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THIRD AMENDMENT
THIS AMENDMENT, dated as of January 13, 1997 (this
"Amendment"), to the Revolving Credit and Competitive Advance
Facility Agreement, dated as of June 30, 1994 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Federal-Mogul Corporation, a Michigan
corporation (the "Borrower"), the banks and other financial
institutions parties thereto (the "Lenders"), The Chase Manhattan
Bank (formerly known as Chemical Bank), as administrative agent for
the Lenders (in such capacity, the "Administrative Agent") and as
CAF Advance Agent, and Comerica Bank, Bank of America Illinois
(formerly known as Continental Bank), NBD Bank (formerly known as
NBD Bank, N.A.) and The Bank of New York, as co-agents.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders
have agreed to make, and have made, certain loans and other
extensions of credit to the Borrower; and
WHEREAS, the Borrower has requested that certain
provisions of the Credit Agreement be modified in the manner
provided for in this Amendment, and the Lenders are willing to
agree to such modifications as provided for in this Amendment;
NOW, THEREFORE, the parties hereto hereby agree as
follows:
1. Defined Terms. Terms defined in the Credit
Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
2. Amendments to Credit Agreement. (a) Subsection
1.1 of the Credit Agreement is hereby amended by deleting the table
contained in the definition of "Eurodollar Margin" contained in
such subsection in its entirety and inserting in lieu thereof the
following table:
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Bond Rating Eurodollar
(S&P/Moody's) Level Margin
A-/A3 or better I .2750%
BBB+/Baa1 or better II .2750%
BBB/Baa2 or better III .2625%
BBB-/Baa3 or better IV .3000%
BB+/Ba1 or better V .5000%
BB/Ba2 or better VI .5000%
BB-/Ba3 or below VII .6250%
(b) Subsection 2.8(a) of the Credit Agreement is
hereby amended by deleting the table contained therein in its
entirety and inserting in lieu thereof the following table:
Bond Rating Facility
(S&P/Moody's) Level Fee Rate
A-/A3 or better I .1250%
BBB+/Baa1 or better II .1500%
BBB/Baa2 or better III .1875%
BBB-/Baa3 or better IV .2000%
BB+/Ba1 or better V .2500%
BB/Ba2 or better VI .2500%
BB-/Ba3 or below VII .3750%
(c) Notwithstanding any provision in the Credit
Agreement to the contrary, for the purposes of determining
compliance with subsection 6.1 of the Credit Agreement for the
periods ending December 31, 1996 and March 31, 1997, the
determination of Cash Flow Coverage will be made without giving
effect to the charges taken by the Borrower in the fourth quarter
of 1995 in an aggregate amount not to exceed $250,000,000 ( of
which no more than $45,000,000 will constitute net cash
expenditures in 1997).
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(d) Notwithstanding any provision in the Credit
Agreement to the contrary, subsection 6.2 of the Credit Agreement
shall be deemed to require for the periods ending December 31, 1996
and March 31, 1997 that Consolidated Total Liabilities plus
Minority Interests as a percentage of Consolidated Tangible Net
Worth as of the last day of such fiscal quarters not be greater
than 425%.
(e) Notwithstanding any provision in the Credit
Agreement to the contrary, subsection 6.7 of the Credit Agreement
shall be deemed to require for the period from December 31, 1996
through March 31, 1997, that the Borrower will not, nor will it
permit any Subsidiary to, lease, sell or otherwise dispose of all
or any portion of its property, assets or business to any Person
except for (i) sales of assets in the ordinary course of business,
(ii) the sale of Precision Forged and the Heavy Wall Bearing
business, (iii) sales of account receivable or related contract
rights, (iv) sales of assets of the Borrower's international retail
business and (v) any other sales of assets having a book value
which, when added to the book value of all other assets sold
pursuant to this clause (v) since the date of this Agreement, does
not exceed 20% of the Borrower's consolidated net worth as of the
last day of the fiscal quarter ended immediately prior to the date
of such sale.
3. Conditions to Effectiveness. This Amendment shall
become effective (retroactive to December 31, 1996) on the date
(the "Amendment Effective Date") on which the Borrower and the
Required Lenders shall have executed and delivered to the
Administrative Agent this Amendment.
4. Representations and Warranties. The
representations and warranties made by the Borrower in the Loan
Documents are true and correct in all material respects on and as
of the Amendment Effective Date, after giving effect to the
effectiveness of this Amendment, as if made on and as of the
Amendment Effective Date.
5. Payment of Expenses. The Borrower agrees to pay
or reimburse the Administrative Agent for all of its reasonable
out-of-pocket costs and expenses incurred in connection with this
Amendment, any other documents prepared in connection herewith and
the transactions contemplated hereby, including, without
limitation, the reasonable free and disbursements of counsel to the
Administrative Agent.
6. No Other Amendments; Confirmation. Except as
expressly amended, modified and supplemented hereby, the provisions
of the Credit Agreement and the Notes are and shall remain in full
force and effect.
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7. Governing Law; Counterparts. (a) This Amendment
and the rights and obligations of the parties hereto shall be
governed by, and construed and interpreted in accordance with, the
laws of the State of New York.
(b) This amendment may be executed by one or more of
the parties to this Amendment on any number of separate
counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the
copies of this Amendment signed by all the parties shall be lodged
with the borrower and the Agent. This Amendment may be delivered
by facsimile transmission of the relevant signature pages hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective
proper and duly authorized officers as of the day and year first
above written.
FEDERAL-MOGUL CORPORATION
By--------------------------------
Title:
THE CHASE MANHATTAN BANK (formerly,
known as Chemical Bank) as
Administrative Agent and CAF
Advance Agent
By---------------------------------
Title: