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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)
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DELAWARE 2673 06-1171404
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
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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. [ ]
------------------------
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CALCULATION OF REGISTRATION FEE
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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
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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.
________________________________________________________________________________
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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.
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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
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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
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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
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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
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THE NOTES OFFERING
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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.
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THE EXCHANGE OFFER
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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
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6
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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
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7
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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.
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8
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THE EXCHANGE NOTES
<TABLE>
<S> <C>
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
</TABLE>
9
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<TABLE>
<S> <C>
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.'
</TABLE>
For additional information regarding the Exchange Notes, see 'Description
of Exchange Notes.'
10
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<PAGE>
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.
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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.
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
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
-------- -----------
-------- -----------
</TABLE>
- ------------
(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.'
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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.
<TABLE>
<CAPTION>
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)
<S> <C> <C> <C> <C> <C> <C> <C>
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%
</TABLE>
(footnotes on next page)
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(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.
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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
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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.
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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
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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
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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.
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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.
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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,
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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
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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.
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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
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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
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(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.
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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
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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,
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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.
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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.
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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.
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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
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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.
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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.
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_____________________________ _____________________________
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
<TABLE>
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PAGE
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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
</TABLE>
------------------------
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
_____________________________ _____________________________
<PAGE>
<PAGE>
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.
<TABLE>
<C> <S>
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.
</TABLE>
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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.
</TABLE>
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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.
</TABLE>
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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.
</TABLE>
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
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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.
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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:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/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
</TABLE>
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EXECUTION COPY
================================================================================
FIRST BRANDS CORPORATION
TO
THE BANK OF NEW YORK,
TRUSTEE
-------------
INDENTURE
DATED AS OF MARCH 1, 1997
-------------
================================================================================
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TABLE OF CONTENTS
PAGE
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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
</TABLE>
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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
</TABLE>
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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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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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SECTION 10.03. Restriction on Sale of Leaseback
Transactions................................................. 88
SECTION 10.04. Compliance Certificate............................................ 89
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<PAGE>
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;
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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
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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.
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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
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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.
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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
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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.
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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.
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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
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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
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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
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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:
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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
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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.
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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)
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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.
________________________________________________________________________________
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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: ________________
<PAGE>
<PAGE>
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
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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.
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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
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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.
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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,
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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
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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
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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
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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
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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.
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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
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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
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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
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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.
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(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
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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
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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
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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.
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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
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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
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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.
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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
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(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
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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
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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,
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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
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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
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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
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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,
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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.
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(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.
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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.
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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
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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
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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
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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.
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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
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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
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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.
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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
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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
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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
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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,
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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
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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
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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
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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
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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
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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
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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
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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.
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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
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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
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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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
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<PAGE>
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
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<PAGE>
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
<PAGE>
<PAGE>
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)
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
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<PAGE>
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
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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
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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.
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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
<PAGE>
<PAGE>
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
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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
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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.
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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
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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
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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
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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.
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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
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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
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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
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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
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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;
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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-
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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
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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
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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
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
Principal
Amount of
Initial Purchaser Notes
- ----------------- ----------
<S> <C>
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
</TABLE>
<PAGE>
<PAGE>
SCHEDULE 2
List of Material Subsidiaries
-----------------------------
A & M Products Inc.
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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;
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
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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
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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
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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
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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
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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
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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
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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
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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;
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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
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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
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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
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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
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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
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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
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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.
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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
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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
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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
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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)
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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.
<PAGE>
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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
<PAGE>
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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
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<PAGE>
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;
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(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
<PAGE>
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================================================================================
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
================================================================================
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TABLE OF CONTENTS
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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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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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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
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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 -
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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);
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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
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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
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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
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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
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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;
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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;
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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
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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
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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;
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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%
-
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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;
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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
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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:
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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
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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);
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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;
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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;
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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
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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;
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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;
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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
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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,
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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
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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
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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
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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
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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
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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
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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,
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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
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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;
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(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;
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(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;
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(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,
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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,
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(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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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,
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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
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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
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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.
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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
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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)
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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
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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.
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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
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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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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:
<PAGE>
<PAGE>
SCHEDULE A to
Committed Rate Note
LOANS, CONVERSIONS AND
PAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION>
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
- ------ ------- ---------- ---------- -------- -------- --------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
</TABLE>
<PAGE>
<PAGE>
SCHEDULE B to
Committed Rate Note
LOANS, CONVERSIONS AND
PAYMENTS OF C/D RATE LOANS
<TABLE>
<CAPTION>
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
- ------ ------- ---------- ---------- -------- -------- ---------- ----------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
- ------ ------- ----------- ---------- -------- -------- ---------- ----------- --------- --------
</TABLE>
<PAGE>
<PAGE>
SCHEDULE C to
Committed Rate Note
LOANS, CONVERSIONS AND
PAYMENTS OF ABR LOANS
<TABLE>
<CAPTION>
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
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
- ------ ------- ----------- ---------- ------------ ---------- --------- --------
</TABLE>
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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:
<PAGE>
<PAGE>
SCHEDULE OF BID LOANS
<TABLE>
<CAPTION>
Date Amount Amount of
of of Interest Maturity Payment Principal Authori-
Loan Loan Rate Date Date Payment zation
- ---- ------ -------- -------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
- ---- ------ -------- -------- ------- --------- --------
- ---- ------ -------- -------- ------- --------- --------
- ---- ------ -------- -------- ------- --------- --------
- ---- ------ -------- -------- ------- --------- --------
- ---- ------ -------- -------- ------- --------- --------
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- ---- ------ -------- -------- ------- --------- --------
- ---- ------ -------- -------- ------- --------- --------
- ---- ------ -------- -------- ------- --------- --------
- ---- ------ -------- -------- ------- --------- --------
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- ---- ------ -------- -------- ------- --------- --------
- ---- ------ -------- -------- ------- --------- --------
- ---- ------ -------- -------- ------- --------- --------
- ---- ------ -------- -------- ------- --------- --------
- ---- ------ -------- -------- ------- --------- --------
- ---- ------ -------- -------- ------- --------- --------
</TABLE>
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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:
<PAGE>
<PAGE>
Schedule I to
Swing Line Note
LOANS AND REPAYMENTS
<TABLE>
<CAPTION> Unpaid
Amount of Amount of Principal
Swing Line Swing Line Balance of
Loans Loans Swing Line Notation
Date Made Repaid Loans Made By
- --------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
- --------- ---------- ----------- ---------- ----------
</TABLE>
<PAGE>
<PAGE>
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].
<PAGE>
<PAGE>
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.:
- -------------------------
<PAGE>
<PAGE>
2
* In the case of Index Rate Bid Loans, insert margin bid. In the case of
Absolute Rate Bid Loans, insert fixed rate bid.
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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:
<PAGE>
<PAGE>
3
FOREST TECHNOLOGIES, INC.
By:____________________________________
Title:
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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:
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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):
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
7
3.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
<PAGE>
<PAGE>
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:
<PAGE>
<PAGE>
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:
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31 FISCAL YEAR ENDED JUNE 30
-------------------- ----------------------------------------------
1996 1995 1996 1995 1994 1993 1992
-------- -------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
<PAGE>
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)
<PAGE>
<PAGE>
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]
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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)
================================================================================
<PAGE>
<PAGE>
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-
<PAGE>
<PAGE>
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-
<PAGE>
<PAGE>
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-
<PAGE>
<PAGE>
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 |
<PAGE>
<PAGE>
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:
<TABLE>
<S> <C>
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
</TABLE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<TABLE>
<S> <C> <C> <C>
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
</TABLE>
* 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.
<TABLE>
<S> <C>
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
</TABLE>
<PAGE>
<PAGE>
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: ......................................................
<PAGE>
<PAGE>
<TABLE>
<S> <C>
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)
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
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 .......................
</TABLE>
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.
<PAGE>
<PAGE>
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,
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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.'
<PAGE>
<PAGE>
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')
<TABLE>
<S> <C>
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
</TABLE>
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:
<TABLE>
<S> <C> <C>
CERTIFICATE NUMBER(S) (IF KNOWN) OF NOTES OR AGGREGATE PRINCIPAL AGGREGATE PRINCIPAL
ACCOUNT NUMBER AT THE BOOK-ENTRY FACILITY AMOUNT REPRESENTED AMOUNT TENDERED
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PLEASE SIGN AND COMPLETE
<S> <C>
Signatures of Registered Holder(s) or
Authorized Signatory: .............................. Date: ....................................... , 1997
.................................................... Address: ...........................................
.................................................... .....................................................
Name(s) of Registered Holder(s): ................... Area Code and Telephone No. ........................
....................................................
....................................................
</TABLE>
<TABLE>
<S> <C>
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): .................................................................................................
..............................................................................................................
</TABLE>
<TABLE>
<CAPTION>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
<S> <C>
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
</TABLE>
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.
<PAGE>
<PAGE>
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.
<PAGE>
<PAGE>
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: .........................................................................
<PAGE>
