EXHIBIT 10.31
EXECUTION COPY
AMENDMENT NO. 2 TO CREDIT AND
GUARANTY AGREEMENT
AMENDMENT NO. 2 dated as of
November 30, 2006 (this “ Amendment ”) to
the Credit and Guaranty Agreement (the “ Credit
Agreement ”) dated as of November 23, 2005, among
Federal-Mogul Corporation, certain of its subsidiaries named on the
signature pages thereto as borrowers (the “ Borrowers
”), the lenders party thereto (the “ Lenders
”) and Citicorp USA, Inc., as administrative agent (the
“ Administrative Agent ”).
W I T N E S S E T H
:
WHEREAS, the Borrowers have asked
the Lenders and the Administrative Agent, and the Lenders party
hereto and the Administrative Agent are willing, on the terms set
forth below, to amend certain provisions of the Credit Agreement
and the Security and Pledge Agreement;
NOW, THEREFORE, the parties hereto
agree as follows:
Section 1 . Defined Terms;
References. Unless otherwise specifically defined herein, each
term used herein has the meaning assigned to such term in the
Credit Agreement or the Security and Pledge Agreement, as
applicable. Each reference to “hereof”,
“hereunder”, “herein” and
“hereby” and each other similar reference and each
reference to “this Agreement” and each other similar
reference contained in the Credit Agreement or the Security and
Pledge Agreement, as applicable, shall, after this Amendment
becomes effective, refer to the Credit Agreement or the Security
and Pledge Agreement, as applicable, as amended hereby.
Section 2. Amendment of
Section 1.01 of the Credit Agreement. Section 1.01 of
the Credit Agreement is hereby amended as follows:
(a) to revise the
defined term “ Adjusted LIBOR Rate ” by deleting
the phrase “upwards, if necessary,” in the
parenthetical in the first sentence thereof, and by deleting the
phrase “next 1/16 th
”
in that same parenthetical and inserting the phrase “nearest
1/100 th
”
in its place;
(b) to insert a new defined term
immediately following the defined term “ AM Finished
Goods ” as follows:
“‘ Amendment
Date’ shall mean November 30,
2006.”;
(c) to insert a new defined term
immediately following the defined term “ Amounts
” as follows:
“‘ Anticipated
Japanese Consolidation ’ shall mean, with respect to
three of the Parent’s and the Subsidiaries’ Japanese
manufacturing, technical and distribution facilities that are
related primarily to the Parent’s and its Subsidiaries’
System Protection Group and Aftermarket operations, the anticipated
consolidation of such facilities into one facility that will be
located in Japan.”;
(d) to revise the defined term
“ Asian Investment ” by deleting
“$90,000,000” from clause (ii)(A) thereof and inserting
“$125,000,000” in its place, by deleting the word
“and” at the end of clause (ii)(D) thereof, by
inserting the following new clause (iii) thereto: “(iii)
related Other Foreign Transfers and”, by renumbering existing
clause (iii) thereof as clause (iv) thereof, and by
deleting the phrase “and (ii)” in clause
(iv) thereof and inserting the phrase “, (ii) and
(iii)” in its place;
(e) to delete the defined term
“ Blocker BV ”;
(f) to revise the defined term
“ China Restructuring ” by inserting the phrase
“or another Non-Debtor Foreign Subsidiary Holding
Company” immediately after the phrase “Mauritius
holding company” in clause (ii) thereof, by deleting the
word “and” at the end of clause (ii) thereof, by
adding the following new clause (iii) thereto: “(iii)
related Other Foreign Transfers and”, by renumbering existing
clause (iii) thereof as clause (iv) thereof, and by
deleting the phrase “and (ii)” in clause
(iv) thereof and inserting the phrase “, (ii) and
(iii)” in its place;
(g) to insert a new defined term
immediately following the defined term “ Commitment
Fee ” as follows:
“‘ Company Voluntary
Arrangements ’ shall mean collectively, (i) the
proposals dated June 23, 2006 for company voluntary
arrangements in respect of T&N and forty-eight other U.K.
Subsidiaries which are group companies, and (ii) the proposals
dated June 23, 2006 for company voluntary arrangements in
respect of Federal Mogul Growth Limited and F-M UK Holding
Limited.”;
(h) to revise the defined term
“ Consolidated EBITDA ” by deleting
“$56,000,000” in clause (g) thereof and inserting
“$60,000,000” in its place;
(i) to revise the defined term
“ Domestic EBITDA ” by deleting
“$56,000,000” in clause (g) thereof and inserting
“$60,000,000” in its place;
(j) to revise the defined term
“ European Tax Restructuring ” by deleting the
phrase “dated November 2005” from clause
(ii) thereof, by adding the following new clause
(ii) thereto: “(ii) Other Foreign Transfers related
thereto and”, by renumbering existing clause
(ii) thereof as clause (iii) thereof, and by deleting the
phrase “clause (i)” in new clause (iii) thereof
and inserting the phrase “clauses (i) and (ii)” in
its place;
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(k) to insert a new defined term
immediately following the defined term “ F-M Taiwan
” as follows:
“‘ Federal-Mogul
Corporation Pre-Emergence International Restructuring Plan
’ shall mean the Federal-Mogul Corporation Simplified
Pre-Emergence International Restructuring Plan Updated
October 27, 2006.”;
(l) to revise the defined term
“ Final Order ” by deleting the word
“Existing” and inserting the word “JPM” in
its place, and by inserting the word “Credit”
immediately following the word “DIP”;
(m) to insert a new defined term
immediately following the defined term “ Foreign
Subsidiary ” as follows:
“‘ French
Restructuring ’ shall mean (i) the conversion of
Federal-Mogul S.A. into a société anonyme simplifiée
such that it becomes Federal-Mogul S.A.S., (ii) the conversion
of Federal-Mogul Automotive France, S.A. into a société
anonyme simplifiée such that it becomes Federal-Mogul
Automotive France, S.A.S., (iii) the sale by Federal-Mogul
Ignition Company of Federal-Mogul Automotive France, S.A.S. to
Federal-Mogul S.A.S. in exchange for Intercompany Loans,
(iv) the possible transfer of such Intercompany Loans by
Federal-Mogul Ignition Company to the Parent in exchange for
cancellation of certain Intercompany Indebtedness, (v) the
merger of Federal-Mogul Automotive France, S.A.S with and into
Federal-Mogul S.A.S, (vi) the contribution to the equity of
Federal-Mogul S.A.S. by Federal-Mogul Ignition Company, or if the
transfer referred to in clause (iv) above has taken place, by
the Parent, of the Intercompany Loans referred to in clause
(iii) above, (vii) related Other Foreign Transfers and
(viii) such other transactions including those contemplated in
the Federal-Mogul Corporation Pre-Emergence International
Restructuring Plan that are incidental to those contained in
clauses (i) through (vii) for the purpose of effecting
the above described transactions; provided that no such
transaction or series of transactions described in the preceding
clauses shall have the effect of reducing the direct or indirect
equity interest therein pledged pursuant to the Loan Documents or
the value thereof or otherwise adversely affect the collateral
position of the Lenders with respect thereto or subject the same to
additional or increased intervening claims.”;
(n) to revise the defined term
“ Intercompany Loan Notes Restructuring ” by
inserting the phrase “or the Excluded Subsidiaries”
immediately following the word “Borrowers” at the end
of clause (i) thereof, by inserting the phrase “or the
Excluded Subsidiaries” immediately following the first
appearance of the word “Borrowers” in clause
(ii) thereof, and by inserting the phrase “, which
equity in such obligor company may be cancelled in part” at
the end of clause (iii)(D) thereof;
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(o) to revise the defined term
“ Italy Restructuring ” by deleting the phrase
“Federal-Mogul Holding Italy S.r.L.” that appears
beginning in the seventh line thereof and inserting the phrase
“a new Non-Debtor Foreign Subsidiary Holding Company”
in its place;
(p) to insert a new defined term
immediately following the defined term “ Loan
Documents ” as follows:
“‘ Luxembourg
Holdco ’ shall mean that certain Foreign Subsidiary
created in connection with the European Tax Restructuring and
described on page 5 of the Federal-Mogul Corporation Pre-Emergence
International Restructuring Plan.”;
(q) to revise the defined term
“ Maturity Date ” by deleting the phrase
“December 9, 2006” and inserting the phrase “July
1, 2007” in its place;
(r) to revise the defined term
“ Mexican Holdco ” by inserting the word
“either” immediately following the word
“mean” and by inserting the phrase “, or the use
of an existing Excluded Subsidiary incorporated under the laws of
one of the states of the United States for such purpose” at
the end thereof;
(s) to revise the defined term
“ Mexican Restructuring ” by inserting the
phrase “if not an existing entity” at the end of clause
(i) thereof, by inserting a new clause (iv) immediately
after the phrase “Mexican Holdco” appearing on the
eighth line thereof: “(iv) the transfer by Federal-Mogul
Canada Limited of its equity interest in Servicos de Componentes
Automotrices S.A., a Mexican company, to Mexican Holdco in exchange
for equity interests in Mexican Holdco,”, by renumbering
existing clause (iv) thereof as clause (v) thereof, by
renumbering existing clause (v) thereof as clause
(vi) thereof, by inserting the phrase “in accordance
with the European Tax Restructuring,” at the beginning of new
clause (vi), by deleting the phrase “Federal-Mogul
Investments B.V., (v) the merger of Mexican Holdco with and
into Federal-Mogul Investments B.V. and” appearing at the end
of new clause (vi) and inserting the phrase “Dutch Co-op
and” in its place, by renumbering existing clause
(vi) thereof as clause (vii) thereof, by deleting the
phrase “and (v)” after the phrase “(iv)” in
new clause (vii) thereof and inserting the phrase “,
(v) and (vi)” in its place, and by inserting the phrase
“; provided that no transaction or series of
transactions described in the preceding clauses shall have the
effect of reducing the direct or indirect equity interest therein
pledged pursuant to the Loan Documents or the value thereof or
otherwise adversely affect the collateral position of the Lenders
with respect thereto or subject the same to additional or increased
intervening claims” at the end of new clause
(vii) thereof;
(t) to revise the defined term
“ Obligations ” by deleting
“$30,000,000” in clause (z) thereof and inserting
“$100,000,000” in its place;
(u) to insert a new defined term
immediately following the defined term “ Other
Currency ” as follows:
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“‘ Other Foreign
Transfers ’ shall mean the authority to, where tax
efficient, transfer (by way of dividend, sale or other means)
second or third tier Non-Debtor Foreign Subsidiaries to the Parent
or another Borrower or Excluded Subsidiary organized under the laws
of one of the states of the United States, followed by the
contribution of the equity interests in such Non-Debtor Foreign
Subsidiaries to one of the Non-Debtor Foreign Subsidiary Holding
Companies described in the European Tax Restructuring in exchange
for equity interests in such Non-Debtor Foreign Subsidiary Holding
Company in order to consolidate ownership of such Non-Debtor
Foreign Subsidiaries; provided that no such transaction
shall have the effect of reducing the direct or indirect equity
interest therein pledged pursuant to the Loan Documents or the
value thereof or otherwise adversely affect the collateral position
of the Lenders with respect thereto or subject the same to
additional or increased intervening claims.”;
(v) to revise the defined term
“ Permitted Investments ” by deleting the word
“Closing” in clause (h) thereof and inserting the
word “Amendment” in its place, by deleting the word
“and” at the end of clause (h) thereof, by
deleting the word “Closing” in clause (i) thereof
and inserting the word “Amendment” in its place, by
deleting the word “Closing” in clause (j) thereof
and inserting the word “Amendment” in its place, by
deleting “$40,000,000” in clause (j) thereof and
inserting the phrase “$70,000,000 on or after the Amendment
Date” in its place, by deleting “$30,000,000” in
clause (l) thereof and inserting “€10,000,000 on
or after the Amendment Date” in its place, by renumbering
existing clause (m) as clause (q), and by inserting the
following new clauses after clause (l):
“(m) investments or additional
investments, not to exceed $20,000,000 in the aggregate, in
connection with the establishment of a technical center in
Pudong-Shanghai, China;”
“(n) additional Investments,
not to exceed $25,000,000 in the aggregate, in connection with
(i) existing or new operations of the Parent and its
Subsidiaries in China and (ii) the transfer of machinery and
equipment having a fair market value of an amount not to exceed
$10,000,000 from the Parent’s St. Louis, Missouri drum and
rotor facility to a facility located in China;”
“(o) additional Investments by
the Parent or any of its Subsidiaries in connection with the
Anticipated Japanese Consolidation in an amount not to exceed
$10,000,0000;” and
“(p) additional investments
made by the Parent or any of its Subsidiaries in the form of
(i) capital contributions to one or more Subsidiaries
organized under the laws of Brazil and/or (ii) the forgiveness
of Indebtedness (A) owing by one or more Subsidiaries
organized under the laws of Brazil to the Parent or any of its
Subsidiaries or (B) purchased from one or more
Subsidiaries
5
organized under the laws of Brazil
by the Parent or any of its Subsidiaries, in an aggregate amount
not to exceed $20,000,000; and”;
(w) to revise the defined term
“ Permitted Liens ” by renumbering clause
(viii)(x) as clause (viii)(A), by deleting
“$15,000,000” in new clause (viii)(A) and inserting
“$25,000,000” in its place, by inserting a new clause
(viii)(B) as follows: “Indebtedness of Non-Debtor Foreign
Subsidiaries owed to Persons other than Affiliates, incurred
pursuant to Section 6.03(xv),” by renumbering clause
(viii)(y) as clause (viii)(C), by renumbering clause (viii)(z) as
clause (viii)(D), by deleting the phrase “derivatives
traders” in clause (x) and inserting the phrase
“hedging counterparties” in its place, by deleting
“$15,000,000” in clause (x) and inserting
“$25,000,000” in its place, by deleting
“and” at the end of clause (xxiii), by inserting the
following new clauses:
“(xxiv) Liens on the assets or
equity of a joint venture securing Indebtedness incurred to satisfy
the Joint Venture Put Obligation relating to such joint venture,
provided that such Indebtedness is permitted by
Section 6.03(xv)”;
“(xxv) Liens on assets of any
Person which becomes a Foreign Subsidiary subsequent to the
Amendment Date to secure Indebtedness of such Person in an
aggregate amount not to exceed $90,000,000 at any time,
provided that such Indebtedness (x) is otherwise
permitted under this Agreement and (y) was in existence at the
time such Person became a Foreign Subsidiary and was not incurred
in contemplation thereof”;
“(xxvi) Liens on assets of any
Non-Debtor Foreign Subsidiary securing Indebtedness permitted by
Section 6.03(xiv),”; and
“(xxvii) Liens consisting of
deposits with hedging counterparties as may be required pursuant to
the terms of the International Swap Dealers Association Master
Agreement(s) executed in connection with the Borrowers’
hedging of all or a portion of the interest rate risk relating to
the Indebtedness that will be required to enable the Borrowers to
terminate the Cases by consummating a plan of reorganization, in an
aggregate amount not to exceed at any time $50,000,000
and”;
by renumbering clause (xxiv) as
clause (xxviii), and by deleting “(xxiii)” from new
clause (xxviii) and inserting “(xxvii)” in its
place.
(x) to revise the defined term
“ Restricted Subsidiaries ” by deleting
“Blocker BV, Spanish ETVA” from clause (i) and
inserting “Luxembourg Holdco” in its place and by
inserting “(including one or more limited liability
companies
6
organized under the laws of one of
the states of the United States of America)” in clause
(ii)(x) immediately following “Company”;
(y) to revise the defined term
“ Restricted Subsidiary Prohibited Indebtedness
” by deleting the existing definition in its entirety and
inserting the following new definition in its place: “shall
mean (i) Indebtedness owed by any Restricted Subsidiary to any
Person other than (i) the Parent or (ii) another
Subsidiary of the Parent which is either (x) a Borrower or
(y) another Subsidiary, but in the case of (y) only if
the incurrence of such Indebtedness would not have the effect of
reducing the value of the equity interest of the incurring
Restricted Subsidiary directly or indirectly pledged pursuant to
the Loan Documents or otherwise adversely affect the collateral
position of the Lenders with respect to the incurring Restricted
Subsidiary or subject the same to additional or increased
intervening claims.”;
(z) to delete the defined term
“ Spanish ETVA ”;
(aa) to insert a new defined term
immediately following the defined term “ U.K.
Administrators ” as follows:
“‘ U.K.
Dissolution ’ shall mean the winding up or striking off
of (x) those U.K. Subsidiaries listed on Schedule 1.02 hereto
or (y) any other U.K. Subsidiary provided that the gross
assets of any other U.K. Subsidiary which is struck off (as shown
in the “High” valuation of any liquidation analysis
produced by Kroll Limited on or about the date of its emergence
from U.K. Administration) is less than £10,000.
(bb) to revise the defined term
“ U.K. Subsidiaries ” by deleting the word
“are” that appears in the third line thereof and
inserting the phrase “were as of the Closing Date (i)”
in its place, and by deleting the word “are” in the
fifth line thereof and inserting the phrase “(ii)” in
its place; and
(cc) to insert a new defined term
immediately following the defined term “ Wagner Brake
Fluid Divestiture ” as follows:
“‘ Wagner Lighting
Divestiture ’ shall mean an Asset Sale consisting of the
sale by the Parent and its Subsidiaries of certain assets located
in the United States related to the Wagner Lighting Group,
including manufacturing equipment related thereto but excluding the
sale of the “Wagner” brand.”
Section 3. Amendment of
Section 2.03 of the Credit Agreement. Section 2.03 of
the Credit Agreement is hereby amended as follows:
(a) to revise clause (a)(B)(i) by
deleting “$375,000,000” and inserting
“$100,000,000” in its place;
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(b) to revise the first sentence of
clause (h) by deleting “$375,000,000” and
insert
