UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF CONNECTICUT


In re                              )
                              )
                              )
RAYTECH CORPORATION,          )    Chapter 11
                              )    Case No. 5-89-00293 (AHWS)
                              )
                              )
Debtor.             )
                              )




RAYTECH CORPORATION'S
SECOND AMENDED PLAN OF REORGANIZATION
(as modified July 21, 2000)



Akin, Gump, Strauss, Hauer &
Feld, L.L.P.
Daniel H. Golden
David H. Botter
Geoffrey T. Raicht
590 Madison Avenue
New York, NY 10022-4616
(212) 872-1000
-and-
Pullman & Comley, LLC
Elizabeth J. Austin
850 Main Street
P.O. Box 7006
Bridgeport, CT 06601-7006
(203) 330-2000
Attorneys for Raytech
Corporation -
Debtor and Debtor-in-
Possession








TABLE OF CONTENTS

PAGE
ARTICLE 1 DEFINITIONS    1
1.1  Defined Terms. 1
1.1.1     Administrative Expense Claim
     1
1.1.2     Affiliate
     1
1.1.3     Affiliate Claims
     2
1.1.4     Allowed
     2
1.1.5     Allowed Amount
     3
1.1.6     Amended and Restated Certificate of Incorporation
     3
1.1.7     Amended and Restated By-Laws
     3
1.1.8     Asbestos PI Permanent Channeling Injunction
     3
1.1.9     Asbestos Personal Injury Claim
     4
1.1.10    Asbestos Personal Injury Contribution Claim
     4
1.1.11    Available Cash
     4
1.1.12    Ballot
     4
1.1.13    Ballot Date
     5
1.1.14    Bankruptcy Code
     5
1.1.15    Bankruptcy Court
     5
1.1.16    Bankruptcy Rules
     5
1.1.17    Board of Directors
     5
1.1.18    Business Day
     5
1.1.19    Certificate of Incorporation
     5
1.1.20    Chapter 11 Case
     5
1.1.21    Claim
     5
1.1.22    Claims Trading Injunction
     6
1.1.23    Confirmation Date
     6
1.1.24    Confirmation Order
     6
1.1.25    Contingent Claim
     6
1.1.26    Creditor
     6
1.1.27    Creditors' Committee
     6
1.1.28    Debtor or Raytech
     6
1.1.29    Debtor in Possession
     6
1.1.30    Demand
     6
1.1.31    Disallowed
     7
1.1.32    Disbursing Agent
     7
1.1.33    Disputed
     7
1.1.34    Disputed Claim Amount
     7
1.1.35    Distribution
     7
1.1.36    District Court
     7
1.1.37    Effective Date
     7
1.1.38    Encumbrance
     7
1.1.39    Entity
     8
1.1.40    Environmental Claim
     8
1.1.41    Equity Interest
     8
1.1.42    Equity Committee
     8
1.1.43    Estimated Amount
     8
1.1.44    Existing Raytech Common Stock
     8
1.1.45    Final Distribution Date
     8
1.1.46    Final Order
     8
1.1.47    FMC
     9
1.1.48    Future Claimants' Representative
     9
1.1.49    Governments
     9
1.1.50    Governments' Claim
     9
1.1.51    Governments' Share
     9
1.1.52    Governments' Settlement Agreement
     9
1.1.53    Initial Distribution Date
     9
1.1.54    Internal Revenue Code
     9
1.1.55    IRS
     10
1.1.56    Justice Department
     10
1.1.57    New Raytech Common Stock
     10
1.1.58    Payment Percentage
     10
1.1.59    PBGC
     10
1.1.60    PBGC Claims
     10
1.1.61    PBGC Litigation
     10
1.1.62    Petition Date
     10
1.1.63    PI Protected Party
     10
1.1.64    PI Trust
     11
1.1.65    PI Trust Agreement
     11
1.1.66    PI Trust Claims
     11
1.1.67    PI Trust Claims Resolution and Distribution
Procedures     12
1.1.68    PI Trust Share
     12
1.1.69    Plan
     12
1.1.70    Priority Claim
     12
1.1.71    Quarterly Distribution Date
     12
1.1.72    Raymark
     12
1.1.73    Raymark Estates
     12
1.1.74    Raymark Plans
     12
1.1.75    Raytech Common Stock
     12
1.1.76    Record Date
     13
1.1.77    Related Parties
     13
1.1.78    Reorganized Debtor or Reorganized Raytech
     13
1.1.79    Retention Period
     13
1.1.80    Retiree Claims
     13
1.1.81    Retiree Committee
     13
1.1.82    Retiree Litigation
     13
1.1.83    Schedules
     13
1.1.84    Secured Claim
     14
1.1.85    Severance Program
     14
1.1.86    Shareholders' Agreement
     14
1.1.87    Shareholder Representative
     14
1.1.88    Smith Distributions
     14
1.1.89    Smith Entity or Entities
     14
1.1.90    State of Connecticut DEP
     14
1.1.91    Stratford Facility
     14
1.1.92    Tax Claim
     15
1.1.93    Tax Refund Assignment Agreement
     15
1.1.94    Trustees
     15
1.1.95    Unliquidated Claim
     15
1.1.96    Unsecured Claim
     15
1.1.97    Unsecured Creditor Funding Obligation
     15
1.1.98    Unsecured Creditor Funding Obligation Remainder
     15
1.1.99    Voting Procedures Order
     15
1.2  Other Terms.   16
1.3  Exhibits. 16
ARTICLE 2 PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSES AND
TAX CLAIMS     16
2.1  Payment of Allowed Administrative Expenses.  16
2.2  Tax Claims.    16
ARTICLE 3 CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY
INTERESTS 17
3.1  Summary.  17
3.2  Classification and Treatment. 17
3.2.1     Class 1. Priority Claims
     17
3.2.2     Class 2. Secured Claims
     18
3.2.3     Class 3. General Unsecured Claims
     18
3.2.4     Class 4.  Affiliate Claims
     21
3.2.5     Class 5.  Equity Interests
     21
3.3  Controversy Concerning Impairment. 22
ARTICLE 4 MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN    22
4.1  Modification of the Plan.     22
4.2  Revocation or Withdrawal.     22
4.2.1     Right to Revoke
     22
4.2.2     Effect of Withdrawal or Revocation
     22
4.3  Amendment of Plan Documents.  23
ARTICLE 5 PROVISIONS FOR TREATMENT OF DISPUTED CLAIMS  23
5.1  Objections to Claims; Prosecution of Disputed Claims.  23
5.2  PI Trust Claims Resolution and Distribution Procedures.
     23
5.3  Distributions on Account of Disputed Claims. 23
ARTICLE 6 ACCEPTANCE OR REJECTION OF THE PLAN     23
6.1  Impaired Classes to Vote.     23
6.2  Acceptance by Class of Claims.     24
6.3  Nonconsensual Confirmation.   24
ARTICLE 7 IMPLEMENTATION OF THE PLAN    24
7.1  Amendment of Certificate of Incorporation.   24
7.2  Amendment of By-Laws.    24
7.3  Creation of PI Trust and Appointment of Trustees. 24
7.4  Distributions under the Plan. 25
7.5  Distributions by the Reorganized Debtor and the PI
Trust.    25
7.6  Delivery of Distributions and Undeliverable or
Unclaimed Distributions. 25
7.6.1     Delivery of Distributions in General
     25
7.6.2     Undeliverable Distributions
     25
7.7  Manner of Payment under the Plan.  26
7.8  Fractional Shares or Other Distributions.    26
7.9  Occurrence of the Confirmation Date.    26
7.10 Occurrence of the Effective Date.  27
7.11 Management of the Reorganized Debtor.   28
7.12 Corporate Action.   29
7.13 Effectuating Documents and Further Transactions.  29
7.14 Listing of Raytech Common Stock.   30
7.15 Allocation of Plan Distributions Between Principal and
Interest. 30
7.16 District Court Approval of the Confirmation Order, the
Asbestos PI Permanent Channeling Injunction and the
Claims Trading Injunction.    30
ARTICLE 8 EXECUTORY CONTRACTS AND UNEXPIRED LEASES     30
8.1  Assumption of Executory Contracts and Unexpired Leases.
     30
8.2  Rejection of Executory Contracts and Unexpired Leases.
     31
8.3  Claims Arising from Rejection or Termination.     31
8.4  Insurance Policies. 31
8.4.1     Assumed Insurance Policies
     31
8.4.2     Rejected Insurance Policies
     32
8.4.3     Reservation of Rights.
     32
8.5  Indemnification and Reimbursement Obligations.    32
8.6  Compensation and Benefit Programs. 32
ARTICLE 9 RETENTION OF JURISDICTION     33
ARTICLE 10 TRANSFERS OF PROPERTY TO AND ASSUMPTION OF CERTAIN
LIABILITIES BY THE PI TRUST   34
10.1 Transfer of Certain Property on the Effective Date.    34
10.1.1    Transfer of Books and Records
     34
10.1.2    Transfer of Plan Consideration
     35
10.2 Assumption of Certain Liabilities by the PI Trust.     35
10.3 Distributions on Account of Disputed Claims Once
Allowed.  35
10.4 Certain Property Held in Trust by the Reorganized
Debtor.   35
10.5 Authority of the Debtor. 35
ARTICLE 11 MISCELLANEOUS PROVISIONS     36
11.1 Payment of Statutory Fees.    36
11.2 Discharge of the Debtor; Effect of Asbestos PI
Permanent Channeling Injunction.   36
11.3 Rights of Action.   36
11.4 Third Party Agreements.  37
11.5 Dissolution of Committees.    37
11.6 Exculpation.   37
11.7 Releases  38
11.8 Title to Assets; Discharge of Liabilities.   38
11.9 Surrender and Cancellation of Instruments.   38
11.10     Notices.
     39
11.11     Headings.
     41
11.12     Severability.
     41
11.13     Governing Law.
     42
11.14     Filing of Additional Documents.
     42
11.15     Compliance with Tax Requirements.
     42
11.16     Exemption from Transfer Taxes.
     42
11.17     Further Assurances.
     43

SCHEDULE 5.1   DISPUTED CLAIMS
SCHEDULE 8.1   CONTRACTS/UNEXPIRED LEASES
SCHEDULE 8.4.1 ASSUMED INSURANCE POLICIES
SCHEDULE 8.4.2 REJECTED INSURANCE POLICIES
EXHIBIT A AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
EXHIBIT B AMENDED AND RESTATED BY-LAWS
EXHIBIT C GOVERNMENTS' SETTLEMENT AGREEMENT
EXHIBIT D PI TRUST AGREEMENT
EXHIBIT E PI TRUST CLAIMS RESOLUTION AND DISTRIBUTION
PROCEDURES
EXHIBIT F TAX REFUND ASSIGNMENT AGREEMENT
EXHIBIT G SHAREHOLDERS' AGREEMENT

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF CONNECTICUT


In re                              )
                              )
                              )
RAYTECH CORPORATION,          )    Chapter 11
                         )    Case No. 5-89-00293 (AHWS)
                              )
                              )
Debtor.             )
                              )


RAYTECH CORPORATION'S
SECOND AMENDED PLAN OF REORGANIZATION

Raytech Corporation hereby proposes the
following second amended plan of reorganization
ARTICLE 1

DEFINITIONS
1.1 Defined Terms.
As used herein, the following terms shall have the
respective meanings specified below, unless the context otherwise
requires
1.1.1 Administrative Expense Claim
Any Claim constituting a cost or expense of
administration in the Chapter 11 Case under sections 503(b) or
1114(e)(2) of the Bankruptcy Code, including, but not limited to,
any actual and necessary costs and expenses of preserving the
estate of the Debtor, any actual and necessary costs and expenses
of operating the business of the Debtor, any indebtedness or
obligation incurred or assumed by the Debtor in connection with
the conduct of its business or for the acquisition or lease of
property or the rendition of services, any allowed compensation
or reimbursement of expenses awarded or allowed under Section
330(a) or 331 of the Bankruptcy Code, and any fees or charges
assessed against the estate of the Debtor under section 1930,
chapter 123, title 28, United States Code.
1.1.2 Affiliate
Any Entity that is an "affiliate" of the Debtor
or the Reorganized Debtor within the meaning of section 101(2) of
the Bankruptcy Code, except (i) the PI Trust, (ii) the Smith
Entities and (iii) Raymark.
1.1.3 Affiliate Claims
All Claims against the Debtor held by an
Affiliate.
1.1.4 Allowed
1.1.4.1 With respect to any Claim, other than an
Administrative Expense Claim or an Asbestos Personal Injury
Claim, proof of which was filed within the applicable period
of limitation fixed in accordance with Bankruptcy Rule
3003(c)(3) by the Bankruptcy Court, (i) as to which no
objection to the allowance thereof has been interposed
within the applicable period of limitation fixed by the
Plan, the Bankruptcy Code, the Bankruptcy Rules, or a Final
Order of the Bankruptcy Court, such Claim to the extent
asserted in the proof of such Claim or, if applicable,
despite the lack of an objection thereto, to the extent it
has been allowed in whole or part by a Final Order of the
Bankruptcy Court, or (ii) as to which an objection has been
interposed, such Claim to the extent that it has been
allowed in whole or in part by a Final Order of the
Bankruptcy Court.
1.1.4.2 With respect to any Claim, other than an
Administrative Expense Claim or an Asbestos Personal Injury
Claim, as to which no proof of claim was filed within the
applicable period of limitation fixed by the Plan, the
Bankruptcy Code, the Bankruptcy Rules, or a Final Order of
the Bankruptcy Court, such Claim to the extent that it has
been listed by the Debtor in its Schedules as liquidated in
amount and not disputed or contingent.
1.1.4.3 With respect to any Claim that is asserted to
constitute an Administrative Expense Claim (i) that
represents an actual or necessary expense of preserving the
estate or operating the business of the Debtor, any such
Claim to the extent that the Debtor determines it to
constitute an Administrative Expense Claim, (ii) other than
with respect to a Claim of a professional person employed
under section 327 or 1103 of the Bankruptcy Code that is
required to apply to the Bankruptcy Court for the allowance
of compensation and reimbursement of expenses pursuant to
section 330 of the Bankruptcy Code, that the Debtor does not
believe constitutes an Administrative Expense Claim, any
such Claim to the extent it is allowed in whole or in part
by a Final Order of the Bankruptcy Court and only to the
extent that such allowed portion is deemed, pursuant to a
Final Order of the Bankruptcy Court, to constitute a cost or
expense of administration under sections 503 or 1114 of the
Bankruptcy Code, or (iii) that represents a Claim of a
professional person employed under section 327, 328 or 1103
of the Bankruptcy Code that is required to apply to the
Bankruptcy Court for the allowance of compensation and
reimbursement of expenses pursuant to section 330 of the
Bankruptcy Code, such Claim to the extent it is allowed by a
Final Order of the Bankruptcy Court under section 330 of the
Bankruptcy Code.
1.1.4.4 With respect to any Asbestos Personal Injury
Claim, such Claims shall neither be Allowed or Disallowed,
but, rather, will be satisfied in accordance with the PI
Trust Claims Resolution and Distribution Procedures.  With
respect to any Demands, Demands will neither be Allowed or
Disallowed, but, rather will be satisfied in accordance with
the PI Trust Claims Resolution and Distribution Procedures.
1.1.5 Allowed Amount
The dollar amount of a Claim as Allowed by the
Court or agreed to by the Debtor. Unless otherwise specified
herein or by Final Order of the Bankruptcy Court, the Allowed
Amount of an Allowed Claim shall not include interest accruing on
such Allowed Claim from and after the Petition Date.
1.1.6 Amended and Restated Certificate of Incorporation
The Certificate of Incorporation, to be amended
and restated in accordance with section 7.1 hereof, in
substantially the form of Exhibit "A" to the Plan.
1.1.7 Amended and Restated By-Laws
The By-Laws of Raytech to be amended and restated
in accordance with section 7.2 hereof, in substantially the form
of Exhibit "B" to the Plan.
1.1.8 Asbestos PI Permanent Channeling Injunction
An order or orders of the Bankruptcy Court or the
District Court in accordance with and pursuant to Section 524 (g)
of the Bankruptcy Code permanently and forever staying,
restraining, and enjoining any Entity from taking any of the
following actions for the purpose of, directly or indirectly,
collecting, recovering, or receiving payment of, on, or with
respect to any PI Trust Claims, all of which shall be channeled
to the PI Trust (other than actions brought to enforce any right
or obligation under the Plan, any exhibits to the Plan, or any
other agreement or instrument between the Debtor or the
Reorganized Debtor and the PI Trust, which actions shall be in
conformity and compliance with the provisions hereof)
a. commencing, conducting, or continuing in any
manner, directly or indirectly, any suit, action, or
other proceeding (including, but not limited to, a
judicial, arbitrary, administrative, or other
proceeding) in any forum against or affecting any PI
Protected Party or any property or interests in
property of any PI Protected Party;
b. enforcing, levying, attaching (including, but
not limited to, any prejudgment attachment),
collecting, or otherwise recovering by any means or in
any manner, whether directly or indirectly, any
judgment, award, decree, or other order against any PI
Protected Party or any property or interests in
property of any PI Protected Party;
c. creating, perfecting, or otherwise enforcing in
any manner, directly or indirectly, any Encumbrance
against any PI Protected Party or any property or
interests in property of any PI Protected Party;
d. setting off, seeking reimbursement of,
contribution from, or subrogation against, or otherwise
recouping in any manner, directly or indirectly, any
amount against any liability owed to any PI Protected
Party or any property or interests in property of any
PI Protected Party; and
e. proceeding in any manner in any place with
regard to any matter that is subject to resolution
pursuant to the PI Trust, except in conformity and
compliance therewith.
1.1.9 Asbestos Personal Injury Claim
Any Claim or Demand now existing or hereafter
arising, whether or not such Claim or Demand is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured, whether or not the facts of or legal bases for such
Claim or Demand are known or unknown, for, under any theory of
law, equity, admiralty, or otherwise, death, bodily injury, or
other personal damages (whether physical, emotional, or
otherwise) to the extent caused or allegedly caused, directly or
indirectly, by exposure to asbestos or asbestos-containing
products for which the Debtor or Raymark has legal liability,
including, but not limited to, any Claim or Demand for
compensatory damages (such as loss of consortium, wrongful death,
survivorship, proximate, consequential, general, and special
damages) and including punitive damages.
1.1.10 Asbestos Personal Injury Contribution Claim
Any Allowed Claim or Demand now existing or
hereafter arising, whether or not such Claim or Demand is reduced
to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured, whether or not the facts of or legal bases
for such Claim or Demand are known or unknown, that is (i) held
by (A) any Entity (other than a director or officer entitled to
indemnification pursuant to section 8.5 of the Plan) who has
been, is, or may be a defendant in an action seeking damages for
death, bodily injury, or other personal damages (whether
physical, emotional, or otherwise) to the extent caused or
allegedly caused, directly or indirectly, by exposure to asbestos
or asbestos-containing products for which the Debtor or Raymark
has legal liability, or (B) any assignee or transferee of such
Entity, and (ii) on account of alleged liability of the Debtor or
Raymark for reimbursement or contribution of any portion of any
damages such Entity has paid or may pay to the plaintiff in such
action.
1.1.11  Available Cash
The amount of cash that, in the judgment of the
Debtor and the financial advisor to the Creditors' Committee, is
not reasonably needed to meet the estimated near term cash
operating needs and capital needs of the Reorganized Debtor on
the anticipated Effective Date of the Plan.  In the event that
the Debtor and the financial advisor to the Creditors' Committee
cannot agree on the amount of the "Available Cash," they shall by
mutual agreement select a nationally recognized certified public
accounting firm (the "National Firm") which is not the regular
accounting firm of the Debtor to make the determination.  The
determination of the National Firm shall be final.
1.1.12 Ballot
The form or forms distributed to holders of
impaired Claims and Equity Interests on which is to be indicated
the acceptance or rejection of the Plan.
1.1.13 Ballot Date
The date set by the Bankruptcy Court by which all
completed Ballots must be received.
1.1.14 Bankruptcy Code
Title 11 of the United States Code, as applicable
to the Chapter 11 Case.
1.1.15 Bankruptcy Court
The United States District Court for the District
of Connecticut, having jurisdiction over the Chapter 11 Case and,
to the extent of any reference made pursuant to section 157 of
title 28 of the United States Code, the unit of such District
Court constituted pursuant to section 151 of title 28 of the
United States Code.
1.1.16 Bankruptcy Rules
The Federal Rules of Bankruptcy Procedure, as
amended, as applicable to the Chapter 11 Case, including the
Local Rules of the Bankruptcy Court.
1.1.17 Board of Directors
The Board of Directors of Raytech, as it may
exist from time to time.
1.1.18 Business Day
Any day which is not a Saturday, Sunday or
Federal holiday.
1.1.19 Certificate of Incorporation
The Certificate of Incorporation of Raytech, as
such Certificate of Incorporation may be amended by the Amended
and Restated Certificate of Incorporation or otherwise.
1.1.20 Chapter 11 Case
The case of the Debtor commenced by the filing by
the Debtor of a voluntary petition for relief under chapter 11 of
the Bankruptcy Code on the Petition Date.
1.1.21 Claim
A "Claim," as defined in section 101(5) of the
Bankruptcy Code, shall mean a right to (a) payment from the
debtor, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, unsecured; or
(b) an equitable remedy for breach of performance if such breach
gives rise to a right to payment from the debtor, whether or not
such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or
unsecured.
1.1.22 Claims Trading Injunction
An order or orders of the Bankruptcy Court or the
District Court permanently and forever staying, restraining, and
enjoining any Entity from, directly or indirectly, purchasing,
selling, transferring, assigning, conveying, pledging, or
otherwise acquiring or disposing of any PI Trust Claim; provided,
however, that the foregoing shall not apply to the transfer of an
Asbestos Personal Injury Claim by will or under the laws of
descent and distribution. Any such order or orders will also
provide that any action taken in violation thereof will be void
ab initio.
1.1.23 Confirmation Date
The date on which the Confirmation Order is
entered by the Clerk of the Bankruptcy Court or District Court.
1.1.24 Confirmation Order
The order or orders of the Bankruptcy Court or
District Court confirming the Plan in accordance with the
provisions of chapter 11 of the Bankruptcy Code, which will
contain, inter alia, the Asbestos PI Permanent Channeling
Injunction.
1.1.25 Contingent Claim
Any Claim, the liability for which attaches or is
dependent upon the occurrence or happening, or is triggered by,
an event, which event has not yet occurred, happened, or been
triggered, as of the date on which such Claim is sought to be
estimated or an objection to such Claim is filed, whether or not
such event is within the actual or presumed contemplation of the
holder of such Claim and whether or not a relationship between
the holder of such Claim and the Debtor now or hereafter exists
or previously existed.
1.1.26 Creditor
Any Entity that holds a Claim against the Debtor
or Debtor in Possession.
1.1.27 Creditors' Committee
The Official Committee of Unsecured Creditors
appointed by the U.S. Trustee in this case.
1.1.28 Debtor or Raytech
Raytech Corporation, a Delaware corporation.
1.1.29 Debtor in Possession
The Debtor, in its capacity as a debtor in
possession pursuant to sections 1107(a) and 1108 of the
Bankruptcy Code.
1.1.30 Demand
A demand for payment, present or future, that (i)
was not a Claim during the Chapter 11 Case; (ii) arises out of
the same or similar conduct or events that gave rise to the
Claims addressed by the Asbestos PI Permanent Channeling
Injunction; and (iii) pursuant to the Plan, is to be satisfied by
the PI Trust.
1.1.31 Disallowed
A Claim that is disallowed in its entirety by a
Final Order of the Bankruptcy Court or another court of competent
jurisdiction.
1.1.32 Disbursing Agent
The Reorganized Debtor or an entity selected by
the Reorganized Debtor to make the Distributions required under
the Plan, in accordance with the terms thereof, after the
Effective Date.
1.1.33 Disputed
A Claim that is neither Allowed or Disallowed,
nor a PI Trust Claim.  The Claims listed on Schedule 5.1 to the
Plan shall be deemed Disputed Claims as of the Confirmation Date.
1.1.34 Disputed Claim Amount
The Estimated Amount of a Disputed Claim, or, if
no Estimated Amount exists, the amount set forth in the proof of
claim relating to such Disputed Claim as the liquidated amount of
such Disputed Claim.
1.1.35 Distribution
The payment or distribution under the Plan of
property or interests in property to the holders of Allowed
Claims (other than PI Trust Claims) and to the PI Trust.
1.1.36 District Court
The United States District Court for District of
Connecticut, having jurisdiction over the Chapter 11 Case.
1.1.37 Effective Date
The first Business Day after the date on which
all of the conditions precedent to the effectiveness of the Plan
specified in Section 7.10 have been satisfied or waived or, if a
stay of the Confirmation Order is in effect on such date, the
first Business Day after the expiration, dissolution, or lifting
of such stay.
1.1.38 Encumbrance
With respect to any asset, any mortgage, lien,
pledge, charge, security interest, assignment, or encumbrance of
any kind or nature in respect of such asset (including, but not
limited to, any conditional sale or other title retention
agreement, any security agreement, and the filing of, or
agreement to give, any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction).
1.1.39 Entity
An individual, corporation, partnership,
association, joint stock company, joint venture, estate, trust,
unincorporated organization, or government or any political
subdivision thereof, or other person or entity.
1.1.40 Environmental Claim
Any Claim existing as of the Confirmation Date
made by any Entity for liability under any Federal, State or
local environmental laws or regulation, permit, order or
authorization.
1.1.41 Equity Interest
Any interest in Raytech represented by (a) shares
of Existing Raytech Common Stock or (b) the options to purchase
Existing Raytech Common Stock issued pursuant to the Raytech
Corporation 1990 Non-Qualified Stock Option Plan (the
"Options").
1.1.42 Equity Committee
The Official Committee of Equity Security Holders
appointed by the U.S. Trustee in the Chapter 11 Case.
1.1.43 Estimated Amount
The estimated dollar value of an Unliquidated
Claim, Disputed Claim, or Contingent Claim pursuant to section
502(c) of the Bankruptcy Code.
1.1.44 Existing Raytech Common Stock
Voting common stock of Raytech, with a par value
of $1.00 for each share, authorized pursuant to the Certificate
of Incorporation as in effect immediately prior to the Effective
Date.
1.1.45 Final Distribution Date
A date after the Initial Distribution Date and
after all Disputed Claims have become either Allowed Claims or
Disallowed Claims that is selected by the Reorganized Debtor in
its discretion but, in any event, is no later than thirty (30)
days thereafter, or such later date as the Bankruptcy Court may
establish, upon request by the Reorganized Debtor, for cause
shown.
1.1.46 Final Order
An order as to which the time to appeal, petition
for certiorari, or move for reargument or rehearing has expired
and as to which no appeal, petition for certiorari, or other
proceedings for reargument or rehearing shall then be pending or
as to which any right to appeal, petition for certiorari,
reargue, or rehear shall have been waived in writing in form and
substance satisfactory to the Debtor or the Reorganized Debtor,
as the case may be, and their counsel or, in the event that an
appeal, writ of certiorari, or reargument or rehearing thereof
has been sought, such order shall have been affirmed by the
highest court to which such order was appealed, or certiorari has
been denied or from which reargument or rehearing was sought, and
the time to take any further appeal, petition for certiorari or
move for reargument or rehearing shall have expired.
1.1.47 FMC
FMC Corporation.
1.1.48 Future Claimants' Representative
The Guardian Ad Litem for Future Claimants
appointed pursuant to the order of the District Court on
September 4, 1990 and the order of the Bankruptcy Court on
October 21, 1994.
1.1.49 Governments
Collectively, the United States Environmental
Protection Agency, as represented by the Justice Department, and
the State of Connecticut, as represented by the State of
Connecticut DEP.
1.1.50 Governments' Claim
The Environmental Claims of the Governments
(including the Environmental Claims of FMC).
1.1.51 Governments' Share
In accordance with the Governments' Settlement
Agreement, eight and one-half (8-1/2%) percent of all assets that
constitute the Unsecured Creditor Funding Obligation Remainder
after subtraction therefrom of all amounts recovered by the
Governments and/or FMC from the Raymark Estates (excluding any
amounts received by the Governments and/or FMC from the sale of
the Stratford Facility by the Chapter 11 Trustee of Raymark).
1.1.52 Governments' Settlement Agreement
That certain agreement by and between the
Governments, FMC, the Creditors' Committee and the Future
Claimants' Representative annexed to the Plan as Exhibit "C,"
which details the financial terms of the recoveries in respect of
the Governments' Claim under the Plan and from the Raymark
Estates.
1.1.53 Initial Distribution Date
A date on or after the Effective Date that is
selected by the Reorganized Debtor in its discretion but, in any
event, is within thirty (30) days after the Effective Date, or
such later date as the Bankruptcy Court may establish, upon
request by the Reorganized Debtor, for cause shown.
1.1.54 Internal Revenue Code
The Internal Revenue Code of 1986, as amended,
and any applicable rulings, regulations (including temporary and
proposed regulations) promulgated thereunder, judicial decisions,
and notices, announcements, and other releases of the United
States Treasury Department or the IRS.
1.1.55 IRS
The United States Internal Revenue Service.
1.1.56 Justice Department
The United States Department of Justice,
Environmental and Natural Resources Division.
1.1.57 New Raytech Common Stock
The additional voting common stock of the
Reorganized Debtor, with a par value of $1.00 for each share,
issued pursuant to Section 7.1(b)(i) hereof.
1.1.58 Payment Percentage
The percentage derived by dividing (x) the
Allowed Amount of any Claim in Class 3 by (y) the sum of (a) all
Allowed Claims in Class 3, (b) the Estimated Amount of all PI
Trust Claims and the Governments' Claim and (c) the Disputed
Claim Amount of all Disputed Claims.  For purposes of determining
the Payment Percentage on the Effective Date, the Disputed Claim
Amount shall be used for all Disputed Claims on such date. The
Payment Percentage shall be recalculated on each Quarterly
Distribution Date to account for Disputed Claims which have
become Allowed Claims or Disallowed Claims during the preceding
quarter.
1.1.59 PBGC
Pension Benefit Guaranty Corporation.
1.1.60 PBGC Claims
The six proofs of claim filed by the PBGC in the
Chapter 11 Case.
1.1.61 PBGC Litigation
That certain adversary proceeding in the Chapter
11 Case entitled Raytech Corporation v. Pension Benefit Guaranty
Corporation, Adv. Pro. No. 99-5051.
1.1.62 Petition Date
March 10, 1989.
1.1.63 PI Protected Party
Any of the following parties
1.1.63.1 the Debtor;
1.1.63.2 the Reorganized Debtor;
1.1.63.3 an Affiliate;
1.1.63.4 any Entity that, pursuant to the Plan or
after the Effective Date, becomes a direct or indirect
transferee of, or successor to, any assets of any of the
Debtor, the Reorganized Debtor, an Affiliate or the PI Trust
(but only to the extent that liability is asserted to exist
by reason of it becoming such a transferee or successor);
1.1.63.5 any Entity that, pursuant to the Plan or
after the Effective Date, makes a loan to the Reorganized
Debtor or the PI Trust or to a successor to, or transferee
of, any assets of the Debtor, the Reorganized Debtor, an
Affiliate or the PI Trust (but only to the extent that
liability is asserted to exist by reason of such Entity
becoming such a lender or to the extent any pledge of assets
made in connection with such a loan is sought to be upset or
impaired); or
1.1.63.6 any Entity (other than Raymark or the Smith
Entities), to the extent he, she, or it is alleged to be
directly or indirectly liable for the conduct of, Claims
against, or Demands on the Debtor, the Reorganized Debtor,
an Affiliate or the PI Trust on account of PI Trust Claims
by reason of one or more of the following
1.1.63.7 such Entity's ownership of a financial
interest in the Debtor or the Reorganized Debtor, a past or
present Affiliate of the Debtor or the Reorganized Debtor,
or predecessor in interest of the Debtor or the Reorganized
Debtor;
1.1.63.8 such Entity's involvement in the management
of the Debtor, the Reorganized Debtor or an Affiliate or any
predecessor in interest of the Debtor, the Reorganized
Debtor or an Affiliate;
1.1.63.9 such Entity's service as an officer,
director, or employee of the Debtor, the Reorganized Debtor,
or Related Parties;
1.1.63.10 such Entity's provision of insurance to the
Debtor or the Reorganized Debtor, or Related Parties; or
1.1.63.11 such Entity's involvement in a transaction
changing the corporate structure, or in a loan or other
financial transaction affecting the financial condition, of
the Debtor, the Reorganized Debtor, or the Related Parties.
1.1.64 PI Trust
The Raytech Corporation Asbestos Personal Injury
Settlement Trust established pursuant to the terms of this Plan
and the PI Trust Agreement.
1.1.65 PI Trust Agreement
The Raytech Corporation Asbestos Personal Injury
Settlement Trust Agreement, substantially in the form of Exhibit
"D" to the Plan.
1.1.66 PI Trust Claims
All Asbestos Personal Injury Claims and Asbestos
Personal Injury Contribution Claims.
1.1.67 PI Trust Claims Resolution and Distribution
Procedures
The Raytech Corporation Asbestos Personal Injury
Trust Distribution Procedures to be implemented by the Trustees
pursuant to the terms and conditions of this Plan and the PI
Trust Agreement, to liquidate, determine and administer claims of
and distributions to holders of PI Trust Claims, substantially in
the form attached hereto as Exhibit "E" and as may be amended
from time to time according to its terms.
1.1.68 PI Trust Share
The Unsecured Creditor Funding Obligation
Remainder after subtraction therefrom of all property required to
satisfy the Governments' Share.
1.1.69 Plan
This plan of reorganization, either in its
present form or as it may be amended, supplemented, or otherwise
modified from time to time, and the exhibits and schedules to the
foregoing, as the same may be in effect at the time such
reference becomes operative.
1.1.70 Priority Claim
Any Claim to the extent such claim is entitled to
priority in right of payment under section 507 of the Bankruptcy
Code, other than an Administrative Expense Claim or Tax Claim.
1.1.71 Quarterly Distribution Date
The first day of each calendar quarter following
the Initial Distribution Date; provided, however, that the first
Quarterly Distribution Date following the Initial Distribution
Date shall be no less than ninety (90) days following such
Initial Distribution Date.
1.1.72 Raymark
Collectively, Raymark Industries, Inc. and
Raymark Corporation and any "affiliate" thereof within the
meaning of section 101(2) of the Bankruptcy Code, excluding
Raytech and any of its Affiliates.
1.1.73 Raymark Estates
The collective estates of Raymark formed in their
cases under Chapter 11 of the Bankruptcy Code.
1.1.74 Raymark Plans
The Raymark Industries, Inc. Retirement Plan for
Hourly Paid Employees and the Retirement Plan for Hourly Paid
Employees of Raymark Industries, Inc., Marshville Plant.
1.1.75 Raytech Common Stock
The total of the Existing Raytech Common Stock
and the New Raytech Common Stock after the Effective Date.
1.1.76 Record Date
The first Business Day following the entry of the
Confirmation Order, or such other date as may be designated by
the Confirmation Order.
1.1.77 Related Parties
Other than Raymark or the Smith Entities, (a) any
past or present Affiliate of the Debtor or the Reorganized
Debtor, (b) any predecessor in interest of the Debtor or the
Reorganized Debtor, or (c) any Entity that owned a financial
interest in the Debtor or the Reorganized Debtor.
1.1.78 Reorganized Debtor or Reorganized Raytech
The Debtor, or any successors in interest
thereto, from and after the Effective Date.
1.1.79 Retention Period
Two (2) years from and after the Effective Date,
or such shorter period as the Bankruptcy Court may set.
1.1.80 Retiree Claims
Claims by or on behalf of retired employees of
Raymark or any of its "affiliates" (as defined in Section
101(2) of the Bankruptcy Code) and their spouses and dependents
for medical, surgical, or hospital care benefits, or benefits in
the event of sickness, accident, disability or death (including
life insurance) or supplemental pension benefits, or claims for
similar retiree health and welfare benefits.  All Retiree Claims
shall be deemed Disputed Claims until a Final Order is entered in
the Retiree Litigation.
1.1.81 Retiree Committee
The Official Committee of Retirees appointed by
the U.S. Trustee in the Chapter 11 Case.
1.1.82 Retiree Litigation
That certain adversary proceeding in the Chapter
11 Case entitled Creditors Committee of Retirees v. Raytech
Corporation and Laureen M. Ryan, in her capacity as Trustee of
the Bankruptcy Estates of Raymark, Adv. Pro. No. 99-5039.
1.1.83 Schedules
The schedules of assets and liabilities and the
statements of financial affairs filed by the Debtor in Possession
with the Bankruptcy Court, as required by section 521 of the
Bankruptcy Code and the Bankruptcy Rules, as such schedules and
statements may be amended by the Debtor in Possession from time
to time in accordance with Bankruptcy Rule 1009.
1.1.84 Secured Claim
"Secured Claim" means (a) a Claim that is
secured by a lien on property in which the Debtor has an
interest, which lien is valid, perfected and enforceable under
applicable law or by reason of a Final Order, or that is subject
to setoff under section 553 of the Bankruptcy Code, to the extent
of the value of the Claim holder's interest in the Debtor's
interest in such property or to the extent of the amount subject
to setoff, as applicable, as determined pursuant to section
506(a) of the Bankruptcy Code, or (b) a Claim Allowed under this
Plan as a Secured Claim.
1.1.85 Severance Program
The severance plan for key employees of the
Debtor, as such plan has been approved by a Final Order.
1.1.86 Shareholders' Agreement
That certain agreement by and among the PI Trust,
the Shareholder Representative and Raytech annexed to the Plan as
Exhibit G, which provides certain rights to the holders of Equity
Interests in Class 5 under the Plan in the case of the sale by
the PI Trust of ninety (90%) percent or more of the New Raytech
Common Stock received by the PI Trust pursuant to the Plan.
1.1.87 Shareholder Representative
The person appointed by the Equity Committee and
approved by the Bankruptcy Court on the Confirmation Date to act
as the representative of the Public Shareholders (as such term is
defined in the Shareholders' Agreement) following the Effective
Date under the terms of the Shareholders' Agreement.
1.1.88 Smith Distributions
Any Distribution under the Plan to be made to any
Smith Entity, which shall be held by the Reorganized Debtor until
satisfaction by the Smith Entities of all Claims against such
entities by any of Raytech, the Reorganized Debtor or Raymark.
All such Distributions may be applied by the Reorganized Debtor
or Raymark, as appropriate, as a set-off against all such Claims
against the Smith Entities.
1.1.89 Smith Entity or Entities
Craig Smith, Bradley Smith, any person or Entity
related to or controlled by them or any other Smith Entity, or
any assignee of any such person or Entity or any other
"affiliate" (as such term is defined in Section 101(2) of the
Bankruptcy Code) of such entities.
1.1.90 State of Connecticut DEP
The State of Connecticut Department of
Environmental Protection.
1.1.91 Stratford Facility
Raymark's former manufacturing facility located
in Stratford, Connecticut which is the subject of that certain in
rem proceeding commenced by the United States of America,
entitled United States and State of Connecticut v. Raymark
Industries, Inc. et al., No. 397 CV00035 (DJS).
1.1.92 Tax Claim
A Claim against the Debtor that is of a kind
specified in section 507(a)(8) of the Bankruptcy Code.
1.1.93 Tax Refund Assignment Agreement
That certain assignment agreement substantially
in the form of Exhibit "F" to the Plan pursuant to which
certain tax benefits shall be assigned to the PI Trust for
subsequent distribution to all holders of Allowed Unsecured
Claims and PI Trust Claims in accordance with the applicable
Payment Percentage and the terms of the Plan.
1.1.94 Trustees
The individuals confirmed by the Bankruptcy Court
to serve as trustees of the PI Trust, pursuant to the terms of
the PI Trust Agreement.
1.1.95 Unliquidated Claim
Any Claim, the amount of liability for which has
not been fixed, whether pursuant to agreement, applicable law, or
otherwise, as of the date on which such Claim is sought to be
estimated.
1.1.96 Unsecured Claim
Any Claim that is not an Administrative Expense
Claim, Tax Claim, Priority Claim, Secured Claim or Affiliates
Claim.
1.1.97    Unsecured Creditor Funding Obligation
The obligation of Reorganized Raytech to fund the
Distributions to all holders of Unsecured Claims in accordance
with the terms of the Plan upon the Effective Date with the
following  (a) the New Raytech Common Stock, which will represent
ninety (90%) percent of all issued shares and unexercised options
of Raytech Common Stock on the Effective Date (b) the Available
Cash, and (c) the funds payable pursuant to the Tax Refund
Assignment Agreement.
1.1.98   Unsecured Creditor Funding Obligation Remainder
The remaining amount of the Unsecured Creditor
Funding Obligation after deduction of the required Distributions
made or to be made to holders of Allowed Unsecured Claims, other
than in respect of the Governments' Claims and PI Trust Claims.
1.1.99   Voting Procedures Order
An order of the Bankruptcy Court approving
procedures relating to the solicitation and tabulation of votes
with respect to the Plan.
1.2 Other Terms.
Wherever from the context it appears appropriate, each
term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in the
masculine, feminine, or neuter gender shall include the
masculine, the feminine, and the neuter. The words "herein,"
"hereof," "hereto," "hereunder," and others of similar
import refer to the Plan as a whole and not to any particular
section, subsection, or clause contained in the Plan. An
initially capitalized term used herein that is not defined herein
shall have the meaning ascribed to such term, if any, in the
Bankruptcy Code, unless the context shall otherwise require.
1.3 Exhibits.
All exhibits to the Plan, to the extent not annexed
hereto, shall be contained in a separate exhibit volume, which
shall be filed with the Clerk of the Bankruptcy Court not less
than twenty (20) days prior to the commencement of the hearing on
confirmation of the Plan. Such exhibits may be inspected in the
office of the Clerk of the Bankruptcy Court during normal hours
of operation of the Bankruptcy Court. Holders of Claims and
Equity Interests may obtain a copy of such exhibit volume, once
filed, from Raytech by a written request sent to the following
address
Raytech Corporation
Suite 295
Four Corporate Drive
Shelton, CT 06484-6240
Att:  LeGrande L. Young, Esq.

ARTICLE 2

PROVISIONS FOR PAYMENT OF
ADMINISTRATIVE EXPENSES AND TAX CLAIMS
2.1 Payment of Allowed Administrative Expenses.
Subject to the provisions of Sections 330(a) and 331 of
the Bankruptcy Code, the Allowed Amount of each Allowed
Administrative Expense Claim shall be paid in full, in cash, on
the Effective Date, or upon such other terms as may be agreed
upon by the holder of an Allowed Administrative Expense Claim and
the Reorganized Debtor or otherwise upon order of the Bankruptcy
Court; provided, however, that Administrative Expense Claims
representing liabilities incurred in the ordinary course of
business by the Debtor in Possession or assumed by the Debtor in
Possession pursuant to the Plan shall be paid by the Reorganized
Debtor in accordance with the terms and conditions of the
particular transactions and any agreements relating thereto.
2.2 Tax Claims.
Each holder of an Allowed Tax Claim shall be paid the
Allowed Amount of its Allowed Tax Claim, at the option of the
Reorganized Debtor, either (a) in full, in cash, on the Effective
Date or (b) upon such other terms as may be mutually agreed upon
between such holder of an Allowed Tax Claim and the Reorganized
Debtor.
ARTICLE 3

CLASSIFICATION AND TREATMENT
OF CLAIMS AND EQUITY INTERESTS
3.1 Summary.
Claims and Equity Interests are classified for all
purposes, including, but not limited to, voting, confirmation,
and distribution pursuant to the Plan and pursuant to Sections
1122 and 1123(a)(1) of the Bankruptcy Code, as follows
CLASS                                        STATUS
Class 1
Priority Claims
Unimpaired - not
entitled to vote.
Class 2
Secured Claims
Unimpaired - not
entitled to vote.
Class 3
General Unsecured
Claims
Impaired - entitled
to vote.
Class 3A
Established for
Section 524(g)
voting purposes only
PI Trust Claims
Impaired - entitled
to vote.
Class 4
Affiliate Claims
Unimpaired - not
entitled to vote.
Class 5
Equity Interests
Impaired - entitled
to vote.

3.2 Classification and Treatment.
3.2.1 Class 1. Priority Claims
3.2.1.1 Classification
Class 1 consists of all Allowed Priority
Claims.
3.2.1.2 Treatment
Each holder of an Allowed Priority Claim
shall be paid the Allowed Amount of its Allowed Priority Claim,
at the option of the Reorganized Debtor either (a) in full, in
cash, on the Effective Date, or (b) upon such other terms as may
be mutually agreed upon between each holder of an Allowed
Priority Claim and the Reorganized Debtor.
3.2.1.3 Status
Class 1 is not impaired.  The holders of the
Claims in Class 1 are deemed to have accepted the Plan and,
accordingly, are not entitled to vote to accept or reject the
Plan.
3.2.2 Class 2. Secured Claims
3.2.2.1 Classification
Class 2 consists of the Secured Claims
3.2.2.2 Treatment
At the option of the Debtor and in accordance
with section 1124 of the Bankruptcy Code, the Secured Claims
shall be treated in one of the following ways
a. The legal, equitable and contractual, rights to
which the Secured Claim entitles the holder thereof
shall be unaltered by the Plan;
or
b. On the Effective Date, the holder of a Secured
Claim shall be paid the Allowed Amount of such Secured
Claim, in full, in cash.
or
c. Such Secured Claim will be otherwise treated in
any other manner so that such Secured Claim shall
otherwise be rendered unimpaired pursuant to Section
1124 of the Bankruptcy Code.
3.2.2.3 Status
Class 2 is not impaired.  The holders of the
Claims in Class 2 are deemed to have accepted the Plan
and, accordingly, are not entitled to vote to accept or
reject the Plan.
3.2.3 Class 3. General Unsecured Claims
3.2.3.1 Classification
Class 3 consists of all General Unsecured
Claims
3.2.3.2 Treatment
Except as described in Section 3.2.3.4 below
and as set forth in a consensual sharing arrangement
described in the Governments' Settlement Agreement,
each holder of an Allowed Unsecured Claim shall be
entitled to receive its Payment Percentage of each
component of the Unsecured Creditor Funding Obligation.
With respect to the holders of PI Trust Claims, the PI
Trust shall receive the PI Trust Share.  Holders of PI
Trust Claims shall receive payment in accordance with
PI Trust Claims Resolution and Distribution Procedures.
3.2.3.3 Status
Class 3 is impaired.  To the extent and in
the manner provided in the Voting Procedures Order,
each holder of a claim in Class 3 shall be entitled to
vote to accept or reject the Plan.

3.2.3.4  Special Provisions Regarding Certain Class 3
Claims
3.2.3.4.1 Class 3A.  PI Trust Claims Voting
Class 3A is established for the sole purpose
of counting the votes of the holders of PI Trust Claims
to determine satisfaction of the 75% voting requirement
set forth in Section 524(g)(2)(B)(ii)(IV)(bb) of the
Bankruptcy Code.  For all other purposes, the holders
of PI Trust Claims shall be treated as holders of Class
3 Claims, including, but not limited to, for the
purpose of the determination of the acceptance or
rejection of the Plan by Class 3.
3.2.3.4.2 Environmental Claims of the
Governments
The Governments and FMC, in respect of their
Environmental Claims, shall be entitled to receive the
Governments' Share in accordance with the Governments'
Settlement Agreement.  The sole recourse of the
Governments and FMC in respect of their Environmental
Claims against the Debtor, the Reorganized Debtor, or
any property or interests in property of the Debtor or
the Reorganized Debtor shall be to the Governments'
Share and the Governments and FMC shall have no right
whatsoever at any time to assert their Environmental
Claims against the Debtor, Reorganized Debtor or any
property or interests in property of the Debtor or the
Reorganized Debtor.
3.2.3.4.3 Retiree Claims
The determination of the treatment of the
holders of Allowed Retiree Claims shall be fixed
following the entry of a Final Order in the Retiree
Litigation.  If it is determined in the Retiree
Litigation that Allowed Retiree Claims are entitled to
payment as Administrative Expense Claims, all holders
of Allowed Retiree Claims shall be afforded the
treatment specified for holders of Allowed
Administrative Expense Claims in Section 2.1 of this
Plan.  If it is determined in the Retiree Litigation
that the Retiree Claims constitute Unsecured Claims,
each holder of an Allowed Retiree Claim shall be
considered a holder of an Allowed Claim in Class 3 and
shall receive the treatment afforded to holders of
Allowed Claims in Class 3.  If it is determined in the
Retiree Litigation that the Debtor is not liable for
the Retiree Claims, then all Retiree Claims shall be
treated as Disallowed Claims.  Until a Final Order is
entered in the Retiree Litigation, all Retiree Claims
shall be treated as Disputed Claims.
3.2.3.4.4 PBGC Claims
The treatment of the PBGC Claims shall be
fixed following the entry of a Final Order in the PBGC
Litigation, or if a determination of the priority and
status of such Claims is not made in the PBGC
Litigation, upon entry of a Final Order fixing the
priority and status of the PBGC Claims.  If it is
determined in the PBGC Litigation that the Reorganized
Debtor has an obligation to assume the Raymark Plans,
then the Reorganized Debtor shall assume the
obligations under the Raymark Plans to the extent
provided by the terms of such Final Order entered in
the PBGC Litigation in accordance with the first
sentence of Section 8.6 of the Plan.  If it is
determined in a Final Order that (i) Allowed PBGC
Claims are entitled to payment as Administrative
Expense Claims or Priority Claims, all holders of
Allowed PBGC Claims shall be afforded the treatment
specified for holders of Allowed Administrative Expense
Claims in Section 2.1 of this Plan or Allowed Priority
Claims in Section 3.2 of this Plan, as appropriate, or
(ii) the PBGC Claims constitute Unsecured Claims, each
holder of an Allowed PBGC Claim shall be considered a
holder of an Allowed Claim in Class 3 and shall receive
the treatment afforded to holders of Allowed Claims in
Class 3.  If, as of the Effective Date, the PBGC
Litigation has not been resolved by the entry of a
Final Order and the Chapter 11 proceedings with respect
to Raymark have been dismissed, converted to
proceedings under Chapter 7, concluded by the entry of
a Final Order closing such cases or otherwise
terminated, and the Chapter 11 Trustee for Raymark
shall no longer be carrying out her duties as
administrator and trustee of the Raymark Plans, then
the Reorganized Debtor shall administer the Raymark
Plans until the entry of a Final Order in the PBGC
Litigation; provided, however, that the Debtor or the
Reorganized Debtor's administration of the Raymark
Plans prior to the entry of a Final Order in the PBGC
Litigation shall not be considered an admission of
liability or responsibility as the employer or
contributing sponsor of the Raymark Plans in the PBGC
Litigation or in any way constitute a waiver of any of
the Debtor's or the Reorganized Debtor's rights
therein, all of which shall be specifically preserved.
Upon the entry of a Final Order in the PBGC Litigation,
the Debtor and/or the Reorganized Debtor shall only be
required to act in accordance with the terms of such
Final Order and applicable law to the extent not
inconsistent with the terms of the Final Order.
3.2.3.4.5 Treatment of PI Trust Claims
All PI Trust Claims shall be satisfied
pursuant to the terms, provisions, and procedures of
the PI Trust Agreement and the PI Trust Claims
Resolution and Distribution Procedures from the PI
Trust Share. The PI Trust will be funded in accordance
with the provisions of Section 10 of the Plan. The sole
recourse of the holder of a PI Trust Claim shall be to
the PI Trust, and such holder shall have no right
whatsoever at any time to assert its PI Trust Claim,
against the Debtor, Reorganized Debtor or any PI
Protected Party or any property or interests in
property of the Debtor or the Reorganized Debtor or any
PI Protected Party. Without limiting the foregoing, on
the Effective Date, the Asbestos PI Permanent
Channelling Injunction shall apply to all holders of PI
Trust Claims and all Entities shall be permanently and
forever stayed, restrained, and enjoined from taking
any actions for the purpose of, directly or indirectly,
collecting, recovering, or receiving payment of, on, or
with respect to any PI Trust Claims (other than actions
brought to enforce any right or obligation under the
Plan, any exhibits to the Plan or any other agreement
or instrument between the Debtor, the Reorganized
Debtor and the PI Trust, which actions shall be in
conformity and compliance with the provisions hereof).
Nothing contained herein shall constitute or be deemed a waiver
of any claim, right, or cause of action that the Debtor, the
Reorganized Debtor, or the PI Trust may have against any Entity
in connection with or arising out of a PI Trust Claim.
3.2.4 Class 4.  Affiliate Claims
3.2.4.1 Classification
Class 4 consists of all Affiliate Claims.
3.2.4.2 Treatment
At the option of the Debtor and in accordance
with section 1124 of the Bankruptcy Code, the Allowed Affiliate
Claims shall be treated in one of the following ways
a. The legal, equitable and contractual rights to
which such Allowed Affiliate Claims entitles the holder
of any such Allowed Affiliate Claim shall be unaltered
by the Plan.
or
b. On the later of the Effective Date or the date
on which any Affiliate Claim becomes Allowed, the
holder of such Allowed Affiliate Claim shall be paid
the Allowed Amount of such Affiliate Claim, in full, in
cash.
or
c. Such Affiliate Claims will be otherwise treated
in any other manner so that such Affiliate Claims shall
otherwise be rendered unimpaired pursuant to Section
1124 of the Bankruptcy Code.
3.2.4.3 Status
Class 4 is not impaired. The holders of
Claims in Class 4 are deemed to accept the Plan and, accordingly,
are not entitled to vote to accept or reject the Plan.
3.2.5 Class 5.  Equity Interests
3.2.5.1 Classification
Class 5 consists of all Equity Interests.
3.2.5.2 Treatment
The holders of Equity Interests will retain
their shares of Existing Raytech Common Stock and Options.
Following issuance of the New Raytech Common Stock, the Existing
Raytech Common Stock will constitute ten (10%) percent on a fully
diluted basis (as of the Effective Date) of the issued and
outstanding Raytech Common Stock on the Effective Date.  The
holders of Equity Interests will also receive the benefits of the
Shareholders' Agreement annexed to the Plan as Exhibit G.

3.2.5.3 Status
Class 5 is impaired.  The holders of Equity
Interests in Class 5 are entitled to vote to accept or reject the
Plan.
3.3 Controversy Concerning Impairment.
In the event of a controversy as to whether any class
of Claims or Equity Interests is impaired under the Plan, the
Bankruptcy Court shall, after notice and a hearing, determine
such controversy prior to the Confirmation Date.
ARTICLE 4

MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN
4.1 Modification of the Plan.
The Debtor may alter, amend, or modify the Plan under
section 1127(a) of the Bankruptcy Code at any time prior to the
Confirmation Date so long as the Plan, as modified, meets the
requirements of sections 1122 and 1123 of the Bankruptcy Code.
After the Confirmation Date and prior to the Effective Date, the
Debtor may alter, amend, or modify the Plan in accordance with
section 1127(b) of the Bankruptcy Code.
4.2 Revocation or Withdrawal.
4.2.1 Right to Revoke
The Plan may be revoked or withdrawn by the
Debtor prior to the Confirmation Date.
4.2.2 Effect of Withdrawal or Revocation
If the Plan is revoked or withdrawn prior to the
Confirmation Date, then the Plan shall be deemed null and void.
In such event, nothing contained herein shall be deemed to
constitute a waiver or release of any claims by the Debtor or any
other Entity or to prejudice in any manner the rights of the
Debtor or any Entity in any further proceedings involving the
Debtor.
4.3 Amendment of Plan Documents.
From and after the Effective Date, the authority to
amend, modify, or supplement the exhibits to the Plan and any
documents attached to such exhibits shall be as provided in such
exhibits and their respective attachments.
ARTICLE 5

PROVISIONS FOR TREATMENT OF DISPUTED CLAIMS
5.1 Objections to Claims; Prosecution of Disputed Claims.
The Reorganized Debtor shall object to the allowance of
Claims filed with the Bankruptcy Court (other than PI Trust
Claims) with respect to which the Reorganized Debtor disputes
liability in whole or in part.  All objections that are filed and
prosecuted by the Reorganized Debtor as provided herein shall be
litigated to Final Order by the Reorganized Debtor or compromised
and settled in accordance with the business judgment of the
Reorganized Debtor.  Unless otherwise provided herein or ordered
by the Bankruptcy Court, all objections by the Reorganized Debtor
to Claims shall be served and filed no later than ninety (90)
days after the Effective Date, subject to any extensions granted
pursuant to a further order of the Bankruptcy Court.  The Claims
listed on Schedule 5.1 to the Plan shall be deemed Disputed
Claims as of the Confirmation Date.
5.2 PI Trust Claims Resolution and Distribution Procedures.
All PI Trust Claims shall be satisfied in accordance
with the PI Trust Claims Resolution and Distribution Procedures
as set forth on Exhibit "E" to the Plan.
5.3 Distributions on Account of Disputed Claims.
Notwithstanding Section 3.2 hereof, a Distribution
shall only be made to the holder of a Disputed Claim when, and to
the extent that, such Disputed Claim becomes Allowed. Such
Distributions shall be made in accordance with Section 10.3
hereof and no interest shall be paid on account of Disputed
Claims that later become Allowed, except to the extent that
payment of interest is required under section 506(b) of the
Bankruptcy Code or by applicable law. No Distribution shall be
made with respect to all or any portion of any Disputed Claim
pending the entire resolution thereof in the manner prescribed by
section 5.1 hereof.
ARTICLE 6

ACCEPTANCE OR REJECTION OF THE PLAN
6.1 Impaired Classes to Vote.
Each holder of a Claim or Equity Interest in an
impaired class of Claims or Equity Interests shall be entitled to
vote to accept or reject the Plan to the extent and in the manner
provided herein or in the Voting Procedures Order.
6.2 Acceptance by Class of Claims.
Acceptance of the Plan by any impaired class of Claims
or Equity Interests shall be determined in accordance with the
Voting Procedures Order and the Bankruptcy Code.
6.3 Nonconsensual Confirmation.
In the event that any impaired class of Claims or
Equity Interests shall fail to accept the Plan in accordance with
section 1129(a) of the Bankruptcy Code, the Debtor reserves the
right to (a) request that the Bankruptcy Court confirm the Plan
in accordance with section 1129(b) of the Bankruptcy Code with
respect to such non-accepting class, in which case the Plan shall
constitute a motion for such relief, or (b) amend the Plan in
accordance with section 4.1 hereof.
ARTICLE 7

IMPLEMENTATION OF THE PLAN
7.1 Amendment of Certificate of Incorporation.
The Certificate of Incorporation shall be amended and
restated as of the Effective Date in substantially the form of
the Amended and Restated Certificate of Incorporation, inter
alia, (a) to prohibit the issuance of nonvoting equity securities
as required by section 1123(a)(6) of the Bankruptcy Code, subject
to further amendment of such Amended and Restated Certificate of
Incorporation as permitted by applicable law, (b) to authorize
the creation of 45,751,779 shares of New Raytech Common Stock, of
which (i) 38,233,989 shares shall be issued pursuant to the
provisions of the Plan and (ii) 7,517,790 shares shall be
reserved for future issuance, and (c) to effectuate the
provisions of the Plan.
7.2 Amendment of By-Laws.
The By-Laws of Raytech shall be amended and restated as
of the Effective Date in substantially the form of the Amended
and Restated By-Laws.
7.3 Creation of PI Trust and Appointment of Trustees.
On the Confirmation Date, the Bankruptcy Court will be
requested to confirm the appointment of (i) the individuals
selected by the Creditors Committee and the Future Claimants'
Representative to serve as Trustees of the PI Trust, (ii) the
individuals selected by the Creditors' Committee to serve as
members of the TAC, as such term is defined in the PI Trust
Agreement and (iii) the individual selected by the Future
Claimants' Representative to serve as the Legal Representative,
as such term is defined in the PI Trust Agreement.  On the
Effective Date, the PI Trust shall be created and shall assume
all liabilities of the Debtor and the Reorganized Debtor to the
holders of PI Trust Claims.  On the Effective Date, all assets
and properties representing the PI Trust Share as of the
Effective Date shall vest in the PI Trust.
7.4 Distributions under the Plan.
Whenever any Distribution to be made under this Plan
shall be due on a day other than a Business Day, such
Distribution shall instead be made, without interest, on the
immediately succeeding Business Day, but shall be deemed to have
been made on the date due. For federal income tax purposes, a
Distribution will be allocated to the principal amount of a Claim
first and then, to the extent the Distribution exceeds the
principal amount of the Claim, to accrued but unpaid interest.
7.5 Distributions by the Reorganized Debtor and the PI Trust.
The Reorganized Debtor or the Disbursing Agent shall
make all Distributions required under the Plan, except to holders
of PI Trust Claims.  All distributions to holders of PI Trust
Claims shall be made from the PI Trust in accordance with the
terms of the PI Trust Agreement and the PI Trust Claims
Resolution and Distribution Procedures.
7.6 Delivery of Distributions and Undeliverable or Unclaimed
Distributions.
7.6.1 Delivery of Distributions in General
Distributions to holders of Allowed Claims shall
be made at the address of the holder of such Claim as indicated
on records of the Debtor.
7.6.2 Undeliverable Distributions
7.6.2.1 Holding of Undeliverable Distributions
If a Distribution to a holder of an Allowed
Claim is returned to the Reorganized Debtor as undeliverable, no
further distributions shall be made to such holder unless and
until the Reorganized Debtor is notified in writing of such
holder's then-current address.  Undeliverable Distributions shall
remain in the possession of the Reorganized Debtor pursuant to
this Section 7.6.2 until such time as a Distribution becomes
deliverable.  Undeliverable cash  shall not be entitled to any
interest, dividends or other accruals of any kind.
7.6.2.2 After Distributions Become Deliverable
Within 20 days after the end of each calendar
quarter following the Initial Distribution Date, the Reorganized
Debtor shall make all Distributions that become deliverable
during the preceding calendar quarter.
7.6.2.3 Failure to Claim Undeliverable Distributions
In an effort to ensure that all holders of
Allowed Claims receive their allocated Distributions, the
Reorganized Debtor will file with the Bankruptcy Court a listing
of unclaimed Distribution holders.  This list will be maintained
for the Retention Period.  Any holder of an Allowed Claim that
does not assert a Claim pursuant to the Plan for an undeliverable
Distribution prior to the expiration of the Retention Period
shall have its Claim for such undeliverable Distribution
discharged and shall be forever barred from asserting any such
Claim against the Reorganized Debtor or its property.  In such
cases, any property held for Distribution on account of such
Allowed Claims shall be property of the Reorganized Debtor, free
of any restrictions thereon.  Nothing contained in the Plan shall
require the Reorganized Debtor to attempt to locate any holder of
an Allowed Claim.
7.7 Manner of Payment under the Plan.
Unless the Entity receiving a payment agrees otherwise,
any payment in cash to be made by the Debtor or the Reorganized
Debtor shall be made, at the election of the Debtor or the
Reorganized Debtor (as the case may be), by check drawn on a
domestic bank or by wire transfer from a domestic bank.
7.8 Fractional Shares or Other Distributions.
Notwithstanding anything to the contrary contained
herein, no fractional shares of New Raytech Common Stock shall be
distributed and no cash payments of fractions of cents will be
made. Fractional cents shall be rounded to the nearest whole cent
(with .5 cent or less to be rounded down). Fractional shares
shall be rounded to the nearest whole share (with .5 share or
less to be rounded down).
7.9 Occurrence of the Confirmation Date.
The following shall constitute conditions to
confirmation of the Plan
7.9.1 The Bankruptcy Court makes the following findings,
each of which shall be contained in the Confirmation Order
7.9.1.1  The Asbestos PI Permanent Channeling Injunction
is to be implemented in connection with the PI Trust and the
Plan.
7.9.1.2  The PI Trust is to be funded in whole or in part
by securities of the Debtor and by the obligations of the
Debtor to make future payments, as described more fully
herein.
7.9.1.3   At the time of the order for relief with
respect to Raytech, Raytech had been named as a defendant in
personal injury, wrongful death, and property damage actions
seeking recovery for damages allegedly caused by the
presence of, or exposure to, asbestos or asbestos-containing
products.
7.9.1.4   The PI Trust, as of the Effective Date, will
assume the liabilities of the Debtor with respect to the PI
Trust Claims.
7.9.1.5   The Debtor is likely to be subject to
substantial future Demands for payment arising out of the
same or similar conduct or events that gave rise to the
Claims that are addressed by the Asbestos PI Permanent
Channeling Injunction.
7.9.1.6   The actual amounts, numbers, and timing of
the future Demands cannot be determined.
7.9.1.7   Pursuit of the Demands outside the procedures
prescribed by the Plan is likely to threaten the Plan's
purpose to deal equitably with Claims and future Demands.
7.9.1.8   The terms of the Asbestos PI Permanent
Channeling Injunction, including any provisions barring
actions against third parties pursuant to section
524(g)(4)(A), are set out in the Plan and in any disclosure
statement supporting the Plan.
7.9.1.9   The Plan establishes in Class 3A a separate
sub-class in Class 3 for the purpose of permitting holders
of PI Trust Claims whose Claims are to be addressed by the
PI Trust to vote as a separate class for the purposes of
Section 524(g) of the Bankruptcy Code, and the total number
of claimants in such sub-class has voted by at least
seventy-five (75%) percent in favor of the Plan.
7.9.1.10 Class 3 as a whole has voted by at least 66
2/3 percent (66.67%) in amount and fifty (50%) percent in
number favor of the Plan.
7.9.1.11 Pursuant to court orders or otherwise, the PI
Trust will operate through mechanisms such as structured,
periodic, or supplemental payments, pro rata distributions,
matrices, or periodic review of estimates of the numbers and
values of present Claims and future Demands, or other
comparable mechanisms, that provide reasonable assurance
that the PI Trust will value, and be in a financial position
to pay, present Claims and future Demands that involve
similar Claims in the same manner.
7.9.1.12 The Future Claimants' Representative was
appointed as part of the proceedings leading to issuance of
the Asbestos PI Permanent Channeling Injunction for the
purpose of protecting the rights of persons that might
subsequently assert Demands that are addressed in the
Asbestos PI Permanent Channeling Injunction and transferred
to the PI Trust.
7.9.1.13 The identification of each PI Protected Party
in the Asbestos PI Permanent Channeling Injunction is fair
and equitable with respect to persons that might
subsequently assert Demands against each such PI Protected
Party, in light of the benefits provided, or to be provided,
to the PI Trust by or on behalf of any such PI Protected
Party.
7.9.2 The Confirmation Order shall be, in form and
substance, acceptable to the Debtor.
The Plan shall not be confirmed and the Confirmation Order shall
not be entered until and unless each of the foregoing conditions
to Confirmation is either satisfied or waived by the Debtor.
Notwithstanding the preceding sentence, the Debtor may not waive
the conditions to confirmation contained in Sections 7.9.1.1
through 7.9.1.13 without the consent of the Creditors' Committee,
the Equity Committee and the Future Claimants' Representative.
7.10 Occurrence of the Effective Date.
The "effective date of the plan," as used in section
1129 of the Bankruptcy Code, shall not occur, and the Plan shall
be of no force and effect, until the Effective Date. The
occurrence of the Effective Date is subject to satisfaction of
the following conditions precedent
7.10.1 The Confirmation Order has become a Final Order,
or, if not, then at least thirty (30) days have elapsed
since the Confirmation Date.
7.10.2 The Bankruptcy Court and/or the District Court, as
required, shall have entered an order or orders establishing
the Asbestos PI Permanent Channeling Injunction, which shall
contain terms satisfactory to the Debtor and which order or
orders shall have become Final Orders.
7.10.3 The Asbestos PI Permanent Channeling Injunction
shall be in full force and effect.
7.10.4 No proceedings to estimate any Claims are pending.
7.10.5 All Trustees, the members of the TAC and the Legal
Representative have executed the PI Trust Agreement.
7.10.6 Rulings from the IRS or an opinion of counsel have
been obtained with respect to the qualification of the PI
Trust as a "qualified settlement fund" within the meaning
of Treasury Regulation section 1.468B-1, et seq.,
promulgated under section 468B of the Internal Revenue Code
and pursuant to sections 1032, 162(a), 461(b) of the
Internal Revenue Code.
7.10.7 Rulings from the IRS or an opinion of counsel have
been obtained with respect to the application of section
382, 108 (e)(2) and 162 of the Internal Revenue Code to the
PI Trust.
Notwithstanding the foregoing, the Debtor reserves, in its
sole discretion, the right, to waive the occurrence of any
of the foregoing conditions precedent to the Effective Date
or to modify any of such conditions precedent. Any such
waiver of a condition precedent hereof may be effected at
any time, without notice, without leave or order of the
Bankruptcy Court, and without any formal action other than
the proceeding to consummate the Plan.  Notwithstanding the
preceding sentences, the Debtor may not without the consent
of the Creditors' Committee, the Equity Committee or the
Future Claimants' Representative waive the conditions to the
Effective Date contained in (x) Sections 7.10.2, 7.10.3,
7.10.6, if such waiver would terminate the effectiveness of
the Asbestos PI Permanent Channeling Injunction and (y)
7.10.7, if such waiver would prohibit the Debtor from
employing fresh start accounting or other beneficial
accounting practices available to a debtor following
confirmation and the effectiveness of a Chapter 11 plan.
Any actions required to be taken on the Effective Date shall
take place and shall be deemed to have occurred
simultaneously, and no such action shall be deemed to have
occurred prior to the taking of any other such action.  If
the Debtor decides that one of the foregoing conditions
cannot be satisfied and the occurrence of such condition is
not waived by the Debtor, then the Debtor shall file a
notice of the failure of the Effective Date with the
Bankruptcy Court, at which time the Plan and the
Confirmation Order shall be deemed null and void.
7.11 Management of the Reorganized Debtor.
On the Effective Date, the Board of Directors shall
consist of nine (9) directors, one appointed by the Equity
Committee (the "Equity Committee Appointee") and the remaining
directors appointed by the Creditors' Committee, following
consultation with the Debtor, the Future Claimants'
Representative and the Governments.  The directors shall be
divided into three classes consisting of three (3) Class I
directors, whose terms will commence on the Effective Date and
expire at the first annual meeting of shareholders of Reorganized
Raytech in 2001, three (3) Class II directors whose terms will
expire at the second annual meeting of shareholders of
Reorganized Raytech in 2002 and three (3) Class III directors,
whose terms will expire at the third annual meeting of
shareholders of Reorganized Raytech in 2003.  Directors elected
annually to fill the seats of directors whose terms expire in
that year shall be elected for terms of three (3) years.
Notwithstanding the preceding sentence, the Equity Committee
Appointee shall be considered a Class III director and shall
serve until the third annual meeting of shareholders of
Reorganized Raytech in 2003; provided, however, that such term
will terminate in the event that the PI Trust sells its entire
interest in the stock of the Reorganized Debtor and the purchaser
or purchasers have offered to purchase all remaining shares of
the Reorganized Debtor not held by the PI Trust at the same price
and upon the same terms and conditions as offered to the PI
Trust.  The officers of the Debtor immediately prior to the
Effective Date shall serve as the officers of the Reorganized
Debtor on and after the Effective Date in accordance with any
employment agreement with the Reorganized Debtor and applicable
nonbankruptcy law.
7.12 Corporate Action.
On the Effective Date, the adoption of the Amended and
Restated Certificate of Incorporation, the filing by the
Reorganized Debtor of the Amended and Restated Certificate of
Incorporation, and the adoption of the Amended and Restated By-
Laws, as contemplated by sections 7.1 and 7.2 hereof, shall be
authorized and approved in all respects, in each case without
further action under applicable law, regulation, order, or rule,
including, but not limited to, any action by the stockholders or
directors of the Debtor, the Debtor in Possession, or the
Reorganized Debtor. On the Effective Date or as soon thereafter
as is practicable, the Reorganized Debtor shall file with the
Secretary of State of the State of Delaware, in accordance with
the applicable Delaware statutes, rules and regulations, the
Amended and Restated Certificate of Incorporation.  On the
Effective Date, the issuance of the New Raytech Common Stock, the
approval and effectiveness of the employment agreements, and
other benefits described in sections 7.11, 7.12, 8.5 and 8.6
hereof, and other matters provided under the Plan involving the
corporate structure of the Reorganized Debtor or corporate action
by the Reorganized Debtor shall be deemed to have occurred, be
authorized, and shall be in effect from and after the Effective
Date without requiring further action under applicable law,
regulation, order, or rule, including, but not limited to, any
action by the stockholders or directors of the Debtor, the Debtor
in Possession, or the Reorganized Debtor.  Notwithstanding the
foregoing, nothing in this section shall excuse the Debtor or
Debtor in Possession from timely performing its obligations under
the Plan.
7.13 Effectuating Documents and Further Transactions.
Each of the officers of the Debtor and the Reorganized
Debtor is authorized, in accordance with his or her authority
under the resolutions of the Board of Directors, to execute,
deliver, file, or record such contracts, instruments, releases,
indentures, and other agreements or documents and take such
actions as may be necessary or appropriate to effectuate and
further evidence the terms and conditions of the Plan and any
notes or securities issued pursuant to the Plan.
7.14 Listing of Raytech Common Stock.
The Raytech Common Stock is currently listed on the New
York Stock Exchange and the Reorganized Debtor shall use its
reasonable efforts to maintain such listing.  If such listing is
not maintained, the Reorganized Debtor shall use its reasonable
efforts to cause the listing of the Raytech Common Stock on a
recognized national securities exchange.
7.15 Allocation of Plan Distributions Between Principal and
Interest.
To the extent that any Allowed Claim entitled to a
Distribution under the Plan is comprised of indebtedness and
accrued but unpaid interest thereon, such Distribution shall, for
federal income tax purposes, be allocated to the principal amount
of the Claim first and then, to the extent the consideration
exceeds the principal amount of the Claim, to accrued but unpaid
interest.
7.16 District Court Approval of the Confirmation Order, the
Asbestos PI Permanent Channeling Injunction and the Claims
Trading Injunction.
The Debtor may seek to have the Confirmation Order, the
Asbestos PI Permanent Channeling Injunction and the Claims
Trading Injunction (which the Debtor shall seek to have entered
by the Bankruptcy Court as part of the Confirmation Order) either
entered or affirmed by the District Court.
ARTICLE 8

EXECUTORY CONTRACTS AND UNEXPIRED LEASES
8.1 Assumption of Executory Contracts and Unexpired Leases.
Any executory contracts or unexpired leases listed on
Schedule "8.1" to the Plan shall be deemed to have been assumed
by the Reorganized Debtor on the Effective Date, and the Plan
shall constitute a motion to assume such executory contracts and
unexpired leases. Subject to the occurrence of the Effective
Date, entry of the Confirmation Order by the Clerk of the
Bankruptcy Court shall constitute approval of such assumptions
pursuant to section 365(a) of the Bankruptcy Code and a finding
by the Bankruptcy Court that each such assumption is in the best
interest of the Debtor, its estate, and all parties in interest
in the Chapter 11 Case. With respect to each such executory
contract or unexpired lease assumed by the Reorganized Debtor,
unless otherwise determined by the Bankruptcy Court pursuant to a
Final Order or agreed to by the parties thereto prior to the
Effective Date, the dollar amount required to cure any defaults
of the Debtor existing as of the Confirmation Date shall be
conclusively presumed to be the amount set forth in Schedule
"8.1" with respect to such executory contract or unexpired
lease. Subject to the occurrence of the Effective Date, any such
cure amount shall be treated as an Allowed Administrative Expense
Claim under the Plan, and, upon payment of such Allowed
Administrative Expense Claim, all defaults of the Debtors
existing as of the Confirmation Date with respect to such
executory contract or unexpired lease shall be deemed cured.
8.2 Rejection of Executory Contracts and Unexpired Leases.
Any executory contracts or unexpired leases of the
Debtor that (i) are not listed on Schedule "8.1" to the Plan,
(ii) have not been assumed by the Debtor with the approval of the
Bankruptcy Court, and (iii) are not the subject of pending
motions to assume at the Confirmation Date shall be deemed to
have been rejected by the Debtor, the Plan shall constitute a
motion to reject such executory contracts and unexpired leases,
and the Reorganized Debtor shall have no liability thereunder
except as is specifically provided in the Plan. Entry of the
Confirmation Order by the Clerk of the Bankruptcy Court shall
constitute approval of such rejections pursuant to section 365(a)
of the Bankruptcy Code and a finding by the Bankruptcy Court that
each such rejected executory contract or unexpired lease is
burdensome and that the rejection thereof is in the best interest
of the Debtor, its estate, and all parties in interest in the
Chapter 11 Case.
8.3 Claims Arising from Rejection or Termination.
Claims created by the rejection of executory contracts
or unexpired leases (including, but not limited to, the rejection
provided in Section 8.4.2 of the Plan) or the expiration or
termination of any executory contract or unexpired lease prior to
the Confirmation Date must be filed with the Bankruptcy Court and
served on the Debtor no later than thirty (30) days after (i) in
the case of an executory contract or unexpired lease that was
terminated or expired by its terms prior to the Confirmation
Date, the Confirmation Date, (ii) in the case of an executory
contract or unexpired lease rejected by the Debtor, the entry of
the order of the Bankruptcy Court authorizing such rejection, or
(iii) in the case of an executory contract or unexpired lease
that is deemed rejected pursuant to section 8.2 of the Plan, the
Confirmation Date. Any such Claims for which a proof of claim is
not filed and served within such time will be forever barred from
assertion and shall not be enforceable against the Debtor, its
estate, assets, properties, or interests in property, or the
Reorganized Debtor or its estate, assets, properties, or
interests in property and shall be discharged under Section 1141
of the Bankruptcy Code. Unless otherwise ordered by the
Bankruptcy Court, all such Claims that are timely filed and
Allowed as provided herein shall be treated as Allowed Unsecured
Claims under the Plan.
8.4 Insurance Policies.
8.4.1 Assumed Insurance Policies
To the extent that any or all of the insurance policies
set forth on Schedule "8.4.1" to the Plan are considered to be
executory contracts, then, notwithstanding anything contained in
sections 8.1 and 8.2 of the Plan to the contrary, the Plan shall
constitute a motion to assume the insurance policies set forth on
Schedule "8.4.1" to the Plan, and, subject to the occurrence of
the Effective Date, the entry of the Confirmation Order by the
Clerk of the Bankruptcy Court shall constitute approval of such
assumption pursuant to section 365(a) of the Bankruptcy Code and
a finding by the Bankruptcy Court that each such assumption is in
the best interests of the Debtor, its estate, and all parties in
interest in the Chapter 11 Case. Unless otherwise determined by
the Bankruptcy Court pursuant to a Final Order or agreed to by
the parties thereto prior to the Effective Date, no payments are
required to cure any defaults of the Debtor existing as of the
Confirmation Date with respect to each such insurance policy set
forth on Schedule "8.4.1" to the Plan. To the extent that the
Bankruptcy Court determines otherwise as to any such insurance
policy, the Debtor reserves the right to seek rejection of such
insurance policy or other available relief.
8.4.2 Rejected Insurance Policies
To the extent that any or all of the insurance policies
set forth on Schedule "8.4.2" to the Plan are considered to be
executory contracts, then, notwithstanding anything contained in
sections 8.1 and 8.2 of the Plan to the contrary, the Plan shall
constitute a motion to reject the insurance policies set forth on
Schedule "8.4.2" to the Plan, and the entry of the Confirmation
Order by the Clerk of the Bankruptcy Court shall constitute
approval of such rejection pursuant to section 365(a) of the
Bankruptcy Code and a finding by the Bankruptcy Court that each
such rejected insurance policy set forth on Schedule "8.4.2" to
the Plan is burdensome and that the rejection thereof is in the
best interests of the Debtor, its estate, and all parties in
interest in the Chapter 11 Case.
8.4.3 Reservation of Rights.
Nothing contained in the Plan, including this section
8.4, shall constitute a waiver of any claim, right, or cause of
action that the Debtor or the Reorganized Debtor, as the case may
be, may hold against the insurer, including, but not limited to,
under any policy of insurance.
8.5 Indemnification and Reimbursement Obligations.
For purposes of the Plan, the obligation of the Debtor
to indemnify and reimburse its directors or officers that were
directors or officers, respectively, as at the Petition Date,
other than the Smith Entities, or who became directors or
officers after the Petition Date, other than the Smith Entities,
against and for any obligations pursuant to articles of
incorporation, by-laws, applicable state law, or specific
agreement, or any combination of the foregoing shall survive
Confirmation of the Plan, remain unaffected thereby, and not be
discharged in accordance with section 1141 of the Bankruptcy
Code, irrespective of whether indemnification or reimbursement is
owed in connection with an event occurring before, on, or after
the Petition Date.
8.6 Compensation and Benefit Programs.
All of the Debtor's obligations under the Raytech
Corporation Retirement Plan for Hourly Employees shall be deemed
assumed by the Reorganized Debtor, survive confirmation of this
Plan, remain unaffected thereby, and not be discharged in
accordance with Section 1141 of the Bankruptcy Code.  All other
of the Debtor's employment and severance policies, including, but
not limited to, the Severance Program, and all compensation and
benefit plans, policies and programs of the Debtor applicable to
their present and former employees, officers, and directors,
including, but not limited to, all savings plans, retirement
plans, health care plans, disability plans, severance benefit
plans, incentive plans, and life, accidental death, and
dismemberment insurance plans, shall be deemed to be, and shall
be treated as though they are, executory contracts that are
deemed assumed under the Plan, and the Debtor's obligations under
such plans, policies, and programs shall be deemed assumed
pursuant to section 365(a) of the Bankruptcy Code, survive
Confirmation of the Plan, remain unaffected thereby, and not be
discharged in accordance with section 1141 of the Bankruptcy
Code. Any defaults existing under any of such plans, policies,
and programs shall be cured promptly after they become known by
the Debtor.
ARTICLE 9

RETENTION OF JURISDICTION
Pursuant to sections 105(a) and 1142 of the Bankruptcy
Code, the Bankruptcy Court shall retain and shall have exclusive
jurisdiction over any matter (a) arising under the Bankruptcy
Code, (b) arising in or related to the Chapter 11 Case or the
Plan, or (c) that relates to the following
9.1 To interpret, enforce, and administer the terms of the PI
Trust Agreement (including all annexes and exhibits thereto), and
the restrictions on transfer of New Raytech Common Stock
contained in the Amended and Restated Certificate of
Incorporation and the Confirmation Order.
9.2 To hear and determine any and all motions or applications
pending on the Confirmation Date for the assumption and/or
assignment or rejection of executory contracts or unexpired
leases to which the Debtor is a party or with respect to which
the Debtor may be liable, and to hear and determine any and all
Claims resulting therefrom or from the expiration or termination
of any executory contract or unexpired lease prior to the
Confirmation Date;
9.3 To determine any and all adversary proceedings,
applications, motions, and contested or litigated matters that
may be pending on the Effective Date or that, pursuant to the
Plan, may be instituted by the Reorganized Debtor after the
Effective Date, including, but not limited to, any claims to
avoid any preferences, fraudulent transfers, or other avoidable
transfers, or otherwise to recover assets for the benefit of the
Debtor's estate;
9.4 To hear and determine any objections to the allowance of
Claims arising prior to the Effective Date, whether filed,
asserted, or made before or after the Effective Date, including,
but not limited to, to hear and determine any objections to the
classification of any Claim and to allow or disallow any Disputed
Claim in whole or in part;
9.5 To issue such orders in aid of execution of the Plan to
the extent authorized or contemplated by section 1142 of the
Bankruptcy Code;
9.6 To consider any modifications of the Plan, remedy any
defect or omission, or reconcile any inconsistency in any order
of the Bankruptcy Court, including, but not limited to, the
Confirmation Order;
9.7 To hear and determine all applications for allowances of
compensation and reimbursement of expenses of professionals under
sections 330 and 331 of the Bankruptcy Code and any other fees
and expenses authorized to be paid or reimbursed under the Plan;
9.8 To hear and determine all controversies, suits, and
disputes that may relate to, impact upon, or arise in connection
with the Plan (and all Exhibits to the Plan) or its
interpretation, implementation, enforcement, or consummation;
9.9 To the extent that Bankruptcy Court approval is required,
to consider and act on the compromise and settlement of any Claim
or cause of action by or against the Debtor's estate;
9.10 To determine such other matters that may be set forth
in the Plan, the Confirmation Order, the Claims Trading
Injunction or the Asbestos PI Permanent Channeling Injunction, or
that may arise in connection with the Plan, the Confirmation
Order, the Claims Trading Injunction or the Asbestos PI Permanent
Channeling Injunction;
9.11 To hear and determine any proceeding that involves the
validity, application, construction, enforceability, or
modification of the Claims Trading Injunction or the Asbestos PI
Permanent Channeling Injunction or of the application of section
524(g) of the Bankruptcy Code to the Asbestos PI Permanent
Channeling Injunction.
9.12 To hear and determine matters concerning state, local,
and federal taxes, fines, penalties, or additions to taxes for
which the Debtor or Debtor in Possession may be liable, directly
or indirectly, in accordance with sections 346, 505, and 1146 of
the Bankruptcy Code; and
9.13 To enter an order or final decree closing the Chapter
11 Case.
To the extent that the Bankruptcy Court is not permitted under
applicable law to preside over any of the foregoing matters, the
reference to the "Bankruptcy Court" in this Article 9 shall be
deemed to be replaced by the "District Court." Notwithstanding
anything in this Article 9 to the contrary, the satisfaction of
PI Trust Claims and the forum in which such claims will be
determined will be governed by and in accordance with the PI
Trust Claims Resolution and Distribution Procedures.
ARTICLE 10

TRANSFERS OF PROPERTY TO AND ASSUMPTION OF
CERTAIN LIABILITIES BY THE PI TRUST
10.1 Transfer of Certain Property on the Effective Date.
10.1.1 Transfer of Books and Records
On the Effective Date or as soon thereafter as is
practicable, the Reorganized Debtor shall transfer and assign, or
cause to be transferred and assigned, to the PI Trust the books
and records of the Debtor that pertain directly to PI Trust
Claims. The Debtor will request that the Bankruptcy Court, in the
Confirmation Order, rule that such transfer does not result in
the destruction or waiver of any applicable privileges pertaining
to such books and records. If the Bankruptcy Court does not so
rule, at the option of the Reorganized Debtor, the Reorganized
Debtor will retain the books and records and enter into
arrangements to permit the Trustees to have access to such books
and records.
10.1.2 Transfer of Plan Consideration
On the Initial Distribution Date, the Reorganized
Debtor shall transfer and assign, or cause to be transferred and
assigned (x) to the PI Trust, the PI Trust Share as of the
Effective Date, less an appropriate reserve for payment of
Disputed Unsecured Claims which subsequently became Allowed, (y)
to the Governments, the Governments' Share as of the Effective
Date, less an appropriate reserve for payment of Disputed
Unsecured Claims which subsequently become Allowed and (z) the
amount of property payable to the holders of Allowed Unsecured
Claims on the Effective Date.
10.2 Assumption of Certain Liabilities by the PI Trust.
In consideration of the property transferred to the PI
Trust pursuant to section 10.1 hereof and in furtherance of the
purposes of the PI Trust and the Plan, the PI Trust shall assume
all liability and responsibility for all PI Trust Claims and the
Reorganized Debtor shall have no further financial or other
responsibility or liability therefor.
10.3 Distributions on Account of Disputed Claims Once
Allowed.
On each Quarterly Distribution Date, the Reorganized
Debtor or the Disbursing Agent, if one is appointed by the
Reorganized Debtor, will make Distributions on account of any
Disputed Claim that has become an Allowed Claim during the
preceding calendar quarter.  Such Distributions will be made
pursuant to the provisions of the Plan governing the applicable
class.  Any amounts which had been reserved for Disputed Claims
which are subsequently determined not to be due and owing in
respect of any such Disputed Claim upon allowance thereof shall
be distributed to the holders of Allowed Unsecured Claims, the PI
Trust or the Governments in accordance with the terms of the
Plan.
10.4 Certain Property Held in Trust by the Reorganized
Debtor.
If and to the extent that any property of the
Reorganized Debtor specified in section 10.1 hereof, under
applicable law or any binding contractual provision, cannot be
effectively transferred and assigned to the appropriate party
pursuant to section 10.1 hereof, or if for any reason after the
Effective Date the Reorganized Debtor shall retain or receive any
property that is owned by the Reorganized Debtor or the Debtor
(as the case may be) and is to be transferred to another party
pursuant to section 10.1 hereof, then the Reorganized Debtor
shall hold such property (and any proceeds thereof) in trust for
the benefit of the appropriate party and shall take such actions
with respect to such property (and any proceeds thereof) as such
party shall direct in writing.
10.5 Authority of the Debtor.
On the Confirmation Date, the Debtor shall be empowered
and authorized to take or cause to be taken, prior to the
Effective Date, all actions necessary to enable them to implement
effectively the provisions of the Plan and the PI Trust
Agreement.
ARTICLE 11

MISCELLANEOUS PROVISIONS
11.1 Payment of Statutory Fees.
All fees payable pursuant to section 1930 of title 28
of the United States Code, as determined by the Bankruptcy Court
at the hearing on confirmation of the Plan, shall be paid by the
Debtor on or before the Effective Date.
11.2 Discharge of the Debtor; Effect of Asbestos PI
Permanent Channeling Injunction.
The rights afforded in the Plan and the treatment of
all Claims and Equity Interests herein shall be in exchange for
and in complete satisfaction, discharge, and release of all
Claims and Equity Interests of any nature whatsoever, including
any interest accrued thereon from and after the Petition Date,
against the Debtor and the Debtor in Possession, or its assets,
properties, or interests in property. Except as otherwise
provided herein, on the Effective Date, all Claims against and
Equity Interests in the Debtor and the Debtor in Possession shall
be satisfied, discharged, and released in full. The Reorganized
Debtor shall not be responsible for any obligations of the Debtor
or the Debtor in Possession except those expressly assumed by the
Reorganized Debtor in the Plan. All Entities shall be precluded
and forever barred from asserting against the Debtor, the
Reorganized Debtor, its successors or assigns, or their assets,
properties, or interests in property any other or further Claims
based upon any act or omission, transaction, or other activity of
any kind or nature that occurred prior to the Effective Date,
whether or not the facts of or legal bases therefor were known or
existed prior to the Effective Date.  With respect to all PI
Trust Claims, the entry of the Asbestos PI Permanent Channeling
Injunction shall permanently and forever stay, enjoin, restrain
any Entity from taking any of the actions prohibited by the
Asbestos PI Permanent Channeling Injunction for the purpose of,
directly or indirectly, collecting, recovering or receiving
payment of, on, or with respect to any PI Trust Claim.
11.3 Rights of Action.
Any rights, claims, or causes of action accruing to the
Debtor or Debtor in Possession pursuant to the Bankruptcy Code or
pursuant to any statute or legal theory, including, but not
limited to, any avoidance or recovery actions under sections 544,
545, 547, 548, 549, 550, 551, and 553 of the Bankruptcy Code and
any rights to, claims, or causes of action for recovery under any
policies of insurance issued to or on behalf of the Debtor or
Debtor in Possession shall remain assets of the Debtor's estates
and, on the Effective Date, shall be transferred to the
Reorganized Debtor. The Reorganized Debtor shall be deemed the
appointed representative to, and may, pursue, litigate, and
compromise and settle any such rights, claims, or causes of
action, as appropriate, in accordance with what is in the best
interests of and for the benefit of the Reorganized Debtor.
Notwithstanding the foregoing or anything contained in this Plan
to the contrary, the Debtor shall forego any interest it may have
in any Claims for recovery from the tobacco industry, including
without limitation, manufacturers and distributors of tobacco
products, arising from that certain litigation entitled Raymark
Industries, Inc. v. The American Tobacco Company, et al. CV 98-
675, and shall forego any right or Claim it would assert against
Raymark for a share of any proceeds Raymark might realize from
any such Claims.  Any such rights or Claims to the extent
required for the PI Trust to realize the benefit therefrom, shall
be assigned to the PI Trust, or, if deemed necessary, shall be
pursued in the name of the Debtor or the Reorganized Debtor for
the benefit of the PI Trust.
11.4 Third Party Agreements.
The Distributions to the various classes of Claims
hereunder shall not affect the right of any Entity to levy,
garnish, attach, or employ any other legal process with respect
to such Distributions by reason of any claimed subordination
rights or otherwise. All of such rights and any agreements
relating thereto shall remain in full force and effect.
11.5 Dissolution of Committees.
On the Effective Date, the Creditors' Committee, the
Equity Committee and the Retiree Committee shall thereupon be
released and discharged of and from all further authority,
duties, responsibilities, and obligations relating to and arising
from and in connection with the Chapter 11 Case, and all such
committees shall be deemed dissolved; provided, however, that,
(i) in the event that the Effective Date occurs prior to the
Confirmation Order becoming a Final Order, the Creditors
Committee, the Equity Committee and the Retiree Committee may, at
their option, continue to serve and function for the purpose of
participating in any appeal of the Confirmation Order until such
time as the Confirmation Order becomes a Final Order and (ii) if
the Effective Date occurs prior to the conclusion of any
outstanding litigation or adversary proceedings in the Chapter 11
Case or prior to the entry of a Final Order with respect to final
fee applications of professionals retained by order of the
Bankruptcy Court during the Chapter 11 Case, the Creditors
Committee, the Equity Committee and the Retiree Committee may, at
their option, continue to serve until a Final Order is entered
with respect to such proceedings.  All post-effective date fees
and expenses of the professionals retained by the Creditors
Committee, Equity Committee and Retiree Committee shall be paid
by the Reorganized Debtor in the ordinary course of its business.
If there shall be any dispute regarding the payment of such fees
and expenses, the parties shall attempt to resolve such dispute
in good faith and if they shall fail to resolve such dispute,
they shall submit the dispute to the Bankruptcy Court for
resolution.
11.6 Exculpation.
None of the Reorganized Debtor, the Creditors'
Committee, the Equity Committee, the Retiree Committee, the
Future Claimants' Representative, or the Governments, or any of
their officers, directors, employees, attorneys, or agents shall
have or incur any liability to any Entity for any act or omission
in connection with or arising out of the pursuit of confirmation
of the Plan, the consummation of the Plan, or the administration
of the Plan or the property to be distributed under the Plan,
except for gross negligence or willful misconduct, and in all
respects shall be entitled to rely upon the advice of counsel
with respect to their duties and responsibilities under the Plan.
The Reorganized Debtor shall defend, hold harmless and indemnify
the Creditors' Committee, the Equity Committee, the Retiree
Committee, the Future Claimants' Representative and the
Governments and any of their officers, directors, employees,
attorneys, agents and members with respect to any such claim or
liability.
11.7 Releases
11.7.1 Except as otherwise specifically provided in the
Plan, for good and valuable consideration, the receipt and
sufficiency of which is acknowledged in this Plan, all current
and former officers and directors of the Debtor, other than the
Smith Entities, and all officers and directors of any Affiliate,
other than the Smith Entities, on and after the Effective Date,
are released from any and all Claims, obligations, rights, suits,
damages, causes of action, remedies and liabilities whatsoever,
whether known or unknown, foreseen or unforeseen, existing or
hereafter arising, in law, equity or otherwise, that any Entity
would have been legally entitled to assert in their own right
(whether individually or collectively) or on behalf of the holder
of any Claim or Equity Interest or other Entity, based in whole
or in part, upon any act or omission, transaction, agreement,
event or other occurrence taking place on or before the Effective
Date for claims or liabilities resulting from their services as
officers or directors of the Debtor or any Affiliate.
11.7.2 Specific Releases by Holders of Claims
On and after the Effective Date, each holder of a
Claim (i) who has accepted the Plan, or (ii) who is entitled to
receive a Distribution of property under the Plan, shall be
deemed to have unconditionally released all current and former
officers and directors of the Debtor and any Affiliate, other
than the Smith Entities, the Debtor, the Reorganized Debtor, the
Creditors' Committee, the Equity Committee, the Retiree
Committee, the Future Claimants' Representative and the
Governments, or any of their officers, directors, employees,
attorneys, members, or agents from any and all claims (as defined
in section 101(5) of the Bankruptcy Code), obligations, rights,
suits, damages, causes of action, remedies and liabilities
whatsoever, whether known or unknown, foreseen or unforeseen,
existing or hereafter arising, in law, equity or otherwise, that
such Entity would have been legally entitled to assert (whether
individually or collectively), based in whole or in part upon any
act or omission, transaction, agreement, event or other
occurrence taking place on or before the Effective Date in any
way relating or pertaining to (x) the Debtor or the Reorganized
Debtor, (y) the Chapter 11 Case, or (z) the negotiation,
formulation and preparation of the Plan or any related
agreements, instruments or other documents.
11.8 Title to Assets; Discharge of Liabilities.
Except as otherwise provided in the Plan, on the
Effective Date, title to all assets and properties and interests
in property dealt with by the Plan shall vest in the Reorganized
Debtor free and clear of all Claims, Equity Interests,
Encumbrances, and other interests, and the Confirmation Order
shall be a judicial determination of discharge of the liabilities
of the Debtor, except as provided in the Plan.
11.9 Surrender and Cancellation of Instruments.
In addition to the provisions of section 3.2 hereof,
each holder of a promissory note or other instrument evidencing a
Claim shall surrender such promissory note or instrument to the
Reorganized Debtor, and the Reorganized Debtor shall distribute
or cause to be distributed to the holder thereof the appropriate
Distribution hereunder. At the option of the Reorganized Debtor
(in its sole and absolute discretion), no Distribution hereunder
shall be made to or on behalf of any holder of such Claim unless
and until such promissory note or instrument is received or the
unavailability of such note or instrument is reasonably
established to the satisfaction of the Reorganized Debtor. In
accordance with section 1143 of the Bankruptcy Code, any such
holder of such a Claim that fails to surrender or cause to be
surrendered such promissory note or instrument or to execute and
deliver an affidavit of loss and indemnity reasonably
satisfactory to the Reorganized Debtor and, in the event that the
Reorganized Debtor requests, furnish a bond in form and substance
reasonably satisfactory to the Reorganized Debtor within the
Retention Period shall be deemed to have forfeited all rights,
claims, and interests and shall not participate in any
Distribution hereunder.
11.10 Notices.
Any notices, requests, and demands required or
permitted to be provided under the Plan, in order to be
effective, shall be in writing (including, but not limited to, by
facsimile transmission), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when
actually delivered or, in the case of notice by facsimile
transmission, when received and telephonically confirmed,
addressed as follows

If to the Debtor
Raytech Corporation

Four Corporate Drive, Suite 295

Shelton, CT 06484-0240

Attn LeGrande L. Young


With a copy to
Akin, Gump, Strauss, Hauer &
Feld, L.L.P.

590 Madison Avenue

New York, New York 10022-4616

Attn Daniel H. Golden, Esq.

And

Pullman & Comley, LLC

850 Main Street

P.O. Box 7006

Bridgeport, CT 06601-7006

Attn Elizabeth J. Austin, Esq.


If to the Creditors' Committee
Caplin & Drysdale, Chartered

399 Park Avenue

New York, NY 10022-4614

Attn Elihu Inselbuch, Esq.


If to the Equity Committee
Hopkins & Sutter

788 Sixteenth Street, N.W.

Washington, D.C. 20006

Attn Murray Drabkin, Esq.

Stephen Garcia, Esq.

     And

Zeisler & Zeisler

558 Clinton Avenue

Bridgeport, CT 06605

Attn Richard Zeisler, Esq.


If to the Futures
Representative
Carter & Civitello

Woodbridge Office Park

One Bradley Road, Suite 301

Woodbridge, CT 06525

Attn Robert F. Carter, Esq.

     And

Coan, Lewendon, Royston &
Gulliver, LLC

495 Orange Street

New Haven, CT 06511

Attn Carl T. Gulliver, Esq.


If to the State of Connecticut
DEP
Attorney General's Office

P.O. Box 120

Hartford, CT 06141-0120

Attn Krista E. Trousdale, Esq.


If to FMC
Neal G. Epstein, Esq.

Eckert Seamans Cherin &
Mellott, LLC

1515 Market Street

Ninth Floor

Philadelphia, PA 19102
If to the Justice Department
U.S. Department of Justice

Environmental Enforcement
Section

P.O. Box 7611

Ben Franklin Station

Washington, D.C. 20044

Attn Henry Friedman, Esq.


If to the United States Trustee
Office of the United States
Trustee

One Century Tower

265 Church Street, Suite 1103

New Haven, CT 06510

Attn Patricia Beary, Esq.
11.11 Headings.
The headings used in the Plan are inserted for
convenience only and neither constitute a portion of the Plan nor
in any manner affect the construction of the provisions of the
Plan.
11.12 Severability.
At the option of the Debtor, acting in its sole
discretion, any provision of the Plan, the Claims Trading
Injunction, the Confirmation Order, the Asbestos PI Permanent
Channeling Injunction, or any of the Exhibits to the Plan that
are determined to be prohibited, unenforceable, or invalid by a
court of competent jurisdiction or any other governmental Entity
with appropriate jurisdiction shall, as to any jurisdiction in
which such provision is prohibited, unenforceable, or
invalidated, be ineffective to the extent of such prohibition,
unenforceability, or invalidation without invalidating the
effectiveness of the remaining provisions of the Plan, the Claims
Trading Injunction, the Confirmation Order, the Asbestos PI
Permanent Channeling Injunction, and the Exhibits to the Plan or
affecting the validity or enforceability of such provisions in
any other jurisdiction.
11.13 Governing Law.
Unless a rule of law or procedure is supplied by
federal law (including the Bankruptcy Code and Bankruptcy Rules),
the laws of the State of Delaware, without giving effect to the
conflicts of laws principles thereof, shall govern the
construction of the Plan and any agreements, documents, and
instruments executed in connection with the Plan, except as
otherwise expressly provided in such instruments, agreements or
documents.
11.14 Filing of Additional Documents.
On or before the Effective Date, the Debtor shall file
with the Bankruptcy Court such agreements and other documents as
may be necessary or appropriate to effectuate and further
evidence the terms and conditions of the Plan.
11.15 Compliance with Tax Requirements.
In connection with the Plan, the Debtor and Reorganized
Debtor will comply with all withholding and reporting
requirements imposed by federal, state and local taxing
authorities, and all Distributions hereunder shall be subject to
such withholding and reporting requirements.
11.16 Exemption from Transfer Taxes.
Pursuant to section 1146(c) of the Bankruptcy Code, the
issuance, transfer, or exchange of notes or equity securities
under the Plan, the creation of any mortgage, deed of trust, or
other security interest, the making or assignment of any lease or
sublease, or the making or delivery of any deed or other
instrument of transfer under, in furtherance of, or in connection
with the Plan shall be exempt from all taxes as provided in such
section 1146.
11.17 Further Assurances.
The Debtor, the Reorganized Debtor and all holders of
Claims receiving Distributions under the Plan and all other
parties in interest shall, from time to time, prepare, execute
and deliver any agreements or documents and take any other action
as may be necessary or advisable to effectuate the provisions and
intent of this Plan at the cost of the Reorganized Debtor.

Dated:  April 19, 2000
Respectfully Submitted,
RAYTECH CORPORATION
By   /s/ LeGrande L. Young __
Name LeGrande L. Young
Title   Vice President,
Secretary and
          General Counsel


AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
Daniel H. Golden
David H. Botter
Geoffrey T. Raicht
590 Madison Avenue
New York, New York  10022

          - and -

PULLMAN & COMLEY, LLC


By/s/ Elizabeth J. Austin
     Elizabeth J. Austin

850 Main Street
P.O. Box 7006
Bridgeport, CT  06601-7006
Co-Counsel for the Debtor


SCHEDULE 8.1
CONTRACTS/UNEXPIRED LEASES


Supplier
Subject

American Stock Transfer & Trust
Transfer Agent
Anthem Blue Cross/Blue Shield
Medical Insurance
Administration
Automatic Data Processing
Payroll Administration
CT Corporation
Corporation Statutory Agent
Caravela Software, Inc.
Website Maintenance
First Union National Bank
Directors and Officers Trustee
Free Enterprise Telephone
Telephone Maintenance
GE Capital Fleet
Automobile Leases
IOS Capital
Copy Machine Lease
Merrill Lynch Pierce Fenner &
Smith
Savings Plans
Recordkeeping/Investment Trust
New York Stock Exchange
Exchange Listing
P & W Software, Inc.
Flex Plan Software Lease
Pierce Leahy Corporation
File Storage Lease
Pitney Bowes
Postage Machine Leases
Charles Schwab
Retirement Plan Trustee
Robert Scinto, Inc.
Corporate Headquarters Building
Lease
Shamrock Building Services
Building Cleaning Service


SCHEDULE 5.1
DISPUTED CLAIMS

All Retiree Claims
PBGC Claims
Raymark Trustee Claims
Claims of any Smith Entities
International Insurance Company

SCHEDULE 8.4.1.
ASSUMED INSURANCE POLICIES


Coverage
Carrier
Policy Number

General Liability
U.S. Fidelity &
Guaranty Company
SIR1003000600
Commercial
Automobile
Hartford Fire Ins.
Co.
31UENBQ9124
All Risk Property
American Protection
Insurance Co.
3ZG008363-01
ERISA
Bond/Dishonesty
Continental Ins. Co.
169588574
Travel Accident
Federal Insurance
Co.
6407-53-61
Fiduciary Liability
Legion Ins. Co.
LF20625307
Dir. & Officers Ins.
National Union Ins.
Co.
860-02-48
Workers Compensation
Wausau Business Ins.
Co.
0410-00-101498
Umbrella
Westchester Fire
Ins. Co.
CUA1046150
Life/AD&D
Guardian Life Ins.
Co.
308639
Long-Term Disability
Guardian Life Ins.
Co.
308639
Medical Ins. Stop
Loss
Anthem Blue Cross




SCHEDULE 8.4.2
REJECTED INSURANCE POLICIES

NONE



EXHIBIT A

FORM OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION



EXHIBIT B

FORM OF
AMENDED AND RESTATED BY-LAWS




EXHIBIT C

FORM OF
GOVERNMENTS' SETTLEMENT AGREEMENT





EXHIBIT D

FORM OF
PI TRUST AGREEMENT




EXHIBIT E

FORM OF
PI TRUST CLAIMS RESOLUTION AND DISTRIBUTION PROCEDURES





EXHIBIT F

FORM OF
TAX REFUND ASSIGNMENT AGREEMENT


EXHIBIT G

FORM OF
SHAREHOLDERS' AGREEMENT













                      CERTIFICATE OF AMENDMENT
                      AND RESTATEMENT OF THE
                    CERTIFICATE OF INCORPORATION
                                 OF
                        RAYTECH CORPORATION


         Pursuant to Section 242 of the General Corporation
                    Law of the State of Delaware

     This Certificate of Incorporation is hereby amended and
restated for the purpose of compliance with Raytech Corporation's
Second Amended Plan of Reorganization (the "Plan of
Reorganization") as confirmed by the United States Bankruptcy Court
for the District of Connecticut in Chapter 11 Case No. 5-89-00293.

     The undersigned, for purposes of amending and restating the
Certificate of Incorporation under the General Corporation Law of
the State of Delaware, certifies:

     FIRST:  The name of the corporation is Raytech Corporation
("Corporation").

     SECOND:  The address of the Corporation's registered office in
the State of Delaware is Corporation Trust Company, 1209 Orange
Street, Wilmington 19801, County of New Castle.  The name of its
registered agent at such address is The Corporation Trust Company.

     THIRD:  The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.

     FOURTH:  The total number of shares of capital stock which the
Corporation shall have authority to issue is Fifty-Five Million
(55,000,000), of which (i) Fifty Million (50,000,000) shares shall
be common stock par value $1.00 per share ("Common Stock") of which
Forty Two Million Four Hundred Eighty Two Thousand Two Hundred Ten
(42,482,210) shares shall be issued pursuant to the provisions of
the Corporation's Plan of Reorganization and Seven Million Five
Hundred Seventeen Thousand Seven Hundred Ninety (7,517,790) shares
shall be authorized for future issuance, and (ii) Five Million
(5,000,000) shares shall be preferred stock, par value $1.00 per
share ("Preferred Stock").
     (a)  Common Stock.  Except as otherwise provided by law, by
this Certificate of Incorporation or by the By-Laws of the
Corporation, as from time to time amended, the holders of
outstanding shares of Common Stock shall possess voting power for
the election of directors and for all other purposes, each holder
of record of shares of Common Stock being entitled to one vote for
each share of Common Stock standing in the holder's name on the
books of the Corporation.  Except as otherwise provided by law, by
this Certificate of Incorporation or the By-Laws of the Corporation
as from time to time amended, the holders of Common Stock shall be
entitled to receive such dividends as from time to time may be
declared by the Board of Directors.  Except as otherwise provided
by law, by this Certificate of Incorporation or by the By-Laws of
the Corporation as from time to time amended, in the event of any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of Common Stock shall be
entitled to share ratably according to the number of shares of
Common Stock held by them in all remaining assets of the
Corporation available for distribution to its stockholders.
     (b)  Preferred Stock:  The Board of Directors may from time to
time by resolution determine the powers, designations, preferences
and relative, participating, optional or other special rights,
including voting rights, and the qualifications, limitations or
restrictions, of each class of Preferred Stock and of each series
within any such class and may increase or decrease the number of
shares within each such class or series; provided, that each share
of Preferred Stock shall be entitled to at least one vote, and
provided further, that the Board of Directors may not decrease the
number of shares within a class or series to less than the number
of shares within such class or series that are then issued and
outstanding and may not increase the number of shares within a
series above the total number of authorized shares of the
applicable class for which the powers, designations, preferences
and rights have not otherwise been set forth herein.

     FIFTH:  The Corporation is to have perpetual existence.

     SIXTH:  Except as otherwise provided in the law of the State
of Delaware, the Corporation's By-Laws or any of them may be
altered or repealed, and new By-Laws may be adopted, by the
stockholders by a majority vote at a meeting or by written consent
without a meeting, and the Board of Directors shall also have
power, by a majority vote of the whole Board of Directors, to alter
or repeal any of the Corporation's By-Laws, and to adopt new By-Laws.

     SEVENTH:  The entire Board of Directors shall consist of not
more than nine and not less than three directors.
     On the effective date of the Consummation of the Plan of
Reorganization ("Effective Date"), each director shall be elected to
hold office until the annual meeting of stockholders held in the
following year and until his or her successor is elected and
qualified.  At each succeeding annual meeting of stockholders
thereafter, or by written consent of the stockholders entitled to
vote thereon in lieu of such meeting the successors of those
directors whose terms of office are then expiring shall be elected
to hold office for a term of one year and until their respective
successors shall be elected and shall qualify.  Notwithstanding the
aforesaid on the Effective Date, the initial Board of Directors
shall be constituted as follows:  one director shall be appointed
by the Equity Committee (as defined in Section 1.1.42 of the Plan
of Reorganization) and the remaining directors shall all be
appointed by the Creditors' Committee (as defined in Section 1.1.27
of the Plan of Reorganization), following consultation with the
Corporation, the Future Claimants' Representative and the
Governments (all as defined in sections 1.1.27, 1.1.47 and 1.1.48,
respectively, of the  Plan of Reorganization).  The Director
appointed by the Equity Committee shall serve for a term of three
years from the Effective Date; provided, however, that such
Director's term will terminate earlier upon sale by the Asbestos
Personal Injury Settlement Trust (as defined in Section 1.1.64 of
the Plan of Reorganization) ("PI Trust") of its entire interest in
the stock of the Reorganized Debtor provided the purchaser or
purchasers have offered to purchase all remaining shares of the
Common Stock not held by the PI Trust at the same price and upon
the same terms and conditions as offered to the PI Trust as set
forth in section 7.11 of the  Plan of Reorganization.
     Any vacancies in the Board of Directors for any reason, and
any newly created directorships resulting from any increase in the
number of directors, may, except as otherwise required by law, be
filled by the Board of Directors acting by three-fourths of the
directors then in office, although less than a quorum, and any
directors so chosen shall hold office until the next election of
the class for which such directors shall have been chosen and until
their successors shall be elected and qualified.  No decrease in
the number of directors shall shorten the term of any incumbent
director.
     Notwithstanding any provision in this Certificate of
Incorporation to the contrary, the provisions set forth in this
Article SEVENTH may not be amended, altered, changed or repealed in
any respect, unless such action is approved by the affirmative vote
of holders of not less than three-fourths of the outstanding shares
entitled to vote thereon.

     EIGHTH:  Any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative (including any action or suit by or in the right of
the Corporation to procure a judgment in its favor) by reason of
the fact that he 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, partnership, joint venture, trust or other enterprise,
shall be indemnified by the Corporation, if, as and to the extent
authorized by applicable law as it exists or may hereafter be
amended, against expenses (including attorney's fees and
disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with the
defense or settlement of such action, suit or proceeding.  The
indemnification and advancement of expenses expressly provided by,
or granted pursuant to, the laws of the State of Delaware shall not
be deemed exclusive of any other rights to which any person seeking
indemnification or advancement of expenses may be entitled under
any By-Law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
     To the fullest extent permitted by the General Corporation Law
of the State of Delaware as the same exists or may hereafter be
amended, a director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, provided that nothing contained in
this Article shall eliminate or limit the liability of a director
(i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of the law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware or (iv) for any
transaction from which the director derived an improper personal
benefit.

     WITNESS my signature this        day of         , 2000.


                                   Albert A. Canosa
                                   President


Attest:


LeGrande L. Young
Secretary















                         RAYTECH CORPORATION

                        AMENDED AND RESTATED
                               BY-LAWS






                     As Adopted           , 2000

<PAGE>
                         RAYTECH CORPORATION
                        AMENDED AND RESTATED
                               BY-LAWS

                          TABLE OF CONTENTS

                                                          Page
ARTICLE I.    Stockholders

    Sec. 1.1  Annual Meeting ...........................    1
    Sec. 1.2  Special Meetings .........................    2
    Sec. 1.3  Record Date for Meetings and
              Other Purposes ...........................    2
    Sec. 1.4  Notice of Meetings .......................    4
    Sec. 1.5  Quorum ...................................    5
    Sec. 1.6  Voting ...................................    5
    Sec. 1.7  Presiding Officer and Secretary ..........    6
    Sec. 1.8  Proxies ..................................    7
    Sec. 1.9  List of Stockholders .....................    7
    Sec. 1.10 Written Consent of Stockholders
              in Lieu of Meeting .......................    8

ARTICLE II.   Directors

    Sec. 2.1  General Powers ...........................    9
    Sec. 2.2  Number of Directors ......................    9
    Sec. 2.3  Election and Term of Directors ...........    9
    Sec. 2.4  Vacancies and Newly Created
              Directorships ............................   10
    Sec. 2.5  Resignation ..............................   11
    Sec. 2.6  Removal ..................................   11
    Sec. 2.7  Meetings .................................   11
    Sec. 2.8  Quorum and Voting ........................   12
    Sec. 2.9  Appointment and Powers of Committees
              of the Board of Directors ................   13
    Sec. 2.10 Notices and Meetings of the Committees ...   15
    Sec. 2.11 Quorum and Actions by Committees .........   15
    Sec. 2.12 Resignations from Committees .............   15
    Sec. 2.13 Written Consent of Directors in
              Lieu of a Meeting ........................   15
    Sec. 2.14 Compensation of Directors ................   16
    Sec. 2.15 Contracts and Transactions Involving
              Insiders .................................   16
    Sec. 2.16 Participation of Meeting by
              Conference Telephone, etc. ...............   17



   (i)
<PAGE>
ARTICLE III.  Officers, Agents and Employees

    Sec. 3.1  Appointment and Term of Office ...........   18
    Sec. 3.2  Resignation and Removal ..................   19
    Sec. 3.3  Compensation and Bond ....................   19
    Sec. 3.4  Chairman of the Board ....................   19
    Sec. 3.5  President ................................   20
    Sec. 3.6  Vice Presidents ..........................   21
    Sec. 3.7  Treasurer ................................   22
    Sec. 3.8  Secretary ................................   22
    Sec. 3.9  Financial Officer ........................   23
    Sec. 3.10 Assistant Treasurers .....................   23
    Sec. 3.11 Assistant Secretaries ....................   23
    Sec. 3.12 Delegation of Duties .....................   24
    Sec. 3.13 Loans to Officers and Employees;
              Guaranty of Obligations of Officers
              and Employees ............................   24

ARTICLE IV.   Mandatory Retirement

    Sec. 4.1  Mandatory Retirement of
              Officers and Directors ...................   24

ARTICLE V.    Indemnification

    Sec. 5.1  Indemnification of Directors, Officers,
              Employees and Agents .....................   25

ARTICLE VI.   Capital Stock

    Sec. 6.1  Certificates .............................   27
    Sec. 6.2  Transfers of Stock .......................   27
    Sec. 6.3  Lost, Stolen or Destroyed Certificates ...   28

ARTICLE VII.  Seal

    Sec. 7.1  Seal .....................................   28

ARTICLE VIII. Waiver of Notice

    Sec. 8.1  Waiver of Notice .........................   29

ARTICLE IX.   Checks, Notes, Drafts, Etc.

    Sec. 9.1  Checks, Notes, Drafts, etc. ..............   30

ARTICLE X.    Amendments

    Sec. 10.1 Amendments ...............................   30



    (ii)

                        AMENDED AND RESTATED

                               BY-LAWS
                                 OF
                         RAYTECH CORPORATION

   These By-Laws are hereby amended and restated for the purpose
of compliance with Raytech Corporation's ("Corporation") Second
Amended Plan of Reorganization (the "Plan of Reorganization") as
confirmed by the United States Bankruptcy Court for the District of
Connecticut in Chapter 11 Case No. 5-89-00293.

                              ARTICLE I
                            Stockholders


        Section 1.1   Annual Meeting.  Except as otherwise
provided in Section 1.10 of these By-Laws, an annual meeting of
stockholders of the Corporation for the election of directors and
for the transaction of such other business as may properly come
before the meeting shall be held at such time and date as may be
fixed by the Corporation's Board of Directors ("Board of
Directors").  The Annual Meeting in each year shall be held at
such place within or without the State of Delaware as may be
fixed by the Board of Directors or, if not so fixed, at the
principal business office of the Corporation at Four Corporate
Drive, Suite 295, Shelton, Connecticut 06484.

        Section 1.2  Special Meetings.  A special meeting of the
stockholders of the Corporation entitled to vote on any business
to be considered at any such meeting may be called by the Board
of Directors, Chairman of the Board, if there is one, the
President or any Vice President.  Upon the written request of the
holders of not less than one-fifth of the voting power of all
shares entitled to vote at the meeting, the President shall call
a special meeting of the stockholders for the purpose specified
in such request and shall cause notice thereof to be given.  If
the President shall not, within fifteen days after the receipt of
such stockholder's request, so call such meeting, such
stockholders may call the same. Special meetings shall be held at
such place within or without the State of Delaware as may be
specified in the notice thereof.

        Section 1.3   Record Date for Meetings and Other
Purposes.  For the purpose of determining the stockholders
entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive
payment of any dividend or other distribution or allotment of any
rights, or entitled to exchange any rights in respect of any
change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance,
a date as the record date for any such determination of
stockholders. Such date shall not be more than 60 nor less than
10 days before the date of such meeting, nor more than 60 days
prior to any proposed action.  Only such stockholders as shall be
stockholders of record on the date so fixed shall be entitled to
notice of, and to vote at, such meeting and any adjournment
thereof, or to give such consent, or to receive payment of such
dividend or other distribution, or to exercise such rights in
respect of any such change, conversion or exchange of stock, or
to participate in such action, as the case may be,
notwithstanding any transfer of any stock on the books of the
Corporation after any record date so fixed.
          If no record date is fixed by the Board of Directors,
(1) the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the date on which
notice is given, or if notice is waived by all stockholders
entitled to vote at the meeting, at the close of business on the
day next preceding the day on which the meeting is held, (2) the
record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no
prior action by the Board of Directors is necessary, shall be at
the close of business on the day on which the first written
consent is expressed by the filing thereof with the Corporation
as provided in Section 1.10 of these By-Laws, and (3) the record
date for determining stockholders for any other purpose shall be
at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
          A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to
adjournment of the meeting, provided, that the Board of Directors
may fix a new record date for the adjourned meeting.

        Section 1.4   Notice of Meetings.  Unless otherwise
provided by law, and unless notice is waived in writing by all
stockholders entitled to vote at a meeting, a written notice of
each meeting of stockholders shall be given to each stockholder
of record entitled to vote at such meeting, by leaving such
notice with him or at his residence or usual place of business,
or by mailing such notice addressed to him at his last-known post
office address as last shown on the stock records of the
Corporation, postage prepaid, not less than 10 days nor more than
60 days before the date of the meeting.  Each notice of a meeting
of stockholders shall state the place, day and hour of the
meeting, and in the case of a special meeting, the purpose or
purposes for which the meeting is called.
        When a meeting is adjourned to another time or place, it
shall not be necessary to give notice of the adjourned meeting if
the time and place to which the meeting is adjourned are
announced at the meeting at which the adjournment is taken and at
the adjourned meeting only such business is transacted as might
have been transacted at the original meeting.  However, if the
adjournment is for more than 30 days, or if after the adjournment
the Board of Directors fixes a new record date for the adjourned
meeting, a notice of the adjourned meeting shall be given not
less than 10 days nor more than 60 days before the date of the
meeting to each stockholder of record entitled to vote at the
meeting.

        Section 1.5   Quorum.  Except as otherwise provided by
law or by the Corporation's Certificate of Incorporation or by
these By-Laws in respect of the vote required for a specified
action, at any meeting of stockholders, the holders of a majority
of the outstanding stock entitled to vote thereat, either present
or represented by proxy, shall constitute a quorum for the
transaction of any business, but the stockholders present,
although less than a quorum, may adjourn the meeting to another
time or place and, except as provided in the last paragraph of
Section 1.4 of these By-Laws, notice need not be given of the
adjourned meeting.  Except as otherwise provided by the
Corporation's Certificate of Incorporation or these By-Laws,
where a separate vote by class if required, the affirmative vote
of the majority of shares of such class present in person or
represented by proxy at the meeting shall be the act of such
class.

        Section 1.6  Voting.  Whenever directors are to be
elected by the stockholders, they shall be elected by a plurality
of the votes cast at the meeting by the stockholders entitled to
vote.  Whenever any corporate action, other than the election of
directors, is to be taken by vote of the stockholders, it shall,
except as otherwise required by law or by the Corporation's
Certificate of Incorporation or by these By-Laws, be authorized
by a majority of the votes cast at the meeting by the
stockholders entitled to vote thereon.
        Except as otherwise provided by law, or by the
Corporation's Certificate of Incorporation, each stockholder of
record of the Corporation entitled to vote on any matter at any
meeting of stockholders shall be entitled to one vote for each
share of such stock standing in the name of such holder on the
stock ledger of the Corporation on the record date for the
determination of the stockholders entitled to vote at the meeting.
       Upon the demand of any stockholder entitled to vote, the
vote for directors or the vote on any other matter at a meeting
shall be by written ballot, but otherwise the method of voting and
the manner in which votes are counted shall be discretionary with
the presiding officer at the meeting.

        Section 1.7   Presiding Officer and Secretary.  At any
meeting of the stockholders if none of the Chairman of the Board,
if there is one, nor the President nor a Vice President nor a
person designated by the Board of Directors to preside at the
meeting shall be present, the stockholders shall appoint a
presiding officer for the meeting.  If neither the Secretary nor
an Assistant Secretary be present, the appointee of the person
presiding at the meeting shall act as Secretary of the meeting.

        Section 1.8   Proxies.  Each stockholder entitled to vote
at a meeting of stockholders or to express consent or dissent to
corporate action in writing without a meeting may authorize
another person or persons to act for him by proxy, but no such
proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period.  Every proxy
shall be signed by the stockholder or by his duly authorized
attorney.

        Section 1.9   List of Stockholders.  The officer who has
charge of the stock ledger of the Corporation shall prepare and
make, at least 10 days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting,
arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of
each stockholder.  Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least 10 days prior to
the meeting, either at a place within the city where the meeting
is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting
is to be held.  The list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and
may be inspected by any stockholder who is present.
     The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list
required by this Section or the books of the Corporation, or to
vote in person or by proxy at any meeting of stockholders.

     Section 1.10  Written Consent of Stockholders in Lieu of
Meeting.  Any action required by statute to be taken at any annual
or special meeting of stockholders of the Corporation, or any
action which may be taken at any annual or special meeting of the
stockholders, may be taken without a meeting, without prior notice
and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the stockholders having not
less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted.  Prompt written
notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those
stockholders who have not consented in writing.  Any such written
consent may be given by one or any number of substantially
concurrent written instruments of substantially similar tenor
signed by such stockholders, in person or by attorney or proxy
duly appointed in writing, and filed with the Secretary or an
Assistant Secretary of the Corporation.  Any such written consent
shall be effective as of the effective date thereof as specified
therein, provided that such date is not more than 60 days prior to
the date such written consent is filed as aforesaid, or, if no
such date is so specified, on the date such written consent is
filed as aforesaid.

                             ARTICLE II
                             Directors

        Section 2.1   General Powers.  The business, property and
affairs of the Corporation shall be managed by and under the
direction of its Board of Directors.

        Section 2.2   Number of Directors.  The Board of Directors
shall consist of not more than nine and not less than three
directors.

        Section 2.3   Election and Term of Directors.  On the
effective date of the Consummation of the Plan of Reorganization
("Effective Date"), each director shall be elected to hold office
until the annual meeting of stockholders held in the following year
and until his or her successor is elected and qualified.  At each
annual meeting of stockholders thereafter, or by written consent of
the stockholders entitled to vote thereon in lieu of such meeting,
the successors of those directors whose terms of office are then
expiring shall be elected to hold office for a term of one year and
until their respective successors shall be elected and shall
qualify.  Notwithstanding the aforesaid, on the Effective Date the
initial Board of Directors shall be constituted as follows:  one
director shall be appointed by the Equity Committee (as defined in
Section 1.1.42 of the Plan of Reorganization) and the remaining
directors shall be appointed by the Creditors' Committee (as
defined in Section 1.1.27 of the Plan of Reorganization), following
consultation with the Corporation, the Future Claimants'
Representative and the Governments (all as defined in sections
1.1.27, 1.1.47 and 1.1.48, respectively, of the  Plan of
Reorganization).  The director appointed by the Equity Committee
shall serve for a term of three years from the Effective Date;
provided, however, that such director's term will terminate earlier
upon sale by the Asbestos Personal Injury Settlement Trust (as
defined in Section 1.1.64 of the Plan of Reorganization) ("PI
Trust") of its entire interest in the stock of the Reorganized
Debtor provided the purchaser or purchasers have offered to
purchase all remaining shares of the Common Stock not held by the
PI Trust at the same price and upon the same terms and conditions
as offered to the PI Trust as set forth in section 7.11 of the
Plan of Reorganization.

        Section 2.4   Vacancies and Newly Created Directorships.
Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by
election at a meeting of stockholders or by written consent of the
stockholders entitled to vote thereon in lieu of a meeting or by a
majority of the Board of Directors then in office.  New directors
elected pursuant to the foregoing shall serve out the term of the
director he or she replaced.


<PAGE>
        Section 2.5   Resignation.  Any director may resign at any
time upon written notice to the Corporation.  Any such resignation
shall take effect at the time specified therein or, if the time be
not specified, upon receipt thereof, and the acceptance of such
resignation, unless required by the terms thereof, shall not be
necessary to make such resignation effective.

        Section 2.6   Removal. Any or all of the directors may be
removed at any time, only for cause, by affirmative vote at a
meeting or by written consent of a majority of the outstanding
shares of capital stock of the Corporation entitled to vote
generally for the election of directors (considered for this
purpose as one class).

        Section 2.7   Meetings.  Meetings of the Board of
Directors, regular or special, may be held at any place within or
without the State of Delaware.  An annual meeting of the Board of
Directors shall be held after each annual election of directors. If
such election occurs at an annual meeting of stockholders, the
annual meeting of the Board of Directors shall be held at the same
place and immediately following such meeting of stockholders, and
no notice thereof need be given.  If an annual election of
directors occurs by written consent in lieu of the annual meeting
of stockholders, the annual meeting of the Board of Directors shall
take place as soon after such written consent is duly filed with
the Corporation as if practicable, either at the next regular
meeting of the Board of Directors or at a special meeting.  The
Board of Directors may fix times and places for regular meetings of
the Board and no notice of such meetings need be given.  Special
meetings of the Board of Directors shall be held whenever called by
the Chairman of the Board, if there is one, the President, a Vice
President or any two or more directors.  Notice of each special
meeting shall be given by the Secretary or by a person calling the
meeting to each director by mailing the same, not later than the
second day before the meeting, or personally or by telefaxing,
e-mailing or telephoning the same, not later than the day before the
meeting.

        Section 2.8   Quorum and Voting.  A majority of the total
number of directors shall constitute a quorum for the transaction
of business, but if there be less than a quorum at any meeting of
the Board of Directors, a majority of the directors present may
adjourn the meeting from time to time, and no further notice
thereof need be given other than announcement at the meeting which
shall be so adjourned.  Except as otherwise provided by law, by the
Corporation's Certificate of Incorporation or by these By-Laws, the
vote of a majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors.

        Section 2.9   Appointment and Powers of Committees of the
Board of Directors.  The Board of Directors may from time to time,
by resolution passed by three-fourths of the whole Board, designate
one or more committees, each committee to consist of one or more
directors of the Corporation.  The Board of Directors may designate
one or more directors as alternate members of any committee, who
may replace any absent or disqualified member at any meeting of the
committee.  The resolution of the Board of Directors may, in
addition or alternatively, provide that in the absence or
disqualification of a member of a committee, the member or members
thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously
appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
Board of Directors, shall have and may exercise all the powers and
authority of the Board of Directors in the management of the
business and affairs of the Corporation, and may authorize the seal
of the Corporation to be affixed to all papers which may require
it, except as otherwise provided by law.  Unless the resolution of
the Board of Directors expressly so provides, no such committee
shall have the power or authority to declare a merger or other
business combination transaction, to sell all or substantially all
of the assets, to incur material amounts of debt, to declare a
dividend or to authorize the issuance of stock.  Any such committee
may adopt rules governing the method of calling and time and place
of holding its meetings.
        The Board of Directors, by resolution adopted by a three-
fourths of the whole Board, may
        (a)  fill any vacancy in any such committee;
        (b)  abolish any such committee at its pleasure; and
        (c)  remove any director from membership on such committee
at any time, with or without cause.
        Actions taken at a meeting of any such committee shall be
kept in a record of its proceedings which shall be reported to the
Board of Directors at its next meeting following such committee
meeting; except that, when the meeting of the Board of Directors is
held within two days after the committee meeting, such report
shall, if not made at the first meeting, be made to the Board of
Directors at its second meeting following such committee meeting.
        Notwithstanding any provision in these By-Laws to the
contrary, the provisions set forth in this Section may not be
amended, altered, changed or repealed in any respect, unless such
action is approved by the affirmative vote of holders of not less
than three-fourths of the outstanding shares entitled to vote
thereon, or by the affirmative vote of directors holding at least
three-fourths of the directorships.

        Section 2.10  Notices and Meetings of the Committees.
Meetings of any committee of the Board of Directors, regular or
special, may be held at any place within or without the State of
Delaware as such committee from time to time may fix or as shall be
specified in the respective notice or waivers of notice thereof,
but no notice of regular meetings need be given.  Notice of each
special meeting shall be given to each member of such committee by
mailing the same not later than the second day before the meeting,
or personally, or by telefaxing, e-mailing or telephoning the same,
not later than the date before the meeting.

        Section 2.11  Quorum and Actions by Committees.  Unless
otherwise provided by the Board of Directors, a majority of each
committee shall constitute a quorum for the transaction of business
and the vote of the majority of the members of such committee
present at which a quorum is present shall be the act of such
committee.

        Section 2.12  Resignations from Committees.  Any member of
a committee may resign by written notice to the Board of Directors.
A resignation shall be effective upon receipt thereof by the Board
or such subsequent time as shall be specified in the notice of
resignation.

        Section 2.13  Written Consent of Directors in Lieu of a
Meeting.  Any action required or permitted to be taken at any
meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if all members of the Board of Directors
or of such committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.


<PAGE>
        Section 2.14  Compensation of Directors.  The Board of
Directors may fix fees of directors, including reasonable allowance
for expenses actually incurred in connection with their duties.

        Section 2.15  Contracts and Transactions Involving
Insiders. No contract or transaction between the Corporation and
one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or
other organization in which one or more of its directors or
officers are directors or officers, or have a financial interest,
or beneficial interest as defined in Section 16 of the Securities
and exchange Act of 1934, shall be void or voidable solely for this
reason, or solely because, in the case of directors, the director
or officer is present at or participates in the meeting of the
Board of Directors or committee thereof which authorizes the
contract or transaction, or solely because his or their votes are
counted for such purpose, if: (1) the material facts as to his
relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee,
and the Board of Directors or committee in good faith authorizes
the contract or transaction by the affirmative votes of a majority
of the disinterested directors, even though the disinterested
directors be less than a quorum; or (2) the material facts as to
his relationship or interest and as to the contract or transaction
are disclosed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically approved
in good faith by vote of the stockholders, provided in either case
that the contract or transaction is fair, as determined by the
Board of Directors, as to the Corporation as of the time it is
authorized, approved or ratified, by the Board of Directors, a
committee thereof, or the stockholders.  Common or interested
directors may be counted in determining the presence of a quorum at
a meeting of the Board of Directors or of a committee which
authorizes the contract or transaction.

        Section 2.16  Participation of Meeting by Conference
Telephone, Etc.  Members of the Board of Directors, or of any
committee designated by the Board, may participate in a meeting of
such Board or committee by means of teleconferencing, conference
telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and
participation in a meeting by such means shall constitute presence
in person at such meeting.


                            ARTICLE III
                   Officers, Agents and Employees

        Section 3.1   Appointment and Term of Office.  The officers
of the Corporation shall include a President, a Secretary, a
Treasurer and, if desired, a Chairman of the Board,  a Vice
Chairman, one or more Vice Presidents, a Financial Officer, one or
more Assistant Secretaries and one or more Assistant Treasurers.
The Board of Directors or a duly authorized committee thereof shall
designate, by resolution, a Chief Executive Officer and may
designate, by resolution, a Chief Financial Officer and a Chief
Operating Officer.  Any one or more Vice Presidents may be
designated as Executive Vice President or Senior Vice President.
The officers shall be elected or appointed by the Board of
Directors or a duly authorized committee thereof at the first
meeting of the Board of Directors or a committee thereof after the
Annual Meeting of stockholders in each year.  The Board or a
committee thereof may elect or appoint such officers, agents and
employees, who shall have such authority and perform such duties as
may be prescribed by the Board of Directors or committee.  Each
officer shall hold  office for the term for which he is elected or
appointed and until his successor is elected or appointed and has
qualified or until his earlier resignation or removal.  Any two or
more offices may be held by the same person, but no officer shall
execute, acknowledge or verify any instrument in more than one
capacity.

        Section 3.2  Resignation and Removal.  Any officer may
resign at any time upon written notice to the Corporation.  Any
officer, agent or employee of the Corporation may be removed by the
Board of Directors, or by a duly authorized committee thereof, with
or without cause at any time.  The Board of Directors or such a
committee thereof may delegate such power of removal as to
officers, agents and employees not appointed by the Board of
Directors or such a committee.  Such removal shall be without
prejudice to a person's contract rights, if any, but the
appointment of any person as an officer, agent or employee of the
Corporation shall not of itself create contract rights.

        Section 3.3  Compensation and Bond.  The compensation of
the officers, agents and employees who are not directors shall be
fixed by the Board of Directors, but this power may be delegated to
any officer, agent, or employee as to persons under his direction
or control.  The Corporation may secure the fidelity of any or all
of its officers, agents, or employees by bond or otherwise.

        Section 3.4   Chairman of the Board.  The Chairman of the
Board, if there is one, shall preside at all meetings of
stockholders and of the Board of Directors at which he or she is
present and shall have such other powers and duties as may be
delegated to him or her by the Board of Directors.  In the event
the Board of Directors, by resolution, shall designate the Chairman
of the Board as the Chief Executive Officer of the Corporation, in
addition to his or her other duties, the Chairman of the Board
shall have general direction of the affairs of the Corporation,
subject to the control of the Board of Directors, shall preside at
all meetings of the stockholders, may employ and discharge
employees and agents of the Corporation, except such as may be

<PAGE>
elected or appointed by the Board of Directors, and he or she may
delegate these powers.
        In his capacity as Chief Executive Officer, the Chairman of
the Board may vote the shares or other securities of any other
domestic or foreign corporation of any type or kind which may at
any time be owned by the Corporation, may execute any stockholders'
or other consents in respect thereof and may in his or her
discretion delegate such powers by executing proxies, or otherwise,
on behalf of the Corporation.  The Board of Directors, by
resolution from time to time, may confer like powers upon any other
person or persons.

        Section 3.5   President.  The President shall have
responsibility to the Chief Operating Officer of the Corporation
and such duties as from time to time may be assigned to him by the
Chief Executive Officer of the Corporation or the Board of
Directors.  In the absence or inability to act of the Chairman of
the Board, if there is one, the President shall perform all the
duties and shall  exercise any of the powers of the Chairman of the
Board.  The performance of any such duty by the President shall be
conclusive evidence of his power to act.

        In the event the Board of Directors, by resolution, shall
designate the President as the Chief Executive Officer of the
Corporation, the President shall have general direction of the
affairs of the Corporation, subject to the control of the Board of
Directors, shall preside at all meetings of the stockholders, and
may employ and discharge employees and agents of the Corporation,
except such as shall be appointed by the Board of Directors, and he
may delegate these powers.  In his capacity as Chief Executive
Officer the President may vote the shares or other securities of
any other domestic or foreign corporation of any type or kind which
may at any time be owned by the Corporation, may execute any
stockholders' or other consents in respect thereof and may in his
discretion delegate such powers by executing proxies, or otherwise,
on behalf of the Corporation.

        Section 3.6   Vice Presidents.  Each Vice President shall
have such powers and perform such duties as the Board of Directors
or the Chairman of the Board, if there is one, may from time to
time prescribe.  In the absence or inability to act of the Chairman
of the Board and President, unless the Board of Directors shall
otherwise provide, the Vice President may perform all the duties
and may exercise any of the powers of the Chairman of the Board and
the President.  The performance of any such duty by a  Vice
President shall be conclusive evidence of his power to act.

        Section 3.7  Treasurer.  The Treasurer shall have charge
of all funds and securities of the Corporation, shall endorse the
same for deposit or collection when necessary and deposit the same
to the credit of the Corporation in such banks or depositaries as
the Board of Directors may authorize.  He may endorse all
commercial documents requiring endorsements for or on behalf of the
Corporation and may sign all receipts and vouchers for payments
made to the Corporation.  He shall have all such powers and duties
as generally are incident to the position of Treasurer or as may be
assigned to him by the Chief Executive Officer or the Board of
Directors.

        Section 3.8   Secretary.  The Secretary shall record all
the proceedings of the meetings of the stockholders and directors
in a book to be kept for that purpose and shall also record therein
all action taken by written consent of the stockholders or
directors in lieu of a meeting.  He shall attend to the giving and
serving of all notices to stockholders and directors.  He shall
have charge of the seal of the Corporation and shall attest the
same by his signature whenever required.  He shall have charge of
the stock ledger and such other books and papers as the Board of
Directors may direct.  He shall have all such further powers and
duties as generally are incident to the position of Secretary or as
may be assigned to him by the Chief Executive Officer or the Board
of Directors.

        Section 3.9   Financial Officer.  The Financial Officer
shall be the accounting officer of the Corporation.  He shall keep
adequate and correct accounts of the Corporation's business
transactions.  In the absence or inability of the Treasurer to
act, the Financial Officer may perform all the duties and exercise
all the powers of the Treasurer.  He shall have all such powers
and duties as generally are incident to the position of Financial
Officer, or as may be assigned to him by the Chief Executive
Officer, the Treasurer or the Board of Directors.

        Section 3.10  Assistant Treasurers.  In the absence or
inability of the Treasurer and the Financial Officer to act, any
Assistant Treasurer may perform all the duties and exercise all
the powers of the Treasurer.  The performance of any such duty by
an Assistant Treasurer shall be conclusive evidence of his power
to act.   An Assistant Treasurer shall also perform such other
duties as the Treasurer or the Board of Directors may assign to
him.

        Section 3.11   Assistant Secretaries.  In the absence or
inability of the Secretary to act, any Assistant Secretary may
perform all the duties and exercise all the powers of the
Secretary.  The performance of any such duty by an Assistant
Secretary shall be conclusive evidence of his power to act.  An
Assistant Secretary shall also perform such other duties as the
Secretary or the Board of Directors may assign to him.

        Section 3.12.  Delegation of Duties.  In case of the
absence of any officer of the Corporation, or for any other reason
that the Board of Directors may deem sufficient, the Board of
Directors may confer for the time being the powers or duties, or
any of them, of such officer upon any other officer or upon any
director.

        Section 3.13  Loans to Officers and Employees; Guaranty of
Obligations of Officers and Employees.  The Corporation may lend
money to, or guarantee any obligation of, or otherwise assist any
officer or other employee of the Corporation or any subsidiary,
including any officer or employee who is a director of the
Corporation or any subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be
expected to benefit the Corporation.  The loan, guaranty or other
assistance may be with or without interest, and may be unsecured,
or secured in such manner as the Board of Directors shall approve,
including, without limitation, a pledge of shares of stock of the
Corporation.

                             ARTICLE IV
                        Mandatory Retirement

        Section 4.1  Mandatory Retirement of Officers and
Directors.  Each officer of the Corporation shall be required to
retire from his employment by the Corporation as such on the first
day of the calendar month following the month during which such
officer attains the age of 70 years.  Each director of the
Corporation shall be required to retire as a director of the
Corporation as of the first day of January of the year in which
such director attains the age of 70 years.  The Board of Directors
may waive such retirement of any officer or director.

                             ARTICLE V
                          Indemnification

        Section 5.1   Indemnification of Directors, Officers,
Employees and Agents. Any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including any action or suit by
or in the right of the Corporation to procure a judgment in its
favor) by reason of the fact that he 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, partnership, joint
venture, trust or other enterprise, shall be indemnified by the
Corporation, if, as and to the extent authorized by applicable law
as it exists or may hereafter be amended, against expenses
(including attorney's fees and disbursements), judgments, fines
and amounts paid in settlement actually and reasonably incurred by
him in connection with the defense or settlement of such action,
suit or proceeding.  The indemnification and advancement of
expenses expressly provided by, or granted pursuant to, the laws
of the State of Delaware shall not be deemed exclusive of any
other rights to which any person seeking indemnification or
advancement of expenses may be entitled under any By-Law,
agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
     To the fullest extent permitted by the General Corporation
Law of the State of Delaware as the same exists or may hereafter
be amended, a director of the Corporation shall not be liable to
the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, provided that nothing
contained in this Article shall eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty
to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of the law, (iii) under Section 174 of the
General Corporation Law of the State of Delaware or (iv) for any
transaction from which the director derived an improper personal
benefit.



<PAGE>
                             ARTICLE VI
                            Common Stock

        Section 6.1  Certificates. Certificates for stock of the
Corporation shall be in such form as shall be approved by the
Board of Directors and shall be signed in the name of the
Corporation by the Chairman or a Vice Chairman of the Board of
Directors, if there be any, or the President or a Vice President,
and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary.  Such certificates may be sealed with
the seal of the Corporation or a facsimile thereof.  Any of or all
the signatures on a certificate may be a facsimile.  In case any
officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with
the same effect as if he were such officer, transfer agent or
registrar at the date of issue.

        Section 6.2  Transfers of Stock.  Transfers of stock shall
be made only upon the books of the Corporation by the holder, in
person or by duly authorized attorney, and on the surrender of the
certificate or certificates for such stock properly endorsed.  The
Board of Directors shall have the power to make all such rules and
regulations, not inconsistent with the Corporation's Certificate
of Incorporation and these By-Laws and the applicable laws, as the
Board of Directors may deem appropriate concerning the issue,
transfer and registration of certificates for stock of the
Corporation.  The Board may appoint one or more transfer agents
and one or more registrars with respect to the certificates
representing shares of stock of the Corporation, and may require
all such stock certificates to bear the signature of either or
both.

        Section 6.3  Lost, Stolen or Destroyed Certificates.  The
corporation may issue a new stock certificate in the place of any
certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Corporation may require the owner of
the lost, stolen or destroyed certificate or his legal
representative to give the Corporation a bond sufficient to
indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such
certificate or the issuance of any such new certificate.  The
Board of Directors may require such owner to satisfy other
reasonable requirements.


                            ARTICLE VII
                                Seal

        Section 7.1  Seal.  The seal of the Corporation shall have
inscribed thereon the name of the Corporation, the year of its
organization and the words "Corporate Seal, Delaware."  The
Corporation may use the seal by causing it or a facsimile thereof
to be impressed or affixed or reproduced in any manner.


                            ARTICLE VIII
                          Waiver of Notice

        Section 8.1  Waiver of Notice.  Whenever any notice of
time, place, purpose or any other matter, including any special
notice or form of notice, is required to be given by statute, or
under any provision of the Corporation's Certificate of
Incorporation or these By-Laws, a written waiver thereof, signed
by the person entitled to notice, whether before or after the time
stated therein, shall be equivalent to giving of such notice.  In
the case of a stockholder, such waiver of notice may be signed by
such stockholder's attorney or proxy duly appointed in writing.
Attendance of a person at a meeting shall constitute a waiver of
notice of such meeting, except when the person attends a meeting
for the express purpose of objecting at the beginning of the
meeting, to the transaction of any business because the meeting is
not lawfully called or convened.  Neither the business to be
transacted at, nor the purpose of, any regular or special meeting
of the stockholders, directors or members of a committee of
directors need be specified in any written waiver of notice unless

<PAGE>
so required by the Corporation's Certificate of Incorporation or
these By-Laws.


                             ARTICLE IX
                    Checks, Notes, Drafts, Etc.

        Section 9.1  Checks, Notes, Drafts, Etc.  Checks, notes,
drafts, acceptances, bills of exchange and other orders or
obligations for the payment of money shall be signed by such
officer or officers or person or persons as the Board of Directors
or a duly authorized committee thereof may from time to time
designate.

                             ARTICLE X
                             Amendments

        Section 10.1  Amendments.  Except as otherwise provided in
the Corporation's Certificate of Incorporation, the By-Laws or the
law of the State of Delaware, these By-Laws or any of them may be
altered or repealed, and new By-Laws may be adopted, by the
stockholders by majority vote at a meeting or by written consent
without a meeting, and the Board of Directors shall also have
power, by a majority vote of the whole Board of Directors, to
alter or repeal any of these By-Laws, and to adopt new By-Laws.








AGREEMENT


     This Agreement is entered into as of June 8, 2000, by and
among the Official Committee of Unsecured Creditors of Raytech
Corporation (the "Committee"), the Guardian Ad Litem For
Future Claimants (the "Guardian"), the United States
Environmental Protection Agency ("U.S. EPA"), the Connecticut
Department of Environmental Protection ("Conn. DEP"), and FMC
Corporation ("FMC").
RECITALS
     A. The Committee and the Guardian together represent, in
the Chapter 11 Reorganization Proceedings of Raytech Corporation
("Raytech"), the interests of all the present and future
holders of  unsecured claims for death, bodily injury or other
personal damages caused, directly or indirectly, by exposure to
asbestos or asbestos-containing products for which Raytech or
Raymark Industries, Inc. or Raymark Corporation (collectively
"Raymark") has legal liability (the "API Claimants").
     B. U.S. EPA,  Conn. DEP and FMC (collectively "the
Environmental Claimants") are asserting claims against Raytech
for liability under federal or state environmental laws.
     C. The claims of both the API Claimants and the
Environmental Claimants are for the most part unliquidated and
include claims for both damages already incurred and amounts to
be incurred in the future.
     D. By their nature, the claims of both the API Claimants
and the Environmental Claimants are susceptible neither to
precise estimation nor ready liquidation in the pending Raytech
reorganization proceedings.  However, in order to formulate and
obtain confirmation of a plan of reorganization for Raytech, the
claims of the API Claimants and the Environmental Claimants must
be estimated so that appropriate provision for the payment of
those and all other valid creditor claims against Raytech may be
made in Raytech's plan of reorganization.
     E. The claims asserted by and on behalf of the API
Claimants and the Environmental Claimants are very large and
constitute virtually all the claims asserted by creditors of
Raytech.
     F. The Committee and the Guardian, on the one hand, and
the Environmental Claimants, on the other, recognized the
desirability of avoiding disputes among them as to the relative
magnitude of the claims of the API Claimants and the
Environmental Claimants.  Following extended negotiations, the
Committee, the Guardian, the U.S. EPA and Conn. DEP (the U.S.
EPA and the Conn. DEP hereinafter being collectively called
"the Governments") reached an agreement as to the terms on
which the API Claimants, as a group, and the Governments, as a
group, would share, respectively, in the assets of Raytech that
would be made available under any plan of reorganization that
they would accept and support to satisfy the claims of all
Raytechs unsecured creditors.  That agreement was embodied in a
letter agreement dated September 29, 1998 (the "Letter
Agreement").
     G. FMC has also asserted a claim against Raytech, which
claim the parties have agreed will be paid out of the
Governments' share of the assets of Raytech.
     H. On March 14, 2000, the Court estimated the API
Claimants' claim in the amount of $6.76 billion, and the
Governments' claims (which include the claim of FMC) in the
amount of $431.75 million.
     I. As a result of developments in the course of the
Raytech reorganization proceedings, including the settlement
with FMC, the Court's estimation of the parties' claims, and the
parties' discovery of certain ambiguities in the Letter
Agreement, the parties have determined to amend, clarify and
restate the Letter Agreement as follows:
TERMS OF AGREEMENT
     1. Respective Shares of the Combined Esates.
        The API Claimants shall receive 91-1/2% and the
Environmental Claimants 8-1/2% of those portions of the bankruptcy
estates of Raymark Industries, Inc. and Raymark Corporation (the
"Raymark Estates") and the bankruptcy estate of Raytech
Corporation (the "Raytech Estate") (collectively the
"Combined Estates") to be distributed to general unsecured
creditors pursuant to any plan of reorganization or liquidation
with respect to those debtors that is confirmed by the
bankruptcy court, except as provided below.  The 8-1/2%
distributable to the Environmental Claimants shall be divided as
follows:  6.057% to the U.S. EPA, 1.833% to FMC, and .61% to
Conn. DEP.
        (a)    Definition and Division of Combined Estates.
        The term Combined Estates, as used herein, includes
all property of the respective bankruptcy estates, including
causes of action, of Raymark Corporation, Raymark Industries,
Inc. and Raytech Corporation, all Chapter 11 Debtors in the
United States Bankruptcy Court for the District of Connecticut
as of the date of this Agreement, except as provided below.
        For purposes of this Agreement, the Combined Estates
do not include the following assets which shall be treated as
provided below:
               (i)  Raymark's former manufacturing facility in
Stratford, Connecticut which has been the subject of an in rem
proceeding commenced by the United States.  See United States
and State of Connecticut v. Raymark Industries, Inc., et al.,
No. 3:97 CV00035 (DJS).  The Governments recovery of that
property, or the proceeds of the sale of that property, shall
not be credited against the Environmental Claimants' share of
the Combined Estates pursuant to paragraph 1(b) of this
Agreement.
               (ii) Liability insurance or any proceeds thereof
of any of the three foregoing Debtors or affiliates, successors
or related entities that may be used to satisfy the claims of
the API Claimants, the Environmental Claimants or any other
creditors of those Debtors shall be paid or assigned to whatever
creditors are legally entitled to have such insurance applied to
their claims and shall not be treated as part of the Combined
Estates, subject to the provisions of paragraph 1(b) below.
               (iii)     Any recovery by or on behalf of either
of the Raymark Estates from any pending or future litigation
against manufacturers and/or distributors of tobacco products
based on claims (whether for contribution, indemnity or
otherwise) that such products caused, exacerbated or contributed
to cancers or other diseases suffered by the API Claimants or
persons who had resolved their asbestos-related disease claims
against the Raymark Debtors prior to their pending bankruptcy
proceedings (the Tobacco Litigation), or proceeds of or
value attributable to the Tobacco Litigation, shall not be
deemed part of the Combined Estates.  One hundred percent of any
proceeds of the Tobacco Litigation, net of all costs and
expenses directly incurred by the Raymark Estates with respect
to such recovery, shall be paid to the  PI Trust to be
established for the benefit of the API Claimants pursuant to the
plan of reorganization in the Raytech Chapter 11 case.
        (b)    Credits Against the Environmental Claimants
Share of the Combined Estates.
        (i)    Except as to the proceeds of the sale of the
former Stratford manufacturing facility as provided in Paragraph
1(a), above, any amounts separately recovered by the
Environmental Claimants solely from the Raymark Estates
(including any  insurance proceeds), net of all costs and
expenses directly incurred by the Raymark Estates or their
assignee with respect to such recovery, shall, at the option of
each of the Environmental Claimants, either be paid to and
retained by the Environmental Claimant or be paid to and
retained by the Personal Injury Trust established for the
benefit of the API Claimants pursuant to the Raytech Plan of
Reorganization.    In the event an Environmental Claimant elects
to be paid and retain such amounts, then that Environmental
Claimant, as soon as reasonably practical, shall remit to the
Personal Injury Trust stock of Reorganized Raytech or stock and
cash equal in value to the amounts paid to and retained by the
Environmental Claimant; provided, however, that no Environmental
Claimant shall be required to remit stock and cash in an
aggregate amount greater than that received from the Raytech
Estate pursuant to the Raytech Plan of Reorganization.  For
purposes of determining the value of the stock received from
Reorganized Raytech, the value of any such stock shall be
equivalent to a pro rata share of the enterprise value of
Reorganized Raytech contained in the court-approved Disclosure
Statement to be drafted and utilized in the Raytech Chapter 11
reorganization proceedings and as finally approved by the Court,
without regard to any increases or decreases in the value of the
stock of Reorganized Raytech occurring subsequent thereto,
whether the result of stock market changes or otherwise.  For
purposes of calculating the dollar amount of the total 8-1/2%
the stock and cash received by the Environmental Claimants from
Reorganized Raytech, the value of any cash dividends paid prior
to the date of the election shall not be included.  For purposes
of determining the value of the stock in the event an
Environmental Claimant elects to retain the amount recovered
from the Raymark Estates and to deliver stock or stock and cash
to the Personal Injury Trust, the value of such stock shall be
the market value of the stock on the date the election is made.
The Environmental Claimants shall:  (A) disclose promptly to the
PI Trust any amount separately recovered by the Environmental
Claimants from the Raymark Estates (including any insurance
proceeds); and (B) make their election pursuant to this
paragraph 1(b)(i) as soon as practical.
        (ii)   Regardless of their receipt of their respective
shares of the Combined Estates, each of the Environmental
Claimants agrees not to release claims against the Raymark
Estates until the Raymark Trustee is satisfied that all
insurance recoveries for property damage and environmental
liabilities have been realized for the benefit of the Raymark
Estates.  Should claims of any nature remain outstanding in
favor of the Environmental Claimants against or in connection
with the Raytech Estates or the Raymark Estates at such time as
the Environmental Claimants determine that they will no longer
pursue such claims, then the Environmental Claimants will assign
any such claims to the PI Trust or the Raymark Trustee, as
appropriate in the circumstances.
     2. Claims by Other Creditors Against the Combined Estates
        If other creditors make claims against the Raymark
Estates or the Raytech Estate that the Environmental Claimants,
the Committee and the Guardian agree should be paid or that are
required to be paid pursuant to a confirmed plan of
reorganization of any of the Debtors, the Environmental
Claimants and API Claimants agree that their respective shares
in the Combined Estates shall be, in effect, proportionally
reduced to permit satisfaction of such claims at the appropriate
payment percentage in accordance with the Bankruptcy Code and
any such confirmed plan.  The Environmental Claimants agree that
in negotiations with Raymark/Raytech's other bona fide
environmental or property damage creditors, if any, the
Environmental Claimants will advise these other creditors that
they should seek recovery in the first instance against any
available property damage insurance of Raymark or the Raymark
Estates.  It is also agreed that (i) the Committee and the
Guardian will support the Environmental Claimants' position that
Raymark's or the Raymark Estates' property damage insurance
proceeds are subject to the claims of property damage or
environmental creditors alone,  and (ii) the Environmental
Claimants will support the Committee's and the Guardian's
position that Raymark's or the Raymark Estates' personal injury
insurance proceeds (including the CIGA settlement proceeds) and
any proceeds from the Tobacco Litigation are subject to the
claims of personal injury creditors alone.

     3. Incorporation of Agreement in Disclosure Statement.
        The terms and conditions of this Agreement shall be
incorporated into any disclosure statement and plan of
reorganization or liquidation with respect to any of the Debtors
that is proposed, supported or consented to by the Committee,
the Guardian and/or the Environmental Claimants and those
parties will oppose any plan that is inconsistent with this
Agreement.

_______________________________
     ______________________________
Henry S. Friedman                  Krista E. Trousdale
Senior Attorney                    Assistant Attorney General
Environmental Enforcement Section  Environmental Protection Department
U.S. Department of Justice         Office of the Attorney General
COUNSEL TO THE UNITED STATES       State of Connecticut
ENVIRONMENTAL PROTECTION           COUNSEL TO THE CONNECTICUT
AGENCY                             DEPARTMENT OF ENVIRONMENTAL
                                   PROTECTION


______________________________
                                   ___________________________________
Ann M. Nevins                      Neil G. Epstein
Assistant United States Attorney   Eckert Seamans Cherrin & Mellott, LLP
District of Connecticut            1515 Market Street, 9th Floor
COUNSEL TO THE UNITED STATES       Philadelphia, PA  19102
ENVIRONMENTAL PROTECTION           COUNSEL TO FMC CORPORATION
AGENCY


_______________________________
                                   ____________________________________
Elihu Inselbuch                    Carl Gulliver
Caplin & Drysdale, Chartered       Coan, Lewendon, Royston & Gulliver, P.C.
399 Park Avenue                    495 Orange Street
New York, NY 10022                 New Haven, CT 06511
COUNSEL TO THE OFFICIAL            COUNSEL TO THE GUARDIAN
COMMITTEE OF UNSECURED             AD LITEM FOR FUTURE CLAIMANTS
CREDITORS



EXHIBIT D

FORM OF
PI TRUST AGREEMENT









THE RAYTECH CORPORATION
ASBESTOS PERSONAL INJURY SETTLEMENT TRUST AGREEMENT

The Raytech Corporation Asbestos Personal Injury Settlement
Trust Agreement ("PI Trust Agreement"), dated the date set
forth on the signature page hereof and effective as of the
Effective Date, is entered into by Raytech Corporation
("Raytech," the "Settlor," or the "Debtor"), a Delaware
corporation, the Debtor and debtor-in-possession in Case No. 5-
89-00293 in the United States Bankruptcy Court for the District
of Connecticut as Settlor; the Legal Representative; the Official
Committee of Unsecured Creditors ("Committee"); and the
Trustees ("Trustees") and the members of the PI Trust Advisory
Committee ("TAC") identified on the signature page hereof and
appointed at Confirmation pursuant to the Raytech Corporation's
Second Amended Plan of Reorganization under Chapter 11 of the
United States Bankruptcy Code, dated as of April 19, 2000
("Plan"), as such Plan may be amended, modified or supplemented
from time to time.  All capitalized terms not otherwise defined
herein shall have their respective meanings as set forth in the
Plan, and such definitions are incorporated herein by reference.
All capitalized terms not defined herein or defined in the Plan,
but defined in the Bankruptcy Code or Rules, shall have the
meanings ascribed to them by the Bankruptcy Code and Rules, and
such definitions are incorporated herein by reference.
WHEREAS, at the time of the entry of the order for relief in
the Chapter 11 case, Raytech was named as a defendant in actions
involving personal injury ("PI") or death claims caused by
exposure to asbestos-containing products for which Raymark
Industries, Inc. and its predecessors and affiliates have legal
liability ("PI Trust Claims" as defined in the Plan); and
WHEREAS, Raytech has reorganized under the provisions of
Chapter 11 of the Bankruptcy Code in a case pending in the United
States Bankruptcy Court for the District of Connecticut, known as
In re Raytech Corporation, Debtor, Case No. 5-89-00293; and
WHEREAS, the Plan has been confirmed by the Bankruptcy
Court; and
WHEREAS, the Plan provides, inter alia, for the creation of
the Raytech Corporation Asbestos Personal Injury Settlement Trust
(the "PI Trust"); and
WHEREAS, pursuant to the Plan, the PI Trust is to use its
assets and income to satisfy all PI Trust Claims; and
WHEREAS, it is the intent of Raytech, the Trustees, the
Committee, the TAC, and the Legal Representative that the PI
Trust be administered, maintained, and operated at all times
through mechanisms that provide reasonable assurance that the PI
Trust will satisfy all PI Trust Claims pursuant to the Raytech
Corporation Asbestos Personal Injury Trust Distribution
Procedures ("Procedures") that are attached hereto as Exhibit 1
in substantially the same manner, and in strict compliance with
the terms of this PI Trust Agreement; and
WHEREAS, pursuant to the Plan, the PI Trust is intended to
qualify as a "qualified settlement fund" within the meaning of
section 1.468B-1 et seq. of the Treasury Regulations promulgated
under section 468B of the Internal Revenue Code ("IRC"); and
WHEREAS, the Bankruptcy Court has determined that the PI
Trust and the Plan satisfy all the prerequisites for an
injunction pursuant to section 524(g) of the Bankruptcy Code, and
such injunction has been entered in connection with the
Confirmation Order;
NOW, THEREFORE, it is hereby agreed as follows:
SECTION 1
AGREEMENT OF TRUST
1.1  Creation and Name.  Raytech as Settlor hereby creates a
trust known as the "Raytech Corporation Asbestos Personal Injury
Settlement PI Trust," which is the PI Trust provided for and
referred to in the Plan.  The Trustees of the PI Trust may
transact the business and affairs of the PI Trust in the name of
the PI Trust.
1.2  Purpose.  The purpose of the PI Trust is to assume the
liabilities of Raytech, and its predecessors and successors in
interest, for all PI Trust Claims and to use the PI Trust's
assets and income to pay the holders of all PI Trust Claims in
accordance with this PI Trust Agreement and the Procedures in
such a way that such holders of PI Trust Claims are treated
fairly, equitably and reasonably in light of the extremely
limited assets available to satisfy such claims, and to otherwise
comply in all respects with the requirements of a trust set forth
in section 524(g)(2)(B) of the Bankruptcy Code.
1.3  Transfer of Assets. Pursuant to the Plan, the number of
shares of Raytech Common Stock plus the amount of Available Cash
shown on Schedule A attached hereto have been transferred and
assigned to the PI Trust to settle and discharge all PI Trust
Claims.  Pursuant to the Plan, Raytech, its successors in
interest thereto, from and after the Effective Date
("Reorganized Raytech"), Raymark and others may also transfer
and assign additional assets to the PI Trust from time to time.
Such additional assets are anticipated to include, but are not
limited to, certain Tax Refunds and Tax Benefits to be
transferred pursuant to the Tax Assignment and Assumption
Agreement attached as Exhibit "G" to the Plan. In all events,
such assets will be transferred to the PI Trust free and clear of
any liens or other claims by Raytech, Reorganized Raytech, any
creditor, shareholder, or other entity.  Raytech, Reorganized
Raytech, Raymark and any other transferors shall also execute and
deliver such documents to the PI Trust as the Trustees reasonably
request to transfer and assign the stock and other assets (the
"PI Trust assets") to the PI Trust.
1.4  Acceptance of Assets and Assumption of Liabilities
     (a)       In furtherance of the purposes of the PI Trust,
the Trustees, on behalf of the PI Trust, hereby expressly accept
the transfer and assignment to the PI Trust of the PI Trust
assets in the time and manner as contemplated in the Plan.
(b) In furtherance of the purposes of the PI Trust,
the Trustees, on behalf of the PI Trust, expressly assume all
liability for all PI Trust Claims.  Except as otherwise provided
in this PI Trust Agreement and the Procedures, the PI Trust shall
have all defenses, cross-claims, offsets, and recoupments, as
well as rights of indemnification, contribution, subrogation, and
similar rights, regarding such claims that Raytech or Reorganized
Raytech has or would have had under applicable law.  Regardless
of the foregoing, however, and except as to holders of Asbestos
Personal Injury Contribution Claims and except as to holders of
any PI Trust Claims time-barred as of March 10, 1989, the
Petition Date, the Trustees on behalf of the PI Trust hereby
waive all rights and defenses based on state and federal statutes
of limitations and repose it might otherwise assert against
holders of PI Trust Claims.  No provision herein or in the
Procedures shall be construed to mandate distributions on any
claims or other actions that would contravene the PI Trust's
compliance with the requirements of a qualified settlement fund
within the meaning of section 1.468B-1 et seq. of the Treasury
Regulations promulgated under section 468B of the IRC.
(c) Raytech and Reorganized Raytech shall be entitled
to indemnification from the PI Trust for any expenses, costs, and
fees (including attorneys' fees and costs, but excluding any such
expenses, costs, and fees incurred prior to the Effective Date),
judgments, settlements, or other liabilities arising from or
incurred in connection with any action related to PI Trust
Claims, including, but not limited to, indemnification or
contribution for such claims prosecuted against Reorganized
Raytech.
     (d)       Nothing in this PI Trust Agreement shall be
construed in any way to limit the scope, enforceability, or
effectiveness of the Injunctions issued in connection with the
Plan or the PI Trust's assumption of all liability for PI Trust
Claims, subject to the provisions of Section 1.4(b) above.
SECTION 2
POWERS AND TRUST ADMINISTRATION
2.1  Powers.
     (a)       The Trustees are and shall act as the fiduciaries
to the PI Trust in accordance with the provisions of this PI
Trust Agreement and the Plan.  The Trustees shall, at all times,
administer the PI Trust and the PI Trust assets in accordance
with the purposes set forth in Section 1.2 above.  Subject to the
limitations set forth in this PI Trust Agreement, the Trustees
shall have the power to take any and all actions that, in the
judgment of the Trustees, are necessary or proper to fulfill the
purposes of the PI Trust, including, without limitation, each
power expressly granted in this Section 2.1, any power reasonably
incidental thereto, and any trust power now or hereafter
permitted under the laws of the State of ___________________.
     (b)       Except as required by applicable law or otherwise
specified herein, the Trustees need not obtain the order or
approval of any court in the exercise of any power or discretion
conferred hereunder.
     (c)       Without limiting the generality of Section 2.1(a)
above, and except as limited below, the Trustees shall have the
power to:
        (i)    receive and hold the PI Trust assets, vote
the Reorganized Raytech Common Stock, and exercise all rights
with respect to, and sell, any securities issued by Reorganized
Raytech that are included in the PI Trust assets, subject to any
restrictions set forth in the Restated Certificate of Reorganized
Raytech;
        (ii)   invest the monies held from time to time by
the PI Trust;
        (iii)  sell, transfer, or exchange any or all
of the PI Trust assets at such prices and upon such terms as the
Trustees may consider proper, consistent with the other terms of
this PI Trust Agreement;
        (iv)   enter into leasing and financing agreements
with third parties to the extent such agreements are reasonably
necessary to permit the PI Trust to operate;
        (v)    pay liabilities and expenses of the PI Trust,
including, but not limited to, PI Trust Expenses;
        (vi)   establish such funds, reserves and accounts
within the PI Trust estate, as deemed by the Trustees to be
useful in carrying out the purposes of the PI Trust;
        (vii)  sue and be sued and participate, as a
party or otherwise, in any judicial, administrative, arbitrative,
or other proceeding;
        (viii) establish, supervise and administer the
PI Trust in accordance with the Procedures and the terms thereof,
a copy of which is annexed hereto as Exhibit 1;
        (ix)   appoint such officers and hire such employees
and engage such legal, financial, accounting, investment,
auditing and forecasting, and other consultants and agents as the
business of the PI Trust requires, and delegate to such persons
such powers and authorities as the fiduciary duties of the
Trustees permit and as the Trustees, in their discretion, deem
advisable or necessary in order to carry out the terms of this PI
Trust;
        (x)    pay employees, legal, financial, accounting,
investment, auditing, and forecasting, and other consultants,
advisors, and agents, including those engaged by the PI Trust in
connection with its alternative dispute resolution activities,
reasonable compensation;
        (xi)   compensate the Trustees, the TAC members, and
the Legal Representative as provided below, and their employees,
legal, financial, accounting, investment and other advisors,
consultants, independent contractors, and agents, and reimburse
the Trustees, the TAC members and the Legal Representative all
reasonable out-of-pocket costs and expenses incurred by such
persons in connection with the performance of their duties
hereunder;
        (xii)  execute and deliver such instruments as
the Trustees consider proper in administering the PI Trust;
        (xiii) enter into such other arrangements with
third parties as are deemed by the Trustees to be useful in
carrying out the purposes of the PI Trust, provided such
arrangements do not conflict with any other provision of this PI
Trust Agreement;
        (xiv)  in accordance with Section 4.6 below,
defend, indemnify and hold harmless (and purchase insurance
indemnifying) (A) the Trustees and (B) the TAC, the Legal
Representative, the officers and employees of the PI Trust, and
any agents, advisors and consultants of the PI Trust, the TAC or
the Legal Representative ("the Additional Indemnitees"), to the
fullest extent that a corporation or trust organized under the
law of the PI Trust's situs is from time to time entitled to
indemnify and/or insure its directors, trustees, officers,
employees, agents, advisors and representatives;
        (xv)   delegate any or all of the authority herein
conferred with respect to the investment of all or any portion of
the PI Trust assets to any one or more reputable individuals or
recognized institutional investment advisors or investment
managers without liability for any action taken or omission made
because of any such delegation, except as provided in Section 4.4
below;
        (xvi)  consult with Reorganized Raytech at such
times and with respect to such issues relating to the conduct of
the PI Trust as the Trustees consider desirable; and
        (xvii) make, pursue (by litigation or
otherwise), collect, compromise or settle, in the name of the PI
Trust or the name of Reorganized Raytech, any claim, right,
action, or cause of action included in the PI Trust assets
including, but not limited to, insurance recoveries, before any
court of competent jurisdiction; provided that settlement of
actions before the Bankruptcy Court require the approval of the
Bankruptcy Court after notice to Reorganized Raytech.
     (d)       The Trustees shall not have the power to guarantee
any debt of other persons.
     (e)       The Trustees shall give the TAC, the Legal
Representative and Reorganized Raytech prompt notice of any act
performed or taken pursuant to Sections 2.1(c)(i), (iii), (vii),
or (xv) above, and any act proposed to be performed or taken
pursuant to Section 2.2(f) below.
2.2  General Administration.
     (a)       The Trustees shall adopt and act in accordance
with the PI Trust Bylaws.  To the extent not inconsistent with
the terms of this PI Trust Agreement, the PI Trust Bylaws shall
govern the affairs of the PI Trust.  In the event of an
inconsistency between the PI Trust Bylaws and this PI Trust
Agreement, the PI Trust Agreement shall govern.
     (b)       The Trustees shall (i) timely file such income tax
and other returns and statements and shall timely pay all taxes
required to be paid, (ii) comply with all withholding
obligations, as required under the applicable provisions of the
IRC and of any state law and the regulations promulgated
thereunder, (iii) meet without limitation all requirements
necessary to qualify and maintain qualification of the PI Trust
as a qualified settlement fund within the meaning of section
1.468B-1 et seq. of the Treasury Regulations promulgated under
section 468B of the IRC, and (iv) take no action that could cause
the PI Trust to fail to qualify as a qualified settlement fund
within the meaning of section 1.468B-1 et seq. of the Treasury
Regulations promulgated under section 468B of the IRC.
     (c)       The Trustees shall timely account to the
Bankruptcy Court as follows:
(i)  The Trustees shall cause to be prepared and
filed with the Bankruptcy Court, as soon as available, and in any
event within one hundred and twenty (120) days following the end
of each fiscal year, an annual report containing financial
statements of the PI Trust (including, without limitation, a
balance sheet of the PI Trust as of the end of such fiscal year
and a statement of operations for such fiscal year) audited by a
firm of independent certified public accountants selected by the
Trustees and accompanied by an opinion of such firm as to the
fairness of the financial statements' presentation of the cash
and investments available for the payment of claims and as to the
conformity of the financial statements with generally accepted
accounting principles.  The Trustees shall provide a copy of such
report to the TAC, the Legal Representative, and Reorganized
Raytech when such reports are filed with the Bankruptcy Court.
        (ii)   Simultaneously with delivery of each set of
financial statements referred to in Article 2.2(c)(i) above, the
Trustees shall cause to be prepared and filed with the Bankruptcy
Court a report containing a summary regarding the number and type
of claims disposed of during the period covered by the financial
statements.  The Trustees shall provide a copy of such report to
the TAC, the Legal Representatives, and Reorganized Raytech when
such report is filed.
        (iii)  All materials required to be filed with
the Bankruptcy Court by this Section 2.2(c) shall be available
for inspection by the public in accordance with procedures
established by the Bankruptcy Court and shall be filed with the
Office of the United States Trustee for the District of
Connecticut.
     (d)       The Trustees shall cause to be prepared as soon as
practicable prior to the commencement of each fiscal year a
budget and cash flow projections covering such fiscal year and
the succeeding four fiscal years.  The Trustees shall provide a
copy of the budget and cash flow projections to the TAC and the
Legal Representative.
     (e)       The Trustees shall consult with the TAC and the
Legal Representative (i) on the general implementation and
administration of the PI Trust; (ii) on the general
implementation and administration of the Procedures; and (iii) on
such other matters as may be required under this PI Trust
Agreement and the Procedures.
(f) The Trustees shall be required to obtain the
consent of the TAC and the Legal Representative pursuant to the
Consent Process set forth in Section 5.7(b) and 6.6(b) below, in
addition to any other instances elsewhere enumerated, in order:
(i) to add to or change the schedule of Asbestos-
Related Disease Categories or criteria set forth on Schedule A of
the Procedures; to change the liquidated values for such
categories set forth on Schedule B of the Procedures; or to begin
processing and paying Level Two claims pursuant to section 5.2 of
the Procedures;
(ii) to redetermine the Pro-rata Percentage
described in Section 4.2 of the Procedures;
(iii) to change the Claims Materials to be provided
holders of PI Trust Claims under Section 6.2 of the Procedures;
(iv) to change the form of release to be provided
pursuant to Section 7.8 of the Procedures;
(v) to require that claimants provide additional
kinds of medical evidence pursuant to Section 7.1 of the
Procedures;
        (vi)   to terminate the PI Trust pursuant to Section
7.2 below;
        (vii)  to settle the liability of any insurer
under any insurance policy or legal action related thereto;
        (viii) to change the compensation of the
members of the TAC, the Legal Representative or Trustees, other
than to reflect cost-of-living increases or changes approved by
the Bankruptcy Court as otherwise provided herein;
        (ix)   to amend any provision of the PI Trust
Agreement or the Procedures;
     (x)       to take structural or other actions to
minimize any tax on the PI Trust assets;
     (xi)      to amend the PI Trust Bylaws in accordance
with the terms thereof; or
               (xii)     to merge any asbestos claims resolution
organization formed by the PI Trust with another asbestos claims
resolution organization that is not specifically created by this
PI Trust Agreement or the Procedures, or to contract with another
asbestos claims resolution organization or other entity that is
not specifically created by this PI Trust Agreement or the
Procedures, or permit any other party to join in any asbestos
claims resolution organization that is formed by the PI Trust
pursuant to the PI Trust Agreement or the Procedures; provided
that such merger, contract or joinder shall not (a) subject
Reorganized Raytech or any successor in interest to any risk of
having any PI Trust Claim asserted against it or them, or
(b) otherwise jeopardize the validity or enforceability of the
section 524(g) injunction; and provided further that the terms of
such merger will require the surviving organization to make
decisions about the allowability and value of claims in
accordance with Section 7.10 of the Procedures which requires
that such decisions be based on (i) the provisions of the
Procedures, and (ii) the Asbestos-Related Disease Categories and
liquidated values for such Categories set forth on Schedules A
and B of the Procedures, respectively.
(g)  The Trustees shall meet with the TAC and the Legal
Representative no less often than quarterly.  The Trustees shall
meet in the interim with the TAC and the Legal Representative
when so requested by either.
(h)  The Trustees, upon notice from either the TAC or
the Legal Representative, if practicable in view of pending
business, shall at their next meeting with the TAC or the Legal
Representative consider issues submitted by the TAC or the Legal
Representative.
2.3  Claims Administration.
     The Trustees shall promptly proceed to implement the
Procedures.
SECTION 3
ACCOUNTS, INVESTMENTS, AND PAYMENTS
3.1  Accounts.  The Trustees may, from time to time, create
such accounts and reserves within the PI Trust estate as they may
deem necessary, prudent, or useful in order to provide for the
payment of expenses and payment of PI Trust Claims and may, with
respect to any such account or reserve, restrict the use of
monies therein.
3.2  Investments.  Investment of monies held in the PI Trust
shall be administered in the manner in which individuals of
ordinary prudence, discretion, and judgment would act in the
management of their own affairs, subject to the following
limitations and provisions:
     (a)       The PI Trust shall not acquire, directly or
indirectly, equity in any entity (other than Reorganized Raytech
or any successor to Reorganized Raytech) or business enterprise
if, immediately following such acquisition, the PI Trust would
hold more than 5% of the equity in such entity or business
enterprise.  The PI Trust shall not hold, directly or indirectly,
more than 10% of the equity in any entity (other than Reorganized
Raytech or any successor to Reorganized Raytech) or business
enterprise.  This provision, however, shall not apply to any
entity or business the PI Trust may acquire as a result of
litigation on fraudulent conveyance or other grounds against any
shareholders or former shareholders of Raytech or Raymark or
against any parties related to any such shareholders or former
shareholders.
     (b)       The PI Trust shall not acquire or hold any long-
term debt securities unless (i) such securities are PI Trust
assets under the Plan, (ii) such securities are rated "Baa" or
higher by Moody's, "BBB" or higher by Standard & Poor's
("S&P's"), or have been given an equivalent investment grade
rating by another nationally recognized statistical rating
agency, or (iii) have been issued or fully guaranteed as to
principal and interest by the United States of America or any
agency or instrumentality thereof.
     (c)       The PI Trust shall not acquire or hold for longer
than ninety (90) days any commercial paper unless such commercial
paper is rated "Prime-1" or higher by Moody's or "A-1" or
higher by S&P's or has been given an equivalent rating by another
nationally recognized statistical rating agency.
     (d)       Excluding any securities by the Debtor or
Reorganized Raytech, the PI Trust shall not acquire or hold any
common or preferred stock or convertible securities unless such
stock or securities are rated "A" or high by Moody's or "A" or
higher by S&P's or have been given an equivalent investment grade
rating by another nationally recognized statistical rating
agency.
     (e)       The PI Trust shall not acquire any debt securities
or other instruments issued by any entity (other than debt
securities or other instruments issued or fully guaranteed as to
principal and interest by the United States of America or any
agency or instrumentality thereof) if, following such
acquisition, the aggregate market value of all debt securities
and instruments issued by such entity held by the PI Trust would
exceed 2% of the aggregate value of the PI Trust estate.  The PI
Trust shall not hold any debt securities or other instruments
issued by any entity (other than debt securities or other
instruments issued or fully guaranteed as to principal and
interest by the United States of America or any agency or
instrumentality thereof and other than debt securities or other
instruments of Reorganized Raytech or any successor to
Reorganized Raytech) to the extent that the aggregate market
value of all securities and instruments issued by such entity
held by the PI Trust would exceed 5% of the aggregate value of
the PI Trust assets.
     (f)       The PI Trust shall not acquire or hold any
certificates of deposit unless all publicly held, long-term debt
securities, if any, of the financial institution issuing the
certificate of deposit and the holding company, if any, of which
such financial institution is a subsidiary, meet the standards
set forth in Section 3.2(b) above.
     (g)       The PI Trust may acquire and hold any securities
or instruments issued by Reorganized Raytech or any successor to
Reorganized Raytech, without regard to the limitations set forth
in Subsections (a)-(f) above.
     (h)       The PI Trust shall not acquire or hold any
repurchase obligations unless, in the opinion of the Trustees,
they are adequately collateralized.
     (i)       The PI Trust shall not acquire or hold any
options.
3.3  Source of Payments.  All PI Trust expenses and payments
and all liabilities with respect to claims shall be payable
solely by the Trustees out of the PI Trust assets.  Neither
Raytech, Reorganized Raytech, their subsidiaries, any successor
in interest or the present or former stockholders, directors,
officers, employees or agents of Raytech, Reorganized Raytech, or
their subsidiaries, nor the Trustees, the TAC or Legal
Representative, or any of their officers, agents, advisors, or
employees shall be liable for the payment of any PI Trust expense
or any other liability of the PI Trust.
SECTION 4
TRUSTEES
4.1  Number.  There shall be three (3) Trustees.  The
initial Trustees shall be those persons named on the signature
page hereof.
4.2  Term of Service.
     (a)       The initial Trustees named pursuant to Article 4.1
above shall serve the staggered terms of three (3), four (4) and
five (5) years as shown on the signature page hereof.  Thereafter
each term of service shall be five (5) years.  The initial
Trustees shall serve from the Effective Date until the earlier of
(i) the end of his or her term, (ii) his or her death, (iii) his
or her resignation pursuant to Section 4.2(b) below, (iv) his or
her removal pursuant to Section 4.2(c) below, or (v) the
termination of the PI Trust pursuant to Section 7.2 below.
     (b)       A PI Trustee may resign at any time by written
notice to the remaining Trustees, the TAC and the Legal
Representative.  Such notice shall specify a date when such
resignation shall take place, which shall not be less than 90
days after the date such notice is given, where practicable.
     (c)       A Trustee may be removed by unanimous vote of the
remaining Trustees in the event that he or she becomes unable to
discharge his or her duties hereunder due to accident or physical
or mental deterioration, or for other good cause.  Good cause
shall be deemed to include, without limitation, any substantial
failure to comply with the general administration provisions of
Section 2.2 above, a consistent pattern of neglect and failure to
perform or participate in performing the duties of the Trustees
hereunder, or repeated non-attendance at scheduled meetings.
Such removal shall require the approval of the Bankruptcy Court
and shall take effect at such time as the Bankruptcy Court shall
determine.
4.3  Appointment of Successor Trustees.
     (a)       In the event of a vacancy in the position of PI
Trustee, whether by term expiration, resignation or removal, the
remaining Trustees shall consult with the TAC and the Legal
Representative concerning appointment of a successor PI Trustee.
The vacancy shall be filled by the unanimous vote of the
remaining Trustees unless a majority of the TAC or the Legal
Representative vetoes the appointment.  In the event that the
remaining Trustees cannot agree on a Successor PI Trustee, or a
majority of the TAC or the Legal Representative vetoes the
appointment of a successor PI Trustee, the Bankruptcy Court shall
make the appointment.  Nothing shall prevent the reappointment of
a PI Trustee for an additional term or terms.
(b) Immediately upon the appointment of any Successor
PI Trustee, all rights, titles, duties, powers and authority of
the predecessor PI Trustee hereunder shall be vested in, and
undertaken by, the Successor PI Trustee without any further act.
No Successor PI Trustee shall be liable personally for any act or
omission of his or her predecessor Trustees.
(c) Each Successor PI Trustee shall serve until the
earlier of (i) the end of a  full term of five (5) years if the
predecessor PI Trustee completed his or her term, (ii) the end of
the remainder of the term of the PI Trustee whom he or she is
replacing if said predecessor PI Trustee did not complete said
term, (iii) his or her death, (iv) his or her resignation
pursuant to Section 4.2(b) above, (v) his or her removal pursuant
to Section 4.2(c) above, or (vi) the termination of the PI Trust
pursuant to Section 7.2 below.
4.4  Liability of Trustees, Officers and Employees.  The
Trustees and the individuals identified as Additional Indemnitees
in Section 2.1(c)(xiv) above shall not be liable to the PI Trust,
to any individual holding an asbestos claim, or to any other
person, except for such individual's own breach of trust
committed in bad faith or willful misappropriation.  In addition,
the Trustees and the Additional Indemnitees shall not be liable
for any act or omission of any other Trustee or Additional
Indemnitee unless such person acted with bad faith in the
selection or retention of such other Trustee or Additional
Indemnitee.
4.5  Compensation and Expenses of Trustees.
        (a)    The Trustees shall receive compensation from the
PI Trust for their services as Trustees in the amount of
$25,000.00 per annum, plus a per diem allowance for meetings or
other PI Trust business performed in the amount of $2,000.00.
For purposes of the per diem allowance, PI Trust business
includes, but is not limited to, attendance at meetings of
Reorganized Raytech's Board of Directors.  For purposes of
section 7.4 below, the Trustees shall determine the scope and
duration of activities that constitute a meeting and, if the
Trustees elect to provide for payment for activities of less than
a full day's duration, may provide for partial payment of per
diem amounts on a proportional basis for activities of less than
a full day's duration.  The per annum and per diem compensation
payable to the Trustees hereunder shall be reviewed every three
(3) years and appropriately adjusted for changes in the cost of
living.  Any other changes in compensation of the Trustees shall
be made subject to the approval of the Bankruptcy Court.
        (b)    The PI Trust will promptly reimburse the Trustees
for all reasonable out-of-pocket costs and expenses incurred by
the Trustees in connection with the performance of their duties
hereunder.
        (c)    The PI Trust shall include a description of the
amounts paid under this Section 4.5 in the accounts to be filed
with the Bankruptcy Court and provided to the TAC, the Legal
Representative, and Reorganized Raytech pursuant to Section 2.2(c)(i).
     4.6       Indemnification of Trustees and Additional
Indemnitees.
        (a)    The PI Trust shall indemnify and defend the
Trustees, as well as the Additional Indemnitees in the
performance of their duties hereunder to the fullest extent that
a corporation or trust organized under the laws of the PI Trust's
situs is from time to time entitled to indemnify and defend such
persons against any and all liabilities, expenses, claims,
damages or losses incurred by them in the performance of their
duties.  Notwithstanding the foregoing, the Trustees and the
Additional Indemnitees shall not be indemnified or defended in
any way for any liability, expense, claim, damage, or loss for
which he or she is ultimately liable under Section 4.4 above.
        (b)    Reasonable expenses, costs and fees (including
attorneys' fees and costs) incurred by or on behalf of a PI
Trustee or Additional Indemnitee in connection with any action,
suit, or proceeding, whether civil, administrative or arbitrative
from which they are indemnified by the PI Trust pursuant to
Section 4.6(a) above, shall be paid by the PI Trust in advance of
the final disposition thereof upon receipt of an undertaking, by
or on behalf of the Trustees or Additional Indemnitee, to repay
such amount in the event that it shall be determined ultimately
by final order that such PI Trustee or Additional Indemnitee is
not entitled to be indemnified by the PI Trust.
        (c)    The Trustees may purchase and maintain reasonable
amounts and types of insurance on behalf of an individual who is
or was a PI Trustee or Additional Indemnitee including against
liability asserted against or incurred by such individual in that
capacity or arising from his or her status as a PI Trustee, TAC
member, Legal Representative, officer, employee, agent or other
representative.
     4.7       Trustees' Lien.  The Trustees and the Additional
Indemnitees shall have a first priority lien upon the PI Trust
assets to secure the payment of any amounts payable to them
pursuant to Section 4.6 above.
     4.8       Trustees' Employment of Experts.  The Trustees may,
but shall not be required to, retain and/or consult with counsel,
accountants, appraisers, auditors and forecasters, and other
parties deemed by the Trustees to be qualified as experts on the
matters submitted to them, and the written opinion of or
information provided by any such parties on any matters submitted
to them by the Trustees shall be full and complete authorization
and protection in respect of any action taken or not taken by the
Trustees hereunder in good faith and in accordance with the
written opinion of or information provided by any such party.
     4.9       Trustees' Independence.  The Trustees shall not,
during the term of their service, hold a financial interest in, act as
attorney or agent for, or serve as any other professional for
Reorganized Raytech.  Notwithstanding the foregoing, any PI
Trustee may serve, without any additional compensation other than
the per diem compensation to be paid by  the PI Trust pursuant to
Section 4.5(a) above, as a director of Reorganized Raytech.  No
PI Trustee shall act as an attorney for any person who holds an
asbestos claim.
     4.10      Bond.  The Trustees shall not be required to post
any bond or other form of surety or security unless otherwise ordered
by the Bankruptcy Court.
SECTION 5
TRUST ADVISORY COMMITTEE
5.1  Members.  The TAC shall consist of three members, who
shall initially be the persons named on the signature page
hereof.
5.2  Duties.  The members of the TAC shall serve in a
fiduciary capacity representing all holders of present PI Trust
Claims.  The Trustees must consult with the TAC on matters
identified in Section 2.2(e) above and in other provisions
herein, and must obtain the consent of the TAC on matters
identified in Section 2.2(f) above.  Where provided in the
Procedures, certain actions by the Trustees are also subject to
the consent of the TAC.
5.3  Term of Office.
     (a)       The initial members of the TAC shall serve the
staggered three (3), four (4) or five (5) year terms shown on the
signature pages hereof.  Thereafter each term of service shall be
five (5) years.  A member of the TAC shall serve until the
earlier of (i) the end of his or her term; (ii) his or her death,
(iii) his or her resignation pursuant to Section 5.3(b) below,
(iv) his or her removal pursuant to Section 5.3(c) below, or
(iv) the termination of the PI Trust pursuant to Section 7.2
below.
     (b)       A member of the TAC may resign at any time by
written notice to the other members of the TAC, the Trustees and
the Legal Representative.  Such notice shall specify a date when
such resignation shall take effect, which shall not be less than
ninety (90) days after the date such notice is given, where
practicable.
     (c)       A member of the TAC may be removed in the event
that he or she becomes unable to discharge his or her duties
hereunder due to accident, physical deterioration, mental
incompetence, or a consistent pattern of neglect and failure to
perform or to participate in performing the duties of such member
hereunder, such as repeated non-attendance at scheduled meetings.
Such removal shall be made at the recommendation of the remaining
members of the TAC with the approval of the Bankruptcy Court.
5.4  Appointment of Successor.
(a) A vacancy caused by resignation or removal or
term expiration shall be filled by the unanimous vote of the
remaining members of the TAC.  In the event they are unable to
agree on a successor, the vacancy shall be filled by the
Bankruptcy Court.
(b) Each successor TAC member shall serve until the
earlier of (i) the end of a full term of five (5) years if the
predecessor member completed his or her  term, (ii) the end of
the remainder of the term of the member whom he or she is
replacing if said predecessor member did not complete said term,
(iii) his or her death, (iv) his or her resignation pursuant to
Section 5.3(b) above, (v) his or her removal pursuant to Section
5.3(c) above, or (vi) the termination of the PI Trust pursuant to
Section 7.2 below.



5.5 TAC's Employment of Professionals.
(a) The TAC may but is not required to retain and/or
consult counsel, accountants, appraisers, auditors, forecasters,
experts, and financial and investment advisors, and such other
parties deemed by the TAC to be qualified as experts on matters
submitted to the TAC (the "Professionals").  The TAC and its
Professionals shall at all times have complete access to the PI
Trust's officers, employees and agents, as well as to the
Professionals retained by the PI Trust, and shall also have
complete access to all information generated by them or otherwise
available to the PI Trust or the Trustees.  In the absence of
gross negligence, the written opinion of or information provided
by any Professional deemed by the TAC to be qualified as an
expert on the particular matter submitted to the TAC shall be
full and complete authorization and protection in support of any
action taken or not taken by the TAC in good faith and in
accordance with the written opinion of or information provided by
the Professional.
     (b)       The Trust shall promptly reimburse, or pay
directly if so instructed, the TAC for all reasonable fees and
costs associated with the TAC's employment of legal counsel
pursuant to this provision in connection with the TAC's
performance of its duties hereunder.  The Trust shall also
promptly reimburse, or pay directly if so instructed, the TAC for
all reasonable fees and costs associated with the TAC's
employment of any other Professional pursuant to this provision
in connection with the TAC's performance of its duties hereunder;
provided, however, that (i) the TAC has first submitted to the
Trust a written request for such reimbursement setting forth the
reasons (A) why the TAC desires to employ such Professional, and
(B) why the TAC cannot rely on Professionals retained by the
Trust to meet the need of the TAC for such expertise or advice,
and (ii) the Trust has approved the TAC's request for
reimbursement in writing.  If the Trust agrees to pay for the TAC
Professional, such reimbursement shall be treated as a Trust
Expense.  If the Trust declines to pay for the TAC Professional,
it must set forth its reasons in writing.  If the TAC still
desires to employ such Professional at Trust expense, the TAC
and/or the Trustees shall resolve their dispute pursuant to the
procedures set forth in Section 7.13 below.
5.6  Compensation and Expenses of TAC.
        (a)    The members of the TAC shall receive compensation
from the PI Trust for their services as TAC members in the amount
of $10,000.00 per annum, plus a per diem allowance for attendance
at meetings or other conduct of PI Trust business in the amount
of $1,000.00.  For purposes of section 7.4 below, the TAC shall
determine the scope and duration of activities that constitute a
meeting and, if the TAC elects to provide for payment for
activities of less than a full day's duration, it may provide for
partial payment of per diem amounts on a proportional basis for
activities of less than a full day's duration. The per annum and
per diem compensation payable to the TAC hereunder shall be
reviewed every three (3) years and appropriately adjusted for
changes in the cost of living.  Any other changes in compensation
of the TAC shall be made only pursuant to the Consent Process
described in section 5.7(b) below, and then subject to approval
by the Bankruptcy Court.
        (b)    The PI Trust will promptly reimburse the members
of the TAC for all reasonable out-of-pocket costs and expenses
incurred by the TAC members in connection with the performance of
their duties hereunder. Such reimbursement or direct payment
shall be deemed a PI Trust expense.
        (c)    The PI Trust shall include a description of the
amounts paid under this Section 5.6 in the accounts to be
filed with the Bankruptcy Court and provided to the Trustees,
the Legal Representative, and Reorganized Raytech pursuant to
Section 2.2(c)(i).
5.7  Procedures for Consultation with and Obtaining the
Consent of the TAC.
(a) Consultation Process.
(i) In the event the Trustees are required to
consult with the TAC pursuant to Section 2.2(e) above or on
other matters as provided herein, the Trustees shall provide the
TAC with written advance notice of the matter under
consideration, and with all relevant information concerning the
matter as is reasonably practicable under the circumstances.
The Trustees shall also provide the TAC with such reasonable
access to experts retained by the PI Trust and its staff (if
any) as the TAC may reasonably request during the time that the
Trustees are considering such matter, and shall also provide the
TAC the opportunity, at reasonable times and for reasonable
periods of time, to discuss and comment on such matter with the
Trustees.
(ii) The Trustees shall take into consideration
the time required for the TAC, if its members so wish, to engage
and consult with its own independent financial or investment
advisors as to such matter.

(b) Consent Process.
(i) In the event the Trustees are required to
obtain the consent of the TAC pursuant to Section 2.2(f) above,
the Trustees shall provide the TAC with a written notice stating
that their consent is being sought pursuant to that provision,
describing in detail the nature and scope of the action the
Trustees propose to take, and explaining in detail the reasons
why the Trustees desire to take such action.   The Trustees shall
provide the TAC as much relevant additional information
concerning the proposed action as is reasonably practicable under
the circumstances.  The Trustees shall also provide the TAC with
such reasonable access to experts retained by the PI Trust and
its staff (if any) as the TAC may reasonably request during the
time that the Trustees are considering such action, and shall
also provide the TAC the opportunity, at reasonable times and for
reasonable periods of time, to discuss and comment on such action
with the Trustees.
(ii) The TAC must consider in good faith and in a
timely fashion any request for its consent by the Trustees, and
must in any event advise the Trustees in writing of its consent
or its objection to the proposed action within 30 days of
receiving the original request for consent from the Trustees.
The TAC may not withhold its consent unreasonably.  If the TAC
decides to withhold its consent, it must explain in detail its
objections to the proposed action.  If the TAC does not advise
the Trustees in writing of its consent or its objections to the
action within 30 days of receiving notice regarding such request,
the TAC's consent to the proposed actions shall be deemed to have
been affirmatively granted.
(iii)   If, after following the procedures
specified in this Section 5.7(b), the TAC continues to object to
the proposed action and to withhold its consent to the proposed
action, the Trustees and/or the TAC shall resolve their dispute
pursuant to the procedures set forth in Section 7.13.
SECTION 6
THE LEGAL REPRESENTATIVE
6.1 Duties.  The Legal Representative shall be the
individual identified on the signature pages hereto.  He or she
shall serve in a fiduciary capacity, representing the interests
of the holders of future PI Trust Claims for the purpose of
protecting the rights of such persons.  The Trustees must consult
with the Legal Representative on matters identified in Section
2.2(e) above and on certain other matters provided herein, and
must obtain the consent of the Legal Representative on matters
identified in Section 2.2(f) above.  Where provided in the
Procedures, certain actions by the Trustees are also subject to
the consent of the Legal Representative.
6.2 Term of Office.
(a) The Legal Representative shall serve until the
earlier of (i) his or her death, (ii) his or her resignation
pursuant to Section 6.2(b) below, (iii) his or her removal
pursuant to Section 6.2(c) below, or (iv) the termination of the
PI Trust pursuant to Section 7.2 below.
(b) The Legal Representative may resign at any time by
written notice to the Trustees.  Such notice shall specify a date
when such resignation shall take effect, which shall not be less
than ninety (90) days after the date such notice is given, where
practicable.
        (c)    The Legal Representative may be removed by the
Bankruptcy Court in the event he or she becomes unable to
discharge his or her duties hereunder due to accident, physical
deterioration, mental incompetence, or a consistent pattern of
neglect and failure to perform or to participate in performing
the duties hereunder, such as repeated non-attendance at
scheduled meetings.
     6.3       Appointment of Successor.    A vacancy caused by
resignation shall be filled with an individual nominated prior to
the effective date of the resignation by the resigning Legal
Representative, and a vacancy caused by death or removal of the
Legal Representative shall be filled with an individual nominated
by the Trustees, the TAC or both.  In any case, the nominee shall
be subject to the approval of the Court.
6.4 Legal Representative's Employment of Professionals.
(a) The Legal Representative may but is not required
to retain and/or consult counsel, accountants, appraisers,
auditors, forecasters, experts, and financial and investment
advisors, and such other parties deemed by the Legal
Representative to be qualified as experts on matters submitted to
the Legal Representative (the "Professionals").  The Legal
Representative and his or her experts shall at all times have
complete access to the PI Trust's officers, employees and agents,
as well as to the Professionals retained by the PI Trust, and
shall also have complete access to all information generated by
them or otherwise available to the PI Trust or the Trustees.  In
the absence of gross negligence, the written opinion of or
information provided by any Professional deemed by the Legal
Representative to be qualified as an expert on the particular
matter submitted to the Legal Representative shall be full and
complete authorization and protection in support of any action
taken or not taken by the Legal Representative in good faith and
in accordance with the written opinion of or information provided
by the Professional.
     (b)       The Trust shall promptly reimburse, or pay
directly if so instructed, the Legal Representative for all
reasonable fees and costs associated with the Legal
Representative's employment of legal counsel pursuant to this
provision in connection with the Legal Representative's
performance of his or her duties hereunder.  The Trust shall also
promptly reimburse, or pay directly if so instructed, the Legal
Representative for all reasonable fees and costs associated with
the Legal Representative's employment of any other Professionals
pursuant to this provision in connection with the Legal
Representative's performance of his or her duties hereunder;
provided, however, that (i) the Legal Representative has first
submitted to the Trust a written request for such reimbursement
setting forth the reasons (A) why the Legal Representative
desires to employ the Professional, and (B) why the Legal
Representative cannot rely on Professionals retained by the Trust
to meet the need of the Legal Representative for such expertise
or advice, and (ii) the Trust has approved the Legal
Representative's request for reimbursement in writing.  If the
Trust agrees to pay for the Legal Representative's Professional,
such reimbursement shall be treated as a Trust Expense.  If the
Trust declines to pay for the Legal Representative's
Professional, it must set forth its reasons in writing.  If the
Legal Representative still desires to employ the Professional at
Trust expense, the Legal Representative and/or the Trustees shall
resolve their dispute pursuant to the procedures set forth in
Section 7.13 below.
6.5  Compensation and Expenses of the Legal Representative.
(a) The Legal Representative shall receive
compensation from the PI Trust for his or her services as the
Legal Representative in the amount of $25,000.00 per annum, plus
payment at the Legal Representative's normal hourly rate for
services performed over and above fifty (50) hours per year. The
per annum compensation payable to the Legal Representative
hereunder shall be reviewed every three (3) years and
appropriately adjusted for changes in the cost of living.  Any
other changes in compensation of the Legal Representative shall
be made only pursuant to the Consent Process described in section
6.6(b) below, and then subject to approval by the Bankruptcy
Court.
(b) The PI Trust will promptly reimburse the Legal
Representative for all reasonable out-of-pocket costs and
expenses incurred by the Legal Representative in connection with
the performance of his or her duties hereunder. Such
reimbursement or direct payment shall be deemed a PI Trust
expense.
        (c)    The PI Trust shall include a description of the
amounts paid under this
Section 6.5 in the accounts to be filed with the Bankruptcy Court
and provided to the Trustees, the Legal Representative, and
Reorganized Raytech pursuant to Section 2.2(c)(i).
6.6  Procedures for Consultation with and Obtaining the
Consent of the Legal Representative.
(a) Consultation Process.
 (i) In the event the Trustees are required to
consult with the Legal Representative pursuant to Section 2.2(e)
above or on any other matters specified herein, the Trustees
shall provide the Legal Representative with written advance
notice of the matter under consideration, and with all relevant
information concerning the matter as is reasonably practicable
under the circumstances.  The Trustees shall also provide the
Legal Representative with such reasonable access to experts
retained by the PI Trust and its staff (if any) as the Legal
Representative may reasonably request during the time that the
Trustees are considering such matter, and shall also provide the
Legal Representative the opportunity, at reasonable times and for
reasonable periods of time, to discuss and comment on such matter
with the Trustees.
(ii) The Trustees shall take into consideration
the time required for the Legal Representative, if he or she so
wishes, to engage and consult with its own independent financial
or investment advisors as to such matter.
(b) Consent Process.
(i) In the event the Trustees are required to
obtain the consent of the Legal Representative pursuant to
Section 2.2(f) above, the Trustees shall provide the Legal
Representative with a written notice stating that his or her
consent is being sought pursuant to that provision, describing in
detail the nature and scope of the action the Trustees propose to
take, and explaining in detail the reasons why the Trustees
desire to take such action.   The Trustees shall provide the
Legal Representative as much relevant additional information
concerning the proposed action as is reasonably practicable under
the circumstances.  The Trustees shall also provide the Legal
Representative with such reasonable access to experts retained by
the PI Trust and its staff (if any) as the Legal Representative
may reasonably request during the time that the Trustees are
considering such action, and shall also provide the Legal
Representative the opportunity, at reasonable times and for
reasonable periods of time, to discuss and comment on such action
with the Trustees.
(ii) The Legal Representative must consider in
good faith and in a timely fashion any request for his or her
consent by the Trustees, and must in any event advise the
Trustees in writing of his or her consent or objection to the
proposed action within 30 days of receiving the original request
for consent from the Trustees.  The Legal Representative may not
withhold his or her consent unreasonably.  If the Legal
Representative decides to withhold  consent, he or she must
explain in detail his or her objections to the proposed action.
If the Legal Representative does not advise the Trustees in
writing of his or her consent or objections to the proposed
action within 30 days of receiving the notice from the Trustees
regarding such consent, the Legal Representative's  consent shall
be deemed to have been affirmatively granted.
(iii) If, after following the procedures specified
in this Section 5.7(b), the Legal Representative continues to
object to the proposed action and to withhold its consent to the
proposed action, the Trustees and/or the Legal Representative
shall resolve their dispute pursuant to the procedures set forth
in Section 7.13.
SECTION 7
GENERAL PROVISIONS
7.1  Irrevocability.  The PI Trust is irrevocable.
7.2  Termination.
     (a)       The PI Trust shall automatically terminate on the
date ninety (90) days after the first to occur of the following
events:
        (i)    the Trustees decide to terminate the PI Trust
because (A) they deem it unlikely that new asbestos claims will
be filed against the PI Trust, (B) all PI Trust Claims duly filed
with the PI Trust have been liquidated and paid to the extent
provided in this PI Trust Agreement and the Procedures or
disallowed by a final, non-appealable order, to the extent
possible based upon the funds available through the Plan, and
(C) twelve (12) consecutive months have elapsed during which no
new asbestos claim has been filed with the PI Trust; or
        (ii)   if the Trustees have procured and have in
place irrevocable insurance policies and have established claims
handling agreements and other necessary arrangements with
suitable third parties adequate to discharge all expected
remaining obligations and expenses of the PI Trust in a manner
consistent with this PI Trust Agreement and the Procedures, the
date on which the Bankruptcy Court enters an order approving such
insurance and other arrangements and such order becomes a final
order; or
        (iii)  to the extent that any rule against
perpetuities shall be deemed applicable to the PI Trust, twenty-
one (21) years less ninety-one (91) days pass after the death of
the last survivor of all of the descendants of Joseph P. Kennedy,
Sr., of Massachusetts living on the date hereof.
     (b)       On the Termination Date, after payment of all the
PI Trust's liabilities have been provided for, all monies
remaining in the PI Trust estate shall be given to such
organization(s) exempt from federal income tax under section
501(c)(3) of the Internal Revenue Code, which tax-exempt
organization(s) shall be selected by the Trustees using their
reasonable discretion; provided, however, that (i) if
practicable, the activities of the selected tax-exempt
organization(s) shall be related to the treatment of, research
on, or the relief of suffering of individuals suffering from
asbestos related lung disorders, and (ii) the tax-exempt
organization(s) shall not bear any relationship to Reorganized
Raytech within the meaning of section 468B(d)(3) of the Internal
Revenue Code.  Notwithstanding any contrary provision of the Plan
and related documents, this Section 7.2(b) cannot be modified or
amended.
7.3  Amendments.  The Trustees, after consultation with the
TAC and the Legal Representative, and subject to the consent of
the TAC and the Legal Representative, may modify or amend this PI
Trust Agreement or any document annexed to it, including, without
limitation, the PI Trust Bylaws or the Procedures.  Any
modification or amendment made pursuant to this Article must be
done in writing.  Notwithstanding anything contained in this PI
Trust Agreement to the contrary, neither this PI Trust Agreement,
the PI Trust Bylaws, the Procedures, nor any document annexed to
the foregoing shall be modified or amended in any way that could
jeopardize, impair, or modify the applicability of section 524(g)
of the Bankruptcy Code, the efficacy or enforceability of the
injunction entered thereunder, or the PI Trust's qualified
settlement fund status under Section 468B of the Internal Revenue
Code.
7.4  Meetings.  The Trustees, the TAC, and the Legal
Representative, shall be deemed to have attended a meeting in the
event such person spends a substantial portion of the day
conferring, in person or by telephone conference call, on PI
Trust matters with the TAC, the Legal Representative, or
Trustees, as applicable.  A Trustee shall also be deemed to have
attended a meeting in the event he or she spends a substantial
portion of the day conferring in person or by telephone with a
claimant or his or her legal representative pursuant to the
Trustees Conference provision in Section 5.2(b)(5) of the
Procedures, or in engaging in activities related to Reorganized
Raytech, including attendance at its Board of Directors meetings.
The Trustees, the TAC and the Legal Representative shall have
complete discretion to determine whether a meeting, as described
herein, occurred for purposes of Sections 4.5, 5.6, and 6.5
above.
7.5  Severability.  Should any provision in this PI Trust
Agreement be determined to be unenforceable, such determination
shall in no way limit or affect the enforceability and operative
effect of any and all other provisions of this PI Trust
Agreement.
7.6  Notices.  Notices to persons asserting claims shall be
given by first class mail, postage prepaid, at the address of
such person, or, where applicable, such person's legal
representative, in each case as provided on such person's claim
form submitted to the PI Trust with respect to his or her
Asbestos Disease Claim.
     (a)       Any notices or other communications required or
permitted hereunder to the following parties shall be in writing
and delivered at the addresses designated below, or sent by
telex, telecopy or facsimile pursuant to the instructions listed
below, or mailed by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows, or to such
other address or addresses as may hereafter be furnished in
writing to each of the other parties listed below in compliance
with the terms hereof.
To the PI Trust through the Trustees:

To the TAC:

To the Legal Representative:

To Reorganized Raytech:

(b)  All such notices and communications if mailed shall be
effective when physically delivered at the designated addresses
or, if electronically transmitted, when the communication is
received at the designated addresses and confirmed by the
recipient by return transmission.
7.7  Successors and Assigns.  The provisions of this PI
Trust Agreement shall be binding upon and inure to the benefit of
Raytech, the PI Trust, the Trustees and Reorganized Raytech, and
their respective successors and assigns, except that neither
Raytech, the PI Trust, the Trustees nor Reorganized Raytech may
assign or otherwise transfer any of its, or their, rights or
obligations under this PI Trust Agreement except, in the case of
the PI Trust and the Trustees, as contemplated by Section 2.1
above.
7.8  Limitation on Claim Interests for Securities Laws
Purposes.  PI Trust Claims, and any interests therein (a) shall
not be assigned, conveyed, hypothecated, pledged or otherwise
transferred, voluntarily or involuntarily, directly or
indirectly, except by will or under the laws of descent and
distribution; (b) shall not be evidenced by a certificate or
other instrument; (c) shall not possess any voting rights; and
(d) shall not be entitled to receive any dividends or interest;
provided, however, that clause (a) of this Section 7.8 shall not
apply to the holder of a claim that is subrogated to a PI Trust
Claim as a result of its satisfaction of such PI Trust Claim.
7.9  Entire Agreement; No Waiver.  The entire agreement of
the parties relating to the subject matter of this PI Trust
Agreement is contained herein and in the documents referred to
herein, and this PI Trust Agreement and such documents supersede
any prior oral or written agreements concerning the subject
matter hereof.  No failure to exercise or delay in exercising any
right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any further exercise
thereof or of any other right, power or privilege.  The rights
and remedies herein provided are cumulative and are not exclusive
of rights under law or in equity.
7.10 Headings.  The headings used in this PI Trust Agreement
are inserted for convenience only and do not constitute a portion
of this PI Trust Agreement, nor in any manner affect the
construction of the provisions of this PI Trust Agreement.
7.11 Governing Law.  This PI Trust Agreement shall be
governed by, and construed in accordance with, the laws of the
State of ________________ without regard to __________________
conflict of law principles.
7.12 Settlor Representative and Cooperation.  Raytech is
hereby irrevocably designated as the Settlor, and it is hereby
authorized to take any action required of the Settlor in
connection with the PI Trust Agreement.  Raytech agrees to
cooperate in implementing the goals and objectives of this PI
Trust.
7.13 Dispute Resolution.  Any disputes that arise under
this PI Trust Agreement or under the Procedures, other than
disputes arising under the Procedures concerning the PI Trust's
classification of claims which disputes shall be resolved
pursuant to Section 5.2(b)(4) of the Procedures, shall be
resolved by reference to an alternative dispute resolution
process mutually agreeable to the parties involved.  Should any
party to the alternative dispute resolution process be
dissatisfied with the decision of the arbitrator(s), then the
party may apply to the Bankruptcy Court for a judicial
determination of the matter.   Respecting only disputes resulting
from the Legal Representative's retention of professionals under
section 6.4(b) above, should the dispute not be resolved within
thirty (30) days, the parties are relieved of the requirement to
pursue alternative dispute resolution prior to application to the
Bankruptcy Court.  Notwithstanding anything else herein
contained, to the extent any provision of this PI Trust Agreement
is inconsistent with any provision of the Plan, the Plan shall
control.
7.14 Enforcement and Administration.  The provisions of this
PI Trust Agreement and the Procedures attached hereto shall be
enforced by the Bankruptcy Court pursuant to the Plan.  The
parties hereby further acknowledge and agree that the Bankruptcy
Court shall have exclusive jurisdiction over the settlement of
the accounts of the Trustees and over any disputes hereunder not
resolved by alternative dispute resolution in accordance with
Section 7.13 above.
7.15 Effectiveness.  This PI Trust Agreement shall not
become effective until it has been executed and delivered by all
the parties hereto.
7.16 Counterpart Signatures.  This PI Trust Agreement may be
executed in any number of counterparts, each of which shall
constitute an original, but such counterparts shall together
constitute but one and the same instrument.
        SIGNATURE PAGE FOLLOWS.

IN WITNESS WHEREOF, the parties have executed this PI Trust
Agreement this _____ day of ________________________, _______.
SETTLOR:  RAYTECH

By:

Name:


Title:



TRUSTEES

______________________________
(Three-year Term)



(Four-year
Term)


___________________________________
_______
(Five-year
Term)


TRUST ADVISORY COMMITTEE


                    (Three-year
Term)



                    (Four-year
Term)



                    (Five-year
Term)


LEGAL REPRESENTATIVE



SCHEDULE A
ASSETS TRANSFERRED TO THE PI TRUST AS OF THE EFFECTIVE DATE




        1.     ____________ Shares of Raytech Common Stock



2. $___________ Available Cash



3. Tax Benefits Pursuant to the Tax Benefits
Assignment
and Assumption Agreement (Exhibit "G" to Plan)











     THE RAYTECH CORPORATION

ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES


     The Raytech Corporation Asbestos Personal Injury Trust
Distribution Procedures ("Procedures") contained herein provide
for satisfying all personal injury ("PI") and death claims
caused by exposure to asbestos-containing products for which
Raymark Industries, Inc. and its predecessors and affiliates
("Raymark") have legal liability that could be asserted against
Raytech Corporation ("Raytech" or the "Debtor"), (hereinafter
for all purposes of these Procedures defined as "PI Trust
Claims"), as provided in and required by the Raytech Corporation
Plan of Reorganization ("Plan") and the Raytech Corporation
Asbestos Personal Injury Settlement Trust Agreement ("PI Trust
Agreement").  The Plan and PI Trust Agreement establish the
Raytech Corporation Asbestos Personal Injury Settlement Trust
("PI Trust").  The Trustees of the PI Trust ("Trustees") shall
implement and administer these Procedures in accordance with the
PI Trust Agreement.   Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to them in the
Plan and the PI Trust Agreement.

SECTION I
     Purpose and Interpretation
     1.1       Purpose.  These Procedures have been adopted
pursuant
to the PI Trust Agreement.  They are designed to provide fair,
equitable, prompt and inexpensive treatment for all PI Trust
Claims that may presently exist or may arise in the future in
substantially the same manner.
     1.2       Interpretation.  Nothing in these Procedures shall
be
deemed to create a substantive right for any claimant.

SECTION II
General Principles
2.1 Background.  These Procedures have been adopted more
than 10 years after Raytech first filed for Chapter 11 relief,
and after lengthy adversary proceedings and negotiations between
and among Raytech, its creditors and its shareholders.  Nothing
approaching full payment of all creditors including asbestos
claimants is possible in light of the large number of PI Trust
Claims that could be filed, both currently and in the future.
The limited assets available in the Raytech estate can satisfy
only a very small fraction of Raytech's liability for all PI
Trust Claims.  Accordingly, these Procedures have been designed
to satisfy all such claims fairly, equally and as sensibly as
possible in light of the inadequacy of the Raytech assets, while
minimizing administrative and processing costs that might further
diminish the already meager amounts available to satisfy such
claims.
     2.2       Issues Addressed In Formulating These Procedures.
As
required by the Bankruptcy Code and as recognized in every other
asbestos-related bankruptcy, all asbestos-related tort claims
must be treated equally, so that each receives an equal
percentage of its value over time from the estate.  At the same
time, it must be recognized that many acutely sick and dying
claimants have waited over a decade for a conclusion of this
reorganization; and, moreover, that the assets of this estate are
sufficiently small, and the number of outstanding severe claims
against this estate are sufficiently large, as to warrant giving
the sickest claimants expedited treatment in the liquidation and
payment of their claims.  These procedures seek to bridge these
goals.
     2.3       Resolution of Issues.  To resolve the competing
interests noted above, these Procedures divide the PI Trust
claims into two levels.  Level One Claims, defined in section
5.1(a) below, include all claims for asbestos-related
malignancies and severely-disabled asbestotics who meet certain
defined criteria.  Level Two Claims, defined in section 5.1(b)
below, include all other PI Trust claims.  These Procedures
provide that Level One Claims will be paid from assets of the PI
Trust as of the Effective Date including without limitation tax
refunds to be turned over by Reorganized Raytech when received.
Upon receipt of sufficient additional assets from other sources,
such as from the resolution of Raymark's contribution claims
against the cigarette manufacturers, these Procedures provide
that the Trustees will determine (i) whether to commence
processing and payment of Level Two Claims as provided in section
5.2 below, and (ii) whether to adjust the Pro-rata Percentage
applicable to both Level One and Level Two Claims.  In the event
the Pro-rata Percentage is increased in such circumstances, the
PI Trust will make additional distributions to holders of Level
One Claims so as to equalize the Pro-rata Percentage paid on
those claims with that to be paid on new Level One and Level Two
Claims.
     2.4       Benefits of Approach.  This approach preserves the
cardinal principle that all holders of asbestos-related claims
and future demands are entitled under the law to pro-rata
distributions on similar claims in substantially the same manner,
while also expediting the liquidation and payment of the claims
of the sickest claim holders.  It also defers the PI Trust's need
to spend substantial amounts to process the numerous claims of
the less-severely-injured until such time as the PI Trust
receives additional funds for their liquidation and payment.
2.5 Effect of Tobacco Litigation.  At the present time
Raymark and other asbestos companies and trusts are plaintiffs in
pending litigation against members of the tobacco industry.  If
Raymark and the other asbestos plaintiffs prevail, Raymark's
share of any recoveries from the tobacco litigation (the
"Tobacco Recoveries") will be transferred to the PI Trust.  The
Trustees, with the consent of the TAC and the Legal
Representative, shall determine if such Tobacco Recoveries are
sufficient to cause the PI Trust to commence processing and
payment of Level Two Claims pursuant to section 5.2 below.

     SECTION III
     Administration of these Procedures
3.1 Trustees' Advisory Committee and Legal Representative.
Pursuant to the Plan and the PI Trust Agreement, these Procedures
will be administered by the Trustees in consultation with a
Trustees Advisory Committee ("TAC"), that represents the
interests of holders of present PI Trust Claims, and a Legal
Representative, who represents the interests of holders of PI
Trust Claims that will be asserted in the future.  The Trustees
shall obtain the consent of the TAC and the Legal Representative
on any amendments to these Procedures pursuant to section 8.1
below and on such other matters as are otherwise required below
and in section 2.2(f) of the PI Trust Agreement.  The Trustees
shall also consult with the TAC and the Legal Representative on
such matters as are provided below and in section 2.2(e) of the
PI Trust Agreement.
3.2 Consent and Consultation Procedures.  In those
circumstances in which consultation or consent is required, the
Trustees will provide written notice to the TAC and the Legal
Representative of the specific amendment or other action that is
proposed.  The Trustees will not implement such amendment nor
take such action unless and until the parties have engaged in the
Consultation Process described in sections 5.7(a) and 6.6(a), or
the Consent Process described in sections 5.7(b) and 6.6(b) of
the PI Trust Agreement, respectively.

     SECTION IV
     Pro-rata Percentage:  Periodic Estimates
     4.1       Uncertainty Of Raytech's Personal Injury Asbestos
Liabilities.  As discussed above, there is inherent uncertainty
regarding Raytech's total asbestos-related tort liabilities, as
well as the total value of the assets available to pay such
claims.  Consequently, there is inherent uncertainty regarding
the amounts that holders of PI Trust Claims will receive.  To
seek to ensure substantively equivalent treatment of all present
and future claims, the Trustees must determine from time to time
the percentage of full liquidated value that holders of PI Trust
Claims will be likely to receive. (the "Pro-rata Percentage").
     4.2       Computation of Pro-rata Percentage.  The initial
Pro-rata Percentage shall be __ percent, and shall be subject to
change pursuant to the terms of these Procedures and the PI Trust
Agreement if the Trustees determine that an adjustment is
required.  No less frequently than once every three years,
commencing with the first day of January occurring after the Plan
is consummated, the Trustees shall reconsider the determination
of the Pro-rata Percentage to assure that it is based on
accurate, current information and may, after such
reconsideration, change the Pro-rata Percentage if necessary with
the consent of the TAC and the Legal Representative.  The
Trustees shall also reconsider the determination of the Pro-rata
Percentage in the interim if requested to do so by the TAC or the
Legal Representative.  The Trustees must base their determination
of the Pro-rata Percentage on current estimates of the number,
types, and values of present and future Level One and, when
payable, Level Two Claims as well as the value and liquidity of
the assets then available to the PI Trust for their payment, as
well as all anticipated administrative and legal expenses and any
other material matters that are reasonable and likely to affect
the sufficiency of funds to pay a comparable percentage of full
value to all holders of PI Trust Claims.  When making these
determinations, the Trustees shall exercise common sense and
flexibly evaluate all relevant factors.
4.3 Payments to Claimants Based on Current Pro-rata
Percentage.  No holder of a PI Trust Claim shall receive a
payment that exceeds the PI Trust's most recent determination of
the Pro-rata Percentage multiplied against the relevant
liquidated value of the claim.  If a redetermination of the Pro-
rata Percentage has been proposed in writing by the Trustees to
the TAC and the Legal Representative but has not yet been
adopted, the claimant shall receive the lower of the current Pro-
rata Percentage or the proposed Pro-rata Percentage.  However, if
the proposed Pro-rata Percentage was the lower amount but is not
subsequently adopted, the claimant shall thereafter receive the
difference between the lower proposed amount and the higher
current amount.  Conversely, if the proposed Pro-rata Percentage
was the higher amount and is subsequently adopted, the claimant
shall thereafter receive the difference between the lower current
amount and the higher adopted amount.
                    SECTION V
     Claims Types:  Processing and Payment
     5.1       Levels of Claims.  There are two levels of PI Trust
claims, each comprised of categories of injuries, as defined
below.
        (a)    Level One Claims.  Level One Claims encompass four
discrete categories of asbestos-related tort claims that meet the
disease criteria set forth on Schedule A hereto.  These are
Category I - Malignant Mesothelioma; Category II - Lung Cancer;
Category III - Other Cancer; and Category IV - Severely
Disabling Asbestosis.  The liquidated values for claims in these
Categories are set forth on Schedule B attached hereto.
        (b)    Level Two Claims.  Level Two Claims encompass two
categories of asbestos-related tort claims.  These are Category V
- Other Asbestosis; and Category VI - Pleural Disease.  The
disease criteria and liquidated values for claims in these
Categories shall be established by the Trustees at the time it is
determined pursuant to section 5.2 below that the PI Trust shall
commence processing and paying Level Two Claims.
     5.2       Processing and Paying Claims.  Consistent with the
principles set forth in section II above, the Trust will make
initial distributions only to holders of Level One Claims, from
the assets of the PI Trust as of the Effective Date including
without limitation tax refunds to be turned over by Reorganized
Raytech when received.  Holders of Level Two Claims will be
entitled to submit their claims for payment to the PI Trust in
accordance with the provisions of this section only after the
Trustees have determined, with the consent of the TAC and the
Legal Representative, that the PI Trust has received sufficient
additional assets to begin processing and paying the claims of
Level Two claimholders.
        (a)    Liquidated Claims.
               (1) Processing.   PI Trust Claims that have been
liquidated by nonappealable judgment or settlement will be
accepted as valid claims by the PI Trust.  Liquidated PI Trust
Claims shall require no processing other than (i) verification of
the holder's identity, (ii) certification as to diagnosis of a
Level One disease category, (iii) payment of the claim, (iv)
release of the PI Trust, and (v) assignment to the PI Trust of
any proof of claim the holder may have against Raymark.
               (2) Liquidated Values.  The liquidated value of a
Liquidated PI Trust Claim shall be the amount shown on Schedule B
for the claim's disease category.  This liquidated value shall be
multiplied by the applicable Pro-rata Percentage to determine the
amount to be distributed in respect of the claim.
               (3)  Marshalling.  Holders of Liquidated PI Trust
Claims that are secured by letters of credit, appeal bonds, or
other security or sureties shall first exhaust their rights
against any applicable security or surety before making a claim
against the PI Trust.  In the event that such security or surety
is insufficient to pay the holder of a Liquidated PI Trust Claim
the amount shown on Schedule B for the relevant Asbestos-Related
Disease Category multiplied by the applicable Pro-rata
Percentage, the PI Trust shall pay the claimant that deficiency.
        (b)    Unliquidated Claims.  As a general matter, these
Procedures provide a separate liquidated value for each Level One
disease category set forth in Schedule A.  These liquidated
values, which are set forth on Schedule B, are based upon an
evaluation of exposure, loss, damages, injury, and other factors
determinative of claim value according to applicable tort law.
These liquidated values shall be adjusted every three years to
reflect increases in the Consumer Price Index in the interim.  A
claimant who holds an unliquidated PI Trust Claim will receive
payment equal to the liquidated value for the relevant disease
category multiplied by the Pro-rata Percentage.
               (1)  Eligibility.  To ensure that only valid
claims receive payments through these Procedures, a claimant must
provide the claim form described in section 6.2 below, which form
shall indicate whether the claimant was exposed to a Raymark
asbestos-containing product or whether the claimant is asserting
the claim based on conspiracy grounds.  The claimant shall also
submit a medical diagnosis that could be introduced as evidence
in the tort system that links exposure to asbestos to an
asbestos-related disease that meets the criteria for one of the
Level One disease categories set forth on Schedule A or for one
of the Level Two disease categories as defined by the Trustees.
If a holder of a non-malignant Category IV, V or VI disease claim
is subsequently diagnosed with an asbestos-related cancer disease
described in Category I, Category II or Category III of Schedule
A, that claimant may subsequently assert a second PI Trust Claim
for such cancer disease which shall be treated as a new claim for
purposes of establishing the claimant's place in the FIFO queue.
However, any additional payment to which the claimant may be
entitled with respect to the new cancer-related PI Trust Claim
shall be reduced by any amount the claimant was paid in respect
of the prior non-malignant claim.
               (2)  Rejection of Claim.  The PI Trust can reject
a PI Trust Claim where the information provided by the claimant
is insufficient to determine whether the claim meets the
requirements of one of the Asbestos-Related Disease Categories
set forth on Schedule A, where the claim has novel, unusual, or
unexpected combinations of asbestos exposures and claimed medical
findings, or pursuant to section 7.3 below.
               (3)  Processing, Payment and Liquidation.  PI
Trust Claims shall be processed and liquidated in FIFO order;
provided, however, that no Level Two Claim will be received,
processed or liquidated until the Trustees have determined, with
the consent of the TAC and the Legal Representative, that the PI
Trust has received sufficient additional assets to enable it to
begin processing and paying Level Two Claims.  Payments to
holders of PI Trust Claims generally will be made in the same
order in which claims are liquidated.  However, as provided in
sections 7.2 and 7.4 below, the Trustees may modify, with the
consent of the TAC and the Legal Representative, the timing and
the appropriate method for making payments.  Such modifications
may include a method for payment on an installment basis, in
which case any installment payment shall be subject to the Pro-
rata Percentage in effect at the time such installment payment is
made.
     (4)       Resolution of Disputes Concerning Claims
Classification.   A holder of an PI Trust Claim may dispute only
(1) the classification of the claim, or the refusal to classify a
claim, in one of the Asbestos-Related Disease Categories
described on Schedule A, and/or (2) the claim's eligibility to be
classified as (a) an Extraordinary PI Trust Claim as described in
section 5.3, (b) an Exigent Health Claim as described in section
5.4(a) below, or (c) an Extreme Hardship Claim as described in
section 5.4 (b) below.  No other issues, particularly including
the Pro-rata Percentage, the liquidated values as set forth on
Schedule B, or the resulting distribution amounts offered for
each category, shall be subject to dispute.  A claimant who
disputes the PI Trust's classification of the claim as described
above has three mutually exclusive options.  The claimant may (i)
request binding arbitration pursuant to alternative dispute
resolution procedures to be adopted by the PI Trust with the
consent of the TAC and the Legal Representative, or (ii) request
a Trustee Conference as described in section 5.2(b)(5) below, or
(iii) commence a lawsuit in the tort system as described in
section 7.6 below.  If the claimant wishes to request either
binding arbitration or a Trustee Conference, that request must be
made within six months of the Trustees' offer in accordance with
section  6.3 below.
               (5)  Trustee Conference Process.  For purposes of
this provision, the claimant will have the option of conferring
with a Trustee designated by the PI Trust.  The process shall be
initiated by the submission to the designated Trustee of a copy
of the claim, any documents submitted previously in support of
the claim and the response of the PI Trust, a statement by the
claimant of the classification requested for the claim consistent
with the provisions of section 5.2(b)(4) above, and any further
documentary evidence that the claimant or the PI Trust believes
relevant.  If based on review of the documentary evidence the
Trustee does not determine the matter in favor of the claimant,
then the claimant is entitled to a telephone conference with the
Trustee, or a meeting with the Trustee at a location designated
by the Trustee.  The Trustee's decision as to the classification
of the claim in a particular Asbestos-Related Disease Category
and/or classification of the claim for extraordinary, exigent, or
extreme hardship treatment shall be final.
               (6)  Full Releases and Assignments of Raymark
Claims.  Holders of PI Trust Claims who receive a payment for the
liquidated value of their claims shall execute and deliver to the
PI Trust (i) a release in a form satisfactory to the Trustees and
(ii) an assignment of any claim or proof of claim against
Raymark.  Such claimants may not thereafter file a new PI Trust
Claim except as provided in section 5.2(b)(1) above.
     5.3       Extraordinary PI Trust Claims.  In the
extraordinary situation in which a claimant satisfactorily
demonstrates in a declaration or affidavit made under penalty of
perjury that he or she was exposed only to Raymark asbestos-
containing products, the claimant's PI Trust Claim may be classified
as an Extraordinary
PI Trust Claim.  In processing such claims, the PI Trust may
require the claimant to authorize release of information from
other trusts or organizations established to satisfy personal
injury claims based on exposure to asbestos-containing products
(hereinafter "asbestos claims resolution organizations")
regarding any claims filed by the claimant with such other trusts
or organizations.  A claimant who holds an Extraordinary PI Trust
Claim shall receive five times the liquidated value shown on
Schedule B for the relevant Asbestos-Related Disease Category
multiplied by the applicable Pro-rata Percentage.
     5.4       Exigent Health and Extreme Hardship Claims.   At
any
time the Trustees may liquidate and pay certain PI Trust Claims
that qualify as Exigent Health Claims and Extreme Hardship
Claims, as defined in this section 5.4.  These PI Trust Claims
may be considered separately no matter what the order of
processing otherwise would have been under these Procedures.
(a) Exigent Health Claims.  A PI Trust Claim qualifies
as an Exigent Health Claim if the claim meets the disease
criteria set forth on Schedule A hereto for Category I -
Malignant Mesothelioma or the claimant provides a declaration or
affidavit made under penalty of perjury by a physician who has
examined the claimant within one hundred twenty days of the date
of declaration or affidavit in which the physician states (i)
that there is substantial medical doubt that the claimant will
survive beyond six months from the date of the declaration or
affidavit, and (ii) that the claimant's terminal condition is
caused by a Category II - Lung Cancer, Category III - Other
Cancer, or Category IV - Severely Disabling Asbestosis disease.
(b) Extreme Hardship Claims.  A PI Trust Claim
qualifies for payment as an Extreme Hardship Claim if the
Trustees, in their sole discretion, determines (i) that the
claimant needs financial assistance on an immediate basis based
on the claimant's expenses and all sources of available income,
and (ii) that there is a causal connection between the claimant's
dire financial condition and the claimant's Category I, Category
II, Category III or Category IV disease.
5.5  Asbestos Personal Injury Contribution Claims.  Asbestos
Personal Injury Contribution Claims, as defined by the Plan and
asserted against the Trust based upon theories of contribution or
indemnification, may not be processed or paid by the PI Trust
unless and until (i) such claim was filed by the applicable Bar
Date established by the Plan, and (ii) the holder of such claim
(the "Contribution Claimant") establishes to the satisfaction
of the Trustees that (a) the Contribution Claimant has paid in
full the liability and obligations of the Trust to the direct
claimant to whom the Trust would otherwise have had a liability
or obligation under these Procedures, and (b) the direct claimant
and the Contribution  Claimant have forever released the Trust
from all liability to the direct claimant.  In no event shall any
Contribution Claimant have any rights against the Trust superior
to the rights of the related direct claimant against the Trust,
including any rights with respect to the timing, amount or manner
of payment.  The Trust shall not pay any Contribution Claimant
unless and until the Contribution Claimant's aggregate liability
for the direct claimant's claim has been fixed, liquidated and
paid by the Contribution Claimant by settlement (with an
appropriate release in favor of the Trust) or a Final Order (as
defined in the Plan).  In any case where the Contribution
Claimant has satisfied the claim of a claimant against the Trust
by way of a settlement, the Contribution Claimant shall obtain
for the benefit of the Trust a release in form and substance
satisfactory to the Trustees.  The Trustees may develop and
approve a separate proof of claim form for Asbestos Personal
Injury Contribution Claims.
     Asbestos Personal Injury Contribution Claims which have not
been disallowed, discharged, or otherwise resolved by prior order
of the Court, shall be processed in accordance with procedures to
be developed and implemented by the Trustees, which procedures
(a) shall determine the validity and allowability of such claims
consistent with section 502(e) of the Bankruptcy Code; (b) shall
allow Contribution Claimants to select either binding arbitration
or a Trustee Conference or resort to the tort system for
resolution of those specific disputes concerning disease
categorization or other treatment of PI Trust Claims described in
section  5.2(b)(4) above; and (c) shall otherwise provide the
same processing and payment to the holders of such claims as the
Trust would have afforded the holders of the underlying valid PI
Trust Claims.




SECTION VI
     Claims Materials
     6.1       Claims Materials.  The PI Trust shall prepare
suitable
and efficient claims materials ("Claims Materials"), and shall
provide such Claims Materials upon a written request for such
materials to the PI Trust.
     6.2       Content of Claims Materials.  The Claims Materials
shall include a copy of these Procedures, such instructions as
the Trustees shall approve, and a proof of claim form.  If
feasible, the forms used by the PI Trust to obtain claims
information shall be the same or substantially similar to those
used by other asbestos claims resolution organizations.  Instead
of collecting some or all of the claims information from a
claimant or the claimant's attorney, the PI Trust may obtain such
information from electronic data bases maintained by any other
asbestos claims resolution organization.  However, the PI Trust
shall inform the claimant that it plans to obtain information as
available from such other organization unless the claimant
objects in writing or provides such information directly to the
PI Trust.  If requested by the claimant, the PI Trust shall
accept information provided electronically.  The claimant may,
but will not be required to, provide the PI Trust with evidence
of recovery from other asbestos claims resolution organizations.
6.3 Withdrawal of Claim.  A claimant can withdraw a PI
Trust Claim at any time upon written notice to the PI Trust and
file another claim subsequently, but any such claim filed after
withdrawal shall be given a FIFO date based on such subsequent
filing.  A claim will be deemed to have been withdrawn if the
claimant neither accepts, rejects, nor initiates arbitration, a
Trustee Conference, or a lawsuit in the tort system within six
months of the PI Trust's offer of payment or rejection of the
claim.  Upon written request and good cause, the PI Trust may
extend this period for an additional six months.

SECTION VII
     General Guidelines for Liquidating and Paying Claims
     7.1       Showing Required.  To Establish a valid PI Trust
Claim,
a claimant must (i) certify exposure to a Raymark asbestos-
containing product or reliance on a conspiracy theory of
jurisprudence sufficient to establish liability of Raymark, or
both, and (ii) submit a medical report from a qualified physician
that (a) results from a physical examination by the physician and
(b) contains a diagnosis of an asbestos-related disease that
meets the Level One criteria set forth on Schedule A or the Level
Two criteria established by the Trustees.  The PI Trust may
require the submission of x-rays, laboratory tests, medical
examinations or reviews, other medical evidence, or any other
evidence to support or verify the PI Trust Claim and require that
medical evidence submitted comply with recognized medical
standards regarding equipment, testing methods, and procedures to
assure that such evidence is reliable.
     7.2       Discretion To Alter Order of Processing Or To
Suspend
Payments.  In the event that the PI Trust faces temporary periods
of limited liquidity, the Trustees may, after consultation with
the TAC and the Legal Representative, suspend the normal order of
payment and may temporarily limit or suspend payments altogether.
     7.3       Costs Considered.  Notwithstanding any provisions
of
these Procedures to the contrary, the Trustees shall always give
appropriate consideration to the cost of investigating and
uncovering invalid PI Trust Claims so that the payment of valid
PI Trust Claims is not further impaired by such processes with
respect to issues related to the validity of the medical evidence
supporting a PI Trust Claim.  The Trustees shall also have the
latitude to make judgments regarding the amount of transaction
costs to be expended by the PI Trust so that valid PI Trust
Claims are not further impaired by the costs of additional
investigation.  Nothing herein shall prevent the Trustees, in
appropriate circumstances, from contesting the validity of any
claim against the PI Trust whatever the costs, or to decline to
accept medical evidence from sources that the Trustees have
determined to be unreliable as described in section 7.9 below.
7.4 Discretion to Vary Payments.  Consistent with the
provisions hereof, the Trustees shall proceed as quickly as
possible to liquidate claims, and shall make payments to holders
of PI Trust Claims in accordance with these Procedures promptly
as funds become available and as claims are liquidated, while
maintaining sufficient resources to pay future valid claims in
substantially the same manner.  Because the PI Trust's income
over time remains uncertain, and decisions about payments must be
based on estimates that cannot be done precisely, they may have
to be revised in light of experiences over time, and there can be
no guarantee of any specific level of payment to claimants.
However, the Trustees shall use their best efforts to treat
similar claims in substantially the same manner, consistent with
their duties as Trustees, the purposes of the PI Trust, and the
practical limitations imposed by the inability to predict the
future with precision.
     7.5       Punitive Damages.  In determining the value of any
liquidated or unliquidated PI Trust Claim, punitive damages shall
not be considered or allowed, notwithstanding their availability
in the tort system.  Pre-judgment interest, post-judgment
interest, interest on deferred payments, or any other type of
interest, delay damages, or similar damages associated with PI
Trust Claims, shall not be paid or allowed.
7.6 Suits in the Tort System.  If the holder of a disputed
PI Trust Claim disagrees with the rejection or categorization of
the holder's claim by the PI Trust, and if the holder has not
submitted the claim to binding arbitration as provided in section
5.2(b)(4) above or elected a Trustee Conference as provided in
section 5.2(b)(5) above, the holder may file a lawsuit against
the Trust in any court in which a case could have been instituted
in the absence of the Chapter 11 proceeding.  Any such lawsuit
must be filed by the claimant in her or her own right and name
and not as a member or representative of a class, and no such
lawsuit may be consolidated with any other lawsuit.  The Chapter
11 Case and these Procedures shall have no effect on trial venue
or choice of laws.  All defenses (including, with respect to the
PI Trust, all defenses which could have been asserted by Raymark
or Raytech, except for defenses based on statutes of limitations
and repose as provided in section 2.3 above) that exist under
applicable law shall be available to both sides at trial;
however, the PI Trust may waive any defense or concede any issue
of fact or law.  The death of a claimant while his/her lawsuit is
pending against the PI Trust shall not reduce the value of a
deceased claimant's PI Trust Claim, notwithstanding applicable
state law to the contrary.
     7.7       Effect of Judgments for Money Damages.
        (a)    PI Trust Claims.  A holder of a PI Trust Claim
who, in accordance with these Procedures, resorts to the legal
system and obtains a final, nonappealable judgment for money
damages shall be paid, when funds are reasonably available, the
applicable Pro-rata Percentage of the liquidated value for the
relevant Asbestos-Related Disease Category as set forth on
Schedule B from time to time amended.  No post-judgment interest
shall accrue on any such amounts.
        (b)    Extraordinary PI Trust Claims. A holder of an
Extraordinary PI Trust Claim who, in accordance with these
Procedures, resorts to the legal system and obtains a final,
nonappealable judgment for money damages will be paid, when funds
are reasonably available, the appropriate Pro-rata Percentage of
said five times the liquidated value of the claim as set forth on
Schedule B from time to time amended.  No post-judgment interest
shall accrue on such amount.
     7.8       Releases.  The Trustees shall have the discretion
to
determine the form and nature of the releases given to the PI
Trust in order to maximize recovery for claimants against other
tortfeasors without increasing the risk or amount of claims for
indemnification or contribution from the PI Trust.  As a
condition to making any payment to a claimant, the PI Trust shall
obtain a general, partial, or limited release as appropriate in
accordance with the applicable state or other law.  If allowed by
state law, the endorsing of a check or draft for payment by or on
behalf of a claimant shall constitute such a release.
7.9    Auditing, Monitoring and Verifying.  The Trustees
may conduct random or other audits to verify information
submitted in connection with these Procedures.  In the event that
an audit reveals that invalid information has been provided to
the PI Trust, the Trustees may penalize any claimant or
claimant's attorney by disallowing the PI Trust Claim or seeking
sanctions from the Bankruptcy Court including, but not limited
to, requiring the source of the invalid information to pay the
costs associated with the audit and any future audit or audits,
reordering the priority of payment of all affected claimants' PI
Trust Claims, raising the level of scrutiny of additional
information submitted from the same source or sources, or seeking
the prosecution of the claimant or claimant's attorney for
presenting a fraudulent claim in violation of 18 U.S.C. Sec. 152.
The PI Trust may develop methods for auditing the reliability of
medical evidence, including independent reading of x-rays.  If
its audits show an unacceptable level of reliability for medical
evidence submitted by specific doctors or medical facilities, the
PI Trust may refuse to accept medical evidence from such doctors
or facilities.
     7.10      Third-Party Services.  Nothing in these Procedures
shall preclude the PI Trust from contracting with another
asbestos claims resolution organization to provide services to
the Trust so long as decisions about the allowability and value
of claims are based on (i) the provisions of these Procedures,
and (ii) the Asbestos-Related Disease Categories and liquidated
values for such Categories set forth on Schedules A and B,
respectively.

     SECTION VIII
Miscellaneous
     8.1       Amendments.  The Trustees may amend, modify,
delete, or
add to any of these Procedures (including, without limitation,
amendments to conform these Procedures to advances in scientific
or medical knowledge or other changes in circumstances), provided
they first obtain the consent of the TAC and the Legal
Representative pursuant to the Consent Process set forth in
sections 5.7(b) and 6.6(b) of the PI Trust Agreement.
     8.2       Severability.  Should any provision contained in
these
Procedures be determined to be unenforceable, such determination
shall in no way limit or affect the enforceability and operative
effect of any and all other provisions of these Procedures.
8.3 Governing Law.  These Procedures shall be governed by,
and construed in accordance with, the laws of the State of
______________.

SCHEDULE A
SCHEDULED ASBESTOS PERSONAL INJURY CLAIMS
CRITERIA FOR EACH ASBESTOS-RELATED DISEASE CATEGORY
Category I - Malignant Mesothelioma:
The malignant mesothelioma category shall have the
following requirements:
A diagnosis by a board-certified pathologist of diffuse
malignant mesothelioma with a primary site in the
pleura or peritoneum or reasonable equivalent clinical
diagnosis in the absence of tissue for pathological
diagnosis.
Category II - Lung Cancer
The lung cancer category shall have the following
requirements:
A diagnosis of primary lung carcinoma that is asbestos-
related by a physician who is board certified in the
field of oncology, pulmonology, pathology or
occupational medicine,
And one of the following:
(i) At least five (5) years of  occupational exposure
to asbestos-containing materials in employment
regularly requiring work in the immediate area of
visible asbestos dust; or
(ii) A medical report demonstrating the existence of
interstitial lung disease; or
(iii) A medical report demonstrating the existence of
pleural disease (thickening or plaques); or
(iv) Pathological evidence of asbestosis;
And evidence of a 10-year latency period between the
date of first exposure to asbestos and the date of
diagnosis of the cancer.
Category III - Other Cancer
The other cancer category shall have the following
requirements:
A diagnosis by a physician who is board certified in
the field of oncology, pulmonology, pathology or
occupational medicine of a malignant primary tumor
originating in the larynx, pharynx, stomach, esophagus,
colon, kidney, lymphoma, myelona or rectum caused or
contributed to by asbestos exposure,
And one of the following:
(i)  At least five (5) years of occupational exposure
to asbestos-containing materials in employment
regularly requiring work in the immediate area of
visible asbestos dust; or
(ii) A medical report demonstrating the existence of
interstitial lung disease; or
(iii) A medical report demonstrating the existence of
pleural disease (thickening or plaques); or
(iv) Pathological evidence of asbestosis;
And evidence of a 10-year latency period between the
date of first exposure to asbestos and the date of
diagnosis of the cancer.
Category IV - Severely Disabling Asbestosis
The severely disabling asbestosis category shall have
the following requirements:
In the case of a deceased claimant, a certification by
a physician who is board certified in the field of
pulmonology, pathology or occupational medicine that an
asbestos-relating disease was a substantial
contributing cause of death;
Or in the case of a living or deceased claimant,
(i) Evidence of an ILO rating of 2/1 or greater; and
(ii) Evidence of lung capacity of 70% or less based on
acceptable PFT measurements, e. g., Forced Vital
Capacity (FVC), Total Lung Capacity (TLC) or
Diffusing Capacity (DLCO); and
(iii) Certification by an examining physician that the
claimant is totally disabled as a result of an
asbestos-related disease.
And in either case, evidence of a 10-year latency
period between the date of first exposure to asbestos
and the date of diagnosis of the asbestosis.

SCHEDULE B
SCHEDULED ASBESTOS PERSONAL INJURY CLAIMS
LIQUIDATED VALUE FOR EACH ASBESTOS-RELATED DISEASE CATEGORY

     Category I - Malignant Mesothelioma
     $70,000
     Category II - Lung Cancer
     $31,000
     Category III - Other Cancer
     $14,000
     Category IV - Severely Disabling Asbestosis
     $30,000



     To be adjusted every three (3) years to reflect any
increases in the Consumer Price Index in the interim.










TAX BENEFITS ASSIGNMENT AND ASSUMPTION AGREEMENT

This TAX BENEFITS ASSIGNMENT AND ASSUMPTION AGREEMENT (this
"Agreement") is made between Raytech Corporation, a Delaware
corporation, and its successors or assigns ("Raytech"), and the
Raytech Corporation Asbestos Personal Injury Settlement Trust
(the "PI Trust" and the "Assignee") as of this ___ day of
____________, 2000.
W I T N E S S E T H:
WHEREAS, on March 10, 1989, Raytech filed a voluntary
petition for relief under Chapter 11 of Title 11 of the United
States Code (the "Bankruptcy Code");
WHEREAS, in connection therewith, Raytech submitted a Plan
of Reorganization (the "Plan") to the United States Bankruptcy
Court for the District of Connecticut (the "Bankruptcy Court");
WHEREAS, the Bankruptcy Court has entered an order
confirming the Plan (the "Confirmation Order");
WHEREAS, the Confirmation Order has become a Final Order;
and
WHEREAS, substantial Tax Benefits (as such term is defined
below) are expected to become available to Raytech as a result of
implementation of the Plan and this Agreement;
WHEREAS, it is intended under the Plan and by the parties to
this Agreement that such Tax Benefits inure and be paid directly
or indirectly to the Unsecured Creditors (as such term is defined
below);
WHEREAS, pursuant to the Plan, Raytech is obligated to
assign those Tax Benefits to and for the benefit of the Unsecured
Creditors; and
WHEREAS, the parties desire to cooperate in the handling of
all Tax matters including, without limitation, the preparation of
Tax Returns (as those terms are defined below).
NOW THEREFORE, in consideration of the premises and the
mutual covenants herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
I.   Defined Terms.  For purposes of this Agreement the following
terms shall have the meanings indicated below.  All other
capitalized terms not otherwise defined herein shall have their
respective meanings as set forth in the Plan, and such
definitions are incorporated herein by reference.
A. "Tax" means any foreign, federal, state and local tax
with respect to which Raytech may be liable for any period
preceding, including, ending on, or beginning the day after, the
Effective Date.
B. "Tax Benefits" mean any Tax Refund, Future Year Tax
Benefit, or Other Tax Benefit (as those terms are defined below).
C. "Tax Refund" means any refund of Tax as a result of
any deduction or loss related to the transfer of New Raytech
Common Stock and Available Cash directly or indirectly to the
Unsecured Creditors, or arising out of any Future Tax Benefit or
Other Tax Benefit, reduced by the amount of any Tax assessment or
similar proceeding affecting the amount of the Tax Refund.
D. "Future Year Tax Benefit" means an amount equal to
any Tax savings or benefits realized by Raytech as a result of a
Tax deduction or Tax credit arising out of implementation of the
Plan or this Agreement that is recognized in and allocable to a
taxable year beginning with the taxable year following the
taxable year in which the Effective Date occurs (the "Future
Year"), reduced by the amount of any Tax assessment or similar
proceeding affecting the amount of the Future Year Tax Benefits.
E. "Other Tax Benefit" means an amount equal to any Tax
savings or benefits realized by Raytech as a result of a Tax
deduction or Tax credit arising out of implementation of the Plan
or this Agreement that does not constitute a Tax Refund or Future
Year Tax Benefit that is recognized in and allocable to any
taxable year including the taxable year in which the Effective
Date occurs, reduced by the amount of any Tax assessment or
similar proceeding affecting the amount of the Other Tax Benefit.
F. "Tax Returns" means for all foreign, federal, state
and local Tax purposes, all consolidated, combined or separate
foreign, federal, state and local Tax returns for any period
preceding, including, ending on, or beginning the day after, the
Effective Date.
G. "Holdback Amount" means a 30 percent (30%) interest
in any Tax Benefit, which interest shall be retained by Raytech
during the Holdback Period.
H. "Holdback Period" means with respect to each Holdback
Amount the period commencing on the date on which the Tax Benefit
giving rise to such Holdback Amount is required to be paid over
to the Assignee pursuant to Section V below and ending upon the
earlier of (i) the end of the day on which the Federal statutory
period of limitations on assessment with respect to such Tax
Benefit expires, or (ii) the date on which a determination of Tax
liability by the Internal Revenue Service, similar state or local
agency, or a court affecting the amount of such Tax Benefit
becomes final.
I. "Unsecured Creditors" means the holders of PI Trust
Claims, the holders of Environmental Claims and the holders of
any other Allowed Unsecured Claims, collectively.
II. Tax Reporting.  Raytech shall, for all Tax purposes,
report the transactions implemented pursuant to the Plan and this
Agreement in the manner that Raytech, the Assignee and their tax
advisors reasonably determine provides all Tax Benefits to
Raytech permitted under the applicable Tax law.  Without
limitation, this reporting obligation shall apply to all Raytech
Tax Returns.
III. Obtaining Tax Refunds.  Unless otherwise determined by
Raytech, the Assignee and their tax advisors, Raytech shall carry
back that amount of the net operating losses arising as a result
of implementation of the Plan and this Agreement required to
offset income earned in, and to obtain Tax Refunds with respect
to, taxable years ending on or before or following or including
the Effective Date.  The taxable years to which the net operating
losses are to be carried back and the income which is to be
offset by the carryback of the net operating losses shall be
determined by Raytech, the Assignee and their tax advisors in a
manner (i) that is consistent with the manner in which Raytech,
the Assignee and their its tax advisors reasonably determine to
report the transactions implemented pursuant to the Plan and this
Agreement, and (ii) that seek an appropriate amount of Tax
Refunds as reasonably determined by Raytech, the Assignee and
their tax advisors to be available under law.  Raytech shall take
all reasonable actions necessary to obtain such Tax Refunds as
expeditiously as possible including, without limitation, the
prompt filing of tentative carryback adjustments pursuant to
section 6411 of the Internal Revenue Code and the regulations
thereunder and/or the prompt filing of amended Tax Returns and/or
refund claims with the particular procedures(s) for obtaining the
Tax Refunds reasonably to be determined by Raytech, the Assignee
and their tax advisors.
IV. Assumption by Assignee of Tax Benefits Obligations.  The
Assignee on behalf of the Unsecured Creditors hereby (i) accepts
assignment of all of Raytech's right, title and interest in and
to the Tax Benefits, subject to Raytech's retention of the
Holdback Amount, and (ii) assumes and shall fully and punctually
pay, perform, discharge and observe any and all obligations or
liabilities to be paid, performed, discharged and observed on the
part of Raytech arising from and after the date hereof in respect
of the Tax Benefits.
V. Assignment and Pay Over of Tax Benefits to Assignee.
Subject to Raytech's retention of the Holdback Amount, Raytech
hereby transfers, assigns and sets over to the Assignee on behalf
of the Unsecured Creditors and each of their successors and
assigns, all of Raytech's right, title and interest in and to the
Tax Benefits, which shall be shared among such Unsecured
Creditors as provided under the terms of the Plan and the
Governments' Settlement Agreement.  In the case of each Tax
Benefit, (i) to the extent that it generates a Tax Refund that is
received by Raytech or any affiliate, the amount of such Tax
Refund less the Holdback Amount shall be paid over to the
Assignee by wire transfer within three (3) business days
following the date that the Refund amount becomes available for
disbursement by Raytech; and (ii) to the extent that it generates
a Future Year Tax Benefit or Other Tax Benefit that results in a
tax savings to Raytech or any affiliate, the amount of such
savings less the Holdback Amount shall be paid over to the
Assignee by wire transfer within three (3) business days
following the date that the tax savings is realized by Raytech
through a reduction in its estimated or actual tax payments.
VI. Pay Over of Tax Benefits to Unsecured Creditors.  Within
three (3) business days following the receipt of any Tax Benefit
from Raytech or an affiliate of Raytech, the Assignee shall pay
over to the other Unsecured Creditors, in the manner provided by
the terms of the Plan and the Governments' Settlement Agreement,
their respective shares of the Tax Benefit, less any Holdback
Amount, plus any accrued interest on their respective shares, and
shall retain the balance of the Tax Benefit, plus any accrued
interest on that balance, in respect of its own share.
VII. Holdback.  During any Holdback Period (i) the Holdback
Amount will be held in a segregated, interest-bearing, account at
a national banking institution, (ii) Raytech shall apply the
Holdback Amount solely to satisfy (a) amounts payable, if any, in
respect of the Assignee's indemnification obligations pursuant to
Section XV hereof, and (b) any Tax assessment or similar
proceeding affecting the amount of the Tax Benefit that gave rise
to the Holdback Amount, and (iii) interest earned on the Holdback
will be taxable to the Assignee.
VIII.   Pay Over of Holdback Amount to Assignee.  Within three
(3) business days following the expiration of any Holdback
Period, Raytech shall pay over the Holdback Amount, plus all
accrued interest thereon, to the Assignee for redistribution to
the Unsecured Creditors pursuant to the terms of the Plan and the
Governments' Settlement Agreement.
IX. Pay Over of Holdback Amount to Unsecured Creditors.  Within
three (3) business days following receipt of any Holdback Amount
from Raytech following the expiration of a Holdback Period, the
Assignee shall pay over to the other Unsecured Creditors, in the
manner provided by the terms of the Plan and the Governments'
Settlement Agreement, their respective shares of the Holdback
Amount, plus any accrued interest on their respective shares, and
shall retain the balance of the Holdback Amount, plus any accrued
interest on that balance, in respect of the PI Trust's share.
X. Security Interest in Holdback Amounts.  In order to secure
the obligations of Raytech to pay over the Holdback Amounts (and
any accrued interest thereon) to the Assignee pursuant to the
Plan and this Agreement, Raytech hereby grants to the Assignee a
first priority security interest in and lien on such Holdback
Amounts (and any interest thereon) and in any proceeds thereof.
If requested by the Assignee, Raytech shall execute such
financing statements and other documents and take such other
actions as, in the determination of the Assignee and its
advisors, are necessary and appropriate to perfect such security
interest.  Upon any default of the obligations to pay over the
Holdback Amounts (and any interest thereon) pursuant to this
Agreement, in addition to any other rights the Assignee may have
under applicable law or equity, the Assignee may foreclose upon
the collateral and shall have all the rights and remedies
provided a secured party under applicable law.  Except as
provided in this Agreement, Raytech may not transfer, assign,
use, pledge, grant a security interest in, or otherwise encumber
or alienate the Holdback Amounts (or any interest thereon) or its
right to receive and hold the Holdback Amounts (or any interest
thereon) for the benefit of the Unsecured Creditors.
XI. Dispute Resolution.  If the parties to this Agreement and
their tax advisors cannot agree on an amount or matter which this
Agreement specifies is to be determined by agreement of the
parties and their tax advisors, the dispute shall be resolved by
a nationally recognized certified public accounting firm which is
selected by the parties to the dispute and which is not the
regular accounting firm for Raytech or the Assignee (the
"National Firm").  The fees, expenses and costs of the National
Firm shall be shared equally by the parties to the dispute.  The
determination of the National Firm shall be final.
XII. Cooperation.  The parties hereto agree to cooperate with
each other to carry out the purposes and intent of this Agreement
including, without limitation, the following:
A. The Assignee and its tax advisors shall be entitled to
review and participate in the preparation of all tax returns
(including amended tax returns) or other tax-related documents of
Raytech that, directly or indirectly, have any bearing on the
rights or obligations provided for in this Agreement, and no such
tax returns or tax-related documents shall be finalized and/or
filed without the prior approval of the Assignee and its tax
advisors, which shall not be unreasonably withheld.  To the
extent reasonable, such approval (or disapproval) shall be made
in a timely manner so as not to impede the ability to timely file
such tax returns or tax-related documents.
B. Subject to reasonable advance notification in writing,
the Assignee and its tax advisors shall have access to (or be
entitled to copies of) all books and records of Raytech and of
any other person or entity who may become a party to this
Agreement, which relate, directly or indirectly, to the right or
obligations provided for in this Agreement.
C. During normal business hours and subject to reasonable
advance notification in writing, the Assignee and its tax
advisors shall have the right to interview appropriate personnel
of Raytech and of any other person or entity who may become a
party to this Agreement concerning matters which relate, directly
or indirectly, to the rights or obligations provided for in this
Agreement.
D. If Raytech or the Assignee receives any notice,
inquiry, assessment or other correspondence from a taxing
authority relating, directly or indirectly, to the rights or
obligations provided for in this Agreement, such party shall
immediately inform (and provide copies of such correspondence to)
the other and any other person or entity that may become a party
to this Agreement.
E. The Assignee and its tax advisors shall be entitled to
participate in any audit or investigation by, or in any
controversy or other dealings with any taxing authority relating,
directly or indirectly, to any matter covered by this Agreement
and such matter shall be not be settled, resolved or otherwise
handled without the prior approval of the Assignee and its tax
advisors, which shall not be unreasonably withheld.  Upon the
receipt by the Assignee and its tax advisors of a request for
such approval, Assignee and its tax advisors shall, to the extent
reasonable, respond in a timely manner so as not to delay the
resolution or other handling of the matter.
XIII. Representations and Warranties of Raytech.  Raytech hereby
represents and warrants to the Assignee for the benefit of the
Unsecured Creditors that:
A. Organization and Good Standing. Raytech is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business as now conducted.
B. Corporate Power and Enforceability. This Agreement has
been duly authorized, executed and delivered by Raytech and is a
legal, valid and binding obligation of Raytech, enforceable
against Raytech in accordance with its terms, except as rights to
indemnity may be limited by Federal or state securities laws and
except as enforcement (i) may be limited by bankruptcy,
insolvency, reorganization moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights
and (ii) is subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law).
C. No Conflicts.  The execution, delivery and performance
of this Agreement and the transactions contemplated hereby do not
and will not (i) violate any provision of any law, rule or
regulation, or any order, writ, judgment, decree, determination
or award having applicability to Raytech, the violation of which
would have a material adverse effect on Raytech's business,
operations or assets, or (ii) conflict with or result in a breach
of or constitute a default under the certificate of incorporation
or by-laws or other document of similar import of Raytech, or
materially conflict with or result, or, with or without the
giving of notice or the lapse of time or both, would result, in a
breach of or constitute a default under any indenture, loan or
credit agreement or any other material agreement or instrument to
which Raytech is a party or by which Raytech or any of its
properties may be bound or affected.
XIV. Representations and Warranties of the Assignee.
A. Power and Enforceability.  The Assignee has full power
and authority to act on behalf of the Unsecured Creditors with
respect to this Agreement.  This Agreement has been duly
authorized, executed and delivered by the Assignee and is a
legal, valid and binding obligation of the Assignee, enforceable
against the Assignee in accordance with its terms, except as
rights to indemnity may be limited by Federal or state securities
laws and except as enforcement (i) may be limited by bankruptcy,
insolvency, reorganization moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights
and (ii) is subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law).
B. No Conflicts.  The execution, delivery and performance
of this Agreement and the transactions contemplated hereby do not
and will not (i) violate any provision of any law, rule or
regulation, or any order, writ, judgment, decree, determination
or award having applicability to the Assignee, the violation of
which would have a material adverse effect on the Assignee's
operations or assets, or (ii) conflict with or result in a breach
of or constitute a default under the organizational documents of
the Assignee, or materially conflict with or result, or, with or
without the giving of notice or the lapse of time or both, would
result, in a breach of or constitute a default under any
indenture, loan or credit agreement or any other material
agreement or instrument to which the Assignee is a party or by
which the Assignee or its properties may be bound or affected.
XV. Indemnity.  The Assignee shall indemnify, hold harmless and
defend Raytech and its respective officers, directors,
shareholders, employees and agents (each, an "Indemnified
Party"), from and against any and all liabilities, losses,
damages, claims, investigations, causes of action and expenses
(including reasonable attorneys' fees and disbursements),
incurred by any Indemnified Party based upon, arising out of or
otherwise relating to (i) any breach of any representation,
warranty, covenant or agreement of the Assignee contained in this
Agreement, or (ii) any third party claims based upon, arising out
of or otherwise relating to the Tax Benefits, or the execution by
the Assignee of this Agreement or any of the other agreements
executed in connection herewith.  Notwithstanding anything
contained herein to the contrary, the Assignee's maximum
aggregate liability for all claims for indemnification pursuant
to this Section XIV shall be limited to the funds then held as
the Holdback Amount pursuant to Section VII hereof.
XVI. General.
A. Notices.  All notices, demands, requests or other
communications provided for or permitted to be given pursuant to
this Agreement must be in writing and shall be deemed to have
been properly given or served by personal delivery, by depositing
the same in the United States mail, postage prepaid and
registered or certified with return receipt requested, or by
sending the same by facsimile transmission or by a nationally
recognized overnight delivery service, as follows:

     If to Raytech:
Raytech Corporation
Four Corporate Drive, Suite 295
Shelton, Connecticut 06484-0240
Attention:  LeGrande L. Young
Facsimile:  203-925-8088

with a copy to:

Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue
New York, New York 10022
Attention:  Daniel H. Golden
Facsimile:  212-872-1002


     If to the Assignee:



with a copy to:





or to such other address or facsimile number as any party may
designate by notice so served upon the other party.  All notices,
demands, requests or other communications sent by mail shall be
effective and deemed served three (3) business days after being
deposited in the United States mail.  All notices, demands,
requests or other communications sent by overnight delivery
service shall be effective and deemed served on the first
business day after being deposited with such overnight delivery
service.  All notices, demands, requests or other communications
sent by facsimile shall be effective and deemed served on the
date of the facsimile confirmation.
B. Entire Agreement.  This Agreement and the documents
referred to herein constitute the entire agreement among the
parties with respect to the subject matter hereof, supersede all
prior agreements and understandings among the parties with
respect thereto, and no party shall be liable or bound to any
other party in any manner by any promises, conditions,
warranties, representations, or covenants except as specifically
set forth herein or therein.
C. Successors and Assigns.  Except as otherwise expressly
provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective
successors and assigns of the parties.  Nothing in this
Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
D.   Amendments and Waivers.  Any term of this Agreement may
be amended and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written
consent of each party hereto.
E. Governing Law.  This Agreement, including the validity
hereof and the rights and obligations of the parties hereunder,
and all amendments and supplements hereof and all waivers and
consents hereunder, shall be construed in accordance with and
governed by the domestic substantive laws of the State of
______________ without giving effect to any choice of law or
conflicts of law provision or rule that would cause the
application of the domestic substantive laws of any other
jurisdiction.
F. Severability.  If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such
provision shall be excluded from this Agreement and the balance
of the Agreement shall be interpreted as if such provision were
so excluded and shall be enforceable in accordance with its
terms.  The parties hereto understand that the federal, state,
and local laws and regulations applicable to this Agreement may
be amended from time to time and agree to execute any amendments
to this Agreement necessary to maintain compliance with those
laws and regulations.
G. Remedies.  In case any one or more of the covenants
and/or agreements set forth in this Agreement shall have been
breached by any party hereto, the party or parties entitled to
the benefit of such covenants or agreements may proceed to
protect and enforce their rights either by suit in equity and/or
by action at law, including, but not limited to, an action for
damages as a result of any such breach and/or an action for
specific performance of any such covenant or agreement contained
in this Agreement.  The rights, powers and remedies of the
parties under this Agreement are cumulative and not exclusive of
any other right, power or remedy which such parties may have
under any other agreement or law.  No single or partial assertion
or exercise of any right, power or remedy of a party hereunder
shall preclude any other or further assertion or exercise
thereof.

H. Attorneys' Fees.  If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement or
any other agreement or document to be executed or delivered
pursuant hereto, the prevailing party shall be entitled to
reasonable attorneys' fees, costs, and disbursements in addition
to any other relief to which such party may be entitled.
I. Captions.  The headings and captions used in this
Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
References to this Agreement include this Agreement as it may be
modified, amended, restated or supplemented from time to time
pursuant to the provisions hereof.  A reference to any law shall
mean that law as it may be amended, modified or supplemented from
time to time, and any successor law.
J. Pronouns.  All terms and words used in this Agreement
shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or
neuter, as the context or sense of this Agreement or any
paragraph or clause herein may require, the same as if such words
had been fully and properly written in the required number and
gender.
K. Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
L. Interpretation of Agreement.  The parties hereto
acknowledge and agree that this Agreement has been negotiated at
arm's-length and among parties equally sophisticated and
knowledgeable in the matters dealt with in this Agreement.
Accordingly, any rule of law or legal decision that would require
interpretation of any ambiguities in this Agreement against the
party that has drafted it is not applicable and is waived.  The
provisions of this Agreement shall be interpreted in a reasonable
manner to effect the intent of the parties as set forth in this
Agreement.
[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.

RAYTECH CORPORATION



By:
___________________________________________
Name:
Title:




Assignee on behalf of itself and the
Unsecured Creditors



By:
____________________________________________
                              Name:
                                   Title:








     SHAREHOLDERS' AGREEMENT



     THIS SHAREHOLDERS' AGREEMENT (the "Agreement") is made and
entered into as of the ____ day of ________, 2001, by and among
The Raytech Corporation Asbestos Personal Injury Settlement Trust
(the "PI Trust"), Murray Drabkin, not individually but solely as
the Shareholder Representative (as such term is defined in
Raytech Corporation's Second Amended Plan of Reorganization), and
Raytech Corporation ("Raytech").

     R E C I T A L S:

     WHEREAS, Raytech has reorganized under the provisions of
Chapter 11 of the Bankruptcy Code in a case pending in the United
States District Court for the District of Connecticut, known as
In re Raytech Corporation, Debtor, Case No. 5-89-00293; and
     WHEREAS, Raytech Corporation's Second Amended Plan of
Reorganization (the "Plan") has been confirmed by the Bankruptcy
Court; and
     WHEREAS, the Plan provides, inter alia, for the PI Trust to
provide "tag-along" rights to the Public Shareholders (as such
term is defined below) of Raytech in certain defined
circumstances;
      WHEREAS, this Agreement establishes the mechanism for
providing the tag-along rights to the Public Shareholders;
     NOW, THEREFORE, in consideration of the premises set forth
above and the mutual covenants herein contained, the parties
hereto agree as follows:

     ARTICLE I
     DEFINITIONS AND CONSTRUCTION

     1.01.  Definitions.  For purposes hereof, the following
terms when used herein and initially capitalized shall have the
meanings set forth below:
     "Legal Representative" shall mean and include any Person
empowered or entitled to act with respect to the property of the
PI Trust, including, but not limited to, any executor,
administrator or trustee.
     "Person" means a natural person, a partnership, a
corporation, a limited liability company, an association, a joint
stock company, a trust, a joint venture, an unincorporated
organization or other entity, or a governmental entity or any
department, agency or political subdivision thereof.
     "Public Shareholder" means any Person that holds New Raytech
Common Stock (as such term is defined in the Plan) that is not
the PI Trust, the United States of America or the State of
Connecticut.
     1.02  Construction.  The masculine pronoun whenever used
herein shall be construed so as to include the feminine and the
neuter, and the singular shall be deemed to include the plural,
whenever the context so requires.

ARTICLE II
     TAG-ALONG RIGHTS

     (a)       In the event that the PI Trust desires to sell 90%
or
more of the New Raytech Common Stock issued to the PI Trust on
the Effective Date, as adjusted for any subsequent stock splits,
dividends, recapitalizations or similar events, to a Person and
its affiliates and subsidiaries in a single transaction or a
series of transactions (a "Proposed Purchaser" and such transfer,
a "Proposed Transfer"), then such PI Trust's right to accept or
initiate such a transaction shall be conditioned upon the
Proposed Purchaser making a tender offer to the Public
Shareholders to purchase a pro rata portion (equivalent to the
percentage of New Raytech Common Stock to be purchased from the
PI Trust) of such Public Shareholders' New Raytech Common Stock
for the same price per share, with the same form of consideration
and otherwise upon the same terms and conditions as the Proposed
Transfer.
     (b)       The PI Trust shall, not less than 30 days prior to
a
Proposed Transfer, notify the Shareholder Representative in
writing of such Proposed Transfer (the "Proposed Transfer
Notice").  Such Proposed Transfer Notice shall set forth:  (i)
the number of shares of New Raytech Common Stock proposed to be
transferred (the "Transferred Securities"); (ii) the name(s) and
address(es) of the Proposed Purchaser(s); (iii) the proposed
amount and all forms of consideration and terms and conditions of
payment offered by such Proposed Purchaser, including the
proposed date for the closing of the Proposed Transfer (the
"Scheduled Closing"); and (iv) that the Proposed Purchaser has
been informed of the tag-along rights of the Public Shareholders
provided for in this Section and has agreed to purchase the
Transferred Securities in accordance with the terms hereof.
     (c)       In the event that the Proposed Purchaser(s) does
not
effect the tender offer to purchase New Raytech Common Stock from
such Public Shareholders as required by Section 2.01(a) hereof,
then the PI Trust shall not sell any New Raytech Common Stock to
the Proposed Purchaser pursuant to the Proposed Transfer.
     ARTICLE III
     ENDORSEMENT ON STOCK CERTIFICATE

     3.01      Upon the Effective Date of the Plan, all
certificates
evidencing the shares New Raytech Common Stock distributed to the
PI Trust pursuant to the Plan shall be endorsed as follows:
     "NOTICE:  This certificate and the shares of common
stock evidenced hereby are subject to the restrictions
stated in, and may not be sold, transferred,
encumbered, or otherwise disposed of in any manner,
voluntarily or involuntarily, except upon compliance
with the provisions of that certain Shareholders'
Agreement dated as of __________, 2001, copies of which
are on file in the offices of the PI Trust , and the
provisions of which are incorporated herein by
reference."

ARTICLE IV
     SPECIFIC PERFORMANCE: INJUNCTIVE RELIEF

     By execution and delivery hereof, each party hereto hereby
acknowledges and agrees that each of the parties to this
Agreement will be entitled to enforce such party's rights under
this Agreement specifically, to recover damages by reason of any
breach of any provision of this Agreement and to exercise all
other rights existing in such party's favor.  The parties hereto
agree and acknowledge that money damages will not be an adequate
remedy for any breach of the provisions of this Agreement and
that any party may in such party's sole discretion apply to any
court of competent jurisdiction for specific performance or
injunctive relief in order to enforce or prevent any violations
of the provisions of this Agreement, without the necessity of
posting a bond or proving actual damages.

     ARTICLE V
     TERM

     5.01  Term.  This Agreement shall commence on the date
hereof and shall continue until terminated upon the earliest to
occur of any of the following events:
        (a)    dissolution of Raytech or the PI Trust;
(b)  the completion of a tender offer for the shares of
New Raytech Common Stock held by Public
Shareholders as required by Section II(a) hereof;
        (c)    the fifteenth year anniversary of this Agreement.
     5.02  Termination.  Upon termination of this Agreement,
Raytech or the PI Trust shall, upon surrender to it by the PI
Trust of the certificates representing the outstanding  Shares
then held by the PI Trust, issue to the PI Trust new certificates
for an equal number of Shares but without the endorsement set
forth in Article IV hereof.
ARTICLE VI
     COMPENSATION

     6.01      Annual Fee.  Raytech shall pay the Shareholder
Representative an annual fee of $10,000.00, payable in advance.
     6.02      Expenses.  Raytech shall reimburse the Shareholder
Representative for all reasonable out-of-pocket expenses incurred
in connection with the performance of his or her responsibilities
under this Agreement, excluding attorneys' fees; provided,
however, that in the event of a Proposed Transfer which shall not
be in compliance with Article II hereof, Raytech shall pay all
reasonable attorneys' fees incurred by the Shareholder
Representative in enforcing the rights of the Public Shareholders
under Article II hereof, provided that such fees shall not exceed
$50,000.  Notwithstanding the foregoing, in addition, in the
event that the Shareholder Representative is required to enforce
the rights of the Public Shareholders under Article II hereof by
the filing of an action or otherwise, then the Shareholder
Representative may recover all reasonable expenses, including
attorneys' fees and costs, from the PI Trust in the event that
the Shareholder Representative obtains a final order that is not
the subject of an appeal determining that a Proposed Tender is
not in compliance with Article II hereof.   Any dispute over the
reasonableness of any fees incurred by the Shareholder
Representative shall be resolved by mandatory arbitration.

ARTICLE VII
RESIGNATION OF SHAREHOLDER REPRESENTATIVE
7.01 Resignation.  The Shareholder Representative may resign
and be discharged from any future obligations and liabilities
hereunder by giving written notice thereof to the Board of
Directors of Raytech and the Trustees of the PI Trust at least 30
days prior to the effective date of such resignation.  Such
resignation shall become effective on the day specified in such
notice.
7.02 Appointment of a Successor Shareholder Representative.
If, at any time, the Shareholder Representative shall give notice
of his intent to resign or shall become incapable of acting as
determined by a court of competent jurisdiction, the United
States Bankruptcy Court for the District of Connecticut,
Bridgeport Division, or such other court of competent
jurisdiction, shall choose, upon notice and a hearing, a
successor Shareholder Representative to act under this Agreement.
7.03 Acceptance of Appointment by Successor Representative.
Any successor Shareholder Representative appointed hereunder
shall execute an instrument accepting such appointment hereunder
in the form determined by the United States Bankruptcy Court for
the District of Connecticut, Bridgeport Division, or such other
court of competent jurisdiction.  Thereupon, such successor
Shareholder Representative shall, without any further act, become
vested with all of the rights, powers, trusts and duties of its
predecessor hereunder with like effect as if originally named
herein.

ARTICLE VIII
MISCELLANEOUS

     8.01  Severability.  Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement or the application thereof to any party of
circumstance shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the minimal extent of
such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions of this Agreement
or the application of such provision to other parties or
circumstances.

     8.02  Governing Law.  This Agreement shall be construed
under the laws of the State of Connecticut (without regard to
Connecticut conflicts of law principles).  By executing this
Agreement, the PI Trust and the Shareholder Representative
thereby consents to, and agrees not to contest, the jurisdiction
of any court sitting in Connecticut to hear any action brought
under this Agreement.
     8.03  Counterparts.  This Agreement may be executed in
several counterparts, each of which when so executed may be
deemed to be an original.
     8.04  Successors and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the Public Shareholders,
the PI Trust and their respective heirs, executors, Legal
Representatives and permitted assigns.
     8.05  Notices.  All notices required to be given under the
terms of this Agreement or which any of the parties may desire to
give hereunder shall be in writing and shall be deemed given upon
personal delivery or two (2) days after deposit in the United
States mail, registered or certified,  postage prepaid, addressed
to the party to be notified at the following address or at such
other address as the party to be notified may, from time to time
in writing, furnish to the other parties in the manner provided
in this Section:
If to the  Shareholder
Representative:     Murray Drabkin
     1814 24th Street, N.W.
     Washington, DC 20008

with a copy to:                         Stephen E. Garcia
     Kaye, Scholer, Fierman, Hays &
Handler
     200 S. Wacker
     Chicago, Illinois 60606

If to the PI Trust:



with a copy to:



If to Raytech or its
Board of Directors :



with a copy to:




     8.06  Headings.  The headings, titles and subtitles herein
are inserted for convenience of reference only and are to be
ignored in any construction of the provisions hereof.

     8.07  Amendments.  No amendments or additions to this
Agreement shall be binding unless in writing and signed by all
the parties hereto.
     8.08  Entire Agreement.  This Agreement, together with the
other documents and instruments referred to herein, constitutes
the entire agreement of the parties and supersedes all other
prior agreements, oral or written, with respect to the subject
matter hereof.

     8.9  Computation of Time.  Time is of the essence of this
Agreement.  In the computation of any period of time provided for
in this Agreement or by law, the day of the act or event from
which said period of time runs shall be excluded and the last day
of such period shall be included, unless it is a Saturday, Sunday
or legal holiday, in which case the period shall be deemed to run
until the end of the next day which is not a Saturday, Sunday or
legal holiday.
     8.10  Waiver.  The waiver by and party hereto of any breach
of any term or condition of this Agreement shall not be deemed to
constitute the waiver of any other breach of the same or any
other term or condition hereof.
     IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and date first mentioned above.

THE RAYTECH CORPORATION ASBESTOS
PERSONAL INJURY SETTLEMENT TRUST


By:

Its:


RAYTECH CORPORATION


By:

Its:



Murray Drabkin, not individually,
but solely as the Shareholder
Representative