FIRST SUPPLEMENTAL INDENTURE
to
INDENTURE
dated as of June 29, 1998
among
FEDERAL-MOGUL CORPORATION
as Issuer,
THE GUARANTORS PARTY HERETO FROM TIME TO TIME
as Guarantors
and
THE BANK OF NEW YORK
as Trustee
Dated as of June 30, 1998
$1,000,000,000
7 1/2% Notes due July 1, 2004
7 3/4% Notes due July 1, 2006
7 7/8% Notes due July 1, 2010
FIRST SUPPLEMENTAL INDENTURE, dated as of June 30, 1998 among Federal-Mogul
Corporation, a Michigan corporation, as issuer (the "Company"), the companies
listed on the signature pages hereto that are subsidiaries of the Company (the
"Guarantors") and The Bank of New York, a New York banking corporation, as
trustee (the "Trustee").
RECITALS
The Company and the Guarantors have duly executed and delivered an
Indenture (as such may be amended, supplemented or modified from time to time,
the "Indenture") dated as of June 29, 1998, providing for the issuance from time
to time of its unsecured debentures, notes or other evidences of indebtedness
("Securities") to be issued in one or more series.
The Company has authorized the issuance of three separate series of
Securities designated as the Company's 7 1/2% Notes due July 1, 2004 (the "7
1/2% Notes"), 7 3/4 Notes due July 1, 2006 (the "7 3/4% Notes")and 7 7/8% Notes
due July 1, 2010 (the "7 7/8% Notes," together with the 7 1/2% Notes and the 7
3/4% Notes, the "Notes"), respectively, in the aggregate principal amount of
$250,000,000 in the case of the 7 1/2% Notes, $400,000,000 in the case of the 7
3/4% Notes, and $350,000,000 in the case of the 7 7/8% Notes, each series to be
guaranteed by each of the Guarantors, on the terms set forth herein.
Section 8.1 of the Indenture provides that the Company, the Guarantors and
the Trustee may at any time and from time to time enter into one or more
indentures supplemental to the Indenture to establish, among other things, the
form and terms of Securities of any series as permitted by Section 3.1 of the
Indenture.
All things necessary to make this First Supplemental Indenture a valid
agreement of the Company and the Guarantors, in accordance with its terms, have
been done.
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually covenanted and agreed as follows for the
equal and ratable benefit of the Holders of the Notes:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions. (a) For all purposes of this First Supplemental
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
1. the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
2. all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
3. all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
and
4. the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this First Supplemental Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Attributable Debt," when used in connection with a Sale and Lease-Back
Transaction, shall mean, as of any particular time, the lesser of (i) the fair
value (as determined by the Board of Directors) of the property subject to such
arrangement and (ii) the then present value (computed by discounting at the
Composite Rate) of the obligation of a lessee for net rental payments during the
remaining term of any lease in respect of such property (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended). The terms "net rental payments" under any lease for any period shall
mean the sum of the rental payments required to be paid in such period by the
lessee thereunder, not including, however, any amounts required to be paid by
such lessee (whether or not designated as rental or additional rental) on
account of maintenance and repairs, insurance, taxes, assessments, water rates
or similar charges required to be paid by such lessee thereunder or any amounts
required to be paid by such lessee thereunder contingent upon the amount of
sales, maintenance and repairs, insurance, taxes, assessments, water rates or
similar charges.
"Composite Rate" means, as of any particular time, the rate of interest,
per annum, compounded semiannually, equal to the sum of the rates of interest
borne by each of the Securities outstanding under this Supplemental Indenture,
as specified on the face of each of the Securities.
"Consolidated Assets" means the Company's assets, determined in accordance
with GAAP and consolidated for financial reporting purposes in accordance with
GAAP, such assets to be valued at book value.
"DTC" means The Depositary Trust Company.
"Funded Indebtedness" means all Indebtedness of the Company and its
Restricted Subsidiaries maturing by its terms more than one year after, or which
is renewable or extendable at the option of the Company for a period ending more
than one year after, the date as of which Funded Indebtedness is being
determined.
"GAAP" means such accounting principles as are generally accepted in the
United States at the date of the Indenture.
"Indebtedness" means, without duplication, (i) all obligations in respect
of borrowed money or for the deferred purchase or acquisition price of property
(including all types of real, personal, tangible, intangible or mixed property)
or services (excluding trade accounts payable, deferred taxes and accrued
liabilities which arise in the ordinary course of business) which are, in
accordance with GAAP, includible as a liability on a balance sheet consolidated
for financial reporting purposes in accordance with GAAP, (ii) all amounts
representing the capitalization of rental obligations in accordance with GAAP,
and (iii) all Contingent Obligations with respect to the foregoing; for purposes
of clause (iii), "Contingent Obligation" means, as to any Person, any obligation
of such Person guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other
3
Person (the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primary for the purpose of assuring the
beneficiary of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the beneficiary of such primary obligation against loss in respect
thereof; provided, however, that the term "Contingent Obligation" shall not
include the endorsement of instruments for deposit or collection in the ordinary
course of business. The term "Contingent Obligation" shall also include the
liability of a general partner in respect of the primary obligations of a
partnership in which it is a general partner. The amount of any Contingent
Obligation of a Person shall be deemed to be an amount equal to the principal
amount of the primary obligation in respect to which such Contingent Obligation
is made.
"Issue Date" means the date of the original issuance of the Notes.
"Principal Property" shall mean the principal manufacturing facilities
owned by the Company or a Restricted Subsidiary located in the United States,
except such as the Board of Directors, in its good faith opinion, reasonably
determines is not significant to the business, financial condition and earnings
of the Company and its consolidated Subsidiaries taken as a whole, as evidenced
by a Board resolution, and except for (i) any and all personal property
including, without limitation, (a) motor vehicles and other rolling stock, and
(b) office furnishings and equipment and information and electronic data
processing equipment, (ii) any property financed through obligations issued by
state, territory or possession of the United States, or any political
subdivision or instrumentality of the foregoing, or (iii) any real property held
for development or sale.
"Restricted Subsidiary" means any consolidated Subsidiary that owns any
Principal Property.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Senior Credit Agreement" means the Second Amended and Restated Credit
Agreement among Federal-Mogul Corporation, The Chase Manhattan Bank as Agent and
the lenders thereunder, dated as of December 18, 1997, as amended.
Section 1.2. Headings. The Article and Section headings herein are for
convenience only and shall not affect the constriction hereof.
4
Section 1.3. Successors and Assigns. This First Supplemental Indenture
shall be binding upon the Company and the Guarantors and their respective
successors and assigns and shall inure to the benefit of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in the
Indenture and this First Supplemental Indenture and in the Notes shall
automatically extend to and be vested in such transferee or assignee, all
subject to the conditions of the Indenture. This First Supplemental Indenture
shall be binding upon the Trustee and its successors and assigns.
Section 1.4. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This First Supplemental Indenture shall
form a part of the Indenture for all purposes, and every Holder of Notes
heretofore or hereafter authenticated and delivered shall be bound hereby.
Section 1.5. Governing Law. THIS FIRST SUPPLEMENTAL INDENTURE, THE NOTES
AND THE GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
Section 1.6. Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts and by telecopier, each of which shall be
an original, but such counterparts shall together constitute but one and the
same instrument.
ARTICLE 2
SCOPE AND TERMS OF THIS FIRST SUPPLEMENTAL INDENTURE
Section 2.1. Scope. (a) The changes, modifications and supplements to the
Indenture effected by this First Supplemental Indenture shall only be applicable
with respect to, and govern the terms of, the Notes issued by the Company and
guaranteed by the Guarantors, which shall be limited in original aggregate
principal amount to $250,000,000, in the case of the 7 1/2% Notes, $400,000,000,
in the case of the 7 3/4% Notes, and $350,000,000, in the case of the 7 7/8%
Notes, and shall not apply to any other Securities that may be issued under the
Indenture unless a supplemental indenture with respect to such other Securities
specifically incorporates such changes, modifications and supplements.
(b) Pursuant to this First Supplemental Indenture, there is hereby created
and designated three series of Securities under the Indenture entitled 7 1/2%
Notes due July 1, 2004, 7 3/4% Notes due July 1, 2006 and 7 7/8% Notes due July
1, 2010. The 7 1/2% Notes, the 7 3/4% Notes and the 7 7/8% Notes shall be in the
forms of Exhibits X-0, X-0 and A-3 hereto, respectively. The Notes shall be
guaranteed by each of the Guarantors as provided in such form and in the
Indenture. The Notes shall be issuable as Registered Securities and shall bear
interest as provided in Exhibits X-0, X-0 and A-3 hereto.
2.2. Terms of the 7 1/2% Notes. The 7 1/2% Notes shall have a Stated
Maturity of July 1, 2004. The 7 1/2% Notes shall be issued in denominations of
$1,000 and integral multiples of $1,000. The 7 1/2% Notes shall bear interest
from the Issue Date; the Interest
5
Payment Dates for the 7 1/2% Notes shall be July 1 and January 1 of each year,
commencing January 1, 1999, and the Regular Record Dates with respect to such
Interest Payment Dates shall be the preceding June 15 and December 15,
respectively. The 7 1/2% Notes shall be redeemable as provided in the form of 7
1/2% Notes attached hereto as Exhibit A-1. The defeasance and covenant
defeasance provisions of Article 4 of the Indenture shall be applicable to the 7
1/2% Notes. The covenants in Article 3 of this First Supplemental Indenture
shall be subject to covenant defeasance as provided in Section 4.5 of the
Indenture.
2.3. Terms of the 7 3/4% Notes. The 7 3/4% Notes shall have a Stated
Maturity of July 1, 2006. The 7 3/4% Notes shall be issued in denominations of
$1,000 and integral multiples of $1,000. The 7 3/4% Notes shall bear interest
from the Issue Date; the Interest Payment Dates for the 7 3/4% Notes shall be
July 1 and January 1 of each year, commencing January 1, 1999, and the Regular
Record Dates with respect to such Interest Payment Dates shall be the preceding
June 15 and December 15, respectively. The 7 3/4% Notes shall be redeemable as
provided in the form of 7 3/4% Notes attached hereto as Exhibit A-2. The
defeasance and covenant defeasance provisions of Article 4 of the Indenture
shall be applicable to the 7 3/4% Notes. The covenants in Article 3 of this
First Supplemental Indenture shall be subject to covenant defeasance as provided
in Section 4.5 of the Indenture.
2.4. Terms of the 7 7/8% Notes. The 7 7/8% Notes shall have a Stated
Maturity of July 1, 2010. The 7 7/8% Notes shall be issued in denominations of
$1,000 and integral multiples of $1,000. The 7 7/8% Notes shall bear interest
from the Issue Date; the Interest Payment Dates for the 7 7/8% Notes shall be
July 1 and January 31 of each year, commencing January 1, 1999, and the Regular
Record Dates with respect to such Interest Payment Dates shall be the preceding
June 15 and December 15, respectively. The 7 7/8% Notes shall be redeemable as
provided in the form of 7 7/8% Notes attached hereto as Exhibit A-3. The
defeasance and covenant defeasance provisions of Article 4 of the Indenture
shall be applicable to the 7 7/8% Notes. The covenants in Article 3 of this
First Supplemental Indenture shall be subject to covenant defeasance as provided
in Section 4.5 of the Indenture.
2.5. Payment of Principal and Interest. Principal and interest on the Notes
will be payable, the transfer of the Notes will be registrable and the Notes may
be presented for exchange at the office or agency of the Company maintained for
such purpose (which will initially be at the corporate trust office of the
Trustee located at c/o The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000). So long as the Notes are represented by Global Notes, the interest
payable on the Notes will be paid to Cede & Co., the nominee of the Depositary,
or its registered assigns as the registered owner of such Global Notes, by wire
transfer of immediately available funds on each applicable Interest Payment
Date. If any of the Notes are no longer represented by a Global Note, payment of
interest may, at the option of the Company, be made by check mailed to the
address of the person entitled thereto. No service change will be made for any
transfer of exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
6
ARTICLE 3
COVENANTS
Section 3.1. Limitation on Liens. So long as the Notes shall be
Outstanding, the Company will not create or assume, and will not permit any
Restricted Subsidiary to create or assume, any notes, bonds, debentures or other
similar evidences of Indebtedness secured by any mortgage, pledge, security
interest or lien (any such mortgage, pledge, security interest or lien being
referred to herein as a "Mortgage" or "Mortgages") of or upon any Principal
Property owned by the Company or by any Restricted Subsidiary or on shares of
capital stock or evidence of Indebtedness of any Restricted Subsidiary, whether
owned at the date of the Indenture or thereafter acquired, without making
effective provision, and the Company in such case will make or cause to be made
effective provision, whereby all Notes (together with, if the Company shall so
determine, any other Indebtedness of the Company or such Restricted Subsidiary,
whether then existing or thereafter created which is not subordinated to the
Notes) shall be secured by such a Mortgage equally and ratably with (or prior
to) any and all other Indebtedness thereby secured, so long as such Indebtedness
shall be so secured; provided, however, that the foregoing shall not apply to
any of the following:
(i) Mortgages on any Principal Property, shares of stock of
Indebtedness of any corporation existing at the time such corporation
becomes a Subsidiary;
(ii) Mortgages on any Principal Property, shares of stock or
Indebtedness acquired, constructed or improved by the Company or any
Restricted Subsidiary after the date of the Indenture which are created or
assumed prior to, or contemporaneously with, such acquisition, construction
or improvement or within 365 days after the acquisition, completion of
construction or improvement or commencement of commercial operation of such
property, to secure or provide for the payment of all or any part of the
purchase price or the cost of such construction or improvement thereof, or,
in addition to Mortgages contemplated by clause (iii) below, Mortgages on
any Principal Property, shares of stock or Indebtedness existing at the
time of acquisition thereof (including acquisition through merger or
consolidation);
(iii) Mortgages on any Principal Property or shares of stock or
Indebtedness acquired from a corporation which is merged with or into the
Company or a Restricted Subsidiary;
(iv) Mortgages on any Principal Property, shares of stock or
Indebtedness to secure Indebtedness to the Company or to a Restricted
Subsidiary;
(v) Mortgages on any Principal Property, shares of stock or
Indebtedness in favor of the United States of America or any State thereof
or The Commonwealth of Puerto Rico, or any department, agency or
instrumentality or political subdivision of the United States of America or
any State thereof or The Commonwealth of Puerto Rico, to secure partial,
progress, advance or other payments, or to secure any Indebtedness incurred
for the purpose of financing all or any part of the cost of acquiring,
constructing or improving any Principal Property, shares of stock or
Indebtedness subject to such
7
Mortgages (including Mortgages incurred in connection with pollution
control, industrial revenue, Title XI maritime financings or similar
financings), or other Mortgages in connection with the issuance of
tax-exempt industrial revenue bonds;
(vi) Mortgages existing as of the date of the Indenture;
(vii) Mortgages for taxes, assessments or other government charges,
the validity of which is being contested in good faith by appropriate
proceedings and materialmen's, mechanics' and other like Mortgages, or
deposits to obtain the release of such Mortgages;
(viii) Mortgages created or deposits made to secure the payment of
workers' compensation claims or the performance of, or in connection with,
tenders, bids, leases, public or statutory obligations, surety and appeal
bonds, contracts, performance and return-of-money bonds or to secure (or in
lieu of) surety or appeal bonds and Mortgages made in the ordinary course
of business for similar purposes; and
(ix) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Mortgage referred to
in the foregoing clauses (i) to (viii), inclusive; provided, however, that
such extension, renewal or replacement shall be limited to all or a part of
the property, shares of stock or Indebtedness which secured the Mortgage so
extended, renewed or replaced (plus improvements on such property).
Notwithstanding the foregoing, the Company or any Restricted Subsidiary may
create or assume Mortgages in addition to those permitted by the immediately
preceding paragraph, and renew, extend or create such Mortgages, provided, that
at the time of such creation, assumption, renewal or replacement, and after
giving effect thereto, the aggregate amount of all Indebtedness so secured by
such a Mortgage as provided above (not including Indebtedness excluded as
provided in clauses (i) through (ix) of the immediately preceding paragraph),
plus all Attributable Debt of the Company and its Restricted Subsidiaries in
respect of Sale and Lease-Back Transactions (defined in Section 3.2 below) which
would not be permitted by either clause (i) or (ii) of the first paragraph under
Section 3.2 below, would not exceed 20% of Consolidated Assets.
Section 3.2. Limitation on Sale and Lease-Back Transactions. So long as the
Notes shall be Outstanding, the Company will not, nor will it permit any
Restricted Subsidiary to, enter into any arrangement with any Person (other than
the Company or any Restricted Subsidiary) providing for the leasing by the
Company or a Restricted Subsidiary of any Principal Property owned by the
Company or such Restricted Subsidiary (except for leases for a term of not more
than three years), which property has been or is to be sold or transferred by
the Company or such Restricted Subsidiary to such person on the security of such
Principal Property more than 365 days after the acquisition thereof or the
completion of construction and commencement of full operation thereof (a "Sale
and Lease-Back Transaction"), unless either (i) the Company or such Restricted
Subsidiary would be entitled pursuant to Section 3.1 to incur Indebtedness
secured by a Mortgage on the Principal Property to be leased back equal in
amount to the Attributable Debt with respect to such Sale and Lease-Back
Transaction without equally
8
and ratably securing the Notes, or (ii) the Company shall, and in any such case
the Company covenants that it will, apply or cause to be applied an amount equal
to the greater of the net proceeds or the fair value (as determined by the Board
of Directors of the Company) of the property so sold to the purchase of
Principal Property or to the retirement (other than any mandatory retirement),
within 365 days of the effective date of any such Sale and Lease-Back
Transaction, of Notes or other Funded Indebtedness; provided, however, that any
such retirement of Notes shall be made in accordance with the Indenture; and
provided, further, that the amount to be applied to such retirement of Notes or
other Funded Indebtedness shall be reduced by an amount equal to the sum of (a)
an amount equal to the principal amount of any Notes delivered within 365 days
after the effective date of such Sale and Lease-Back Transaction to the Trustee
for retirement and cancellation, and (b) the principal amount of other Funded
Indebtedness voluntarily retired by the Company within such 365-day period,
excluding, in each case, retirements pursuant to mandatory sinking fund or
prepayment provisions and payments at Maturity.
Notwithstanding the foregoing,
(i) the Company or any Restricted Subsidiary may enter into Sale and
Lease-Back Transactions in addition to any permitted by the immediately
preceding paragraph and without any obligation to retire any Notes or other
Indebtedness; provided, that at the time of entering into such Sale and
Lease-Back Transaction and after giving effect thereto, Attributable Debt
resulting from such Sale and Lease-Back Transaction, plus the aggregate
amount of all Indebtedness secured by a Mortgage (not including
Indebtedness excluded as provided in clauses (i) through (ix) under Section
3.1 above), does not exceed 20% of Consolidated Assets; and
(ii) the Company or any Restricted Subsidiary may, at any time, enter
into a Sale and Lease-Back Transaction with respect to any or all of the
following properties: its plant located in Mooresville, Indiana and its
Precision Forged Products Division facilities located in Gallipolis, Ohio;
Plymouth, Michigan; and Romulus, Michigan.
ARTICLE 4
BOOK-ENTRY SECURITY
Section 4.1. The Notes will be Registered Securities represented by one or
more securities in global form that will be deposited with, or on behalf of, DTC
in its capacity as Depositary and registered in the name of Cede & Co., the
nominee of DTC. Unless and until exchanged in whole or in part for a certificate
issued in definitive registered form, the global security or securities may not
be transferred except as a whole (i) by DTC to a nominee of DTC, (ii) by a
nominee of DTC to DTC or another nominee of DTC or (iii) by DTC or any such
nominee to a successor Depositary or a nominee of such successor Depositary.
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the day and year first above written.
9
FEDERAL-MOGUL CORPORATION
by: -----------------------------------
Name:
Title:
FEDERAL-MOGUL DUTCH HOLDINGS INC.,
as Guarantor
by: -----------------------------------
Name:
Title:
FEDERAL-MOGUL GLOBAL INC., as Guarantor
by: -----------------------------------
Name:
Title:
FEDERAL-MOGUL U.K. HOLDINGS INC.,
as Guarantor
by: -----------------------------------
Name:
Title:
XXXXXX AUTOMOTIVE COMPANY, INC.,
as Guarantor
by: -----------------------------------
Name:
Title:
FEDERAL MOGUL VENTURE CORPORATION,
as Guarantor
by: -----------------------------------
Name:
Title:
10
FEDERAL-MOGUL WORLD WIDE, INC.,
as Guarantor
by: -----------------------------------
Name:
Title:
FEDERAL-MOGUL GLOBAL PROPERTIES, INC.,
as Guarantor
by: -----------------------------------
Name:
Title:
FELT PRODUCTS MFG. CO., as Guarantor
by: -----------------------------------
Name:
Title:
FEL-PRO MANAGEMENT CO., as Guarantor
by: -----------------------------------
Name:
Title:
FEL-PRO CHEMICAL PRODUCTS L.P.,
as Guarantor
by: FEL-PRO MANAGEMENT CO., as General Partner
by: ------------------------------
Name:
Title:
00
XXX XXXX XX XXX XXXX, as Trustee
by: -----------------------------------
Name:
Title:
12
