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EXHIBIT 10.29
SECOND AMENDMENT TO NOTE AGREEMENT
This SECOND AMENDMENT dated as of July 14, 1995 (the "Second
Amendment") to the Note Agreement dated as of December 1, 1990,
among FEDERAL-MOGUL CORPORATION, a Michigan corporation (the
"Company") and the Purchasers listed on the signature page hereof
(the "Purchasers").
WHEREAS, the Company and the Purchasers (including any
successors or assigns) are parties to a Note Agreement dated as of
December 1, 1990 (the "Note Agreement") and to an Amendment dated
as of December 11, 1992 (the "First Amendment"); and
WHEREAS, the Company and the Purchasers wish to amend the Note
Agreement as herein set forth; and
WHEREAS, unless expressly provided otherwise in this
Amendment, all terms used in this Amendment which are defined in
the Note Agreement have the same meanings as used in the Note
Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual promises and undertakings set forth herein and in the Note
Agreement, the Company and the Purchasers agree as follows:
Section 1.1 Amendment of Section 5.1.
(a) Section 5.1 of the Note Agreement is amended by amending
the definition of "Consolidated Tangible Net Worth" to read in its
entirety as follows:
"Consolidated Tangible Net Worth": The consolidated
stockholders'equity of the Company and its Subsidiaries,
including non-redeemable preferred stock of the Company,
determined in accordance with generally accepted accounting
principles and including minority interests as of the date of
this Agreement which are listed in the attached Annex VI,
plus, solely for periods ending on or before December 31,
1996, the principal amount of outstanding 7 3/4% Convertible
Subordinated Debentures due 2012 of the Company, if any, less
Intangible Assets (net of accumulated amortization) of the
Company and its Subsidiaries on a consolidated basis at such
date determined in accordance with generally accepted
accounting principles; provided, that Consolidated Tangible
Net Worth shall not at any time reflect any additions or
deductions resulting from foreign currency translation gains
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or losses, the initial implementation of FAS 109 (including
any adjustments to goodwill) or the application from time to
time of FAS 106.
(b) The last sentence of the definition of "Indebtedness" in
Section 5.1 of the Note Agreement is amended to read as follows:
" . . . Indebtedness shall not include unfunded pension
obligations of the Company or its Subsidiaries, nor with respect to
periods ending on or before December 31, 1996, the principal amount
of outstanding 7 3/4% Convertible Subordinate Debentures due 2012,
if any."
(c) Section 5.1 of the Note Agreement is further amended to
add the following new definitions to read in their entirety as
follows:
"FAS 106": Statement of Financial Accounting Standards
No.106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions", as published by the Financial Accounting Standards
Board.
"FAS 109": Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes", as published by the
Financial Accounting Standards Board.
"Intangible Assets": assets having no physical evidence
and that, in conformity with GAAP, should be classified as
intangible assets, including, without limitation, patents, patent
rights, trademarks, trade names, organizational expenses and
goodwill.
"Moody's Bond Rating": for any day, the rating of the
Company's senior long-term unsecured debt by Moody's Investor
Service, Inc. in effect at 11:00 a.m. New York City time, on such
day.
"S&P Bond Rating": for any day, the rating of the
Company's senior long-term unsecured debt by Standard & Poor's
Ratings Group in effect at 11:00 a.m., New York City time, on such
day.
Section 1.2 Amendment of Section 7.4. Section 7.4 of the Note
Agreement is amended to read in its entirety as follows:
"Section 7.4 Indebtedness of Subsidiaries. The Company
will not permit any Subsidiary to permit to exist, create,
assume, incur, guarantee or otherwise become liable, directly
or indirectly, in respect of any Indebtedness except:
(a) Indebtedness owed to the Company or to a
Wholly-Owned Subsidiary; and
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(b) Other Indebtedness, provided that the sum
of (i) the outstanding aggregate amount of Indebtedness
of all Subsidiaries plus (ii) outstanding Indebtedness
secured by Liens permitted by Section 7.5 (g) shall at no
time exceed 30% of Consolidated Tangible Net Worth."
Section 2. Interest Rate Adjustment. In the event the Company
shall have obtained ratings with respect to its long-term unsecured
indebtedness of less than "BBB-" from Standard & Poor's Corporation
and less than "Baa3" from Moody's Investor Service, Inc., the
Company agrees to amend the outstanding Notes (the "Amended Notes")
to bear interest at the rate of 100 basis points per annum above
the original interest rate (9.93% with respect to Series A Notes
and 10.06% with respect to Series B Notes) from the date on which
both such ratings shall have been obtained until the earlier of:
(i) the first date thereafter on which the Company shall have
obtained either an S&P Bond Rating of "BBB-" or a Moody's Bond
Rating of at least "Baa3" (the "Adjustment Period"), or (ii)
December 31, 1996. The computation of any Reinvestment Yield
pursuant to the terms of the Note Agreement or the Amended Notes
shall not be affected in any manner by the increase in the interest
rate contemplated herein during the Adjustment Period. The Amended
Notes will be identical in all other respects with the original
Notes.
Section 3. Execution in Counterparts and Effective Date. This
Amendment may be executed in any number of counterparts, and any
party hereto may execute any counterpart, each of which when
executed and delivered will be deemed to be an original and all of
which taken together will be deemed to be one instrument. The
execution of this Agreement by any party hereto will not become
effective until counterparts hereof have been executed by the
Company and the holders of at least 66 2/3% in aggregate principal
amount of outstanding Notes at which time this Amendment shall
become effective as of
July 14, 1995.
Section 4. Headings. Section headings in this Amendment are
included for convenience of reference only and are not part of this
Amendment for any other purpose.
Section 5. Governing Law. This Amendment shall be governed
by and construed and enforced in accordance with the internal laws
of the state of Illinois other than principles of conflicts of law.
Section 6. Integration. The Note Agreement, as modified and
amended by the First Amendment and this Second Amendment, remains
in full force and effect and sets forth the entire understanding of
the parties with respect to the subject matter hereof and
supersedes all prior agreements with respect thereto, whether
written or oral.
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Section 7. Ratification. Except to the extent hereby
modified, amended or waived, the Note Agreement is in all respects
hereby ratified, confirmed and approved by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the 14th day of July, 1995.
FEDERAL-MOGUL CORPORATION
PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY
ALLSTATE LIFE
INSURANCE COMPANY
STATE MUTUAL LIFE ASSURANCE
COMPANY OF AMERICA
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