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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): February 8, 1994
1-1511
(Commission file number)
FEDERAL-MOGUL CORPORATION
(exact name of registrant as specified in its charter)
MICHIGAN 38-0533580
(State or other jurisdiction (I.R.S. employer
of incorporation) identification number)
26555 Northwestern Highway, Southfield, Michigan 48034
(Address of principal executive offices) (Zip Code)
(313) 354-7700
(Registrant's telephone number
including area code)
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Item 5. Other Events
An exhibit is filed herewith in connection with the Registration
Statement on Form S-3 (File No. 33-51265) filed by Federal-Mogul Corporation
(the "Company") with the Securities and Exchange Commission covering, among
other securities, the Company's Common Stock, without par value. The exhibit
consists of the Underwriting Agreement (including the provisions of the Terms
Agreement dated February 8, 1994) between the Company and CS First Boston
Corporation and Donaldson, Lufkin & Jenrette Securities Corporation (the
"Underwriting Agreement") as representatives of the several underwriters.
Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits
(c) The following are filed as Exhibits to this Report:
Exhibit
Number Description
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1.4 Underwriting Agreement (including the provisions of the Terms
Agreement dated February 8, 1994) between the Company and CS
First Boston Corporation and Donaldson, Lufkin & Jenrette Securities
Corporation as representatives of the several underwriters.
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 8, 1994
FEDERAL-MOGUL CORPORATION
By: /s/ Stephanie G. Heim
Name: Stephanie G. Heim
Title: Associate General Counsel
and Assistant Secretary
3
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EXHIBIT INDEX
Exhibit
Number Description
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1.4 Underwriting Agreement (including the provisions of the Terms
Agreement dated February 8, 1994) between the Company and CS
First Boston Corporation and Donaldson, Lufkin & Jenrette Securities
Corporation as representatives of the several underwriters.
4
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Exhibit 1.4
FEDERAL-MOGUL CORPORATION
Common Stock
(without par value)
UNDERWRITING AGREEMENT
1. Introductory. Federal-Mogul Corporation, a Michigan corporation
("Company"), proposes to issue and sell from time to time shares of its common
stock, without par value ("Common Stock"), registered under the registration
statement referred to in Section 2(a) ("Registered Securities"). Particular
offerings of the Registered Securities will be sold pursuant to a Terms
Agreement referred to in Section 3, for resale in accordance with terms of
offering determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Firm Securities". The firm or firms which agree to
purchase those Firm Securities which may be offered and sold in the United
States and Canada ("U.S. Firm Securities") are hereinafter referred to as the
"Underwriters" of such U.S. Firm Securities, and the representative or
representatives of the Underwriters, if any, specified in a Terms Agreement
referred to in Section 3 are hereinafter referred to as the "Representatives";
provided, however, that if the Terms Agreement does not specify any
representative of the Underwriters, the term "Representatives", as used in this
Agreement (other than in Sections 2(b), 5(d) and 6 and the second sentence of
Section 3), shall mean the Underwriters. If specified in such Terms Agreement,
the Company may grant to the Underwriters and the Managers, if any, listed in
the Terms Agreement ("Managers") the right to purchase at the election of the
Representatives an additional number of shares specified in such Terms
Agreement as provided in Section 3 hereof (the "Optional Securities"). The
U.S. Firm Securities and the Optional Securities, if any, which the
Underwriters elect to purchase pursuant to Section 3 hereof ("U.S. Optional
Securities"), are herein collectively referred to as the "U.S. Securities".
It is understood that, if so indicated in the Terms Agreement, the Company
is concurrently entering into a Subscription Agreement, dated the date hereof
("Subscription Agreement"), with the several Managers named in Schedule A to
such Subscription Agreement, relating to the concurrent offering and sale of
the number of shares of common stock of the Company specified in such
Subscription Agreement ("International Firm Securities", which together with
the Optional Securities that may be sold to the Managers by the
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Company ("International Optional Securities") are hereinafter called the
"International Securities") outside the United States and Canada
("International Offering"). The U.S. Securities and the International
Securities are collectively referred to as the "Securities". If so indicated
in the Terms Agreement, to provide for the coordination of their activities,
the U.S. Underwriters and the Managers have entered into an Agreement Between
U.S. Underwriters and Managers which permits them, among other things, to sell
the Securities to each other for purposes of resale.
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 33-51265) relating to the Registered
Securities, including a prospectus relating to the U.S. Securities has been
filed with the Securities and Exchange Commission ("Commission") and has
become effective. Such registration statement, as amended at the time of any
Terms Agreement referred to in Section 3, is hereinafter referred to as the
"Registration Statement", the prospectus relating to the U.S. Securities
included in such Registration Statement, as supplemented as contemplated by
Section 3 to reflect the terms of offering of the U.S. Securities, as first
filed with the Commission pursuant to and in accordance with Rule 424(b)
("Rule 424(b)") under the Securities Act of 1933 ("Act"), including all
material incorporated by reference therein, is hereinafter referred to as the
"Prospectus" and the form of prospectus relating to the International
Securities, as supplemented to reflect the terms of offering of the
International Securities, if any, which is identical to the Prospectus except
for the outside front cover page, the inside front cover page, the text under
the captions "Underwriting" and "Subscription and Sale" in the prospectus
supplement relating to the International Securities, respectively, and the
outside back cover page (copies of such pages having been heretofore
delivered to CS First Boston Limited on behalf of the Managers), is
hereinafter referred to as the "International Prospectus"; and the Prospectus
and the International Prospectus are hereinafter referred to collectively as
the "Prospectuses".
(b) On the effective date of the registration statement relating to the
Registered Securities, such registration statement conformed in all respects
to the
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requirements of the Act and the rules and regulations of the Commission
("Rules and Regulations") and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and on
the date of each Terms Agreement referred to in Section 3, the Registration
Statement and the Prospectus will conform in all respects to the requirements
of the Act and the Rules and Regulations, and neither of such documents nor
the International Prospectus will include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, except that the
foregoing does not apply to statements in or omissions from any of such
documents based upon written information furnished to the Company by any
Underwriter or any Manager, if any, through the Representatives, if any,
specifically for use therein.
3. Purchase and Offering of U.S. Securities. The obligation of the
Underwriters to purchase the U.S. Firm Securities will be evidenced by an
exchange of telegraphic or other written communications ("Terms Agreement") at
the time the Company determines to sell the U.S. Firm Securities. The Terms
Agreement will incorporate by reference the provisions of this Agreement,
except as otherwise provided therein, and will specify the firm or firms which
will be Underwriters, the names of any Representatives, the number of U.S. Firm
Securities to be purchased by each Underwriter, and the purchase price to be
paid by the Underwriters. The Terms Agreement will also specify the time and
date of delivery of the U.S. Firm Securities and payment (such time and date,
or such other time not later than seven full business days thereafter as the
Representatives and the Company agree as the time for payment and delivery,
being herein and in the Terms Agreement referred to as the "First Closing
Date"), the place of delivery and payment and any details of the terms of
offering that should be reflected in the prospectus supplement relating to the
offering of the U.S. Firm Securities. In addition, the Company may specify in
the Terms Agreement applicable to any U.S. Firm Securities that the Company
grants to the Underwriters the right (an "Over-allotment Option") to purchase
at their election up to the number of U.S. Optional Securities set forth in the
Terms Agreement. The obligation of the Managers to purchase the International
Securities, if any, will be evidenced by the Subscription Agreement. Upon
written notice from the Representatives given to the Company not more than 30
days subsequent to the date of the initial public offering of the
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U.S. Securities, the Underwriters may purchase all or less than all of the U.S.
Optional Securities, which shall be at the purchase price per Security to be
paid for the U.S. Firm Securities. Such U.S. Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the
number of shares of U.S. Firm Securities set forth opposite such Underwriter's
name bears to the total number of shares of U.S. Firm Securities (subject to
adjustment by the Representatives to eliminate fractions) and may be purchased
by the Underwriters only for the purpose of covering over-allotments made in
connection with the sale of the U.S. Firm Securities. No Optional Securities
shall be sold or delivered unless the U.S. Firm Securities and the
International Firm Securities, if any, previously have been, or simultaneously
are, sold and delivered. The right to purchase the Optional Securities or any
portion thereof may be surrendered and terminated at any time upon notice by
the Representatives on behalf of the Underwriters and the Managers, if any, to
the Company.
The time for the delivery of and payment for the U.S. Optional Securities,
being herein referred to as the "Second Closing Date", which may be the First
Closing Date (the First Closing Date and the Second Closing Date, if any, being
sometimes referred to as a "Closing Date"), shall be determined by the
Representatives but shall be not earlier than two nor later than seven business
days after written notice of election to purchase Optional Securities is given.
The Company will deliver the U.S. Optional Securities to the Representatives
for the accounts of the several Underwriters against payment of the purchase
price therefor by certified or official bank check or checks in the funds
specified in the Terms Agreement with respect to payment for the U.S. Firm
Securities and will be made available for checking and packaging at a
reasonable time in advance of the Second Closing Date.
The obligations of the Underwriters to purchase the U.S. Securities will be
several and not joint. It is understood that the Underwriters propose to offer
the U.S. Securities for sale as set forth in the Prospectus. The certificates
for the U.S. Securities will be in definitive form, in such denominations and
registered in such names as the Underwriters may request.
4. Certain Agreements of the Company. The Company agrees with the several
Underwriters that it will furnish to Sullivan & Cromwell, counsel for the
Under-writers, one signed copy of the registration statement relating to the
Registered Securities, including all exhibits, in the form it became effective
and of all
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amendments thereto and that, in connection with each offering of Securities:
(a) The Company will file the Prospectus with the Commission pursuant to
and in accordance with Rule 424(b)(2) (or, if applicable and if consented to
by the Representatives, subparagraph (5)) not later than the second business
day following the execution and delivery of the Terms Agreement.
(b) The Company will advise the Representatives promptly of any proposal to
amend or supplement the Registration Statement or either of the Prospectuses
and will afford the Representatives a reasonable opportunity to comment on
any such proposed amendment or supplement; and the Company will also advise
the Representatives promptly of the filing of any such amendment or
supplement and of the institution by the Commission of any stop order
proceedings in respect of the Registration Statement or of any part thereof
and will use its reasonable best efforts to prevent the issuance of any such
stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act in connection with sales by any
Underwriter or dealer, any event occurs as a result of which either or both
of the Prospectuses as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, or if it is necessary at any time to amend
either or both of the Prospectuses to comply with the Act, the Company, at
its own expense, promptly will prepare an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance and, in the case of an amendment or supplement to the Prospectus,
will file such amendment or supplement with the Commission. Neither the
Representatives' consent to, nor the Underwriters' delivery of, any such
amendment or supplement shall constitute a waiver of any of the conditions
set forth in Section 5.
(d) As soon as practicable, but not later than 16 months, after the date of
each Terms Agreement, the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12 months
beginning after the later of (i) the
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effective date of the registration statement relating to the Registered
Securities, (ii) the effective date of the most recent post-effective
amendment to the Registration Statement to become effective prior to the date
of such Terms Agreement and (iii) the date of the Company's most recent
Annual Report on Form 10-K filed with the Commission prior to the date of
such Terms Agreement, which will satisfy the provisions of Section 11(a) of
the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, and so long as
delivery of a Prospectus by any Underwriter or dealer may be required under
the Act, the Prospectus and all amendments and supplements to such documents,
in each case as soon as available and in such quantities as are requested.
The Company will pay the expenses of printing and distributing all such
documents.
(f) The Company will arrange for the qualification of the Securities for
sale under the laws of such jurisdictions as the Representatives designate
and will continue such qualifications in effect so long as required for the
distribution.
(g) During the period of 10 years after the date of any Terms Agreement,
the Company will furnish to the Representatives and, upon request, to each of
the other Underwriters, if any, as soon as practicable after the end of each
fiscal year, a copy of its annual report to stockholders for such year; and
the Company will furnish to the Representatives (i) as soon as available, a
copy of each report or definitive proxy statement of the Company filed with
the Commission under the Securities Exchange Act of 1934 or mailed to
stockholders, and (ii) from time to time, such other information concerning
the Company as the Representatives may reasonably request.
(h) The Company will pay all expenses incident to the performance of its
obligations under this Agreement and will reimburse the Underwriters for any
expenses (including reasonable fees and disbursements of counsel) incurred by
them in connection with qualification of the Securities for sale under the
laws of such jurisdictions as the Representatives may designate and the
printing of memoranda relating thereto and for any expenses incurred in
distributing
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the Prospectuses, any preliminary prospectuses and any preliminary prospectus
supplements to the Underwriters and the Managers.
(i) For a period beginning at the time of execution of the Terms Agreement
and ending 120 days after the Closing Date, without the prior written consent
of CS First Boston Corporation on behalf of the Representatives, the Company
will not offer, sell, contract to sell or otherwise dispose of any shares of
its Common Stock or securities convertible into, or exercisable or
exchangeable for shares of its Common Stock except issuances in accordance
with the terms of the Company's Preferred Stock Purchase Rights, or pursuant
to any employee or director stock option plan, stock ownership plan, stock
bonus plan, stock compensation plan or dividend reinvestment plan of the
Company as in effect on the date hereof or issuances upon the conversion of
securities or the exercise of warrants outstanding on the date of the
relevant Terms Agreement.
5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the U.S. Firm Securities on
the First Closing Date and the U.S. Optional Securities on the Second Closing
Date will be subject to the accuracy of the representations and warranties on
the part of the Company herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) On or prior to the date of the Terms Agreement, the Representatives
shall have received a letter, dated the date of delivery thereof, of Ernst &
Young, confirming that they are independent auditors within the meaning of
the Act and the applicable published Rules and Regulations thereunder and
stating in effect that:
(i) in their opinion, the consolidated financial statements and any
supplementary financial information and schedules audited by them and
included in the Registration Statement or the Prospectuses, comply in form
in all material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations, and the audited
financial statements of SPR included in the Registration
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Statement or Prospectuses comply in all material respects with Article 3-05
of Regulation S-X;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in SAS No. 71 with respect to any unaudited
financial statements and read any unaudited financial data and unaudited pro
forma financial data included in such Prospectuses and the unaudited
financial statements from which such financial data were obtained;
(iii) on the basis of the procedures and reading referred to in (ii)
above, a reading of the latest available interim financial statements of the
Company and its subsidiaries, inspection of the minute books of the Company
and its subsidiaries since the date of the latest audited financial
statements included in the Prospectuses and inquiries of officials of the
Company and its subsidiaries who have responsibility for financial and
accounting matters and other specified procedures, nothing came to their
attention that caused them to believe that:
(A) the unaudited pro forma combined condensed statements of earnings
and pro forma combined condensed balance sheets included in the
Prospectuses do not comply as to form in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X of the Commission
and the related published Rules and Regulations or the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of those statements;
(B) the unaudited financial statements of the Company included in such
Prospectuses do not comply in form in all material respects with the
applicable accounting requirements of the Act and the related published
Rules and Regulations or any material modifications should be made for
them to be in conformity with generally accepted accounting principles;
(C) as of a specified date not more than five days prior to the date of the
Terms
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Agreement, there was any change in the capital stock or any increase in
short-term debt and current maturities of long-term debt or long- term
debt of the Company and its consolidated subsidiaries or there was any
decrease in consolidated net current assets or total shareholders' equity,
as compared with amounts shown on the latest balance sheet of the Company
included in the Prospectuses; or
(D) for the period from the date of the latest statement of earnings of
the Company included in the Prospectuses to the specified date referred to
in clause (C) there were any decreases, as compared with the corresponding
period of the previous year in consolidated net sales or in the total or
per share amounts of consolidated earnings from continuing operations or
net earnings;
except in all cases set forth in clauses (C) and (D) above for changes,
increases or decreases which the Prospectuses disclose have occurred or may
occur or which are described in such letter;
(iv) with respect to the unaudited combined condensed balance sheet of
TRW Automotive Aftermarket Group ("AAB") at June 30, 1992 and the unaudited
combined condensed statements of earnings for the six months ended June 30,
1992 and 1991, and the unaudited combined condensed statement of cash flows
for the six month period ended June 30, 1992, included in the Prospectuses
they have read such unaudited combined condensed financial statements and
(A) agreed the amounts contained therein with the Company's accounting
records as of June 30, 1992 and 1991, and for the six month periods then
ended; and
(B) on September 14, 1992 inquired of certain officials of AAB who have
responsibility for financial and accounting matters whether such unaudited
combined condensed financial statements (i) are in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited combined financial statements of AAB
included in the
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Prospectuses, and (ii) comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
Rules and Regulations and that those officials stated that such unaudited
combined condensed financial statements (i) are in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements, and (ii) comply
as to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations,
except that the unaudited combined condensed financial statements of AAB
do not include an unaudited combined condensed statement of cash flows for
the six months ended June 30, 1991 as required by generally accepted
accounting principles;
(v) with respect to the unaudited combined condensed statement of
earnings of AAB for the period from January 1, 1992 to October 20, 1992
included in the Prospectuses, they have read such unaudited financial
statements and
(A)(i) agreed the underlying unadjusted amounts to the accounting
records of AAB, and (ii) proved the arithmetic accuracy of the application
of the adjustments made by the Company to the unaudited financial
statement for it to be in conformity with generally accepted accounting
principles on a basis substantially consistent with that of the audited
combined financial statements of AAB; and
(B) inquired of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and who
were responsible for preparation of such unaudited combined condensed
statement of earnings subsequent to the October 20, 1992 purchase of AAB
by the Company whether, since October 20, 1992, anything has come to their
attention that caused them to believe that such unaudited combined
condensed statement of earnings (i) requires material modifications to be
in conformity with generally accepted accounting principles, and (ii)
complies as to form in
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all material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations and that those
officials stated that based on their knowledge such unaudited combined
condensed statement of earnings (i) does not require material
modifications to be in conformity with generally accepted accounting
principles, and (ii) complies as to form in all material respects with the
applicable accounting requirements of the Act and the related published
Rules and Regulations; and
(vi) they have compared specified dollar amounts (or percentages derived
from such dollar amounts) and other financial information contained in such
Prospectuses (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the general
accounting records of the Company and its subsidiaries subject to the
internal controls of the Company's accounting system or are derived directly
from such records by analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts, percentages and
other financial information to be in agreement with such results, except as
otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into such Prospectuses shall be deemed included in such
Prospectuses for purposes of this subsection. With respect to the Company's
compliance with Article 3-05 of Regulation S-X, Ernst & Young may rely on the
accuracy of the audited financial statements of SPR included in such
Prospectuses.
(b) On or prior to the date of the Terms Agreement, the Representatives
shall have received a letter, dated the date of delivery thereof, of Arthur
Andersen & Co., confirming that they are independent auditors within the
meaning of the Act and the applicable and published Rules and Regulations
thereunder and stating in effect that:
(i) in their opinion, the financial statements audited by them and
included in the Registration Statement and the Prospectuses, comply in form
in all material respects with the
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applicable accounting requirements of the Act and the related published
Rules and Regulations (except that they need not opine as to such financial
statements' compliance with Article 3-05 of Regulation S-X);
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in SAS No. 71 with respect to the unaudited
financial statements of Sealed Power Corporation and Sealed Power
Corporation of Canada, Ltd. (collectively "SPR") included in such
Prospectuses, and read the unaudited financial data of SPR included in such
Prospectuses and the unaudited financial statements from which such
financial information was obtained;
(iii) on the basis of the procedures and reading referred to in (ii)
above, inspection of the minute books of SPR since the date of the latest
audited financial statements of SPR included in the Prospectuses and
inquiries of officials of SPR who had responsibility for financial and
accounting matters and other specified procedures, nothing came to their
attention that caused them to believe that the unaudited combined condensed
statement of assets and liabilities of SPR at September 30, 1993 and the
unaudited combined condensed statements of revenues and expenses for the
nine months ended September 30, 1993, and 1992, and the unaudited combined
condensed statement of cash flows for the nine months ended September 30,
1993 do not comply in form in all material respects with the applicable
accounting requirements of the Act and the related published Rules and
Regulations or any material modifications should be made for them to be in
conformity with generally accepted accounting principles;
(iv) they have compared specified dollar amounts (or percentages derived
from such dollar amounts) and other financial information contained in such
Prospectuses (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the general
accounting records of SPR subject to the internal controls of SPR's
accounting system or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a
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reading of such general accounting records and other procedures specified in
such letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into such Prospectuses shall be deemed included in such
Prospectuses for purposes of this subsection. Arthur Andersen & Co. may note
that the audited financial statements of SPR included in such Prospectuses
have been prepared for the purpose of complying with the applicable
accounting requirements of the Act and the related published Rules and
Regulations for filing with the Commission pursuant to the Agreement of
Purchase and sale between SPX Corporation ("SPX") and Federal-Mogul
Corporation, dated as of September 15, 1993, and that such financial
statements are not intended to be a complete presentation of SPR's assets,
liabilities, equity, revenues, expenses and cash flows. In addition, they
may note that SPR's operations reflected in the financial statements of SPR
included in such Prospectuses represent SPX's operations that marketed and
distributed replacement engine and under vehicle parts in the United States
and Canada, and that the operating results as presented in such financial
statements do not include any costs associated with financing such operations
or charges for certain administrative and management functions provided
centrally by SPX and that, as a result, such financial statements may not
necessarily reflect the combined income that would have resulted if SPR's
operations had been conducted on an independent basis.
(c) The Prospectus shall have been filed with the Commission in accordance
with the Rules and Regulations and Section 4(a) of this Agreement. Prior to
such Closing Date, no stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge
of the Company or any Underwriter, shall be contemplated by the Commission.
(d) Subsequent to the execution of the Terms Agreement, there shall not
have occurred (i) any change, or any development involving a prospective
change, in or affecting particularly the business or properties of the
Company or its subsidiaries which, in
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the judgment of a majority in interest of the Underwriters, including any
Representatives, materially impairs the investment quality of the Securities
or the Registered Securities; (ii) any downgrading in the rating of any debt
securities or preferred stock of the Company by either Standard & Poor's
Corporation or Moody's Investors Services, Inc., or any public announcement
that any such organization has under surveillance or review its rating of
any debt securities or preferred stock of the Company for possible
downgrading; (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any securities
of the Company on any exchange or in the over-the-counter market; (iv) any
banking moratorium declared by Federal or New York authorities; or (v) any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the judgment of a
majority in interest of the Underwriters, including any Representatives, the
effect of any such outbreak, escalation, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with completion of the sale
of and payment for the U.S. Securities.
(e) The Representatives shall have received an opinion, dated such Closing
Date, of George N. Bashara, Jr., General Counsel of the Company, to the
effect that:
(i) The Company has been duly incorporated and is an existing corporation
in good standing under the laws of the State of Michigan, with corporate
power and authority to own its properties and conduct its business as
described in the Prospectuses; and the Company is duly qualified to do
business as a foreign corporation in good standing in each jurisdiction in
which it owns or leases substantial properties or in which the conduct of
its business requires such qualification and in which the consequences of a
failure to so qualify would have a material adverse effect on the properties
or business of the Company and its subsidiaries taken as a whole;
(ii) The Securities delivered on such Closing Date and all other outstanding
shares of the Common Stock of the Company have been duly
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authorized and validly issued, are fully paid and nonassessable and conform
to the description thereof contained in the Prospectuses; and the
stockholders of the Company have no preemptive rights with respect to the
Securities;
(iii) There are no contracts, agreements or understandings known to such
counsel between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such person
or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the Company
under the Act.
(iv) No consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Terms Agreement
(including the provisions of this Agreement) or the Subscription Agreement,
if any, in connection with the issuance or sale of the Securities by the
Company, except such as have been obtained and made under the Act and such
as may be required under state securities laws;
(v) The execution, delivery and performance of the Terms Agreement
(including the provisions of this Agreement) and the Subscription Agreement,
if any, and the issuance and sale of the Securities will not result in a
breach or violation of any of the terms and provisions, of, or constitute a
default under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the
Company or any subsidiary of the Company or any of their properties, or any
agreement or instrument to which the Company or any such subsidiary is a
party or by which the Company or any such subsidiary is bound or to which
any of the properties of the Company or any such subsidiary is subject, or
the charter or by-laws of the Company or any such subsidiary, and the
Company has full power and authority to authorize, issue and sell the
Securities as contemplated by the Terms Agreement (including the provisions
of this
-15-
<PAGE> 16
Agreement) and the Subscription Agreement, respectively;
(vi) The Registration Statement has become effective under the Act, the
Prospectus was filed with the Commission pursuant to the subparagraph of
Rule 424(b) specified in such opinion on the date specified therein, and, to
the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or of any part thereof has been
issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Act, and the registration statement
relating to the Registered Securities, as of its effective date, the
Registration Statement and the Prospectus, as of the date of the Terms
Agreement, and any amendment or supplement thereto, as of their respective
dates, complied as to form in all material respects with the requirements of
the Act and the Rules and Regulations; such counsel has no reason to believe
that such registration statement, as of its effective date, the Registration
Statement or any amendments or supplements thereto, as of their respective
dates, contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectuses or any amendments
or supplements thereto, as of their respective dates, contained any untrue
statement of a material fact or omitted to state any material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading; the descriptions in the Registration
Statement and Prospectuses of statutes, legal and governmental proceedings
and contracts and other documents are accurate and fairly present the
information required to be shown; and such counsel does not know of any
legal or governmental proceedings required to be described in the
Registration Statement or the Prospectuses which are not described as
required or of any contracts or documents of a character required to be
described in the Registration Statement or Prospectuses or to be filed as
exhibits to the Registration Statement which are not described and filed as
required; it being understood that such counsel need express no opinion as
to the financial statements or other financial data contained in
-16-
<PAGE> 17
the Registration Statement or the Prospectuses; and
(vii) The Terms Agreement (including the provisions of this Agreement) and
the Subscription Agreement, if any, have been duly authorized, executed and
delivered by the Company.
Such counsel shall also state that such counsel has been advised by the
New York Stock Exchange that the Securities have been duly authorized for
listing, subject to official notice of issuance, on the New York Stock
Exchange.
(f) The Representatives shall have received an opinion, dated such Closing
Date, of Wachtell, Lipton, Rosen & Katz, counsel for the Company, to the
effect that:
(i) The Securities delivered on such Closing Date conform to the
description thereof contained in the Prospectuses;
(ii) Under the laws of the State of New York and federal law, no
consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required for the consummation of
the transactions contemplated by the Terms Agreement (including the
provisions of this Agreement) or the Subscription Agreement, if any, in
connection with the issuance or sale of the Securities by the Company,
except such as have been obtained and made under the Act and such as may be
required under state securities laws;
(iii) To the knowledge of such counsel, under the laws of the State of
New York and federal law, the execution, delivery and performance of the
Terms Agreement (including the provisions of this Agreement) and the
Subscription Agreement, if any, and the issuance and sale of the Securities
will not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any statute, any rule, regulation or
order of any governmental agency or body or any court having jurisdiction
over the Company or any of its properties, or any agreement or instrument to
which the Company is a party, or by which the Company is bound, or to which
any of the properties of the Company is subject, or the charter or by-laws
of the Company, and the Company
-17-
<PAGE> 18
has full power and authority to authorize, issue and sell the Securities as
contemplated by the Terms Agreement (including the provisions of this
Agreement) and the Subscription Agreement, if any, respectively;
(iv) To the extent applicable, such counsel has reviewed the
information in the Prospectuses under the caption "Certain Federal Income
Tax Considerations" and "Certain Special Federal Tax Considerations for
Non-United States Holders," if any, and to the extent they constitute
matters of law or legal conclusion, they are accurate in all material
respects; and
(v) The Registration Statement has become effective under the Act, the
Prospectus was filed with the Commission pursuant to the subparagraph of
Rule 424(b) specified in such opinion on the date specified therein, and, to
the best of the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or of any part thereof has been
issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Act, and the registration statement
relating to the Registered Securities, as of its effective date, the
Registration Statement and the Prospectuses, as of the date of the Terms
Agreement, and any amendment or supplement thereto, as of their respective
dates, complied as to form in all material respects with the requirements of
the Act and the Rules and Regulations; such counsel have no reason to
believe that such registration statement, as of its effective date, the
Registration Statement, or any amendments or supplements thereto, as of
their respective dates, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectuses or any amendments or supplements thereto, as of their
respective dates, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; it being understood that such counsel need express no opinion as
to the financial statements or other financial data contained in the
Registration Statement or the Prospectuses.
-18-
<PAGE> 19
In rendering such opinion, Wachtell, Lipton, Rosen & Katz may rely as to all
matters governed by Michigan law upon the opinion of George N. Bashara, Jr.
referred to above (provided that they shall state that they believe that the
Under-writers are justified in relying upon such opinion).
(g) The Representatives shall have received from Sullivan & Cromwell,
counsel for the Underwriters, such opinion or opinions, dated such Closing
Date, with respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectuses and other related
matters as they may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters. In rendering such opinion, Sullivan & Cromwell may
rely as to the incorporation of the Company and all other matters governed by
Michigan law upon the opinion of George N. Bashara, Jr. referred to above.
(h) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to the
best of their knowledge after reasonable investigation, shall state that the
representations and warranties of the Company in this Agreement are true and
correct, that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date, that no stop order suspending the effectiveness of the
Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are contemplated by the
Commission and that, subsequent to the date of the most recent financial
statements in the Prospectuses, there has been no material adverse change in
the financial position or results of operation of the Company and its
subsidiaries except as set forth in or contemplated by the Prospectuses or as
described in such certificate.
(i) The Representatives shall have received a letter, dated such Closing
Date, of Ernst & Young, which reconfirms the matters set forth in their letter
delivered pursuant to subsection (a) of this Section and states in effect that:
(i) in their opinion, any financial statements and any supplementary
financial information or
-19-
<PAGE> 20
schedules audited by them and included in the Registration Statement or the
Prospectuses and not covered by their letter delivered pursuant to
subsection (a) of this Section comply in form in all material respects with
the applicable accounting requirements of the Act and the related published
Rules and Regulations;
(ii) they have performed the procedures specified by the American Institute
of Certified Public Accountants for a review of interim financial
information as disclosed in SAS No. 71 with respect to any unaudited
financial statements and read any unaudited financial data and unaudited pro
forma financial data included in such Prospectuses and not covered by their
letter delivered pursuant to subsection (a) of this Section;
(iii) on the basis of the procedures and reading referred to in (ii) above, a
reading of the latest available interim financial statements of the Company
and its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements
included in the Prospectuses and inquiries of officials of the Company who
have responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe
that:
(A) the unaudited pro forma combined condensed statements of earnings and
pro forma combined condensed balance sheets, if any, included in the
Prospectuses and not covered by their letter delivered pursuant to
subsection (a) of this Section do not comply as to form in all material
respects with the applicable requirements of Rule 11-02 of Regulation S-X of
the Commission and the related published Rules and Regulations or the pro
forma adjustments have not been properly applied to the historical amounts
in compilation of those statements.
(B) the unaudited financial statements, if any, included in the
Prospectuses and not covered by their letter delivered pursuant to
subsection (a) of this Section do not comply in form in all material
respects with the applicable accounting requirements of the Act and the
related
-20-
<PAGE> 21
published Rules and Regulations or any material modifications should be made
for them to be in conformity with generally accepted accounting principles;
(C) as of a date not more than five days prior to such Closing Date,
there was any change in the capital stock or any increase in short- term
debt and current maturities of long-term debt or long-term debt of the
Company and its consolidated subsidiaries or there was any decrease in
consolidated net current assets or total shareholders' equity, as compared
with amounts shown on the latest balance sheet of the Company included in
the Prospectuses; or
(D) for the period from the date of the latest statement of earnings of
the Company included in the Prospectuses to the specified date referred to
in clause (C) there were any decreases, as compared with the corresponding
period of the previous year, in consolidated net sales in the total or per
share amounts of consolidated earnings from continuing operations or net
earnings;
except in all cases set forth in clauses (C) and (D) above for changes,
increases or decreases which the Prospectuses disclose have occurred or may
occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages derived
from such dollar amounts) and other financial information included in the
Prospectuses and not covered by their letter delivered pursuant to
subsection (a) of this Section (in each case to the extent that such dollar
amounts, percentages and other financial information are derived from the
general accounting records of the Company and its subsidiaries subject to
the internal controls of the Company's accounting system or are derived
directly from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
-21-
<PAGE> 22
All financial statements and schedules included in material incorporated by
reference into the Prospectuses shall be deemed included in the Prospectuses
for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as they reasonably request.
(j) On such Closing Date the Managers, if any, shall have purchased the
International Firm Securities or the International Optional Securities, as the
case may be, pursuant to the Subscription Agreement.
6. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, either of the Prospectuses, or any amendment or
supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter or Manager, if any,
through the Representatives, if any, specifically for use therein.
(b) Each Underwriter will severally indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, either of the Prospectuses, or
any amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement,
-22-
<PAGE> 23
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter or Manager, if any,
through the Representatives, if any, specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then
-23-
<PAGE> 24
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the U.S. Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Company on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering of the U.S. Securities (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the U.S. Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
-24-
<PAGE> 25
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed the Registration Statement and to each person, if any,
who controls the Company within the meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase U.S. Securities under the Terms Agreement on
either the First or Second Closing Date and the aggregate number of shares of
the U.S. Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total number of shares of the
U.S. Securities that the Underwriters are obligated to purchase on such Closing
Date, the Representatives may make arrangements satisfactory to the Company for
the purchase of such U.S. Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non- defaulting Underwriters shall be obligated severally, in proportion to
their respective commitments under this Agreement and the Terms Agreement, to
purchase the U.S. Securities that such defaulting Underwriters agreed but
failed to purchase on such Closing Date. If any Underwriter or Underwriters so
default and the aggregate number of shares of the U.S. Securities with respect
to which such default or defaults occur exceeds 10% of the total number of
shares of the U.S. Securities that the Underwriters are obligated to purchase
on such Closing Date and arrangements satisfactory to the Representatives and
the Company for the purchase of such U.S. Securities by other persons are not
made within 36 hours after such default, such Terms Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Company,
except as provided in Section 8 (provided that if such default occurs with
respect to the U.S. Optional Securities after the First Closing Date, this
Agreement will not terminate as to the U.S. Firm Securities). As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
The foregoing obligations and agreements set forth in this Section will not
apply if the Terms Agreement
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<PAGE> 26
specifies that such obligations and agreements will not apply.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
the Company or its officers and of the several Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made
by or on behalf of any Underwriter, the Company or any of their respective
representatives, officers or directors or any controlling person and will
survive delivery of and payment for the U.S. Securities. If the Terms
Agreement is terminated pursuant to Section 7 or if for any reason the purchase
of the U.S. Securities by the Underwriters under the Terms Agreement is not
consummated, the Company shall remain responsible for the expenses to be paid
or reimbursed by it pursuant to Section 4 and the respective obligations of the
Company and the Underwriters pursuant to Section 6 shall remain in effect and
if any U.S. Securities have been purchased hereunder the representations and
warranties in Section 2 and all obligations under Section 5 shall also remain
in effect. If the purchase of the U.S. Securities by the Underwriters is not
consummated for any reason other than solely because of the termination of this
Agreement pursuant to Section 7 or the occurrence of any event specified in
clause (iii), (iv) or (v) of Section 5(d), the Company will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements
of counsel) reasonably incurred by them in connection with the offering of the
U.S. Securities.
9. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their addresses furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at 26555 Northwestern Highway, Southfield,
Michigan 48034, Attention: George N. Bashara, Jr.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the Company and such Underwriters as are identified in Terms
Agreements and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
11. Applicable Law. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York without regard to the choice of law provisions thereof.
-26-
<PAGE> 27
FEDERAL-MOGUL CORPORATION
("Company")
Common Stock
TERMS AGREEMENT
February 8, 1994
Federal-Mogul Corporation
26555 Northwestern Highway
Southfield, Michigan 48034
Attention: Martin E. Welch, III
Senior Vice President and
Chief Financial Officer
Dear Sirs:
On behalf of the several Underwriters named in Schedule A hereto and for
their respective accounts, we offer to purchase, on and subject to the terms
and conditions of the Underwriting Agreement attached hereto and to be filed in
a Current Report on Form 8-K on February 8, 1994 and incorporated by reference
in the Company's registration statement on Form S-3 (No. 33-51265)
("Underwriting Agreement"), the following securities ("Securities") on the
following terms:
Title: Common Stock
Number of U.S. Firm Securities: 4,250,000
Maximum Number of U.S. Optional Securities: 637,500
Purchase Price: $33.265 per share.
Expected Reoffering Price: $34.375 per share, subject to change by the
undersigned.
Closing: 10:00 A.M. on February 15, 1994, at Sullivan & Cromwell, 250 Park
Avenue, New York, N.Y. in New York Clearing House (next day) funds.
<PAGE> 28
Underwriters' Compensation: $4,717,500, payable to the Representatives for
the proportionate accounts of the Underwriters on the Closing Date.
Names and Addresses of Representatives:
CS First Boston Corporation
Donaldson, Lufkin & Jenrette Securities
Corporation
c/o CS First Boston Corporation
Park Avenue Plaza
New York, NY 10055
The respective number of shares of the U.S. Securities to be purchased by
each of the Underwriters are set forth opposite their names in Schedule A
hereto.
The provisions of the Underwriting Agreement are incorporated herein by
reference.
The U.S. Securities will be made available for checking and packaging at the
office of CS First Boston Corporation or, at the option of CS First Boston
Corporation, at the office of The Depositary Trust Company at least 24 hours
prior to the Closing Date.
Subscription Agreement: Dated February 8, 1994 among CS First Boston
Limited, Berliner Handels- und Frankfurter Bank, Donaldson, Lufkin & Jenrette
Securities Corporation, S.G. Warburg Securities Ltd., Banque Paribas, Credit
Lyonnais Securities, Daiwa Europe Limited, J. Henry Schroder Wagg & Co. Limited
and UBS Limited (the "Managers") and the Company
International Firm Securities: 750,000
International Optional Securities: 112,500
Agreement Between U.S. Underwriters and Managers: Dated February 8, 1994
among the Managers and CS First Boston Corporation and Donaldson, Lufkin &
Jenrette Securities Corporation as representatives of the U.S. Underwriters
-2-
<PAGE> 29
Please signify your acceptance of our offer by signing the enclosed response
to us in the space provided and returning it to us.
Very truly yours,
CS FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
On behalf of themselves
and as Representatives of
the Several Underwriters
CS FIRST BOSTON CORPORATION
By /s/ ALAN H. HOWARD
Alan H. Howard
Director
-3-
<PAGE> 30
SCHEDULE A
<TABLE>
<CAPTION>
Principal
Underwriter Amount
----------- ------
<S> <C>
CS First Boston Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,075,000
Donaldson, Lufkin & Jenrette Securities
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,075,000
Baird, Patrick & Co., Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
Bear, Stearns & Co., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Credit Lyonnais Securities (USA) Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
First of Michigan Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
Furman Selz Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
Gabelli & Company, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Invemed Associates, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Kemper Securities, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
C.J. Lawrence/Deutsche Bank Securities
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
Lehman Brothers Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
McDonald & Company Securities, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Prudential Securities Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Smith Barney Shearson Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
S.G. Warburg & Co. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,250,000
----------
----------
</TABLE>
-4-
<PAGE> 31
To: CS FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
As Representatives of the Several Underwriters,
c/o CS FIRST BOSTON CORPORATION
Park Avenue Plaza
New York, N.Y. 10055
We accept the offer contained in your letter, dated February
8, 1994, relating to 4,250,000 shares of our Common Stock, without par value.
We also confirm that, to the best of our knowledge after reasonable
investigation, the representations and warranties of the undersigned in the
Underwriting Agreement filed as an exhibit to the under-signed's registration
statement on Form S-3 (No. 33-51265) ("Underwriting Agreement") are true and
correct, no stop order suspending the effectiveness of the Registration
Statement (as defined in the Underwriting Agreement) or of any part thereof has
been issued and no proceedings for that purpose have been instituted or, to the
knowledge of the undersigned, are contemplated by the Securities and Exchange
Commission and, subsequent to the respective dates of the most recent financial
statements in the Prospectuses (as defined in the Underwriting Agreement),
there has been no material adverse change in the financial position or results
of operations of the undersigned and its subsidiaries except as set forth in or
contemplated by the Prospectuses.
Very truly yours,
FEDERAL-MOGUL CORPORATION
By /s/ MARTIN E. WELCH, III
Martin E. Welch, III
Senior Vice President and
Chief Financial Officer
-5-
