agreement between such holder and the Company in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal. THE METHOD OF DELIVERY OF NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS. Any beneficial owner whose Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct such registered holder to tender on such beneficial owner's behalf. See 'Instruction to Registered Holder and/or Book-Entry Transfer Facility Participant from Owner' included with the Letter of Transmittal. Signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an Eligible Institution (as defined below) unless the Notes tendered pursuant thereto are tendered (i) by a registered holder who has not completed the box entitled 'Special Registration Instructions' or 'Special Delivery Instructions' on the Letter of Transmittal or (ii) for the account of an Eligible Institution. In the event that signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantee must be by a member firm of the Medallion System (an 'Eligible Institution'). If the Letter of Transmittal is signed by a person other than the registered holder of any Notes listed therein, such Notes must be endorsed or accompanied by a properly completed bond power, 28 signed by such registered holder as such registered holder's name appears on such Notes with the signature thereon guaranteed by an Eligible Institution. If the Letter of Transmittal or any Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, offices of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and evidence satisfactory to the Company of their authority to so act must be submitted with the Letter of Transmittal. The Company understands that the Exchange Agent will make a request promptly after the date of this Prospectus to establish accounts with respect to the Notes at the book-entry transfer facility, The Depository Trust Company (the 'Book-Entry Transfer Facility'), for the purpose of facilitating the Exchange Offer, and subject to the establishment thereof, any financial institution that is a participant in the Book-Entry Transfer Facility's system may make book-entry delivery of Notes by causing such Book-Entry Transfer Facility to transfer such Notes into the Exchange Agent's account with respect to the Notes in accordance with the Book-Entry Transfer Facility's procedures for such transfer. Although delivery of the Notes may be effected through book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer Facility, an appropriate Letter of Transmittal properly completed and duly executed with any required signature guarantee and all other required documents must in each case be transmitted to and received or confirmed by the Exchange Agent at its address set forth below on or prior to the Expiration Date, or, if the guaranteed delivery procedures described below are complied with, within the time period provided under such procedures. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Exchange Agent. The Exchange Agent and DTC have confirmed that the Exchange Offer is eligible for the DTC Automated Tender Offer Program ('ATOP'). Accordingly, DTC participants may electronically transmit their acceptance of the Exchange Offer by causing DTC to transfer Notes in accordance with DTC's ATOP procedures for transfer. DTC will then send an Agent's Message to Exchange Agent. The term 'Agent's Message' means a message transmitted by DTC, received by Exchange Agent and forming part of the confirmation of a book-entry transfer, which states that DTC has received an express acknowledgment from the participant in DTC tendering Notes which are the subject of such book-entry confirmation, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Company may enforce such agreement against such participant. In the case of an Agent's Message relating to guaranteed delivery, the term means a message transmitted by DTC and received by Exchange Agent, which states that DTC has received an express acknowledgment from the participant in DTC tendering Notes that such participant has received and agrees to be bound by the Notice of Guaranteed Delivery. All questions as to the validity, form, eligibility (including time of receipt), acceptance of tendered Notes and withdrawal of tendered Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Notes not properly tendered or any Notes the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right in its sole discretion to waive any defects, irregularities or conditions of tender as to particular Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in the Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Notes must be cured within such time as the Company shall determine. Although the Company intends, to notify holders of defects or irregularities with respect to tenders of Notes, neither the Company, the Exchange Agent nor any other person shall incur any liability for failure to give such notification. Tenders of Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holders, unless otherwise provided in the Letter of Transmittal, as soon as practicable following the Expiration Date. 29 GUARANTEED DELIVERY PROCEDURES Holders who wish to tender their Notes and (i) whose Notes are not immediately available, (ii) who cannot deliver their Notes, the Letter of Transmittal or any other required documents to the Exchange Agent or (iii) who cannot complete the procedures for book-entry transfer, prior to the Expiration Date, may effect a tender if: (a) the tender is made through an Eligible Institution; (b) prior to the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the holder, the certificate number(s) of such Notes and the principal amount of Notes tendered, stating that the tender is being made thereby and guaranteeing that, within five New York Stock Exchange trading days after the Expiration Date, the Letter of Transmittal (or facsimile thereof) together with the certificate(s) representing the Notes (or a confirmation of book-entry transfer of such Notes into the Exchange Agent's account at the Book-Entry Transfer Facility), and any other documents required by the Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent; and (c) such properly completed and executed Letter of Transmittal (of facsimile thereof), as well as the certificate(s) representing all tendered Notes in proper form for transfer (or a confirmation of book-entry transfer of such Notes into the Exchange Agent's account at the Book-Entry Transfer Facility), and all other documents required by the Letter of Transmittal are received by the Exchange Agent upon five New York Stock Exchange trading days after the Expiration Date. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be sent to holders who wish to tender their Notes according to the guaranteed delivery procedures set forth above. WITHDRAWAL OF TENDERS Except as otherwise provided herein, tenders of Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. To withdraw a tender of Notes in the Exchange Offer, a telegram, telex, letter or facsimile transmission notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person having deposited the Notes to be withdrawn (the 'Depositor'), (ii) identify the Notes to be withdrawn (including the certificate number(s) and principal amount of such Notes, or, in the case of Notes transferred by book-entry transfer, the name and number of the account at the Book-Entry Transfer Facility to be credited), (iii) be signed by the holder in the same manner as the original signature on the Letter of Transmittal by which such Notes were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Trustee with respect to the Notes register the transfer of such Notes into the name of the person withdrawing the tender and (iv) specify the name in which any such Notes are to be registered, if different from that of the Depositor. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company, whose determination shall be final and binding on all parties. Any Notes so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer and no Exchange Notes will be issued with respect thereto unless the Notes so withdrawn are validly retendered. Any Notes which have been tendered but which are not accepted for exchange will be returned to the holder thereof without cost to such holder as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Notes may be retendered by following one of the procedures described above under ' -- Procedures for Tendering' at any time prior to the Expiration Date. 30 CONDITIONS Notwithstanding any other term of the Exchange Offer, the Company shall not be required to accept for exchange, or exchange Exchange Notes for, any Notes, and may terminate or amend the Exchange Offer as provided herein before the acceptance of such Notes, if: (a) any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the Exchange Offer which, in the sole judgment of the Company, might materially impair the ability of the Company to proceed with the Exchange Offer or any material adverse development has occurred in any existing action or proceeding with respect to the Company or any of its subsidiaries; or (b) any law, statute, rule, regulation or interpretation by the staff of the Commission is proposed, adopted or enacted, which, in the sole judgment of the Company, might materially impair the ability of the Company to proceed with the Exchange Offer or materially impair the contemplated benefits of the Exchange Offer to the Company; or (c) any governmental approval has not been obtained, which approval the Company shall, in its sole discretion, deem necessary for the consummation of the Exchange Offer as contemplated hereby. If the Company determines in its sole discretion that any of the conditions are not satisfied, the Company may (i) refuse to accept any Notes and return all tendered Notes to the tendering holders, (ii) extend the Exchange Offer and retain all Notes tendered prior to the expiration of the Exchange Offer, subject, however, to the rights of holders to withdraw such Notes (see ' -- Withdrawal of Tenders') or (iii) waive such unsatisfied conditions with respect to the Exchange Offer and accept all properly tendered Notes which have not been withdrawn. EXCHANGE AGENT The Bank of New York has been appointed as Exchange Agent for the Exchange Offer. Questions and requests for assistance, requests for additional copies of this Prospectus or of the Letter of Transmittal and requests for Notice of Guaranteed Delivery should be directed to the Exchange Agent addressed as follows: The Bank of New York 101 Barclay Street -- 7E New York, New York 10286 Attention: Reorganization Section Telephone: (212) 815-6333 Facsimile: (212) 571-3080 Delivery to an address other than as set forth above will not constitute a valid delivery. FEES AND EXPENSES The expenses of soliciting tenders will be borne by the Company. The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telecopy, telephone or in person by officers and regular employees of the Company and its affiliates. The Company has not retained any dealer-manager in connection with the Exchange Offer and will not make any payments to brokers, dealers, or others soliciting acceptances of the Exchange Offer. The Company, however, will pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection therewith. The cash expenses to be incurred in connection with the Exchange Offer will be paid by the Company. Such expenses include fees and expenses of the Exchange Agent and Trustee, accounting and legal fees and printing costs, among others. 31 ACCOUNTING TREATMENT The Exchange Notes will be recorded at the same carrying value as the Notes, which is face value, as reflected in the Company's accounting records on the date of exchange. Accordingly, no gain or loss for accounting purposes will be recognized by the Company. The expenses of the Exchange Offer will be expensed over the term of the Exchange Notes. CONSEQUENCES OF FAILURE TO EXCHANGE The Notes that are not exchanged for Exchange Notes pursuant to the Exchange Offer will remain restricted securities. Accordingly, such Notes may be resold only (i) to the Company (upon redemption thereof or otherwise), (ii) so long as the Notes are eligible for resale pursuant to Rule 144A, to a person inside the United States whom the seller reasonably believes is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act in a transaction meeting the requirements of Rule 144A, in accordance with Rule 144 under the Securities Act, or pursuant to another exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel reasonably acceptable to the Company), (iii) outside the United States to a foreign person in a transaction meeting the requirements of Rule 904 under the Securities Act, or (iv) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. To the extent that Notes are tendered and accepted in the Exchange Offer, the trading market for untendered and tendered but unaccepted Notes could be adversely affected. RESALE OF THE EXCHANGE NOTES With respect to resales of Exchange Notes, based on interpretations by the staff of the Commission set forth in no-action letters issued to third parties, the Company believes that a holder or other person who receives Exchange Notes, whether or not such person is the holder (other than a person that is an 'affiliate' of the Company within the meaning of Rule 405 under the Securities Act) who receives Exchange Notes in exchange for Notes in the ordinary course of business and who is not participating, does not intend to participate, and has no arrangement or understanding with person to participate, in the distribution of the Exchange Notes, will be allowed to resell the Exchange Notes to the public without further registration under the Securities Act and without delivering to the purchasers of the Exchange Notes a prospectus that satisfies the requirements of Section 10 of the Securities Act. However, if any holder acquires Exchange Notes in the Exchange Offer for the purpose of distributing or participating in a distribution of the Exchange Notes, such holder cannot rely on the position of the staff of the Commission enunciated in such no-action letters or any similar interpretive letters, and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction, unless an exemption from registration is otherwise available. Further, each Participating Broker-Dealer that receives Exchange Notes for its own account in exchange for Notes, where such Notes were acquired by such Participating Broker-Dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. As contemplated by these no-action letters and the Registration Rights Agreement, each holder accepting the Exchange Offer is required to represent to the Company in the Letter of Transmittal that (i) the Exchange Notes are to be acquired by the holder or the person receiving such Exchange Notes, whether or not such person is the holder, in the ordinary course of business, (ii) the holder or any such other person (other than a broker-dealer referred to in the next sentence) is not engaging and does not intend to engage, in the distribution of the Exchange Notes, (iii) the holder or any such other person has no arrangement or understanding with any person to participate in the distribution of the Exchange Notes, (iv) neither the holder nor any such other person is an 'affiliate' of the Company within the meaning of Rule 405 under the Securities Act, and (v) the holder or any such other person acknowledges that if such holder or other person participates in the Exchange Offer for the purpose of distributing the Exchange Notes it must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the Exchange Notes and cannot rely on those no-action letters. As indicated above, each Participating Broker-Dealer that receives an Exchange Note for its own account in exchange for Notes must acknowledge that it will deliver a 32 prospectus in connection with any resale of such Exchange Notes. For a description of the procedures for such resales by Participating Broker-Dealers, see 'Plan of Distribution.' CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following discussion is based upon current provisions of the Internal Revenue Code of 1986, as amended, applicable Treasury regulations, judicial authority and administrative rulings and practice. There can be no assurance that the Internal Revenue Service (the 'Service') will not take a contrary view, and no ruling from the Service has been or will be sought. Legislative, judicial or administrative changes or interpretations may be forthcoming that could alter or modify the statements and conditions set forth herein. Any such changes or interpretations may or may not be retroactive and could affect the tax consequences to holders. Certain holders (including insurance companies, tax-exempt organizations, financial institutions, broker-dealers, foreign corporations and persons who are not citizens or residents of the United States) may be subject to special rules not discussed below. The Company recommends that each holder consult such holder's own tax advisor as to the particular tax consequences of exchanging such holder's Notes for Exchange Notes, including the applicability and effect of any state, local or foreign tax laws. The exchange of the Notes for the Exchange Notes pursuant to the Exchange Offer should not be a taxable event to the holder and thus the holder should not recognize any taxable gain or loss as a result of the exchange. A holder's adjusted tax basis in the Exchange Notes will be the same as his adjusted tax basis in the Notes exchanged therefor, and his holding period for the Notes will be included in his holding period for the Exchange Notes. Although the exchange of the Notes for the Exchange Notes will not create additional 'market discount' or 'amortizable bond premium,' to the extent that a holder acquired the Notes at a market discount or with amortizable bond premium, such discount or premium would generally carry over to the Exchange Notes received in exchange for the Notes. Such holders should consult their tax advisors regarding the United States Federal income tax treatment of such market discount and amortizable bond premium. PLAN OF DISTRIBUTION Each Participating Broker-Dealer that receives Exchange Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with resales of Exchange Notes received in exchange for Notes where such Notes were acquired as a result of market-making activities or other trading activities. The Company has agreed that for a period of 180 days after the Expiration Date, it will make this Prospectus, as amended or supplemented, available to any Participating Broker-Dealer for use in connection with any such resale. In addition, until , 1997, all dealers effecting transactions in the Exchange Notes may be required to deliver a prospectus. The Company will not receive any proceeds from any sales of the Exchange Notes by Participating Broker-Dealers. Exchange Notes received by Participating Broker-Dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchaser or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such Participating Broker-Dealer and/or the purchasers of any such Exchange Notes. Any Participating Broker-Dealer that resells the Exchange Notes that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Notes may be deemed to be an 'underwriter' within the meaning of the Securities Act and any profit on any such resale of Exchange Notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act. 33 For a period of 180 days after the Expiration Date the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any Participating Broker-Dealer that requests such documents in the Letter of Transmittal. LEGAL MATTERS Certain legal matters in connection with the issuance of Exchange Notes offered hereby will be passed upon for the Company by Kirkland & Ellis, New York, New York. EXPERTS The consolidated financial statements and schedule of the Company as of June 30, 1996 and 1995, and for each of the years in the three-year period ended June 30, 1996, have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. With respect to the unaudited interim financial information for the periods ended September 30, 1996 and 1995, and December 31, 1996 and 1995, incorporated by reference herein, the independent certified public accountants have reported that they applied limited procedures in accordance with professional standards for a review of such information. However, their separate reports included in the Company's quarterly reports on Form 10-Q for the quarters ended September 30, 1996 and 1995, and December 31, 1996 and 1995, and incorporated by reference herein, state that they did not audit and they do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. The accountants are not subject to the liability provisions of section 11 of the Securities Act of 1933 for their report on the unaudited interim financial information because that report is not a 'report' or a 'part of the registration statement prepared or certified by the accountants' within the meaning of sections 7 and 11 of the Act. 34 _____________________________ _____________________________ NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER CONTAINED HEREIN OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES, NOR DOES IT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF. ------------------------ TABLE OF CONTENTS
PAGE ---- Available Information....................................................................................................... 3 Incorporation of Certain Documents by Reference............................................................................. 3 Prospectus Summary.......................................................................................................... 5 Recent Developments......................................................................................................... 11 Use of Proceeds............................................................................................................. 11 Capitalization.............................................................................................................. 12 Selected Consolidated Financial Data........................................................................................ 13 Business.................................................................................................................... 15 Description of Exchange Notes............................................................................................... 17 The Exchange Offer.......................................................................................................... 24 Certain Federal Income Tax Consequences..................................................................................... 33 Plan of Distribution........................................................................................................ 33 Legal Matters............................................................................................................... 34 Experts..................................................................................................................... 34
------------------------ UNTIL , 1997 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE EXCHANGE NOTES OFFERED HEREBY, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. FIRST BRANDS CORPORATION OFFER TO EXCHANGE ITS SERIES B 7.25% SENIOR NOTES DUE 2007 FOR ANY AND ALL OF ITS OUTSTANDING 7.25% SENIOR NOTES DUE 2007 ------------------------- PROSPECTUS ------------------------- , 1997 _____________________________ _____________________________ PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Company is incorporated under the laws of the State of Delaware. Section 145 of the General Corporation Law of the State of Delaware, inter alia, ('Section 145') provides that a Delaware corporation may indemnify any persons who were, are or are threatened to be made, parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer, director, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation's best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his conduct was illegal. A Delaware corporation may indemnify any persons who are, were or are threatened to be made, a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation's best interests, provided that no indemnification is permitted without judicial approval if the officer, director, employee or agent is adjudged to be liable to the corporation. Where an officer, director, employee or agent is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or director has actually and reasonably incurred. The Company's Certificate of Incorporation provides for the indemnification of directors and officers of the Company to the fullest extent permitted by the General Corporation Law of the State of Delaware, as it currently exists or may hereafter be amended. Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him and incurred by him in any such capacity, arising out of his status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145. The Company maintains and has in effect insurance policies covering all of the Company's directors and officers against certain liabilities for actions taken in such capacities, including liabilities under the Securities Act of 1933. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) Exhibits. 3.1 -- Restated Certificate of Incorporation of the Company, as amended by consent of the stockholders of the Company as of April 11, 1991. Incorporated by reference to Exhibit 3.1 to Form 10-K filed by the Registrant on September 25, 1992. 3.2 -- By-Laws of the Company, as amended by consent of the stockholders of the Company as of April 11, 1991, and as further amended by the Board of Directors on January 20, 1995, pursuant to Article Fifth, Section G of the Restated Certificate of Incorporation. Incorporated by reference to Form 10-K filed by the Registrant on September 26, 1995. 4.1 -- Indenture dated as of March 1, 1997 between First Brands Corporation and The Bank of New York, relating to the 7.25% Senior Notes due 2007.
II-1 4.2 -- Purchase Agreement dated as of March 5, 1997 among First Brands Corporation, Bear Stearns & Co. Inc., TD Securities (USA) Inc., Credit Lyonnais Securities (USA) Inc. and First Union Capital Markets Corp. --relating to the 7.25% Senior Notes due 2007. 4.3 -- Registration Rights Agreement dated as of March 5, 1997 among First Brands Corporation, Bear Stearns & Co. Inc., TD Securities (USA) Inc., Credit Lyonnais Securities (USA) Inc. and First Union Capital Markets Corp.-- relating to the 7.25% Senior Notes due 2007. 5.1 -- Opinion and consent of Kirkland & Ellis. 10.1 -- Amended and Restated Credit Agreement dated as of February 28, 1997, among the Company, The Chase Manhattan Bank, as Agent, and The Several Lenders Parties thereto. 10.2(a) -- Leasing Agreement dated as of November 16, 1993, between the Company and Citicorp North America, Inc., relating to its Glad Plastic Bag and Wrap facility in Cartersville, Georgia. Incorporated by reference to Exhibit 10.2 to Form 10-Q for Quarter ended December 31, 1993, filed by the Registrant on February 14, 1994. 10.2(b) -- Rider No. 1 thereto, dated as of December 1, 1993. Incorporated by reference to Exhibit 10.2(b) to Form 10-K filed by the Registrant on September 12, 1994. 10.2(c) -- Rider No. 2 thereto, dated as of May 11, 1994. Incorporated by reference to Exhibit 10.2(c) to Form 10-K filed by the Registrant on September 12, 1994. 10.3(a) -- Equipment Lease Agreement, dated as of October 15, 1993, between the Company and PNC Leasing Corp, relating to its Glad Plastic Bag and Wrap facility in Rogers, Arkansas. Incorporated by reference to Exhibit 10.6 to Form 10-Q for Quarter ended December 31, 1993, filed by the Registrant on February 14, 1994. 10.3(b) -- First Amendment thereto, dated as of October 15, 1995. Incorporated by reference to Exhibit 10.3(b) to Form 10-Q for Quarter ended December 31, 1995, filed by Registrant on February 12, 1996. 10.4(a) -- Agreement dated December 23, 1994 between the Company and Pitney Bowes Credit Corporation ('Pitney Bowes') to the exercise by the Company of an Early Purchase Option with regard to certain equipment at the Company's GLAD Plastic Wrap and Bag facility at Rogers, Arkansas. (This equipment was subject to the Equipment Lease Agreement dated as of December 23, 1991 between Pitney Bowes and the Company; the Equipment Lease Agreement was previously filed as and incorporated by reference to Exhibit 10.9 to Form S-1 filed by the Registrant on February 7, 1992.) Incorporated by reference to Exhibit 10.5(a) to Form 10-Q for Quarter ended December 31, 1994, filed by the Registrant on February 14, 1995. 10.4(b) -- Bill of Sale by Pitney Bowes, dated December 23, 1994, for certain equipment repurchased by the Company pursuant to the Company's exercise of the Early Purchase Option provided for in the Equipment Lease Agreement. Incorporated by reference to Exhibit 10.5(b) to Form 10-Q for Quarter ended December 31, 1994, filed by the Registrant on February 14, 1995. 10.5 -- Letters dated May 4, 1995 and June 23, 1995 of the Company and NationsBanc Leasing Corporation ('NationsBanc') -- successor in interest to NationsBanc Leasing Corporation of Georgia), respectively, relating to the exercise by the Company of an Early Purchase Option with regard to certain equipment at the Company's GLAD plastic wrap and bag facility in Amherst, Virginia. (This equipment was subject to the Equipment Lease Agreement dated as of June 25, 1992, between NationsBanc and the Company; the Equipment Lease Agreement was previously filed as and incorporated by reference to Exhibit 10.14 to Form 10-K filed by the Registrant on September 25, 1992.) Incorporated by reference to Form 10-K filed by the Registrant on September 26, 1995. 10.6 -- Purchase Agreement, dated as of June 25, 1993, between the Company and NationsBanc Leasing Corporation, relating to the sale and leaseback of certain equipment at the Company's GLAD plastic wrap and bag facility in Amherst, Virginia. Incorporated by reference to Exhibit 10.16 to Form 10-K filed by the Registrant on September 28, 1993. 10.7 -- Equipment Lease Agreement, dated as of June 25, 1993, between the Company and NationsBanc Leasing Corporation, relating to the sale and leaseback of certain equipment at the Company's GLAD plastic wrap and bag facility in Amherst, Virginia. Incorporated by reference to Exhibit 10.17 to Form 10-K filed by the Registrant on September 29, 1993. 10.8(a) -- Sales Agreement dated as of January 1, 1989 between Union Carbide Chemicals & Plastics Company, Inc. (formerly Union Carbide Corporation) and the Company, (confidential treatment has been granted with respect to certain portions of the Sales Agreement, such portions were omitted and filed separately with the Securities and Exchange Commission). Incorporated by reference to Exhibit 10.22(b) to Form 10-K filed by the Registrant on September 19, 1989.
II-2 10.8(b) -- Sales Agreement, dated March 1, 1991, between Union Carbide Chemicals and Plastics Company Inc. and the Company (confidential treatment has been granted with respect to certain portions of the Sales Agreement; such portions were omitted and filed separately with the Securities and Exchange Commission). Incorporated by reference to Post-Effective Amendment No. 1 to Form S-1 filed by the Registrant on June 12, 1991. 10.9 -- Agreement, dated December 29, 1994, between the Company and Metropolitan Life Insurance Company ('Metropolitan'), for the purchase of the 13.25% Subordinated Note due 2001 (the 'Note'), outstanding in the principle amount of $45,000,000, by the Company on January 4, 1995. (This Note was issued pursuant to the Note Purchase Agreement ('Purchase Agreement') dated as of July 1, 1986, between the Company and Metropolitan and the Subordinated Notes Registration Rights Agreement ('Rights Agreement') dated as of July 1, 1986; the Purchase Agreement was previously filed as and incorporated by reference to Exhibit 4(ii) to Form S-1 filed by the Registrant on July 15, 1986; the Rights Agreement was previously filed as and incorporated by reference to Exhibit 10(xii) to Form S-1 filed by the Registrant on July 15, 1986.) Incorporated by reference to Exhibit 10.11(b) to Form 10-Q for Quarter ended December 31, 1994, filed by the Registrant on February 14, 1995. 10.10 -- Underwriting Agreement among the Company, certain stockholders and The First Boston Corporation, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated as representatives of the Several Underwriters, relating to 8,400,000 shares of Common Stock of the Company. Incorporated by reference to Exhibit 1.1 to Form S-1 filed by the Registrant on March 5, 1991. 10.11 -- Subscription Agreement among the Company, certain stockholders and Credit Suisse First Boston Limited and Merrill Lynch International Limited as Managers, relating to 2,110,000 shares of Common Stock of the Company. Incorporated by reference to Exhibit 1.2 to Form S-1 filed by the Registrant on March 5, 1991. 10.12(a) -- Pooling and Servicing Agreement, dated as of May 21, 1992, between the Company, First Brands Funding Inc. and Chemical Bank, as Trustee, relating to First Brands Funding Master Trust trade receivables-backed financing. Incorporated by reference to Exhibit 10.20(a) to Form 10-K filed by the Registrant on September 25, 1992. 10.12(b) -- Variable Funding Supplement thereto, dated as of May 21, 1992. Incorporated by reference to Exhibit 10.20(b) to Form 10-K filed by the Registrant on September 25, 1992. 10.12(c) -- Amendment No. 1 thereto, dated as of December 22, 1993. Incorporated by reference to Exhibit 10.18(c) to Form 10-Q for Quarter ended December 31, 1993, filed by the Registrant on February 14, 1994. 10.13 -- Asset Purchase and Sale Agreement, dated as of May 21, 1992, between the Company and First Brands Funding Inc., relating to First Brands Funding Master Trust trade receivables-backed financing. Incorporated by reference to Exhibit 10.21 to Form 10-K filed by the Registration on September 25, 1992. 10.14 -- Asset Purchase and Sale Agreement dated as of May 21, 1992, between the Company and Himolene Incorporated, relating to First Brands Funding Master Trust trade receivables-backed financing. Incorporated by reference to Exhibit 10.22 to Form 10-K filed by the Registrant on September 25, 1992. 10.15 -- Asset Purchase and Sale Agreement dated as of June 27, 1996, between the Company and A & M Products Inc., relating to First Brands Funding Master Trust trade receivables-backed financing. Incorporated by reference to Exhibit 10.16 to Form 10-K filed by the Registrant on September 27, 1996. 10.16 -- Second Amended and Restated Letter of Credit Reimbursement Agreement, April 22, 1996, between the Company, Credit Suisse, First Brands Funding Inc. and First Brands Funding Master Trust, amending and restating the Amended and Restated Letter of Credit Reimbursement Agreement, dated as of December 2, 1993, relating to First Brands Funding Master Trust trade receivables-backed financing. Incorporated by reference to Exhibit 10.17 to Form 10-K filed by the Registrant on September 27, 1996. 10.17 -- Amended Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.34 to Form 10-K filed by the Registrant on September 12, 1990. 10.18 -- First Brands Corporation 1994 Performance Stock Option and Incentive Plan. Incorporated by reference to Exhibit A to the Definitive Proxy Statement for Annual Meeting of Stockholders, filed by the Registrant on September 28, 1993. 10.19 -- First Brands Corporation Non-Employee Directors Stock Option Plan Incorporated by reference to Exhibit A to the Definitive Proxy Statement for Annual Meeting of Stockholders filed by the Registrant on September 26, 1995.
II-3 10.20 -- First Brands Corporation Annual Incentive Plan. Incorporated by reference to Exhibit A to the Definitive Proxy Statement for Annual Meeting of Stockholders, filed by the Registrant on September 26, 1995. 10.21 -- Rights Agreement, dated as of March 22, 1996, between the Company and Continental Stock Transfer & Trust Company, as Rights Agent, including the form of Certificate of Designation, Preferences and Rights of Junior Participating Preferred Stock, Series A, attached thereto as Exhibit A, the form of Rights Certificate attached thereto as Exhibit B and the Summary of Rights attached thereto as Exhibit C. Incorporated by reference to Exhibit 1.1 to Form 8-A filed by the Registrant on March 25, 1996. 10.22(a) -- Purchase and Sale Agreement dated as of June 30, 1994, between the Registrant and Vestar/Freeze Holdings Corporation and Vestar Equity Partners, L.P., relating to the sale by the Registrant of its businesses of developing, manufacturing, marketing, selling and/or distributing automotive antifreeze, cooling system tools, cooling system chemicals for cleaning and sealing leaks in automotive cooling systems, ice fighting products, PRESTONE brake fluid products, PRESTONE power steering fluid products, and PRESTONE transmission stop-leak fluid products, and antifreeze recycling business. Incorporated by reference to Exhibit 2.1 to Form 8-K filed by the Registrant on September 12, 1994. 10.22(b) -- Amendment No. 1 thereto, dated as of August 25, 1994. Incorporated by reference to Exhibit 2.2 to Form 8-K filed by the Registrant on September 12, 1994. 12.1 -- Statement of Computation of Ratios. 21.1 -- Subsidiaries of First Brands Corporation. 23.1 -- Consent of KPMG Peat Marwick LLP. 23.2 -- Consent of Kirkland & Ellis (included in Exhibit 5.1). 24.1 -- Powers of Attorney (included in signature page). 25.1 -- Statement of Eligibility of Trustee on Form T-1. 99.1 -- Form of Letter of Transmittal. 99.2 -- Form of Notice of Guaranteed Delivery. 99.3 -- Form of Tender Instructions.
ITEM 22. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement; (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof; (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering; and (4) If the registrant is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by Rule 3-19 of the chapter at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information II-4 required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3. (1) The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. (2) The registrant undertakes that every prospectus: (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the 'Securities Act') may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described under Item 20 or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Danbury, State of Connecticut, on April 18, 1997. FIRST BRANDS CORPORATION By /S/ JOSEPH B. FUREY .................................. NAME: JOSEPH B. FUREY TITLE: VICE PRESIDENT AND CONTROLLER POWER OF ATTORNEY The undersigned hereby severally constitute and appoint Joseph B. Furey attorney-in-fact for the undersigned in any and all capacities, with the power of substitution, to sign any amendment to this Registration Statement, and to file the same with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities and on the dates indicated:
SIGNATURE TITLE DATE - ------------------------------------------ -------------------------------------------- ------------------- /s/ WILLIAM V. STEPHENSON Chairman, President, Chief Executive Officer April 18, 1997 ......................................... and Director WILLIAM V. STEPHENSON /s/ DONALD A. DESANTIS Senior Vice President and Chief Financial April 18, 1997 ......................................... Officer DONALD A. DESANTIS /s/ ALFRED E. DUDLEY Director April 18, 1997 ......................................... ALFRED E. DUDLEY /s/ JAMES R. MAHER Director April 18, 1997 ......................................... JAMES R. MAHER /s/ JAMES R. MCMANUS Director April 18, 1997 ......................................... JAMES R. MCMANUS Director April 18, 1997 ......................................... DWIGHT C. MINTON /s/ DENIS NEWMAN Director April 18, 1997 ......................................... DENIS NEWMAN /s/ THOMAS H. ROWLAND Director April 18, 1997 ......................................... THOMAS H. ROWLAND /s/ ERVIN R. SHAMES Director April 18, 1997 ......................................... ERVIN R. SHAMES /s/ ROBERT G. TOBIN Director April 18, 1997 ......................................... ROBERT G. TOBIN
II-6 EX-4 2 EXHIBIT 4.1 EXECUTION COPY ================================================================================ FIRST BRANDS CORPORATION TO THE BANK OF NEW YORK, TRUSTEE ------------- INDENTURE DATED AS OF MARCH 1, 1997 ------------- ================================================================================
TABLE OF CONTENTS PAGE ---- RECITALS OF THE COMPANY....................................................................... 1 ARTICLE I Definitions and Other Provisions of General Application SECTION 1.01. Definitions....................................................... 1 SECTION 1.02. Compliance Certificates and Opinions.............................. 10 SECTION 1.03. Form of Documents Delivered to Trustee...................................................... 11 SECTION 1.04. Acts of Holders................................................... 11 SECTION 1.05. Notices, Etc., to Trustee and Company............................. 12 SECTION 1.06. Notice to Holders; Waiver......................................... 13 SECTION 1.07. Compliance with Trust Indenture Act............................... 13 SECTION 1.08. Effect of Headings and Table of Contents..................................................... 14 SECTION 1.09. Successors and Assigns............................................ 14 SECTION 1.10. Separability Clause............................................... 14 SECTION 1.11. Benefits of Indenture............................................. 14 SECTION 1.12. Governing Law..................................................... 14 SECTION 1.13. Legal Holidays.................................................... 14 ARTICLE II Security Forms SECTION 2.01. Forms Generally................................................... 15 SECTION 2.02. Form of Face of Security.......................................... 15 SECTION 2.03. Form of Reverse of Security....................................... 20 SECTION 2.04. Form of Trustee's Certificate of Authentication............................................... 31 SECTION 2.05. Form of Legend for Global Securities.............................. 31 SECTION 2.06 Form of Legend on Restricted Securities................................................... 32
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PAGE ---- ARTICLE III The Securities SECTION 3.01. Title and Terms................................................... 32 SECTION 3.02. Denominations..................................................... 34 SECTION 3.03. Execution, Authentication, Delivery and Dating................................................... 34 SECTION 3.04. Temporary Securities.............................................. 37 SECTION 3.05. Registration, Registration of Transfer and Exchange........................................ 37 SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities................................................... 40 SECTION 3.07. Payment of Interest; Interest Rights Preserved.................................................... 41 SECTION 3.08. Persons Deemed Owners............................................. 43 SECTION 3.09. Cancelation....................................................... 44 SECTION 3.10. Computation of Interest........................................... 44 SECTION 3.11. CUSIP Number...................................................... 44 SECTION 3.12. Book-Entry Provisions for Global Security..................................................... 44 SECTION 3.13. Special Transfer Provisions....................................... 46 SECTION 3.14. Maintenance of Office or Agency................................... 51 SECTION 3.15. Money for Securities Payments to Be Held in Trust..................................................... 52 ARTICLE IV Satisfaction and Discharge SECTION 4.01. Satisfaction and Discharge of Indenture.................................................... 53 SECTION 4.02. Application of Trust Money........................................ 54 SECTION 4.03. Defeasance and Discharge of Indenture............................. 55 SECTION 4.04 Defeasance of Certain Obligations................................. 57 ARTICLE V Remedies SECTION 5.01. Events of Default................................................. 58 SECTION 5.02. Acceleration of Maturity; Rescission and Annulment................................................ 60 SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee................................... 61 SECTION 5.04. Trustee May File Proofs of Claim.................................. 62
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PAGE ---- SECTION 5.05. Trustee May Enforce Claims Without Possession of Securities..................................... 63 SECTION 5.06. Application of Money Collected.................................... 64 SECTION 5.07. Limitation on Suits............................................... 64 SECTION 5.08. Unconditional Right of Holders to Receive Principal, Premium and Interest..................................................... 65 SECTION 5.09. Restoration of Rights and Remedies................................ 65 SECTION 5.10. Rights and Remedies Cumulative.................................... 65 SECTION 5.11. Delay or Omission Not Waiver...................................... 66 SECTION 5.12. Control by Holders................................................ 66 SECTION 5.13. Waiver of Past Defaults........................................... 66 SECTION 5.14. Undertaking for Costs............................................. 67 SECTION 5.15. Waiver of Stay or Extension Laws.................................. 67 ARTICLE VI The Trustee SECTION 6.01. Certain Duties and Responsibilities............................... 68 SECTION 6.02. Notice of Default................................................. 68 SECTION 6.03. Certain Rights of Trustee......................................... 68 SECTION 6.04. Not Responsible for Recitals or Issuance of Securities....................................... 70 SECTION 6.05. May Hold Securities............................................... 71 SECTION 6.06. Money Held in Trust............................................... 71 SECTION 6.07. Compensation and Reimbursement.................................... 71 SECTION 6.08. Disqualification; Conflicting Interests.................................................... 72 SECTION 6.09. Corporate Trustee Required; Eligibility.................................................. 72 SECTION 6.10. Resignation and Removal; Appointment of Successor................................................. 73 SECTION 6.11. Acceptance of Appointment by Successor.................................................... 75 SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business....................................... 75 SECTION 6.13. Preferential Collection of Claims Against Company............................................... 76
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PAGE ---- ARTICLE VII Holders' Lists and Reports by Trustee and Company SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders......................................... 76 SECTION 7.02. Preservation of Information; Communication to Holders..................................... 77 SECTION 7.03. Reports by Trustee................................................ 77 SECTION 7.04. Reports by Company................................................ 77 ARTICLE VIII Consolidation, Merger, Conveyance, Transfer of Lease SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms............................................. 79 SECTION 8.02. Successor Substituted............................................. 80 ARTICLE IX Supplemental Indentures SECTION 9.01. Supplemental Indentures Without Consent of Holders........................................... 80 SECTION 9.02. Supplemental Indentures with Consent of Holders................................................... 81 SECTION 9.03. Execution of Supplemental Indentures.............................. 82 SECTION 9.04. Effect of Supplemental Indentures................................. 83 SECTION 9.05. Conformity with Trust Indenture Act 83 SECTION 9.06. Reference in Securities to Supplement Indentures................................................... 83 SECTION 9.07. Notice of Supplemental Indentures................................. 83 SECTION 9.08. Waiver of Certain Covenants....................................... 83 SECTION 9.09. Payments for Consent.............................................. 84 ARTICLE TEN Covenants SECTION 10.01. Payment of Principal, Premium and Interest..................................................... 84 SECTION 10.02. Restriction on Secured Debt....................................... 84
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PAGE ---- SECTION 10.03. Restriction on Sale of Leaseback Transactions................................................. 88 SECTION 10.04. Compliance Certificate............................................ 89
EXECUTION COPY INDENTURE, dated as of March 1, 1997 between FIRST BRANDS CORPORATION, a Delaware corporation (herein called the "Company"), having its principal office at 83 Wooster Heights Road, Danbury, Connecticut 06813-1911, and THE BANK OF NEW YORK, as Trustee (herein called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the creation of an issue of 7.25% Senior Notes due 2007 (the "Series A Securities") and 7.25% Senior Notes due 2007 (the "Series B Securities" and together with the Series A Securities, the "Securities"), of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture. For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities as follows: ARTICLE I Definitions and Other Provisions of General Application SECTION 1.01. Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular. (b) All other terms used herein which are defined in the Trust Indenture Act or by Commission Rule under the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; the following TIA terms used in this Indenture have the following meanings: "indenture securities" means the Securities; 2 "indenture security holder" means a Holder; "indenture to be qualified" means this Indenture; and "indenture trustee" or "institutional trustee" means the Trustee. (c) Any gender used in this Indenture shall be deemed and construed to include correlative words of the masculine, feminine or neuter gender. (d) All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States of America at the date of such computation. (e) All references in this instrument to designated "Articles", "Sections" and other subdivisions are to the designated Articles, Sections and other subdivisions of this instruments; and the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. (f) "or" is not exclusive. (g) "including" means including without limitation. Certain terms, used principally in Article VI, are defined in that Article. "Act", when used with respect to any Holder, has the meaning specified in Section 1.04. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control", when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or 3 otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Attributable Debt" in respect of any Sale and Leaseback Transaction means, at the date of determination, the present value (discounted at the rate of interest implicit in the terms of the lease) of the obligation of the lessee for net rental payments during the remaining term of the lease (including any period for which such lease has been extended or may, at the option of the lessor, be extended). "Net rental payments" under any lease for any period means the sum of the rental and other payments required to be paid in such period by the lessee thereunder, excluding any amounts required to be paid by such lessee (whether or not designated as rental or additional rental) on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges required to be paid by such lessee thereunder or any amounts required to be paid by such lessee thereunder contingent upon the amount of sales, maintenance and repairs, insurance, taxes, assessments, water rates or similar charges. "Board of Directors" means either the board of directors of the Company or any duly authorized committee appointed by that board. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification. Where any provision of this Indenture refers to action to be taken pursuant to a Board Resolution such action may be taken by any committee, officer or employee of the Company authorized to take such action by a Board Resolution. "Business Day", means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions generally in New York City are authorized or obligated by law or executive order to close. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. 4 "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor corporation. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman of the Board, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee. "Consolidated Net Tangible Assets" means, at the date of determination, the aggregate amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (a) all current liabilities (excluding any indebtedness for money borrowed having a maturity of less than 12 months from the date of the then most recent consolidated balance sheet of the Company publicly available but which by its terms is renewable or extendable beyond 12 months from such date at the option of the borrower) and (b) all goodwill, trade names, patents, unamortized debt discount and expense and any other like intangibles, all as set forth on the then most recent consolidated balance sheet of the Company publicly available and computed in accordance with generally accepted accounting principles. "Corporate Trust Office" means the office of the Trustee in The City of New York, New York at which at any particular time its corporate trust business shall be principally administered, which office at the date hereof is located at 101 Barclay Street, Floor 21 West, New York, New York 10286; and such other office as the Trustee may designate from time to time. "Corporation" includes corporations, associations, companies, joint stock companies and business trusts. "Debt" has the meaning specified in Section 10.02. "Defaulted Interest" has the meaning specified in Section 3.07. "Depositary" means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, The Depository Trust 5 Company or another Person designated as Depositary by the Company, which must be a clearing agency registered under the Exchange Act. "Event of Default" has the meaning specified in Section 5.01. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exchange Offer" means any exchange pursuant to the Registration Rights Agreement of Series A Securities for a like principal amount of Series B Securities. "Funded Debt" means Debt which by its terms matures at or is extendible or renewable at the option of the obligor to a date more than 12 months after the date of the creation of such Debt. "Global Security" has the meaning specified in Section 3.01. "Holder" means a Person in whose name a Security is registered in the Security Register. "Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof. "Initial Purchasers" means Bear, Stearns & Co. Inc., TD Securities (USA) Inc., Credit Lyonnais Securities (USA) Inc. and First Union Capital Markets Corp. "Institutional Accredited Investor" means an institution that is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act. "interest", when used with respect to any Security, means the amount of all interest accruing on such Security, including all additional interest payable on the Securities pursuant to the Registration Rights Agreement. "interest payment date", when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security. 6 "Issue Date" means the original date of issuance of the Securities. "Lien" or "Liens" has the meaning specified in Section 10.02. "Maturity", when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "Non-U.S. Person" means a person who is not a U.S. person, as defined in Regulation S. "Officers' Certificate" means a certificate signed by the Chairman of the Board, the President, a Vice President or an Assistant Vice President of the Company, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee. "Offshore Global Security" has the meaning set forth in Section 3.01. "Offshore Physical Security" has the meaning set forth in Section 3.01. "Opinion of Counsel" means a written opinion of counsel, who may (except as otherwise expressly provided in this Indenture) be an employee of or counsel for the Company. Such counsel should be acceptable to the Trustee, whose acceptance shall not be unreasonably withheld. "Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (i) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancelation; (ii) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as 7 its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (iii) Securities which have been paid pursuant to Section 3.06 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder or whether a quorum is present at a meeting of Holders of Securities, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor. "Paying Agent" means any Person authorized by the Company to pay the principal of (and premium, if any) and/or interest on any Securities on behalf of the Company. "Person" means any individual, Corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Physical Security", has the meaning set forth in Section 3.01. 8 "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security, and, for the purposes of this definition, any Security authenticated and delivered under Section 3.06 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Principal Property" means any plant, office facility, warehouse, distribution center or equipment located within the United States of America (other than its territories or possessions) and owned by the Company or any Subsidiary, the gross book value (without deduction of any depreciation reserves) of which on the date as of which the determination is being made exceeds 1% of Consolidated Net Tangible Assets of the Company, except any such property which the Board of Directors, in its good faith opinion, determines is not of material importance to the business conducted by the Company and its Subsidiaries, taken as a whole, as evidenced by a Board Resolution. "Private Exchange Securities" has the meaning specified in the Registration Rights Agreement. "Private Placement Legend" means the legend initially set forth on the Securities in the form set forth in Section 2.02(a). "Purchase Agreement" means the Purchase Agreement dated March 5, 1997 among the Company and the Initial Purchasers. "Qualified Institutional Buyer" or "QIB" shall have the meaning specified in Rule 144A under the Securities Act. "Registration Rights Agreement" means the Registration Rights Agreement dated as of March 5, 1997 among the Company and the Initial Purchasers, as the same may be amended or supplemented or otherwise modified from time to time in accordance with the terms thereof. "Regulation S" means Regulation S under the Securities Act. 9 "Responsible Officer", when used with respect to the Trustee, means any officer of the Trustee assigned by it to administer its corporate trust matters. "Restricted Subsidiary" means any Subsidiary of the Company which owns or leases Principal Property. "Rule 144A" means Rule 144A under the Securities Act. "Securities" has the meaning stated in the first recital of this Indenture that are authenticated and delivered under this Indenture. For all purposes of this Indenture, the term "Securities" shall include any Series B Securities to be issued and exchanged for any Series A Securities pursuant to the Registration Rights Agreement and for purposes of this Indenture, all Series A Securities and Series B Securities shall vote together as one series of Securities under this Indenture. "Securities Act" means the Securities Act of 1933. "Security Register" and "Security Registrar" have the respective meanings specified in Section 3.05. "Stated Maturity", when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable. "Subsidiary" means any Corporation or other business entity of which securities (excluding securities entitled to vote for directors only by reason of the happening of a contingency) entitled to elect at least a majority of the Corporation's directors shall at the time be owned, directly or indirectly, by the Company, or one or more Subsidiaries, or by the Company and one or more Subsidiaries. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include such successor Person. "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in force at the date as of which 10 this instrument was executed, except as provided in Section 9.05. "U.S. Global Security" has the meaning set forth in Section 3.01. "U.S. Government Obligations" means direct obligations of the United States of America, backed by its full faith and credit. "U.S. Physical Security" has the meaning set forth in Section 3.01. "Vice President", when used with respect to the Company, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president". SECTION 1.02. Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of each such individual, he has made such examination or 11 investigation as is necessary to enable him to express an informed opinion whether such covenant or condition has been complied with; and (d) a statement whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 1.03. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of any officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which such officer's certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. SECTION 1.04. Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such 12 Holders in person or by an agent duly appointed in writing, and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than such signer's individual capacity, such certificate or affidavit shall also constitute sufficient proof of such signer's authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (c) The ownership of Securities shall be proved by the Security Register. (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. SECTION 1.05. Notices, Etc., to Trustee and Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with: 13 (a) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with a Responsible Officer of the Trustee at its Corporate Trust Office, Attention: Corporate Trust Administration; or (b) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument (Attention: [ ]) or at any other address previously furnished in writing to the Trustee by the Company. SECTION 1.06. Notices to Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at such Holder's address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given my mail, neither the failure to mail such notice, or any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made by or with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. SECTION 1.07. Compliance with Trust Indenture Act. Upon the issuance of the Series B Securities, if any, or the effectiveness of the Shelf Registration Statement (as defined in Registration Rights Agreement), this Indenture 14 will be subject to the provisions of the Trust Indenture Act of 1939 that are required to be part of this Indenture and shall, to the extent applicable, be governed by such provisions. SECTION 1.08. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 1.09. Successors and Assigns. All covenants and agreements in this Indenture by the Company or the Trustee shall bind its successors and assigns, whether so expressed or not. SECTION 1.10. Separability Clause. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto, any Paying Agent, any Securities Registrar, and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 1.12. Governing Law. This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the conflict of law provisions thereof. SECTION 1.13. Legal Holidays. Except as may be otherwise specified with respect to any particular Securities, in any case where any interest payment date or Stated Maturity of any Security shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest or principal (and premium, if any) need not be made on such Date, but may be made on the next succeeding Business Day with the same force and effect as if made on the interest payment date or at the Stated Maturity, provided that no interest shall accrue for the period from and after such interest payment date or Stated Maturity, as the case may be. 15 ARTICLE II Security Forms SECTION 2.01. Forms Generally. The Securities shall be in substantially the forms set forth, or referenced, in this Article, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities. The Trustee's certificates of authentication shall be in substantially the form set forth in this Article with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture. The definitive Securities may be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange on which the Securities may be listed, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities. SECTION 2.02. Form of Face of Security. (a) The form of the face of the Series A Securities shall be substantially as follows: THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(A) 16 TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. --------------------------- Each Holder hereof, by its acceptance hereof, will be deemed to have agreed to be bound by the provisions of the Registration Rights Agreement. --------------------------- FIRST BRANDS CORPORATION 7.25% SENIOR NOTES DUE 2007 SERIES A CUSIP No. ___________ No. __________ $__________ FIRST BRANDS CORPORATION, a Delaware corporation (the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to ___________ or registered assigns, the principal sum of _____________ United States dollars on March 1, 2007, at the office or agency of the Company referred to below, and to pay interest thereon on March 1 and September 1, of each year, commencing on September 1, 1997, accruing from March 1, 1997 or from the most recent date to which interest has been paid or duly provided for, at the rate of 7.25% per annum, until the principal hereof is paid or duly provided for. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. 17 The interest so payable, and punctually paid or duly provided for, on any interest payment date will, as provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the February 15 or August 15, whether or not a Business Day, as the case may be, next preceding such interest payment date. Any such interest not so punctually paid, or duly provided for, and interest on such defaulted interest at the then applicable interest rate borne by the Securities, to the extent lawful, shall forthwith cease to be payable to the Holder on such record date, and may be paid to the person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice of which shall be given to Holders of Securities not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of the Depositary or any clearing agency through which clearing of trades of the Securities regularly takes place or any securities exchange on which the Securities may be listed, and upon such notice as may be required by the Depositary or any such clearing agency or exchange, all as more fully provided in such Indenture. In addition, the Company may be obligated to pay additional interest pursuant to certain provisions of the Registration Rights Agreement. If this Security is a Global Security, all payments in respect of this Security will be made to the Depositary or its nominee in immediately available funds in accordance with customary procedures established from time to time by the Depositary. If this Security is a Global Security and a Restricted Security, reference is made to the restriction on ownership of beneficial interests herein contained in the Indenture. If this Security is not a Global Security, payment of the principal of, premium, if any, and interest on this Security will be made at the office or agency of the Company maintained for that purpose in The City of New York, or at such other office or agency of the Company as may be maintained for such purpose, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the address of the person entitled thereto as such address shall appear on the Security Register. 18 Reference is hereby made to the further provisions of this Security set forth on the reverse hereof. Unless the certificate of authentication hereon has been duly executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, First Brands Corporation has caused this instrument to be duly executed. Dated: FIRST BRANDS CORPORATION By: ------------------ Name: Title: By: ------------------ Name: Title: (b) The form of the face of the Series B Securities shall be substantially as follows: FIRST BRANDS CORPORATION --------------------------- 7.25% SENIOR NOTES DUE 2007 SERIES B CUSIP No. ___________ No. __________ $__________ FIRST BRANDS CORPORATION, a Delaware corporation (the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to ______________ or registered assigns, the principal sum of ________________ United States Dollars on March 1, 2007, at the office or agency of the Company referred to below, and to pay interest thereon on March 1 and September 1, of each year, commencing on September 1, 1997, accruing from March 1, 1997 or from 19 the most recent date to which interest has been paid or duly provided for, at the rate of 7.25% per annum, until the principal hereof is paid or duly provided for. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The interest so payable, and punctually paid or duly provided for, on any interest payment date will, as provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on February 15 and August 15, whether or not a Business Day, as the case may be, next preceding such interest payment date. Any such interest not so punctually paid, or duly provided for, and interest on such defaulted interest at the then applicable interest rate borne by the Securities, to the extent lawful, shall forthwith cease to be payable to the Holder on such record date, and may be paid to the person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice of which shall be given to Holders of Securities not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of the Depositary or any clearing agency through which clearing of trades of the Securities regularly takes place or any securities exchange on which the Securities may be listed, and upon such notice as may be required by the Depositary or any such clearing agency or exchange, all as more fully provided in such Indenture. If this Security is a Global Security, all payments in respect of this Security will be made to the Depositary or its nominee in immediately available funds in accordance with customary procedures established from time to time by the Depositary. If this Security is not a Global Security, payment of the principal of, premium, if any, and interest on this Security will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan in The City of New York, or at such other office or agency of the Company as may be maintained for such purpose, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts provided, however, that payment of interest may be made at the option of the Company by check mailed to the address of the person 20 entitled thereto as such address shall appear on the Security Register. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof. Unless the certificate of authentication hereon has been duly executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, First Brands Corporation has caused this instrument to be duly executed. Dated: FIRST BRANDS CORPORATION By: ------------------ Name: Title: By: ------------------ Name: Title: SECTION 2.03. Form of Reverse of Security. (a) The form of the reverse of the Series A Securities shall be substantially as follows: This Security is one of a duly authorized issue of Securities of the Company designated as its 7.25% Senior Notes due 2007 (the "Series A Securities"), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $150,000,000, which may be issued under an indenture (herein called the "Indenture") dated as of March 1, 1997 between the Company and The Bank of New York, as trustee (herein called the "Trustee," which term includes any successor Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Company, the Trustee and the 21 Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. All capitalized terms used in this Series A Security which are defined in the Indenture and not otherwise defined herein shall have the meanings assigned to them in the Indenture. No reference herein to the Indenture and no provisions of this Series A Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Security at the times, place, and rate, and in the coin or currency, herein prescribed. Pursuant to the Registration Rights Agreement, the Company will be obligated to consummate an exchange offer pursuant to which the Holder of this Security shall have the right to exchange this Security for 7.25% Senior Notes due 2007, Series B, of the Company (the "Series B Securities"), which have been registered (or, with respect to certain Series B Securities, which will be entitled to such registration, as set forth in the Registration Rights Agreement) under the Securities Act, in like principal amount and having identical terms as the Series A Securities. The Holders of Series A Securities shall be entitled to receive certain additional interest payments in the event such exchange offer is not consummated and upon certain other conditions, all pursuant to and in accordance with the terms of the Registration Rights Agreement. The Series A Securities and the Series B Securities are together referred to herein as the "Securities". The Indenture contains provisions (which provisions apply to this Series A Security) for defeasance at any time of (a) the entire indebtedness of the Company on this Series A Security and (b) certain restrictive covenants and related Events of Default, in each case upon compliance by the Company with certain conditions set forth therein. The Company and the Trustee may, without the consent of the Holders of any Outstanding Securities, amend, waive or supplement the Indenture or the Securities for certain specified purposes, including curing ambiguities, defects or inconsistencies, maintaining the qualification of the Indenture under the Trust Indenture Act of 1939, as amended, and making any change that does not adversely 22 affect the rights of any Holder. Other amendments and modifications of the Indenture or the Securities may be made by the Company and the Trustee with the consent of the Holders of not less than a majority of the aggregate principal amount of the Outstanding Securities, subject to certain exceptions requiring the consent of the Holders of the particular Securities to be affected. Any such consent or waiver by or on behalf of the Holder of this Series A Security shall be conclusive and binding upon such Holder and upon all future Holders of this Series A Security and of any Series A Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Series A Security. All Series A Securities and Series B Securities shall vote together as one series of Securities under the Indenture. The Series A Securities are issuable only in registered form without coupons in denominations of $100,000 and any integral multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Series A Securities are exchangeable for a like aggregate principal amount of Series A Securities of a different authorized denomination, as requested by the Holder surrendering the same. If this Series A Security is in certificated form, then as provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Series A Security is registrable on the Security Register of the company, upon surrender of this Series A Security for registration of transfer at the office or agency of the Company maintained for such purpose in The City of New York or at such other office or agency of the Company as may be maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Series A Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. If this Series A Security is a Restricted Security in certificated form, then as provided in the Indenture and subject to certain limitations therein set forth, the 23 Holder, provided it is a Qualified Institutional Buyer, may exchange this Series A Security for a book-entry security by instructing the Trustee to arrange for such Series A Security to be represented by a beneficial interest in a Global Security in accordance with the customary procedures of the Depositary. If this Series A Security is a Global Security, it is exchangeable for Series A Securities in certificated form if (i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary or the Depositary ceases to be a "clearing agency" registered under the Exchange Act and, in each case, a successor Depositary is not appointed by the Company within 90 days of such notice or such cessation, as the case may be, (ii) the Company executes and delivers to the Trustee a Company Order that such Global Security shall be exchangeable or (iii) there shall have occurred and be continuing an Event of Default with respect to any Securities represented by the Global Security. Upon the occurrence in respect of any Global Security of any one or more of the conditions specified in clauses (i), (ii) and (iii) of the preceding sentence such Global Security may be exchanged for Securities not bearing the legend specified in Section 2.05 and registered in the names of such Persons as may be specified by the Depositary (including Persons other than the Depositary). In addition, in accordance with the provisions of the Indenture and subject to certain limitations therein set forth, a beneficial owner of a beneficial interest in a Global Security may request a Series A Security in certificated form, in exchange in whole or in part, as the case may be, for such beneficial owner's interest in the Global Security. In any such instance, an owner of a beneficial interest in a Global Security will be entitled to physical delivery in certificated form of Series A Securities in authorized denominations equal in principal amount to such beneficial interest and to have such Series A Securities registered in its name. No service charge shall be made for any registration of transfer or exchange or redemption of Series A Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. At any time when the Company is not subject to Section 12 or 15(d) of the Securities Exchange Act of 1934, upon the request of a Holder of a Series A Security, the 24 Company will promptly furnish or cause to be furnished such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto) to such Holder or to a prospective purchase of such Series A Security designated by such Holder, as the case may be, in order to permit compliance by such Holder with Rule 144A under the Securities Act. Prior to and at the time of due presentment of this Series A Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the person in whose name this Series A Security is registered as the owner hereof for all purposes, whether or not this Series A Security shall be overdue, and neither the Company, the trustee nor any agent shall be affected by notice to the contrary. This Security shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the conflict of law provisions thereof. ASSIGNMENT FORM If you the holder want to assign this Security, fill in the form below and have your signature guaranteed: I or we assign and transfer this Security to ________________________________________________________________________________ (Insert assignee's social security or tax ID number)____________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Print or type assignee's name, address and zip code) and irrevocably appoint_____________________________________________________________ ________________________________________________________________________________ agent to transfer this Security on the books of the Company. The agent may substitute another to act for such agent. In connection with any transfer of this Security occurring prior to the date which is the earlier of (i) the date of the declaration by the Commission of the effectiveness of a registration statement under the 25 Securities Act of 1933 (the "Securities Act"), covering resales of this Security (which effectiveness shall not have been suspended or terminated at the date of the transfer) and (ii) the later of March 10, 1999, or the date two years (or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder) after the later of the date of issuance appearing on the face of this Security and the last date on which the Company or an affiliate of the Company was the owner of this Security (or any Predecessor Security), the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with the transfer and that: [Check one] [ ] (a) this Security is being transferred in compliance with the exemption from registration under the Securities Act provided by Rule 144A thereunder. or [ ] (b) this Security is being transferred other than in accordance with (a) above and documents, including a transferee certificate substantially in the form attached hereto, are being furnished which comply with the conditions of transfer set forth in this Security and the Indenture. If none of the foregoing boxes is checked and, in the case of (b) above, if the appropriate document is not attached or otherwise furnished to the Trustee, the Trustee or Registrar shall not be obligated to register this Security in the name of any person other than the Holder hereof unless and until the conditions to any such transfer or registration set forth herein and in Section 3.13 of the Indenture shall have been satisfied. ________________________________________________________________________________ 26 Date:________________________________ Your signature:_____________________ (Sign exactly as your name appears on the other side of this Security) By:__________________ Notice: To be executed by an executive officer Signature Guarantee: ________________ TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A (including the information specified in Rule 144A(d)(4)) or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated:__________________________ By:_______________ Notice: To be executed by an executive officer [The Transferee Certificates (Exhibits A and B to the Indenture) will be attached to the Series A Security]. (b) The form of the reverse of the Series B Securities shall be substantially as follows: This Security is one of a duly authorized issue of Securities of the Company designated as its 7.25% Senior Notes due 2007, Series B (the "Series B Securities"), limited (except as otherwise provided in the Indenture 27 referred to below) in aggregate principal amount to $150,000,000 which may be issued under an indenture (herein called the "Indenture") dated as of March 1, 1997, between the Company and The Bank of New York, as trustee (herein called the "Trustee," which term includes any successor Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties, obligations and immunities thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. All capitalized terms used in this Series B Security which are defined in the Indenture and not otherwise defined herein shall have the meanings assigned to them in the Indenture. No reference herein to the Indenture and no provision of this Series B Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Security at the time, place, and rate, and in the coin or currency, herein prescribed. The Series B Securities were issued pursuant to an exchange offer pursuant to which 7.25% Senior Notes due 2007 of the Company (the "Series A Securities"), in like principal amount and having substantially identical terms as the Series B Securities, were exchanged for the Series B Securities. The Series A Securities and the Series B Securities are together referred to herein as the "Securities". The Indenture contains provisions (which provisions apply to this Series B Security) for defeasance at any time of (a) the entire indebtedness of the Company on this Series B Security and (b) certain restrictive covenants and related Events of Default, in each case upon compliance by the Company with certain conditions set forth therein. The Company and the Trustee may, without the consent of the Holders of any Outstanding Securities, amend, waive or supplement the Indenture or the Securities for certain specified purposes, including, among other things, curing ambiguities, defects or inconsistencies, maintaining the qualification of the Indenture under the Trust Indenture 28 Act of 1939, as amended, and making any change that does not adversely affect the rights of any Holder. Other amendments and modifications of the Indenture or the Securities may be made by the Company and the Trustee with the consent of the Holders of not less than a majority of the aggregate principal amount of the Outstanding Securities, subject to certain exceptions requiring the consent of the Holders of the particular Securities to be affected. Any such consent or waiver by or on behalf of the Holder of this Series B Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Series B Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Series B Security. All Series A Securities and Series B Securities shall vote together as one series of Securities under the Indenture. The Series B Securities are issuable only in registered form without coupons in denominations of $1,000 and any amount in excess thereof which is an integral multiple of $1,000. As provided in the Indenture and subject to certain limitations therein set forth, the Series B Securities are exchangeable for a like aggregate principal amount of Series B Securities of a different authorized denomination, as requested by the Holder surrendering the same. If this Series B Security is in certificated form, then as provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Series B Security is registrable on the Security Register of the Company, upon surrender of this Series B Security for registration of transfer at the office or agency of the Company maintained for such purpose in The City of New York or at such other office or agency of the Company as may be maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof of his attorney duly authorized in writing, and thereupon one or more new Series B Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 29 If this Series B Security is a Global Security, it is exchangeable for Series B Securities in certificated form if (i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary or the Depositary ceases to be a "clearing agency" registered under the Exchange Act and, in each case, a successor Depositary is not appointed by the Company within 90 days of such notice or such cessation, as the case may be, (ii) the Company executes and delivers to the Trustee a Company Order that such Global Security shall be exchangeable or (iii) there shall have occurred and be continuing an Event of Default with respect to any Securities represented by the Global Security. Upon the occurrence in respect of any Global Security of any one or more of the conditions specified in clauses (i), (ii) and (iii) of the preceding sentence such Global Security may be exchanged for Securities not bearing the legend specified in Section 2.05 and registered in the names of such Persons as may be specified by the Depositary (including Persons other than the Depositary). In addition, in accordance with the provisions of the Indenture and subject to certain limitations therein set forth, a beneficial owner of a beneficial interest in a Global Security may request a Series B Security in certificated form, in exchange in whole or in part, as the case may be, for such beneficial owner's interest in the Global Security. In any such instance, an owner of a beneficial interest in a Global Security will be entitled to physical delivery in certificated form of Series B Securities in authorized denominations equal in principal amount of such beneficial interest and to have such Series B Securities registered in its name. No service charge shall be made for any registration of transfer or exchange or redemption of Series B Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to and at the time of due presentment of this Series B Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the person in whose name this Series B Security is registered as the owner hereof for all purposes, whether or not this Series B Security shall be overdue, and neither the Company, the Trustee nor any agent shall be affected by notice to the contrary. 30 This Security shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the conflict of law provisions thereof. ASSIGNMENT FORM If you the holder want to assign this Security, fill in the form below and have your signature guaranteed: I or we assign and transfer this Security to ________________________________________________________________________________ (Insert assignee's social security or tax ID number)____________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Print or type assignee's name, address and zip code) and irrevocably appoint ________________________________________________________________________________ agent to transfer this Security on the books of the Company. The agent may substitute another to act for such agent. ________________________________________________________________________________ Date:___________________________ Your signature:_________________________ (Sign exactly as your name appears on the other side of this Security) By:_____________________ Notice: To be executed by an executive officer Signature Guarantee: ________________ 31 SECTION 2.04. Form of Trustee's Certificate of Authentication. This is one of the Securities of the series designated therein and issued pursuant to the within-mentioned Indenture. TRUSTEE'S CERTIFICATE OF AUTHENTICATION Dated: THE BANK OF NEW YORK, by _________________________ Authorized Signatory SECTION 2.05. Form of Legend for Global Securities. Any Global Security authenticated and delivered hereunder shall, in addition to the provisions contained in Sections 2.02 and 2.03, bear a legend in substantially the following form or such similar form as may be required by the Depositary: "THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York), a New York corporation, to the issuer or to its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as requested by an authorized representative of The Depository Trust Company (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of The 32 Depository Trust Company), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein." SECTION 2.06. Form of Legend on Restricted Securities. During the period beginning on the later of the Issue Date and the last date on which the Company or any Affiliate of the Company was the owner of a Series A Security (or any Predecessor Security) and ending on the date two years (or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder) from any such date (or such longer period as may be required under the Securities Act or applicable state securities laws in the opinion of counsel for the Company), any Series A Security issued or owned during the period set forth above, as the case may be, and any Security issued upon registration of transfer of, or in exchange for, or in lieu of, such Series A Security, shall be deemed a "Restricted Security" and shall be subject to the restrictions on transfer provided in the legend set forth on the face of the form of Series A Security in Section 2.02(a); provided, however, that the term "Restricted Security" shall not include (a) any Series A Security which is issued upon transfer of, or in exchange for, any Security which is not a Restricted Security or (b) any Series A Security as to which such restrictions on transfer have been terminated in accordance with Section 3.05, (c) any Series B Security issued pursuant to the Registered Exchange Offer or (d) any Series B Security covered by a Shelf Registration Statement (as defined in the Registration Rights Agreement). Any Restricted Security shall bear the legend set forth on the face of the Security pursuant to Section 2.02(a). ARTICLE III The Securities SECTION 3.01. Title and Terms. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is limited to $150,000,000 aggregate principal amount of Series A Securities and Series B Securities, except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 3.03, 3.04, 3.05, 3.06 or 9.06. 33 The Series A Securities shall be known and designated as the "7.25% Senior Notes due 2007" of the Company. The Series B Securities shall be known and designated as the "7.25% Senior Notes due 2007, Series B" of the Company. The final Stated Maturity of the Series A Securities and the Series B Securities shall be March 1, 2007, and the Series A Securities and Series B Securities shall each bear interest at the rate of 7.25% per annum (as adjusted pursuant to the Registration Rights Agreement) from March 1, 1997 or from the most recent date to which interest has been paid, as the case may be, payable semiannually on March 1 and September 1, in each year, commencing September 1, 1997, until the principal thereof is paid or duly provided for. Interest on any overdue principal, interest (to the extent lawful) or premium, if any, shall be payable on demand. Series B Securities may be issued only in exchange for a like principal amount of Series A Securities pursuant to an Exchange Offer. Series A Securities offered and sold in reliance on Rule 144A shall be issued initially in the form of a single permanent global security (the "U.S. Global Security") and Series A Securities offered and sold in reliance on Regulation S shall be issued initially in the form of a single permanent global security (the "Offshore Global Security" and together with the U.S. Global Security, the "Global Securities"), each substantially in the form set forth in Sections 2.02(a) and 2.03(a) hereof, deposited with the Trustee, as custodian of the Depositary, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of any Global Security may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary or its nominee, as hereinafter provided. Series A Securities which are offered and sold to Institutional Accredited Investors which are not QIBs (excluding Non-U.S. Persons) shall be issued in the form of permanent certificated Securities in registered form (the "U.S. Physical Securities"). Securities issued pursuant to Section 3.13 in exchange for interests in the U.S. Global Security shall be in the form of U.S. Physical Securities. Securities issued in exchange for interests in the Offshore Global Security pursuant to Section 3.13 shall be in the form of permanent certificated Securities in registered form 34 (the "Offshore Physical Securities" and together with the U.S. Physical Securities, the "Physical Securities"). Physical Securities shall be in substantially the form set forth in Sections 2.02(a) and 2.03(a) hereof. The principal of, premium, if any, and interest on Global Securities shall be payable to the Depositary or its nominee, as the case may be, as the sole registered owner and the sole holder of the Global Securities represented thereby. The principal of, premium, if any, and interest on Securities in certificated form shall be payable at the office or agency of the Company maintained for such purpose in The City of New York, or at such other office or agency of the Company as may be maintained for such purpose; provided, however, that at the option of the Company interest may be paid by check mailed to the addresses of the persons entitled thereto as such addresses shall appear on the Security Register. At the election of the Company, the entire Indebtedness on the Securities or certain of the Company's obligations and covenants and certain Events of Default thereunder may be defeased as provided in Article IV. SECTION 3.02. Denominations. The Securities shall be issuable only in denominations of $1,000 or any amount in excess thereof which is an integral multiple of $1,000; provided, however, that the Series A Securities shall be issuable only in denominations of $100,000 or any amount in excess thereof which is an integral multiple of $1,000. SECTION 3.03. Execution, Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Company by any two of its Chairman of the Board, its President or its Vice Presidents. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signature of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. 35 At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and make available for delivery such Securities as provided in this Indenture. On Company Order, the Trustee or an authenticating agent shall authenticate for original issue Series B Securities in an aggregate principal amount not to exceed $150,000,000; provided that such Series B Securities shall be issuable only upon the valid surrender for cancelation of Series A Securities of a like aggregate principal amount in accordance with an Exchange Offer pursuant to the Registration Rights Agreement. In each case, the Trustee shall be entitled to receive an Officer's Certificate and an Opinion of Counsel of the Company that it may reasonably request in connection with such authentication of Securities. Such order shall specify the amount of Securities to be authenticated and the date on which the original issue of Series A Securities or Series B Securities is to be authenticated. The aggregate principal amount of Securities outstanding at any time may not exceed $150,000,000 except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 3.01. Each Security shall be dated the date of its authentication. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and made available for delivery hereunder and is entitled to the benefits of this Indenture. Notwithstanding the foregoing, if any Security shall have been authenticated and made available for delivery hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancelation as provided in Section 3.09 together with a written statement (which need not comply with Section 1.02 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Company, 36 for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture. In case the Company, pursuant to Article VIII, shall be consolidated, amalgamated, merged with or into any other person or shall convey, transfer or lease substantially all of its properties and assets to any person, and the successor person resulting from such consolidation, amalgamation or surviving such merger, or into which the Company shall have been merged, or the person which shall have received a conveyance, transfer or lease as aforesaid, shall have executed an indenture supplemental hereto with the Trustee pursuant to Article VIII, any of the Securities authenticated or made available for delivery prior to such consolidation, amalgamation, merger, conveyance, transfer or lease may, from time to time, at the request of the successor person, be exchanged for other Securities executed in the name of the successor person with such changes in terminology and form as may be appropriate, but otherwise in substance of like tenor as the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon Company Order of the successor person, shall authenticate and deliver replacement Securities as specified in such request for the purpose of such exchange. If such Securities shall at any time be authenticated and made available for delivery in any new name of a successor person pursuant to this Section 3.03 in exchange or substitution for or upon registration of transfer of any Securities, such successor person, at the option of the Holders but without expense to them, shall provide for the exchange of all Securities at the time Outstanding for Securities authenticated and delivered in such new name. The Trustee may appoint an authenticating agent to authenticate Securities on behalf of the Trustee if directed to do so by a Company Order. Each reference in this Indenture to authentication by the Trustee includes authentication by each such agent. An authenticating agent has the same rights as any Security Registrar or Paying Agent to deal with the Company and its Affiliates. If any of the Securities are to be issued in the form of one or more Global Securities, then the Company shall execute and the Trustee shall authenticate and make available for delivery one or more Global Securities that (i) shall represent and shall be in minimum denominations of 37 $100,000, in the case of the Series A Securities, and $1,000, in the case of the Series B Securities, or integral multiples of $1,000 in excess thereof, (ii) shall be registered in the name of the Depositary for such Global Security or Securities or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions and (iv) shall bear the legend in substantially the form set forth in Section 2.05. SECTION 3.04. Temporary Securities. Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and make available for delivery, temporary Securities which are printed, lithographed, typewritten or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. Such temporary Securities may be in the form of Global Securities. If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities of like tenor upon surrender of the temporary Securities at the office or agency of the Company designated for such purpose pursuant to Section 3.14, without charge to the Holder. Upon surrender for cancelation of any one or more temporary Securities the Company shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor a like principal amount of definitive Securities of like tenor and of any authorized denominations. Until so exchanged the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities. SECTION 3.05. Registration, Registration of Transfer and Exchange. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "Security 38 Registrar" for the purpose of registering Securities and transfers of Securities as herein provided at the Corporate Trust Office. Upon surrender for registration of transfer of any Security at the office or agency of the Company designated for such purpose pursuant to Section 3.14, the Company shall execute and the Trustee shall authenticate and deliver (in the name of the designated transferee or transferees) one or more new Securities, of any authorized denominations and of a like aggregate principal amount and tenor and bearing a number not contemporaneously outstanding. Subject to the provisions of Sections 3.12 and 3.13, at the option of the Holder, Securities may be exchanged for other Securities, of any authorized denominations and of a like aggregate principal amount and tenor, upon surrender of the Securities to be exchanged at the office or agency of the Company designated for such purpose pursuant to Section 3.14. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and make available for delivery, the Securities which the Holder making the exchange is entitled to receive. If a Series A Security is a U.S. Physical Security, then as provided in this Indenture and subject to the limitations herein set forth, the Holder, provided it is a Qualified Institutional Buyer, may exchange such Security for a book-entry security by instructing the Trustee to arrange for such Series A Security to be represented by a beneficial interest in a Global Security. All Securities issued upon any registration of transfer or exchange of Securities, including any exchange pursuant to an Exchange Offer, shall be the valid obligations of the Company, evidencing the same debt and entitled to the same benefits under this Indenture as the Securities surrendered upon such registration of transfer or exchange and no such transfer or exchange shall constitute a repayment of any obligation nor create any new obligation, of the Company. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly 39 executed, by the Holder thereof or such Holder's attorney duly authorized in writing. Every Restricted Security shall be subject to the restrictions on transfer provided in the legend required to be set forth on the face of each Restricted Security pursuant to Section 2.06, Section 2.02(a) and the restrictions set forth in this Section 3.05, and the Holder of each Restricted Security, by such Holder's acceptance thereof, agrees to be bound by such restrictions on transfer. The restrictions imposed by this Section 3.05 and Section 2.06 upon the transferability of any particular Restricted Security shall cease and terminate (a) in the case of an Offshore Global Security or an Offshore Physical Security, on the 41st day after the Issue Date or (b) in the case of a U.S. Global Security or a U.S. Physical Security, on (x) the later of March 10, 1999 or two years (or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder) after the later of the Issue Date or the last date on which the Company or any Affiliate of the Company was the owner of such Restricted Security (or any predecessor of such Restricted Security) or (y) (if earlier) if and when such Restricted Security has been sold pursuant to an effective registration statement under the Securities Act or, unless the Holder thereof is an affiliate of the Company within the meaning of Rule 144 (or such successor provision), transferred pursuant to Rule 144 or Rule 904 under the Securities Act (or any successor provision). Any Restricted Security as to which such restrictions on transfer shall have expired in accordance with their terms or shall have terminated may, upon surrender of such Restricted Security for exchange to the Trustee or any transfer agent in accordance with the provisions of this Section 3.05, be exchanged for a new Security, of like series, tenor and aggregate principal amount, which shall not bear the restrictive legend required by Section 2.06 and shall thereafter be deemed not to be a Restricted Security for any purpose under this Indenture. The Company shall inform the Trustee in writing of the effective date of any registration statement registering any Restricted Securities under the Securities Act. No service charge shall be made for any registration of transfer, exchange or redemption of Securities, but the Company may require payment of a sum 40 sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.04 or 9.06 not involving any transfer. The Company may but shall not be required (i) to issue, register the transfer of or exchange Securities during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities selected for redemption under Section 11.03 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. Notwithstanding any other provision of this Indenture, a Global Security may not be transferred except as a whole by the Depositary for such Global Security to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary. Any Holder of the Global Security shall, by acceptance of such Global Security, agree that transfers of beneficial interests in such Global Security may be effected only through a book-entry system maintained by the Holder of such Global Security (or its agent), and that ownership of a beneficial interest in the Security shall be required to be reflected in a book entry. When Securities are presented to the Security Registrar with a request to register the transfer or to exchange them for an equal principal amount of Securities of other authorized denominations, the Security Registrar shall register the transfer or make the exchange as requested if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities at the Security Registrar's request. SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. 41 If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its written request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security, including a Global Security if the destroyed, lost or stolen Security was a Global Security, of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder. A new Security shall have such legends as appeared on the old Security unless the Company determines otherwise. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. SECTION 3.07. Payment of Interest; Interest Rights Preserved. Interest on any Security which is payable, and is punctually paid or duly provided for, on any date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered in the 42 Security Register at the close of business on the record date for such interest payment date. Any interest on any Security which is payable but is not punctually paid or duly provided for on any interest payment date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant record date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (a) or (b) below: (a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be so held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities at such Holder's address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of 43 business on such Special Record Date and shall no longer be payable pursuant to the following clause (b). (b) The Company may make payment of any Defaulted Interest on the Securities in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of, or in exchange for, or in lieu of, any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. SECTION 3.08. Persons Deemed Owners. Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered in the Security Register as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.07) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. No holder of any beneficial interest in any Global Security held on its behalf by a Depositary (or its nominee) shall have any rights under this Indenture with respect to such Global Security or any Security represented thereby, and such Depositary may be treated by the Company, the Trustee, and any agent of the Company or the Trustee as the owner of such Global Security or any Security represented thereby for all purposes whatsoever. Notwithstanding the foregoing, with respect to any Global Security, nothing herein shall prevent the Company, the Trustee, or any agent of the Company or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by a Depositary or impair, as between a Depositary and such holders of beneficial interest in such Global Security, the operation of customary practices governing the 44 exercise of the rights of the Depositary (or its nominees) as Holder of such Global Security. SECTION 3.09. Cancelation. All Securities surrendered for payment or registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Company may at any time deliver to the Trustee for cancelation any Securities previously authenticated and made available for delivery hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancelation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Securities held by the Trustee shall be returned to the Company. SECTION 3.10. Computation of Interest. Interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months. SECTION 3.11. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers, and if it does so, the Trustee shall use the applicable CUSIP number in notices of redemption or exchange as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Securities, and that reliance may be placed only on the other identification numbers printed on the Securities. The Company will promptly notify the Trustee of any change in any CUSIP number. All Series B Securities shall bear identical CUSIP numbers. The Company shall promptly notify the Trustee in writing of any change in the CUSIP number of either series of Securities. SECTION 3.12. Book-Entry Provisions for Global Security. (a) Each Global Security initially shall (i) be registered in the name of the Depositary for such Global Security or the nominee of such Depositary, (ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear legends as set forth in Section 2.05. 45 (b) Transfers of a Global Security shall be limited to transfers of such Global Security in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in a Global Security may be transferred in accordance with the rules and procedures of the Depositary and the provisions of Section 3.13. Beneficial owners may obtain Physical Securities in exchange for their beneficial interests in a Global Security upon request in accordance with the Depositary's and the Security Registrar's procedures (x) in the case of the Offshore Global Security, at any time on or after the 41st day following the Issue Date, and (y) in the case of the U.S. Global Security, at any time. In addition, Physical Securities shall be issued in exchange for a Global Security if (i) the Depositary notified the Company that it is unwilling or unable to continue as Depositary for a Global Security or the Depositary ceases to be a "clearing agency" registered under the Exchange Act and, in each case, a successor Depositary is not appointed by the Company within 90 days of such notice or such cessation, as the case may be, (ii) the Company executes and delivers to the Trustee a Company Order that such Global Security shall be so exchangeable or (iii) an Event of Default has occurred and is continuing with respect to any Securities represented by a Global Security. Upon the occurrence in respect of any Global Security of any one or more of the conditions specified in clauses (i), (ii) and (iii) of the preceding sentence such Global Security may be exchanged for Securities not bearing the legend specified in Section 2.05 and registered in the names of such Persons as may be specified by the Depositary (including Persons other than the Depositary). (c) Any beneficial interest in one of the Global Securities that is transferred to a person who takes delivery in the form of an interest in the other Global Security will, upon transfer, cease to be an interest in such Global Security and become an interest in the other Global Security and, accordingly, will thereafter be subject to all transfer restrictions, if any, and other procedures applicable to beneficial interests in such other Global Security for as long as it remains such an interest. (d) In connection with any transfer of a portion of the beneficial interest in the U.S. Global Security to beneficial owners pursuant to subsection (b) of this Section, the Security Registrar shall reflect on its books and records the date and a decrease in the principal amount 46 of the U.S. Global Security in an amount equal to the principal amount of the beneficial interest in the U.S. Global Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and make available for delivery, one or more U.S. Physical Securities of like tenor and amount. (e) In connection with the transfer of an entire Global Security to beneficial owners thereof pursuant to subsection (b) of this Section, such Global Security shall be deemed to be surrendered to the Trustee for cancelation, and the Company shall execute, and the Trustee shall authenticate and make available for delivery, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in such Global Security, an equal aggregate principal amount of Physical Securities of authorized denominations. (f) Any U.S. Physical Security delivered in exchange for an interest in the U.S. Global Security pursuant to subsection (b) or subsection (d) of this Section shall, except as otherwise provided by paragraph (a)(i)(x) or paragraph (e) of Section 3.13, bear the Private Placement Legend. (g) The registered holder of the Global Security may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities. (h) QIBs that are beneficial owners of interests in a Global Security may receive Physical Securities (which shall bear the Private Placement Legend if required by Section 2.06) in accordance with the procedures of the Depositary. In connection with the execution, authentication and delivery of such Physical Securities, the Registrar shall reflect on its books and records a decrease in the principal amount of the relevant Global Security equal to the principal amount of such Physical Securities, and the Company shall execute and the Trustee shall authenticate and deliver one or more Physical Securities having an equal aggregate principal amount. SECTION 3.13. Special Transfer Provisions. Unless and until (i) such Series A Security is sold under an effective registration statement or (ii) such Series A Security is exchanged for a Series B Security in connection 47 with an effective registration statement, in each case pursuant to the Registration Rights Agreement, the following provisions shall apply to each Series A Security: (a) Transfers to Non-QIB Institutional Accredited Investors. The following provisions shall apply with respect to registration of any proposed transfer of a Restricted Security to any Institutional Accredited Investor which is not a QIB (excluding Non-U.S. persons): (i) The Security Registrar shall register the transfer of any Series A Security, whether or not such Security bears the Private Placement Legend, if (x) the requested transfer is subsequent to a date which is two years after the later of the Issue Date and the last date on which the Company or any of its Affiliates was the owner of such Security or (y) the proposed transferee has delivered to the Security Registrar a certificate substantially in the form of Exhibit A hereto. (ii) If the proposed transferor is an Agent Member holding a beneficial interest in the U.S. Global Security seeking to transfer a U.S. Physical Security to another person, upon receipt by the Security Registrar of (x) the documents, if any, required by paragraph (i) and (y) instructions given in accordance with the Depositary's and the Security Registrar's procedures therefor, the Security Registrar shall reflect on its books and records the date and a decrease in the principal amount of the U.S. Global Security in an amount equal to the principal amount of the beneficial interest in the U.S. Global Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and make available for delivery, one or more U.S. Physical Certificates of like tenor and amount. (b) Transfers to QIBs. The following provisions shall apply with respect to the registration of any 48 proposed transfer of a Restricted Security to a QIB(other than a Non-U.S. person): (i) If the Security to be transferred consists of (x) U.S. Physical Securities, the Security Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on the form of Series A Security stating, or has otherwise advised the Company and the Security Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the form of Series A Security stating, or has otherwise advised the Company and the Security Registrar in writing, that it is purchasing the Series A Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account are QIBs within the meaning of Rule 144A, and that it is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption form registration provided by Rule 144A or (y) an interest in the U.S. Global Security, the transfer of such interest may be effected only through the book-entry system maintained by the Depositary. (ii) If the proposed transferee is an Agent Member, and the Series A Security to be transferred consists of U.S. Physical Securities, upon receipt by the Security Registrar of instructions given in accordance with the Depositary's and the Security Registrar's procedures therefor, the Security Registrar shall reflect on its books and records the date and an increase in the principal amount of the U.S. Global Security in an amount equal to the principal amount of the U.S. Physical Securities to be transferred, and the Trustee shall cancel the U.S. Physical Securities so transferred. 49 (c) Transfers of Interests in the Offshore Global Security or Offshore Physical Securities to U.S. Persons. The following provisions shall apply with respect to any transfer of interests in the Offshore Global Security or Offshore Physical Securities to U.S. Persons: (i) prior to the removal of the Private Placement Legend from the Offshore Global Security or Offshore Physical Securities pursuant to Section 2.06 and Section 3.05, the Security Registrar shall refuse to register such transfer; and (ii) after such removal, the Security Registrar shall register the transfer of any such Security without requiring any additional certification. (d) Transfers to Non-U.S. Persons at Any Time. The following provisions shall apply with respect to any transfer of a Series A Security to a Non-U.S. Person: (i) The Security Registrar shall register any proposed transfer to any Non-U.S. Person if the Security to be transferred is a U.S. Physical Security or an interest in the U.S. Global Security only upon receipt of a certificate substantially in the form of Exhibit B from the proposed transferor. (ii) (x) If the proposed transferor is an Agent Member holding a beneficial interest in the U.S. Global Security, upon receipt by the Registrar of (1) the documents required by paragraph (i) of this paragraph (d) and (2) instructions in accordance with the Depositary's and the Security Registrar's procedures, the Security Registrar shall reflect on its books and records the date and a decrease in the principal amount of the U.S. Global Security in an amount equal to the principal amount of the beneficial interest in the U.S. Global Security to be transferred, and (y) if the proposed transferee is an Agent Member, upon receipt by the Security Registrar of instructions given in accordance with the Depositary's and the Security Registrar's 50 procedures, the Security Registrar shall reflect on its books and records the date and an increase in the principal amount of the Offshore Global Security in an amount equal to the principal amount of the U.S. Physical Securities or the U.S. Global Security, as the case may be, to be transferred, and the Trustee shall cancel the Physical Security so transferred or decrease the principal amount of the U.S. Global Security, as the case may be. (e) Private Placement Legend. Upon the transfer, exchange or replacement of Securities not bearing the Private Placement Legend, the Security Registrar shall deliver Securities that do not bear the Private Placement Legend. Upon the transfer, exchange or replacement of Securities bearing the Private Placement Legend, the Security Registrar shall deliver only Securities that bear the Private Placement Legend unless either (i) the Private Placement Legend is no longer required pursuant to Section 2.06 and Section 3.05, or (ii) there is delivered to the Security Registrar an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act. (f) General. By its acceptance of any Security, or any beneficial interest in any Global Security, bearing the Private Placement Legend, each Holder of such Security or beneficial interest acknowledges the restrictions on transfer of such Security set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Security only as provided in this Indenture. The Security Registrar shall not register a transfer of any Security unless such transfer complies with the restrictions on transfer of such Security set forth in this Indenture. In connection with any transfer of Securities to an Institutional Accredited Investor, each such Holder or beneficial owner agrees by its acceptance of the Securities to furnish the Security Registrar or the Company such certifications, legal opinions or other information as such Person may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or a transaction not subject to, the 51 registration requirements of the Securities Act; provided that the Security Registrar shall not be required to determine (but may rely on a determination made by the Company with respect to) the sufficiency of any such certifications, legal opinions or other information. The Security Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 3.12 or this Section 3.13. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Security Registrar. SECTION 3.14. Maintenance of Office or Agency. The Company will maintain in The City of New York, New York, an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Corporate Trust Office of the Trustee shall be such office or agency of the Company, unless the Company shall designate and monitor the other office or agency for one or more of such purposes. The Company will give prompt written notice to the Trustee of the location and any change in the location of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereto appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies where Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in The City of New York, New York, for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. 52 SECTION 3.15. Money for Securities Payments To Be Held in Trust. If the Company shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of (and premium, if any) or interest on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum in the currency in which such Securities are payable sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its failure so to act. Whenever the Company shall have one or more Paying Agents, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its failure so to act. The Company will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (a) hold all sums held by it for the payment of the principal of (and premium, if any) or interest on Securities in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (b) give the Trustee notice of any default by the Company in the making of any payment of principal (and premium, if any) or interest on the Securities; and (c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be 53 held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent, and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on any Security and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company on Company Request. ARTICLE IV Satisfaction and Discharge SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (a) either (i) all Securities theretofore authenticated and delivered (other than (A) Securities which have been destroyed, lost or stolen and which have been 54 replaced or paid as provided in Section 3.06 and (B) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 3.15) have been delivered to the Trustee for cancelation; or (ii) all such Securities not theretofore delivered to the Trustee for cancelation (A) have become due and payable; or (B) will become due and payable at their Stated Maturity within one year; and the Company, in the case of (A) or (B), has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount, in the currency in which such Securities are payable, sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancelation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the respective Stated Maturity; (b) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 6.07, and, if money shall have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of this Section, the obligations of the Trustee under Section 4.02 and the last paragraph of Section 3.15, shall survive. SECTION 4.02. Application of Trust Money. Subject to provisions of the last paragraph of Section 3.15, all money deposited with the Trustee pursuant to Section 4.01 shall be held in trust and applied by it, in 55 accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee but such money need not be segregated from other funds except to the extent required by law. SECTION 4.03. Defeasance and Discharge of Indenture. The Company shall be deemed to have paid and discharged the entire indebtedness on all the Outstanding Securities on the 124th day after the date of the deposit referred to in subparagraph (d) hereof, and the provisions of this Indenture, as they relate to such Outstanding Securities, shall no longer be in effect (and the Trustee, at the expense of the Company, shall, at Company Request, execute proper instruments acknowledging the same), except as to: (a) the rights of Holders of Securities to receive, from the trust funds described in subparagraph (d) hereof, (i) payment of the principal of (and premium, if any) or interest on the Outstanding Securities on the Stated Maturity of such principal or installment of principal or interest and (ii) the benefit of any mandatory sinking fund payments applicable to the Securities on the day on which such payments are due and payable in accordance with the terms of this Indenture and the Securities; (b) the Company's obligations with respect to such Securities under Sections 3.05, 3.06, 3.14 and 3.15; (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder; provided that the following conditions shall have been satisfied: (d) the Company has deposited or caused to be irrevocably deposited with the Trustee (or another trustee satisfying the requirements of Section 6.09) as trust funds in the trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities, (i) money in an amount, or (ii) U.S. Government Obligations which through the payment of interest and principal in respect thereof in 56 accordance with their terms will provide not later than one day before the due date of any payment referred to in clause (A) or (B) of this subparagraph (d) money in an amount or (iii) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent certified public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge the principal of (and premium, if any) and each installment of principal of (and premium, if any) and interest on the Outstanding Securities on the Stated Maturity of such principal or installment of principal and interest; (e) such deposit shall not cause the Trustee with respect to the Securities to have a conflicting interest as defined in Section 6.08 and for purposes of the Trust Indenture Act with respect to the Securities; (f) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; (g) no Event of Default of the type referred to in paragraph (e) or (f) with respect to the Company or event which with notice or lapse of time would become such an Event of Default shall have occurred and be continuing on the date of such deposit or during the period ending on the 123rd day after such date; (h) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel to the effect that there has been a change in applicable Federal law such that, or the Company has received from, or there has been published by, the Internal Revenue Service a ruling to the effect that, Holders of the Securities will not recognize income, gain or loss for Federal income tax purposes as a result of such deposits, defeasance and discharge and will be subject to Federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred; and (i) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the 57 defeasance contemplated by this Section have been complied with. SECTION 4.04. Defeasance of Certain Obligations. The Company may omit to comply with any term, provision or condition set forth in Sections 10.02 and 10.03 and any such omission with respect to Sections 10.02 and 10.03 shall not be an Event of Default; provided that the following conditions have been satisfied: (a) with reference to this Section 4.04, the Company has deposited or caused to be irrevocably deposited with the Trustee (or another trustee satisfying the requirements of Section 6.09) as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities, (i) money in an amount, or (ii) U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide not later than one day before the Stated Maturity (a) money in an amount, or (iii) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge the principal of (and premium, if any) and each installment of principal (and premium, if any) and interest on the Outstanding Securities on the Stated Maturity of such principal or installments of principal and interest; (b) such deposit shall not cause the Trustee to have a conflicting interest as defined in Section 6.08 and for purposes of the Trust Indenture Act; (c) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; (d) no Event of Default or event which with notice or lapse of time would become an Event of Default shall have occurred and be continuing on the date of such deposit; (e) the Company has delivered to the Trustee an Opinion of Counsel to the effect that Holders will not recognize income, gain or loss for Federal income tax 58 purposes as a result of such deposit and defeasance of certain obligations and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and (f) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the defeasance contemplated in this Section have been complied with. ARTICLE V Remedies SECTION 5.01. Events of Default. "Event of Default" wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, sale or regulation of any administrative or governmental body): (a) default in the payment of any interest upon any Security when it becomes due and payable, and continuance of such default for a period of 30 days; or (b) default in the payment of the principal of (or premium, if any, on) any Security at its Maturity; or (c) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (d) a default under any indenture or instrument under which the Company or any Restricted Subsidiary 59 shall have outstanding or shall have guaranteed the payment of at least $10,000,000 aggregate principal amount of indebtedness for money borrowed (other than this Indenture or any Debt Security) shall happen and be continuing which default (i) is caused by a failure to pay the principal of or premium, if any, or interest on such indebtedness prior to the expiration of the grace period provided in such indebtedness on the date of such default or (ii) results in the acceleration of such indebtedness so that the same shall be or become due and payable prior to the date on which the same would otherwise have become due and payable, and such acceleration shall not be rescinded or annulled within 10 days after notice thereof shall have been given, by registered or certified mail, to the Company by the Trustee, or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Securities at the time Outstanding; provided, however, that if such default under such indenture or instrument shall be remedied or cured by the Company or waived by the Holders of such indebtedness, then, unless the Securities shall have been accelerated as provided herein, the Event of Default hereunder by reason thereof shall be deemed likewise to have been thereupon remedied, cured or waived without further action upon the part of either the Trustee or any Holders of the Securities; or (e) the entry by a court having jurisdiction in the premises of (i) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law or (ii) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect to the Company under any applicable Federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or (f) the commencement by the Company for a voluntary case or proceeding under any applicable 60 Federal or state bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of such action. The term "Bankruptcy Law" means title 11, U.S. Code or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. A default under clause (d) is not an Event of Default with respect to the Securities until the Trustee notifies the Company in writing, or the Holders of at least 25% in principal amount of the then outstanding Securities notify the Company and the Trustee in writing, of the default and the Company does not cure the default within 60 days after receipt of such notice. The written notice must specify the default, demand that it be remedied and state that the notice is a "Notice of Default". SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities may declare the principal amount of all of the Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified portion thereof) shall become immediately due and payable. 61 At any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in aggregate principal amount of the Outstanding Securities, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if (a) the Company has paid or deposit with the Trustee a sum sufficient to pay (i) all overdue interest on all Securities, (ii) the principal of (and premium, if any, on) any Securities which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Securities, (iii) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and (iv) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.07, and (b) all Events of Default, other than the nonpayment of the principal of Securities which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13. No such rescission shall affect any subsequent default or impair any right consequent thereon. SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee. The Company covenants that if (a) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or 62 (b) default is made in the payment of the principal of (or premium, if any, on) any Securities at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Security, the whole amount then due and payable on such Security for principal (and premium, if any) and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue interest at the rate or rates prescribed therefor in such Security, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Security and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Security, wherever situated. If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. SECTION 5.04. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have 63 made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (i) to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.07) and of the Holders allowed in such judicial proceeding, and (ii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.07. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors' or other similar committee. SECTION 5.05. Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after 64 provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and for any other amounts due the Trustee under Section 6.07, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. SECTION 5.06. Application of Money Collected. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, or at the date or dates of fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 6.07; and SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest, respectively; and THIRD: The balance, if any, to the Person or Persons entitled thereto. SECTION 5.07. Limitation on Suits. No Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default; (2) the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, 65 expenses and liabilities to be incurred in compliance with such request; (4) the Trustee, for 60 days after its receipt of such notice, request and offer of indemnity, has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. SECTION 5.08. Unconditional Right of Holders to Receive Principal, Premium and Interest. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 3.07) interest on such Security on the Stated Maturity or Maturities expressed in such Security and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then, and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen 66 Securities in the last paragraph of Section 3.06, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. SECTION 5.12. Control by Holders. The Holders of a majority in aggregate principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities, provided that (1) such direction shall not be in conflict with any rule of law or with this Indenture, and (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. SECTION 5.13. Waiver of Past Defaults. The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities may, on behalf of the Holders of all the Securities, waive any past default hereunder and its consequences, except a default (1) in the payment of the principal of (or premium, if any) or interest on any Security, or (2) in respect of a covenant or provision hereof which under Article IX cannot be modified or amended 67 without the consent of the Holder of each Outstanding Security affected. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to waive any past default hereunder. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to waive any default hereunder, whether or not such Holders remain Holders after such record date; provided that unless such majority in principal amount shall have waived such default prior to the date which is 120 days after such record date, any such waiver of such default previously given shall automatically and without further action by any Holder be canceled and of no further effect. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 5.14. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Security by such Holder's acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided, however, that the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security on or after the Stated Maturity or Maturities expressed in such Security. SECTION 5.15. Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or 68 in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE VI The Trustee SECTION 6.01. Certain Duties and Responsibilities. The provisions of TIA Section 3.15 shall apply to the Trustee. SECTION 6.02. Notice of Defaults. Within 90 days after the occurrence of any default hereunder, the Trustee shall transmit by mail to all Holders of Securities, as their names and addresses appear in the Security Register, notice of such default hereunder known to the Trustee, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Security, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Holders of Securities; and provided, further, that in the case of any default of the character specified in Section 5.01(c), no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default. SECTION 6.03. Certain Rights of Trustee. Subject to the provisions of TIA Section 3.15(a) through 315(d): (a) The Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, 69 other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. (b) Any instruction, request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order or as otherwise expressly provided herein and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution. (c) Whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate. (d) Before the Trustee acts or refrains from acting, the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (e) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. (f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability of any kind by reason of such inquiry or investigation. 70 (g) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. (h) The Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture. (i) The Trustee shall not be required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (j) Except with respect to Section 10.01 herein, the Trustee shall have no duty to inquire as to the performance of the Company's covenants in Article IV hereof. In addition, the Trustee shall not be deemed to have knowledge of any Event of Default except (i) any Event of Default occurring pursuant to Sections 5.01(1), 5.01(2) and 10.01 herein or (ii) any Event of Default of which the Trustee shall have received written notification or obtained actual knowledge. SECTION 6.04. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Securities and perform its obligations hereunder and that the statements made by it in a Statement of Eligibility on Form T-1, when supplied to the Company, will be true and accurate subject to the qualifications set forth therein. The Trustee or any Authenticating Agent shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. 71 SECTION 6.05. May Hold Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to TIA Sections 3.10(b) and 3.11, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. SECTION 6.06. Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed to in writing by the Company and the Trustee. SECTION 6.07. Compensation and Reimbursement. The Company agrees (1) to pay to the Trustee from time to time, as the Company and the Trustee shall from time to time agree in writing, compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, including taxes (other than taxes based upon, measured by or determined by the income of the Trustee), disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to indemnify the Trustee (and its agents) for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. 72 The obligations of the Company under this Section 6.07 to compensate and indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture. Such additional indebtedness shall be a senior claim to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (and premium, if any) or interest on particular Securities, and the Securities are hereby subordinated to each senior claim. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Article V hereof, the expenses (including reasonable fees and expenses of counsel) and the compensation for the service in connection therewith are intended to constitute expenses of administration under any applicable bankruptcy law. The Trustee shall give the Company notice of any claim or liability for which the Trustee might be entitled to indemnification under subparagraph (3) of this Section 6.07 within a reasonable amount of time after a trust officer of the Trustee becomes aware of such claim or liability. SECTION 6.08. Disqualification; Conflicting Interests. The provisions of TIA Section 3.10(b) shall apply to the Trustee. SECTION 6.09. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be eligible to act under TIA Section 3.10(a)(1) and shall have a combined capital and surplus of at least $100,000,000 and subject to supervision or examination by Federal, state or District of Columbia authority. The Trustee hereby represents and warrants that it is currently in compliance and at all times will remain in compliance with the requirements of this Section 6.09. If such Corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Neither the 73 Company, nor any Person directly or indirectly controlling, controlled by or under common control with the Company, shall act as Trustee hereunder. SECTION 6.10. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11. (b) The Trustee may resign at any time by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. (c) The Trustee may be removed at any time by Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee and to the Company. (d) If at any time: (1) the Trustee shall fail to comply with TIA Section 3.10(b) after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 6.09 and shall fail to resign after written request therefor by the Company or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of rehabilitation, conservation or liquidation, or (4) the Trustee shall commence a voluntary case under the Federal bankruptcy laws, as now or thereafter constituted, or any other applicable Federal or state bankruptcy, insolvency or similar law or shall consent to the appointment of or taking possession by a 74 receiver, custodian, liquidator, assignee, trustee, sequestrator (or other similar official) of the Trustee or its property or affairs, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or shall take corporate action in furtherance of any such action, then, in any such case, (i) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (ii) subject to Section 5.14, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees and shall comply with the applicable requirements of Section 6.11. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered within 30 days after such resignation, removal or incapability, or the occurrence of such vacancy, the resigning, removed or incapacitated Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 6.11, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. (f) The Company shall give notice of each resignation and each removal of the Trustee and each 75 appointment of a successor Trustee by mailing written notice of such event by first-class mail, postage prepaid, to all Holders of Securities as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. SECTION 6.11. Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. (b) Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) and (b) of this Section, as the case may be. (c) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business. Any Corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any Corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any Corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such Corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. 76 In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and make available for delivery the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities; in case any of the Securities shall not have been authenticated by the Trustee then in office, any successor by merger, conversion or consolidation to such Trustee may authenticate such Securities either in the name of such predecessor hereunder or in the name of the successor Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate Securities in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation. Section 6.13. Preferential Collection of Claims Against Company. The Trustee shall comply with TIA Section 311(a). A Trustee which has resigned or been removed is subject to TIA Section 311(a) to the extent indicated therein. ARTICLE VII Holders' Lists and Reports by Trustee and Company SECTION 7.01. Company To Furnish Trustee Names and Addresses of Holders. If the Trustee is not acting as Security Registrar for the Securities, the Company will furnish or cause to be furnished to the Trustee: (a) at intervals of no more than six months commencing after the Issue Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of a date not more than 15 days prior to the time such information is furnished, and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and 77 content as of a date not more than 15 days prior to the time such list is furnished. SECTION 7.02. Preservation of Information; Communication to Holders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.01 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished. (b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by TIA Section 312(b). (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 7.02(b), regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 7.02(b). SECTION 7.03. Reports by Trustee. Within 60 days after December 31 of each year commencing with December 31, 1997, the Trustee shall transmit by mail to all Holders of Securities as provided in TIA Section 313(c) a brief report dated as of such December 31 if required by TIA Section 313(a). A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any Securities are listed on any stock exchange. SECTION 7.04. Reports by Company. The Company shall: (1) file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the 78 information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents or reports pursuant to either of said Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; notwithstanding anything to the contrary herein, the Trustee shall have no duty to review such documents for the purposes of determining compliance with any provision of this Indenture; (2) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; (3) transmit by mail to all Holders, as their names and addresses appear in the Security Register, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (1) and (2) of this Section as may be required by rules and regulations prescribed from time to time by the Commission; and (4) furnish to the Trustee the Officers' Certificate provided for in Section 10.09. 79 ARTICLE VIII Consolidation, Merger, Conveyance, Transfer of Lease SECTION 8.01. Company May Consolidate, Etc., Only On Certain Terms. The Company shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person and the Company shall not permit any person to consolidate with or merge into the Company or convey transfer or lease all or substantially all of its properties and assets to the Company, unless: (1) the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a Corporation, partnership or trust, shall be organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed; (2) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; (3) if, as a result of any such consolidation or merger or such conveyance, transfer or lease, properties or assets of the Company would become subject to a mortgage, pledge, lien, security interest or other encumbrance which would not be permitted by this Indenture, the Company or such successor Person, as the case may be, shall take such steps as shall be necessary to effectively secure the Securities equally and ratably with (or prior to) all indebtedness secured thereby; and (4) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each 80 stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. SECTION 8.02. Successor Substituted. Upon any consolidation of the Company with, or merger by the Company into, any other Person or conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 8.01, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities. ARTICLE IX Supplemental Indentures SECTION 9.01. Supplemental Indentures Without Consent of Holders. Without the consent of any Holders, the Company, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or (2) to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power herein conferred upon the Company; or (3) to add any additional Events of Default; or (4) to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in 81 bearer form, registrable or not registrable as to principal, and with or without interest coupons; or (5) to secure the Securities; or (6) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee hereunder; or (7) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided such action shall not adversely affect the interests of the Holders in any material respect; or (8) to comply with the requirements of the Commission in order to effect or maintain the qualifications of this Indenture under the Trust Indenture Act. SECTION 9.02. Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby, (a) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any such Security, or reduce the principal amount thereof or the rate of interest thereon or change the place of Payment where, or the coin or currency in which, any such Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof, or (b) reduce the percentage in principal amount of the Outstanding Securities, the consent of whose 82 Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver of compliance with certain provisions of this Indenture or certain defaults and their consequence provided in this Indenture, or (c) modify any of the provision of this Section 9.02, Section 5.13 or Section 9.08, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in this Section 9.02 and Section 9.08, or the deletion of this proviso, in accordance with the requirements of Sections 6.11(b) and 9.01(h). The Company may, but shall not obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any indenture supplemental hereto. If a record date is fixed for such purpose, the Holders on such record date or their duly designated proxies, and only such Persons, shall be entitled to consent to such supplemental indenture, whether or not such Holders remain Holders after such record date; provided that unless such consent shall have become effective by virtue of the requisite percentage having been obtained prior to the date which is 120 days after such record date, any such consent previously given shall automatically and without further action by any Holder be canceled and of no further effect. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 9.03. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, 83 but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby to the extent provided therein. SECTION 9.05. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. SECTION 9.06. Reference in Securities to Supplemental Indentures. Securities authenticated and made available for delivery after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in a form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and made available for delivery by the Trustee in exchange for Outstanding Securities. SECTION 9.07. Notice of Supplemental Indentures. Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of Section 9.02, the Company shall give notice thereof to the Holders of each Outstanding Security so affected, pursuant to Section 1.06, setting forth in general terms the substance of such supplemental indenture. SECTION 9.08. Waiver of Certain Covenants. The Company may omit in any particular instance to comply with any term, provision or condition set forth in Sections 10.02 and 10.03 if before the time for such compliance the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but 84 no such waiver shall extend to or affect each term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to waive any such term, provision or condition. If a record date is fixed for such purpose, the Holders on such record date or their duly designated proxies, and only such Persons, shall be entitled to waive any such term, provision or condition hereunder, whether or not such Holders remain Holders after such record date; provided that unless the Holders of not less than a majority in principal amount of the Outstanding Securities shall have waived such term, provision or condition prior to the date which is 90 days after such record date, any such waiver previously given shall automatically and without further action by any Holder be canceled and of no further effect. SECTION 9.09. Payment for Consent. None the Company, any Affiliate of the Company or any Subsidiary shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Securities unless such consideration is offered to be paid or agreed to be paid to all Holders which so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. ARTICLE X Covenants SECTION 10.01. Payment of Principal, Premium and Interest. The Company covenants and agrees for the benefit of the Holders that it will duly and punctually pay the principal of (and premium, if any) and interest on the Securities in accordance with the terms of the Securities and this Indenture. SECTION 10.02. Restrictions on Secured Debt. (a) The Company will not itself, and will not permit any 85 Restricted Subsidiary to, incur, issue, assume or guarantee any notes, bonds, debentures or other similar evidences of indebtedness for money borrowed (notes, bonds, debentures or other similar evidences of indebtedness for money borrowed being hereinafter in this Article called "Debt"), secured by a pledge of, or mortgage or other lien on, any Principal Property, now owned or hereafter owned by the Company or any Restricted Subsidiary, or any shares of stock or Debt of any Restricted Subsidiary (pledges, mortgages and other liens being hereinafter in this Article called "Lien" or "Liens"), without effectively providing that the Securities (together with, if the Company shall so determine, any other Debt of the Company or such Restricted Subsidiary then existing or thereafter created which is not subordinate to the Securities) shall be secured equally and ratably with (or prior to) such secured Debt, so long as such secured Debt shall be so secured; provided, however, that this Section shall not apply to, and there shall be excluded from secured Debt in any computation under this Section, Debt secured by: (i) Liens on any Principal Property acquired (whether by merger, consolidation, purchase, lease or otherwise), constructed or improved by the Company or any Restricted Subsidiary after the date of this Indenture which are created or assumed prior to, contemporaneously with or within 270 days after such acquisition, construction or improvement, to secure or provide for the payment of all or any part of the cost of such acquisition, construction or improvement (including related expenditures capitalized for Federal income tax purposes in connection therewith) incurred after the date of this Indenture; (ii) Liens of or upon any property, shares of capital stock or Debt existing at the time of acquisition thereof, whether by merger, consolidation, purchase, lease or otherwise (including Liens of or upon property, shares of capital stock or indebtedness of a corporation existing at the time such corporation becomes a Restricted Subsidiary); (iii) Liens in favor of, or which secure debt owing to, the Company or any Restricted Subsidiary; (iv) Liens in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision of the United States of America or any State thereof or political 86 entity affiliated therewith, or in favor of any other country, or any political subdivision thereof, to secure partial, progress, advance or other payments, or other obligations, pursuant to any contract or statute or to secure any Debt incurred for the purpose of financing all or any part of the cost of acquiring, constructing or improving the property subject to such Liens (including Liens incurred in connection with pollution control, industrial revenue or similar financings); (v) Liens imposed by law, such as mechanics', worker's, repairmen's, materialmen's, carriers', warehousemen's, vendors' or other similar liens arising in the ordinary course of business, or governmental (Federal, state or municipal) liens arising out of contracts for the sale of products or services by the Company or any Restricted Subsidiary, or deposits or pledges to obtain the release of any of the foregoing; (vi) pledges or deposits under workmen's compensation laws or similar legislation and Liens of judgments thereunder which are not currently dischargeable, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of money) or leases to which the Company or any Restricted Subsidiary is a party, or deposits to secure public or statutory obligations of the Company or any Restricted Subsidiary, or deposits in connection with obtaining or maintaining self-insurance or to obtain the benefits of any law, regulation or arrangement pertaining to unemployment insurance, old age pensions, social security or similar matters, or deposits of cash or obligations of the United States of America to secure surety, appeal or customs bonds to which the Company or any Restricted Subsidiary is a party, or deposits in litigation or other proceedings such as, but not limited to, interpleader proceedings; (vii) Liens created by or resulting from any litigation or other proceeding which is being contested in good faith by appropriate proceedings, including Liens arising out of judgments or awards against the Company or any Restricted Subsidiary with respect to which the Company or such Restricted Subsidiary is in good faith prosecuting an appeal or proceedings for review; or Liens incurred by the Company or any Restricted Subsidiary for the purpose of obtaining a 87 stay or discharge in the course of any litigation or other proceeding to which the Company or such Restricted Subsidiary is a party; (viii) Liens for taxes or assessments or governmental charges or levies not yet due or delinquent, or which can thereafter be paid without penalty, or which are being contested in good faith by appropriate proceedings; (ix) Liens consisting of easements, rights-of-way, zoning restrictions, restrictions on the use of real property, and defects and irregularities in the title thereto, landlords' liens and other similar liens and encumbrances none of which interfere materially with the use of the property covered thereby in the ordinary course of the business of the Company or such Restricted Subsidiary and which do not, in the opinion of the Company, materially detract from the value of such properties; (x) Liens existing on the Issue Date; or (xi) any extension, renewal or replacement (or successive extensions, renewals or replacements), as a whole or in part, of any Lien referred to in the foregoing clauses (i) to (x), inclusive; provided that (1) such extension, renewal or replacement Lien shall be limited to all or a part of the same property, shares of stock or Debt that secured the Lien extended, renewed or replaced (plus improvements on such property) and (2) the Debt secured by such Lien at such time is not increased. (b) Notwithstanding the restrictions contained in subsection (a) of this Section, the Company and its Restricted Subsidiaries, or any of them, may incur, issue, assume or guarantee Debt secured by Liens without equally and ratably securing the Securities of each series then Outstanding; provided that at the time of such incurrence, issuance, assumption or guarantee, after giving effect thereto and to the retirement of any Debt which is concurrently being retired, the aggregate amount of all outstanding Debt secured by Liens which could not have been incurred, issued, assumed or guaranteed by the Company or a Restricted Subsidiary without equally and ratably securing the Securities of each series then Outstanding except for the provisions of this subdivision (b), together with the 88 aggregate amount of Attributable Debt incurred pursuant to subsection (b) of Section 10.03, does not at such time exceed the greater of (i) $100,000,000 or (ii) 25% of Consolidated Net Tangible Assets of the Company. SECTION 10.03. Restriction on Sale and Leaseback Transactions. (a) The Company will not itself, and it will not permit any Restricted Subsidiary to, enter into any arrangement with any bank, insurance company or other lender or investor (not including the Company or any Restricted Subsidiary) or to which any such lender or investor is a party, providing for the leasing by the Company or a Restricted Subsidiary for a period, including renewals, in excess of three years of any Principal Property which has been or is to be sold or transferred by the Company or any Restricted Subsidiary to such lender or investor or to any person to whom funds have been or are to be advanced by such lender or investor on the security of such Principal Property (herein referred to as a "Sale and Leaseback Transaction") unless either: (i) the Company or such Restricted Subsidiary would, at the time of entering into such arrangement, be entitled, without equally and ratably securing the Securities of each series then Outstanding, to incur Debt secured by a Lien on such property, pursuant to paragraphs (i) to (xi), inclusive, of Section 10.02; or (ii) the Company within 270 days after the sale or transfer shall have been made by the Company or by a Restricted Subsidiary, applies an amount equal to the greater of (A) the net proceeds of the sale of the Principal Property sold and leased back pursuant to such arrangement or (B) the fair market value of the Principal Property so sold and leased back at the time of entering into such arrangement (as determined by any two of the following: the Chairman or a Vice Chairman of the Board of the Company, its President, its Chief Financial Officer, its Vice President of Finance, if any, its Treasurer or its Controller) to (x) the retirement of Funded Debt of the Company; provided that the amount to be applied to the retirement of Funded Debt of the Company shall be reduced by (1) the principal amount of any Securities delivered within 270 days after such sale to the Trustee for retirement and cancelation, and (2) the principal amount of Funded Debt, other than Securities, voluntarily retired by the Company within 270 days after such sale or (y) or the 89 purchase, construction or development of other property, facilities or equipment used or useful in the Company's or its Restricted Subsidiaries' business. Notwithstanding the foregoing, no retirement referred to in this clause (a)(ii) may be effected by payment at maturity or pursuant to any mandatory sinking fund payment or mandatory prepayment provision. (b) Notwithstanding the restrictions contained in subsection (a) of this Section, the Company and its Restricted Subsidiaries, or any of them, may enter into a Sale and Leaseback Transaction; provided that at the time of such transaction, after giving effect thereto and to the retirement of any Funded Debt which is concurrently being retired, the aggregate amount of all Attributable Debt in respect of Sale and Leaseback Transactions existing at such time which could not have been entered into except for the provisions of this subsection (b), together with the aggregate amount of all outstanding debt incurred pursuant to subsection (b) of Section 10.02, does not at such time exceed the greater of (i) $100,000,000 or (ii) 25% of Consolidated Net Tangible Assets of the Company. (c) A Sale and Leaseback Transaction shall not be deemed to result in the creation of a Lien. SECTION 10.04. Compliance Certificate. (a) The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether each has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to his or her knowledge each entity has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if an Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action each is taking or proposes to take with respect thereto) and that to his or her knowledge no event has occurred and remains in existence by reasons of which payments on account of the principal of or interest, if any, on the Securities of any series is prohibited or if such event has occurred, a description of the event and what 90 action each is taking or proposes to take with respect thereto. (b) The Company shall deliver to the Trustee, forthwith upon any Officer becoming aware of (i) any Event of Default or (ii) any event of default under any other mortgage, indenture or instrument, an Officers' Certificate specifying such Event of Default or event of default and what action the Company is taking or proposes to take with respect thereto. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be only executed all as of the day and year first above written. FIRST BRANDS CORPORATION, by /s/ DONALD DeSANTIS _____________________________ Name: Donald DeSantis Title: Senior Vice President, Chief Financial Officer and Treasurer THE BANK OF NEW YORK, as Trustee, by /s/ VIVIAN GEORGES _____________________________ Name: Vivian Georges Title: Assistant Vice President EXHIBIT A FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS FIRST BRANDS CORPORATION THE BANK OF NEW YORK 101 Barclay Street Floor 21 West New York, NY 10286 Attention: Corporate Trust Administration Ladies and Gentlemen: In connection with our proposed purchase of 7.25% Senior Notes due 2007 (the "Notes") of First Brands Corporation (the "Company"), we confirm that: 1. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or their investment, as the case may be. 2. We are acquiring the Notes purchased by us for our account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion. 3. We understand that any subsequent transfer of the Notes is subject to certain restrictions and conditions set forth in the Indenture relating to the Notes and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes except in compliance with, such restrictions and conditions and the Securities Act of 1933 (the "Securities Act"). 4. We understand that the Notes have not been registered under the Securities Act, and that the Notes may not be sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we A-1 should sell or otherwise transfer any Notes prior to the date which is two years after the original issuance of the Notes, we will do so only (i) to the Company or any of its subsidiaries, (ii) inside the United States in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act), (iii) inside the United States to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that, prior to such transfer, furnished (or has furnished on its behalf by a U.S. broker/dealer) to the Trustee (as defined in the Indenture relating to the Notes), a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Notes (the form of which letter can be obtained from the Trustee), (iv) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (v) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available), or (vi) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing any of the Notes from us a notice advising such purchaser that resales of the Notes are restricted as stated herein. 5. We are not acquiring the Notes for or on behalf of, and will not transfer the Notes to, any pension or welfare plan (as defined in Section 3 of the Employee Retirement Income Security Act of 1974), except as permitted in the section entitled "Notice to Investors" of the Offering Memorandum. 6. We understand that, on any proposed resale of any Notes, we will be required to furnish to the Trustee and the Company such certification, legal opinions and other information as the Trustee and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect. The Company and the Trustee are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. A-2 THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. ___________________________________ (Name of Purchaser) By: ___________________________ Name: Title: Address: Date: _________________________ Upon transfer, the Notes should be registered in the name of the new beneficial owner as follows: Name:__________________________________________ Address:_______________________________________ _______________________________________________ Taxpayer ID Number:____________________________ A-3 EXHIBIT B FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S ------------------------ FIRST BRANDS CORPORATION THE BANK OF NEW YORK 101 Barclay Street Floor 21 West New York, NY 10286 Attention: Corporate Trust Ladies and Gentlemen: In connection with our proposed sale of $________ aggregate principal amount of 7.25% Senior Notes due 2007 (the "Notes") of First Brands Corporation (the "Company"), we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the Securities Act of 1933 and, accordingly, we represent that: (1) the offer of the Notes was not made to a U.S. Person; (2) either (a) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States or (b) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been prearranged with a buyer in the United States; (3) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; and (4) the transaction is not part of a plan or scheme to evade the registration requirements of the U.S. Securities Act of 1933. B-1 In addition, if the sale is made during a restricted period and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable thereto, we confirm that such sale has been made in accordance with the applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S. ___________________________ (Name of Transferor) By:________________________ Name: Title: Address: Date:______________________ Upon transfer, the Notes should be registered in the name of the new beneficial owner as follows: Name:____________________________________________________ Address:_________________________________________________ _________________________________________________________ Taxpayer ID Number:______________________________________ B-2 EX-4 3 EXHIBIT 4.2 Execution Copy FIRST BRANDS CORPORATION $150,000,000 7.25% SENIOR NOTES DUE 2007 PURCHASE AGREEMENT ------------------ March 5, 1997 BEAR, STEARNS & CO. INC. TD SECURITIES (USA) INC. CREDIT LYONNAIS SECURITIES (USA) INC. FIRST UNION CAPITAL MARKETS CORP. c/o Bear, Stearns & Co. Inc. 245 Park Avenue New York, New York 10167 Ladies and Gentlemen: First Brands Corporation, a corporation organized and existing under the laws of Delaware (the "Company"), hereby confirms its agreement with you (the "Initial Purchasers"), as set forth below. 1. The Securities. Subject to the terms and conditions herein contained, the Company proposes to issue and sell to the Initial Purchasers $150,000,000 aggregate principal amount of its 7.25% Senior Notes Due 2007 (the "Notes"). The Notes are to be issued under an indenture (the "Indenture") to be dated as of March 1, 1997 between the Company and The Bank of New York, as trustee (the "Trustee"). The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933 (the "Act"), in reliance on one or more exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated February 28, 1997 (together with the documents incorporated by reference therein, the "Preliminary Memorandum") and a final offering memorandum dated March 10, 1997 (together 2 with the documents incorporated by reference therein, the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum"), each setting forth or including a description of the terms of the Notes and the offering of the Notes, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included or incorporated by reference therein. The Initial Purchasers and their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company has agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Exchange Notes (as defined therein) or, in certain cases, the Notes under the Act. 2. Representations and Warranties. The Company represents and warrants to and agrees with the Initial Purchasers that: (a) None of the Preliminary Memorandum as of the date thereof, the Final Memorandum or any amendment or supplement thereto as of the date thereof and at all times subsequent thereto up to the Closing Date (as defined in Section 3 below) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this Section 2(a) do not apply to statements or omissions made in reliance upon and in conformity with information relating to the Initial Purchasers furnished to the Company expressly for use in the Preliminary Memorandum, the Final Memorandum or any amendment or supplement thereto. (b) As of December 31, 1996, the Company had the capitalization set forth in the Final Memorandum; all the subsidiaries of the Company meeting the conditions for a "significant subsidiary" set forth in Rule 1-02(w) of the Commission's Regulation S-X are listed on Schedule 2 attached hereto (each, a "Subsidiary" and collectively, the "Subsidiaries"); all the outstanding shares of capital stock 3 of the Company and the Subsidiaries have been, and as of the Closing Date will be, duly authorized and validly issued and are fully paid and nonassessable; except as set forth in the Final Memorandum, all the outstanding shares of capital stock of each of the Subsidiaries will be owned by the Company, directly or through subsidiaries, free and clear of all liens, encumbrances, equities and claims. (c) Each of the Company and the Subsidiaries has been duly incorporated, is validly existing and is in good standing as a corporation under the laws of its jurisdiction of incorporation, with all requisite corporate power and authority to own its properties and conduct its business as now conducted, and as described in the Final Memorandum; each of the Company and the Subsidiaries is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions where the ownership or leasing of its properties or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on the general affairs, management, business, condition (financial or otherwise), or results of operations of the Company and the Subsidiaries, taken as a whole (any such event, a "Material Adverse Effect"). (d) The Company has the corporate power and authority to execute, deliver and perform each of its obligations under the Notes, the Exchange Notes and the Private Exchange Notes (as defined in the Registration Rights Agreement). The Notes, the Exchange Notes and the Private Exchange Notes have each been duly authorized by all requisite corporate action of the Company and, when executed by the Company and authenticated by the Trustee in accordance with the provisions of the Indenture and, in the case of the Notes, when delivered to and paid for by the Initial Purchasers in accordance with the terms of this Agreement, will have been duly executed, issued and delivered and will constitute valid and binding obligations of the Company, entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms, except that the enforcement thereof may be subject to (i) bank- ruptcy, insolvency, reorganization, moratorium or other laws now or hereafter in effect relating to or affecting creditors' rights generally (including applicable fraudulent transfer laws), and (ii) general principles of equity (regardless of whether enforceability is considered in a 4 proceeding at law or in equity) and the discretion of the court before which any proceeding therefor may be brought. (e) The Company has the corporate power and authority to execute, deliver and perform its obligations under the Indenture. The form of the Indenture meets the requirements for qualification under the Trust Indenture Act of 1939, as amended (the "TIA"). The Indenture has been duly authorized by all requisite corporate action of the Company and, when executed and delivered by the Company (assuming the due authorization, execution and delivery by the Trustee), will constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other laws now or hereafter in effect relating to or affecting creditors' rights generally (including applicable fraudulent transfer laws) and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and the discretion of the court before which any proceeding therefor may be brought. (f) The Company has the corporate power and authority to execute, deliver and perform its obligations under the Registration Rights Agreement. The Registration Rights Agreement has been duly authorized by all requisite corporate action of the Company and, 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 that (A) the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other laws now or hereafter in effect relating to or affecting creditors' rights generally (including applicable fraudulent transfer laws) and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and the discretion of the court before which any proceeding therefor may be brought and (B) any rights to indemnity or contribution thereunder may be limited by federal and state securities laws and public policy considerations. (g) The Company has the corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions 5 contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company. (h) No consent, approval, authorization or order of any court or governmental agency or body is required for the performance of this Agreement or the consummation by the Company of the transactions contemplated hereby, except such as have been obtained and such as may be required under state securities or "Blue Sky" laws in connection with the purchase and resale of the Notes by the Initial Purchasers and except that the exchange offer contemplated by the Registration Rights Agreement requires an effective registration statement. None of the Company or the Subsidiaries is (i) in violation of its certificate of incorporation or bylaws (or similar organizational document), (ii) in breach or violation of any statute, judgment, decree, order, rule or regulation applicable to any of them except for any such breach or violation which would not, individually or in the aggregate, have a Material Adverse Effect, or (iii) in breach of or default under (nor has any event occurred which, with notice or passage of time or both, would constitute a default under) or in violation of any of the terms or provisions of any indenture, mortgage, deed of trust, loan agreement, note or other instrument pursuant to which the Company or its Subsidiaries has indebtedness for borrowed money outstanding or any material lease, license, franchise agreement, permit, certificate, contract or other material agreement or instrument to which any of them is a party (collectively, "Contracts"), except for any such breach, default, violation or event which would not, individually or in the aggregate, have a Material Adverse Effect. (i) The execution, delivery and performance by the Company of this Agreement, the Indenture and the Registration Rights Agreement and the consummation by the Company of the transactions contemplated hereby and thereby (including the issuance and sale of the Notes to the Initial Purchasers), and the fulfillment of the terms hereof and thereof, will not constitute or result in a breach of or a default under (or an event which with notice or passage of time or both would constitute a default under) or violation of any of (i) the terms or provisions of any Contract, except for any such breach, violation, default or event which would not, individually or in the aggregate, have a Material Adverse Effect, (ii) the certificate of incorporation or bylaws (or similar organizational document) 6 of the Company or any of the Subsidiaries, or (iii) (assuming compliance with all applicable state securities or "Blue Sky" laws and assuming the accuracy of the representations and warranties of the Initial Purchasers in Section 8 hereof) any statute, judgment, decree, order, rule or regulation applicable to the Company or any of the Subsidiaries or any of their respective properties or assets, except for any such breach or violation which would not, individually or in the aggregate, have a Material Adverse Effect. (j) The consolidated financial statements of the Company (including the notes thereto) included or incorporated by reference in the Final Memorandum present fairly in all material respects the financial position, results of operations and cash flows of the Company at the dates and for the periods to which they relate and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis, except as otherwise stated therein. KPMG Peat Marwick LLP (the "Independent Accountants") is an independent public accounting firm within the meaning of the Act and the rules and regulations promulgated thereunder. (k) Other than as described in the Memorandum or the documents incorporated by reference therein, there is not pending or, to the knowledge of the Company, threatened any action, suit, proceeding, inquiry or investigation to which the Company or any of the Subsidiaries is a party, or to which the property or assets of the Company or any of the Subsidiaries are subject, before or brought by any court, arbitrator or governmental agency or body which, if determined adversely to the Company or any of the Subsidiaries, would, individually or in the aggregate, have a Material Adverse Effect or which seeks to restrain, enjoin, prevent the consummation of or otherwise challenge the issuance or sale of the Notes to be sold hereunder or the consummation of the transactions contemplated hereby. (l) Each of the Company and the Subsidiaries possesses all licenses, permits, certificates, consents, orders, approvals and other authorizations from all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, presently required or necessary to own or lease, as the case may be, and to operate its properties and to carry on its businesses in the manner described in the Final Memorandum 7 ("Permits"), except where the failure to obtain such Permits would not, individually or in the aggregate, have a Material Adverse Effect; each of the Company and the Subsidiaries has fulfilled and performed in all material respects all of its obligations with respect to such Permits and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the holder of any such Permit; and none of the Company or the Subsidiaries has received any notice of any proceeding relating to revocation or modification of any such Permit, except as described in the Final Memorandum and except where such revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect. (m) Since the date of the most recent financial statements included or incorporated by reference in the Final Memorandum, except as described therein, none of the Company or the Subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree; and since the respective dates as of which information is given in the Final Memorandum, there has not been any material adverse change in the capital stock or consolidated short-term or long-term debt of the Company (exclusive of the issue of Notes contemplated by this Agreement) or any event or development that, individually or in the aggregate, has had or would be reasonably likely to have a Material Adverse Effect, otherwise than as set forth or contemplated in the Final Memorandum. (n) None of the Company or the Subsidiaries will be an "investment company" or "promoter" or "principal underwriter" for an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended, and the rules and regulations thereunder. (o) The Notes, the Exchange Notes, the Indenture and the Registration Rights Agreement will conform in all material respects to the descriptions thereof in the Final Memorandum. (p) No holder of securities of the Company or any Subsidiary will be entitled to have such securities registered under the registration statements required to be filed 8 by the Company pursuant to the Registration Rights Agreement other than as expressly permitted thereby. (q) Neither the Company nor its respective "affiliates" (as defined in Rule 501(b) of Regulation D under the Act) have directly, or through any agent, (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any "security" (as defined in the Act) which is or could be integrated with the sale of the Notes in a manner that would require the registration under the Act of the Notes or (ii) engaged in any form of general solicitation or general advertising (as those terms are used in Regulation D under the Act) in connection with the offering of the Notes or in any manner involving a public offering within the meaning of Section 4(2) of the Act. (r) Assuming the accuracy of the representations and warranties of the Initial Purchasers in Section 8 hereof, it is not necessary in connection with the offer, sale and delivery of the Notes to the Initial Purchasers in the manner contemplated by this Agreement to register any of the Notes under the Act or to qualify the Indenture under the TIA. (s) No securities of the Company are of the same class (within the meaning of Rule 144A under the Act) as the Notes and listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934 (the "Exchange Act"), or quoted in a U.S. automated inter-dealer quotation system. (t) None of the Company or the Subsidiaries has taken, nor will any of them take, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Notes. 3. Purchase, Sale and Delivery of the Notes. On the basis of the representations, warranties, agreements and covenants herein contained and subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the Initial Purchasers, and the Initial Purchasers, acting severally and not jointly, agree to purchase the Notes in the respective amounts set forth on Schedule 1 hereto from the Company, at 98.878% of their principal amount plus accrued interest from March 1, 1997. One or 9 more certificates in definitive form for the Notes that the Initial Purchasers have agreed to purchase hereunder, and in such denomination or denominations and registered in such name or names as the Initial Purchasers request upon notice to the Company at least 36 hours prior to the Closing Date, shall be delivered by or on behalf of the Company to the Initial Purchasers, against payment by or on behalf of the Initial Purchasers of the purchase price therefor by wire transfer (same day funds) to such account or accounts as the Company shall specify prior to the Closing Date, or by such means as the parties hereto shall agree prior to the Closing Date. Such delivery of and payment for the Notes shall be made at the offices of Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New York at 10:00 a.m., New York time, on March 10, 1997, or at such other place, time or date as the Initial Purchasers, on the one hand, and the Company, on the other hand, may agree upon, such time and date of delivery against payment being herein referred to as the "Closing Date". The Company will make such certificate or certificates for the Notes available for checking and packaging by the Initial Purchasers at the offices of Bear, Stearns & Co. Inc. in New York, New York, or at such other place as Bear, Stearns & Co. Inc. may designate, at least 24 hours prior to the Closing Date. 4. Offering by the Initial Purchasers. The Initial Purchasers propose to make an offering of the Notes at the price and upon the terms set forth in the Final Memorandum, as soon as practicable after this Agreement is entered into and as in the judgment of the Initial Purchasers is advisable. 5. Covenants of the Company. The Company covenants and agrees with each of the Initial Purchasers that: (a) The Company will not amend or supplement the Final Memorandum or any amendment or supplement thereto of which the Initial Purchasers shall not previously have been advised and furnished a copy for a reasonable period of time prior to the proposed amendment or supplement and as to which the Initial Purchasers shall not have given their consent, which consent shall not be unreasonably withheld. The Company will promptly, upon the reasonable request of the Initial Purchasers or counsel for the Initial Purchasers, make any amendments or supplements to the Preliminary Memorandum or the Final Memorandum that may be 10 necessary or advisable in connection with the resale of the Notes by the Initial Purchasers. (b) The Company will cooperate with the Initial Purchasers in arranging for the qualification of the Notes for offering and sale under the securities or "Blue Sky" laws of such jurisdictions as the Initial Purchasers may designate and will continue such qualifications in effect for as long as may be necessary to complete the resale of the Notes; provided, however, that in connection therewith, the Company shall not be required to qualify as a foreign corporation or to execute a general consent to service of process in any jurisdiction or subject itself to taxation in excess of a nominal dollar amount in any such jurisdiction where it is not then so subject. (c) If, at any time prior to the completion of the distribution by the Initial Purchasers of the Notes or the Private Exchange Notes, any event occurs or information becomes known as a result of which, in the judgment of the Company or in the opinion of counsel for the Initial Purchasers, the Final Memorandum as then amended or supplemented would include any untrue statement of a material fact, or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if for any other reason it is necessary at any time, in the judgment of the Company or in the opinion of counsel for the Initial Purchasers, to amend or supplement the Final Memorandum to comply with applicable law, the Company will promptly notify the Initial Purchasers thereof and will prepare, at the expense of the Company, an amendment or supplement to the Final Memorandum that corrects such statement or omission or effects such compliance. (d) The Company will, without charge, provide to the Initial Purchasers and to counsel for the Initial Purchasers as many copies of the Preliminary Memorandum and the Final Memorandum or any amendment or supplement thereto as the Initial Purchasers may reasonably request. (e) The Company will apply the net proceeds from the sale of the Notes as set forth under "Use of Proceeds" in the Final Memorandum. (f) For so long as any of the Notes remain outstanding, the Company will furnish to the Initial 11 Purchasers who are then making a market in the Notes copies of all reports and other substantive communications (financial or otherwise) furnished by the Company to the Trustee, or the holders of the Notes and, as soon as available, copies of any reports or financial statements furnished to or filed by the Company with the Commission or any national securities exchange on which any class of securities of the Company may be listed. (g) Prior to the Closing Date, the Company will furnish to the Initial Purchasers, as soon as they have been prepared, a copy of any unaudited interim financial statements of the Company for any quarterly period subsequent to the period covered by the most recent financial statements appearing in the Final Memorandum. (h) None of the Company or any of its "affiliates" will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any "security" (as defined in the Act) which could be integrated with the sale of the Notes in a manner which would require the registration under the Act of the Notes. (i) The Company will not, and will not permit any of the Subsidiaries to, engage in any form of general solicitation or general advertising (as those terms are used in Regulation D under the Act) in connection with the offering of the Notes or in any manner involving a public offering within the meaning of Section 4(2) of the Act. (j) For so long as any of the Notes remain outstanding, the Company will make available, upon request, to any seller of such Notes the information specified in Rule 144A(d)(4) under the Act, in the event that the Company is not then subject to Section 13 or 15(d) of the Exchange Act. (k) The Company will use its reasonable efforts to (i) permit the Notes to be designated PORTAL securities in accordance with the rules and regulations adopted by the NASD relating to trading in the Private Offerings, Resales and Trading through Automated Linkages market (the "Portal Market") and (ii) permit the Notes to be eligible for clearance and settlement through The Depository Trust Company. 12 6. Expenses. The Company agrees to pay all costs and expenses incident to the performance of its obligations under this Agreement, whether or not the transactions contemplated herein are consummated or this Agreement is terminated pursuant to Section 11 hereof, including all costs and expenses incident to (i) the printing, word processing or other production of documents with respect to the transactions contemplated hereby, including any costs of printing the Preliminary Memorandum and the Final Memorandum and any amendment or supplement thereto, and any "Blue Sky" memoranda, (ii) all arrangements relating to the delivery to the Initial Purchasers of copies of the foregoing documents, (iii) the fees and disbursements of the counsel, the accountants and any other experts or advisors retained by the Company, (iv) preparation (including printing), issuance and delivery to the Initial Purchasers of the Notes, (v) the qualification of the Notes under state securities and "Blue Sky" laws, including filing fees and reasonable fees and disbursements of counsel for the Initial Purchasers relating thereto, (vi) expenses of the Company in connection with any meetings with prospective investors in the Notes, (vii) fees and expenses of the Trustee including fees and expenses of counsel, (viii) all expenses and listing fees incurred in connection with the application for quotation of the Notes on the PORTAL Market and (ix) any fees charged by investment rating agencies for the rating of the Notes. If the sale of the Notes provided for herein is not consummated because any condition to the obligations of the Initial Purchasers set forth in Section 7 hereof is not satisfied, because this Agreement is terminated pursuant to Section 11 hereof or because of any failure, refusal or inability on the part of the Company to perform all obligations and satisfy all conditions on its part to be performed or satisfied hereunder (other than solely by reason of a default by the Initial Purchasers of their obligations hereunder after all conditions hereunder have been satisfied in accordance herewith), the Company agrees to promptly reimburse the Initial Purchasers upon demand for all reasonable out-of-pocket expenses (including reasonable fees, disbursements and charges of Cravath, Swaine & Moore, counsel for the Initial Purchasers) that shall have been incurred by the Initial Purchasers in connection with the proposed purchase and sale of the Notes. 7. Conditions of the Initial Purchasers' Obligations. The obligations of the Initial Purchasers to purchase and pay for the Notes shall, in their sole 13 discretion, be subject to the satisfaction or waiver of the following conditions on or prior to the Closing Date: (a) On the Closing Date, the Initial Purchasers shall have received a letter, dated as of the Closing Date and addressed to the Initial Purchasers, of Einar M. Rod, Esq., General Counsel for the Company, in form and substance satisfactory to counsel for the Initial Purchasers, to the effect that: He and/or members of his staff have participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants for the Company, representatives of the Initial Purchasers and counsel for the Initial Purchasers, at which conferences the contents of the Final Memorandum and related matters were discussed and, on the basis of such participation, although he has not independently verified and is not passing upon and assumes no responsibility for the accuracy, completeness or fairness of the statements contained in the Final Memorandum, no facts have come to his attention which lead him to believe that the Final Memorandum, on the date thereof or at the Closing Date, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no opinion with respect to the financial statements and related notes thereto and the other financial, statistical and accounting data included in the Final Memorandum). References to the Final Memorandum in this subsection (a) shall include any amendment or supplement thereto prepared in accordance with the provisions of this Agreement at the Closing Date. (b) On the Closing Date, the Initial Purchasers shall have received the opinion, dated as of the Closing Date and addressed to the Initial Purchasers, of Kirkland & Ellis, special counsel for the Company, in form and substance satisfactory to counsel for the Initial Purchasers, to the effect that: (i) Each of the Company and the Subsidiaries is validly existing and in good standing under the laws of its respective jurisdiction of incorporation and has 14 all requisite corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Final Memorandum. The Company is duly qualified to do business as a foreign corporation in good standing in the jurisdictions set forth on Schedule B thereto. (ii) Except as set forth in or contemplated by the Final Memorandum, to the knowledge of such counsel, no holder of securities of the Company is entitled to have such securities registered under a registration statement filed by the Company pursuant to the Registration Rights Agreement. (iii) To the knowledge of such counsel, no legal or governmental proceedings are pending to which the Company is a party or to which the property or assets of the Company are subject which would be required under the Act to be described in a registration statement or in a prospectus and are not described in the Final Memorandum or in a document incorporated by reference therein, or which seek to restrain, enjoin, prevent the consummation by the Company of or otherwise challenge the issuance or sale of the Notes to be sold hereunder to the Initial Purchasers or the application of the net proceeds therefrom as described in the Final Memorandum under the caption "Use of Proceeds". (iv) The Company has the corporate power and authority to execute, deliver and perform its obligations under the Indenture, the Notes, the Exchange Notes and the Private Exchange Notes; the form of the Indenture meets the requirements for qualification under the TIA; the Indenture has been duly authorized by all requisite corporate action of the Company and, when duly executed and delivered by the Company (assuming the due authorization, execution and delivery thereof by the Trustee), will constitute the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other laws now or hereafter in effect relating to or affecting creditors' rights generally (including applicable fraudulent transfer laws) and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in 15 equity) and the discretion of the court before which any proceeding therefor may be brought. (v) The Notes have each been duly authorized by all requisite corporate action of the Company and when duly executed and delivered by the Company and paid for by the Initial Purchasers in accordance with the terms of this Agreement (assuming the due authorization, execution and delivery of the Indenture by the Trustee and due authentication and delivery of the Notes by the Trustee in accordance with the Indenture), will constitute the valid and binding obligations of the Company, entitled to the benefits of the Indenture, and enforceable against the Company in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other laws now or hereafter in effect relating to or affecting creditors' rights generally (including applicable fraudulent transfer laws) and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and the discretion of the court before which any proceeding therefor may be brought. (vi) The Exchange Notes and the Private Exchange Notes have been duly authorized by all requisite corporate action of the Company and, when the Exchange Notes and the Private Exchange Notes have been duly executed and delivered by the Company in accordance with the terms of the Registration Rights Agreement and the Indenture (assuming the due authorization, execu- tion and delivery of the Indenture by the Trustee and due authentication and delivery of the Exchange Notes and the Private Exchange Notes by the Trustee in accordance with the Indenture), will constitute the valid and legally binding obligations of the Company, entitled to the benefits of the Indenture, and enforceable against the Company in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other laws now or hereafter in effect relating to or affecting creditors' rights generally (including applicable fraudulent transfer laws) and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and the discretion of the court before which any proceeding therefor may be brought. 16 (vii) The Company has the corporate power and authority to execute, deliver and perform its obligations under the Registration Rights Agreement; the Registration Rights Agreement has been duly authorized by all requisite corporate action of the Company and, when duly executed and delivered by the Company (assuming due authorization, execution and delivery thereof by the Initial Purchasers), will constitute the valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except that (A) the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other laws now or hereafter in effect relating to or affecting creditors' rights generally (including applicable fraudulent transfer laws) and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and the discretion of the court before which any proceeding therefor may be brought and (B) any rights to indemnity or contribution thereunder may be limited by federal and state securities laws and public policy considerations. (viii) The Company has the corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby; the execution, delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all requisite corporate action of the Company. This Agreement has been duly executed and delivered by the Company. (ix) The Indenture, the Notes, the Exchange Notes and the Registration Rights Agreement conform as to legal matters in all material respects to the descriptions thereof contained in the Final Memorandum. (x) The execution and delivery of this Agreement, the Indenture and the Registration Rights Agreement and the consummation of the transactions contemplated hereby and thereby (including the issuance and sale of the Notes to the Initial Purchasers) will not result in a breach or violation of (i) the articles of incorporation or bylaws of the Company, or 17 (ii) (assuming compliance with all applicable state securities or "Blue Sky" laws and assuming the accuracy of the representations and warranties of the Initial Purchasers in Section 8 hereof) any United States Federal or New York State statute, judgment, decree, order, rule or regulation of any governmental authority or regulatory body or the Delaware General Corporation Law of which such counsel is aware, which, in such counsel's experience, is normally applicable both to general business corporations which are not engaged in regulated business activities and to transactions of the type contemplated by the Final Memorandum (but without having made any special investigation as to other laws and provided that such opinion need not cover any laws or regulations to which the Company or its affiliates may be subject as a result of the Initial Purchasers' legal or regulatory status or the involvement of the Initial Purchasers in such transaction), except for any such conflict, breach or violation which would not, individually or in the aggregate, have a Material Adverse Effect. (xi) To the knowledge of such counsel, no consent, approval, authorization or order of any United States Federal, State of New York or Delaware governmental authority is required to be obtained by the Company for the issuance and sale by the Company of the Notes to the Initial Purchasers or the other transactions contemplated hereby, except such as may be required under Blue Sky laws, as to which such counsel need express no opinion, and those which have previously been obtained except where the failure to obtain such consents or waivers would not result in a Material Adverse Effect and except that the exchange offer contemplated by the Registration Rights Agreement requires an effective registration statement under the Act and the qualification of the Indenture under the TIA. (xii) No registration under the Act of the Notes is required in connection with the sale of the Notes to the Initial Purchasers as contemplated by this Agreement and the Final Memorandum or in connection with the initial resale of the Notes by the Initial Purchasers in accordance with Section 8 of this Agreement, and prior to the commencement of the Exchange Offer (as defined in the Registration Rights 18 Agreement) or the effectiveness of the Shelf Registration Statement (as defined in the Registration Rights Agreement), the Indenture is not required to be qualified under the TIA, in each case assuming (i) that the purchasers who buy such Notes in the initial resale thereof are qualified institutional buyers as defined in Rule 144A promulgated under the Act ("QIBs") or institutional accredited investors as defined in Rule 501(a)(1), (2), (3) or (7) promulgated under the Act ("Accredited Investors") or foreign persons under Regulation S, (ii) the accuracy of the Initial Purchasers' representations in Section 8 and those of the Company contained in this Agreement regarding the absence of a general solicitation in connection with the sale of such Notes to the Initial Purchasers and the initial resale thereof, (iii) the due performance by the Initial Purchasers of the agreements set forth in Section 8 hereof and (iv) the accuracy of the representations made by each Accredited Investor who purchases Notes in the initial resale as set forth in the Final Memorandum. (xiii) Assuming the proceeds from the sale of the Notes are applied as described in the Final Memorandum, neither the consummation of the transactions contemplated by this Agreement nor the sale, issuance, execution or delivery of the Notes will violate Regulation G, T, U or X of the Board of Governors of the Federal Reserve System. (xiv) None of the Company or the Subsidiaries is an "investment company" or "promoter" or "principal underwriter" for an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended, and the rules and regulations thereunder. The opinion of Kirkland & Ellis described in this Section shall be rendered to the Initial Purchasers at the request of the Company and shall so state therein. At the time the foregoing opinion is delivered, such counsel shall additionally state that such counsel has participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants for the Company, representa tives of the Initial Purchasers and counsel for the Initial Purchasers, at which conferences the contents of the Final 19 Memorandum and related matters were discussed and, on the basis of such participation (relying as to materiality to a large extent upon the opinions of officers and other representatives of the Company), although such counsel has not independently verified and is not passing upon and assumes no responsibility for the accuracy, completeness or fairness of the statements contained in the Final Memorandum, no facts have come to its attention which leads it to believe that the Final Memorandum, on the date thereof or at the Closing Date, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no opinion with respect to the financial statements and related notes thereto and the other financial, statistical and accounting data included in the Final Memorandum). References to the Final Memorandum in this subsection (b) shall include any amendment or supplement thereto prepared in accordance with the provisions of this Agreement at the Closing Date. In rendering such opinion, such counsel may state that they express no opinion as to the laws of any jurisdiction other than the federal laws of the United States, the laws of the States of New York and the Delaware General Corporation Law. Such counsel may also state that, insofar as such opinion involves factual matters, such counsel have relied, to the extent they deem proper, upon certificates of officers of the Company and certificates of public officials; provided, however, that such certificates have been provided to the Initial Purchasers. (c) On the Closing Date, the Initial Purchasers shall have received the opinion, in form and substance satisfactory to the Initial Purchasers, dated as of the Closing Date and addressed to the Initial Purchasers, of Cravath, Swaine & Moore, counsel for the Initial Purchasers, with respect to certain legal matters relating to this Agreement and such other related matters as the Initial Purchasers may reasonably require. In rendering such opinion, Cravath, Swaine & Moore shall have received from the Company and may rely upon such certificates and other documents and information as it may reasonably request to pass upon such matters. 20 (d) The Initial Purchasers shall have received from the Independent Accountants comfort letters dated the date hereof and the Closing Date, in form and substance satisfactory to the Initial Purchasers and their counsel. (e) The representations and warranties of the Company contained in this Agreement shall be true and correct on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date; the statements of the Company's officers made pursuant to any certificate delivered in accordance with the provisions hereof shall be true and correct on and as of the date made and on and as of the Closing Date; the Company shall have performed all covenants and agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date; and, except as described in the Final Memorandum (exclusive of any amendment or supplement thereto after the date hereof), subsequent to the date of the most recent financial statements in such Final Memorandum, there shall have been no event or development that, individually or in the aggregate, has or would be reasonably likely to have a Material Adverse Effect. (f) The sale of the Notes hereunder shall not be enjoined (temporarily or permanently) on the Closing Date. (g) The Initial Purchasers shall have received a certificate of the Company, dated the Closing Date, signed by its Chairman of the Board, President or any Senior Vice President and the Chief Financial Officer or Controller, to the effect that: (i) the representations and warranties of the Company contained in this Agreement are true and correct as of the date hereof and as of the Closing Date, and the Company has performed all covenants and agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date; (ii) at the Closing Date, since the date hereof or since the date of the most recent financial statements in the Final Memorandum (exclusive of any amendment or supplement thereto after the date hereof), no event or events have occurred, no information has become known nor does any condition exist that, individually or in 21 the aggregate, would have a Material Adverse Effect; and (iii) the sale of the Notes hereunder have not been enjoined (temporarily or permanently). (h) On the Closing Date, the Initial Purchasers shall have received the Registration Rights Agreement executed by the Company and such agreement shall be in full force and effect at all times from and after the Closing Date. On or before the Closing Date, the Initial Purchasers and counsel for the Initial Purchasers shall have received such further documents, opinions, certificates, letters and schedules or instruments relating to the business, corporate, legal and financial affairs of the Company and the Subsidiaries as they shall have heretofore reasonably requested from the Company. All such documents, opinions, certificates, letters, schedules or instruments delivered pursuant to this Agreement will comply with the provisions hereof only if they are reasonably satisfactory in all material respects to the Initial Purchasers and counsel for the Initial Purchasers. The Company shall furnish to the Initial Purchasers such conformed copies of such documents, opinions, certificates, letters, schedules and instruments in such quantities as the Initial Purchasers shall reasonably request. 8. Offering of Notes; Restrictions on Transfer. Each of the Initial Purchasers represents and warrants (as to itself only) that it is a QIB. Each of the Initial Purchasers agrees with the Company (as to itself only) that (i) it has not and will not engage in any form of general solicitation or general advertising (as those terms are used in Regulation D under the Act) in connection with the offering of the Notes or in any manner involving a public offering within the meaning of Section 4(2) of the Act; and (ii) it has and will solicit offers for the Notes only from, and will offer the Notes only to (A) in the case of offers inside the United States, (x) persons whom the Initial Purchasers reasonably believe to be QIBs or, if any such person is buying for one or more institutional accounts for which such person is acting as fiduciary or agent, only when such person has represented to the Initial Purchasers that 22 each such account is a QIB, to whom notice has been given that such sale or delivery is being made in reliance on Rule 144A, and, in each case, in transactions under Rule 144A or (y) a limited number of other institutional investors reasonably believed by the Initial Purchasers to be Accredited Investors that, prior to their purchase of the Notes, deliver to the Initial Purchasers a letter containing the representations and agreements set forth in Annex A to the Final Memorandum and (B) in the case of offers outside the United States, to persons other than U.S. persons ("foreign purchasers", which term shall include dealers or other professional fiduciaries in the United States acting on a discretionary basis for foreign beneficial owners (other than an estate or trust)); provided, however, that in the case of this clause (B), in purchasing such Notes such persons are deemed to have represented and agreed as provided under the caption "Notice to Investors" contained in the Final Memorandum. 9. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each Initial Purchaser and each person, if any, who controls any Initial Purchaser within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against any and all losses, liabilities, claims, damages and expenses whatsoever as incurred (including but not limited to reasonable attorneys' fees and any and all expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Memorandum, or in any supplement thereto or amendment thereof, or arise out of or are based upon 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; provided, however, that the Company will not be liable in any such case to the extent but only to the extent that any such loss, liability, claim, damage or expense arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with the information relating to the Initial Purchasers furnished to the Company 23 expressly for use therein; and provided further, that this indemnity agreement with respect to the Preliminary Memorandum shall not inure to the benefit of any Initial Purchaser from whom the person asserting such losses, liabilities, claims, damages or expenses purchased Notes, or any person controlling such Initial Purchaser, if a copy of the Final Memorandum (as then amended or supplemented if the Company shall have furnished any such amendments or sup- plements thereto, but excluding documents incorporated or deemed to be incorporated by reference therein) was not sent or given by or on behalf of the Initial Purchasers to such person at or prior to the written confirmation of the sale of such Notes to such person and if the Final Memorandum (as so amended or supplemented, but excluding documents incorporated or deemed to be incorporated by reference therein) would have corrected the defect giving rise to such loss, liability, claim, damage or expense, it being understood that this proviso shall have no application if such defect shall have been corrected in a document which is incorporated or deemed to be incorporated by reference in the Final Memorandum. This indemnity agreement will be in addition to any liability which the Company may otherwise have including under this Agreement. (b) Each Initial Purchaser, severally and not jointly, agrees to indemnify and hold harmless the Company, each of the directors of the Company and each other person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against any losses, liabilities, claims, damages and expenses whatsoever as incurred (including but not limited to attorneys' fees and any and all expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), jointly or several, to which they or any of them may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of material fact contained in any Memorandum or in any amendment thereof or supplement thereto, or arise out of or are based upon 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, in each case to the extent, but only to the extent, that any such loss, liability, claim, damage 24 or expense arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with the information relating to the Initial Purchasers furnished to the Company expressly for use therein. This indemnity will be in addition to any liability which any Initial Purchaser may otherwise have including under this Agreement. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify each party against whom indemnification is to be sought in writing of the commencement thereof (but the failure so to notify an indemnifying party shall not relieve it from any liability which it may have under paragraph (a) or (b) above). In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel satisfactory to such indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by one of the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to take charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) such indemnified party or parties shall have been advised by counsel that there may be defenses available to it or them which are different from or additional to those available to one or all of the indemnifying parties (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by the indemnifying parties. Anything in this subsection to the contrary notwithstanding, an indemnifying party shall not be liable for any settlement of any claim or action effected without its written consent; 25 provided, however, that such consent was not unreasonably withheld. (d) In order to provide for contribution in circumstances in which the indemnification provided for in the preceding paragraphs of this Section 9 is for any reason held to be unavailable from any indemnifying party or is insufficient to hold harmless a party indemnified thereunder, the Company and the Initial Purchasers shall contribute to the aggregate losses, claims, damages, liabilities and expenses of the nature contemplated by such indemnifi- cation provision (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, but after deducting in the case of losses, claims, damages, liabilities and expenses suffered by the Company any contribution received by the Company from persons, other than the Initial Purchasers, who may also be liable for contribution, including persons who control the Company within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, officers and directors of the Company) as incurred to which the Company and one or more of the Initial Purchasers may be subject, in such proportions as is appropriate to reflect the relative benefits received by the Company and the Initial Purchasers from the offering of the Notes or, if such allocation is not permitted by applicable law or indemnification is not available as a result of the indemnifying party not having received notice as provided in the preceding paragraphs of this Section 9, in such proportion as is appropriate to reflect not only the relative benefits referred to above but also the relative fault of the Company and the Initial Purchasers in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable con- siderations. The relative benefits received by the Company and the Initial Purchasers shall be deemed to be in the same proportion as (x) the total proceeds from the offering (net of discounts and commissions but before deducting expenses) received by the Company and (y) the discounts and commis- sions received by the Initial Purchasers, respectively. The relative fault of the Company and of the Initial Purchasers 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 Company or the Initial Purchasers and the parties' relative intent, know- 26 ledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this paragraph (d) were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), (i) in no case shall any Initial Purchaser be required to contribute any amount that in the aggregate exceeds the price at which the Notes were sold by such Initial Purchaser under this Agreement, less the amount of any damages that such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls an Initial Purchaser within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the same rights to contribution as such Initial Purchaser, and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, and each officer and director of the Company shall have the same rights to contribution as the Company, subject in each case to clauses (i) and (ii) of this paragraph (d). Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties, notify each party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may have under this paragraph (d) or otherwise. No party shall be liable for contribution with respect to any action or claim settled without its consent; provided, however, that such consent was not unreasonably withheld. 10. Survival Clause. The respective representations, warranties, agreements, covenants, indemnities and other statements of the Company, its officers and the Initial Purchasers set forth in this Agreement or made by or on behalf of them pursuant to this Agreement shall remain in 27 full force and effect, regardless of (i) any investigation made by or on behalf of the Company, any of its officers or directors, the Initial Purchasers or any other person referred to in Section 9 hereof and (ii) delivery of and payment for the Notes. The respective agreements, covenants, indemnities and other statements set forth in Sections 6, 9 and 15 hereof shall remain in full force and effect, regardless of any termination or cancelation of this Agreement. 11. Termination. (a) This Agreement may be terminated in the sole discretion of the Initial Purchasers by notice to the Company given prior to the Closing Date in the event that the Company shall have failed, refused or been unable to perform all obligations and satisfy all conditions on its part to be performed or satisfied hereunder at or prior thereto or, if at or prior to the Closing Date: (i) any domestic or international event or act or occurrence has materially disrupted, or in the opinion of the Initial Purchasers will in the immediate future materially disrupt, the market for the Company's securities or securities in general; or (ii) if trading on the New York or American Stock Exchanges shall have been suspended, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, on the New York or American Stock Exchanges by the New York or American Stock Exchanges or by order of the Commission or any other governmental authority having jurisdiction; or (iii) if a banking moratorium has been declared by a state or federal authority or if any new restriction materially adversely affecting the offering of the Notes shall have become effective; or (iv) if, subsequent to the date of this Agreement, there has been any downgrading in the rating of the Company's debt securities by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act) or any notice given of any intended or potential downgrading in the rating of the Company or of a possible change in any such rating that does not indicate the direction of the possible change; or (v) (A) if the United States becomes engaged in hostilities or there is an escalation of hostilities involving the United States or there is a declaration of a national emergency or war by the United States or (B) if there shall have been such change in political, financial or economic conditions if the effect of any such event in (A) or (B) as in the judgment of the Initial Purchasers makes it impracticable or inadvisable to 28 proceed with the offering, sale and delivery of the Notes on the terms contemplated by the Final Memorandum. (b) Termination of this Agreement pursuant to this Section 11 shall be without liability of any party to any other party except as provided in Section 10 hereof. 12. Information Supplied by the Initial Purchasers. The statements set forth in the last paragraph on the front cover page, the third paragraph on page 2, and in the third paragraph and the fourth sentence of the fourth paragraph under the heading "Plan of Distribution" in the Final Memorandum (to the extent such statements relate to the Initial Purchasers) constitute the only information furnished by the Initial Purchasers to the Company for the purposes of Sections 2(a) and 9 hereof. 13. Notices. All communications hereunder shall be in writing and, if sent to the Initial Purchasers, shall be mailed or delivered to Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York 10167, Attention: Capital Markets, 4th Floor; if sent to the Company, shall be mailed or delivered to the Company at 83 Wooster Heights Road, Danbury, Connecticut 06813-1911, Attention: General Counsel. All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; and one business day after being timely delivered to a next-day air courier. 14. Successors. This Agreement shall inure to the benefit of and be binding upon the Initial Purchasers, the Company and their respective successors and legal representatives, and nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person except that (i) the indemnities of the Company contained in Section 9 of this Agreement shall also be for the benefit of any person or persons who control the Initial Purchasers within the meaning of 29 Section 15 of the Act or Section 20 of the Exchange Act and (ii) the indemnities of the Initial Purchasers contained in Section 9 of this Agreement shall also be for the benefit of the directors and officers of the Company and any person or persons who control the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act. No purchaser of Notes from the Initial Purchasers will be deemed a successor because of such purchase. 15. Applicable Law. The validity and interpretation of this Agreement, and the terms and conditions set forth herein shall be governed by and construed in accordance with the laws of the state of New York applicable to contracts made and to be performed wholly therein, without giving effect to any provisions thereof relating to conflicts of law. 16. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 30 If the foregoing correctly sets forth our understanding, please indicate your acceptance thereof in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and the Initial Purchasers. Very truly yours, FIRST BRANDS CORPORATION By: /s/ JOSEPH B. FUREY __________________________________ Name: Joseph B. Furey Title: Vice President, Controller & Secretary The foregoing Agreement is hereby confirmed and accepted as of the date first above written. BEAR, STEARNS & CO. INC. TD SECURITIES (USA) INC. CREDIT LYONNAIS SECURITIES (USA) INC. FIRST UNION CAPITAL MARKETS CORP., By: Bear Stearns & Co. Inc., By: /s/ TIMOTHY A. O'NEILL _________________________________ Name: Timothy A. O'Neill Title: Senior Managing Director SCHEDULE 1
Principal Amount of Initial Purchaser Notes - ----------------- ---------- Bear, Stearns & Co. Inc. ........................... $130,000,000 TD Securities (USA) Inc. ........................... 10,000,000 Credit Lyonnais Securities (USA) Inc. .............. 5,000,000 First Union Capital Markets Corp. .................. 5,000,000 ------------ Total ........................................ $150,000,000
SCHEDULE 2 List of Material Subsidiaries ----------------------------- A & M Products Inc. EX-4 4 EXHIBIT 4.3 Execution Copy REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of March 5, 1997, between FIRST BRANDS CORPORATION, a Delaware corporation (the "Company"), and BEAR, STEARNS & CO. INC., TD SECURITIES (USA) INC., CREDIT LYONNAIS SECURITIES (USA) INC. and FIRST UNION CAPITAL MARKETS CORP. (the "Initial Purchasers"). This Agreement is being entered into in connection with the Purchase Agreement, dated the date hereof, between the Company and the Initial Purchasers (the "Purchase Agreement"), which provides for the sale by the Company to the Initial Purchasers of $150,000,000 aggregate principal amount of the Company's 7.25% Senior Notes Due 2007 (the "Notes"). In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Company has agreed to provide the registration rights set forth in this Agreement for the benefit of the Initial Purchasers and its direct and indirect transferees. The execution and delivery of this Agreement is a condition to the obligation of the Initial Purchasers to purchase the Notes under the Purchase Agreement. The parties hereby agree as follows: SECTION 1. Definitions. As used in this Agreement, the following terms shall have the following meanings: "Additional Interest" shall have the meaning set forth in Section 4(a) hereof. "Advice" shall have the meaning set forth in the last paragraph of Section 5 hereof. "Agreement" shall have the meaning set forth in the first introductory paragraph hereto. "Applicable Period" shall have the meaning set forth in Section 2(b) hereof. "Closing Date" shall mean the Closing Date set forth in the Purchase Agreement. 2 "Company" shall have the meaning set forth in the first introductory paragraph hereto. "Effectiveness Date" shall mean, with respect to any Registration Statement, the 75th day after the Filing Date with respect thereto. "Effectiveness Period" shall have the meaning set forth in Section 3(a) hereof. "Event Date" shall have the meaning set forth in Section 4(b) hereof. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. "Exchange Notes" shall have the meaning set forth in Section 2(a) hereof. "Exchange Offer" shall have the meaning set forth in Section 2(a) hereof. "Exchange Registration Statement" shall have the meaning set forth in Section 2(a) hereof. "Filing Date" shall mean (a) if no Registration Statement has been filed by the Company pursuant to this Agreement, the 45th day after the Issue Date; provided, however, that if a Shelf Notice is given within 10 days of the Filing Date, then the Filing Date with respect to the initial Shelf Registration shall be the 15th calendar day after the date of the giving of such Shelf Notice; and (b) in each other case (which may be applicable notwithstanding the consummation of the Exchange Offer), the 30th day after the delivery of a Shelf Notice. "Holder" shall mean any holder of a Registrable Note or Registrable Notes. "Indemnified Person" shall have the meaning set forth in Section 7(c) hereof. "Indemnifying Person" shall have the meaning set forth defined in Section 7(c) hereof. 3 "Indenture" shall mean the Indenture, dated as of March 1, 1997, between the Company and The Bank of New York, as trustee, pursuant to which the Notes are being issued, as amended or supplemented from time to time in accordance with the terms thereof. "Initial Purchasers" shall have the meaning set forth in the first introductory paragraph hereto. "Inspectors" shall have the meaning set forth in Section 5(o) hereof. "Issue Date" shall mean the date on which the original Notes were sold to the Initial Purchasers pursuant to the Purchase Agreement. "Majority Holders" shall have the meaning set forth in Section 3(c) hereof. "NASD" shall have the meaning set forth in Section 5(s) hereof. "Notes" shall have the meaning set forth in the second introductory paragraph hereto. "Participant" shall have the meaning set forth in Section 7(a) hereof. "Participating Broker-Dealer" shall have the meaning set forth in Section 2(b) hereof. "Person" shall mean an individual, trustee, corporation, partnership, limited liability company, joint stock company, trust, unincorporated association, union, business association, firm or other legal entity. "Private Exchange" shall have the meaning set forth in Section 2(b) hereof. "Private Exchange Notes" shall have the meaning set forth in Section 2(b) hereof. "Prospectus" shall mean the prospectus included in any Registration Statement (including any prospectus subject to completion and a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in 4 reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, and all other amendments and supplements to the Prospectus, with respect to the terms of the offering of any portion of the Registrable Notes covered by such Registration Statement including posteffective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. "Purchase Agreement" shall have the meaning set forth in the second introductory paragraph hereto. "Records" shall have the meaning set forth in Section 5(o) hereof. "Registrable Notes" shall mean each Note upon original issuance of the Notes and at all times subsequent thereto, each Exchange Note as to which Section 2(c)(iv) hereof is applicable upon original issuance and at all times subsequent thereto and each Private Exchange Note upon original issuance thereof and at all times subsequent thereto, until in the case of any such Note, Exchange Note or Private Exchange Note, as the case may be, the earliest to occur of (i) a Registration Statement (other than, with respect to any Exchange Note as to which Section 2(c)(iv) hereof is applicable, the Exchange Registration Statement) covering such Note, Exchange Note or Private Exchange Note, as the case may be, has been declared effective by the SEC and such Note (unless such Note was not tendered for exchange by the Holder thereof), Exchange Note or Private Exchange Note, as the case may be, has been disposed of in accordance with such effective Registration Statement, (ii) such Note, Exchange Note or Private Exchange Note, as the case may be, is sold in compliance with Rule 144, or (iii) such Note, Exchange Note or Private Exchange Note, as the case may be, ceases to be outstanding for purposes of the Indenture. "Registration Statement" shall mean any registration statement of the Company, including, but not limited to, the Exchange Registration Statement, that covers any of the Registrable Notes pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including posteffective 5 amendments, all exhibits, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. "Rule 144" shall mean Rule 144 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing for offers and sales of securities made in compliance therewith resulting in offers and sales by subsequent holders that are not affiliates of an issuer of such securities being free of the registration and prospectus delivery requirements of the Securities Act. "Rule 144A" shall mean Rule 144A promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144) or regulation hereafter adopted by the SEC. "Rule 415" shall mean Rule 415 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933 and the rules and regulations of the SEC promulgated thereunder. "Shelf Notice" shall have the meaning set forth in Section 2(c) hereof. "Shelf Registration" shall have the meaning set forth in Section 3(a) hereof. "TIA" shall mean the Trust Indenture Act of 1939, as amended. "Trustee" shall mean the trustee under the Indenture and, if existent, the trustee under any indenture governing the Exchange Notes and Private Exchange Notes (if any). "Underwritten registration or underwritten offering" shall mean a registration in which securities 6 of the Company are sold to an underwriter for reoffering to the public. SECTION 2. Exchange Offer. (a) The Company agrees to file with the SEC no later than the Filing Date an offer to exchange (the "Exchange Offer") any and all of the Registrable Notes (other than the Private Exchange Notes, if any) for a like aggregate principal amount of debt securities of the Company, which are identical in all material respects to the Notes (the "Exchange Notes") (and which are entitled to the benefits of the Indenture or a trust indenture which is identical in all material respects to the Indenture (other than such changes to the Indenture or any such identical trust indenture as are necessary to comply with any requirements of the SEC to effect or maintain the qualification thereof under the TIA) and which, in either case, has been qualified under the TIA), except that the Exchange Notes (other than Private Exchange Notes, if any) (i) shall have been registered pursuant to an effective Registration Statement under the Securities Act, (ii) shall contain no restrictive legend thereon and (iii) shall not contain any requirement by the Company to pay Additional Interest (other than with respect to periods prior to the issuance of such Exchange Notes). The Exchange Offer shall be registered under the Securities Act on the appropriate form (the "Exchange Registration Statement") and shall comply with all applicable tender offer rules and regulations under the Exchange Act. The Company agrees to use its best efforts to (x) cause the Exchange Registration Statement to be declared effective under the Securities Act on or before the Effectiveness Date; (y) keep the Exchange Offer open for at least 30 calendar days (or longer if required by applicable law) after the date that notice of the Exchange Offer is mailed to Holders; and (z) consummate the Exchange Offer on or prior to the 150th day following the Issue Date. If after such Exchange Registration Statement is declared effective by the SEC, the Exchange Offer or the issuance of the Exchange Notes thereunder is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Exchange Registration Statement shall be deemed not to have become effective for purposes of this Agreement. Each Holder who participates in the Exchange Offer will be required to represent that any Exchange Notes received by it will be acquired in the ordinary course of its business, that at the time of the consummation of the Exchange Offer such Holder will have no arrangement or understanding with any Person to participate in the 7 distribution of the Exchange Notes in violation of the provisions of the Securities Act, and that such Holder is not an affiliate of the Company within the meaning of the Securities Act. Upon consummation of the Exchange Offer in accordance with this Section 2, the Company shall have no further obligation to register Registrable Notes (other than Private Exchange Notes and other than in respect of any Exchange Notes as to which clause 2(c)(iv) hereof applies) pursuant to Section 3 hereof. No securities other than the Exchange Notes shall be included in the Exchange Registration Statement. (b) The Company shall include within the Prospectus contained in the Exchange Registration Statement a section entitled "Plan of Distribution", reasonably acceptable to the Initial Purchasers, which shall contain a summary statement of the positions taken or policies made by the Staff of the SEC with respect to the potential "underwriter" status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange Offer (a "Participating Broker-Dealer"), whether such positions or policies have been publicly disseminated by the Staff of the SEC or such positions or policies, in the judgment of counsel for the Initial Purchasers, represent the prevailing views of the Staff of the SEC. Such "Plan of Distribution" section shall also expressly permit the use of the Prospectus by all Persons subject to the prospectus delivery requirements of the Securities Act, including all Participating Broker-Dealers, and include a statement describing the means by which Participating Broker-Dealers may resell the Exchange Notes. If any Participating Broker-Dealer participates in the Exchange Offer and notifies the Company or causes the Company to be notified in writing that it is a Participating Broker-Dealer within 30 days after the last date for which exchanges are accepted pursuant to the Exchange Offer, the Company shall use its reasonable efforts to keep the Exchange Registration Statement effective and to amend and supplement the Prospectus contained therein, in order to permit such Prospectus to be lawfully delivered by any Participating Broker-Dealer subject to the prospectus delivery requirements of the Securities Act for such period of time as is necessary to comply with applicable law in connection with any resale of the Exchange Notes; provided, however, that such period shall not exceed 180 days after 8 the last date for which exchanges are accepted pursuant to the Exchange Offer (or such shorter period when all Exchange Notes received by Participating Broker-Dealers in exchange for Registrable Notes acquired for their own account as a result of market-making or other trading activities have been disposed of by such Participating Broker-Dealers or such longer period if extended pursuant to the last paragraph of Section 5 hereof) (the "Applicable Period"); and Participating Broker-Dealers shall not be authorized by the Company to, and shall not, deliver such Prospectus after such period in connection with resales contemplated by this Section 2(b) or otherwise. If, prior to the last date for which exchanges are accepted pursuant to the Exchange Offer, the Initial Purchasers hold any Notes acquired by them and having the status of an unsold allotment in the initial distribution, the Company shall, upon the request of any of the Initial Purchasers, simultaneously with the delivery of the Exchange Notes in the Exchange Offer issue and deliver to the Initial Purchasers in exchange (the "Private Exchange") for such Notes held by the Initial Purchasers a like principal amount of debt securities of the Company that are identical in all material respects to the Exchange Notes (the "Private Exchange Notes") (and which are issued pursuant to the same indenture as the Exchange Notes) except for the placement of a restrictive legend on such Private Exchange Notes. The Private Exchange Notes shall bear the same CUSIP number as the Exchange Notes. Interest on the Exchange Notes and the Private Exchange Notes will accrue from the last interest payment date on which interest was paid on the Notes surrendered in exchange therefor or, if no interest has been paid on the Notes, from March 1, 1997. In connection with the Exchange Offer, the Company shall: (i) mail to each Holder a copy of the Prospectus forming part of the Exchange Registration Statement, together with an appropriate letter of transmittal and related documents; (ii) utilize the services of a depositary for the Exchange Offer with an address in the Borough of Manhattan, The City of New York; 9 (iii) permit Holders to withdraw tendered Notes at any time prior to the close of business, New York time, on the last business day on which the Exchange Offer shall remain open; and (iv) otherwise comply in all material respects with all applicable laws, rules and regulations. As soon as practicable after the close of the Exchange Offer or the Private Exchange, as the case may be, the Company shall: (i) accept for exchange all Notes tendered and not validly withdrawn pursuant to the Exchange Offer or the Private Exchange; (ii) deliver to the Trustee for cancelation all Notes so accepted for exchange; and (iii) cause the Trustee to authenticate and deliver promptly to each Holder of Notes, either Exchange Notes or Private Exchange Notes, as the case may be, equal in principal amount to the Notes of such Holder so accepted for exchange. The Exchange Notes and the Private Exchange Notes may be issued under (i) the Indenture or (ii) an indenture identical in all material respects to the Indenture, which in either event shall provide that (A) the Exchange Notes shall not be subject to the transfer restrictions applicable to the Notes or the requirement of the Company to pay Additional Interest thereon and (B) the Private Exchange Notes shall be subject to the transfer restrictions applicable to the Notes. The Indenture or such indenture shall provide that the Exchange Notes, the Private Exchange Notes and the Notes shall vote and consent together on all matters as one class and that none of the Exchange Notes, the Private Exchange Notes or the Notes will have the right to vote or consent as a separate class on any matter. (c) If (i) because of any change in law or in currently prevailing interpretations of the Staff of the SEC, the Company is not permitted to effect an Exchange offer, (ii) the Exchange Offer is not consummated within 150 days of the Issue Date, (iii) any holder of Private Exchange Notes so requests at any time after the consummation of the Private Exchange or (iv) in the case of any Holder that participates in the Exchange Offer, such 10 Holder does not receive Exchange Notes on the date of the exchange that may be sold without restriction under federal securities laws (other than due solely to the status of such Holder as an affiliate of the Company within the meaning of the Securities Act), then the Company shall promptly deliver written notice thereof (the "Shelf Notice") to the Trustee and, in the case of clauses (i) and (ii), all Holders, in the case of clause (iii), the Holders of the Private Exchange Notes and, in the case of clause (iv), the affected Holder, and shall file a Shelf Registration pursuant to Section 3 hereof. SECTION 3. Shelf Registration. If a Shelf Notice is delivered as contemplated by Section 2(c) hereof, then: (a) Shelf Registration. The Company shall file with the SEC prior to the Filing Date a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering all the Registrable Notes (the "Shelf Registration"). The Shelf Registration shall be on Form S-3 or another appropriate form permitting registration of such Registrable Notes for resale by Holders in the manner or manners designated by them. The Company shall not permit any securities other than the Registrable Notes to be included in the Shelf Registration. The Company shall use its best efforts to cause the Shelf Registration to be declared effective under the Securities Act on or prior to the Effectiveness Date and shall use its reasonable efforts to keep the Shelf Registration continuously effective under the Securities Act until the date which is three years from the Issue Date, subject to extension pursuant to the last paragraph of Section 5 hereof (the "Effectiveness Period"), or such shorter period ending when all Registrable Notes covered by the Shelf Registration have been sold in the manner set forth and as contemplated in the Shelf Registration. (b) Withdrawal of Stop Orders. If the Shelf Registration ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the sale of all the securities registered thereunder), the Company shall use its best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof. (c) Supplements and Amendments. The Company shall promptly supplement and amend the Shelf Registration 11 if required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration, if required by the Securities Act, or if reasonably requested by the Holders of a majority in aggregate principal amount (the "Majority Holders") of the Registrable Notes covered by such Registration Statement or by any underwriter of such Registrable Notes. SECTION 4. Additional Interest. (a) The Company and the Initial Purchasers agree that the Holders of Registrable Notes will suffer damages if the Company fails to fulfill its obligations under Section 2 or Section 3 hereof and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Company agrees to pay, as liquidated damages, additional interest on the Notes ("Additional Interest") under the circumstances and to the extent set forth below: (i) if (A) neither the Exchange Registration Statement nor the Shelf Registration has been filed on or prior to the applicable Filing Date or (B) notwithstanding that the Company has consummated or will consummate an Exchange Offer, the Company is required to file a Shelf Registration Statement and such Shelf Registration Statement is not filed on or prior to the Filing Date applicable thereto, then, commencing on the day after the Filing Date applicable thereto, Additional Interest shall accrue on the Notes over and above the stated interest at a rate of 0.50% per annum; (ii) if (A) neither the Exchange Registration Statement nor the Shelf Registration is declared effective by the SEC on or prior to the relevant Effectiveness Date or (B) notwithstanding that the Company has consummated or will consummate the Exchange Offer, the Company is required to file a Shelf Registration and such Shelf Registration is not declared effective by the SEC on or prior to the Effectiveness Date in respect of such Shelf Registration, then, commencing on the day after such Effectiveness Date, Additional Interest shall accrue on the Notes included or which should have been included in such Registration Statement over and above the stated interest at a rate of 0.50% per annum; and (iii) if (A) the Company has not exchanged Exchange Notes for all Notes validly tendered in accordance with 12 the terms of the Exchange Offer on or prior to the 150th day after the Issue Date or (B) the Exchange Registration Statement ceases to be effective at any time prior to the time that the Exchange Offer is consummated or (C) if applicable, the Shelf Registration has been declared effective and such Shelf Registration ceases to be effective at any time during the Effectiveness Period, then Additional Interest shall accrue (over and above any interest otherwise payable on such Notes) at a rate of 0.50% per annum on (x) the 151st day after the Issue Date with respect to the Notes validly tendered and not exchanged by the Company, in the case of (A) above, or (y) the day the Exchange Registration Statement ceases to be effective in the case of (B) above, or (z) the day such Shelf Registration ceases to be effective in the case of (C) above (it being understood and agreed that, notwithstanding any provision to the contrary, so long as any Note which is the subject of a Shelf Notice is then covered by an effective Shelf Registration Statement, no Additional Interest shall accrue on such Note); provided, however, that the Additional Interest rate on any affected Note may not exceed at any one time in the aggregate 0.50% per annum; and provided further that (1) upon the filing of the Exchange Registration Statement or a Shelf Registration (in the case of clause (i) of this Section 4(a)), (2) upon the effectiveness of the Exchange Registration Statement or the Shelf Registration (in the case of clause (ii) of this Section 4(a)), or (3) upon the exchange of Exchange Notes for all Notes tendered and not validly withdrawn (in the case of clause (iii)(A) of this Section 4(a)), or upon the effectiveness of the Exchange Registration Statement which had ceased to remain effective (in the case of (iii)(B) of this Section 4(a)), or upon the effectiveness of the Shelf Registration which had ceased to remain effective (in the case of (iii)(C) of this Section 4(a)), Additional Interest on the affected Notes as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to accrue. (b) The Company shall notify the Trustee within three business days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an "Event Date"). Any amounts of Additional Interest due pursuant to clauses (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable to the Holders of affected Notes in cash semiannually on each March 1 and 13 September 1 (to the holders of record on the February 15 and August 15 immediately preceding such dates), commencing with the first such date occurring after any such Additional Interest commences to accrue. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the affected Registrable Notes of such Holders, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed), and the denominator of which is 360. SECTION 5. Registration Procedures. In connection with the filing of any Registration Statement pursuant to Sections 2 or 3 hereof, the Company shall effect such registration(s) to permit the sale of the securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto and in connection with any Registration Statement filed by the Company hereunder, the Company shall: (a) prepare and file with the SEC prior to the Filing Date a Registration Statement or Registration Statements as prescribed by Sections 2 or 3 hereof, to use its best efforts to cause each such Registration Statement to become effective and to use its reasonable efforts to cause such Registration Statement to remain effective as provided herein; provided, however, that, if (i) such filing is pursuant to Section 3 hereof, or (ii) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Company shall, if requested, furnish to and afford the Holders of the Registrable Notes covered by such Registration Statement or each such Participating Broker-Dealer, as the case may be, one counsel selected by the Majority Holders (the "Majority Counsel") and the managing underwriters of an underwritten offering (and their counsel, if any) of Registrable Notes, if any, a reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits 14 thereto) proposed to be filed (in each case at least five business days prior to such filing). The Company shall not file any Registration Statement or Prospectus or any amendments or supplements thereto in respect of which the Holders must be afforded an opportunity to review prior to the filing of such document, if the Majority Holders of the Registrable Notes covered by such Registration Statement, or any such Participating Broker-Dealer, as the case may be, the Majority Counsel, or the managing underwriters (or their counsel, if any), if any, shall reasonably object; (b) prepare and file with the SEC such amendments and posteffective amendments to each Shelf Registration or Exchange Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period or the Applicable Period or until consummation of the Exchange Offer, as the case may be; cause the related Prospectus to be supplemented by any Prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and comply with the provisions of the Securities Act and the Exchange Act applicable to it with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the subsequent resale of any securities being sold by a Participating Broker-Dealer covered by any such Prospectus; the Company will be deemed not to have used its reasonable efforts to cause the Exchange Offer Registration Statement or any Shelf Registration Statement, as the case may be, to remain effective during the Applicable Period or the Effectiveness Period, as the case may be, if the Company voluntarily takes any action that would result in the Holder of Registrable Notes covered thereby or Participating Broker-Dealers seeking to sell Exchange Notes not being able to sell such Registrable Notes or Exchange Notes, as the case may be, during that period unless (i) such action is, in the reasonable judgment of the Company, required by applicable law (including any interpretation of the SEC) or (ii) such action is taken by the Company in good faith and for valid business reasons (not including avoidance of the Company's obligations hereunder), including the acquisition or divestiture of assets, so long as the Company promptly 15 complies with the requirements of Section 5(k) hereof and the last paragraph of this Section 5; (c) if (i) a Shelf Registration is filed pursuant to Section 3 hereof, or (ii) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, notify the selling Holders of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, the Majority Counsel and the managing underwriters of an underwritten offering of Registrable Notes and their counsel, if any, promptly (but in any event within three business days) (A) when a Prospectus or any supplement thereto or posteffective amendment has been filed, and, with respect to a Registration Statement or any posteffective amendment, when the same has become effective under the Securities Act (including in such notice a written statement that any Holder may, upon request, obtain, at the sole expense of the Company, one conformed copy of such Registration Statement or posteffective amendment including financial statements and schedules, documents incorporated or deemed to be incorporated by reference and exhibits), (B) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the initiation of any proceedings for that purpose, (C) if at any time when a prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Notes or resales of Exchange Notes by Participating Broker-Dealers upon written notice by any such Participating Broker-Dealer of a resale, the representations and warranties of the Company contained in any agreement (including any underwriting agreement), contemplated by Section 5(n) hereof cease to be true and correct, (D) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (E) of the happening of any event, the existence of any condition or any information becoming known that makes any statement 16 made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in or amendments or supplements to such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (F) of the determination by the Company that a posteffective amendment to a Registration Statement would be appropriate; (d) use its reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement or the qualification (or exemption from qualification) of any of the Registrable Notes or the Exchange Notes for sale in any jurisdiction as soon as practicable; (e) if a Shelf Registration is filed pursuant to Section 3 and if requested by the managing underwriter or underwriters (if any), or the Holders of a majority in principal amount of the Registrable Notes being sold in connection with an underwritten offering, (i) promptly incorporate in a prospectus supplement or posteffective amendment such information as the managing underwriter or underwriters (if any), such Holders, or counsel for any of them reasonably request to be included therein, (ii) make all required filings of such prospectus supplement or such posteffective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such prospectus supplement or posteffective amendment, and (iii) supplement or make amendments to such Registration Statement; (f) if (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who 17 seeks to sell Exchange Notes during the Applicable Period, furnish to each selling Holder of Registrable Notes and to each such Participating Broker-Dealer who so requests, to the Majority Counsel and to each managing underwriter of an underwritten public offering of Registrable Notes and their counsel, if any, at the sole expense of the Company, one conformed copy of the Registration Statement or Registration Statements and each posteffective amendment thereto, including financial statements and schedules, and, if requested, all documents incorporated or deemed to be incorporated therein by reference and all exhibits; (g) if (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, deliver to each selling Holder of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, the Majority Counsel, and to the underwriters, if any, and such underwriters' counsel, at the sole expense of the Company, as many copies of the Prospectus or Prospectuses (including each form of preliminary prospectus) and each amendment or supplement thereto and any documents incorporated by reference therein as such Persons may reasonably request; and, subject to the last paragraph of this Section 5, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, and the underwriters or agents, if any, and dealers (if any), in connection with the offering and sale of the Registrable Notes covered by, or the sale by Participating Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and any amendment or supplement thereto; (h) prior to any public offering of Registrable Notes or any delivery of a Prospectus contained in the Exchange Registration Statement by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use its reasonable efforts to register or qualify such Registrable Notes (and to cooperate with selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may 18 be, the Majority Counsel, the managing underwriter or underwriters, if any, and such underwriters' counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Notes) for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer, or the managing underwriter or underwriters of an underwritten offering of Registrable Notes shall reasonably request in writing; provided, however, that where Exchange Notes held by Participating Broker-Dealers or Registrable Notes are offered other than through an underwritten offering, the Company agrees to cause its counsel to perform Blue Sky investigations and file registrations and qualifications required to be filed pursuant to this Section 5(h); keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Exchange Notes held by Participating Broker-Dealers or the Registrable Notes covered by the applicable Registration Statement; provided, however, that the Company shall not be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or (C) subject itself to taxation in excess of a nominal dollar amount in any such jurisdiction where it is not then so subject; (i) if a Shelf Registration is filed pursuant to Section 3 hereof, cooperate with the selling Holders of Registrable Notes and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Notes to be sold, which certificates shall not bear any restrictive legends (except any customary legend borne by securities held through The Depository Trust Company or any similar depository) and shall be in a form eligible for deposit with The Depository Trust Company; and enable such Registrable Notes to be in such denominations (consistent with the provisions of the Indenture and the officers' certificate establishing the form and terms of the Notes pursuant to the Indenture) and registered in such names as the 19 managing underwriter or underwriters, if any, or Holders may reasonably request; (j) use its reasonable efforts to cause the Registrable Notes covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the Holders thereof or the underwriter or underwriters, if any, to dispose of such Registrable Notes, except as may be required solely as a consequence of the nature of a selling Holder's business, in which case the Company will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals; (k) if (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, upon the occurrence of any event contemplated by paragraph 5(c)(ii)(E) or 5(c)(ii)(F) hereof, as promptly as practicable prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole expense of the Company, a supplement or posteffective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Notes being sold thereunder or to the purchasers of the Exchange Notes to whom such Prospectus will be delivered by a Participating Broker-Dealer, any such Prospectus will not contain 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 light of the circumstances under which they were made, not misleading; (l) use its reasonable efforts to cause the Registrable Notes covered by a Registration Statement or the Exchange Notes, as the case may be, to be rated with the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration 20 Statement or the Exchange Notes, as the case may be, or the managing underwriter or underwriters, if any; (m) prior to the effective date of the first Registration Statement relating to the Registrable Notes, (i) provide the Trustee with certificates for the Registrable Notes or Exchange Notes, as the case may be, in a form eligible for deposit with The Depository Trust Company and (ii) provide a CUSIP number for the Registrable Notes or Exchange Notes, as the case may be; (n) in connection with any underwritten offering of Registrable Notes pursuant to a Shelf Registration, negotiate in good faith and enter into an underwriting agreement, which shall be in form and scope as is customary in underwritten offerings of debt securities with similar credit ratings to the Notes and take all such other actions as are reasonably requested by the managing underwriter or underwriters in order to facilitate the registration or the disposition of such Registrable Notes and, in such connection, (i) make such representations and warranties to, and covenants with, the underwriters with respect to the business of the Company and its subsidiaries and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, as are customarily made by issuers to underwriters in underwritten offerings of debt securities with similar credit ratings to the Notes, and confirm the same in writing if and when requested; (ii) obtain the written opinion of counsel to the Company (which may be the Company's General Counsel) and written updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters, addressed to the underwriters covering the matters customarily covered in opinions requested in underwritten offerings of debt securities with similar credit ratings to the Notes and such other matters as may be reasonably requested by the managing underwriter or underwriters; (iii) obtain "cold comfort" letters and updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which 21 financial statements and financial data are, or are required to be, included or incorporated by reference in the Registration Statement), addressed to each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings of debt securities with similar credit ratings to the Notes and such other matters as reasonably requested by the managing underwriter or underwriters; and (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures no less favorable than those set forth in Section 7 hereof (or such other provisions and procedures acceptable to the Majority Holders of Registrable Notes covered by such Registration Statement and the managing underwriter or underwriters or agents) with respect to all parties to be indemnified pursuant to said Section. The above shall be done at the closing under such underwriting agreement, or as and to the extent required thereunder; (o) if (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, and to the extent customary in connection with a due diligence investigation for an offering of debt securities with a similar credit rating, make available for inspection by representatives approved by the Majority Holders of such Registrable Notes being sold, or such Participating Broker-Dealers, as the case may be, any underwriter participating in any such disposition of Registrable Notes, if any, one counsel to the underwriters, if any (collectively, the "Inspectors"), at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and instruments of the Company and its subsidiaries (collectively, the "Records") as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities. Records which the Company determines, in good faith, to be confidential and any Records which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such 22 Registration Statement, (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (iii) disclosure of such information is, in the opinion of counsel for any Inspector, necessary or advisable in connection with any action, claim, suit or proceeding, directly or indirectly, involving or potentially involving such Inspector and arising out of, based upon, relating to, or involving this Agreement, or any transactions contemplated hereby or arising hereunder, or (iv) the information in such Records has been made generally available to the public. Each selling Holder of such Registrable Securities and each such Participating Broker-Dealer will be required to agree that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Company unless and until such information is generally available to the public. Each selling Holder of such Registrable Notes and each such Participating Broker-Dealer will be required to further agree that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company to undertake appropriate action to prevent disclosure of the Records deemed confidential at the Company's sole expense; (p) provide an indenture trustee for the Registrable Notes or the Exchange Notes, as the case may be, and use its reasonable efforts to cause the Indenture or the trust indenture provided for in Section 2(a) hereof, as the case may be, to be qualified under the TIA not later than the effective date of the Exchange Offer or the first Registration Statement relating to the Registrable Notes; and in connection therewith, cooperate with the trustee under any such indenture and the Holders of the Registrable Notes, to effect such changes to such indenture as may be required for such indenture to be so qualified in accordance with the terms of the TIA; and execute, and use its reasonable efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable such indenture to be so qualified in a timely manner; 23 (q) comply with all applicable rules and regulations of the SEC and make generally available to its securityholders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Notes are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Company after the effective date of a Registration Statement, which statements shall cover said 12-month periods; (r) if an Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Registrable Notes by Holders to the Company (or to such other Person as directed by the Company) in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be, the Company shall mark, or cause to be marked, on such Registrable Notes that such Registrable Notes are being canceled in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be; in no event shall such Registrable Notes be marked as paid or otherwise satisfied; (s) cooperate with each seller of Registrable Notes covered by any Registration Statement and each underwriter, if any, participating in the disposition of such Registrable Notes and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc. (the "NASD"); and (t) use its reasonable efforts to take all other steps necessary or advisable to effect the registration of the Registrable Notes covered by a Registration Statement contemplated hereby. The Company may require each seller of Registrable Notes as to which any Registration is being effected to furnish to the Company such information regarding such seller and the distribution of such Registrable Notes as the Company may, from time to time, reasonably request. The Company may exclude from such registration the Registrable 24 Notes of any seller who unreasonably fails to furnish such information within a reasonable time after receiving such request. Each seller as to which any Shelf Registration is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such seller not materially misleading. Each Holder of Registrable Notes and each Participating Broker-Dealer agrees by acquisition of such Registrable Notes or Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, that, upon actual receipt of any notice from the Company of the happening of any event of the kind described in Section 5(c)(ii)(B), 5(c)(ii)(D), 5(c)(ii)(E), or 5(c)(ii)(F) hereof, such Holder will forthwith discontinue disposition of such Registrable Notes covered by such Registration Statement or Prospectus or Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as the case may be, until such Holder's or Participating Broker-Dealer's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof, or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements thereto. In the event the Company shall give any such notice, each of the Effectiveness Period and the Applicable Period shall be extended by the number of days during such periods from and including the date of the giving of such notice to and including the date when each seller of Registrable Notes covered by such Registration Statement or Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof or (y) the Advice. SECTION 6. Registration Expenses. (a) All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not the Exchange Offer or a Shelf Registration is filed or becomes effective, including (i) all registration and filing fees (including (A) fees with respect to filings required to be made with the NASD in connection with an underwritten offering and (B) fees and expenses of compliance with state securities or Blue Sky laws (including reasonable fees and disbursements of counsel in connection with Blue Sky qualifications of the Registrable Notes or Exchange Notes and determination of the 25 eligibility of the Registrable Notes or Exchange Notes for investment under the laws of such jurisdictions (x) where the holders of Registrable Notes are located, in the case of the Exchange Notes, or (y) as provided in Section 5(h) hereof, in the case of Registrable Notes or Exchange Notes to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses, including expenses of printing certificates for Registrable Notes or Exchange Notes in a form eligible for deposit with The Depository Trust Company and of printing prospectuses if the printing of prospectuses is requested by the managing underwriter or underwriters, if any, by the Majority Holders of the Registrable Notes included in any Registration Statement or sold by any Participating Broker-Dealer, as the case may be, (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company and, subject to the provisions of Section 6(b) hereof, reasonable fees and disbursements of counsel for the sellers of Registrable Notes, (v) fees and disbursements of all independent certified public accountants referred to in Section 5(n)(iii) hereof (including the expenses of any special audit and "cold comfort" letters required by or incident to such performance), (vi) rating agency fees, if any, and any fees associated with making the Registrable Notes or Exchange Notes eligible for trading through The Depository Trust Company, (vii) Securities Act liability insurance, if the Company desires such insurance, (viii) fees and expenses of all other Persons retained by the Company, (ix) internal expenses of the Company (including all salaries and expenses of officers and employees of the Company performing legal or accounting duties), (x) the expense of any annual audit, (xi) the fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange, if applicable, and (xii) the expenses relating to printing, word processing and distributing all Registration Statements, any underwriting agreement, indentures and any other documents necessary in order to comply with this Agreement. (b) The Company shall (i) reimburse the Holders of the Registrable Notes being registered pursuant to this Agreement for the reasonable fees and disbursements, in an aggregate amount not to exceed $25,000, of not more than one counsel (in addition to appropriate local counsel) chosen by the Majority Holders of the Registrable Notes to be included in such Registration Statement and (ii) reimburse out-of-pocket expenses (other than legal expenses) of Holders of Registrable Notes incurred in connection with the 26 registration and sale of the Registrable Notes pursuant to a Shelf Registration or in connection with the exchange of Registrable Notes pursuant to the Exchange Offer. SECTION 7. Indemnification. (a) The Company agrees to indemnify and hold harmless each Holder of Registrable Notes offered pursuant to a Shelf Registration Statement and each Participating Broker-Dealer selling Exchange Notes during the Applicable Period, the affiliates, directors, officers, agents, representatives and employees of each such Person or its affiliates, and each other Person, if any, who controls any such Person or its affiliates within the meaning of either Section 15 of the Securities Act or Section 20(a) of the Exchange Act (each, a "Participant"), from and against any and all losses, liabilities, claims, damages and expenses whatsoever as incurred (including reasonable attorneys' fees and any and all expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement pursuant to which the offering of such Registrable Notes or Exchange Notes, as the case may be, is registered, or in any supplement thereto or amendment thereof, or any related Prospectus, or any supplement thereto or amendment thereof, or any related preliminary Prospectus, or arise out of or are based upon 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; provided, however, that the Company will not be liable to any Participant in any such case to the extent but only to the extent that any such loss, liability, claim, damage or expense arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information relating to such Participant furnished to the Company in writing by or on behalf of such Participant expressly for use therein; provided further, however, that such indemnity agreement with respect to any preliminary Prospectus shall not inure to the benefit of any Participant from whom the Person asserting any loss, liability, claim, damage or expense purchased Registrable 27 Notes or Exchange Notes, as the case may be, if a copy of the Prospectus filed as part of an effective Registration Statement (as then amended or supplemented and furnished by the Company to such Participant) was not sent or given by or on behalf of such Participant to such Person, if such is required by law, at or prior to the sale of such Registrable Notes or Exchange Notes, as the case may be, and if such Prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, liability, claim, damage or expense. This indemnity agreement will be in addition to any liability which the Company may otherwise have, including under this Agreement. (b) Each Participant agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors and officers and each Person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act to the same extent as the foregoing indemnity from the Company to each Participant, but only (i) with reference to information relating to such Participant furnished to the Company in writing by or on behalf of such Participant expressly for use in any Registration Statement or Prospectus, any amendment or supplement thereto, or any preliminary prospectus or (ii) with respect to any untrue statement or representation made by such Participant in writing to the Company. (c) Promptly after receipt by any Person in respect of which indemnity may be sought under subsection (a) or (b) above of notice of the commencement of any action, such Person (the "Indemnified Person") shall, if a claim in respect thereof is to be made against the Person whom such indemnity may be sought (the "Indemnifying Person") under such subsection, notify each Indemnifying Person against whom indemnification is to be sought in writing of the commencement thereof (but the failure so to notify an Indemnifying Person shall not relieve it from any liability which it may have under paragraph (a) or (b) above). In case any such action is brought against any Indemnified Person, and it notifies an Indemnifying Person of the commencement thereof, the Indemnifying Person will be entitled to participate therein, and to the extent it may elect by written notice delivered to the Indemnified Person promptly after receiving the aforesaid notice from such Indemnified Person, to assume the defense thereof with counsel satisfactory to such Indemnified Person. Notwithstanding the foregoing, the Indemnified Person or parties 28 shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person or parties unless (i) the employment of such counsel shall have been authorized in writing by one of the Indemnifying Persons in connection with the defense of such action, (ii) the Indemnifying Persons shall not have employed counsel to take charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) such Indemnified Person or Persons shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to one or all of the Indemnifying Persons (in which case the Indemnifying Persons shall not have the right to direct the defense of such action on behalf of the Indemnified Person or Persons), in any of which events such fees and expenses shall be borne by the Indemnifying Persons. Anything in this subsection to the contrary notwithstanding, an Indemnifying Person shall not be liable for any settlement of any claim or action effected without its written consent; provided, however, that such consent was not unreasonably withheld. (d) In order to provide for contribution in circumstances in which the indemnification provided for in the preceding paragraphs of this Section 7 is for any reason held to be unavailable from any Indemnifying Person or is insufficient to hold harmless an Indemnified Person thereunder, each Indemnifying Person shall contribute to the aggregate losses, claims, damages, liabilities and expenses of the nature contemplated by such indemnification provision (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, but after deducting in the case of losses, claims, damages, liabilities and expenses suffered by the Company any contribution received by the Company from persons, other than the Indemnified Persons, who may also be liable for contribution, including persons who control the Company within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, officers and directors of the Company) as incurred to which the Indemnified Party may be subject, in such proportions as is appropriate to reflect the relative benefits received by the Indemnifying Person or Persons, on the one hand, and the Indemnified Person or Persons on the other from the offering of the Notes or, if such allocation is not permitted by applicable law or indemnification is not available as a result of the 29 Indemnifying Person not having received notice as provided in the preceding paragraphs of this Section 7, in such proportion as is appropriate to reflect not only the relative benefits referred to above but also the relative fault of the Indemnifying Person or Persons, on the one hand, and the Indemnified Person or Persons on the other in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the parties 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 Company or the Participant and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties agree that it would not be just and equitable if contribution pursuant to this paragraph (d) were determined by pro rata allocation (even if the Participants were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), (i) in no case shall a Participant be required to contribute any amount in excess of the amount by which proceeds received by such Participant from sales of Registrable Notes or Exchange Securities, as the case may be, exceeds the amount of damages that such Participant has otherwise been required to pay or has paid by reason of such untrue statement or alleged untrue statement or omission or alleged omission, and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties, notify each party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may have under this paragraph (d) or otherwise. No party shall be liable for contribution with respect to any action or claim settled without its consent; provided, however, that such consent was not unreasonably withheld. 30 SECTION 8. Rule 144 and Rule 144A. The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder in a timely manner in accordance with the requirements of the Securities Act and the Exchange Act and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Registrable Notes, make publicly available annual reports and such information, documents and other reports of the type specified in Sections 13 and 15(d) of the Exchange Act. The Company further covenants for so long as any Registrable Notes remain outstanding, to make available to any Holder or beneficial owner of Registrable Notes in connection with any sale thereof and any prospective purchaser of such Registrable Notes from such Holder or beneficial owner the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Registrable Notes pursuant to Rule 144A. SECTION 9. Underwritten Registration. If any of the Registrable Notes covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Majority Holders of such Registrable Notes included in such offering and reasonably acceptable to the Company. No Holder of Registrable Notes may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's Registrable Notes on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. SECTION 10. Miscellaneous. (a) No Inconsistent Agreements. The Company has not entered, as of the date hereof, and the Company will not, after the date of this Agreement, enter into any agreement with respect to any of its securities that is inconsistent with the rights granted to the Holders of Registrable Notes in this Agreement or otherwise conflicts with the provisions hereof. The Company has not entered and the Company will not enter into any agreement with respect to any of its securities which will 31 grant to any Person piggy-back registration rights with respect to a Registration Statement. (b) Adjustments Affecting Registrable Notes. The Company will not, directly or indirectly, take any action with respect to the Registrable Notes as a class that would adversely affect the ability of the Holders of Registrable Notes to include such Registrable Notes in a registration undertaken pursuant to this Agreement. (c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, otherwise than with the prior written consent of the Holders of not less than a majority in aggregate principal amount of the then outstanding Registrable Notes. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Notes whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Notes may be given by Holders of at least a majority in aggregate principal amount of the Registrable Notes being sold by such Holders pursuant to such Registration Statement; provided, however, that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the immediately preceding sentence. (d) Notices. All notices and other communications (including any notices or other communications to the Trustee) provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, next-day air courier or facsimile: (i) if to a Holder of the Registrable Notes or any Participating Broker-Dealer, at the most current address of such Holder or Participating Broker-Dealer, as the case may be, set forth on the records of the 32 registrar under the Indenture, with a copy in like manner to the Initial Purchasers as follows: Bear, Stearns & Co. Inc. 245 Park Avenue New York, New York 10167 Facsimile No: (212) 272-2000 Attention: Capital Markets, 4th Floor with a copy to: Cravath, Swaine & Moore Worldwide Plaza 825 Eighth Avenue New York, New York 10019 Facsimile No: (212) 474-3700 Attention: Kris F. Heinzelman (ii) if to the Initial Purchasers, at the address specified in Section 10(d)(i); (iii) if to the Company, as follows: First Brands Corporation 83 Wooster Heights Road Danbury, Connecticut 06813-1511 Facsimile No.: (203) 731-2570 Attention: General Counsel with copies to: Kirkland & Ellis Citicorp Center 153 East 53rd Street New York, New York 10022-4675 Facsimile No: (212) 446-4900 Attention: Charles B. Fromm All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; one business day after being timely delivered to a next-day air courier; and when receipt is acknowledged by the addressee, if sent by facsimile. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person 33 giving the same to the Trustee at the address and in the manner specified in such Indenture. (e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign holds Registrable Notes. (f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, as applied to contracts made and performed wholly within the State of New York, without regard to principles of conflicts of law. (i) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. (j) Notes Held by the Company or Its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Notes is required hereunder, Registrable Notes held by the Company or its affiliates (as such term is defined in Rule 405 under the Securities Act) 34 shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (k) Third-Party Beneficiaries. Holders of Registrable Notes and Participating Broker-Dealers are intended third-party beneficiaries of this Agreement and this Agreement may be enforced by such Persons. 35 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. FIRST BRANDS CORPORATION, by /s/ JOSEPH B. FUREY ___________________________________ Name: Joseph B. Furey Title: Vice President, Controller & Secretary BEAR, STEARNS & CO. INC. TD SECURITIES (USA) INC. CREDIT LYONNAIS SECURITIES (USA) INC. FIRST UNION CAPITAL MARKETS CORP., By: Bear, Stearns & Co. Inc., by /s/ TIMOTHY A. O'NEILL ___________________________________ Name: Timothy A. O'Neill Title: Senior Managing Director EX-5 5 EXHIBIT 5.1 KIRKLAND & ELLIS PARTNERSHIP INCLUDING PROFESSIONAL CORPORATION Citicorp Center 153 East 53rd Street New York, New York 10022-4675 April 24, 1997 First Brands Corporation 83 Wooster Heights Road Danbury, Connecticut 06813-1911 Re: Series B 7.25% Senior Notes due 2007 Gentlemen: We have acted as special counsel to First Brands Corporation, a Delaware corporation (the "Company"), in connection with the proposed registration under the Securities Act of 1933, as amended (the "Securities Act"), of $150,000,000 principal amount of Series B 7.25% Senior Notes due 2007 (the "Exchange Notes") for the purpose of effecting an exchange offer (the "Exchange Offer") for the Company's 7.25% Senior Notes due 2007 (the "Notes"). In connection therewith, we have examined and relied upon the original, or copies certified or otherwise identified to our satisfaction, of: (i) the Restated Certificate of Incorporation and By-Laws of the Company; (ii) minutes and records of the corporate proceedings of the Company with respect to the issuance and sale of the Exchange Notes; (iii) the registration statement regarding the registration of the Exchange Notes (the "Registration Statement") and exhibits thereto; (iv) the form of indenture entered into between the Company and The Bank of New York (the "Trustee") relating to the Notes (the "Indenture"); and (v) such other documents, corporate records and other instruments as we have deemed necessary for the expression of the opinions contained herein. For purposes of this opinion, we have assumed the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies, and the authenticity of the originals of all documents submitted to us as copies. We have also assumed the genuineness of the signatures of persons signing all documents in connection with which this opinion is rendered, the authority of such persons signing on behalf of the parties thereto other than the Company, and the due authorization, execution and delivery of all documents by the parties thereto other than the Company. It is our opinion that when, as and if (i) the Registration Statement shall have become effective pursuant to the provisions of the Securities Act, (ii) the Indenture shall have been qualified pursuant to the provisions of the Trust Indenture Act of 1939, as amended, (iii) the Notes shall have been validly tendered to the Company and (iv) the Exchange Notes shall have been issued in the form and containing the terms described in the Registration Statement, the Indenture, the resolutions of the Company's Board of Directors (and any authorized committee thereof) authorizing the foregoing and any legally required consents, approvals, authorizations and other order of the Commission and any other regulatory authorities to be obtained, the Exchange Notes when issued pursuant to the Exchange Offer will be legally issued, fully paid and nonassessable and will constitute binding obligations of the Company. Our opinions as herein expressed are subject to the following qualifications: (a) our opinions are subject to the effect of applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or transfer or other laws of general applicability relating to or affecting the enforcement of creditors' rights from time to time in effect and to general principles of equity; (b) provisions in the Indenture and the Exchange Notes deemed to impose the payment of interest on interest may be unenforceable, void or voidable under applicable law; (c) requirements in the Indenture and the Exchange Notes specifying that the provisions thereof may only be waived in writing may not be valid, binding or enforceable to the extent that an oral or implied agreement by trade practice or course of conduct has been created modifying any provision of such documents; (d) we express no opinion as to the enforceability of the indemnification provisions of the Indenture and the Notes insofar as said provisions might require indemnification with respect to any litigation against the Company determined adversely to the Trustee, or any loss, cost or expense arising out of the Trustee's gross negligence or willful misconduct or any violation by such trustee of statutory duties, general principles or equity or public policy; and (e) we express no opinion with respect to indemnification or contribution obligations which contravene public policy including, without limitation, indemnification or contribution obligations which arise out of failure to comply with applicable state or federal securities law. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to this firm under the section titled "Legal Matters" in the Registration Statement. We do not find it necessary for the purposes of this opinion, and accordingly we do not purport to cover herein, the application of the securities or "Blue Sky" laws of the various states to the issuance of the Notes. We are admitted to practice law in the State of New York, and we express no opinions as to matters under or involving any laws other than the laws of the State of New York, the federal laws of the United States of America and the General Corporation Law of the State of Delaware. This opinion is furnished to you in connection with the filing of the Registration Statement, and is not to be used, circulated, quoted or otherwise relied upon for any other purposes. Yours very truly, /s/ Kirkland & Ellis KIRKLAND & ELLIS EX-10 6 EXHIBIT 10.1 ================================================================================ AMENDED AND RESTATED CREDIT AGREEMENT among FIRST BRANDS CORPORATION, THE CHASE MANHATTAN BANK, as Agent, and THE SEVERAL LENDERS PARTIES HERETO Dated as of February 28, 1997 ================================================================================ TABLE OF CONTENTS
Page SECTION 1. DEFINITIONS......................................................................................... 1 1.1. Defined Terms.................................................................................... 1 1.2. Other Definitional Provisions.................................................................... 23 SECTION 2. THE COMMITTED RATE LOANS; THE BID LOANS; THE SWING LINE LOANS...................................... 23 2.1. The Committed Rate Loans......................................................................... 23 2.2. The Bid Loans.................................................................................... 25 2.3. Limitation on Aggregate Extensions of Credit..................................................... 29 2.4. Repayment of Loans............................................................................... 29 2.5. Termination or Reduction of Commitments.......................................................... 29 2.6. Optional and Mandatory Prepayments............................................................... 29 2.7. Interest Rates and Payment Dates................................................................. 31 2.8. Minimum Amounts of Tranches...................................................................... 31 2.9. Fees ......................................................................................... 31 2.10. Requirements of Law.............................................................................. 32 2.11. Taxes .......................................................................................... 34 2.12. Computation of Interest and Fees................................................................. 35 2.13. Pro Rata Treatment and Payments.................................................................. 35 2.14. Inability to Determine Interest Rate............................................................. 36 2.15. Illegality....................................................................................... 37 2.16. Indemnity........................................................................................ 37 2.17. Conversion and Continuation Options.............................................................. 38 2.18. Eurocurrency Reserve Costs....................................................................... 39 2.19. Use of Proceeds.................................................................................. 39 2.20. Swing Line Commitment............................................................................ 39 2.21. Swing Line Note.................................................................................. 40 2.22. Procedure for Borrowing for Swing Line Loans..................................................... 40 2.23. Refunded Swing Line Loans; Swing Line Loan Participations....................................... 41 SECTION 3. LETTERS OF CREDIT.................................................................................. 42 3.1. Letters of Credit................................................................................ 42 3.2. Issuance of Letters of Credit.................................................................... 43 3.3. Participating Interests.......................................................................... 43 3.4. Reimbursement Obligation of the Company.......................................................... 43 3.5. Letter of Credit Payments........................................................................ 44 3.6. Letter of Credit Fees............................................................................ 44 3.7. Obligations of the Company Absolute.............................................................. 45 3.8. Letter of Credit Application..................................................................... 45 3.9. Purpose of Letters of Credit..................................................................... 45 SECTION 4. REPRESENTATIONS AND WARRANTIES...................................................................... 46 4.1. Financial Condition.............................................................................. 46 4.2. No Change........................................................................................ 47 4.3. Corporate Existence; Compliance with Law......................................................... 47 4.4. Corporate Power; Authorization................................................................... 47
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Page 4.5. Enforceable Obligations.......................................................................... 47 4.6. No Legal Bar..................................................................................... 48 4.7. No Material Litigation........................................................................... 48 4.8. Federal Regulation............................................................................... 48 4.9. Investment Company Act........................................................................... 48 4.10. No Default....................................................................................... 48 4.11. Ownership of Property; Liens..................................................................... 48 4.12. Patents and Trademarks........................................................................... 48 4.13. Taxes .......................................................................................... 49 4.14. No Burdensome Restrictions....................................................................... 49 4.15. ERISA .......................................................................................... 49 4.16. Subsidiaries..................................................................................... 50 4.17. Lessor Intellectual Property..................................................................... 50 4.18. Environmental Status............................................................................. 50 SECTION 5. CONDITIONS PRECEDENT................................................................................ 51 5.1. Conditions to Initial Extension of Credit........................................................ 51 5.2. Conditions to Each Extension of Credit........................................................... 53 SECTION 6. AFFIRMATIVE COVENANTS............................................................................... 54 6.1. Financial Statements............................................................................. 54 6.2. Certificates; Other Information.................................................................. 55 6.3. Payment of Obligations........................................................................... 56 6.4. Conduct of Business and Maintenance of Existence................................................. 56 6.5. Maintenance of Property and Insurance............................................................ 56 6.6. Inspection of Property; Books and Records; Discussions.......................................... 57 6.7. Notices ......................................................................................... 57 6.8. Separate Corporate Entity for and Borrowing by Unrestricted Subsidiaries........................ 58 SECTION 7. NEGATIVE COVENANTS.................................................................................. 58 7.1. Limitation on Liens.............................................................................. 58 7.2. Prohibition of Fundamental Changes............................................................... 60 7.3. Limitation on Restricted Payments................................................................ 60 7.4. Limitation on Investments, Acquisitions, Loans and Advances..................................... 61 7.5. Limitations on Sale of Assets.................................................................... 62 7.6. Ratio of Consolidated Total Indebtedness to Consolidated Total Capitalization................... 63 7.7. Interest Coverage Ratio.......................................................................... 63 7.8. Limitation on Indebtedness of Unrestricted Subsidiaries......................................... 63 7.9. Limitation on Prepayments, Amendments and Payments in respect of Subordinated Indebtedness and New Sale- Leasebacks...................................................................... 63 7.10. Limitation on Affiliate Transactions............................................................. 65 7.11. Prohibition on Change in Business................................................................ 65 7.12. Limitation on Assets of Non-Recourse. Unrestricted Subsidiaries...................................................................................... 65
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Page SECTION 8. EVENTS OF DEFAULT................................................................................... 65 SECTION 9. THE AGENT........................................................................................... 69 9.1. Appointment...................................................................................... 69 9.2. Delegation of Duties............................................................................. 70 9.3. Exculpatory Provisions........................................................................... 70 9.4. Reliance by Agent................................................................................ 70 9.5. Notice of Default................................................................................ 71 9.6. Non-Reliance on Agent and Other Lenders.......................................................... 71 9.7. Indemnification.................................................................................. 72 9.8. Agent in its Individual Capacity................................................................. 72 9.9. Successor Agent.................................................................................. 72 SECTION 10. MISCELLANEOUS...................................................................................... 73 10.1. Amendments and Waivers.......................................................................... 73 10.2. Notices......................................................................................... 74 10.3. No Waiver; Cumulative Remedies.................................................................. 75 10.4. Survival of Representations and Warranties...................................................... 75 10.5. Payment of Expenses and Taxes................................................................... 75 10.6. Successors and Assigns; Participations; Purchasing Lenders.................................... 76 10.7. Adjustments; Set-off............................................................................ 79 10.8. Confidentiality................................................................................. 80 10.9. Further Assurances.............................................................................. 81 10.10. Severability.................................................................................... 81 10.11. Counterparts.................................................................................... 81 10.12. GOVERNING LAW................................................................................... 81 10.13. Submission to Jurisdiction...................................................................... 81 10.14. Acknowledgements................................................................................ 82 10.15. WAIVER OF JURY TRIAL............................................................................ 82 10.16. Integration..................................................................................... 82
- iii - Schedules Schedule I Commitments, Commitment Percentages, Lending Offices Schedule II Patents Schedule III Trademarks Schedule IV Competitors Schedule 4.1 Sales, Transfers and Other Dispositions Schedule 4.7 Litigation Schedule 4.16 Subsidiaries Schedule 4.17 Effective Date Lessor Intellectual Property Schedule 4.18 Environmental Matters Schedule V Existing Financing Leases Schedule 7.10 Permitted Affiliate Transactions Exhibits Exhibit A Committed Rate Note Exhibit B Bid Loan Note Exhibit C Swing Line Note Exhibit D Bid Loan Confirmation Exhibit E Bid Loan Offer Exhibit F Bid Loan Request Exhibit G Subsidiary Guarantee Consent Exhibit H Swing Line Loan Participation Certificate Exhibit I Cash Collateral Agreement Exhibit J Borrowing Certificate Exhibit K Opinion of Kirkland & Ellis Exhibit L Assignment and Acceptance - iv - AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 28, 1997, among FIRST BRANDS CORPORATION, a Delaware corporation (the "Company"), the several lenders from time to time parties hereto (the "Lenders"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as agent for the Lenders hereunder (in such capacity, the "Agent"). W I T N E S S E T H : WHEREAS, the Company, certain lenders (the "Existing Lenders"), and The Chase Manhattan Bank (formerly Chemical Bank), as agent for the Existing Lenders, are parties to a Credit Agreement, dated as of February 3, 1995 (as the same has been amended, supplemented or otherwise modified, the "Existing Credit Agreement"), pursuant to which the Existing Lenders have made revolving credit loans, bid loans and swing line loans, and issued or participated in letters of credit for the account of the Company; and WHEREAS, the Company has requested that the Existing Credit Agreement be amended to effect certain modifications as more particularly set forth herein; and WHEREAS, the Lenders are agreeable to the Company's request and to amending and restating the Existing Credit Agreement on the terms and conditions set forth herein to effect such request; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, the parties hereto hereby agree that on the Effective Date (as hereinafter defined) the Existing Credit Agreement shall be amended and restated to read in its entirety as follows: SECTION 1. DEFINITIONS 1.1. Defined Terms. As used in this Agreement, the following terms shall have the following respective meanings (such definitions to be equally applicable to the singular and plural forms thereof): "ABR Loans" shall mean Loans whose interest rate is based on the Alternate Base Rate; "Absolute Rate Bid Loan" shall mean a loan made pursuant to an Absolute Rate Bid Loan Request; "Absolute Rate Bid Loan Request" shall mean any Bid Loan Request requesting the Lenders to offer to make Bid Loans at an absolute rate (as opposed to a rate composed of the Applicable Index Rate plus (or minus) a margin); 2 "Affiliate" of any Person shall mean any Person (other than a Restricted Subsidiary) which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person; for purposes of this definition, control of a Person shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise; "Agent" shall have the meaning ascribed thereto in the preamble hereto; "Aggregate Outstandings" shall have the meaning specified in subsection 2.3; "Agreement" shall mean this Credit Agreement, as the same may be amended, supplemented or otherwise modified from time to time; "Alternate Base Rate" shall mean, for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of: (a) the Prime Rate in effect on such day; (b) the Base CD Rate in effect on such day plus 1%; and (c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. If for any reason the Agent shall have determined (which determination shall be conclusive absent clearly demonstrable error) that it is unable to ascertain the Base CD Rate or the Federal Funds Effective Rate or both for any reason, including the inability or failure of the Agent to obtain sufficient quotations in accordance with the terms thereof, the Alternate Base Rate shall be determined without regard to clause (b) or (c), or both, as appropriate, until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the date of such change; "Applicable Index Rate" shall mean, in respect of any Bid Loan requested pursuant to an Index Rate Bid Loan Request, the LIBO Rate applicable to the Interest Period for such Bid Loan; "Applicable Margin" shall mean, for each Type of Loan, the rate per annum set forth opposite the actual or implied senior unsecured long-term debt rating of the Company below (or, if the Applicable Margin is determined by reference to the rating of another rating agency, such ratings as are 3 generally recognized as being equivalent to those set forth below), as quoted by such rating agency or otherwise determined in a manner reasonably satisfactory to the Agent by reference to the ratings of the Company's subordinated unsecured long-term debt securities published by Moody's or S&P, or, if neither of Moody's or S&P no longer publishes ratings of the Company's senior unsecured long-term debt securities or subordinated unsecured long-term debt securities, the rate per annum set forth below opposite the applicable ratio of Consolidated Total Indebtedness to Consolidated EBITDA: Consolidated Total Indebtedness/ Consolidated Eurodollar Ratings EBITDA Loan CD Loan ------- ------------- ---------- ------- S&P Moody's --- ------- BB+ or Ba1 or less >2.25x 0.425% 0.550% less - BBB- Baa3 <2.25x but 0.275% 0.400% >1.25x - BBB Baa2 <1.25x but 0.250% 0.375% >0.75x - BBB+ Baa1 <0.75x but 0.225% 0.350% >0.50x - A- or A3 or <0.50x 0.175% 0.300% higher higher In the event that the Applicable Margin is being determined in accordance with the actual or implied senior unsecured long-term debt rating of the Company and such rating by either S&P or Moody's is not the rating set forth opposite the then-current such rating by the other rating agency in the table above under the heading "Ratings", the Applicable Margin shall be the rate per annum set forth opposite the higher of such two ratings. Changes in the Applicable Margin (whether increases or decreases thereof) shall take effect on the first Business Day following the date the relevant change in the rating of the Company's securities is published; and In the event that the Applicable Margin is being determined in accordance with the ratio of Consolidated Total Indebtedness to Consolidated EBITDA, the Applicable Margin for any date during any fiscal quarter shall be determined by reference to the ratio of Consolidated Total Indebtedness to Consolidated EBITDA as of the last day of the Company's second preceding fiscal quarter, provided that if the Company shall at any time fail to deliver to the Lenders prior to the first day of any fiscal quarter the financial 4 statements required pursuant to subsection 6.1 for the period ending at the end of the second preceding fiscal quarter, such ratio, until such financial statements shall be delivered, shall be deemed to be greater than 2.25 to 1; "Assignment and Acceptance" shall have the meaning ascribed thereto in subsection 10.6(c); "Available Commitment" shall mean, as to any Lender at any time, the excess, if any, of (a) the amount of such Lender's Commitment as in effect at such time over (b) the sum of (i) the aggregate principal amount of all Committed Rate Loans made by such Lender then outstanding plus (ii) the undrawn face amount of such Lender's participating interest or, in the case of Chase, residual interest in all Letters of Credit issued pursuant to subsections 3.1 and 3.2 plus (iii) such Lender's participating interest in or, in the case of Chase, residual interest in the unpaid reimbursement obligations of the Company with respect to Letters of Credit whether or not outstanding at such time, plus (iv) in the case of Chase, the aggregate principal amount of all Swing Line Loans made by Chase then outstanding; "Banking Governmental Authority" shall mean any of the Board, the Office of the Comptroller of the Currency or the Federal Deposit Insurance Corporation (or any successor bank regulatory authorities or agencies); "Base CD Rate" shall mean the sum of (a) the product of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the numerator of which is one and the denominator of which is one minus the CD Reserve Percentage and (b) the C/D Assessment Rate; "Bid Loan" shall mean each bid loan made pursuant to subsection 2.2; "Bid Loan Confirmation" shall mean each confirmation by the Company of its acceptance of Bid Loan Offers, which Bid Loan Confirmation shall be substantially in the form of Exhibit D and shall be delivered to the Agent in writing, by telex or by facsimile transmission; "Bid Loan Note" shall be as defined in subsection 2.2(f); "Bid Loan Offer" shall mean each offer by a Lender to make Bid Loans pursuant to a Bid Loan Request, which Bid Loan Offer shall contain the information specified in Exhibit E and shall be delivered to the Agent by telephone, immediately confirmed by telex or facsimile transmission; "Bid Loan Request" shall mean each request by the Company for Lenders to submit bids to make Bid Loans, which 5 shall contain the information in respect of such requested Bid Loans specified in Exhibit F and shall be delivered to the Agent in writing, by telex or facsimile transmission, or by telephone, immediately confirmed by telex or facsimile transmission; "Board" shall mean the Board of Governors of the Federal Reserve System (or any successor thereto); "Borrowing Date" shall mean any day specified in a notice pursuant to subsection 2.1, 2.2 or 2.22 as a date on which the Company requests that Loans be made hereunder; "Business Day" shall mean a day other than a Saturday, Sunday or other day on which commercial lenders in New York, New York, are authorized or required by law to close; "Capitalized Lease" shall mean any lease of property, real or personal, the obligations under which are, or are required to be, capitalized on a balance sheet of the Company in accordance with GAAP; "Cash Collateral Agreement" shall have the meaning ascribed thereto in subsection 2.6(b); "Cash Equivalents" at any date shall mean (a) securities with maturities of one year or less from the date of acquisition thereof issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit, bankers acceptances and eurodollar time deposits with maturities of one year or less from the date of acquisition, and overnight lender deposits of any Lender or any other commercial lender having capital and surplus in excess of $500,000,000, (c) repurchase agreements involving securities of the type described in clause (a) above with Lenders and with other commercial lenders having capital and surplus in excess of $500,000,000, (d) commercial paper of a Lender or a domestic issuer rated at least A-1 by S&P or P-1 by Moody's and (e) shares of an open-end investment company registered under the Investment Company Act of 1940, as amended, all or substantially all of the assets of which are required to be invested in investments of the types described in and meeting the requirements of clauses (a) through (d) of this definition; "C/D Assessment Rate" for any day as applied to any C/D Rate Loan or ABR Loan shall mean the annual assessment rate in effect on such day which is payable by a member of the Bank Insurance Fund maintained by the Federal Deposit Insurance Corporation (the "FDIC") classified as well-capitalized and within supervisory subgroup "B" (or a comparable successor assessment risk classification) within the meaning of 12 C.F.R. 'SS' 327.3(e) (or any successor provision) to the FDIC (or any successor) for the FDIC's (or 6 such successor's) insuring time deposits at offices of such institution in the United States; "C/D Base Rate" with respect to each day during each Interest Period pertaining to a C/D Rate Loan shall mean the rate of interest per annum notified to the Agent by Chase as the average rate bid at 9:00 A.M., New York City time, or as soon thereafter as practicable, on the first day of such Interest Period by a total of three certificate of deposit dealers of recognized standing selected by Chase for the purchase at face value from Chase of its certificates of deposit in an amount comparable to the C/D Rate Loan of Chase to which such Interest Period applies and having a maturity comparable to such Interest Period; "C/D Rate" with respect to each day during each Interest Period pertaining to a C/D Rate Loan shall mean a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1%): C/D Base Rate ----------------------------- + C/D Assessment Rate 1.00 - C/D Reserve Percentage "C/D Rate Loans" shall mean Committed Rate Loans the rate of interest applicable to which is based upon the C/D Rate; "C/D Rate Tranche" shall mean the C/D Rate Loans, the Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day); "C/D Reserve Percentage" for any day as applied to any C/D Rate Loan or any ABR Loan shall mean that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board, for determining the maximum reserve requirement for a Depositary Institution (as defined in Regulation D of the Board) in respect of new non-personal time deposits in Dollars in New York City having a maturity comparable to the Interest Period for such C/D Rate Loan (or, with respect to an ABR Loan, of 30 days or more) and in an amount of $100,000 or more; "Chase" shall mean The Chase Manhattan Bank, a New York banking corporation; "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time; "Collateral Documents" shall be the collective reference to the Cash Collateral Agreement and any Subsidiary Guarantees; 7 "Commercial Letters of Credit" shall mean the commercial documentary letters of credit, payable in Dollars, to be issued by Chase hereunder in such form as may from time to time be approved by Chase, in favor of such beneficiaries as the Company or any Restricted Subsidiary shall specify from time to time (which beneficiaries shall be reasonably acceptable to Chase), for the account of the Company for the purchase of goods in the ordinary course of its business; "Commercial Paper Notes" shall mean Commercial Paper Notes backed directly or indirectly by accounts receivable of the Company and its Restricted Subsidiaries purchased by Funding; "Commitment" shall mean, as to any Lender, the obligation of such Lender to make Committed Rate Loans to the Company, and to issue or participate in, as the case may be, Letters of Credit for the account of the Company, and, in the case of the Swing Line Lender, to make Swing Line Loans to the Company, hereunder in a combined aggregate principal amount and aggregate face amount, as the case may be, at any one time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule I; "Commitment Percentage" of any Lender at any time shall mean the percentage of the aggregate Commitments then constituted by such Lender's Commitment; "Commitment Period" shall mean the period from and including the Effective Date to but not including the Termination Date; "Committed Rate Loans" shall have the meaning ascribed thereto in subsection 2.1(a); "Committed Rate Notes" shall have the meaning ascribed thereto in subsection 2.1(c); "Commonly Controlled Entity" shall mean an entity, whether or not incorporated, which is under common control with the Company within the meaning of Section 4001 of ERISA or is part of a group which includes the Company and which is treated as a single employer under Section 414 of the Code; "Company" shall have the meaning ascribed thereto in the preamble hereto; "Competitor" shall mean, at any time, any Person which is engaged in a business competitive with a business of the Company or any of its Subsidiaries, and which the Company has enumerated on Schedule IV and as supplemented by the Company in writing from time to time; 8 "Consolidated EBITDA" shall mean Consolidated EBITDAR minus Consolidated Lease Expense. "Consolidated EBITDAR" shall mean, for any period, Consolidated Net Income for such period, plus to the extent deducted from revenues in determining such Consolidated Net Income, (a) Consolidated Interest Expense for such period, (b) tax expense for the Company and its Consolidated Subsidiaries (other than Non-Recourse Unrestricted Subsidiaries) for such period, (c) depreciation and amortization expense of the Company and its Consolidated Subsidiaries (other than Non-Recourse Unrestricted Subsidiaries) for such period, (d) Consolidated Lease Expense for such period, and (e) the amount of other noncash charges of the Company and its Consolidated Subsidiaries (other than Non-Recourse Unrestricted Subsidiaries) during such period minus noncash revenues of the Company and its Consolidated Subsidiaries (other than Non-Recourse Unrestricted Subsidiaries) during such period; "Consolidated Interest Expense" shall mean, for any period, the amount of interest expense, both expensed and capitalized, of the Company and its Consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP, for such period on the aggregate principal amount of their Indebtedness, determined on a consolidated basis in accordance with GAAP (except that for purposes of this definition no Non-Recourse Unrestricted Subsidiary shall be deemed to constitute a Consolidated Subsidiary); "Consolidated Lease Expense" shall mean, for any period, the aggregate amount of fixed and contingent rentals payable by the Company and its Consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP (except that for purposes of this definition no Non-Recourse Unrestricted Subsidiary shall be deemed to constitute a Consolidated Subsidiary), for such period with respect to leases of real and personal property; "Consolidated Net Income" for any fiscal period of the Company shall mean consolidated net income or loss of the Company and its Consolidated Subsidiaries (except that for purposes of this definition no Non-Recourse Unrestricted Subsidiary shall be deemed to constitute a Consolidated Subsidiary, provided that any portion of the consolidated net income of the Company and its Consolidated Subsidiaries (without giving effect to the foregoing exception) resulting from the operations of any Non-Recourse Unrestricted Subsidiary shall be included only to the extent that, subject to any Requirement of Law or Contractual Obligation applicable to such Non-Recourse Unrestricted Subsidiary, such Non-Recourse Unrestricted Subsidiary would be able to dividend such earnings to the Company or a Restricted Subsidiary (net, however, of any taxes that would be 9 applicable to the payment of such dividends)) as it would appear on a consolidated statement of income of the Company and its Consolidated Subsidiaries for such fiscal period prepared in accordance with GAAP; "Consolidated Net Worth" at any date shall mean the amount set forth opposite the caption "stockholder's equity" (or any like caption) on a consolidated balance sheet of the Company and its Consolidated Subsidiaries at such date prepared in accordance with GAAP (except that any investment by the Company or any of its Subsidiaries in a Non-Recourse Unrestricted Subsidiary shall be accounted for on the equity basis); "Consolidated Subsidiary" shall mean a Subsidiary of the Company whose accounts are consolidated with those of the Company for financial reporting purposes in accordance with GAAP; "Consolidated Total Capitalization" shall mean Consolidated Net Worth plus Consolidated Total Indebtedness. "Consolidated Total Indebtedness" at any date shall mean the sum of (without duplication) (a) the Indebtedness of the Company and its Consolidated Subsidiaries at such date determined on a consolidated basis in accordance with GAAP, plus (b) the aggregate amount of Contingent Obligations of the Company and its Consolidated Subsidiaries outstanding on such date (other than Contingent Obligations of the Company or any Consolidated Subsidiary which support Indebtedness of the Company or any of its Subsidiaries) determined on a consolidated basis in accordance with GAAP, plus (c) the aggregate face amount of commercial paper issued by the CP Issuer and outstanding on such date pursuant to the Securitization Documents, minus the aggregate principal amount of Non-Recourse Indebtedness of the Company's Non-Recourse Unrestricted Subsidiaries outstanding on such date that, but for the provisions of subsection 7.8(b), would not be permitted hereunder; "Contingent Obligation" as to any Person shall mean (a) the undrawn face amount of all letters of credit issued for the account of such Person and (b) any obligation of such Person guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends, letters of credit or other obligations ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to 10 purchase property, securities or services primarily for the purpose of assuring the obligee under any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the obligee under such primary obligation against loss in respect thereof; provided that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business; the amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if any Contingent Obligation is specifically limited to a portion of any such primary obligation, that portion to which it is limited) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith; "Contractual Obligation" of any Person shall mean any provision of any security issued by such Person or of any material agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound; "Controlled Foreign Corporation" shall mean a controlled foreign corporation within the meaning of Section 957 of the Code; "Default" shall mean any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied; "Dollars" and "$" shall mean dollars in lawful currency of the United States of America; "Domestic Dollar Loans" shall be the collective reference to C/D Rate Loans and ABR Loans; "Domestic Lending Office" shall mean, initially, the office of a Lender designated as such in Schedule I; thereafter, such other office of such Lender, if any, which shall be making C/D Rate Loans and ABR Loans; "Effective Date" shall mean February __, 1997; "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time; "Eurodollar Lending Office" shall mean, initially, the office of a Lender designated as such in Schedule I hereto; thereafter, such other office of such Lender, if any, which shall be making Eurodollar Loans; 11 "Eurodollar Loans" shall mean Committed Rate Loans hereunder that bear interest for the Interest Period applicable thereto at an interest rate based upon the LIBO Rate; "Eurodollar Tranche" shall mean the Eurodollar Loans, the Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day); "Event of Default" shall mean any of the events specified in Section 8 provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied; "Existing Credit Agreement" shall have the meaning ascribed thereto in the recitals to this Agreement; "Existing Lenders" shall have the meaning ascribed thereto in the recitals to this Agreement; "Existing Letter of Credit" shall mean Irrevocable Standby Letter of Credit NO. T214417 issued by Chase on behalf of the Company in the amount of $667,207, for the benefit of Lumberman's Mutual Casualty Insurance Company, American Motorist Insurance Company, American Manufacturers Mutual Insurance Company and American Protection Insurance Company, as amended. "Facility Fee Rate" shall mean the rate per annum set forth opposite the actual or implied senior unsecured long-term debt rating of the Company below (or, if the Facility Fee Rate is determined by reference to the rating of another rating agency, such ratings as are generally recognized as being equivalent to those set forth below), as quoted by such rating agency or otherwise determined in a manner reasonably satisfactory to the Agent by reference to the ratings of the Company's subordinated unsecured long-term debt securities published by Moody's or S&P, or, if neither of Moody's or S&P no longer publishes ratings of the Company's senior unsecured long-term debt securities or subordinated unsecured long-term debt securities, the rate per annum set forth below opposite the applicable ratio of Consolidated Total Indebtedness to Consolidated EBITDA: Consolidated Total Indebtedness/ Consolidated Facility Ratings EBITDA Fee ------- ------------------ -------- S&P Moody's --- ------- BB+ or less Ba1 or less >2.25x 0.200% - BBB- Baa3 <2.25x but >1.25x 0.150% - BBB Baa2 <1.25x but >0.75x 0.125% - BBB+ Baa1 <0.75X but >0.50x 0.100% - 12 A- or higher A3 or higher <0.50x 0.075% In the event that the Facility Fee Rate is being determined in accordance with the actual or implied senior unsecured long-term debt rating of the Company and such rating by either S&P or Moody's is not the rating set forth opposite the then-current such rating by the other rating agency in the table above under the heading "Ratings", the Facility Fee Rate shall be the rate per annum set forth opposite the higher of such two ratings. Changes in the Facility Fee Rate (whether increases or decreases thereof) shall take effect on the first Business Day following the date the relevant change in the rating of the Company's securities is published; and In the event that the Facility Fee Rate is being determined in accordance with the ratio of Consolidated Total Indebtedness to Consolidated EBITDA, the Facility Fee Rate for any date during any fiscal quarter shall be determined by reference to the ratio of Consolidated Total Indebtedness to Consolidated EBITDA as of the last day of the Company's second preceding fiscal quarter, provided that if the Company shall at any time fail to deliver to the Lenders prior to the first day of any fiscal quarter the financial statements required pursuant to subsection 6.1 for the period ending at the end of the second preceding fiscal quarter, such ratio, until such financial statements shall be delivered, shall be deemed to be greater than 2.25 to 1; "Federal Funds Effective Rate" shall mean, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average quotations, for such day of such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it; "Financing Lease" shall mean any operating lease of production and/or handling equipment listed on Schedule V or entered into by the Company or any of its Restricted Subsidiaries after the Effective Date; "Financing Lease Value" of any Financing Lease at a particular time shall mean the net present value of the then remaining rental payments thereon (discounted at the implicit lease rate applicable to such Financing Lease); "Foreign Indebtedness Letters of Credit" shall mean standby letters of credit, payable in Dollars, issued by Chase for the account of the Company in favor of financial institutions in support of Indebtedness of Foreign Subsidiaries owing to such financial institutions; 13 "Foreign Subsidiaries" shall mean Subsidiaries of the Company which are organized or incorporated under the laws of any jurisdiction other than the laws of the United States or of any state thereof or the District of Columbia or which shall not conduct any significant portion of their business in the United States; "Funding" shall mean First Brands Funding Inc, a Delaware corporation and a wholly-owned Subsidiary of the Company or any other successor or replacement thereto, including any purchaser in a multi-seller program; "GAAP" shall mean generally accepted accounting principles in the United States of America as in effect from time to time; provided that when used in Section 7 (or in the definitions referred to in Section 7), whether directly or indirectly through a reference to a capitalized term used therein, "GAAP" shall mean generally accepted accounting principles as in effect on the date hereof, provided, further, that when used with respect to consolidated financial statements of the Company and its Restricted Subsidiaries, whether directly or indirectly through a reference to a capitalized term, "GAAP" shall mean generally accepted accounting principles which would be applicable as if such Restricted Subsidiaries constituted all of the Company's Consolidated Subsidiaries and the Company's investments in Unrestricted Subsidiaries were accounted for using the cost method; "Governmental Authority" shall mean any nation or government, any state or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government; "Indebtedness" of a Person at any date shall mean (a) indebtedness of such Person for borrowed money, (b) indebtedness of such Person for the deferred purchase price of services or property, excluding trade payables incurred in the ordinary course of business, (c) obligations of such Person under Capitalized Leases, (d) indebtedness of such Person arising under acceptance facilities and (e) indebtedness consisting of unpaid reimbursement obligations in respect of all drafts drawn under letters of credit issued for the account of such Person (including, without limitation, any such indebtedness or other obligation described in this definition that is non-recourse to the credit of such Person but is secured by assets of such Person); "Indenture" shall mean the Indenture dated as of March 1, 1992, between the Company and the United States Trust Company of New York, as Trustee, pursuant to which the Senior Subordinated Notes were issued, as the same may be 14 amended, supplemented or otherwise modified from time to time in accordance with subsection 7.9; "Index Rate Bid Loan" shall mean a Bid Loan made pursuant to an Index Rate Bid Loan Request; "Index Rate Bid Loan Request" shall mean any Bid Loan Request requesting the Lenders to offer to make Bid Loans at an interest rate equal to the Applicable Index Rate plus (or minus) a margin; "Insolvency" shall mean, with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of such term as used in Section 4245 of ERISA; "Insolvent" shall mean pertaining to a condition of Insolvency; "Interest Payment Date" shall mean (a) as to any ABR Loan, each Payment Date to occur after any such Loan is made hereunder, (b) as to any Eurodollar Tranche having an Interest Period of one, two or three months, and any C/D Rate Tranche having an Interest Period of 30, 60 or 90 days, the last day of the applicable Interest Period with respect thereto and (c) as to any Eurodollar Tranche or C/D Rate Tranche having an Interest Period of six months or 180 days, respectively, the date which is three months or 90 days, respectively, after the commencement of such Interest Period and the last day of such Interest Period; "Interest Period" shall mean (a) with respect to any Eurodollar Loan: (i) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Company in a notice of borrowing or notice of conversion, as the case may be, given with respect thereto as provided in subsection 2.1 or subsection 2.17(a), as the case may be; and (ii) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Company by irrevocable notice to the Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; (b) with respect to any C/D Rate Loan: 15 (i) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such C/D Rate Loan and ending 30, 60, 90 or 180 days thereafter, as selected by the Company in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto as provided in subsection 2.1 or subsection 2.17, as the case may be; and (ii) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such C/D Rate Loan and ending 30, 60, 90 or 180 days thereafter, as selected by the Company by irrevocable notice to the Agent not less than two Business Days prior to the last day of the then current Interest Period with respect thereto; and (c) with respect to any Bid Loan that is made pursuant to an Absolute Rate Bid Loan Request, the period commencing on the Borrowing Date with respect to such Bid Loan and ending on the date not less than 7 days nor more than 183 days thereafter, as specified by the Company in such Bid Loan Request; provided that the foregoing provisions relating to Interest Periods are subject to the following: (i) if any Interest Period relating to a C/D Rate Loan would otherwise end on a day which is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day; (ii) if any Interest Period with respect to any Eurodollar Loan or a Bid Loan made pursuant to an Index Rate Bid Loan Request would otherwise end on a day which is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day; (iii) any Interest Period that would otherwise extend beyond the Termination Date shall end on such date; (iv) any Interest Period with respect to a Eurodollar Loan or an Index Rate Bid Loan which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; and 16 (v) the Company shall select Interest Periods so as not to require a payment or prepayment of any Eurodollar Loan or C/D Rate Loan during an Interest Period for such Loan; "Lenders" shall have the meaning ascribed thereto in the preamble hereto; "Lessor Intellectual Property" shall mean intellectual property (whether pursuant to a license or otherwise) which pertains to an asset subject to a sale-leaseback transaction permitted by this Agreement and in which intellectual property the lessor in such transaction has obtained rights in connection with such transaction; "Letter of Credit Application" shall mean a letter of credit application for a standby letter of credit or a commercial letter of credit, as the case may be, executed and delivered by the Company for a Letter of Credit on the then customary form of Chase therefor; "Letters of Credit" shall be the collective reference to the Commercial Letters of Credit and the Standby Letters of Credit; "LIBO Rate" with respect to each day during each Interest Period pertaining to a Eurodollar Loan or a Bid Loan made pursuant to an Index Rate Bid Loan Request shall mean the rate per annum at which Chase's Eurodollar Lending Office is offered Dollar deposits two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where the foreign currency and exchange operations or eurodollar funding operations of such Eurodollar Lending Office are customarily conducted at or about 11:00 A.M., New York City time, for delivery on the first day of such Interest Period for the number of days comprised therein and in an amount approximately equal to the amount of the Eurodollar Loans of Chase to be outstanding during such Interest Period or, in the case of Index Rate Bid Loans, $10,000,000; "Lien" shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same legal effect as any of the foregoing and the filing of any financing statement under the Uniform Commercial Code (other than any such financing statement filed for informational purposes only or in connection with Financing Leases) or comparable law of any jurisdiction to evidence any of the foregoing); 17 "Loan" shall mean any loan made by any Lender pursuant to this Agreement; "Loan Documents" shall mean this Agreement, the Notes and the Collateral Documents; "Material Adverse Effect" shall mean a material adverse effect on (a) the business, operations, property, financial condition or prospects of the Company and its Restricted Subsidiaries taken as a whole, (b) the ability of the Company or any of its Material Subsidiaries to perform its obligations under this Agreement or the Notes or the other Loan Documents to which it is a party, or (c) the validity or enforceability of this Agreement or any of the Notes, Collateral Documents or other Loan Documents or the rights and remedies of the Agent or the Lenders hereunder or thereunder; "Material Subsidiary" shall mean any Subsidiary at any time at which all amounts which would be included as assets on a balance sheet of such Subsidiary determined in accordance with GAAP as of such time are $1,000,000 or more; "Moody's" shall mean Moody's Investors Service, Inc.; "Multiemployer Plan" shall mean a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA; "New Sale-Leaseback" shall mean any transaction entered into by the Company after the Effective Date for the sale of equipment of the Company which is permitted to be sold by the Company under this Agreement, and the subsequent lease back of such equipment to the Company from the purchaser thereof; "Non-Recourse Indebtedness" of any Unrestricted Subsidiary of the Company at any date shall mean Indebtedness of such Unrestricted Subsidiary, (i) the payment of which Indebtedness has not been assumed by the Company or any Restricted Subsidiary and (ii) for which Indebtedness neither the Company nor any Restricted Subsidiary has become directly or indirectly liable (including, without limitation, pursuant to a Contingent Obligation); "Non-Recourse Unrestricted Subsidiary" shall mean any Unrestricted Subsidiary which shall have created Non-Recourse Indebtedness that, but for the provisions of subsection 7.8(b), would not be permitted to exist hereunder; "Notes" shall be the collective reference to the Committed Rate Notes, the Bid Notes and the Swing Line Note; 18 "Patents" shall mean all of the following to the extent that the Company or any of its Restricted Subsidiaries has any right, title or interest: (i) all letters patent of the United States and all applications therefor, including, without limitation, any referred to in Schedule II hereto, and (ii) all reissues or extensions of such letters patent and all continuations, continuations-in-part or divisions of such applications; "Payment Dates" shall mean the last day of each March, June, September and December; "Payment Office" shall mean, initially, the office of the Agent located at 270 Park Avenue, New York, New York 10017; thereafter, such other office of the Agent, if any, which it may designate by notice to the parties hereto as the Payment Office; "PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor thereto); "Person" shall mean an individual, a partnership, a limited liability company, a corporation, a business trust, a joint stock company, a trust, an unincorporated association, a joint venture, a Governmental Authority or any other entity of whatever nature; "Plan" shall mean any employee benefit plan which is covered by ERISA and in respect of which the Company or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA; "Post-Default Rate" with respect to all or any portion of any Loan not paid when due (whether at the stated maturity, by acceleration or otherwise), shall mean a rate per annum for each day during the period (the "Default Period") commencing on the due date of all or such portion of such Loan until such Loan or such portion is paid in full (after as well as before judgment) equal to 2% above (a) if such Loan is a Eurodollar Loan or C/D Rate Loan, the Applicable Margin plus the LIBO Rate or C/D Rate for Interest Periods during the Default Period or (b) if such Loan is an ABR Loan, the Alternate Base Rate; "Prime Rate" shall mean the rate of interest per annum publicly announced from time to time by Chase as its prime rate in effect at its principal office in New York City. The Prime Rate is not intended to be the lowest rate of interest charged by Chase in connection with extensions of credit to debtors; 19 "Register" shall mean a register for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Loans owing to, each Lender from time to time; "Reorganization" shall mean, with respect to any Multiemployer Plan, the condition that such Plan is in reorganization within the meaning of Section 4241 of ERISA; "Reportable Event" shall mean any of the events set forth in Section 4043(b) of ERISA, other than those events as to which the thirty day notice period is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. 'SS' 2615; "Required Lenders" at any date shall mean Lenders whose Commitment Percentages aggregate at least 51%, or if the Commitments shall have been terminated, Lenders holding Committed Rate Loans in an aggregate principal amount of at least 51% of the aggregate principal amount of all Committed Rate Loans then outstanding; "Requirement of Law" for any Person shall mean the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its material property or to which such Person or any of its material property is subject; "Responsible Financial Officer" shall mean the president, the chief executive officer, the chief financial officer, controller, treasurer or any assistant treasurer of the Company; "Restricted Payment" shall have the meaning ascribed thereto in subsection 7.3; "Restricted Subsidiary" shall mean any Subsidiary of the Company other than an Unrestricted Subsidiary; "S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc.; "Securities Act" shall mean the Securities Act of 1933, and any successor Federal statute, and the rules and regulations thereunder, as in effect from time to time; "Securitization Documents" shall mean the Asset Purchase and Sale Agreement by and between the Company and Funding, Subsidiary Purchase Agreements by and between the Company and its Subsidiaries, the Pooling and Servicing Agreement (including supplements thereto) by and among the Company, Funding, the CP Issuer, the 20 letter of credit issuer and the trustee thereunder, the Pledge and Security Agreement by and among the CP Issuer, the collateral agent and the liquidity bank agent, the Depositary Agreement by and between the depositor and the CP Issuer, the CP Dealer Agreement by and between the CP Issuer and the commercial paper dealer, the Liquidity Agreement by and among the CP Issuer, the liquidity bank agent and certain banks, and the LOC Reimbursement Agreement by and among the letter of credit issuer, the trustee, Funding and the Company, as in effect on the Effective Date, including the documents and agreements contemplated by the foregoing, as such the foregoing, singularly or in the aggregate may be amended, supplemented, refinanced, replaced, substituted or otherwise modified from time to time, pursuant to which no more than $100,000,000 in aggregate principal amount of Commercial Paper Notes at any time outstanding are issued; "Seller Paper" shall mean any notes, bonds, debentures or other debt securities issued by any purchaser of any assets from the Company or its Restricted Subsidiaries as a portion of the consideration for such purchaser's purchase of such assets; "Senior Subordinated Notes" shall mean the 9-1/8% Senior Subordinated Notes of the Company due 1999; "Single Employer Plan" shall mean any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan; "Standby Letter of Credit" shall mean an irrevocable letter of credit, in a face amount of not less than $250,000, issued in accordance with subsections 3.1 and 3.2 by Chase in Dollars for the account of the Company for credit support and working capital purposes in the ordinary course of business; "STP" shall mean STP Consumer Services Inc., a Delaware corporation; "Subordinated Debt" shall mean (a) the Senior Subordinated Notes and (b) all other unsecured Indebtedness of the Company or any of its Restricted Subsidiaries no part of the principal of which is required to be paid (whether by way of mandatory sinking fund, mandatory redemption, mandatory prepayment, or otherwise) prior to February 28, 2002, and the payment of the principal of and interest on which, and other obligations of the Company or such Restricted Subsidiary in respect of, is by its terms either junior or pari passu in right of payment with the Senior Subordinated Notes; 21 "Subordinated Debt Prepayment" shall have the meaning ascribed thereto in subsection 7.9(a); "Subsidiary" of any Person shall mean a corporation or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other Persons performing similar functions for such entity, are owned, directly or indirectly, by such Person. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company; "Subsidiary Guarantee" shall mean any Subsidiary Guarantee made by a Restricted Subsidiary in favor of the Agent and the Lenders, substantially in the form of Exhibit G to the Existing Credit Agreement, as the same may be amended, supplemented or modified from time to time; "Subsidiary Guarantee Consent" shall mean the consent made by the Subsidiary Guarantors substantially in the form of Exhibit G hereto. "Subsidiary Guarantor" shall mean each Restricted Subsidiary other than Funding; "Swing Line Commitment" shall mean the obligation of the Swing Line Lender to make Swing Line Loans pursuant to subsection 2.20 in an aggregate amount at any one time outstanding not to exceed $25,000,000; "Swing Line Lender" shall have the meaning ascribed thereto in subsection 2.20; "Swing Line Loan Participation Certificate" shall mean a certificate substantially in the form of Exhibit H; "Swing Line Loans" shall have the meaning ascribed thereto in subsection 2.20; "Swing Line Note" shall have the meaning ascribed thereto in subsection 2.21; "Swing Line Participation Amount" shall have the meaning ascribed thereto in subsection 2.23(c); "Swing Line Rate" shall mean, for any day, a rate per annum equal to the Alternate Base Rate for such day minus .20%; "Termination Date" shall mean February __, 2002; 22 "Three-Month Secondary CD Rate" shall mean, for any day, the secondary market rate for three-month certificates of deposit reported as being in effect on such day (or, if such day is not a Business Day, the next preceding Business Day) by the Board through the public information telephone line of the Federal Reserve Bank of New York (which rate will, under the current practices of the Board, be published in Federal Reserve Statistical Release H.15(519) during the week following such day), or, if such rate is not so reported, the average (rounded upwards to the nearest 1/100 of 1%) of the secondary market quotations for three-month certificates of deposit of major money center banks in New York City received at approximately 10:00 a.m., New York City time, on such day or next preceding Business Day by the Agent from three New York City negotiable certificate of deposit dealers of recognized standing selected by it; "Trademarks" shall mean all of the following to the extent that the Company or any Restricted Subsidiary has any right, title or interest in the United States: (i) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles and other source or business identifiers and the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of any state thereof, including, without limitation, those described in Schedule III hereto, and (ii) all renewals thereof; "Tranche" shall be the collective reference to Eurodollar Loans or C/D Rate Loans, as the case may be, the Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day); "Transferee" shall have the meaning ascribed thereto in subsection 10.6(f); "Type" shall mean, as to any Committed Rate Loan, its nature as an ABR Loan, a Eurodollar Loan or a C/D Rate Loan; "Uniform Customs" shall mean the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500, as the same may be amended from time to time; "Unrestricted Subsidiary" shall mean (a) any Foreign Subsidiary or other Subsidiary which is a Controlled Foreign Corporation and which, in any such case, is not a Subsidiary Guarantor, and (b) any other Subsidiary at any time at which all amounts which would be included as assets on a balance 23 sheet of such Subsidiary determined in accordance with GAAP as of such time are less than $1,000,000. 1.2. Other Definitional Provisions. (a) All terms defined in this Agreement shall have the defined meanings when used in the Notes or any of the Collateral Documents or any certificate or other document made or delivered pursuant hereto or thereto unless otherwise defined therein. (b) As used herein, in the Notes or in any of the Collateral Documents, and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in subsection 1.1, and accounting terms partly defined in subsection 1.1 to the extent not defined, shall have the respective meanings given to them under GAAP. To the extent that the definitions of accounting terms herein are inconsistent with the meanings of such terms under GAAP, the definitions contained herein shall control. (c) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement or in any of the Collateral Documents shall refer to this Agreement or such Collateral Document as a whole and not to any particular provision of this Agreement or such Collateral Document; and Section, subsection, Schedule and Exhibit references contained in this Agreement are references to Sections, subsections, Schedules and Exhibits in or to this Agreement unless otherwise specified. SECTION 2. THE COMMITTED RATE LOANS; THE BID LOANS; THE SWING LINE LOANS 2.1. The Committed Rate Loans. (a) Subject to the terms and conditions hereof, each Lender severally agrees to make revolving credit loans ("Committed Rate Loans") to the Company from time to time during the Commitment Period in an aggregate principal amount at any one time outstanding not to exceed the amount of such Lender's Commitment, provided that no Committed Rate Loan shall be made hereunder if, after giving effect thereto, subsection 2.3 would be contravened. During the Commitment Period the Company may use the Commitments by borrowing, prepaying the Committed Rate Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. (b) The Committed Rate Loans may from time to time be (i) Eurodollar Loans, (ii) ABR Loans, (iii) C/D Rate Loans or (iv) a combination thereof, as determined by the Company and notified to the Agent in accordance with subsections 2.1(d) and 2.17, provided that no Committed Rate Loan shall be made as a Eurodollar Loan or a C/D Rate Loan after the day that is one month or 30 days, respectively, prior to the Termination Date. 24 (c) The Committed Rate Loans made by each Lender shall be evidenced by a promissory note of the Company, substantially in the form of Exhibit A with appropriate insertions as to payee, date and principal amount (a "Committed Rate Note"), payable to the order of such Lender and in a principal amount equal to the lesser of (a) the amount of the initial Commitment of such Lender and (b) the aggregate unpaid principal amount of all Committed Rate Loans made by such Lender. Each Lender is hereby authorized to record the date, Type and amount of each Committed Rate Loan made by such Lender, each continuation thereof, each conversion of all or a portion thereof to another Type, the date and amount of each payment or prepayment of principal thereof and, in the case of Eurodollar Loans and C/D Rate Loans, the length of each Interest Period with respect thereto, on the schedules annexed to and constituting a part of its Committed Rate Note, and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded; provided, however, that the failure to make any such recordation (or any error in such recordation), shall not affect the obligations of the Company hereunder or under any Committed Rate Note. Each Committed Rate Note shall (x) be dated the Effective Date, (y) be stated to mature on the Termination Date and (z) provide for the payment of interest in accordance with subsection 2.7. (d) The Company may borrow Committed Rate Loans under the Commitments during the Commitment Period on any Business Day, provided that the Company shall give the Agent irrevocable notice (which notice must be received by the Agent prior to 11:30 A.M., New York City time, (a) three Business Days prior to the requested Borrowing Date, if all or any part of the requested Committed Rate Loans are to be initially Eurodollar Loans, (b) two Business Days prior to the requested Borrowing Date, if all or any part of the requested Committed Rate Loans are to be initially C/D Rate Loans, or (c) on the requested Borrowing Date, if all of the requested Committed Rate Loans are to be initially ABR Loans), specifying (i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, ABR Loans, C/D Rate Loans or a combination thereof and (iv) if the borrowing is to be entirely or partly of Eurodollar Loans or C/D Rate Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Periods therefor. Each borrowing of Committed Rate Loans under the Commitments shall be in an amount equal to (x) in the case of ABR Loans, $2,500,000 or a whole multiple of $1,000,000 in excess thereof (or, if the then Available Commitments are less than $2,500,000, such lesser amount) and (y) in the case of Eurodollar Loans or C/D Rate Loans, $10,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of any such notice from the Company, the Agent shall promptly (to the extent reasonably practicable on the same day) notify each Lender thereof. Each Lender will make the amount of its pro rata share of each borrowing under this subsection 2.1 available to the Agent for the account of the Company at the office of the Agent specified in subsection 10.2 prior to 11:00 A.M. (or, in the case of ABR Loans, 1:00 P.M.), New York City time, on the 25 Borrowing Date requested by the Company in funds immediately available to the Agent. Such borrowing will then be made available to the Company by the Agent crediting the account of the Company on the books of such office with the aggregate of the amounts made available to the Agent by the Lenders and in like funds as received by the Agent. (e) The Company shall give a notice pursuant to subsection 2.1(d) in respect of the Committed Rate Loans to be made on the Effective Date, which notice shall specify the aggregate amount thereof which the Company wishes to have outstanding on such date. Such amount shall not be less than the aggregate principal amount of Committed Rate Loans outstanding under the Existing Credit Agreement immediately prior to the Effective Date. The proceeds of all such Loans made on the Effective Date will be applied to the payment of all loans under the Existing Credit Agreement outstanding immediately prior to the Effective Date. 2.2. The Bid Loans. (a) The Company may borrow Bid Loans from time to time on any Business Day during the period from the Effective Date until the date occurring 7 days prior to the Termination Date in the manner set forth in this subsection 2.2 and in amounts up to the available amount of the aggregate Commitments, provided that no Bid Loan shall be made hereunder if, after giving effect thereto, subsection 2.3 would be contravened. (b) (i) The Company shall request Bid Loans by delivering a Bid Loan Request to the Agent, not later than 12:00 Noon (New York City time) four Business Days prior to the proposed Borrowing Date (in the case of an Index Rate Bid Loan Request), and not later than 11:30 A.M. (New York City time) one Business Day prior to the proposed Borrowing Date (in the case of an Absolute Rate Bid Loan Request). Each Bid Loan Request may solicit bids for Bid Loans in an aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and for not more than three alternative maturity dates for such Bid Loans. The maturity date for each Bid Loan made pursuant to an Absolute Rate Bid Loan Request shall be not less than 7 days nor more than 183 days after the Borrowing Date therefor and the maturity date for each Bid Loan made pursuant to an Index Rate Bid Loan Request shall be 1, 2, 3, or 6 months after the Borrowing Date therefor (and in any event, in each such case, not after the Termination Date). The Agent shall promptly (to the extent reasonably practicable on the same day) notify each Lender by telex or facsimile transmission of the contents of each Bid Loan Request received by it. (ii) In the case of an Index Rate Bid Loan Request, upon receipt of notice from the Agent of the contents of such Bid Loan Request, any Lender that elects, in its sole discretion, to do so, shall irrevocably offer to make one or more Bid Loans at the Applicable Index Rate plus or minus a margin determined by such Lender in its sole discretion for each such Bid Loan. Any 26 such irrevocable offer shall be made by delivering a Bid Loan Offer to the Agent, before 10:30 A.M. (New York City time) three Business Days before the proposed Borrowing Date, setting forth the maximum amount of Bid Loans for each maturity date, and the aggregate maximum amount for all maturity dates, which such Lender would be willing to make (which amounts may, subject to subsection 2.2(a), exceed such Lender's Commitment), and the margin above or below the Applicable Index Rate at which such Lender is willing to make each such Bid Loan; the Agent shall advise the Company before 11:15 A.M. (New York City time) three Business Days before the proposed Borrowing Date, of the contents of each such Bid Loan Offer received by it. If the Agent in its capacity as a Lender shall, in its sole discretion, elect to make any such offer, it shall advise the Company of the contents of its Bid Loan Offer before 10:15 A.M. (New York City time) three Business Days before the proposed Borrowing Date. (iii) In the case of an Absolute Rate Bid Loan Request, upon receipt of notice from the Agent of the contents of such Bid Loan Request, any Lender that elects, in its sole discretion, to do so shall irrevocably offer to make one or more Bid Loans at a rate of interest determined by such Lender in its sole discretion for each such Bid Loan. Any such irrevocable offer shall be made by delivering a Bid Loan Offer to the Agent, before 9:30 A.M. (New York City time) on the proposed Borrowing Date, setting forth the maximum amount of Bid Loans for each maturity date, and the aggregate maximum amount for all maturity dates, which such Lender would be willing to make (which amount may, subject to subsection 2.2(a), exceed such Lender's Commitment), and the rate of interest at which such Lender is willing to make each such Bid Loan; the Agent shall advise the Company before 10:15 A.M. (New York City time) on the proposed Borrowing Date of the contents of each such Bid Loan Offer received by it. If the Agent in its capacity as a Lender shall, in its sole discretion, elect to make any such offer, it shall advise the Company of the contents of its Bid Loan Offer before 9:15 A.M. (New York City time) on the proposed Borrowing Date. (iv) The Company shall before 11:30 A.M. (New York City time) three Business Days before the proposed Borrowing Date (in the case of Bid Loans requested by an Index Rate Bid Loan Request) and before 11:30 A.M. (New York City time) on the proposed Borrowing Date (in the case of Bid Loans requested by an Absolute Rate Bid Loan Request) either, in its absolute discretion: (A) cancel such Bid Loan Request by giving the Agent telephone notice to that effect, or (B) accept one or more of the offers made by any Lender or Lenders pursuant to clause (ii) or clause (iii) above, as the case may be, by giving telephone notice to the Agent (immediately confirmed by delivery to the Agent of a Bid Loan Confirmation) of the amount of Bid Loans for each relevant maturity date to be made by each Lender (which 27 amount for each such maturity date shall be equal to or less than the maximum amount for such maturity date specified in the Bid Loan Offer of such Lender, and for all maturity dates included in such Bid Loan Offer shall be equal to or less than the aggregate maximum amount specified in such Bid Loan Offer for all such maturity dates) and reject any remaining offers made by Lenders pursuant to clause (ii) or clause (iii) above, as the case may be; provided, however, that (x) the Company may not accept offers for Bid Loans for any maturity date in an aggregate principal amount in excess of the maximum principal amount requested in the related Bid Loan Request, (y) if the Company accepts any of such offers, it must accept offers strictly based upon pricing for such relevant maturity date and no other criteria whatsoever and (z) if two or more Lenders submit offers for any maturity date at identical pricing and the Company accepts any of such offers but does not wish to (or by reason of the limitations set forth in subsection 2.2(a) or in clause (x) of this proviso, cannot) borrow the total amount offered by such Lenders with such identical pricing, the Company shall accept offers from all of such Lenders in amounts allocated among them pro rata according to the amounts offered by such Lenders (or as nearly pro rata as shall be practicable after giving effect to the requirements of subsection 2.2(b)(i). (v) If the Company notifies the Agent that a Bid Loan Request is canceled pursuant to clause (iv)(A) above, the Agent shall give prompt telephone notice thereof to the Lenders, and the Bid Loans requested thereby shall not be made. (vi) If the Company accepts pursuant to clause (iv)(B) above one or more of the offers made by any Lender or Lenders, the Agent shall promptly notify each Lender which has made such an offer, of the aggregate amount of such Bid Loans to be made on such Borrowing Date for each maturity date and of the acceptance or rejection of any offers to make such Bid Loans made by such Lender. Each Lender which is to make a Bid Loan shall, before 12:00 Noon (New York City time) on the Borrowing Date specified in the Bid Loan Request applicable thereto, make available to the Agent at its office set forth in subsection 10.2 the amount of Bid Loans to be made by such Lender, in immediately available funds. The Agent will make such funds available to the Company as soon as practicable on such date at the Agent's aforesaid address. As soon as practicable after each Borrowing Date, the Agent shall notify each Lender of the aggregate amount of Bid Loans advanced on such Borrowing Date and the respective maturity dates thereof. (c) Within the limits and on the conditions set forth in this subsection 2.2, the Company may from time to time borrow under this subsection 2.2, repay pursuant to paragraph (d) below, and reborrow under this subsection 2.2. (d) The Company shall repay to the Agent for the account of each Lender which has made a Bid Loan (or the assignee 28 in respect thereof, as the case may be) on the maturity date of each Bid Loan (such maturity date being that specified by the Company for repayment of such Bid Loan in the related Bid Loan Request) the then unpaid principal amount of such Bid Loan. The Company shall not have the right to prepay any principal amount of any Bid Loan. (e) The Company shall pay interest on the unpaid principal amount of each Bid Loan from the Borrowing Date to the stated maturity date thereof, at the rate of interest determined pursuant to paragraph (b) above (calculated on the basis of a 360 day year for actual days elapsed), payable on the maturity date for such Bid Loan, provided that if the maturity date for such Bid Loan is more than 90 days (in the case of Absolute Rate Bid Loans) or three months (in the case of Index Rate Bid Loans) after the Borrowing Date for such Bid Loan, as the case may be, interest for such Bid Loan shall be payable on the date which is 90 days or 3 months, as the case may be, after the Borrowing Date for such Bid Loan and on the maturity date for such Bid Loan. If all or a portion of the principal amount of or interest on any Bid Loan shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), (i) such overdue principal amount shall, without limiting any rights of any Lender under this Agreement, bear interest from the date on which such payment was due at a rate per annum which is 2% above the rate which would otherwise be applicable pursuant to the Bid Loan Note evidencing such Bid Loan until the scheduled maturity date with respect thereto as set forth in the Bid Loan Note evidencing such Bid Loan, and for each day thereafter at a rate per annum which is 2% above the Alternate Base Rate until paid in full (as well after as before judgment) and (ii) such overdue interest shall bear interest from the date the same was due at a rate per annum which is 2% above the Alternate Base Rate. All payments of interest in respect of Bid Loans shall be made to the Agent for the account of the relevant Lenders. (f) The Bid Loans made by each Lender shall be evidenced initially by a promissory note of the Company, substantially in the form of Exhibit B with appropriate insertions (a "Bid Loan Note"), payable to the order of such Lender and representing the obligation of the Company to pay the unpaid principal amount of all Bid Loans made by such Lender, with interest on the unpaid principal amount from time to time outstanding of each Bid Loan evidenced thereby as prescribed in subsection 2.2(e). Each Lender is hereby authorized to record the date and amount of each Bid Loan made by such Lender, the maturity date thereof, the date and amount of each payment of principal thereof and the interest rate with respect thereto on the schedule annexed to and constituting part of its Bid Loan Note, and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded; provided, however, that the failure to make any such recordation (or any error in such recordation) shall not affect the obligations of the Company hereunder or under any Bid Loan Note. Each Bid Loan Note shall be dated the Effective Date, and each 29 Bid Loan evidenced thereby shall bear interest for the period from and including the Borrowing Date thereof on the unpaid principal amount thereof from time to time outstanding at the applicable rate per annum determined as provided in, and such interest shall be payable as specified in, subsection 2.2(e). 2.3. Limitation on Aggregate Extensions of Credit. At no time may (i) the sum of (A) the aggregate principal amount of Committed Rate Loans outstanding at such time, plus (B) the aggregate principal amount of Bid Loans outstanding at such time, plus (C) the aggregate undrawn face amount of all Letters of Credit outstanding at such time, plus (D) any unpaid reimbursement obligations of the Company with respect to Letters of Credit whether or not outstanding at such time, plus (E) the aggregate principal amount of all Swing Line Loans outstanding at such time (collectively, the amount described in clauses (i)(A)- (E) of this subsection 2.3 shall be referred to as the "Aggregate Outstandings"), exceed (ii) the aggregate Commitments in effect at such time. 2.4. Repayment of Loans. (a) The Company shall pay to the Agent for the account of the Lenders the unpaid principal amount of each Committed Rate Loan and each Swing Line Loan, plus all interest accrued thereon, on the Termination Date. (b) The Company will repay each Bid Loan as provided in subsection 2.2. 2.5. Termination or Reduction of Commitments. (a) The Company shall have the right at any time to terminate or reduce the Commitments upon not less than four Business Days' prior notice to the Agent (which shall notify the Lenders thereof as soon as practicable) of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction (which shall not be less than $5,000,000 or a whole multiple of $1,000,000 above $5,000,000) and shall be irrevocable and effective only upon receipt by the Agent; provided that in no event shall any such termination or reduction be permitted that would cause the Aggregate Outstandings at such time (after giving effect to any concurrent prepayments) to exceed the Commitments as so reduced. (b) The Commitments, once terminated or reduced, may not be reinstated. 2.6. Optional and Mandatory Prepayments. (a) The Company may, subject to subsection 2.16, at any time and from time to time, prepay the Committed Rate Loans and/or the Swing Line Loans then outstanding, in whole or in part, without premium or penalty, and upon at least three Business Days' irrevocable notice to the Agent, in the case of Eurodollar Loans, upon at least two Business Days' irrevocable notice to the Agent, in the case of C/D Rate Loans and upon irrevocable notice to the Agent not later than 12:00 Noon, New York City time, on the date of such prepayment, in the case of ABR Loans, each such notice to 30 specify (i) the date and amount of such prepayment, (ii) whether the prepayment is of Eurodollar Loans, ABR Loans, C/D Rate Loans, or a combination thereof, and, if of a combination thereof, the principal amount of prepayment allocable to each and (iii) the original principal amount of the Swing Line Loan, Swing Line Loans, Committed Rate Loan or Committed Rate Loans which are to be prepaid and the date or dates such Swing Line Loan, Swing Line Loans, Committed Rate Loan or Committed Rate Loans were made, provided that the Company may not both prepay ABR Loans under this subsection 2.6(a) and borrow ABR Loans under subsection 2.1 or 2.23 on the same day. Upon receipt of any such notice, the Agent shall promptly notify each Lender thereof. If any such notice is given, the Company will make the prepayment specified therein, together with any amounts payable pursuant to subsection 2.16, and such prepayment, together with such amounts payable pursuant to subsection 2.16, shall be due and payable on the date specified therein, together (in the case of Eurodollar Loans or C/D Rate Loans) with accrued interest to such date on the amount prepaid. Each partial prepayment of the Loans pursuant to this paragraph (a) shall be in an amount equal to $2,500,000 or a greater whole multiple of $1,000,000; provided, that unless the Eurodollar Loans or C/D Rate Loans comprising any Tranche are prepaid in full, no prepayment shall be made in respect of Eurodollar Loans or C/D Rate Loans if, after giving effect to such prepayment, the aggregate principal amount of the Loans comprising any Tranche shall be less than $5,000,000. (b) If at any time the Aggregate Outstandings exceed the aggregate Commitments in effect at such time, whether as a result of a reduction or termination of the Commitments pursuant to subsection 2.5, or otherwise, the Company shall immediately prepay the Committed Rate Loans or Swing Line Loans, or, if no Committed Rate Loans or Swing Line Loans are outstanding, cash collateralize the Letters of Credit and the Bid Loans (in each case pursuant to a cash collateral agreement substantially in the form of Exhibit I (the "Cash Collateral Agreement")) in an amount equal to such excess, together with interest thereon accrued to the date of such prepayment and any amounts payable pursuant to subsection 2.16 in connection therewith. (c) If the making of any mandatory prepayment pursuant to subsection 2.6(b) would result in an obligation of the Company to pay any material amounts pursuant to subsection 2.16, the Company shall be entitled, in lieu of making the required prepayment at such time, to place an amount equal to such prepayment in a cash collateral account established pursuant to the Cash Collateral Agreement. Moneys on deposit in such cash collateral account shall be invested in short-term obligations of the United States government and shall be applied to the prepayment of the Loans in accordance the Cash Collateral Agreement on the earliest date on which the costs to the Lenders referred to in subsection 2.16 would be avoided. During the period prior to such prepayment of such Loans, interest shall continue to accrue on such Loans. Prior to the depositing of any moneys in the cash collateral account, the Agent and the Lenders 31 shall be provided with such legal opinions and other documentation with respect to the legality, validity, enforceability, perfection and priority of the cash collateral account as they may reasonably deem necessary or appropriate. 2.7. Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the LIBO Rate plus the Applicable Margin. (b) Each ABR Loan shall bear interest at a rate per annum equal to the Alternate Base Rate or, if such ABR Loan is a Swing Line Loan, at the Swing Line Rate. (c) Each C/D Rate Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the C/D Rate determined for such day plus the Applicable Margin. (d) If all or a portion of (i) the principal amount of any Committed Rate Loan or any Swing Line Loan or (ii) any interest, fees or other amounts payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to (x) in the case of overdue principal, the Post-Default Rate or (y) in the case of overdue interest, fees or other amounts payable hereunder, 2% above the rate described in paragraph (b) of this subsection, in each case from the date of such non-payment until such amount is paid in full (both before and after judgment). (e) Interest on each Loan shall be payable in arrears on each Interest Payment Date applicable thereto, at maturity and upon payment (including prepayment) in full thereof, provided that interest payable pursuant to paragraph (d) of this subsection shall be payable on demand. 2.8. Minimum Amounts of Tranches. All borrowings, conversions and continuations of Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of the Loans comprising (i) each Eurodollar Tranche shall be equal to $10,000,000 or a whole multiple of $1,000,000 in excess thereof and (ii) each C/D Rate Tranche shall be equal to $10,000,000 or a whole multiple of $1,000,000 in excess thereof. 2.9. Fees. The Company agrees to pay (a) to the Agent for the account of each Lender a facility fee for the period from and including the Effective Date to, but excluding, the Termination Date, computed at the Facility Fee Rate in effect from time to time on the average daily amount of the Commitment (used and unused) of such Lender during the period for which payment is made, payable in arrears on each Payment Date and on the Termination Date or earlier date of termination of the 32 Commitments and (b) to the Agent, solely for the Agent's own account (i) the fees payable pursuant to the Fee Letter, dated January 23, 1997, between the Company and the Agent in the amounts and on the dates specified therein and (ii) such other fees in the amounts and payable on the dates from time to time agreed to in writing by the Company and the Agent. 2.10. Requirements of Law. (a) In the event that any change in any Requirement of Law or in the interpretation or application thereof, or compliance by any Lender or its Domestic Lending Office or Eurodollar Lending Office with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: (i) shall subject any Lender or its Domestic Lending Office or Eurodollar Lending Office to any tax of any kind whatsoever with respect to this Agreement, any Note, any Eurodollar Loan or C/D Rate Loan made by it, or any Letters of Credit or any commitments to extend credit under this Agreement, or changes the basis of taxation of payments to such Lender or its Domestic Lending Office or Eurodollar Lending Office in respect thereof (except for taxes covered by subsection 2.11 and changes in the rate of tax on the overall net income of such Lender); (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by or for the account of, any office of such Lender which is not otherwise included in the determination of the LIBO Rate or the C/D Rate hereunder; or (iii) shall impose on such Lender or its Domestic Lending Office or Eurodollar Lending Office any other condition; and the result of any of the foregoing is to increase the cost to such Lender or its Domestic Lending Office or Eurodollar Lending Office, by an amount which such Lender deems to be material, of making, converting into, continuing, maintaining or participating in Eurodollar Loans, C/D Rate Loans, Letters of Credit or the commitments to extend credit hereunder or to reduce any amount receivable by it in respect of its Eurodollar Loans, its C/D Rate Loans, the Letters of Credit or its commitment to extend credit hereunder, then, in any such case, the Company shall promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such additional cost or reduced amount receivable as determined by such Lender (using a method of calculation substantially similar to that used with similarly situated borrowers). If any Lender becomes entitled to claim any additional amounts pursuant to this subsection 2.10, it shall promptly notify the Company in writing, through the Agent, of the 33 event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this subsection submitted by an officer of a Lender (which certificate shall set forth the basis of calculation of such amount in reasonable detail), through the Agent, to the Company shall be conclusive, in the absence of manifest error. If any Lender requests payment of increased costs from the Company, such Lender shall, upon request of the Company, use reasonable efforts to change its Domestic Lending Office or Eurodollar Lending Office, as the case may be, for the purpose of minimizing such increased costs; provided that nothing herein shall obligate such Lender to change its Domestic Lending Office or Eurodollar Lending Office, as the case may be, or to take any other steps, which such Lender considers in its sole discretion to be adverse to its interests. If any Lender shall request the payment of any additional amounts pursuant to this subsection 2.10, the Company shall have the right to require that all Loans made thereafter by such Lender shall be made as ABR Loans. This covenant shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder. (b) In the event that any Lender shall have determined that any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof does or shall have the effect of reducing the rate of return on such Lender's or such corporation's capital as a consequence of its obligations hereunder or under or in respect of any Letters of Credit to a level below that which such Lender could have achieved but for such change or compliance (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy) by any amount deemed by such Lender to be material, then from time to time, within 15 days after demand by such Lender (with a copy to the Agent), the Company shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. A certificate as to any additional amounts payable pursuant to this subsection submitted by an officer of a Lender (which certificate shall set forth the basis of calculation of such amount in reasonable detail), through the Agent, to the Company shall be conclusive, in the absence of manifest error. If the Company becomes obligated to pay additional amounts described in this subsection 2.10(b) as a result of any condition described in this subsection 2.10(b) and payment of such amount is demanded by any Lender, then the Company may, on ten Business Days' prior written notice to the Agent and such Lender, cause such Lender to (and such Lender shall) assign pursuant to subsection 10.6 (provided that such Lender shall not be required to pay any fee pursuant to subsection 10.6(e)) all of its rights and obligations under this Agreement to a bank or financial institution selected by the Company and reasonably acceptable to the Agent, provided that in no event shall the assigning Lender be required to pay or 34 surrender to such purchasing Lender or other bank or financial institution any of the fees received by such assigning Lender pursuant to this Agreement. This covenant shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder. 2.11. Taxes. (a) All payments made by the Company under this Agreement and the Notes shall be made free and clear of, and without reduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding, in the case of the Agent and each Lender, net income and franchise taxes based upon net income imposed on the Agent or such Lender, as the case may be, by the jurisdiction under the laws of which it is organized or in which is located any office from or at which such Lender is making or maintaining its Loans, or any political subdivision or taxing authority thereof or therein (all such non-excluded taxes, levies, imposts, duties, charges, fees, deductions and withholdings being hereinafter called "Taxes"). If any Taxes are required to be withheld from any amounts payable to the Agent or any Lender hereunder or under the Notes, the amounts so payable to the Agent or such Lender shall be increased to the extent necessary to yield to the Agent or such Lender (after payment of all Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement and the Notes. Whenever any Taxes are payable by the Company, as promptly as possible thereafter the Company shall send to the Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt received by the Company showing payment thereof. If the Company fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Agent the required receipts or other required documentary evidence, the Company shall indemnify the Agent and the Lenders for any incremental taxes, interest or penalties that may become payable by the Agent or any Lender as a result of any such failure. The agreements in this subsection shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder. (b) Each Lender that is not incorporated under the laws of the United States of America or a state thereof agrees that prior to the first Interest Payment Date it will deliver to the Company and the Agent (i) two duly completed copies of United States Internal Revenue Service Form 1001 or 4224 or successor applicable form, as the case may be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form. Each such Lender also agrees to deliver to the Company and the Agent two further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms or other manner of certification, as the case may be, on or before the date that any such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Company and the Agent, and such extensions or 35 renewals thereof as may reasonably be requested by the Company or the Agent. Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes, unless in any such case an event (including, without limitation, any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender advises the Company that it is not capable of so receiving payments without any deduction or withholding, and (ii) in the case of a Form W-8 or W-9, that it is entitled to an exemption from United States backup withholding tax. 2.12. Computation of Interest and Fees. (a) Interest on ABR Loans whenever calculated on the basis of the Prime Rate shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for actual days elapsed. Interest on Eurodollar Loans, C/D Rate Loans, and ABR Loans whenever calculated on the basis of the Base CD Rate or the Federal Funds Effective Rate, and facility fees, letter of credit fees and all other fees shall be calculated on the basis of a 360-day year for the actual days elapsed. The Agent will, as soon as practicable, notify the Company and the Lenders of each determination of a LIBO Rate and a C/D Rate. Any change in the interest rate on a Loan resulting from a change in the Alternate Base Rate, the C/D Assessment Rate or the C/D Reserve Percentage shall become effective as of the opening of business on the day on which such change becomes effective. The Agent shall as soon as practicable notify the Company and the Lenders of the effective date and the amount of each such change in interest rate. (b) Each determination of an interest rate by the Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Company and the Lenders in the absence of manifest error. 2.13. Pro Rata Treatment and Payments. (a) Each borrowing by the Company of Committed Rate Loans from the Lenders hereunder, each payment by the Company on account of any facility fee or letter of credit fee hereunder and any reduction of the Commitments of the Lenders shall be made pro rata according to the respective Commitment Percentages of the Lenders. (b) All payments (including prepayments) to be made by the Company hereunder and under the Notes, whether on account of principal, interest, fees or otherwise, shall be made without set off or counterclaim and shall be made prior to 12:00 Noon, New York City time, on the due date thereof to the Agent, for the account of the Lenders, at the Agent's office specified in subsection 10.2, in Dollars and in immediately available funds. The Agent shall distribute such payments to the Lenders promptly (to the extent reasonably practicable on the same day) upon receipt in like funds as received. If any payment hereunder 36 (other than payments on the Eurodollar Loans or a Bid Loan made pursuant to an Index Rate Bid Loan Request) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. If any payment on a Eurodollar Loan or a Bid Loan made pursuant to an Index Rate Bid Loan Request becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day, and during any such extension interest shall be payable thereon at the then applicable rate. (c) Unless the Agent shall have been notified in writing by any Lender prior to a Borrowing Date for Committed Rate Loans that such Lender will not make the amount that would constitute its Commitment Percentage of the borrowing of Committed Rate Loans on such date available to the Agent, the Agent shall assume that such Lender has made such amount available to the Agent on such Borrowing Date, and the Agent may, in reliance upon such assumption, make available to the Company a corresponding amount. If such amount is made available to the Agent on a date after such Borrowing Date, such Lender shall pay to the Agent on demand an amount equal to the product of (i) the daily average Federal funds rate during such period as quoted by the Agent, times (ii) the amount of such Lender's Commitment Percentage of such borrowing, times (iii) a fraction the numerator of which is the number of days that elapse from and including such Borrowing Date to the date on which such Lender's Commitment Percentage of such borrowing shall have become immediately available to the Agent and the denominator of which is 360. A certificate of the Agent submitted to any Lender with respect to any amounts owing under this subsection 2.13 shall be conclusive in the absence of manifest error. If such Lender's Commitment Percentage of such borrowing is not in fact made available to the Agent by such Lender within three Business Days of such Borrowing Date, the Agent shall be entitled to recover such amount with interest thereon at the rate per annum applicable to ABR Loans hereunder, on demand, from the Company. 2.14. Inability to Determine Interest Rate. In the event that prior to the first day of any Interest Period: (a) the Agent shall have determined (which determination shall be conclusive and binding upon the Company) that by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the LIBO Rate or the C/D Rate for such Interest Period, or (b) the Agent shall have received notice from the Required Lenders that the LIBO Rate or the C/D Rate determined or to be determined for such Interest Period will 37 not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period, the Agent shall give telex, telecopy or telephonic notice thereof to the Company and the Lenders as soon as practicable thereafter. If such notice is given (w) any Eurodollar Loans or C/D Rate Loans, as the case may be, requested to be made on the first day of such Interest Period shall be made as ABR Loans, (x) any Committed Rate Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans or C/D Rate Loans, as the case may be, shall be converted to or continued as ABR Loans, (y) any outstanding Eurodollar Loans or C/D Rate Loans, as the case may be, shall be converted, on the first day of such Interest Period, to ABR Loans and (z) any Bid Loans requested pursuant to an Index Rate Bid Loan Request to be made on the first day of such Interest Period shall not be made as Bid Loans. Until such notice has been withdrawn by the Agent, no further Eurodollar Loans or C/D Rate Loans, as the case may be, shall be made or continued as such, nor shall the Company have the right to convert Committed Rate Loans to Eurodollar Loans or C/D Rate Loans, as the case may be. 2.15. Illegality. Notwithstanding any other provision herein, if any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Lender or its Eurodollar Lending Office to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Domestic Dollar Loans to Eurodollar Loans shall forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to ABR Loans on the respective last days of the then-current Interest Periods with respect to such Loans or within such earlier period as may be required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then-current Interest Period with respect thereto, the Company shall pay to such Lender such amounts, if any, as may be required pursuant to subsection 2.16. 2.16. Indemnity. The Company agrees to indemnify each Lender for, and to hold such Lender harmless from, any loss or expense which such Lender may sustain or incur as a consequence of (a) default by the Company in payment when due of the principal amount of or interest on any Eurodollar Loan or C/D Rate Loan, (b) default by the Company in making a borrowing of, conversion into or continuance of Eurodollar Loans or C/D Rate Loans after the Company has given a notice requesting the same in accordance with the provisions of this Agreement, (c) default by the Company in making any prepayment after the Company has given a notice thereof in accordance with the provisions of this Agreement or (d) the making of a prepayment or conversion of Eurodollar Loans or C/D Rate Loans on a day which is not the last day of an Interest Period with respect thereto, including, 38 without limitation, in each case, any such loss or expense arising from the reemployment of funds obtained by it or from fees payable to terminate the deposits from which such funds were obtained. A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by an officer of a Lender, through the Agent, to the Company shall be conclusive, absent manifest error. This covenant shall survive termination of this Agreement and payment of the Notes and all other amounts payable hereunder. 2.17. Conversion and Continuation Options. (a) The Company may elect from time to time to convert Eurodollar Loans or C/D Rate Loans to ABR Loans, and/or to convert Eurodollar Loans or ABR Loans to C/D Rate Loans, by giving the Agent at least two Business Days' prior irrevocable notice of such election, provided that any such conversion of Eurodollar Loans or C/D Rate Loans may only be made on the last day of an Interest Period with respect thereto. The Company may elect from time to time to convert ABR Loans or C/D Rate Loans to Eurodollar Loans by giving the Agent at least three Business Days' prior irrevocable notice of such election, provided that any such conversion of C/D Rate Loans may, subject to the third succeeding sentence, only be made on the last day of an Interest Period with respect thereto. Any such notice of conversion to Eurodollar Loans or C/D Rate Loans shall specify the length of the initial Interest Period or Interest Periods therefor. Upon receipt of any such notice the Agent shall promptly notify each Lender thereof. If the last day of the then current Interest Period with respect to C/D Rate Loans that are to be converted to Eurodollar Loans is not a Business Day, such conversion shall be made on the next succeeding Business Day, and during the period from such last day to such succeeding Business Day such Loans shall bear interest as if they were ABR Loans. All or any part of outstanding Eurodollar Loans, ABR Loans and C/D Rate Loans may be converted as provided herein, provided that (i) no Loan may be converted into a Eurodollar Loan or a C/D Rate Loan when any Event of Default has occurred and is continuing and the Agent or the Required Lenders have determined that such a conversion is not appropriate, (ii) any such conversion may only be made if, after giving effect thereto, subsection 2.8 shall not have been contravened and (iii) no Loan may be converted into a Eurodollar Loan or a C/D Rate Loan after the date that is one month or 30 days, respectively, prior to the Termination Date. (b) Any Eurodollar Loans or C/D Rate Loans may be continued as such upon the expiration of the then-current Interest Period with respect thereto by the Company giving notice to the Agent, in accordance with the applicable provisions of the term "Interest Period" set forth in subsection 1.1, of the length of the next Interest Period to be applicable to such Loans, provided that no Eurodollar Loan or C/D Rate Loan may be continued as such (i) when any Event of Default has occurred and is continuing and the Agent or the Required Lenders have determined that such a continuation is not appropriate, (ii) if, after giving effect thereto, subsection 2.8 would be contravened 39 or (iii) after the date that is one month or 30 days, respectively, prior to the Termination Date and provided, further, that if the Company shall fail to give any required notice as described above in this paragraph such Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period. 2.18. Eurocurrency Reserve Costs. The Company agrees to pay to each Lender which requests compensation under this subsection 2.18 (by notice to the Company and the Agent), on the last day of each Interest Period with respect to any Eurodollar Loan made by such Lender, so long as such Lender shall be required to maintain reserves against "Eurocurrency liabilities" under Regulation D of the Board (or, so long as such Lender may be required by the Board or by any other Governmental Authority to maintain reserves against any other category of liabilities which includes deposits by reference to which the interest rate on Eurodollar Loans is determined as provided in this Agreement or against any category of extensions of credit or other assets of such Lender which includes any Eurodollar Loans), an additional amount (determined by such Lender and notified to the Company) representing such Lender's calculation or, if an accurate calculation is impracticable, reasonable estimate (using such reasonable means of allocation as such Lender shall determine) of the actual costs, if any, incurred by such Lender during such Interest Period as a result of the applicability of the foregoing reserves to such Eurodollar Loans, which amount in any event shall not exceed the product of the following for each day of such Interest Period: (i) the principal amount of the Eurodollar Loans made by such Lender to which such Interest Period relates outstanding on such day; and (ii) the difference between (x) a fraction the numerator of which is the LIBO Rate (expressed as a decimal) applicable to such Eurodollar Loan and the denominator of which is one minus the maximum rate (expressed as a decimal) at which such reserve requirements are imposed by the Board or other Governmental Authority on such date minus (y) such numerator; and (iii) a fraction the numerator of which is one and the denominator of which is 360. 2.19. Use of Proceeds. The proceeds of the Loans shall be used by the Company to refinance outstanding Indebtedness under the Existing Credit Agreement, for the Company's working capital requirements and for any of the Company's corporate purposes not prohibited under this Agreement. 2.20. Swing Line Commitment. Subject to the terms and conditions hereof, Chase, as the swing line lender (in such capacity, the "Swing Line Lender") agrees to make extensions of credit available to the Company from time to time during the 40 Commitment Period by making swing line loans (the "Swing Line Loans") to the Company in an aggregate principal amount at any one time outstanding not to exceed the Swing Line Commitment; provided that (a) the aggregate principal amount of Swing Line Loans outstanding at any time shall not exceed the Swing Line Commitment then in effect (notwithstanding that the Swing Line Loans outstanding at any time, when aggregated with the Swing Line Lender's other outstanding Loans hereunder, may exceed the Swing Line Commitment then in effect) and (b) the Company shall not request and the Swing Line Lender shall not make, any Swing Line Loan if, after giving effect to the making of such Swing Line Loan, subsection 2.3 would be contravened. Swing Line Loans shall bear interest at the Swing Line Rate. From and after the Effective Date and during the Commitment Period, the Company may use the Swing Line Commitment by borrowing, repaying and reborrowing, all in accordance with the terms and conditions hereof. 2.21. Swing Line Note. The Swing Line Loans made by the Swing Line Lender shall be evidenced by a promissory note of the Company substantially in the form of Exhibit C, with appropriate insertions (the "Swing Line Note"), payable to the order of the Swing Line Lender and representing the obligation of the Company to pay the lesser of the Swing Line Commitment and the Swing Line Loans. The Swing Line Lender is hereby authorized to record the date and the amount of each Swing Line Loan made by the Swing Line Lender and the date and amount of each payment or prepayment of principal thereof, on the schedule annexed to and constituting a part of the Swing Line Note, and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded; provided, however, that the failure to make any such recordation shall not affect the obligations of the Company hereunder or under the Swing Line Note. The Swing Line Note shall (a) be dated the Effective Date, (b) be stated to mature on the Termination Date and (c) provide for the payment of interest in accordance with subsection 2.7 as such subsection is applicable to ABR Loans. 2.22. Procedure for Borrowing for Swing Line Loans. Whenever the Company desires that the Swing Line Lender make Swing Line Loans under subsection 2.20 it shall give the Swing Line Lender irrevocable telephonic notice confirmed promptly in writing (which telephonic notice must be received by the Swing Line Lender not later than 11:30 A.M., New York City time, on the proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date (which shall be a Business Day during the Commitment Period). Each borrowing under the Swing Line Commitment shall be in an amount equal to $100,000 or a whole multiple thereof. Not later than 2:00 P.M., New York City time, on the Borrowing Date specified in a notice in respect of Swing Line Loans, the Swing Line Lender shall make available to the Agent at its office specified in subsection 10.2 an amount in immediately available funds equal to the amount of the Swing Line Loan to be made by the Swing Line Lender. The Agent shall make the proceeds of such Swing Line Loan available to the 41 Company on such Borrowing Date by depositing such proceeds in the account of the Company with the Agent on such Borrowing Date for transmittal by the Agent upon the Company's request. 2.23. Refunded Swing Line Loans; Swing Line Loan Participations. (a) The Swing Line Lender, at any time and from time to time in its sole and absolute discretion may, on behalf of the Company (which hereby irrevocably directs the Swing Line Lender to act on its behalf), on one Business Day's notice given by the Swing Line Lender no later than 10:00 A.M., New York City time, request each Lender to make, and each Lender hereby agrees to make, a Committed Rate Loan that is an ABR Loan, in an amount equal to such Lender's Commitment Percentage (calculated with respect to the aggregate Commitments then outstanding) of the aggregate amount of the Swing Line Loans (the "Refunded Swing Line Loans") outstanding on the date of such notice, to repay the Swing Line Lender. Unless any of the events described in Section 8(h) shall have occurred (in which case the procedures of subsection 2.23(c) shall apply), each Lender shall make the amount of such Committed Rate Loan available to the Agent at its office set forth in subsection 10.2 in immediately available funds, not later than 10:00 A.M., New York City time, one Business Day after the date of such notice. The proceeds of such Committed Rate Loans shall be immediately paid by the Agent to the Swing Line Lender which shall apply such proceeds to repay the Refunded Swing Line Loans. Effective on the day such Committed Rate Loans are made, the portion of the Swing Line Loans so paid shall no longer be outstanding as Swing Line Loans, shall no longer be due under the Swing Line Note and shall be due under the respective Committed Rate Notes issued to the Lenders in accordance with their respective Commitment Percentages of the aggregate Commitments. The Company authorizes the Swing Line Lender to charge the Company's accounts with the Agent (up to the amount available in each such account) in order to immediately pay the amount of such Refunded Swing Line Loans to the extent amounts received from the Lenders are not sufficient to repay in full such Refunded Swing Line Loans. (b) Notwithstanding anything herein to the contrary, the Swing Line Lender shall not be obligated to make any Swing Line Loans if a Default or an Event of Default shall have occurred and be continuing. The Swing Line Lender shall notify the Company of such election not to make any Swing Line Loans unless the Event of Default is of the type specified in Section 8(h). (c) If prior to the time a Committed Rate Loan would have otherwise been made pursuant to subsection 2.23(a), one of the events described in Section 8(h) shall have occurred and be continuing, each Lender shall, on the date such Committed Rate Loan was to have been made pursuant to the notice referred to in subsection 2.23(a) (the "Refunding Date"), purchase an undivided participating interest in an amount equal to (i) its Commitment Percentage times (ii) the aggregate principal amount of Swing Line Loans then outstanding which were to have been repaid with 42 such Refunded Swing Line Loans (the "Swing Line Participation Amount"). On the Refunding Date, each Lender shall transfer to the Swing Line Lender, in immediately available funds, such Lender's Swing Line Participation Amount, and upon receipt thereof the Swing Line Lender shall deliver to such Lender a Swing Line Loan Participation Certificate dated the date of the Swing Line Lender's receipt of such funds and in the Swing Line Participation Amount. (d) Whenever, at any time after the Swing Line Lender has received from any Lender such Lender's Swing Line Participation Amount, the Swing Line Lender receives any payment on account of the Swing Line Loans, the Swing Line Lender will distribute to such Lender its Swing Line Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender's participating interest was outstanding and funded); provided, however, that in the event that all or any part of such payment received by the Swing Line Lender is required to be returned, such Lender will return to the Swing Line Lender such portion thereof previously distributed to it by the Swing Line Lender. (e) Each Lender's obligation to make the Loans referred to in subsection 2.23(a) and to purchase participating interests pursuant to subsection 2.23(c) shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such Lender or the Company may have against the Swing Line Lender, the Company or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default; (iii) any adverse change in the condition (financial or otherwise) of the Company; (iv) any breach of this Agreement or any other Loan Document by the Company, any Subsidiary or any other Lender; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. SECTION 3. LETTERS OF CREDIT 3.1. Letters of Credit. Effective as of the Effective Date, the Existing Letter of Credit shall be deemed a Standby Letter of Credit outstanding under, and subject to the terms of, this Agreement. Subject to the terms and conditions hereof, Chase agrees to issue Letters of Credit for the account of the Company from time to time on any Business Day during the Commitment Period; provided that (a) the sum of (i) the face amount of any such Letter of Credit, plus (ii) the aggregate face amount of all Letters of Credit then outstanding, shall in no event exceed $50,000,000; and (b) no Letter of Credit shall be issued if, after giving effect to such issuance, the Aggregate Outstandings at the time of such issuance would exceed the aggregate Commitments then in effect on such date. Each Letter of Credit renewed or issued hereunder shall (a) expire no later than the date five days prior to the Termination Date, (b) be denominated in Dollars, and (c) be in a minimum face amount of 43 $50,000 in the case of Commercial Letters of Credit and $250,000 in the case of Standby Letters of Credit. Each Letter of Credit shall be subject to the Uniform Customs and, to the extent not inconsistent therewith, the laws of the State of New York. 3.2. Issuance of Letters of Credit. (a) The Company may request Chase to issue a Letter of Credit upon at least five Business Days' written notice to Chase at its address specified in subsection 10.2, setting forth in such notice (i) the proposed issuance date of such Letter of Credit, (ii) the face amount of such Letter of Credit and (iii) in the case of Commercial Letters of Credit, the proposed form thereof, and by the concurrent delivery to Chase of a Letter of Credit Application, completed to the satisfaction of Chase. The Company shall also provide such other certificates, documents and other papers and information as Chase may reasonably request. Upon receipt of such notice and Letter of Credit Application, Chase will notify each other Lender thereof and shall, subject to the terms and conditions hereof, process such Letter of Credit Application, and the other certificates, documents, and other papers delivered to Chase in connection therewith, in accordance with its customary procedures, and shall promptly issue such Letter of Credit (but in no event shall Chase be required to issue any Letter of Credit earlier than five Business Days after receipt by Chase of the Letter of Credit Application relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof and by furnishing a copy thereof to the Company. Chase will notify the Lenders of the issuance of such Letter of Credit as soon as reasonably practicable following such issuance. (b) Each Letter of Credit issued hereunder shall, among other things, (i) be denominated in Dollars, (ii) provide for the payment of sight drafts when presented for honor thereunder in accordance with the terms thereof and when accompanied by the certificate(s) or other document(s) described therein, (iii) in the case of a Standby Letter of Credit, have an expiry date occurring not later than the date that is one year after the date of issuance of such Standby Letter of Credit and in the case of a Commercial Letter of Credit, have an expiry date occurring not later than the date that is 360 days after the date of issuance of such Commercial Letter of Credit, (iv) have an expiry date occurring not later than five days prior to the Termination Date, and (v) be in a form satisfactory to Chase. 3.3. Participating Interests. Effective as of the date of issuance thereof, Chase agrees to apportion and does apportion, to each other Lender, and each other Lender severally and irrevocably agrees to take and does take, an undivided participating interest in each Letter of Credit in a percentage equal to such Lender's Commitment Percentage as in effect at such time. 3.4. Reimbursement Obligation of the Company. To induce Chase to issue Letters of Credit, the Company hereby agrees to reimburse Chase (i) unless such reimbursement 44 obligation has been accelerated pursuant to Section 8, on each date on which Chase notifies the Company of the date and amount of a draft presented under any Letter of Credit and paid by Chase for (A) the amount of such draft paid by Chase under such Letter of Credit and (B) the amount of any taxes, fees, charges or other costs or expenses whatsoever incurred by Chase in connection with any payment made by Chase or any Lender under, or with respect to, such Letter of Credit and (ii) upon the acceleration of such reimbursement obligation in accordance with Section 8, in an amount equal to the then maximum liability (whether direct or contingent) of Chase under each Letter of Credit then outstanding. Each such payment shall be made to Chase at such office as shall have been specified in writing by Chase, in lawful money of the United States of America and in immediately available funds. Interest shall be payable on any and all amounts remaining unpaid by the Company under this subsection 3.4 from the date such amounts become payable (whether at stated maturity, by acceleration or otherwise) until payment in full at the Post-Default Rate with respect to ABR Loans. 3.5. Letter of Credit Payments. (a) If any draft shall be presented for payment under any Letter of Credit, Chase shall promptly notify the Company of the date and the amount of the draft presented for payment. The responsibility of Chase to the Company in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are in conformity with such Letter of Credit. (b) In the event that Chase makes a payment under any Letter of Credit and is not reimbursed in full therefor in accordance with the provisions of subsection 3.4 forthwith upon demand of Chase, Chase will promptly notify each other Lender. Forthwith upon its receipt of any such notice, each other Lender will transfer to Chase, in immediately available funds, an amount equal to such other Lender's Commitment Percentage of the unreimbursed portion of such payment. (c) Whenever, at any time after Chase has made a payment under any Letter of Credit and has received from any other Lender such other Lender's Commitment Percentage of the unreimbursed portion of such payment, Chase receives any reimbursement on account of such unreimbursed portion or any payment of interest on account thereof, Chase will distribute to such other Lender its Commitment Percentage thereof. 3.6. Letter of Credit Fees. (a) The Company agrees to pay to the Agent, with respect to each Letter of Credit, a letter of credit fee of (i) 1/8 of 1% of the face amount thereof, in the case of Commercial Letters of Credit, payable upon issuance and (ii) in the case of Standby Letters of Credit, a rate per annum, calculated on the face amount thereof, equal to the Applicable Margin then in effect for Eurodollar Loans, 45 payable on each Payment Date and on the expiry date thereof. The Agent shall remit to each Lender (including Chase) a ratable portion of such letter of credit fees based upon such Lender's Commitment Percentage (as in effect on the date of issuance of such Letter of Credit) of the amount received by the Agent. The Company agrees to pay or reimburse Chase upon demand for such normal and customary fees, costs and expenses as are incurred or charged by Chase from time to time in issuing, effecting payment under or administering any Letter of Credit (including, without limitation, amendment, negotiation, transfer and payment fees). (b) The Company shall pay to Chase, for its own account, with respect to each Letter of Credit, payable in advance on the date of issuance thereof, a letter of credit origination fee equal to 0.125% per annum on the face amount of such Letter of Credit. 3.7. Obligations of the Company Absolute. The Company's obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment which the Company may have or have had against Chase or any beneficiary of a Letter of Credit. The Company also agrees with Chase that Chase shall not be responsible for, and the Company's reimbursement obligations under subsection 3.4 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be in any and all respects invalid, fraudulent or forged, or any dispute between or among the Company or any Restricted Subsidiary and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Company or any Restricted Subsidiary against any beneficiary of such Letter of Credit or any such transferee. Chase shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions caused by Chase's gross negligence or willful misconduct. The Company agrees that any action taken or omitted by Chase under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct and in accordance with the standards of care specified in the Uniform Customs and, to the extent not consistent therewith, the Uniform Commercial Code of the State of New York, shall be binding on the Company and shall not put Chase or any other Lender under any liability to the Company. 3.8. Letter of Credit Application. To the extent that any provision of any Letter of Credit Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall be controlling. 3.9. Purpose of Letters of Credit. Each Letter of Credit shall be used by the Company for credit support (including 46 to support the obligations of Restricted Subsidiaries) and other general corporate purposes in the ordinary course of business. SECTION 4. REPRESENTATIONS AND WARRANTIES To induce the Lenders to enter into this Agreement and to make the Loans and to issue and/or to participate in the Letters of Credit hereunder, the Company hereby represents and warrants to the Agent and each Lender that: 4.1. Financial Condition. The consolidated balance sheet of the Company and its Consolidated Subsidiaries as at June 30, 1996 and the related statements of consolidated earnings, consolidated stockholders' equity and consolidated cash flows for the fiscal year ended on such date, reported on by KPMG Peat Marwick, complete and correct copies of which have heretofore been furnished to each Lender, respectively present fairly the consolidated financial condition of the Company and its Consolidated Subsidiaries as at such date, and the consolidated results of their operations and their consolidated cash flows for the fiscal year then ended. The unaudited consolidated balance sheet of the Company and its Consolidated Subsidiaries as at December 31, 1996 and the related unaudited statements of consolidated earnings, consolidated stockholders' equity and consolidated cash flows for the three-month period ended on such date, certified by a Responsible Financial Officer, complete and correct copies of which have heretofore been furnished to each Lender, present fairly the consolidated financial condition of the Company and its Consolidated Subsidiaries as at such date, and the consolidated results of their operations and their consolidated cash flows for the three-month period then ended (subject to normal year-end audit adjustments). All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by such accountants and as disclosed therein, for the absence of notes and for normal year-end adjustments). Neither the Company nor any of its Consolidated Subsidiaries had, as of the date of the most recent balance sheet referred to above, any Contingent Obligation, contingent liability or liability for taxes, long-term lease or unusual forward or long-term commitment, which is not reflected in the foregoing statements or in the notes thereto, other than contingent items which could not reasonably be expected to have a Material Adverse Effect. Except as set forth in Schedule 4.1 or as disclosed in the Company's Report on Form 10-Q for the quarter ended December 31, 1996, during the period from December 31, 1996 to and including the Effective Date there has been no sale, transfer or other disposition by the Company or any of its Consolidated Subsidiaries of any material part of its business or property and no purchase or other acquisition (including any capital stock of any other Person) material in relation to the consolidated financial condition of the Company and its Consolidated Subsidiaries at December 31, 1996. 47 4.2. No Change. (a) Except as set forth on Schedule 4.1 or as disclosed in the Company's Report on Form 10-Q for the quarter ended December 31, 1996, since December 31, 1996, there has been no change, and no development or event involving a prospective change, which has had or could reasonably be expected to have a Material Adverse Effect and (b) since December 31, 1996, except as permitted by this Agreement, no dividends or other distributions have been declared, paid or made upon the capital stock of the Company nor has any of the capital stock of the Company been redeemed, retired, purchased or otherwise acquired for value by the Company or any of its Subsidiaries. 4.3. Corporate Existence; Compliance with Law. Each of the Company and its Material Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority and the legal right to own its property, to lease the property it operates and to conduct its business, except as permitted by subsection 7.2. As of the Effective Date, the Company is duly qualified as a foreign corporation and is in good standing under the laws of each State of the United States and the District of Columbia. Except as permitted by subsection 7.2, each of the Company and its Subsidiaries is duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of business requires such qualification and is in compliance with all Requirements of Law, except to the extent that the failure to be so qualified or to so comply would not, in the aggregate, have a Material Adverse Effect. 4.4. Corporate Power; Authorization. Each of the Company and each Subsidiary Guarantor has the corporate power and authority, and the legal right, to make, deliver and perform the Loan Documents to which it is a party and, in the case of the Company, to obtain extensions of credit hereunder, and has taken all necessary corporate action on its part to be taken to authorize the borrowings and issuances of Letters of Credit contemplated by this Agreement on the terms and conditions of this Agreement and the Notes and to authorize the execution, delivery and performance of the Loan Documents to which it is a party. No consent or authorization of, or filing with, or other act in respect of, any Person (including, without limitation, any Governmental Authority) is required in connection with the execution, delivery, performance, validity or enforceability of any of the Loan Documents or the borrowings and issuances of Letters of Credit contemplated by this Agreement. 4.5. Enforceable Obligations. Each of the Loan Documents has been, and each of the Notes will be, duly executed and delivered on behalf of the Company and each Subsidiary Guarantor which is a party thereto, and each of the Loan Documents constitutes, and each of the Notes when executed and delivered will constitute, a legal, valid and binding obligation of the Company or such Subsidiary Guarantor which is a party thereto enforceable against the Company or such Subsidiary 48 Guarantor which is a party thereto in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). 4.6. No Legal Bar. The execution, delivery and performance of each of the Loan Documents, the borrowings and issuances of Letters of Credit contemplated by this Agreement and the use of the proceeds thereof (a) do not and will not violate (i) any Requirement of Law or (ii) any Contractual Obligation of the Company or any of its Material Subsidiaries and (b) will not result in, or require, the creation or imposition of any Lien (other than Liens created pursuant to the Collateral Documents) on any of its or their respective properties or revenues pursuant to any such Requirement of Law or Contractual Obligation. 4.7. No Material Litigation. Except as described in Schedule 4.7, no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Company, threatened by or against the Company or any of its Subsidiaries or against any of its or their respective properties or revenues (a) with respect to this Agreement, the Notes or any Collateral Document or any of the transactions contemplated hereby or thereby or (b) which would, in the reasonable judgment of the Company, have a Material Adverse Effect. 4.8. Federal Regulation. No part of the proceeds of any of the Loans and no Letter of Credit will be used for any purpose which violates the provisions of Regulation G, T, U or X of the Board as in effect on the date of making of such Loans or issuance of such Letter of Credit. 4.9. Investment Company Act. Neither the Company nor any of its Subsidiaries is an "investment company" (as defined or used in the Investment Company Act of 1940, as amended). 4.10. No Default. Neither the Company nor any of its Material Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. 4.11. Ownership of Property; Liens. Each of the Company and its Material Subsidiaries has good and marketable fee, or valid leasehold or subleasehold, interests in all its material real property, and good and marketable title to all other material property owned by it; and none of such property is subject to any Lien, except as permitted in subsection 7.1. 4.12. Patents and Trademarks. Each of the Company and its Material Subsidiaries owns, or has all right to use, all Patents and Trademarks necessary for the conduct of its business 49 as currently conducted. Schedules II and III list all material Patents and registered Trademarks, respectively, owned by each of the Company, First Brands Properties, Inc., A&M Products, Inc., Himolene Incorporated and Forest Technologies, Inc. in their respective names as of the date hereof, there being no other material Patents and registered Trademarks owned by the Company and its Material Subsidiaries as of the date hereof. No material registered copyright is owned by the Company as of the date hereof. To the best of the Company's knowledge, as of the date hereof each such material Patent and (except as described in Schedule III) Trademark is valid and enforceable and is subsisting, unexpired and has not been abandoned in the country (and with respect to each such Trademark, for the goods) specified on Schedules II and III, respectively. Except for the licenses listed in Schedules II and III, as of the date hereof none of such material Patents or Trademarks listed in Schedule II or III is the subject of any licensing or franchise agreement. Except as disclosed in Schedules II or III as of the date hereof no holding, decision or judgment has been rendered by any court or administrative agency which would limit, cancel or question the validity of, and, to the knowledge of the Company, no action or proceeding is pending seeking to limit, cancel or question the validity of, any such material Patent or Trademark and, to the knowledge of the Company, no action or proceeding is pending which, if adversely determined, would have a material adverse effect on the value of any such material Patent or Trademark. 4.13. Taxes. Each of the Company and its Material Subsidiaries has filed or caused to be filed all tax returns which to the knowledge of the Company are required to be filed, and has paid all taxes shown to be due and payable on said returns or on any material assessments made against it or any of its property and all other material taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, except for taxes not yet due and except for those the amount or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the Company or its Material Subsidiaries, as the case may be. 4.14. No Burdensome Restrictions. No Contractual Obligation of the Company or any of its Subsidiaries, and no Requirement of Law, has, or insofar as the Company may reasonably foresee may have, a Material Adverse Effect. 4.15. ERISA. No Reportable Event material in relation to the business, operations, property or financial or other condition of the Company and its Restricted Subsidiaries taken as a whole has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any employee benefit plan. Each Plan has complied in all material respects with the applicable provisions of ERISA and the Code. The present value of all benefits vested under all Single Employer Plans (based on those actuarial assumptions used to fund the Plans) did not, as of the last annual valuation date 50 prior to the date on which this representation is made or deemed made, exceed the value of the assets of the Plans allocable to such vested benefits by more than $10,000,000. Neither the Company nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan and the liability to which the Company or any Commonly Controlled Entity would become subject under ERISA if the Company or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made is not in excess of $500,000, in the case of any one Multiemployer Plan, or $1,000,000 in the aggregate, in the case of more than one Multiemployer Plan. No Multiemployer Plan is in Reorganization or Insolvent. 4.16. Subsidiaries. The Subsidiaries listed on Schedule 4.16 will constitute all of the Subsidiaries (Restricted and Unrestricted) of the Company as of the Effective Date, and the Subsidiaries designated on such Schedule as Unrestricted Subsidiaries constitute all of the Unrestricted Subsidiaries of the Company as of the Effective Date. 4.17. Lessor Intellectual Property. Each item of Lessor Intellectual Property is solely associated with the business in which is used the equipment subject to the sale-leaseback transaction pursuant to which the lessor in such transaction obtained an interest therein. Schedule 4.17 sets forth all Lessor Intellectual Property as of the date hereof. 4.18. Environmental Status. To the knowledge of the Company after reasonable investigation, the use of all of the real property and the operation of the Company's and its Subsidiaries' facilities thereon is in substantial compliance with all material applicable zoning, environmental protection, land use and building codes, laws, rules, orders, regulations, statutes, decrees, requirements and/or ordinances, except to the extent that the failure to be in such substantial compliance could not reasonably be expected to have a Material Adverse Effect. The Company has no knowledge of any pending or threatened governmental or private proceedings or notices of violations against it or any of its Subsidiaries or any of its or any such Subsidiary's real property with respect to the ownership, condition or maintenance of its or any such Subsidiary's real property, except for such proceedings or notices which could not reasonably be expected to have a Material Adverse Effect. To the best of the Company's knowledge, none of its or any Subsidiary's real property contains any hazardous or toxic waste or underground storage tanks, except (i) that its and its Subsidiaries' real property contains storage tanks used to store petroleum, petroleum products, waste water and certain nonhazardous and non-toxic substances, (ii) as disclosed on Schedule 4.18 and (iii) for quantities of hazardous or toxic waste, and underground storage tanks, which could not reasonably be expected to have a Material Adverse Effect. To the best of the Company's knowledge, each parcel of its or any Subsidiary's real property 51 is in substantial compliance with all material state and federal environmental standards and requirements, except to the extent that the failure to be in such substantial compliance could not reasonably be expected to have a Material Adverse Effect. The Company has not, nor has any of its Subsidiaries, received any written notices of violation, non-compliance, liability, potential liability, or adversary action by regulatory agencies with respect to any of its or any Subsidiary's real property regarding environmental control matters or environmental permit compliance, except for those notices relating to violations or adversary actions that could not reasonably be expected to have a Material Adverse Effect. As of the date hereof, to the best of the Company's knowledge after reasonable investigation, hazardous waste has not been transported onto or disposed of onto any of the Company's or any Subsidiary's real property since such real property has been owned by the Company or such Subsidiary. SECTION 5. CONDITIONS PRECEDENT 5.1. Conditions to Initial Extension of Credit. The effectiveness of this Agreement, and the obligation of each Lender to make the initial extension of credit requested to be made hereunder, is subject to the satisfaction of the following conditions precedent on or prior to February 28, 1997: (a) Existing Credit Agreement. The Agent shall have received evidence, satisfactory to the Agent, with a copy for each Lender, that all obligations of the Existing Lenders under the Existing Credit Agreement have been terminated, including, without limitation, those with respect to all letters of credit issued pursuant to the Existing Credit Agreement (other than the Existing Letter of Credit), that all payments of principal and interest payable under the Existing Credit Agreement and all fees payable and all other amounts due thereunder have been paid in full and that no Loans (as defined in the Existing Credit Agreement) made pursuant to the Existing Credit Agreement are outstanding; (b) Agreement; Notes. The Agent shall have received, (i) this Agreement, executed and delivered by a duly authorized officer of the Company, with a counterpart for each Lender, (ii) for the account of each Lender, a Committed Rate Note and a Bid Note, and (iii) for the account of the Swing Line Lender, a Swing Line Note; in each case conforming to the requirements hereof and executed and delivered by a duly authorized officer of the Company; (c) Collateral Documents. The Agent shall have received, with a copy for each Lender, (i) the Subsidiary Guarantee Consent, executed and delivered by a duly authorized officer of each Restricted Subsidiary (other than Funding), and (ii) a Cash Collateral Agreement, executed and 52 delivered by a duly authorized officer of the Company, each of which Collateral Documents will reflect this Agreement; (d) Borrowing Certificate of the Company. The Agent shall have received, with an executed counterpart for each Lender, a certificate of the Company in substantially the form of Exhibit J, dated the Effective Date and executed and delivered by a duly authorized officer of the Company; (e) Corporate Proceedings. The Agent shall have received, with a copy for each Lender, (i) a copy of resolutions in form and substance reasonably satisfactory to the Agent, of the Board of Directors of the Company and each Subsidiary Guarantor authorizing (x) the execution, delivery and performance of the Loan Documents to which it is a party, and (y) the granting by it of the pledges and security interests granted by it pursuant to the Collateral Documents to which it is a party, and (ii) a copy of the certificate of incorporation and the by-laws of the Company and each Subsidiary Guarantor, in each case certified, with an executed counterpart of such certification for each Lender, by the Secretary or an Assistant Secretary of the Company or such Subsidiary Guarantor as of the Effective Date; and such certificate shall state that the resolutions, the certificate of incorporation and the by-laws thereby certified have not been amended, modified, revoked or rescinded and are in full force and effect as of the date of such certificate; (f) Incumbency Certificates. The Agent shall have received, with an executed counterpart for each Lender, a certificate of the Secretary or an Assistant Secretary of the Company and each Subsidiary Guarantor, dated the Effective Date, as to the incumbency and signature of the officers of the Company and each Subsidiary Guarantor executing each of the Loan Documents to which it is a party and any certificate or other documents to be delivered by it pursuant hereto and thereto, together with evidence of the incumbency of such Secretary or Assistant Secretary; (g) Legal Opinions. The Agent shall have received, with an executed counterpart for each Lender, the executed legal opinion of Kirkland & Ellis, counsel to the Company, substantially in the form of Exhibit K, with such changes therein as shall be requested or approved by the Agent; such legal opinion shall cover such matters incident to the transactions contemplated by this Agreement, the Notes and the Collateral Documents as the Lenders may reasonably require; (h) No Litigation. Except as set forth on Schedule 4.7, (i) no litigation, investigation or proceeding before or by any arbitrator or Governmental Authority shall be continuing or threatened against the Company or any Subsidiary of the Company or against the officers or 53 directors of any thereof (A) in connection with this Agreement, the Notes, the Collateral Documents or any of the transactions contemplated hereby or thereby and which, in the reasonable opinion of the Required Lenders, is deemed material or (B) which would, in the reasonable opinion of the Required Lenders, have a Material Adverse Effect; and (ii) no injunction, writ, restraining order or other order of any nature materially adverse to the Company and its Subsidiaries or the conduct of its or their business or inconsistent with the due consummation of the transactions contemplated hereby shall have been issued by any Governmental Authority; (i) Fees. The Agent shall have received for the account of itself and the Lenders all fees payable to the Agent and the Lenders on or prior to the Effective Date pursuant to Sections 2 and 3; and (j) Other. All corporate and other proceedings and all documents, instruments and other legal matters in connection with the transactions contemplated by this Agreement, the Notes and the Collateral Documents shall be satisfactory in form and substance to each Lender and the Agent and their counsel. 5.2. Conditions to Each Extension of Credit. The agreement of each Lender to make any extension of credit requested to be made on any date (including, without limitation, its initial extension of credit, any Swing Line Loan and the issuance of any Letter of Credit), is subject to the satisfaction of the following conditions precedent as of the date such extension of credit is made: (a) Representations and Warranties. Each of the representations and warranties made by the Company in or pursuant to this Agreement and the Collateral Documents to which it is a party, and each of the representations and warranties made by any Subsidiary of the Company in or pursuant to any Collateral Documents to which it is a party, and each of the representations and warranties contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement or any Collateral Document shall be true and correct in all material respects on and as of such date as if made on and as of such date; and (b) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the extension of credit requested to be made on such date. Each borrowing of Loans by the Company hereunder, and each issuance of a Letter of Credit hereunder, shall constitute a representation and warranty by the Company as of the date of such 54 borrowing or issuance, as the case may be, that the conditions contained in this subsection 5.2 have been satisfied. SECTION 6. AFFIRMATIVE COVENANTS From the date hereof and so long as the Commitments remain in effect or any amounts remain owing hereunder, under any Note or under any Letter of Credit or Letter of Credit Application, the Company covenants and agrees that: 6.1. Financial Statements. The Company will furnish to each Lender: (a) as soon as available, but in any event within 90 days after the end of each fiscal year of the Company, copies of the consolidated balance sheet of the Company and its Consolidated Subsidiaries as at the end of such fiscal year and the related statements of consolidated earnings, consolidated stockholders' equity and consolidated cash flows for such fiscal year, setting forth in comparative form the figures as of the end of and for the previous year, in each case certified, without a going concern or like qualification or qualification arising out of the scope of the audit, by independent certified public accountants of nationally recognized standing; and (b) as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of the Company, copies of the unaudited consolidated balance sheet of the Company and its Consolidated Subsidiaries as at the end of such quarter and the related unaudited statements of consolidated earnings, consolidated stockholders' equity and consolidated cash flows for such quarter and the portion of the fiscal year through such quarter, in each case setting forth in comparative form the figures as of the end of and for the corresponding periods of the previous fiscal year, certified by a Responsible Financial Officer as presenting fairly the financial condition and results of operations of the Company and its Consolidated Subsidiaries (subject in each case to normal year-end audit adjustments); all such financial statements to be complete and correct in all material respects and prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein (except as approved by such accountants or officer, as the case may be, and disclosed therein and except that the financial statements referred to in subsection 6.1(b) need not contain footnotes and may be subject to year-end adjustments); provided that all such financial statements of the Company and its Consolidated Subsidiaries referred to in this subsection 6.1 shall not include as assets of the Company or any Restricted Subsidiary any notes receivable, interest receivable or any other assets (other than the investment accounts of the 55 Company and the Restricted Subsidiaries accounting for such Person's investments in the Unrestricted Subsidiaries permitted pursuant to subsections 7.4(f) and (g)) arising from any transaction between the Company or any Restricted Subsidiary and any Unrestricted Subsidiary, and shall not include as income of the Company or any Restricted Subsidiary any interest, dividend or any other income arising from any transaction between the Company or any Restricted Subsidiary and any Unrestricted Subsidiary unless, and only to the extent that, such interest, dividend or other income has theretofore been received by the Company or such Restricted Subsidiary in cash, and shall reflect the investments of the Company and its Restricted Subsidiaries in the Unrestricted Subsidiaries on a cost basis. 6.2. Certificates; Other Information. The Company will furnish: (a) to each Lender concurrently with the delivery of each set of the financial statements referred to in subparagraph (a) of subsection 6.1, a certificate of the independent certified public accountants certifying such set of financial statements stating that, although such examination was not conducted with a view toward determining whether a Default or Event of Default occurred or existed, in making the examination necessary for such certification no knowledge was obtained of any Default or Event of Default (except as specified in such certificate) and attaching to such certification the calculations prepared by the Company to support such statement in respect of subsections 7.6 and 7.7, and verifying such calculations; (b) to each Lender concurrently with the delivery of each set of the financial statements referred to in paragraphs (a) and (b) of subsection 6.1, a certificate of a Responsible Financial Officer (A) stating that, to the best of such officer's knowledge, during the period covered by such set of financial statements each of the Company and its Subsidiaries has observed or performed in all material respects all of its covenants and other agreements, and satisfied in all material respects every condition, contained in this Agreement, the Notes and the Collateral Documents to be observed, performed or satisfied by it, and that such officer has obtained no knowledge of any Default or Event of Default (except as specified in such certificate) and (B) showing in detail the calculations supporting such statement in respect of subsections 7.6 and 7.7 and, if applicable, reconciliations to reflect changes in GAAP since the date hereof; (c) to each Lender (i) promptly after the same are sent and received, copies of all financial statements, reports and notices which the Company sends to holders of the capital stock of the Company as a class, and (ii) promptly after the same are filed and received, copies of all financial statements and reports which the Company may 56 make to, or file with, and copies of all material notices the Company receives from, the Securities and Exchange Commission or any public body succeeding to any or all of the functions of the Securities and Exchange Commission; (d) to each Lender, as soon as available, but in any event within 15 days prior to the beginning of each fiscal year of the Company, a copy of the consolidated plan and forecast of the Company and its Consolidated Subsidiaries for the next succeeding fiscal year; (e) to each Lender promptly after the execution thereof copies of all material amendments, waivers and consents entered into by the Company relating to the Indenture, any Financing Lease, and any New Sale-Leaseback; and (f) to each Lender promptly such additional financial and other information (including, without limitation, consolidating financial statements) as any Lender through the Agent may from time to time reasonably request. 6.3. Payment of Obligations. The Company will, and will cause each of its Restricted Subsidiaries to, pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all of its material Indebtedness and other material obligations of whatever nature (including any obligations for taxes), except, without prejudice to the effectiveness of paragraph (g) of Section 8, for any Indebtedness or other material obligation which is being contested in good faith by appropriate proceedings and with respect to which, on a consolidated basis, adequate reserves in conformity with GAAP shall have been provided on the books of the Company or its Restricted Subsidiaries, as the case may be. 6.4. Conduct of Business and Maintenance of Existence. The Company will, and will cause each of its Restricted Subsidiaries to, (a) except as otherwise provided in subsections 7.2 and 7.5, preserve, renew and keep in full force and effect its corporate existence and take all reasonable action to maintain all its material rights, licenses, privileges and franchises necessary or desirable in the normal conduct of its business and (b) comply with all of its Contractual Obligations and Requirements of Law, except to the extent that the failure to comply therewith would not, in the aggregate, have a Material Adverse Effect. 6.5. Maintenance of Property and Insurance. The Company will, and will cause each of its Restricted Subsidiaries to, keep all of its property necessary for the continued operation of its business in good working order and condition (ordinary wear and tear excepted) and maintain with financially sound and reputable insurance companies insurance thereon and with respect to product liability claims, in each case in at least such amounts and with such deductibles and against at least 57 such risks as are usually insured against in the same general area by companies engaged in the same or similar businesses; and, the Company will furnish any Lender, upon the written request of such Lender through the Agent, full information as to the insurance carried. 6.6. Inspection of Property; Books and Records; Discussions. The Company will, and will cause each of its Restricted Subsidiaries to, (a) keep proper books of record and account in which full, true and correct entries in conformity with GAAP in all material respects (or, in the case of Foreign Subsidiaries, generally accepted accounting principles in effect from time to time in their respective jurisdictions of incorporation) and all Requirements of Law in all material respects shall be made of all dealings and transactions in relation to its business and activities and (b) permit representatives of the Agent or any Lender (at the Agent's or such Lender's expense, as the case may be) to visit and inspect any of its properties and to examine and make abstracts from any of its books and records at their customary location at any reasonable time and as often as may reasonably be desired for use by such Lender in making continuing credit decisions hereunder, and to discuss the business, operations, properties and financial and other condition of the Company and its Restricted Subsidiaries with its officers and employees and with its independent certified public accountants. 6.7. Notices. The Company will promptly give written notice to each Lender of: (a) the occurrence of any Default or Event of Default; (b) upon knowledge thereof of any officer of the Company, any default or event of default under any Contractual Obligation of the Company or any of its Restricted Subsidiaries which, in the reasonable judgment of the Company, would have a Material Adverse Effect; (c) any litigation, investigation or proceeding affecting the Company or any of its Restricted Subsidiaries of which the Company or any such Restricted Subsidiary has knowledge and which, in the reasonable judgment of the Company, would have a Material Adverse Effect; (d) the commencement of any investigation or proceeding into or against the Company or any of its Restricted Subsidiaries of which the Company or any such Restricted Subsidiary has knowledge with respect to any alleged violations of laws relating to the protection of the environment which could, in the reasonable judgment of the Company, have a Material Adverse Effect and, quarterly thereafter, the status of each such investigation or proceeding; 58 (e) the following events, as soon as possible and in any event within 30 days after the Company knows or has reason to know thereof: (i) the occurrence or expected occurrence of any Reportable Event with respect to any Plan, or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan, or (ii) the institution of proceedings or the taking or expected taking of any other action by PBGC or the Company or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the terminating, Reorganization or Insolvency of, any Plan; and (f) any material change which, in the reasonable judgment of the Company, would have a material adverse effect on the business, operations, property or financial condition of the Company and its Restricted Subsidiaries taken as a whole. Each notice pursuant to this subsection 6.7 shall be accompanied by a statement of a Responsible Financial Officer setting forth details of the occurrence referred to therein and stating what action the Company proposes to take with respect thereto. 6.8. Separate Corporate Entity for and Borrowing by Unrestricted Subsidiaries. The Company shall, and shall cause each of its Subsidiaries to, operate each Unrestricted Subsidiary in such a manner as to make it apparent to all creditors of such Unrestricted Subsidiary that such Unrestricted Subsidiary is an entity separate and distinct from the Company or any Restricted Subsidiary and as such is solely responsible for its debts; such manner shall include, but not be limited to, the maintenance of a separate board of directors for such Unrestricted Subsidiary. Nothing in this subsection 6.8 shall be construed to prohibit guarantees by the Company or any Restricted Subsidiary of obligations of any Unrestricted Subsidiary to the extent otherwise permitted hereunder or under the other Loan Documents. SECTION 7. NEGATIVE COVENANTS From the date hereof and so long as the Commitments remain in effect or any amounts remain owing hereunder, under any Note or under any Letter of Credit or Letter of Credit Application, the Company covenants and agrees that: 7.1. Limitation on Liens. The Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, except for: (a) Liens in favor of the Agent and the Lenders created pursuant to the Cash Collateral Agreement; 59 (b) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings; provided that adequate reserves with respect thereto are maintained on the books of the Company or its Restricted Subsidiaries, as the case may be, in conformity with GAAP; (c) carriers', warehousemen's, mechanics', materialmen's, repairmen's, or other like Liens arising in the ordinary course of business and not overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings; (d) pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation and deposits securing liability to insurance carriers under insurance or self-insurance arrangements; (e) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (f) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the Company or such Restricted Subsidiary; (g) Liens securing Indebtedness of the Company and its Restricted Subsidiaries in respect of the purchase price of fixed or capital assets; provided that the Indebtedness secured by such Liens would not result in any violation of subsection 7.6, and provided, further that (A) such Liens do not at any time encumber any property other than the property financed by such Indebtedness and the amount of Indebtedness secured thereby is not increased and (B) the principal amount of Indebtedness (other than Capitalized Leases) secured by any such Lien shall at no time exceed 100% of the fair value (as determined in good faith by the board of directors of the Company or such Restricted Subsidiary) of the respective asset at the time it was acquired; (h) Liens created in connection with Capitalized Leases, Financing Leases, and New Sale-Leasebacks; provided that such Liens do not at any time encumber any property other than the property financed by such Capitalized Lease, Financing Lease or New Sale-Leaseback, and the amount of such Capitalized Lease, Financing Lease or New Sale-Leaseback is not increased; 60 (i) Liens on the proceeds or the rights thereto securing Indebtedness of the Company and its Restricted Subsidiaries for financing export sales under bankers' acceptances; (j) Liens on accounts receivable of the Company, its Subsidiaries or Funding to the extent created as contemplated by the Securitization Documents; and (k) Liens on Patents and Trademarks in the ordinary course of the Company's or such Restricted Subsidiary's business as conducted as of the Effective Date. 7.2. Prohibition of Fundamental Changes. Except as permitted in subsections 7.4 and 7.5, the Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any transaction of merger or consolidation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of related transactions, all or substantially all of its business, property or tangible or intangible assets, whether now owned or hereafter acquired, or acquire by purchase or otherwise, all or substantially all the business, property or fixed assets of, or stock or other evidence of beneficial ownership of, any Person, except that so long as no Default or Event of Default shall have occurred and be continuing, or would result therefrom, the Company or any of its Restricted Subsidiaries may enter into a transaction of merger or consolidation, provided that the Company or such Restricted Subsidiary shall be the continuing or surviving corporation. 7.3. Limitation on Restricted Payments. The Company will not, and will not permit any of its Restricted Subsidiaries to, declare or pay any dividends (other than dividends payable solely in capital stock (excluding any non-perpetual or mandatorily-redeemable preferred stock) of the Company) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, retirement or other acquisition of, shares of any class of capital stock of the Company or any stock options or warrants to purchase any such capital stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Company (any such declaration, payment, setting apart, purchase, redemption, retirement, acquisition or distribution, a "Restricted Payment"), except that so long as on the date of declaration or notice of such Restricted Payment no Default or Event of Default would (on a pro forma basis after giving effect to such Restricted Payment) have occurred and be continuing, the Company may make Restricted Payments subsequent to the Effective Date in an aggregate amount not to exceed the sum of (a) $100,000,000, (b) an amount equal to 50% of Consolidated Net Income for each fiscal quarter ended after the Effective Date for which financial statements shall have been delivered to the Lenders pursuant to subsection 6.1 and (c) $20,000,000, 61 constituting that portion of the Company's stock buyback program unused at the Effective Date. 7.4. Limitation on Investments, Acquisitions, Loans and Advances. The Company will not, and will not permit any of its Restricted Subsidiaries to, make any advance, loan, extension of credit or capital contribution to, or purchase or otherwise acquire any stock, bonds, notes, debentures or other securities of, or acquire by purchase or otherwise all or substantially all of the business, properties or assets of, or make any other investment in, any Person, except (a) extensions of trade credit in the ordinary course of business, (b) investments in Cash Equivalents, (c) loans and advances (i) to officers, directors and employees of the Company or its Restricted Subsidiaries for travel, entertainment, relocation and other expenses in the ordinary course of business and (ii) to officers, directors and employees of the Company or any of its Subsidiaries in an aggregate amount not to exceed $5,000,000 to be used to purchase common stock of the Company and for the exercise of options to purchase common stock of the Company granted to such officers, directors or employees under stock option plans of the Company or any of its Subsidiaries, each such loan to have a maturity not in excess of ten years, (d) purchases of inventory in the ordinary course of business, (e) investments in an amount not to exceed $500,000 in the aggregate in insurance companies with which the Company maintains excess liability insurance, (f) loans, advances, extensions of credit, capital contributions and investments by the Company to and in Persons that are Restricted Subsidiaries or simultaneously therewith become Restricted Subsidiaries (other than any thereof permitted under clause (h) of this subsection 7.4); provided that prior to the making of the initial loan, advance, extension of credit, capital contribution or investment in any such Subsidiary, the Company shall (i) cause such Subsidiary to become a party to the Subsidiary Guarantee as a Subsidiary Guarantor and (ii) provide the Agent and the Lenders with such satisfactory legal opinions and other documentation with respect to the legality, validity and enforceability of such guarantee thereby as the Agent may reasonably deem necessary or appropriate, (g) the Company's investment in the Restricted Subsidiaries and Unrestricted Subsidiaries listed on Schedule 4.16 as of the Effective Date, 62 (h) the transactions contemplated by the Securitization Documents, (i) loans, advances, extensions of credit, capital contributions and investments by the Company to and in Persons that are Foreign Subsidiaries; provided that (i) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (ii) such loan, advance, extension of credit, capital contribution or investment would not have a Material Adverse Effect, (j) acquisitions of securities of, or assets of, other Persons other than Subsidiaries so long as the acquisition thereof does not materially change the nature of the business in which the Company and its Restricted Subsidiaries, taken as a whole, are engaged from that in which the Company and its Restricted Subsidiaries were engaged on the Effective Date, (k) Seller Paper (i) issued in connection with the sale by the Company of its former "Prestone" business in an aggregate principal amount not in excess of $12,000,000, (ii) which may be issued in connection with the sale by the Company of its East Hartford facility in an aggregate principal amount not to exceed $5,300,000, and (iii) which may be issued in connection with any other sale or disposition of any property permitted under subsection 7.5(a), (b) or (c) in an aggregate principal amount not to exceed 10% of the fair market value of such property at the time of such sale, and (l) loans, advances, extensions of credit, capital contributions and investments in addition to those in subsections 7.4(a) through (k) above which additional loans, advances, extensions of credit, capital contributions and investments do not exceed in the aggregate $15,000,000. 7.5. Limitations on Sale of Assets. Except as permitted by subsections 7.2 and 7.4, the Company will not, nor will it permit any of its Restricted Subsidiaries to, sell, lease or otherwise dispose of any of its assets (including, without limitation, receivables and leasehold interests and shares of capital stock of Restricted Subsidiaries of the Company, whether then owned by the Company or any Restricted Subsidiary or then issued by any Restricted Subsidiary), except: (a) sales of obsolete or worn out property, or property (including inventory) disposed of in the ordinary course of business; (b) sales or other dispositions such that at the time of such sale the aggregate fair market value as determined in good faith by the Company's Board of Directors or applicable committee thereof of all property subject to all such sales or dispositions made in reliance on this subsection 7.5(b) from and after the Effective Date shall not exceed 25% of Consolidated Net Worth as of the most 63 recent fiscal quarter for which the financial statements contemplated in subsections 6.1(a) and (b) have been delivered; and (c) the sale of accounts receivable and all items relating thereto (including, without limitation, purchase agreements, security interests, contracts, financing statements, guarantees, insurance, monies due or to become due, and proceeds thereof) by the Company, Subsidiaries of the Company and Funding as contemplated by the Securitization Documents. 7.6. Ratio of Consolidated Total Indebtedness to Consolidated Total Capitalization. The Company will not at any time permit the ratio of Consolidated Total Indebtedness at such time to Consolidated Total Capitalization to exceed 0.60 to 1.0. 7.7. Interest Coverage Ratio. The Company will not permit, for any period of four consecutive fiscal quarters of the Company, the ratio of (a) Consolidated EBITDAR for such period to (b) the sum of (i) Consolidated Interest Expense for such period and (ii) Consolidated Lease Expense for such period to be less than 2.25 to 1.0. 7.8. Limitation on Indebtedness of Unrestricted Subsidiaries. The Company will not permit any of its Unrestricted Subsidiaries to create, incur, assume or suffer to exist any Indebtedness, except: (a) Indebtedness in an aggregate principal amount for all Unrestricted Subsidiaries not to exceed $50,000,000 at any one time outstanding; and (b) Other Non-Recourse Indebtedness of any Non-Recourse Unrestricted Subsidiary. 7.9. Limitation on Prepayments, Amendments and Payments in respect of Subordinated Indebtedness and New Sale- Leasebacks. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, (i) directly or indirectly, by deposit of monies or otherwise, prepay, purchase, redeem, retire, defease or otherwise acquire, or make any optional payment on account of any principal of, interest on, or premium payable in connection with the optional prepayment, redemption, defeasance or retirement of, any Subordinated Debt (any such payment, a "Subordinated Debt Prepayment"), unless, (x) the Company or such Restricted Subsidiary shall give written notice to the Agent at the address specified in subsection 10.2 at least 20 days prior to making such Subordinated Debt Prepayment and (y) at the time notice of such payment is given, no Default or Event of Default shall have occurred and be continuing or would (on a pro forma basis after 64 giving effect to such Subordinated Debt Prepayment) result from making such Subordinated Debt Prepayment, or (ii) cause or permit the termination in full or part (including a partial payment or termination) of any New Sale-Leaseback if, after giving effect to such termination and any payments required to be made in connection therewith, any Default or Event of Default shall have occurred and be continuing, or (iii) agree to the modification or amendment of any of the terms of payment of or applicable to, or amortization or sinking fund requirements of or applicable to, or the terms of subordination of or applicable to, any Subordinated Debt or any instrument evidencing or governing the terms of any Subordinated Debt, or (iv) agree to any modification of the Indenture, or any of the instruments referred to in clause (iii) above or any documents entered into in connection with any New Sale-Leaseback which would restrict the ability of the Company to effect any amendments or modifications to this Agreement or the other Loan Documents or to prepay the amounts outstanding hereunder and thereunder, or (v) agree to any modification of any affirmative or negative covenants, events of default or remedial provisions of or applicable to the Indenture, or any of the instruments referred to in clause (iii) above, if the effect of any such modification is to place any further restrictions on the Company or increase the obligations of the Company thereunder or confer on the holders of any such instrument any additional rights (including, without limitation, with respect to such holder's ability to accelerate the obligations thereunder). (b) Nothing in subsection 7.9(a) shall be deemed to prohibit any refinancing of any of the Financing Leases or New Sale-Leasebacks so long as no Default or Event of Default would occur as a result thereof. (c) The Company will not give any notice to the Agent referred to in Sections 3.02 or 12.01(c) of the Indenture relating to optional redemption and defeasance of the Senior Subordinated Debentures which would not be permitted under subsection 7.9(a)(i) or 7.9(e) at the time such notice is given. (d) The Company will not permit the modification or waiver of, or any change other than those which could not have an adverse effect on the Company or the Agent or any Lender in the provisions of the certificate of incorporation of the Company. (e) The Company and the Lenders acknowledge that the Company may request that the Required Lenders consent to a Subordinated Debt Prepayment, or an amendment, waiver or other 65 modification of the terms of any Subordinated Debt, or refinancing of any Subordinated Debt, which is otherwise prohibited by this subsection 7.9, and that upon the consent of the Required Lenders in the manner set forth in subsection 10.1 for a waiver, the Company may make such Subordinated Debt Prepayment or consent to such amendment, waiver or other modification or refinancing in the amount and subject to the other terms and conditions as may be set forth in such consent. 7.10. Limitation on Affiliate Transactions. Except for the intercompany debt between First Brands Properties Inc. and Citrus Holdings Limited or one of its subsidiaries, as described on Schedule 7.10 hereto, the Company will not, nor will it permit its Restricted Subsidiaries to, enter into any material transactions, including, without limitation, the purchase, sale or exchange of property or the rendering of any services, with any Affiliate of the Company, except a transaction which is in the ordinary course of the Company's or such Restricted Subsidiary's business and which is upon fair and reasonable terms no less favorable to the Company or such Restricted Subsidiary than it would obtain in a comparable arm's-length transaction with a Person not an Affiliate; provided that the foregoing shall not restrict transactions between the Company and any Restricted Subsidiary or between any Restricted Subsidiaries. 7.11. Prohibition on Change in Business. The Company will not, and will not permit its Subsidiaries to, enter into any business, either directly or indirectly, if the effect thereof would be to materially change the nature of the business in which the Company and its Restricted Subsidiaries, taken as a whole, are engaged from that in which the Company and its Restricted Subsidiaries were engaged on the Effective Date. 7.12. Limitation on Assets of Non-Recourse Unrestricted Subsidiaries. The Company will not at any time permit the consolidated total assets of all Non-Recourse Unrestricted Subsidiaries to exceed 25% of the consolidated total assets of the Borrower and all its Subsidiaries without the prior written consent of the Required Lenders. SECTION 8. EVENTS OF DEFAULT Upon the occurrence and during the continuance of any of the following events: (a) Payments. (i) Failure by the Company to pay when due any principal of any Note or any reimbursement obligation in respect of any Letter of Credit or (ii) failure by the Company to pay any interest on any Note or to pay any fee or other amount payable hereunder within three Business Days after the date when due; (b) Representations and Warranties. Any representation or warranty made or, pursuant to subsection 66 5.2, deemed made by the Company or any Restricted Subsidiary in this Agreement or any Collateral Document, or in any certificate, document or financial or other written statement furnished at any time in connection herewith or therewith shall prove to have been untrue or misleading in any material respect on the date when made or so deemed to have been made; (c) Certain Covenants. Default by the Company in the observance or performance of any covenant or agreement contained in Section 7 or subsection 2.6(b); (d) Other Covenants. Default by the Company in the observance or performance of any other covenant or agreement contained in this Agreement and the continuance of such default unremedied for a period of 30 days after knowledge thereof by any officer of the Company or notice to the Company thereof by the Agent or any Lender, or for a period of 60 days after knowledge thereof by any officer of the Company or notice to the Company thereof by the Agent or any Lender, if by reason of the nature of such default the same cannot be remedied within the 30-day period commencing on the date of such default and the Company (in the judgment of the Required Lenders) proceeds with reasonable diligence during such 60-day period to cure such default; (e) Collateral Document Covenants. Default by the Company or any Material Subsidiary in the observance or performance of any other covenant or agreement contained in any Collateral Document to which it is a party and continuance of such default unremedied for a period of 30 days after knowledge thereof by any officer of the Company or notice to the Company thereof by the Agent or any Lender, or for a period of 60 days after knowledge thereof by any officer of the Company or notice to the Company thereof by the Agent or any Lender, if by reason of the nature of such default the same cannot be remedied within the 30-day period commencing on the date of such default and the Company (in the judgment of the Required Lenders) proceeds with reasonable diligence during such 60-day period to cure such default; (f) Effectiveness of Collateral Documents. If for any reason (other than any act on the part of the Agent or any Lender) any Collateral Document ceases to be in full force and effect or any party thereto (other than the Agent or any Lender) shall so assert in writing; (g) Cross-Default. The Company or any of its Restricted Subsidiaries shall (i) default in the payment of (A) principal of or interest on any of its Indebtedness (other than any such default in respect of the Notes or reimbursement obligations in respect of the Letters of Credit) or in the payment of any Contingent Obligation relating to Indebtedness, where the aggregate principal 67 amount of all such Indebtedness and Contingent Obligations then outstanding exceeds $5,000,000, or (B) rent or stipulated loss value in respect of any Financing Leases having an aggregate Financing Lease Value in excess of $5,000,000, in either case beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness, Contingent Obligation or Financing Lease was created or (ii) default in the observance or performance of any other agreement or condition relating to any Indebtedness or Contingent Obligation (the aggregate principal amount of which then outstanding exceeds $5,000,000) or any Financing Leases (having an aggregate Financing Lease Value at such time in excess of $5,000,000), or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness, beneficiary or beneficiaries of such Contingent Obligation or lessor under such Financing Lease (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries or lessor) to cause such Indebtedness or Financing Lease to become due prior to its stated maturity or such Contingent Obligation to become payable; (h) Commencement of Bankruptcy or Reorganization Proceeding. (i) The Company or any of its Restricted Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, wind-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets; or (ii) there shall be commenced against the Company or any of its Restricted Subsidiaries any such case, proceeding or other action referred to in subsection (i) which results in the entry of an order for relief or any such adjudication or appointment or remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against the Company or any of its Restricted Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) the Company or any of its Restricted Subsidiaries shall take any action authorizing, or in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth above in this paragraph (h); or 68 (v) the Company or any of its Restricted Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; (i) Material Judgments. One or more judgments or decrees shall be entered against the Company or any of its Restricted Subsidiaries involving in the aggregate a liability (not covered by insurance) of $5,000,000 or more and all such judgments or decrees shall not have been vacated, satisfied, discharged or suspended pending appeal by bond or otherwise within 60 days from the entry thereof; (j) ERISA. (i) Any Person shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) other than a prohibited transaction that has been specifically authorized or otherwise permitted by the United States Department of Labor or other Governmental Authority having jurisdiction therefor, involving any Single Employer Plan with vested unfunded liabilities in excess of $500,000 or any Multiemployer Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any such Plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any such Single Employer Plan, which Reportable Event or institution of proceedings is likely to result in the termination of such Plan for purposes of Title IV of ERISA, and, in the case of a Reportable Event, the continuance of such Reportable Event unremedied for ten days after notice of such Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA is given or the continuance of such proceedings for thirty days after commencement thereof, as the case may be, (iv) any Multiemployer Plan or any such Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Company or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan, or (vi) any other event or condition shall occur or exist with respect to any Multiemployer Plan or any such Single Employer Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, is likely to subject the Company or any of its Subsidiaries to any tax, penalty or other liabilities in the aggregate material in relation to the business, operations, property or financial condition of the Company and its Subsidiaries taken as a whole; (k) Ownership of Common Stock. If prior to the date on which the sum of the then outstanding Commitments and the then aggregate Financing Lease Value on such date becomes less than $200,000,000, any Person or Persons acting in concert of beneficial ownership (within the meaning of Rule 69 13d-3 of the Securities and Exchange Commission promulgated under the Securities Exchange Act of 1934, as amended, or any successor, replacement or analogous rule or provision of law) shall acquire beneficial ownership of 30% or more of the voting power of the Company's capital stock and such condition shall have continued for 30 days or more, provided, however, that the events described in this paragraph (k) shall not constitute a Default or Event of Default unless and until a notice of determination to such effect is delivered by the Required Lenders to the Company; then, and in any such event, (x) if such event is an Event of Default specified in clause (i), (ii), (iii) or (iv) of paragraph (h) above with respect to the Company, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement (including amounts payable in respect of Letters of Credit whether or not the beneficiaries thereof shall have presented the drafts and other documents required thereunder) and the Notes shall immediately become due and payable, and (y) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the Agent may, or upon the request of the Required Lenders, the Agent shall, by notice to the Company, declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, the Agent may, or upon the request of the Required Lenders, the Agent shall, by notice of default to the Company, declare the Loans (with accrued interest thereon) and all other amounts owing under this Agreement (including amounts payable in respect of Letters of Credit whether or not the beneficiaries thereof shall have presented the drafts and other documents required thereunder) and the Notes to be due and payable forthwith, whereupon the same shall immediately become due and payable. With respect to all Letters of Credit that shall not have expired or with respect to which presentment for honor shall not have occurred, the Company shall deposit in a cash collateral account opened by the Agent pursuant to the Cash Collateral Agreement an amount equal to the aggregate undrawn amount of Letters of Credit, and the unused portion thereof, if any, shall be returned to the Company after the respective expiry dates of the Letters of Credit and after all obligations of the Company hereunder and under the other Loan Documents are paid in full. Except as expressly provided above in this Section 8, presentment, demand, protest and all other notices of any kind are hereby expressly waived. SECTION 9. THE AGENT 9.1. Appointment. Each Lender hereby irrevocably designates and appoints Chase as the Agent of such Lender under the Loan Documents. Each Lender hereby irrevocably authorizes Chase, as the Agent for such Lender, to take such action on its behalf under the provisions of the Loan Documents and to exercise 70 such powers and perform such duties as are expressly delegated to the Agent by the terms of the Loan Documents, together with such other powers as are reasonably incidental thereto. Chase hereby accepts its appointment as Agent and the authorization set forth above. Notwithstanding any provision to the contrary in the Loan Documents, the Agent shall not have any duties or responsibilities, except those expressly set forth in the Loan Documents, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into the Loan Documents or otherwise exist against the Agent. 9.2. Delegation of Duties. The Agent may execute any of its duties under the Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 9.3. Exculpatory Provisions. Neither the Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with the Loan Documents (except for its or such Person's own gross negligence or wilful misconduct) or (b) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by the Company or any Subsidiary or any officer thereof contained in the Loan Documents or in any certificate, report, statement or other document referred to or provided for in, or received by it under or in connection with, the Loan Documents or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of the Loan Documents or for any failure of any party thereto (other than the Agent) to perform its obligations thereunder. The Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, the Loan Documents, or to inspect the properties, books or records of any party to any thereof. 9.4. Reliance by Agent. The Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Company), independent accountants and other experts selected by the Agent. The Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Agent. The Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it 71 shall have received such advice or concurrence of the Required Lenders or, to the extent that any Loan Document expressly provides that the Agent is justified in relying only upon all of the Lenders, all of the Lenders as it deems appropriate or it shall have been expressly indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agent shall in all cases be fully protected in acting, or in refraining from acting, under the Loan Documents in accordance with a request of the Required Lenders or, to the extent that any Loan Document expressly provides that the Agent is justified in relying only upon all of the Lenders, all of the Lenders, and such request, and any action taken or failure to act pursuant thereto, shall be binding upon all the Lenders and all future holders of the Notes. 9.5. Notice of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless it has received notice from a Lender or the Company referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Agent receives any such notice, it shall promptly give notice thereof to the Lenders. The Agent shall take such action with respect to any Default or Event of Default as shall be reasonably directed by the Required Lenders or, to the extent that any Loan Document expressly provides that the Agent is justified in relying only upon all of the Lenders, all of the Lenders; provided that, except as expressly provided herein, unless and until the Agent shall have received such directions, it may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders. 9.6. Non-Reliance on Agent and Other Lenders. Each Lender expressly acknowledges that neither the Agent nor any of its respective officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by any of them hereafter taken, including any review of the affairs of the Company or any Subsidiary, shall be deemed to constitute any representation or warranty by the Agent to any Lender. Each Lender represents to the Agent that it has or will, independently and without reliance upon the Agent or any other Lender, and based on such documents and information as it has deemed or will deem appropriate, made and will make its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Company and its Subsidiaries, and made and will make its own decision to make its Loans, participate in Letters of Credit and enter into the Loan Documents to which it is or will be a party. Each Lender also represents that it will, independently and without reliance upon the Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals 72 and decisions in taking or not taking action under the Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Company and its Subsidiaries. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Agent hereunder or furnished to the Agent with copies or counterparts for the Lenders, the Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, financial and other condition or creditworthiness of the Company which may come into its possession or the possession of any of its officers, directors, employees, agents, attorneys-in-fact or affiliates. 9.7. Indemnification. The Lenders agree to indemnify the Agent (in its capacity as such), to the extent not reimbursed by the Company and without limiting the obligation of the Company to do so, ratably according to the respective amounts of their Commitment Percentages, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Notes) be imposed on, incurred by or asserted against the Agent in such capacity in any way relating to or arising out of the Loan Documents, or any documents contemplated by or referred to therein or the transactions contemplated thereby or any action taken or omitted by the Agent in such capacity thereunder or in connection therewith; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting solely from the gross negligence or willful misconduct of the Agent. The agreements in this subsection 9.7 shall survive the payment of the Notes and all other amounts payable hereunder. 9.8. Agent in its Individual Capacity. The Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Company or any of its Subsidiaries as though the Agent were not the Agent under the Loan Documents. With respect to its Loans and any Note or other promissory note issued to it, the Agent shall have the same rights and powers under this Agreement as any Lender and may exercise the same as though it were not the Agent, and the terms "Lender" and "Lenders" shall include the Agent in its individual capacity. 9.9. Successor Agent. The Agent may resign as Agent upon 30 days' notice to the Company and the Lenders. If the Agent shall resign as Agent under this Agreement, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall, if no Default or Event of Default has occurred and is continuing, be subject to 73 approval by the Company, which approval shall not be unreasonably withheld (or, if the Required Lenders and the Company are unable to select such successor agent within such 30-day period, a successor agent shall be selected by the then Agent), whereupon such successor agent (which shall be a bank or trust company) shall succeed to the rights, powers and duties of the Agent under all of the Loan Documents, and the term "Agent" shall mean such successor agent effective upon its appointment, and the former Agent's rights, powers and duties as Agent shall be terminated, without any other or further act or deed on the part of such former Agent or any of the parties to this Agreement or any holders of the Notes. After any retiring Agent's resignation hereunder as Agent, the provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under the Loan Documents. SECTION 10. MISCELLANEOUS 10.1. Amendments and Waivers. With the written consent of the Required Lenders, the Agent and the appropriate parties to the Loan Documents may, from time to time, enter into written amendments, supplements or modifications hereto or thereto for the purpose of adding any provisions to the Loan Documents or changing in any manner the rights of the Lenders or of such parties thereunder, and with the consent of the Required Lenders, the Agent on behalf of the Lenders may execute and deliver to the appropriate parties to the Loan Documents a written instrument waiving, on such terms and conditions as the Agent may specify in such instrument, any of the requirements of the Loan Documents or any Default or Event of Default and its consequences; provided that no such waiver and no such amendment, supplement or modification shall (a) reduce the amount or extend the final maturity of any Note of any Lender, or reduce the rate or extend the time of payment of interest thereon, or change the amount or terms (including, without limitation, fees and commissions) of such Lender's Commitment, in each case without the consent of the Lender affected thereby, (b) amend the definition of "Termination Date" contained in subsection 1.1, without the written consent of all of the Lenders, (c) release all or substantially all of the collateral provided for in any Collateral Document (or, except as expressly permitted hereunder, permit any creditor to obtain a Lien on such collateral), or terminate the Subsidiary Guarantee or release any Subsidiary Guarantor from its obligations thereunder (except, to the extent that any such Subsidiary Guarantor is sold, merged, dissolved or otherwise ceases to be a Subsidiary of the Company, in each case as a result of a transaction which is permitted hereunder, the Agent may release such Subsidiary Guarantor from the Subsidiary Guarantee), or sell all of the capital stock of, or all or substantially all of the assets of, any Restricted Subsidiary (except as permitted hereunder), or amend, modify or waive any provision of this subsection 10.1 or change the definition of "Required Lenders" contained in subsection 1.1, or consent to the 74 assignment or transfer by the Company or any Subsidiary Guarantor of any of its rights and obligations under this Agreement and the other Loan Documents (except, with respect to any Subsidiary Guarantor, to the extent such Subsidiary Guarantor ceases to be a Subsidiary of the Company as a result of a transaction which is permitted hereunder), in each case without the written consent of all of the Lenders, or (d) amend, modify or waive any provision of Section 9 without the written consent of the then Agent. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Company, the other parties to the Loan Documents, the Lenders, the Agent and all future holders of the Notes. In the case of any waiver, the Company, the other parties to the Loan Documents, the Lenders and the Agent shall be restored to their former position and rights hereunder, under the other Loan Documents and under the outstanding Notes, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. The Agent shall, as soon as practicable, furnish a copy of each such amendment, supplement, modification or waiver to each Lender. 10.2. Notices. Unless otherwise expressly provided herein, all notices, consents, requests and demands to or upon the respective parties hereto to be effective shall be in writing or by telecopy and shall be deemed to have been duly given or made when delivered by hand, mail or courier, or, in the case of telecopy notice, when sent (with machine or oral confirmation), addressed as follows in the case of each of the Company and the Agent and as set forth in Schedule I in the case of each of the other parties hereto, or to such address or other address as may be hereafter notified by any of the respective parties hereto or any future holders of the Notes: The Company: First Brands Corporation 83 Wooster Heights Road Danbury, Connecticut 06813-1911 Attention: Chief Financial Officer Telecopy: (203) 731-2518 with a copy to: First Brands Corporation 83 Wooster Heights Road Danbury, Connecticut 06813-1911 Attention: Einar M. Rod Telecopy: (203) 731-2518 The Agent: The Chase Manhattan Bank 270 Park Avenue New York, New York 10017 Attention: Edward McNulty Telecopy: (212) 270-0330 75 with a copy to: The Chase Manhattan Bank Agent Bank Services 1 Chase Manhattan Plaza New York, New York 10005 Attention: Sandra Miklave Telecopy: (212) 552-5658 provided that any notice, request or demand to or upon the Agent, the Swing Line Lender or Chase, as the case may be, pursuant to subsection 2.1, 2.2, 2.5, 2.6, 2.22 or 3.2 shall not be effective until received. 10.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Agent or any Lender, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 10.4. Survival of Representations and Warranties. All representations and warranties made hereunder and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the Notes. 10.5. Payment of Expenses and Taxes. The Company agrees (a) to pay or reimburse the Agent for all its reasonable out-of-pocket costs and expenses incurred in connection with the preparation, execution and delivery of, and any amendment, supplement or modification to, the Loan Documents and any other documents prepared in connection herewith, and the consummation of the transactions contemplated hereby and thereby, including, without limitation, the fees and disbursements of one counsel retained by the Agent, (b) to pay or reimburse each Lender and the Agent for all their reasonable costs and expenses incurred in connection with the enforcement or preservation of any rights under the Loan Documents and any such other documents, including, without limitation, fees and disbursements of counsel (which may be the reasonable invoiced allocated costs and expenses of in-house legal counsel or staff determined in good faith) to (i) the Agent and to the several Lenders, and (ii) upon the reasonable determination by Lenders, whose Commitment Percentages aggregate more than 66-2/3% of the Commitment Percentages of all Lenders other than the Agent (in its capacity as Lender), that an actual or potential conflict of interest may exist in the representation of such Lenders by the counsel referred to in clause (i) above, one alternate counsel for the several Lenders, (c) to pay and indemnify and hold harmless each Lender and the Agent from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, 76 excise and other taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, the Loan Documents and any such other documents, and (d) to pay and indemnify and hold harmless each Lender and the Agent (and their respective directors, officers, employees and agents) from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement and performance of the Loan Documents and any such other documents or preservation of rights thereunder or in any way relating to any Financing Leases or New Sale-Leasebacks (all the foregoing, collectively, the "indemnified liabilities"); provided that the Company shall have no obligation hereunder with respect to indemnified liabilities arising from (i) the gross negligence or wilful misconduct of the Agent or any such Lender, (ii) legal proceedings commenced against the Agent or any such Lender by any security holder or creditor thereof, arising out of and based upon rights afforded any such security holder or creditor solely in its capacity as such, or (iii) legal proceedings commenced against the Agent or any such Lender by any other Lender. The agreements in this subsection shall survive repayment of the Notes and all other amounts payable hereunder. 10.6. Successors and Assigns; Participations; Purchasing Lenders. (a) This Agreement shall be binding upon and inure to the benefit of the Company, the Lenders, the Agent, all future holders of the Notes and their respective successors and assigns, except that the Company may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each Lender. (b) Any Lender may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time sell to one or more banks or other entities which are not then Competitors or Affiliates of Competitors of the Company ("Participants") participating interests in any Loan owing to such Lender, any Note held by such Lender, the Commitment of such Lender or any other interest of such Lender hereunder and under the other Loan Documents. Each Lender shall promptly notify the Company of any such sale of a participating interest to a Participant, provided that any failure to provide such notice shall not affect the validity or enforceability of any such sale. In the event of any such sale by a Lender of participating interests to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of any such Note for all purposes under this Agreement and the other Loan Documents, and the Company and the Agent shall continue to deal solely and directly with such Lender in 77 connection with such Lender's rights and obligations under this Agreement and the other Loan Documents. Each Participant shall agree in writing with the selling Lender that such Participant shall comply with the confidentiality provisions of subsection 10.8. Nothing herein shall be deemed to obligate the Company to provide any financial or other information or documents to any Participant. The Company agrees that if amounts outstanding under this Agreement and the Notes are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement and any Note to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement or any Note, provided that such Participant shall only be entitled to such right of setoff if it shall have agreed in the agreement pursuant to which it shall have acquired its participating interest to share with the Lenders the proceeds thereof as provided in subsection 10.7. The Company also agrees that each Participant shall be entitled to the benefits of subsections 2.10, 2.11, 2.15, 2.16, 2.18 and 10.5 with respect to its participation in the Commitments and the Loans outstanding from time to time; provided, that no Participant shall be entitled to receive any greater amount pursuant to such subsections than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred. The participation agreement pursuant to which such Participant obtains its participating interest may require the consent of the Participant to amendments, waivers or modifications of the Loan Documents only to the extent that any such amendment, waiver or modification would, pursuant to the proviso to the first sentence of subsection 10.1, require the consent of the Lender which sold such participating interest and the transferor Lender shall retain the sole right to approve, without the consent of any Participant, all other amendments, modifications or waivers. (c) Any Lender may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time sell to any Lender and, with the consent of the Company and the Agent (which in each case shall not be unreasonably withheld), to one or more additional banks or financial institutions ("Assignees") all or any part of its rights and obligations under this Agreement, the Notes, and the other Loan Documents, in amounts to be no less than $10,000,000 (or, if less, the entire amount of such Lender's Commitment) pursuant to an Assignment and Acceptance substantially in the form of Exhibit L (an "Assignment and Acceptance") executed by such Assignee, such transferor Lender and, if required, the Company and the Agent and delivered to the Agent for its acceptance and recording in the Register. Upon such execution, delivery, acceptance and recording, from and after the Transfer Effective Date determined pursuant to and as defined in such 78 Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereunder with a Commitment as set forth therein, and (y) the transferor Lender thereunder shall, to the extent provided in such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of a transferor Lender's rights and obligations under this Agreement, such transferor Lender shall cease to be a party hereto except as to subsections 2.10, 2.11, 2.15, 2.18 and 10.5). Such Assignment and Acceptance shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Assignee and the resulting adjustment, if any, of Commitment Percentages arising from the purchase by such Assignee of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the other Loan Documents. On or prior to the Transfer Effective Date determined pursuant to and as defined in such Assignment and Acceptance, the Company, at its own expense, shall execute and deliver to the Agent in exchange for the surrendered Notes new Notes to the order of such Assignee in an amount, in the case of Committed Rate Notes, equal to the Commitment assumed by it pursuant to such Assignment and Acceptance and, if the transferor Lender has retained a Commitment hereunder, new Notes to the order of the transferor Lender in an amount, in the case of Committed Rate Notes, equal to the Commitment retained by it hereunder. Such new Notes shall be dated the Effective Date and shall otherwise be in the form of the Notes replaced thereby. The Notes surrendered by the transferor Lender shall be returned by the Agent to the Company marked "canceled". (d) The Agent shall maintain at its address referred to in subsection 10.2 a copy of each Assignment and Acceptance delivered to it and the Register for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Loans owing to, each Lender from time to time. The entries in the Register shall be conclusive, in the absence of manifest error, and the Company, the Agent and the Lenders may treat each Person whose name is recorded in the Register as the owner of the Loan recorded therein for all purposes of this Agreement. The Register shall be available for inspection by the Company or any Lender at any reasonable time and from time to time upon reasonable prior notice. (e) Upon its receipt of an Assignment and Acceptance executed by a transferor Lender and Assignee (and, in the case of an Assignee that is not then a Lender or an affiliate thereof, by the Company and the Agent) together with payment to the Agent of a registration and processing fee of $4,000, the Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the Transfer Effective Date determined pursuant thereto record the information contained therein in the Register and give notice of such acceptance and recordation to the Lenders and the Company. 79 (f) The Company authorizes each Lender to disclose to any Participant or Assignee (each, a "Transferee") and any prospective Transferee permitted hereunder any and all financial information or other documents in such Lender's possession concerning the Company and its affiliates which has been delivered to such Lender by or on behalf of the Company pursuant to this Agreement or which has been delivered to such Lender by or on behalf of the Company in connection with such Lender's credit evaluation of the Company and its affiliates prior to becoming a party to this Agreement; provided, that, prior to any such disclosure, such Transferee or prospective Transferee shall agree, in a signed writing in favor of the Company to comply with the confidentiality requirements set forth in subsection 10.8 as if such Transferee or prospective Transferee were a Lender hereunder. (g) If, pursuant to this subsection, any interest in this Agreement or any Note is transferred to any Assignee which is organized under the laws of any jurisdiction other than the United States or any State thereof, the transferor Lender shall cause such Assignee, concurrently with the effectiveness of such transfer, to comply with subsection 2.11(b). (h) Nothing herein shall prohibit any Lender from pledging or assigning any Note to any Federal Reserve Bank in accordance with applicable law. 10.7. Adjustments; Set-off. (a) If any Lender (a "benefitted Lender") shall at any time receive any payment of all or part of any of its Loans (or participations therein) or its interest in the reimbursement obligations of the Company under the Letters of Credit, in each case which are then due, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in paragraph (h) of Section 8, or otherwise except pursuant to subsections 2.10(b) and 10.6) in a greater proportion than any such payment to and collateral received by any other Lender, if any, in respect of such other Lender's Loans (or participations therein, as the case may be) or its interest in the reimbursement obligations of the Company under the Letters of Credit, or interest thereon, such benefitted Lender shall purchase for cash from the other Lenders such portion of each such other Lender's Loans (or participations therein, as the case may be) or its interest in the reimbursement obligations of the Company under the Letters of Credit or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such benefitted Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Lenders; provided that if all or any portion of such excess payment or benefits is thereafter recovered from such benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. The Company agrees that each Lender so 80 purchasing a portion of another Lender's Loans (or participations therein, as the case may be) or its interest in the reimbursement obligations of the Company under the Letters of Credit, or interest thereon, may exercise all rights of payment (including, without limitation, rights of set-off) with respect to such portion as fully as if such Lender were the direct holder of such portion. (b) In addition to any rights and remedies of the Lenders provided by law, upon the occurrence of an Event of Default and acceleration of the obligations owing in connection with this Agreement, each Lender shall have the right, without prior notice to the Company, any such notice being expressly waived to the extent permitted by applicable law, and without regard for any collateral security held by or on behalf of such Lender, to set off and apply against any indebtedness, whether matured or unmatured, of the Company to such Lender, any amount owing from such Lender to the Company at, or at any time after, the happening of any of the above mentioned events, and such right of set-off may be exercised by such Lender against the Company or against any trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver, custodian or execution, judgment or attachment creditor of the Company, or against anyone else claiming through or against the Company or such trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver, or execution, judgment or attachment creditor, notwithstanding the fact that such right of set-off shall not have been exercised by such Lender prior to the making, filing or issuance, or service upon such Lender of, or of notice of, any such petition, assignment for the benefit of creditors, appointment or application for the appointment of a receiver, or issuance of execution, subpoena, order or warrant. Each Lender agrees promptly to notify the Company and the Agent after any such set-off and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such set-off and application. 10.8. Confidentiality. Each Lender agrees to take normal and reasonable precautions and exercise due care to maintain the confidentiality of all information provided to it by the Company in connection with this Agreement (other than information which is a matter of general public knowledge or which has heretofore been or is hereafter published for public distribution or filed as public information with any governmental or bank regulatory authority other than as a result of a breach of this covenant); provided that any Lender may disclose such information (a) at the request of any bank regulatory authority or in connection with an examination of such Lender by any such authority, (b) pursuant to subpoena or other court process, (c) when required to do so in accordance with the provisions of any applicable law, (d) at the direction of any other agency of any State of the United States or of any other jurisdiction in which such Lender conducts its business, (e) to such Lender's independent auditors and other professional advisors or (f) 81 subject to 10.6(f), to any Transferee or potential Transferee of such Lender. 10.9. Further Assurances. The Company agrees that at any time and from time to time upon the written request of the Agent, the Company will, and will cause its Subsidiaries to, execute and deliver such further documents and do such further acts and things as the Agent may reasonably request in order to effect the purposes of this Agreement and the other Loan Documents. 10.10. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 10.11. Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with each of the Company and the Agent. 10.12. GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 10.13. Submission to Jurisdiction. The Company hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal action or proceeding relating to this Agreement (and the other Loan Documents to which it is a party), or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof; (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any such substantially similar form of mail), postage prepaid to the Company at its 82 address set forth in subsection 10.2 or at such other address of which the Agent shall have been notified pursuant thereto; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this subsection any special, exemplary, punitive or consequential damages. 10.14. Acknowledgements. The Company hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the Notes and the other Loan Documents; (b) neither the Agent nor any Lender has any fiduciary relationship to the Company, and the relationship between Agent and Lenders, on one hand, and Company, on the other hand, is solely that of debtor and creditor; and (c) no joint venture exists among the Lenders or among the Company and the Lenders. 10.15. WAIVER OF JURY TRIAL. THE PARTIES HERETO EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT, AND FOR ANY COUNTERCLAIM THEREIN. 10.16. Integration. This Agreement including, without limitation, the agreements referred to in subsection 2.9, represents the entire agreement of each of the parties hereto with respect to the subject matter hereof and there are no promises or representations by the Agent or any Lender relative to the subject matter hereof not stated or referred to herein. 83 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. FIRST BRANDS CORPORATION By /s/ DONALD DeSANTIS --------------------------------------- Title: Senior Vice President THE CHASE MANHATTAN BANK, as Agent and as a Lender By: /s/ PETER C. ECKSTEIN --------------------------------------- Title: Vice President THE BANK OF NEW YORK By: /s/ KENNETH SNEIDER --------------------------------------- Title: Vice President CREDIT SUISSE FIRST BOSTON By: /s/ JAMES RODIER --------------------------------------- Title: Managing Director By: /s/ CHRIS HORGAN --------------------------------------- Title: Associate LTCB TRUST COMPANY By: /s/ GREGORY HONG --------------------------------------- Title: Senior Vice President MELLON BANK, N.A. By: /s/ JOSEPH F. BOND --------------------------------------- Title: Vice President NATIONSBANK, N.A. By: /s/ EILEEN C. HIGGINS --------------------------------------- Title: Vice President 84 PNC BANK, NATIONAL ASSOCIATION By: /s/ SARAH McCLINTOCK --------------------------------------- Title: Vice President ROYAL BANK OF CANADA By: /s/ SHERYL L. GREENBERG --------------------------------------- Title: Manager TORONTO DOMINION (NEW YORK), INC. By: /s/ DEBBIE A. GREENE --------------------------------------- Title: Vice President CREDIT LYONNAIS NEW YORK BRANCH By: /s/ RON HURST --------------------------------------- Title: Vice President FLEET NATIONAL BANK By: /s/ BARBARA AGOSTINI --------------------------------------- Title: Assistant Vice President FIRST UNION NATIONAL BANK By: /s/ ROBERT H. WATERS, JR. --------------------------------------- Title: Senior Vice President MORGAN GUARANTY TRUST COMPANY OF NEW YORK By: /s/ DEBORAH A. BROADHEIM --------------------------------------- Title: Vice President 1 SCHEDULE I Commitments, Commitment Percentages and Lending Offices Commitment Bank and Lending Office Percentage Commitment - ----------------------- ---------- ---------- THE CHASE MANHATTAN BANK 8.67% $26,000,000 270 Park Avenue New York, New York 10017 Attention: Edward McNulty Telecopy: (212) 270-0330 Telephone: (212) 270-4812 THE BANK OF NEW YORK 8.00% $24,000,000 One Wall Street New York, New York 10286 Attention: Kenneth Sneider, Jr Telecopy: (212) 635-6999 Telephone: (212) 635-6863 CREDIT SUISSE FIRST BOSTON 8.00% $24,000,000 11 Madison Avenue New York, New York 10010 Attention: Chris Horgan Telecopy: (212) 325-8309 Telephone: (212) 325-9157 LTCB TRUST COMPANY 8.00% $24,000,000 165 Broadway, 49th Floor New York, New York 10006 Attention: Gregory Hong Telecopy: (212) 608-2371 Telephone: (212) 335-4534 NATIONSBANK, N.A 8.00% $24,000,000 101 North Tryon Street, 15th Floor Charlotte, North Carolina 28255 with a copy to: NATIONSBANK, N.A 767 Fifth Avenue New York, New York 10153-0083 Attention: Eileen Higgins Telecopy: (212) 751-6909 Telephone: (212) 407-5337 2 PNC BANK, NATIONAL ASSOCIATION 8.00% $24,000,000 335 Madison Avenue 10th Floor New York, New York 10017 Attention: Sarah McClintock Telecopy: (212) 409-3737 Telephone: (212) 409-3726 ROYAL BANK OF CANADA 8.00% $24,000,000 Grand Cayman (North America No. 1) Branch c/o New York Branch Financial Square New York, New York 10005-3531 Attention: David Barsalav Telecopy: (212) 428-6459 Telephone: (212) 428-6418 with a copy to: ROYAL BANK OF CANADA Financial Square, 24th Floor New York, New York 10005-3531 Attention: Sheryl Greenberg Telecopy: (212) 428-6459 Telephone: (212) 428-6476 TORONTO DOMINION (NEW YORK), INC. 8.00% $24,000,000 909 Fannin Street, 17th Floor Houston, Texas 77010 with a copy to: TORONTO DOMINION (NEW YORK), INC. 31 West 52nd Street New York, New York 10019 Attention: Robert Harris/Nancy Sheridan Telecopy: (212) 262-1926 Telephone: (212) 468-0585 CREDIT LYONNAIS 8.00% $24,000,000 1301 Avenue of the Americas New York, New York 10019 Attention: Rod Hurst Telecopy: (212) 459-3179 Telephone: (212) 261-7362 FLEET NATIONAL BANK 8.00% $24,000,000 One Landmark Square, 12th Floor Stamford, Connecticut 06904 Attention: Barbara Agostini Telecopy: (203) 358-6111 Telephone: (203) 358-6195 3 FIRST UNION NATIONAL BANK 8.00% $ 24,000,000 550 Broad Street, 15th Floor Newark, New Jersey 07102 Attention: Mark Smith Telecopy: (201) 565-6681 Telephone: (201) 565-6465 MORGAN GUARANTY TRUST COMPANY 8.00% $ 24,000,000 OF NEW YORK 60 Wall Street 22nd Floor New York, NY 10260 Attention: Deborah Broadheim Telecopy: (212) 648-5021 Telephone: (212) 648-8063 MELLON BANK, N.A 3.33% $ 10,000,000 1 MBC Pittsburgh, Pennsylvania 15258 with a copy to: MELLON BANK, N.A 65 East 55th Street New York, New York 10022-3219 Attention: Joseph Bond Telecopy: (212) 702-5269 Telephone: (212) 702-4017 TOTAL: 100.00% $300,000,000 EXHIBIT A FORM OF COMMITTED RATE NOTE $__________ New York, New York February __, 1997 FOR VALUE RECEIVED, the undersigned, FIRST BRANDS CORPORATION, a Delaware corporation (the "Company"), hereby unconditionally promises to pay on the Termination Date to the order of (the "Lender") at the office of The Chase Manhattan Bank located at 270 Park Avenue, New York, New York 10017 in lawful money of the United States of America and in immediately available funds, the principal amount of the lesser of (a) DOLLARS ($ ) and (b) the aggregate unpaid principal amount of all Committed Rate Loans made by the Lender to the undersigned pursuant to subsection 2.1 of the Credit Agreement referred to below. The undersigned further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time from the date hereof at the rates per annum set forth in subsection 2.7 of the Credit Agreement referred to below until any such amount shall become due and payable (whether at the stated maturity, by acceleration or otherwise), and thereafter on such overdue amount at the rate per annum set forth in subsection 2.7(d) of the Credit Agreement until paid in full (as well after as before judgment). Interest shall be payable in arrears on each Interest Payment Date, commencing on the first such date to occur after the date hereof, at maturity and upon payment (including prepayment) of the unpaid principal amount hereof to the extent provided in the Credit Agreement, provided that interest payable pursuant to subsection 2.7(d) of the Credit Agreement shall be payable on demand. The holder of this Note is authorized to record the date, Type and amount of each Committed Rate Loan made pursuant to subsection 2.1 of the Credit Agreement, the date and amount of each payment or prepayment of principal with respect thereto, the Eurodollar Rate or the C/D Rate, the length of each Interest Period with respect to the portion of such Committed Rate Loan made and/or maintained as either a Eurodollar Loan or a C/D Rate Loan, as the case may be, and each conversion or continuation made pursuant to subsection 2.17 of the Credit Agreement, on the schedules annexed hereto and made a part hereof, which recordation shall constitute prima facie evidence of the accuracy of the information so recorded; provided that failure by such holder to make any such recordation (or any error in such recordation) on this Note shall not affect the obligations of the Company under this Note or under the Credit Agreement. 2 This Note is one of the Committed Rate Notes referred to in the Amended and Restated Credit Agreement, dated as of February __, 1997 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among the Company, the Lender, the other lenders parties thereto, and The Chase Manhattan Bank, as Agent, and is subject to optional and mandatory prepayment in whole or in part as provided therein. Terms used herein which are defined in the Credit Agreement shall have such defined meanings unless otherwise defined herein or unless the context otherwise requires. Payment and performance of this Note is guaranteed as set forth in the Subsidiary Guarantee. The Company agrees to pay all costs and expenses incurred by the Lender in connection with the enforcement of its rights and remedies under the Credit Agreement, this Note and the Subsidiary Guarantee. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Upon the occurrence of any one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided therein. THIS COMMITTED RATE NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. FIRST BRANDS CORPORATION By: -------------------------------------- Title: SCHEDULE A to Committed Rate Note LOANS, CONVERSIONS AND PAYMENTS OF EURODOLLAR LOANS
Interest Amount of Period Amount of Amount of C/D Rate and Amount of Eurodollar ABR Loans Loans Maturity Eurodollar Loans Converted Converted Date Loans Converted Amount into into With Converted into of Notation Amount Eurodollar Eruodollar Respect Interest into C/D Principal Made Date of Loan Loans Loans Thereto Rate ABR Loans Rate Loans Repaid By - ------ ------- ---------- ---------- -------- -------- --------- ---------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
SCHEDULE B to Committed Rate Note LOANS, CONVERSIONS AND PAYMENTS OF C/D RATE LOANS
Interest Period Amount of Amount of Amount of and Amount of C/D Rate ABR Eurodollar Maturity C/D Rate Loans Loans Loans Date Loans Converted Amount Converted Converted With Converted into of Notation Amount into C/D into C/D Respect Interest into Eurodollar Principal Made Date of Loan Rate Loans Rate Loans Thereto Rate ABR Loans Rate Loans Repaid By - ------ ------- ---------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- -------- - ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
SCHEDULE C to Committed Rate Note LOANS, CONVERSIONS AND PAYMENTS OF ABR LOANS
Amount of Amount of Amount of Amount of Eurodollar C/D Rate ABR ABR Loans Loans Loans Loans Amount Converted Converted Converted Converted of Notation Amount into into into Euro- into C/D Principal Made Date of Loan ABR Loans ABR Loans dollar Loans Rate Loans Repaid By - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- -------- - ------ ------- ----------- ---------- ------------ ---------- --------- --------
EXHIBIT B [FORM OF BID LOAN NOTE] PROMISSORY NOTE $300,000,000 New York, New York February __, 199_ FOR VALUE RECEIVED, the undersigned, FIRST BRANDS CORPORATION, a Delaware corporation (the "Company"), hereby unconditionally promises to pay to the order of (the "Lender") at the office of The Chase Manhattan Bank located at 270 Park Avenue, New York, New York 10017, in lawful money of the United States of America and in immediately available funds, the principal amount of (a) THREE HUNDRED MILLION DOLLARS ($300,000,000), or, if less, (b) the aggregate unpaid principal amount of all Bid Loans made by the Lender to the Company pursuant to subsection 2.2 of the Credit Agreement referred to below. The principal amount of each Bid Loan evidenced hereby shall be payable on the maturity date therefor set forth on the schedule annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof (the "Grid"). The Company further agrees to pay interest in like money at such office on the unpaid principal amount of each Bid Loan evidenced hereby, at the rate per annum set forth in respect of such Bid Loan on the Grid, calculated on the basis of a year of 360 days and actual days elapsed from the date of such Bid Loan until the due date thereof (whether at the stated maturity, by acceleration or otherwise) and thereafter at the rates determined in accordance with subsection 2.2(e) of the Credit Agreement. Interest on each Bid Loan evidenced hereby shall be payable on the date or dates set forth in respect of such Bid Loan on the Grid. Bid Loans evidenced by this Note may not be prepaid. The holder of this Note is authorized to endorse on the Grid the date, amount, interest rate, and maturity date in respect of each Bid Loan made pursuant to subsection 2.2 of the Credit Agreement and each payment of principal with respect thereto, which endorsement shall constitute prima facie evidence of the accuracy of the information endorsed; provided, however, that the failure to make any such endorsement (or any error in such recordation) shall not affect the obligations of the Company under this Note or under the Credit Agreement. This Note is one of the Bid Loan Notes referred to in the Amended and Restated Credit Agreement, dated as of February __, 1997 (as amended, supplemented or otherwise modified from time to 2 time, the "Credit Agreement"), among the Company, the Lender, the other lenders parties thereto, and The Chase Manhattan Bank, as Agent, and is entitled to the benefits thereof. Payment and performance of this Note is guaranteed as set forth in the Subsidiary Guarantee. The Company agrees to pay all costs and expenses incurred by the Lender in connection with the enforcement of its rights and remedies under the Credit Agreement, this Note and the Subsidiary Guarantee. Upon the occurrence of any one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided therein. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Terms defined in the Credit Agreement are used herein with their defined meanings unless otherwise defined herein. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. FIRST BRANDS CORPORATION By --------------------------------------- Title: SCHEDULE OF BID LOANS
Date Amount Amount of of of Interest Maturity Payment Principal Authori- Loan Loan Rate Date Date Payment zation - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- -------- - ---- ------ -------- -------- ------- --------- --------
EXHIBIT C [FORM OF SWING LINE NOTE] New York, New York $25,000,000 February __, 199_ FOR VALUE RECEIVED, the undersigned, FIRST BRANDS CORPORATION, a Delaware corporation (the "Company"), hereby unconditionally promises to pay to the order of THE CHASE MANHATTAN BANK (the "Swing Line Lender") on the Termination Date, as defined in the Credit Agreement (as defined below), at its offices located at 270 Park Avenue, New York, New York 10017, in lawful money of the United States of America and in immediately available funds, the lesser of (a) TWENTY-FIVE MILLION DOLLARS ($25,000,000) and (b) the aggregate unpaid principal amount of all Swing Line Loans made by the Swing Line Lender to the Company pursuant to subsection 2.20 of the Credit Agreement referred to below. The Company further agrees to pay interest in like money at said office on the unpaid principal amount hereof from time to time and, to the extent permitted by law, accrued and unpaid interest in respect hereof until payment in full of the principal amount hereof and accrued interest hereon at the rate per annum and on the dates specified in the Credit Agreement until paid in full (after as well as before judgment). The holder of this Note is authorized to record the date and the amount of each Swing Line Loan made by the Swing Line Lender pursuant to subsection 2.20 of the Credit Agreement and the date and amount of each payment or prepayment of the principal hereof on Schedule I annexed hereto and made a part hereof and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded, provided, that the failure to make any such recordation (or any error in such recordation) shall not affect the obligations of the Company hereunder or under the Credit Agreement. This Note is the Swing Line Note referred to in the Amended and Restated Credit Agreement, dated as of February __, 1997, among the Company, the Swing Line Lender, the other banks and financial institutions parties thereto from time to time and The Chase Manhattan Bank, as agent for said banks and financial institutions (as the same may from time to time be amended, modified or supplemented, the "Credit Agreement"; terms defined therein being used herein as so defined), is entitled to the benefits thereof and may be prepaid in whole or in part as provided therein. Payment and performance of this Note is guaranteed as set forth in the Subsidiary Guarantee. The Company agrees to pay all costs and expenses incurred by the Swing Line Lender in 2 connection with the enforcement of its rights and remedies under the Credit Agreement, this Note and the Subsidiary Guarantee. If any payment on this Note becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. Upon the occurrence of any one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable as provided therein. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. FIRST BRANDS CORPORATION By: -------------------------------------- Title: Schedule I to Swing Line Note LOANS AND REPAYMENTS
Unpaid Amount of Amount of Principal Swing Line Swing Line Balance of Loans Loans Swing Line Notation Date Made Repaid Loans Made By - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ---------- - --------- ---------- ----------- ---------- ----------
EXHIBIT D [FORM OF BID LOAN CONFIRMATION] ____________, 19__ The Chase Manhattan Bank, as Agent 270 Park Avenue New York, New York 10017 Dear Sirs: Reference is made to the Amended and Restated Credit Agreement, dated as of February __, 1997, among the undersigned, the Lenders from time to time parties thereto, and The Chase Manhattan Bank, as Agent (as the same may be amended, supplemented or otherwise modified, the "Credit Agreement"). Terms defined in the Credit Agreement are used herein as therein defined. In accordance with subsection 2.2(b)(iv)(B) of the Credit Agreement, the undersigned accepts and confirms the offers by the Bid Loan Lender(s) to make Bid Loans to the undersigned on ________, 19__ [Bid Loan Date] under [clause (ii)] [clause (iii)] of said subsection 2.2(b) in the (respective) amount(s) set forth on the attached list of Bid Loans offered. Very truly yours, FIRST BRANDS CORPORATION By: -------------------------------------- Title: [Company to attach Bid Loan offer list prepared by Agent with accepted amount entered by the Company to right of each Bid Loan offer]. EXHIBIT E [FORM OF BID LOAN OFFER] ____________, 19__ The Chase Manhattan Bank, as Agent 270 Park Avenue New York, New York 10017 Dear Sirs: Reference is made to the Amended and Restated Credit Agreement, dated as of February __, 1997, among First Brands Corporation, a Delaware corporation, the Lenders from time to time parties thereto, and The Chase Manhattan Bank, as Agent (as the same may be amended, supplemented or otherwise modified, the "Credit Agreement"). Terms defined in the Credit Agreement are used herein as therein defined. In accordance with [clause (ii)] [clause (iii)] of subsection 2.2(b) of the Credit Agreement, the undersigned Lender offers to make Bid Loans thereunder in the following amounts with the following maturity dates: Bid Loan Request Dated _________, 19__ Type of Bid Loan Requested: Bid Loan Date: ___________, 19__ ____________________________ Aggregate Maximum Amount (All Maturity Dates): $_______________________ Maturity Date 1 : Maturity Date 2 : Maturity Date 3 : - --------------- --- --------------- --- --------------- --- Maximum Amount $ Maximum Amount $ Maximum Amount $ --- --- --- Rate * Amount $ Rate * Amount $ Rate * Amount $ - --- - --- - --- Rate * Amount $ Rate * Amount $ Rate * Amount $ - --- - --- - --- The undersigned Lender [will][will not] accept an allocation of the Bid Loans solicited pursuant to the Company's Bid Loan Request, dated , 19 , which would make the undersigned's Bid Loan less than $5,000,000. Very truly yours, [NAME OF BIDDING LENDER] By: -------------------------------------- Name: Title: Telephone No.: Fax No.: - ------------------------- 2 * In the case of Index Rate Bid Loans, insert margin bid. In the case of Absolute Rate Bid Loans, insert fixed rate bid. EXHIBIT F [FORM OF BID LOAN REQUEST] __________ 199__ The Chase Manhattan Bank, as Agent 270 Park Avenue New York, New York 10017 Dear Sirs: Reference is made to the Amended and Restated Credit Agreement, dated as of February __, 1997, among the undersigned, the Lenders from time to time parties thereto, and The Chase Manhattan Bank, as Agent for such Lenders (as the same may from time to time be amended, supplemented or otherwise modified, the "Credit Agreement"). Terms defined in the Credit Agreement are used herein as therein defined. This is an [Index Rate] [Absolute Rate] Bid Loan Request pursuant to subsection 2.2(b)[(ii)][(iii)] of the Credit Agreement requesting quotes for the following Bid Loans: Aggregate Principal Amount $ $ $ ------- ------- ------- ------- ------- ------- Bid Loan Date _____________ Note: Pursuant to the Credit Agreement, a Bid Loan Request may be transmitted in writing, by telex or by facsimile transmission, or by telephone, immediately confirmed by telex or facsimile transmission. In any case, a Bid Loan Request shall contain the information specified in the second paragraph of this form. 2 [Interest Period]* _______ _______ _______ Maturity Date** _______ _______ _______ Interest Payment Dates _______ _______ _______ Very truly yours, FIRST BRANDS CORPORATION By:_____________________ Title: - -------- * Insert only in an Index Rate Bid Request. ** In an Index Rate Bid Request, insert last day of Interest Period. EXHIBIT G FORM OF SUBSIDIARY GUARANTEE CONSENT Reference is made to the (i) Credit Agreement, dated as of February 3, 1995 (the "Existing Credit Agreement"), among First Brands Corporation, a Delaware corporation (the "Company"), the several banks and financial institutions parties thereto and Chemical Bank, a New York banking corporation, as agent; (ii) the Subsidiary Guarantee, dated as of February 3, 1995 (the "Subsidiary Guarantee"), made by the parties signatory thereto (the "Guarantors"), in favor of the Agent and (iii) the Amended and Restated Credit Agreement, dated as of February __, 1997 (the "Amended and Restated Credit Agreement"), among the Company, the several banks and other financial institutions parties thereto (the "Lenders") and The Chase Manhattan Bank, a New York banking corporation (formerly Chemical Bank), as agent (the "Agent"). All capitalized terms used herein that are not otherwise defined herein shall have the respective meanings ascribed thereto in the Existing Credit Agreement, the Subsidiary Guarantee or the Amended and Restated Credit Agreement, as the context may require. In connection with the execution of the Amended and Restated Credit Agreement, each of the undersigned Guarantors under the Subsidiary Guarantee hereby acknowledges receipt thereof and hereby (i) affirms its obligations under each Loan Document to which it is a party, and affirms and agrees that each such Loan Document is and shall remain in full force and effect, in each case upon and after giving effect to the Amended and Restated Credit Agreement and (ii) represents and warrants to the Lenders that all representations and warranties made by it under each Loan Document to which it is a party are true and correct as if made on the date hereof, in each case upon and after giving effect to the Amended and Restated Credit Agreement and to the affirmations and agreements set forth herein. Each of the undersigned Guarantors further agrees that (i) each reference in each Loan Document to the "Credit Agreement" shall hereafter include reference to the Amended and Restated Credit Agreement, (ii) each guarantee, and other obligation and agreement made, granted, undertaken or agreed to by it in respect of or by reference to the "Credit Agreement", any term defined therein or any obligations thereunder shall be deemed to have been, and hereby is, made, granted, undertaken and agreed to, as the case may be, in respect of the Amended and Restated Credit Agreement, the terms defined therein and the obligations thereunder, as applicable, and (iii) each Loan Document is hereby affirmed, amended and restated to the extent necessary to effectuate the foregoing. 2 Dated as of: February __, 1997 PAULSBORO PACKAGING, INC. By:____________________________________ Title: FIRST BRANDS PROPERTIES INC. By:____________________________________ Title: FIRST BRANDS ACQUISITIONS INC. By:____________________________________ Title: A&M PRODUCTS INC. By:____________________________________ Title: HIMOLENE INCORPORATED By:____________________________________ Title: 3 FOREST TECHNOLOGIES, INC. By:____________________________________ Title: EXHIBIT H [FORM OF SWING LINE LOAN PARTICIPATION CERTIFICATE] __________________ __, 19__ [Name of Bank] ________________ ________________ ________________ Dear Sirs: Pursuant to subsection 2.23(c) of the Amended and Restated Credit Agreement, dated as of February __, 1997 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"; unless otherwise defined herein, terms defined in the Credit Agreement are used herein as therein defined), among First Brands Corporation, a Delaware corporation, the several lenders from time to time parties thereto (the "Lenders") and The Chase Manhattan Bank, a New York banking corporation, as agent for the Lenders thereunder (in such capacity, the "Agent"), the undersigned, as the Swing Line Lender under the Credit Agreement, hereby acknowledges receipt from you on the date hereof of __________________ DOLLARS ($______) as 2 payment for an undivided participating interest in the following Swing Line Loan: Date of Swing Line Loan: __________________ Principal Amount of Swing Line Loan Participating Interest: $_________________ Very truly yours, THE CHASE MANHATTAN BANK By:_____________________ Title: EXHIBIT I CASH COLLATERAL AGREEMENT CASH COLLATERAL AGREEMENT, dated as of February __, 1997 (as the same may from time to time be amended, supplemented or otherwise modified, the "Agreement"), made by FIRST BRANDS CORPORATION, a Delaware corporation (the "Company"), in favor of The Chase Manhattan Bank, as agent for the Lenders (the "Agent"). W I T N E S S E T H : WHEREAS, the Company, the lenders parties thereto (the "Lenders") and the Agent are parties to an Amended and Restated Credit Agreement, dated as of February __, 1997 (as the same may from time to time be amended, supplemented or otherwise modified, the "Credit Agreement"; unless otherwise defined herein, terms defined in the Credit Agreement are used herein with such defined meanings); and WHEREAS, the Company may from time to time, prior to the Termination Date request Bid Loans, and the Lenders may make Bid Loans all in accordance with the terms of the Credit Agreement; and WHEREAS, The Chase Manhattan Bank ("Chase") may from time to time issue Letters of Credit for the account of the Company during the Commitment Period, and the Lenders agree to take undivided participating interests in such Letters of Credit, all in accordance with the terms and conditions of the Credit Agreement; and WHEREAS, pursuant to subsection 2.6(b) and (c) of the Credit Agreement, if at any time the Aggregate Outstandings shall exceed the Commitments, the Company is required under the Credit Agreement, if no Committed Rate Loans or Swing Line Loans are outstanding, to cash collateralize the Letters of Credit and the Bid Loans in an amount equal to such excess, and the Company may in lieu of making a prepayment under subsection 2.6(b) of the Credit Agreement which would result in material obligations of the Company under subsection 2.16 of the Credit Agreement deposit cash collateral in the amount of such prepayment, in each case in accordance with a cash collateral agreement substantially on the terms hereof; and WHEREAS, pursuant to Section 8 of the Credit Agreement, if, at the time the Commitments are terminated and the Loans and other amounts owing under the Credit Agreement become immediately due and payable, there exist Letters of Credit which have not 2 expired or with respect to which presentment for honor has not occurred, the Company shall deposit in the cash collateral account established pursuant to this Agreement an amount equal to the aggregate undrawn amount of such Letters of Credit; and WHEREAS, it is a condition precedent to the obligations of the Agent and the Lenders under the Credit Agreement that the Company shall have executed and delivered this Agreement; NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows: ARTICLE I 1.1 Security Deposit Account. (a) The Agent has established an interest-bearing demand deposit account numbered 323-293034 and entitled "CHASE/FIRST BRANDS CORPORATION - Cash Collateral Account" (the "Account" or the "Cash Collateral Account"). If at any time (i) pursuant to subsection 2.6(b) of the Credit Agreement, the Company is required to cash collateralize the Bid Loans and/or the Letters of Credit, or pursuant to subsection 2.6(c) the Company has determined to deposit cash collateral in lieu of making a prepayment pursuant to subsection 2.6(b) of the Credit Agreement, then the Company will deposit in the Account in cash such amount, if any, as is necessary to cause the amount of cash and securities (valued at the then fair market value determined by the Agent) then on deposit in the Account to be no less than the excess, if any, of the Aggregate Outstandings over the Commitments at such time (the amount of any such excess, the "Collateralized Amount"), and (ii) pursuant to the penultimate sentence of Section 8 of the Credit Agreement, the Company is required to make a deposit in the Account, the Company shall immediately deposit in cash the amount specified in such sentence into the Account. All moneys and securities in the Account shall constitute collateral security for the payment by the Company of the outstanding Bid Loans and the reimbursement obligations of the Company with respect to the Letters of Credit and Committed Rate Loans in respect of which the Company has determined to deposit cash collateral in lieu of making any prepayments, and shall at all times be subject to the exclusive domain and control of the Agent. Moneys and securities in the Cash Collateral Account may be withdrawn therefrom only as specifically provided in this Agreement. (b) All moneys and securities at any time deposited in the Cash Collateral Account, whether by the Company or by any other Person, and all interest or other income earned with respect thereto, are herein called the "Pledged Deposits". (c) The Company hereby assigns, delivers, pledges and conveys to the Agent, and grants to the Agent a security interest in, the Pledged Deposits as collateral security for the prompt and unconditional payment in full of the Bid Loans and the 3 reimbursement obligations of the Company with respect to the Letters of Credit and Committed Rate Loans in respect of which the Company has determined to deposit cash collateral in lieu of making any prepayments, as described in subsection 1.1(a) hereof. (d) The Company shall not have any rights or powers with respect to the Pledged Deposits or any part thereof, except (i) as provided in subsection 2.1 hereof and (ii) the right to have the Pledged Deposits applied to the payment of the Bid Notes and the reimbursement obligations and Cash Collateralized Prepayments (as defined below) of the Company with respect to the Letters of Credit, in accordance with the provisions of subsection 1.2 hereof. (e) If at any time the amount of the Pledged Deposits deposited in the Account pursuant to subsection 1.1(a)(i) hereof exceeds the Collateralized Amount, the Agent will release an amount of the Pledged Deposits equal to such excess. 1.2 Application of Pledged Deposits. (a) The Pledged Deposits shall be accumulated in the Cash Collateral Account and held therein until released pursuant to subsection 1.1(e) hereof or applied in accordance with this subsection 1.2. (b) (i) Upon the maturity of any outstanding Bid Loan (whether at the stated maturity, by acceleration, or otherwise), the Agent shall withdraw from the Cash Collateral Account Pledged Deposits in an amount equal to the unpaid principal amount of such Bid Loan or if less the amount of the Pledged Deposits, and apply such Pledged Deposits to the payment of such principal. (ii) At any time at which there shall exist any reimbursement obligation which is then due and payable as a result of a drawing under a Letter of Credit, the Agent shall withdraw from the Cash Collateral Account Pledged Deposits in an amount equal to such reimbursement obligation, or, if less, the amount of the Pledged Deposits, and apply such Pledged Deposits to the payment of such reimbursement obligations thereon. (iii) Upon the first day on which any portion of any Loan which, but for the application of subsection 2.6(c) of the Credit Agreement, would have been prepaid pursuant to subsection 2.6(b) thereof (a "Cash Collateralized Prepayment"), may be paid or prepaid without the costs to the Lenders referred to in subsection 2.16 thereof, the Agent shall withdraw from the Cash Collateral Account Pledged Deposits in an amount equal to the amount of such Cash Collateralized Prepayment or if less the amount of the Pledged Deposits, and apply such Pledged Deposits to the payment of such Cash Collateralized Prepayment. (iv) After payment in full of all principal amount of the Bid Loans and reimbursement obligations under Letters of Credit pursuant to clauses (i) and (ii) of this paragraph (b), the Agent shall withdraw from the Cash Collateral Account Pledged 4 Deposits in an amount equal to the accrued and unpaid interest on such Bid Loans and reimbursement obligations and apply such Pledged Deposits pro rata thereto. ARTICLE II 2.1 Investment. (a) Funds held by the Agent in the Cash Collateral Account shall not be invested or reinvested except as provided in the following paragraph (b). (b) Unless an Event of Default shall have occurred and be continuing, collected funds on deposit in the Cash Collateral Account may be invested or reinvested, in accordance with the written instructions of the Company, in Cash Equivalents. (c) The Agent shall sell all or any designated part of the securities held in the Cash Collateral Account if (i) so directed by the Company by the delivery of a written request or (ii) at any time proceeds thereof are required for any withdrawal under Article One of this Agreement. If any such sale (or any payment at maturity) produces a net sum less than the cost (including accrued interest paid as such) of the securities so sold or paid and such sale causes the amount of the Pledged Deposits to fall below the Collateralized Amount, the Agent shall give written notice of such deficiency to the Company, and the Company shall promptly pay to the Agent immediately available funds in an amount equal to such deficiency for deposit in the Cash Collateral Account. If any such sale (or any payment at maturity) produces a net sum greater than the cost (including accrued interest paid as such) of the securities so sold or paid (a "Profit"), such net sum shall be considered income on the Pledged Deposits and shall be subject to the provisions of paragraph (d) of this subsection 2.1. All such securities, the interest thereon and the net proceeds of the sale or payment thereof (to the extent such interest and proceeds shall not have been paid to the Company in accordance with the terms hereof) plus any deficiency paid by the Company to the Agent shall be held in the Cash Collateral Account for the same purposes as the funds used to purchase such securities. (d) The Agent and the Company hereby agree that any interest paid as such on cash or securities in the Cash Collateral Account (less an amount equal to accrued interest paid upon purchase) and any Profits received by the Agent on the sale or other disposition of securities in the Cash Collateral Account shall, unless there is an existing Event of Default, be paid to the Company as collected by the Agent during the term of this Agreement; provided, however, that, whether or not an Event of Default is in existence, interest and Profits on the cash and securities at any time held in the Cash Collateral Account shall be retained in such Account if and to the extent that withdrawal thereof would reduce the Pledged Deposits below the Collateralized Amount at such time. 5 ARTICLE III 3.1 The Agent's Fees, Expenses and Responsibilities. (a) The Company agrees to pay the reasonable fees and expenses of the Agent (including reasonable counsel fees) incurred in connection with its execution and delivery of this Agreement and the performance of its duties hereunder. The duties of the Agent are only such as are specifically provided herein. The Agent shall have no liability hereunder except for the performance by it in good faith of the acts to be performed by it hereunder and except for its own willful default or misconduct or gross negligence. (b) The Agent shall be under no responsibility with respect to any of the moneys deposited with it hereunder other than to comply with the specific duties and responsibilities herein set forth or set forth in written instructions herein provided for. The Agent may consult with counsel and shall be fully protected in respect of any action taken or omitted by it in accordance with such counsel's advice. The Company hereby assumes liability for and agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify and hold harmless the Agent from and against any and all liabilities, obligations, losses, damages, penalties, taxes, claims, actions, suits, costs, expenses and disbursements (including counsel fees and expenses) of whatsoever kind and nature which may be imposed on, incurred by or asserted at any time against the Agent and in any way relating to or arising out of this Agreement or the administration of the Cash Collateral Account or the action or inaction of the Agent hereunder, except only that the Company shall not be required to indemnify the Agent in the case of willful misconduct or gross negligence on the part of the Agent. The indemnities contained in this subsection 3.1(b) shall survive the termination of this Agreement. The Agent shall not be required to institute legal proceedings of any kind. The Agent shall have no responsibility for the genuineness or validity of any document, notice, request, instruction or other item delivered to it and shall be fully protected in acting in accordance with written schedules, notices, requests or instructions given to it hereunder and believed by it to have been signed by the proper party or parties. 3.2 Notices. All notices, instructions and other communications to any party hereto shall be in writing and may be made or delivered in person, or by first class mail addressed to such party as provided below (or to such other address as such party may hereafter specify in a written notice to the other parties hereto), or by telecopy dispatched to such party at the number set forth below (or at such other number as such party may hereafter specify in a written notice to the other parties hereto): 6 The Company: First Brands Corporation 83 Wooster Heights Road Danbury, Connecticut 06813 Attention: Chief Financial Officer Telecopy: (203) 732-2518 The Agent: The Chase Manhattan Bank 270 Park Avenue New York, New York 10017 Attention: Edward McNulty Telecopy: (212) 270-0330 All notices, instructions and other communications shall be deemed given when received by the party to whom addressed. 3.3 Amendments and Supplements. No agreement shall be effective to amend, supplement or discharge in whole or in part this Agreement unless such agreement is in writing and signed by the parties hereto in accordance with the Credit Agreement. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns, provided that the Company shall not assign this Agreement without the prior written consent of the Lenders. 3.4 Action by Company. The Company may perform any of its duties hereunder or exercise any of its rights hereunder by and through duly authorized agents specifically designated for such purposes. 3.5 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Agent, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 3.6 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 3.7 Integration. This Agreement represents the entire agreement of each of the parties hereto with respect to the subject matter hereof and there are no promises or representations by the Agent or any Lender relative to the subject matter hereof not stated or referred to herein. 7 3.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 8 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first set forth above. FIRST BRANDS CORPORATION By_________________________ Title: THE CHASE MANHATTAN BANK, as Agent By_________________________ Title: EXHIBIT J [FORM OF BORROWING CERTIFICATE] Pursuant to subsection 5.1(d) of the Amended and Restated Credit Agreement, dated as of February __, 1997 (as the same from time to time be amended, supplemented or otherwise modified, the "Credit Agreement"), among First Brands Corporation (the "Company"), the several lenders from time to time parties thereto (the "Lenders") and The Chase Manhattan Bank, as agent for the Lenders (the "Agent"), the undersigned hereby certifies to the Lenders that: 1. The representations and warranties of the Company and the Subsidiary Guarantors set forth in the Credit Agreement and the Collateral Documents or which are contained in any other certificate, document or financial or other written statement furnished pursuant to or in connection with the Credit Agreement and the Collateral Documents are true and correct in all material respects on and as of the Effective Date. 2. Immediately prior to and immediately after the making of the Loans requested to be made, and the issuance of the Letters of Credit requested to be issued, on the Effective Date, no Default or Event of Default has occurred and is continuing. The terms used in this Certificate shall have the respective meanings ascribed to them in the Credit Agreement. Executed this _____ day of February, 1997. FIRST BRANDS CORPORATION By_________________________ Title: EXHIBIT L ASSIGNMENT AND ACCEPTANCE Reference is made to the Amended and Restated Credit Agreement, dated as of February __, 1997 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among First Brands Corporation (the "Borrower"), the Lenders named therein and The Chase Manhattan Bank, as agent for the Lenders (in such capacity, the "Agent"). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. ____________________________ (the "Assignor") and _____________________________ (the "Assignee") agree as follows: (a) The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Assignment Effective Date (as defined below), a ___% interest (the "Assigned Interest") in and to the Assignor's rights and obligations under the Credit Agreement and the other Loan Documents with respect to those credit facilities contained in the Credit Agreement as are set forth on SCHEDULE 1 (individually, an "Assigned Facility"; collectively, the "Assigned Facilities"), in a principal amount for each Assigned Facility as set forth on SCHEDULE 1. (b) The Assignor (a) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto or with respect to the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto, other than that the Assignor has not created any adverse claim upon the interest being assigned by it hereunder and that such interest is free and clear of any such adverse claim; (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower, any of its Subsidiaries or any other obligor or the performance or observance by the Borrower, any of its Subsidiaries or any other obligor of any of their respective obligations under the Credit Agreement or any other Loan Document or any other instrument or document furnished pursuant hereto or thereto; and (c) attaches any Notes (other than, if the Assignor is to retain any part of its Commitment, its Bid Loan Note) held by it evidencing the Assigned Facilities and (i) requests that the Agent, upon request by the Assignee, exchange the attached Notes for a new Note or Notes payable to the Assignee and (ii) if the Assignor has 2 retained any interest in the Assigned Facility, requests that the Agent exchange the attached Notes for a new Note or Notes payable to the Assignor, in each case in amounts which reflect the assignment being made hereby (and after giving effect to any other assignments which have become effective on the Assignment Effective Date). (c) The Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements delivered pursuant to subsection 4.1 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it will, independently and without reliance upon the Assignor, the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender including, if it is organized under the laws of a jurisdiction outside the United States, its obligation pursuant to subsection 2.11(b) of the Credit Agreement. (d) The effective date of this Assignment and Acceptance shall be ____, 199___ (the "Assignment Effective Date"). Following the execution of this Assignment and Acceptance, it will be delivered to the Agent for acceptance by it and recording by the Agent pursuant to the Credit Agreement, effective as of the Assignment Effective Date (which shall not, unless otherwise agreed to by the Agent, be earlier than five Business Days after the date of such acceptance and recording by the Agent). (e) Upon such acceptance and recording, from and after the Assignment Effective Date, the Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to the Assignment Effective Date or accrue subsequent to the Assignment Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Agent for periods prior to the Assignment Effective Date or with respect to the making of this assignment directly between themselves. 3 (f) From and after the Assignment Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and under the other Loan Documents and shall be bound by the provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement. (g) This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York. IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed as of the date first above written by their respective duly authorized officers on Schedule 1 hereto. SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE RELATING TO THE AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF FEBRUARY __, 1997 AMONG FIRST BRANDS CORPORATION, THE LENDERS NAMED THEREIN AND THE CHASE MANHATTAN BANK, AS AGENT FOR THE LENDERS (IN SUCH CAPACITY, THE "AGENT") - -------------------------------------------------------------------------------- Name of Assignor: Name of Assignee: Effective Date of Assignment: Credit Principal Commitment Percentage Facility Assigned Amount Assigned Assigned - ----------------- --------------- --------------------- $________________ ___ . ___________________% [Name of Assignee] [Name of Assignor] By _____________________________ By__________________________________ Name: Name: Title: Title: Accepted: *Consented To: The Chase Manhattan Bank, as First Brands Corporation Agent By _____________________________ By__________________________________ Name: Name: Title: Title: - ------------- * If requested. EX-12 7 EXHIBIT 12.1 EXHIBIT 12.1 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
SIX MONTHS ENDED DECEMBER 31 FISCAL YEAR ENDED JUNE 30 -------------------- ---------------------------------------------- 1996 1995 1996 1995 1994 1993 1992 -------- -------- ------ ------ ------ ------ ------ Pre-tax Income $ 55.4 $ 51.9 $108.9 $ 74.8 $103.7 $ 89.1 $ 66.4 Fixed Charges (excluding Capitalized Interest) 14.5 14.5 28.5 30.9 35.3 39.0 48.3 -------- -------- ------ ------ ------ ------ ------ $ 69.9 $ 66.4 $137.4 $105.7 $139.0 $128.1 $114.7 Interest Incurred $ 11.0 $ 11.0 $ 21.5 $ 22.8 $ 26.7 $ 29.7 $ 40.4 Capitalized Interest 1.0 1.0 2.0 0.8 1.1 1.1 2.8 Rent Expense (33%) 3.5 3.5 7.0 8.1 8.6 9.3 9.7 -------- -------- ------ ------ ------ ------ ------ Fixed Charges $ 15.5 $ 15.5 $ 30.5 $ 31.7 $ 36.4 $ 40.1 $ 52.9 Ratio of Earnings to Fixed Charges 4.5X 4.3X 4.5X 3.3X 3.8X 3.2X 2.2X
EX-21 8 EXHIBIT 21.1 Exhibit 21.1 SUBSIDIARIES OF FIRST BRANDS CORPORATION (Delaware) (Unless otherwise noted, the following are wholly-owned by First Brands Corporation) First Brands Properties Inc. (Delaware) First Brands Acquisitions Inc. (Delaware) [wholly owned by First Brands Properties Inc.] A & M Products Inc. (Texas) [wholly owned by First Brands Acquisitions Inc.] First Brands Australia Pty Limited (Australia) [66.5% owned by First Brands Properties Inc.; 30% owned by FBC, LLC; 3.5% owned by management] NationalPak Pty Limited (Australia) [wholly owned by First Brands Australia Ltd.] First Brands New Zealand Limited (New Zealand) [96.5% owned by First Brands Properties Inc.; 3.5% owned by management] Zendel Battery Co Limited (New Zealand) [wholly owned by First Brands New Zealand Ltd.] Homepack Marketing Limited (New Zealand) [wholly owned by Zendel Battery Company] NationalPak New Zealand Limited (New Zealand) [wholly owned by Zendel Battery Company] Forest Technology Corporation (Delaware) Himolene Incorporated (Delaware) Paulsboro Packaging, Inc. (New Jersey) STP Products, Inc. (Delaware) First Brands Funding Inc. (Delaware) Polysak, Inc. (Connecticut) STP Corporation (Delaware) STP Consumer Services Inc. (Delaware) Antifreeze Technology Systems, Inc. (Delaware) Antifreeze Properties, Inc. (Delaware) First Brands International, Inc. (Delaware) First Brands Asia Limited (Hong Kong) First Brands (Guangzhou) Ltd. (China) [51% owned by First Brands Asia Limited] STP International (Australia) Pty. Ltd. (Australia) SUBSIDIARIES OF FIRST BRANDS CORPORATION (Delaware) (CONTINUED) (Unless otherwise noted, the following are wholly-owned by First Brands Corporation) First Brands Holdings Corporation (Canada) First Brands (Canada) Corporation (Canada) [wholly-owned by First Brands Holdings Corporation] FBC, LLC (Delaware) [wholly-owned by First Brands (Canada) Corporation] STP Scientifically Tested Products of Canada Ltd. (Canada) [wholly-owned by First Brands Holdings Corporation] Renaissance: A Resource Recovery Corporation (Canada) [wholly- owned by First Brands Holdings Corporation] First Brands Africa Holdings (Pty) Ltd (South Africa) [93% owned by First Brands Holdings Corporation] First Brands Africa (Pty) Ltd (South Africa) (wholly-owned by First Brands Africa Holdings (Pty) Ltd.) First Brands Zimbabwe (Private) Ltd (Zimbabwe) (wholly-owned by First Brands Africa (Pty) Ltd.) Multifoil Trading (Pty) Ltd (South Africa) (wholly-owned by First Brands Africa Holdings (Pty) Ltd.) First Brands Europe Limited (United Kingdom) STP First Brands Espana, S. L. (Spain) [wholly-owned by First Brands Europe Limited] First Brands Mexicana, S.A. de C.V. (Mexico) Fabricante de Productos Plasticos, S.A. de C.V. (Mexico) [wholly-owned by First Brands Mexicana, S.A. de C.V.] PCM International, Inc. (Delaware) [wholly-owned by Fabricante de Productos Plasticos, S.A. de D.V.] Comercial First Brands, S.A. de C.V. (Mexico) [wholly-owned by First Brands Mexicana, S.A. de C.V.] Distribuidora First Brands, S.A. de C.V. (Mexico) [wholly-owned by First Brands Mexicana, S.A. de C.V.] First Brands Philippines, Inc. (Philippines) First Brands Puerto Rico, Inc. (Puerto Rico) Comercial STP Ltda. (Brazil) STP Corporation (Deutschland) GmbH (Germany) [in liquidation] EX-23 9 EXHIBIT 23.1 EXHIBIT 23.1 INDEPENDENT AUDITOR'S CONSENT The Board of Directors FIRST BRANDS CORPORATION: We consent to the use of our audit reports dated August 8, 1996, relating to the consolidated balance sheets of First Brands Corporation and subsidiaries as of June 30, 1996 and 1995, and the related consolidated statements of income, stockholders' equity and cash flows for each of the years in the three year period ended June 30, 1996, and the related schedule, which audit reports appear in the June 30, 1996 annual report on Form 10-K of First Brands Corporation, and to the reference to our firm under the heading 'Experts' and 'Selected Consolidated Financial Information' in the Prospectus. KPMG PEAT MARWICK LLP New York, New York April 24, 1997 EX-25 10 EXHIBIT 25.1 CONFORMED COPY ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) [ ] --------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) --------------------- FIRST BRANDS CORPORATION (Exact name of obligor as specified in its charter) Delaware 06-1171404 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 83 Wooster Heights Road Building 301, P.O. Box 1911 Danbury, Connecticut 06813-1911 (Address of principal executive offices) (Zip code) ---------------------- 7.25% Senior Notes due 2007, Series B (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005 (b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE. 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 22nd day of April, 1997. THE BANK OF NEW YORK By: /S/PAUL J. SCHMALZEL ------------------------------ Name: PAUL J. SCHMALZEL Title: ASSISTANT TREASURER -4- EXHIBIT 7 - ------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 1996, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS in Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin............. $ 4,404,522 Interest-bearing balances......... 732,833 Securities: Held-to-maturity securities ...... 789,964 Available-for-sale securities .... 2,005,509 Federal funds sold in domestic offices of the bank: Federal funds sold................ 3,364,838 Loans and lease financing receivables: Loans and leases, net of unearned income................28,728,602 LESS: Allowance for loan and lease losses.............584,525 LESS: Allocated transfer risk reserve..................... 429 Loans and leases, net of unearned income, allowance, and reserve.. 28,143,648 Assets held in trading accounts..... 1,004,242 Premises and fixed assets (including capitalized leases)............... 605,668 Other real estate owned............. 41,238 Investments in unconsolidated subsidiaries and associated companies......................... 205,031 Customers' liability to this bank on acceptances outstanding........ 949,154 Intangible assets................... 490,524 Other assets........................ 1,305,839 ----------- Total assets........................ $44,043,010 =========== LIABILITIES Deposits: In domestic offices............... $20,441,318 Noninterest-bearing......8,158,472 Interest-bearing........12,282,846 In foreign offices, Edge and Agreement subsidiaries, and IBFs.. 11,710,903 Noninterest-bearing.........46,182 Interest-bearing........11,664,721 Federal funds purchased in domestic offices of the bank: Federal funds purchased........... 1,565,288 Demand notes issued to the U.S. Treasury.......................... 293,186 Trading liabilities................. 826,856 Other borrowed money: With original maturity of one year or less.................... 2,103,443 With original maturity of more than one year................... 20,766 Bank's liability on acceptances exe- cuted and outstanding............. 951,116 Subordinated notes and debentures... 1,020,400 Other liabilities................... 1,522,884 ----------- Total liabilities................... 40,456,160 ----------- EQUITY CAPITAL Common stock........................ 942,284 Surplus............................. 525,666 Undivided profits and capital reserves.......................... 2,129,376 Net unrealized holding gains (losses) on available-for-sale securities........................ ( 2,073) Cumulative foreign currency transla- tion adjustments.................. ( 8,403) ----------- Total equity capital................ 3,586,850 ----------- Total liabilities and equity capital........................... $44,043,010 =========== I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot | Thomas A. Renyi | Directors Alan R. Griffith | EX-99 11 EXHIBIT 99.1 LETTER OF TRANSMITTAL TO TENDER FOR EXCHANGE 7.25% SENIOR NOTES DUE 2007 OF FIRST BRANDS CORPORATION PURSUANT TO THE PROSPECTUS DATED , 1997 THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1997 UNLESS EXTENDED (THE 'EXPIRATION DATE'). PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS If you desire to accept the Exchange Offer, this Letter of Transmittal should be completed, signed, and submitted to the Exchange Agent: By Overnight Carrier or by Hand: By Registered or Certified Mail: The Bank of New York The Bank of New York 101 Barclay Street 101 Barclay Street-7E Corporate Trust Services Window New York, New York 10286 Ground Level Attn: Reorganization Section New York, New York 10286 Attn: Reorganization Section
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT 212-815-6333, OR BY FACSIMILE AT 212-571-3080. The undersigned hereby acknowledges receipt of the Prospectus dated , 1997 (the 'Prospectus') of First Brands Corporation, a Delaware corporation (the 'Issuer'), and this Letter of Transmittal (the 'Letter of Transmittal'), that together constitute the Issuer's offer (the 'Exchange Offer') to exchange $1,000 in principal amount of its Series B 7.25% Senior Notes due 2007 (the 'Exchange Notes'), which have been registered under the Securities Act of 1933, as amended (the 'Securities Act'), pursuant to a Registration Statement, for each $1,000 in principal amount of its outstanding 7.25% Senior Notes due 2007 (the 'Notes'), of which $150,000,000 aggregate principal amount is outstanding. Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus. This Letter of Transmittal is to be used by holders of Notes if (i) certificates representing Notes are to be physically delivered to the Exchange Agent herewith by such holders or (ii) tender of Notes is to be made by book-entry transfer to the Exchange Agent's account at the Depository Trust Company (the 'DTC') pursuant to the procedures set forth in the Prospectus under the caption 'The Exchange Offer -- Procedures for Tendering.' Delivery of documents to DTC does not constitute delivery to the Exchange Agent. Holders of Notes who are tendering by book-entry transfer to the Exchange Agent's account at DTC can execute the tender through the Automated Tender Offer Program for which the transaction will be eligible. DTC participants that are accepting the Exchange Offer must transmit their acceptance to DTC, which will verify the acceptance and execute a book-entry delivery to the Exchange Agent's account at DTC. DTC will then send an Agent's Message to the Exchange Agent for its acceptance. Delivery of the Agent's Message by DTC will satisfy the terms of the Exchange Offer as to execution and delivery of a Letter of Transmittal by the participant identified in the Agent's Message. The term 'Agent's Message' means a message, transmitted by DTC to and received by the Exchange Agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by the Letter of Transmittal and that the Issuer may enforce such Letter of Transmittal against such participant. The undersigned hereby tenders the Notes described in Box 1 below (the 'Tendered Notes') pursuant to the terms and conditions described in the Prospectus and this Letter of Transmittal. The undersigned is the registered owner of all the Tendered Notes and the undersigned represents that it has received from each beneficial owner of the Tendered Notes ('Beneficial Owners') a duly completed and executed form of 'Instruction to Registered Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner' accompanying this Letter of Transmittal, instructing the undersigned to take the action described in this Letter of Transmittal. Subject to, and effective upon, the acceptance for exchange of the Tendered Notes, the undersigned hereby exchanges, assigns, and transfers to, or upon the order of, the Issuer, all right, title, and interest in, to, and under the Tendered Notes. Please issue the Exchange Notes exchanged for Tendered Notes in the name(s) of the undersigned. Similarly, unless otherwise indicated under 'Special Delivery Instructions' below (Box 3), please send or cause to be sent the certificates for the Exchange Notes (and accompanying documents, as appropriate) to the undersigned at the address shown below in Box 1. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the true and lawful agent and attorney in fact of the undersigned with respect to the Tendered Notes, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver the Tendered Notes to the Issuer or cause ownership of the Tendered Notes to be transferred to, or upon the order of, the Issuer, on the books of the registrar for the Notes and deliver all accompanying evidences of transfer and authenticity to, or upon the order of, the Issuer upon receipt by the Exchange Agent, as the undersigned's agent, of the Exchange Notes to which the undersigned is entitled upon acceptance by the Issuer of the Tendered Notes pursuant to the Exchange Offer, and (ii) receive all benefits and otherwise exercise all rights of beneficial ownership of the Tendered Notes, all in accordance with the terms of the Exchange Offer. The undersigned understands that tenders of Notes pursuant to the procedures described under the caption 'The Exchange Offer' in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Issuer upon the terms and subject to the conditions of the Exchange Offer, subject only to withdrawal of such tenders on the terms set forth in the Prospectus under the caption 'The Exchange Offer -- Withdrawal of Tenders.' All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and any Beneficial Owner(s), and every obligation of the undersigned or any Beneficial Owners hereunder shall be binding upon the heirs, representatives, successors, and assigns of the undersigned and such Beneficial Owner(s). The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, assign, and transfer the Tendered Notes and that the Issuer will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, and adverse claims when the Tendered Notes are acquired by the Issuer as contemplated herein. The undersigned and each Beneficial Owner will, upon request, execute and deliver any additional documents reasonably requested by the Issuer or the Exchange Agent as necessary or desirable to complete and give effect to the transactions contemplated hereby. The undersigned hereby represents and warrants that the information set forth in Box 2 is true and correct. By accepting the Exchange Offer, the undersigned hereby represents and warrants that (i) the Exchange Notes to be acquired by the undersigned and any Beneficial Owner(s) in connection with the Exchange Offer are being acquired by the undersigned and any Beneficial Owner(s) in the ordinary course of business of the undersigned and any Beneficial Owner(s), (ii) the undersigned and each Beneficial Owner are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the Exchange Notes, (iii) except as otherwise disclosed in writing herewith, neither the undersigned nor any Beneficial Owner is an 'affiliate,' as defined in Rule 405 under the Securities Act, of the Issuer, and (iv) the undersigned and each Beneficial Owner acknowledge and agree that any person participating in the Exchange Offer with the intention or for the purpose of distributing the Exchange Notes must comply with the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (together with the rules and regulations promulgated thereunder, the 'Securities Act'), in connection with a secondary resale of the Exchange Notes acquired by such person and cannot rely on the position of the Staff of the Securities and Exchange Commission (the 'Commission') set forth in the no-action letters that are discussed in the section of the Prospectus entitled 'The Exchange Offer.' In addition, by accepting the Exchange Offer, the undersigned hereby (i) represents and warrants that, if the undersigned or any Beneficial Owner of the Notes is a Participating Broker-Dealer, such Participating Broker-Dealer acquired the Notes for its own account as a result of market-making activities or other trading activities and has not entered into any arrangement or understanding with the Issuer or any affiliate of the Issuer (within the meaning of Rule 405 under the Securities Act) to distribute the New Notes to be received in the Exchange Offer, (ii) acknowledges that, by receiving New Notes for its own account in exchange for Notes, where such Notes were acquired as a result of market-making activities or other trading activities, such Participating Broker-Dealer will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes and (iii) agrees that, within sixty (60) days of acceptance of the Exchange Offer such Participating Broker-Dealer will notify the Issuer in writing of its status as a Participating Broker-Dealer. [ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED HEREWITH. [ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE 'Use of Guaranteed Delivery' BELOW (Box 4). [ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE 'Use of Book-Entry Transfer' BELOW (Box 5). PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING THE BOXES BOX 1 DESCRIPTION OF NOTES TENDERED (ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY) AGGREGATE PRINCIPAL AGGREGATE NAME(S) AND ADDRESS(ES) OF REGISTERED NOTE HOLDER(S), EXACTLY CERTIFICATE AMOUNT PRINCIPAL AS NAME(S) APPEAR(S) ON NOTE CERTIFICATE(S) NUMBER(S) OF REPRESENTED BY AMOUNT (PLEASE FILL IN, IF BLANK) NOTES* CERTIFICATE(S) TENDERED** TOTAL
* Need not be completed by book-entry transfer. ** The minimum permitted tender is $1,000 in principal amount of Notes. All other tenders must be in integral multiples of $1,000 of principal amount. Unless otherwise indicated in this column, the principal amount of all Note Certificates identified in this Box 1 or delivered to the Exchange Agent herewith shall be deemed tendered. See Instruction 4. BOX 2 BENEFICIAL OWNER(S) STATE OF PRINCIPAL RESIDENCE OF EACH PRINCIPAL AMOUNT OF TENDERED NOTES BENEFICIAL OWNER OF TENDERED NOTES HELD FOR ACCOUNT OF BENEFICIAL OWNER
BOX 3 SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 5, 6 AND 7) TO BE COMPLETED ONLY IF EXCHANGE NOTES EXCHANGED FOR NOTES AND UNTENDERED NOTES ARE TO BE SENT TO SOMEONE OTHER THAN THE UNDERSIGNED, OR TO THE UNDERSIGNED AT AN ADDRESS OTHER THAN THAT SHOWN ABOVE. Mail Exchange Note(s) and any untendered Notes to: Name(s): ..................................................................... (PLEASE PRINT) Address: ...................................................................... ............................................................................... ............................................................................... (INCLUDE ZIP CODE) Tax Identification or Social Security No.: .................................... BOX 4 USE OF GUARANTEED DELIVERY (SEE INSTRUCTION 2) TO BE COMPLETED ONLY IF NOTES ARE BEING TENDERED BY MEANS OF A NOTICE OF GUARANTEED DELIVERY. Name(s) of Registered Holder(s): .............................................. Date of Execution of Notice of Guaranteed Delivery: ........................... Name of Institution which Guaranteed Delivery: ................................ BOX 5 USE OF BOOK-ENTRY TRANSFER (SEE INSTRUCTION 1) TO BE COMPLETED ONLY IF DELIVERY OF TENDERED NOTES IS TO BE MADE BY BOOK-ENTRY TRANSFER. Name of Tendering Institution: ................................................ Account Number: ............................................................... Transaction Code Number: ...................................................... BOX 6 TENDERING HOLDER SIGNATURE (SEE INSTRUCTIONS 1 AND 5) IN ADDITION, COMPLETE SUBSTITUTE FORM W-9 X ......................................................... SIGNATURE GUARANTEE (IF REQUIRED BY INSTRUCTION 5) X ......................................................... Authorized Signature (SIGNATURE OF REGISTERED HOLDER(S) OR X ......................................................... AUTHORIZED SIGNATORY) Name: ..................................................... Note: The above lines must be signed by the registered (PLEASE PRINT) holder(s) of Notes as their name(s) appear(s) on the Notes Title: .................................................... or by persons(s) authorized to become registered holder(s) Name of Firm: ............................................. (evidence of which authorization must be transmitted with (MUST BE AN ELIGIBLE INSTITUTION this Letter of Transmittal). If signature is by a trustee, AS DEFINED IN INSTRUCTION 2) executor, administrator, guardian, attorney-in-fact, Address: ................................................... officer, or other person acting in a fiduciary or ............................................................ representative capacity, such person must set forth his or ............................................................ her full title below. See Instruction 5. (INCLUDE ZIP CODE) Name(s): .................................................. Area Code and Telephone Number: ........................................................... ............................................................ Capacity: ................................................. Dated: .................................................... ........................................................... Street Address: ........................................... ........................................................... ........................................................... (INCLUDE ZIP CODE) Area Code and Telephone Number: ........................................................... Tax Identification or Social Security Number: ........................................................... BOX 7 BROKER-DEALER STATUS [ ] Check this box if the Beneficial Owner of the Notes is a Participating Broker-Dealer and such Participating Broker-Dealer acquired the Notes for its own account as a result of market-making activities or other trading activities. (Note that if this box is checked, notice must be given to the Issuer pursuant to the instructions elsewhere contained in this Letter of Transmittal)
PAYOR'S NAME: FIRST BRANDS CORPORATION Name (if joint names, list first and circle the name of the person or entity whose number you enter in Part 1 below. See instructions if your name has changed.) Address SUBSTITUTE City, State and ZIP Code FORM W-9 DEPARTMENT OF THE TREASURY List account number(s) here (optional) Social Security Number or TIN INTERNAL REVENUE SERVICE .................................................. PART 1 -- PLEASE PROVIDE YOUR TAXPAYER IDENTIFICATION NUMBER ('TIN') IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW PART 2 -- Check the box if you are NOT subject to backup withholding under the provisions of section 3406(a)(1)(C) of the Internal Revenue Code because (1) you have not been notified that you are subject to backup withholding as a result of failure to report all interest or dividends or (2) the Internal Revenue Service has notified you that you are no longer subject to backup withholding. [ ] CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT PART 3 -- THE INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND Awaiting TIN [ ] COMPLETE. SIGNATURE ........................ DATE .......................
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. INSTRUCTIONS TO LETTER OF TRANSMITTAL FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND NOTES. A properly completed and duly executed copy of this Letter of Transmittal, including Substitute Form W-9, and any other documents required by this Letter of Transmittal must be received by the Exchange Agent at its address set forth herein, and either certificates for Tendered Notes must be received by the Exchange Agent at its address set forth herein or such Tendered Notes must be transferred pursuant to the procedures for book-entry transfer described in the Prospectus under the caption 'Exchange Offer -- Procedures for Tendering' (and a confirmation of such transfer received by the Exchange Agent), in each case prior to 5:00 p.m., New York City time, on the Expiration Date. The method of delivery of certificates for Tendered Notes, this Letter of Transmittal and all other required documents to the Exchange Agent is at the election and risk of the tendering holder and the delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. Instead of delivery by mail, it is recommended that the Holder use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. No Letter of Transmittal or Notes should be sent to the Issuer. Neither the Issuer nor the registrar is under any obligation to notify any tendering holder of the Issuer's acceptance of Tendered Notes prior to the closing of the Exchange Offer. 2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Notes but whose Notes are not immediately available, and who cannot deliver their Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date must tender their Notes according to the guaranteed delivery procedures set forth below, including completion of Box 4. Pursuant to such procedures: (i) such tender must be made by or through a firm which is a member of a recognized Medallion Program approved by the Securities Transfer Association Inc. (an 'Eligible Institution') and the Notice of Guaranteed Delivery must be signed by the holder; (ii) prior to the Expiration Date, the Exchange Agent must have received from the holder and the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by mail or hand delivery) setting forth the name and address of the holder, the certificate number(s) of the Tendered Notes and the principal amount of Tendered Notes, stating that the tender is being made thereby and guaranteeing that, within five New York Stock Exchange trading days after the Expiration Date, this Letter of Transmittal together with the certificate(s) representing the Notes and any other required documents will be deposited by the Eligible Institution with the Exchange Agent; and (iii) such properly completed and executed Letter of Transmittal, as well as all other documents required by this Letter of Transmittal and the certificate(s) representing all Tendered Notes in proper form for transfer, must be received by the Exchange Agent within five New York Stock Exchange trading days after the Expiration Date. Any holder who wishes to tender Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery relating to such Notes prior to 5:00 p.m., New York City time, on the Expiration Date. Failure to complete the guaranteed delivery procedures outlined above will not, of itself, affect the validity or effect a revocation of any Letter of Transmittal form properly completed and executed by an Eligible Holder who attempted to use the guaranteed delivery process. 3. BENEFICIAL OWNER INSTRUCTIONS TO REGISTERED HOLDERS. Only a holder in whose name Tendered Notes are registered on the books of the registrar (or the legal representative or attorney-in-fact of such registered holder) may execute and deliver this Letter of Transmittal. Any Beneficial Owner of Tendered Notes who is not the registered holder must arrange promptly with the registered holder to execute and deliver this Letter of Transmittal on his or her behalf through the execution and delivery to the registered holder of the 'Instructions to Registered Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner' form accompanying this Letter of Transmittal. 4. PARTIAL TENDERS. Tenders of Notes will be accepted only in integral multiples of $1,000 in principal amount. If less than the entire principal amount of Notes held by the holder is tendered, the tendering holder should fill in the principal amount tendered in the column labeled 'Aggregate Principal Amount Tendered' of the box entitled 'Description of Notes Tendered' (Box 1) above. The entire principal amount of Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Notes held by the holder is not tendered, then Notes for the principal amount of Notes not tendered and Exchange Notes issued in exchange for any Notes tendered and accepted will be sent to the Holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal, as soon as practicable following the Expiration Date. 5. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the registered holder(s) of the Tendered Notes, the signature must correspond with the name(s) as written on the face of the Tendered Notes without alteration, enlargement or any change whatsoever. If any of the Tendered Notes are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any Tendered Notes are held in different names, it will be necessary to complete, sign and submit as many separate copies of the Letter of Transmittal as there are different names in which Tendered Notes are held. If this Letter of Transmittal is signed by the registered holder(s) of Tendered Notes, and Exchange Notes issued in exchange therefor are to be issued (and any untendered principal amount of Notes is to be reissued) in the name of the registered holder(s), then such registered holder(s) need not and should not endorse any Tendered Notes, nor provide a separate bond power. In any other case, such registered holder(s) must either properly endorse the Tendered Notes or transmit a properly completed separate bond power with this Letter of Transmittal, with the signature(s) on the endorsement or bond power guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of any Tendered Notes, such Tendered Notes must be endorsed or accompanied by appropriate bond powers, in each case, signed as the name(s) of the registered holder(s) appear(s) on the Tendered Notes, with the signature(s) on the endorsement or bond power guaranteed by an Eligible Institution. If this Letter of Transmittal or any Tendered Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations, or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and, unless waived by the Issuer, evidence satisfactory to the Issuer of their authority to so act must be submitted with this Letter of Transmittal. Endorsements on Tendered Notes or signatures on bond powers required by this Instruction 5 must be guaranteed by an Eligible Institution. Signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution unless the Tendered Notes are tendered (i) by a registered holder who has not completed the box set forth herein entitled 'Special Delivery Instructions' (Box 3) or (ii) by an Eligible Institution. 6. SPECIAL DELIVERY INSTRUCTIONS. Tendering holders should indicate, in the applicable box (Box 3), the name and address to which the Exchange Notes and/or substitute Notes for principal amounts not tendered or not accepted for exchange are to be sent, if different from the name and address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated. 7. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any, applicable to the exchange of Tendered Notes pursuant to the Exchange Offer. If, however, a transfer tax is imposed for any reason other than the transfer and exchange of Tendered Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered holder or on any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. Except as provided in this Instruction 7, it will not be necessary for transfer tax stamps to be affixed to the Tendered Notes listed in this Letter of Transmittal. 8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that the holder(s) of any Tendered Notes which are accepted for exchange must provide the Issuer (as payor) with its correct taxpayer identification number ('TIN'), which, in the case of a holder who is an individual, is his or her social security number. If the Issuer is not provided with the correct TIN, the Holder may be subject to backup withholding and a $50 penalty imposed by the Internal Revenue Service. (If withholding results in an over-payment of taxes, a refund may be obtained.) Certain holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. See the enclosed 'Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9' for additional instructions. To prevent backup withholding, each holder of Tendered Notes must provide such holder's correct TIN by completing the Substitute Form W-9 set forth herein, certifying that the TIN provided is correct (or that such holder is awaiting a TIN), and that (i) the holder has not been notified by the Internal Revenue Service that such holder is subject to backup withholding as a result of failure to report all interest or dividends or (ii) the Internal Revenue Service has notified the holder that such holder is no longer subject to backup withholding. If the Tendered Notes are registered in more than one name or are not in the name of the actual owner, consult the 'Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9' for information on which TIN to report. The Issuer reserves the right in its sole discretion to take whatever steps are necessary to comply with the Issuer's obligation regarding backup withholding. 9. VALIDITY OF TENDERS. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of Tendered Notes will be determined by the Issuer in its sole discretion, which determination will be final and binding. The Issuer reserves the right to reject any and all Notes not validly tendered or any Notes the Issuer's acceptance of which would, in the opinion of the Issuer or their counsel, be unlawful. The Issuer also reserves the right to waive any conditions of the Exchange Offer or defects or irregularities in tenders of Notes as to any ineligibility of any holder who seeks to tender Notes in the Exchange Offer. The interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) by the Issuer shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Notes must be cured within such time as the Issuer shall determine. Neither the Issuer, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Notes, nor shall any of them incur any liability for failure to give such notification. Tenders of Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holders, unless otherwise provided in this Letter of Transmittal, as soon as practicable following the Expiration Date. 10. WAIVER OF CONDITIONS. The Issuer reserves the absolute right to amend, waive or modify any of the conditions in the Exchange Offer in the case of any Tendered Notes. 11. NO CONDITIONAL TENDER. No alternative, conditional, irregular, or contingent tender of Notes or transmittal of this Letter of Transmittal will be accepted. 12. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. Any tendering Holder whose Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated herein for further instructions. 13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance and requests for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Exchange Agent at the address indicated herein. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer. 14. ACCEPTANCE OF TENDERED NOTES AND ISSUANCE OF NOTES; RETURN OF NOTES. Subject to the terms and conditions of the Exchange Offer, the Issuer will accept for exchange all validly tendered Notes as soon as practicable after the Expiration Date and will issue Exchange Notes therefor as soon as practicable thereafter. For purposes of the Exchange Offer, the Issuer shall be deemed to have accepted tendered Notes when, as and if the Issuer has given written or oral notice (immediately followed in writing) thereof to the Exchange Agent. If any Tendered Notes are not exchanged pursuant to the Exchange Offer for any reason, such unexchanged Notes will be returned, without expense, to the undersigned at the address shown in Box 1 or at a different address as may be indicated herein under 'Special Delivery Instructions' (Box 3). 15. WITHDRAWAL. Tenders may be withdrawn only pursuant to the procedures set forth in the Prospectus under the caption 'The Exchange Offer.' EX-99 12 EXHIBIT 99.2 NOTICE OF GUARANTEED DELIVERY WITH RESPECT TO 7.25% SENIOR NOTES DUE 2007 OF FIRST BRANDS CORPORATION PURSUANT TO THE PROSPECTUS DATED , 1997 This form must be used by a holder of 7.25% Senior Notes due 2007 (the 'Notes') of First Brands Corporation, a Delaware corporation (the 'Company'), who wishes to tender Notes to the Exchange Agent pursuant to the guaranteed delivery procedures described in 'The Exchange Offer -- Guaranteed Delivery Procedures' of the Company's Prospectus, dated , 1997 (the 'Prospectus') and in Instruction 2 to the related Letter of Transmittal. Any holder who wishes to tender Notes pursuant to such guaranteed delivery procedures must ensure that the Exchange Agent receives this Notice of Guaranteed Delivery prior to the Expiration Date of the Exchange Offer. Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus or the Letter of Transmittal. THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON UNLESS EXTENDED (THE 'EXPIRATION DATE'). THE BANK OF NEW YORK (the 'Exchange Agent') By Overnight Carrier or by Hand: By Registered or Certified Mail: The Bank of New York The Bank of New York 101 Barclay Street 101 Barclay Street-7E Corporate Trust Services Window New York, New York 10286 Ground Level Attn: Reorganization Section New York, New York 10286 Attn: Reorganization Section
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an 'Eligible Institution' under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. Ladies and Gentlemen: The undersigned hereby tenders to the Company, upon the terms and subject to the conditions set forth in the Prospectus and the related Letter of Transmittal, receipt of which is hereby acknowledged, the principal amount of Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus and in Instruction 2 of the Letter of Transmittal. The undersigned hereby tenders the Notes listed below: CERTIFICATE NUMBER(S) (IF KNOWN) OF NOTES OR AGGREGATE PRINCIPAL AGGREGATE PRINCIPAL ACCOUNT NUMBER AT THE BOOK-ENTRY FACILITY AMOUNT REPRESENTED AMOUNT TENDERED
PLEASE SIGN AND COMPLETE Signatures of Registered Holder(s) or Authorized Signatory: .............................. Date: ....................................... , 1997 .................................................... Address: ........................................... .................................................... ..................................................... Name(s) of Registered Holder(s): ................... Area Code and Telephone No. ........................ .................................................... ....................................................
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly as their name(s) appear on certificates for Notes or on a security position listing as the owner of Notes, or by person(s) authorized to become Holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must provide the following information. Please print name(s) and address(es) Name(s): ..................................................................................................... .............................................................................................................. Capacity: .................................................................................................... Address(es): ................................................................................................. ..............................................................................................................
GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or is a commercial bank or trust company having an office or correspondent in the United States, or is otherwise an 'eligible guarantor institution' within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, guarantees deposit with the Exchange Agent of the Letter of Transmittal (or facsimile thereof), together with the Notes tendered hereby in proper form for transfer (or confirmation of the book-entry transfer of such Notes into the Exchange Agent's account at the Book-Entry Transfer Facility described in the prospectus under the caption 'The Exchange Offer -- Procedures for Tendering' and in the Letter of Transmittal) and any other required documents, all by 5:00 p.m., New York City time, on the fifth New York Stock Exchange trading day following the Expiration Date. Name of firm ....................................... ..................................................... (AUTHORIZED SIGNATURE) Address ............................................ Name ............................................... .................................................... (PLEASE PRINT) (INCLUDE ZIP CODE) Title .............................................. Area Code and Tel. No. ............................. Dated ....................................... , 1996
DO NOT SEND SECURITIES WITH THIS FORM. ACTUAL SURRENDER OF SECURITIES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, AN EXECUTED LETTER OF TRANSMITTAL. INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY 1. Delivery of this Notice of Guaranteed Delivery. A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the Exchange Agent at its address set forth herein prior to the Expiration Date. The method of delivery of this Notice of Guaranteed Delivery and any other required documents to the Exchange Agent is at the election and sole risk of the holder, and the delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. As an alternative to delivery by mail, the holders may wish to consider using an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. For a description of the guaranteed delivery procedures, see Instruction 2 of the Letter of Transmittal. 2. Signatures on this Notice of Guaranteed Delivery. If this Notice of Guaranteed Delivery is signed by the registered holder(s) of the Notes referred to herein, the signature must correspond with the name(s) written on the face of the Notes without alteration, enlargement, or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a participant of the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of the Notes, the signature must correspond with the name shown on the security position listing as the owner of the Notes. If this Notice of Guaranteed Delivery is signed by a person other than the registered holder(s) of any Notes listed or a participant of the Book-Entry Transfer Facility, this Notice of Guaranteed Delivery must be accompanied by appropriate bond powers, signed as the name of the registered holder(s) appears on the Notes or signed as the name of the participant shown on the Book-Entry Transfer Facility's security position listing. If this Notice of Guaranteed Delivery is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other person acting in a fiduciary or representative capacity, such person should so indicate when signing and submit with the Letter of Transmittal evidence satisfactory to the Company of such person's authority to so act. 3. Requests for Assistance or Additional Copies. Questions and requests for assistance and requests for additional copies of the Prospectus may be directed to the Exchange Agent at the address specified in the Prospectus. Holders may also contact their broker, dealer, commercial bank, trust company, or other nominee for assistance concerning the Exchange Offer. EX-99 13 EXHIBIT 99.3 INSTRUCTIONS TO REGISTERED HOLDER AND/OR BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER OF FIRST BRANDS CORPORATION 7.25% SENIOR NOTES DUE 2007 To Registered Holder and/or Participant of the Book-Entry Transfer Facility: The undersigned hereby acknowledges receipt of the Prospectus, dated , 1997 (the 'Prospectus') of First Brands Corporation, a Delaware corporation (the 'Company'), and the accompanying Letter of Transmittal (the 'Letter of Transmittal'), that together constitute the Company's offer (the 'Exchange Offer'). Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus. This will instruct you, the registered holder and/or book-entry transfer facility participant, as to action to be taken by you relating to the Exchange Offer with respect to the 7.25% Senior Notes due 2007 (the 'Notes') held by you for the account of the undersigned. The aggregate face amount of the Notes held by you for the account of the undersigned is (FILL IN AMOUNT): $ of the 7.25% Senior Notes due 2007 With respect to the Exchange Offer, the undersigned hereby instructs you (CHECK APPROPRIATE BOX): [ ] TO TENDER the following Notes held by you for the account of the undersigned (INSERT PRINCIPAL AMOUNT OF NOTES TO BE TENDERED, IF ANY): $ [ ] NOT TO TENDER any Notes held by you for the account of the undersigned. If the undersigned instruct you to tender the Notes held by you for the account of the undersigned, it is understood that you are authorized (a) to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations that (i) the undersigned's principal residence is in the state of (FILL IN STATE) , (ii) the undersigned is acquiring the Exchange Notes in the ordinary course of business of the undersigned, (iii) the undersigned is not participating, does not participate, and has no arrangement or understanding with any person to participate in the distribution of the Exchange Notes, (iv) the undersigned acknowledges that any person participating in the Exchange Offer for the purpose of distributing the Exchange Notes must comply with the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the 'Act'), in connection with a secondary resale transaction of the Exchange Notes acquired by such person and cannot rely on the position of the Staff of the Securities and Exchange Commission set forth in no-action letters that are discussed in the section of the Prospectus entitled 'The Exchange Offer -- Resales of the Exchange Notes,' and (v) the undersigned is not an 'affiliate,' as defined in Rule 405 under the Act, of the Company; (b) to agree, on behalf of the undersigned, as set forth in the Letter of Transmittal; and (c) to take such other action as necessary under the Prospectus or the Letter of Transmittal to effect the valid tender of such Notes. SIGN HERE Name of beneficial owner(s): ................................................... Signature(s): ................................................................. Name (please print): .......................................................... Address: ...................................................................... ............................................................................... ............................................................................... Telephone number: ............................................................. Taxpayer Identification or Social Security Number: ............................ Date: ......................................................................... -----END PRIVACY-ENHANCED MESSAGE-----