Exhibit 10.22
420,000,000
SIXTH AMENDED AND RESTATED
RECEIVABLE INTEREST PURCHASE AGREEMENT
Dated as of February 16, 2001
Among
FEDERAL-MOGUL FUNDING CORPORATION,
as Seller,
FEDERAL-MOGUL CORPORATION
as Servicer,
BLUE RIDGE ASSET FUNDING CORPORATION
and
FALCON ASSET SECURITIZATION CORPORATION,
as Purchasers,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,
as Liquidity Providers,
BANK ONE, NA,
as Administrative Agent and as Falcon Agent
and
WACHOVIA BANK, N.A.,
as Blue Ridge Agent
TABLE OF CONTENTS
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Page
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ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms............................................ 3
Section 1.02 Other Definitional Provisions............................ 25
ARTICLE II.
PURCHASE ARRANGEMENTS; PAYMENTS AND COLLECTIONS
Section 2.01 Purchase Facility........................................ 26
Section 2.02 Increases................................................ 27
Section 2.03 Decreases................................................ 27
Section 2.04 Payment Requirements..................................... 28
Section 2.05 Payments................................................. 28
Section 2.06 Collections Prior to Amortization........................ 28
Section 2.07 Collections Following Amortization....................... 29
Section 2.08 Application of Collections............................... 29
Section 2.09 Payment Recission........................................ 30
Section 2.10 Clean Up Call............................................ 30
ARTICLE III.
YIELD
Section 3.01 Accrual and Payment of Yield............................. 30
Section 3.02 Falcon's CP Yield; Notification of CP Costs.............. 30
Section 3.03 Blue Ridge's CP Yield; Notification of CP Costs.......... 30
Section 3.04 Base Rate Yield.......................................... 31
Section 3.05 LIBO Rate Yield and Unavailability of the LIBO Rate...... 31
Section 3.06 Liquidity Funding........................................ 31
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.01 Seller Representations and Warranties.................... 32
Section 4.02 Liquidity Provider Representations and Warranties........ 35
ARTICLE V.
CONDITIONS OF PURCHASES
Section 5.01 Conditions Precedent to Initial Purchase................. 35
Section 5.02 Conditions Precedent to All Purchases and Reinvestments.. 36
ARTICLE VI.
COVENANTS OF THE SELLER AND SERVICER
Section 6.01 Affirmative Covenants of Seller and the Servicer.............................................. 36
(a) Notices....................................................................................... 36
(b) Compliance with Laws.......................................................................... 37
(c) Audits; Inspection Rights..................................................................... 37
(d) Keeping and Marking of Records and Books...................................................... 38
(e) Compliance with Invoices and Credit Policies; Taxes........................................... 38
(f) Purchase of Receivables from the Originators.................................................. 38
(g) Ownership Interest............................................................................ 38
(h) Payment to Federal-Mogul...................................................................... 39
(i) Performance and Enforcement of Sale Agreement................................................. 39
(j) Purchasers' Reliance.......................................................................... 39
(k) Collections................................................................................... 40
(l) Minimum Net Worth............................................................................. 41
(m) Credit Agreement/Pledge Agreement/Security Agreement/Surety Documents/Trust Agreement......... 41
(n) [Reserved].................................................................................... 41
(o) Certificate of Responsible Officer Pursuant to Credit Agreement............................... 41
Section 6.02 Negative Covenants of Seller.................................................................. 41
(a) Name Change, Offices, Records and Books of Accounts........................................... 41
(b) Change in Payment Instructions to Obligors.................................................... 41
(c) Modifications to Credit Policies.............................................................. 42
(d) Sales, Liens, Etc............................................................................. 42
(e) Nature of Business; Other Agreements; Other Indebtedness...................................... 42
(f) Amendments to Sale Agreement.................................................................. 42
(g) Amendments to Corporate Documents............................................................. 43
(h) Merger........................................................................................ 43
(i) Restricted Junior Payments.................................................................... 43
(j) Financial Covenants Under Credit Agreement Incorporated by Reference.......................... 43
ARTICLE VII.
SERVICING, ADMINISTRATION AND COLLECTION OF THE RECEIVABLES
Section 7.01 Designation of Servicer....................................................................... 43
Section 7.02 Duties of Servicer............................................................................ 44
Section 7.03 Collection Notices............................................................................ 45
Section 7.04 Responsibilities of the Seller................................................................ 45
Section 7.05 Settlement Date Statements/Interim Settlement Date Statements................................. 45
Section 7.06 Quarterly Servicer's Certificate.............................................................. 46
Section 7.07 Weekly Report and Distribution................................................................ 46
Section 7.08 Reporting Covenants of the Servicer........................................................... 46
(a) Financial Reporting........................................................................... 46
(b) Notices....................................................................................... 47
Section 7.09 Inspection Rights............................................................................. 47
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Section 7.10 Credit Policies....................................................................... 47
Section 7.11 Servicing Compensation................................................................ 48
ARTICLE VIII.
AMORTIZATION EVENTS
Section 8.01 Amortization Events................................................................... 48
ARTICLE IX.
INDEMNIFICATION
Section 9.01 Indemnities by the Seller............................................................. 50
Section 9.02 Increased Cost and Reduced Return..................................................... 52
Section 9.03 Costs and Expenses Relating to this Agreement......................................... 53
Section 9.04 Taxes................................................................................. 53
ARTICLE X.
THE ADMINISTRATIVE AGENT
Section 10.01 Authorization and Action.............................................................. 54
Section 10.02 Delegation of Duties.................................................................. 55
Section 10.03 Exculpatory Provisions................................................................ 55
Section 10.04 Reliance by Administrative Agent...................................................... 55
Section 10.05 Non-Reliance on Administrative Agent and Other Purchasers............................. 56
Section 10.06 Reimbursement and Indemnification..................................................... 56
Section 10.07 Administrative Agent in its Individual Capacity....................................... 56
Section 10.08 Successor Administrative Agent........................................................ 56
ARTICLE XI.
THE CO-AGENTS
Section 11.01 Authorization and Action.............................................................. 57
Section 11.02 Delegation of Duties.................................................................. 57
Section 11.03 Exculpatory Provisions................................................................ 57
Section 11.04 Reliance by Co-Agents................................................................. 58
Section 11.05 Non-Reliance on Agents and other Purchasers........................................... 58
Section 11.06 Reimbursement and Indemnification..................................................... 59
Section 11.07 Co-Agents in their Individual Capacities.............................................. 59
ARTICLE XII.
ASSIGNMENTS; PARTICIPATIONS
Section 12.01 Assignments........................................................................... 59
Section 12.02 Participations........................................................................ 60
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ARTICLE XIII.
MISCELLANEOUS
Section 13.01 Waivers and Amendments...................................................................... 60
Section 13.02 Notices..................................................................................... 61
Section 13.03 Ratable Payments............................................................................ 62
Section 13.04 Protection of Ownership Interests of the Administrative Agent on behalf of the Purchasers
and Co-Agents............................................................................... 62
Section 13.05 Confidentiality............................................................................. 63
Section 13.06 Bankruptcy Petition......................................................................... 64
Section 13.07 Limitation of Liability..................................................................... 64
Section 13.08 CHOICE OF LAW............................................................................... 64
Section 13.09 CONSENT TO JURISDICTION..................................................................... 64
Section 13.10 WAIVER OF JURY TRIAL........................................................................ 64
Section 13.11 Integration; Survival of Terms.............................................................. 65
Section 13.12 Counterparts; Severability.................................................................. 65
Section 13.13 Bank One Roles and Wachovia Roles........................................................... 65
Section 13.14 Characterization............................................................................ 65
Section 13.15 Acknowledgments............................................................................. 66
EXHIBIT A FORM OF PURCHASE NOTICE
EXHIBIT B FORM OF COLLECTION ACCOUNT AGREEMENT
EXHIBIT C FORM OF SETTLEMENT DATE STATEMENT
EXHIBIT D PRINCIPAL PLACES OF BUSINESS, CHIEF EXECUTIVE OFFICE, OFFICES FOR
RECORDS, FEDERAL EMPLOYEE IDENTIFICATION NUMBER
EXHIBIT E COLLECTION BANKS AND COLLECTION ACCOUNTS
EXHIBIT F FORM OF COMPLIANCE CERTIFICATE
EXHIBIT G CREDIT POLICIES
EXHIBIT H FORM OF REDUCTION NOTICE
EXHIBIT I FORM OF INTERIM SETTLEMENT DATE STATEMENT
SCHEDULE A CONDITIONS PRECEDENT TO INITIAL PURCHASE
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THIS SIXTH AMENDED AND RESTATED RECEIVABLE INTEREST PURCHASE
AGREEMENT, dated as of February 16, 2001, is by and among:
(1) FEDERAL-MOGUL FUNDING CORPORATION, a Michigan
corporation (the "Seller"),
(2) FEDERAL-MOGUL CORPORATION, a Michigan corporation, as
the initial servicer (initially, the "Servicer"),
(3) BLUE RIDGE ASSET FUNDING CORPORATION, a Delaware
corporation ("Blue Ridge"), and FALCON ASSET SECURITIZATION
CORPORATION, a Delaware corporation ("Falcon" and, together with
Blue Ridge, each individually a Purchaser and a "Conduit," and
collectively the "Conduits"),
(4) WACHOVIA BANK, N.A. ("Wachovia"), as a liquidity
provider to Blue Ridge (together with its successors and
permitted assigns, the "Blue Ridge Liquidity Providers" and,
together with Blue Ridge, the "Blue Ridge Group),
(5) BANK ONE, NA (formerly known as The First National Bank
of Chicago), as a liquidity provider to Falcon (together with its
respective successors and permitted assigns, the "Falcon
Liquidity Providers" and, together with Falcon, the "Falcon
Group"),
(6) WACHOVIA BANK, N.A., in its capacity as agent for the
Blue Ridge Group (in such capacity, together with its successors
in such capacity, the "Blue Ridge Agent" or a "Co-Agent"), and
BANK ONE, NA, in its capacity as agent for the Falcon Group (in
such capacity, together with its successors in such capacity, the
"Falcon Agent" or a "Co-Agent"), and
(7) BANK ONE, NA (formerly known as The First National Bank
of Chicago), in its capacity as administrative agent for the Blue
Ridge Group, the Falcon Group and the Co-Agents (in such
capacity, together with its successors in such capacity, the
"Administrative Agent"),
and amends and restates that certain Amended and Restated Receivable Interest
Purchase Agreement dated as of July 1, 1999, by and among the Seller, the
Servicer, Falcon, International Securitization Corporation ("ISC"), the
financial institutions from time to time party thereto, as investors, and Bank
One, NA, as agent (the "Agent"), as amended by Amendment No. 1, dated as of
September 29, 1999, to Amended and Restated Receivable Interest Purchase
Agreement, dated as of July 1, 1999, by and among, the Seller, the Servicer,
Falcon, ISC, the financial institutions from time to time party thereto and the
Agent, as further amended by Amendment No. 2, dated as of March 31, 2000, to
Amended and Restated Receivable Interest Purchase Agreement, dated as of July 1,
1999, by and among the Seller, the Servicer, Falcon, ISC, the financial
institutions from time to time party thereto and the Agent, as amended by the
Fourth Amended and Restated Receivable Interest Purchase Agreement, dated as of
June 26, 2000, by
and among the Seller, the Servicer, Blue Ridge, Falcon, the financial
institutions from time to time party thereto, the Administrative Agent, the
Falcon Agent and the Blue Ridge Agent, amended by the Fifth Amended and Restated
Receivable Interest Purchase Agreement, dated as of December 27, 2000, among the
Seller, the Servicer, Blue Ridge, Falcon, the financial institutions from time
to time party thereto, the Administrative Agent, the Falcon Agent and the Blue
Ridge Agent (collectively, the "Existing Agreement").
PRELIMINARY STATEMENTS
WHEREAS, the Seller has been transferring and assigning
Receivable Interests pursuant to the Existing Agreement and now
desires to transfer and assign Receivable Interests to the Co-
Agents for the benefit of their respective Purchaser Groups from
time to time;
WHEREAS, the parties desire to amend and restate the
Existing Agreement as hereinafter provided;
WHEREAS, on the terms and subject to the conditions
hereinafter set forth, each of Blue Ridge and Falcon may, in its
absolute and sole discretion, purchase Receivable Interests from
the Seller from time to time and, in the event that Blue Ridge or
Falcon does not purchase a particular Receivable Interest, unless
the Seller otherwise directs, the Blue Ridge Liquidity Providers
or the Falcon Liquidity Providers, as the case may be, shall
purchase such Receivable Interest from the Seller;
WHEREAS, the Blue Ridge Liquidity Providers have also agreed
to provide a liquidity facility to Blue Ridge with respect to
Receivable Interests purchased by it, and the Falcon Liquidity
Providers have also agreed to provide a liquidity facility to
Falcon with respect to Receivable Interests purchased by it;
WHEREAS, Federal-Mogul Corporation has been requested to
act, and is willing to act, as Servicer on behalf of the Seller
and the Purchasers in accordance with the terms hereof;
WHEREAS, Bank One, NA has been requested to act, and is
willing to act, as Falcon Agent on behalf of Falcon and the
Falcon Liquidity Providers, and Wachovia Bank, N.A. has been
requested to act, and is willing to act, as Blue Ridge Agent on
behalf of Blue Ridge and the Blue Ridge Liquidity Providers, in
each case, in accordance with the terms of this Agreement, and
WHEREAS, Bank One, NA has been requested to act, and is
willing to act, as Administrative Agent on behalf of the
Purchasers and the Co-Agents in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms. As used in this Agreement, the following
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terms shall have the following meanings:
"Accrual Period" means, for both Conduits, each calendar month,
provided that the initial Accrual Period hereunder means the period from (and
including) the Closing Date to (and including) the last day of the calendar
month thereafter.
"Administration Fee" shall have the meaning specified in the Fee
Letter.
"Administrative Agent" has the meaning assigned to that term in the
preamble of this Agreement.
"Adverse Claim" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.
"Affected Liquidity Provider" shall have the meaning assigned to such
term in Section 12.01(c).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control another Person if
the controlling Person owns 10% or more of any class of voting securities of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the other Person, whether
through ownership of voting securities, by contract or otherwise. In addition,
for purposes of the definitions of "Obligor Overconcentration," "Eligible
Receivable" and "Net Receivables Balance," a Person shall be deemed to control
another Person if such Person owns more than 50% of any class of voting
securities (or corresponding interest in the case of non-corporate entities) of
the other Person.
"Agents" means the Administrative Agent and the Co-Agents.
"Aggregate Commitment" means collectively the Blue Ridge Group
Commitments and the Falcon Group Commitments.
"Aggregate Reduction" has the meaning assigned to such term in Section
2.03.
"Aggregate Reserve Percentage" means, as of any Report Date or Interim
Report Date, the sum of (a) the Loss Reserve Percentage, (b) the Floating
Dilution Reserve Percentage, (c) the Fee Reserve Percentage and (d) the FX
Reserve Percentage.
"Aggregate Reserves" shall equal, as of any Report Date or Interim
Report Date, the product of (a) the Aggregate Reserve Percentage times (b) the
Available Receivables.
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"Aggregate Unpaids" means, at any time, an amount equal to the sum of
all (a) Capital, (b) Obligations, and (c) without duplication, other amounts
owed (whether due or accrued) hereunder or under the Fee Letter to the Agents
and the Purchasers at such time, plus all accrued and unpaid Monthly Servicing
Fees owed hereunder to the Servicer.
"Agreement" means this Sixth Amended and Restated Receivable Interest
Purchase Agreement, as it may be amended, modified, supplemented or amended and
restated and in effect from time to time.
"Amortization Event" has the meaning assigned to that term in Section
8.01.
"Assignment Agreement" has the meaning assigned to that term in
Section 12.01(b).
"Available Funding Amount" means, as of any date of determination, the
lesser of (a) the Available Receivables less the Aggregate Reserves and (b)
$420,000,000.
"Available Receivables" means, as of any Report Date or Interim Report
Date, the excess of the Net Receivables Balance over the Contractual Dilution
Balance.
"Bank One" means Bank One, NA, in its individual capacity and its
successors.
"Bank One Roles" has the meaning assigned to that term in Section
13.13(a).
"Base Rate" means, for either of the Purchaser Groups, a rate per
annum equal to the prime rate or base rate of interest, as applicable, announced
by its Reference Bank from time to time, changing when and as such rate changes.
"Blue Ridge" has the meaning assigned to that term in the preamble to
this Agreement and includes such entity's successors and assigns.
"Blue Ridge Agent" has the meaning assigned to that term in the
preamble of this Agreement.
"Blue Ridge Group" has the meaning assigned to that term in the
preamble of this Agreement.
"Blue Ridge Group Commitment" means, for each Blue Ridge Liquidity
Provider, the commitment of such Blue Ridge Liquidity Provider to purchase its
Pro Rata Share of Receivable Interests from (i) the Seller and (ii) Blue Ridge,
such Pro Rata Share not to exceed, in the aggregate, the amount set forth
opposite such Blue Ridge Liquidity Provider's name on the signature pages of
this Agreement, as such amount may be modified in accordance with the terms
hereof.
"Blue Ridge Liquidity Agreement" means the Liquidity Asset Purchase
Agreement dated as June 26, 2000, among Blue Ridge, the Blue Ridge Agent and the
Blue Ridge Liquidity Providers from time to time party thereto, as amended,
restated, supplemented, replaced or otherwise modified from time to time.
4
"Blue Ridge Liquidity Providers" has the meaning assigned to that term
in the preamble of this Agreement.
"Blue Ridge Purchase Limit" means $200,000,000.
"Broken Funding Costs" means for any Receivable Interest which: (i)
has its Capital reduced without compliance by the Seller with the notice
requirements hereunder or (ii) does not become subject to an Aggregate Reduction
following the delivery of any Reduction Notice or (iii) is subject to a
Liquidity Funding or is otherwise assigned under Article II or terminated prior
to the date on which it was originally scheduled to end; an amount equal to the
excess, if any, of (A) the Discount or Yield (as applicable) that would have
accrued during the remainder of the Tranche Periods or the CP Tranche Periods
for Commercial Paper determined by the applicable Co-Agent to relate to such
Receivable Interest (as applicable) subsequent to the date of such reduction,
assignment or termination (or in respect of clause (ii) above, the date such
Aggregate Reduction was designated to occur pursuant to the Reduction Notice) of
the Capital of such Receivable Interest if such reduction, assignment or
termination had not occurred or such Reduction Notice had not been delivered,
over (B) the sum of (x) to the extent all or a portion of such Capital is
allocated to another Receivable Interest, the amount of Discount or Yield
actually accrued during the remainder of such period on such Capital for the new
Receivable Interest, and (y) to the extent such Capital is not allocated to
another Receivable Interest, the income, if any, actually received during the
remainder of such period by the holder of such Receivable Interest from
investing the portion of such Capital not so allocated. In the event the amount
referred to in clause (B) exceeds the amount referred to in clause (A), the
relevant Purchaser or Purchasers agree to pay to the Seller the amount of such
excess. All Broken Funding Costs shall be due and payable hereunder upon demand.
"Business Day" means any day on which banks are not authorized or
required to close in New York, New York, Detroit, Michigan, Atlanta, Georgia,
Winston-Salem, North Carolina, or Chicago, Illinois, and The Depository Trust
Company of New York is open for business and, if the applicable Business Day
relates to any computation or payment to be made with respect to the LIBO Rate,
any day on which dealings in dollar deposits are carried on in the London
interbank market.
"Canadian Receivables" means Receivables which are payable in Canadian
Dollars and generated from sales to Obligors located in Canada.
"Capital" of any Receivable Interest means, at any time, (A) the
Purchase Price of such Receivable Interest, minus (B) the sum of the aggregate
amount of Collections and other payments received by the Co-Agents which in each
case are applied to reduce such Capital in accordance with the terms and
conditions of this Agreement; provided that such Capital shall be restored (in
accordance with Section 2.09 hereof) in the amount of any Collections or other
payments so received and applied if at any time the distribution of such
Collections or payments are rescinded, returned or refunded for any reason.
"Change of Control" means (i) any Person or Persons acting in concert
shall acquire beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934) of
50% or more of the outstanding
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shares of voting stock of Federal-Mogul; or (ii) during any period of twelve
(12) consecutive months, commencing before or after the Closing Date,
individuals who at the beginning of such twelve-month period were directors of
Federal-Mogul shall cease for any reason to constitute a majority of the board
of directors of Federal-Mogul; or (iii) except as set forth in the Pledge
Agreement, Federal-Mogul shall cease to own, free and clear of all Adverse
Claims, all of the outstanding shares of voting stock of the Seller on a fully
diluted basis; or (iv) any Person, other than the Lenders and the Administrative
Agent (as such terms are defined in the Credit Agreement) and the Surety Parties
(as such term is defined in the Trust Agreement), shall have the right, directly
or indirectly, to direct or instruct the Trustee (as such term is defined in the
Pledge Agreement) to exercise any rights, remedies, powers, privileges or
options with respect to the common stock or voting stock of the Seller pursuant
to the terms of the Pledge Agreement; or (v) any Person, directly or indirectly,
exercises in any manner whatsoever any rights or remedies or takes any action
pursuant to the Pledge Agreement (including, but not limited to, any rights and
remedies pursuant to Section 5 of the Pledge Agreement and/or the exercise of
any rights relating to the appointment of such Person as an attorney-in-fact
under the Pledge Agreement) with respect the common stock or voting stock of the
Seller.
"Closing Date" means June 26, 2000.
"Co-Agents" means the Blue Ridge Agent and the Falcon Agent.
"Collection Account" means each concentration account, depositary
account, lock-box account or similar account in which any Collections are
collected or deposited.
"Collection Account Agreement" means, in the case of any actual or
proposed Collection Account, an agreement in substantially the form of Exhibit B
hereto.
"Collection Bank" means, at any time, any of the banks or other
financial institutions holding one or more Collection Accounts.
"Collection Notice" means a notice in the form attached to a
Collection Account Agreement, from the Administrative Agent to a Collection
Bank.
"Collection Period" means, with respect to any Settlement Date, the
calendar month preceding the month in which such Settlement Date occurs.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all cash proceeds of Related Security with respect to such
Receivable and all Deemed Collections payable to the Co-Agents for the account
of the applicable Purchaser(s) by the Seller.
"Commercial Paper" means promissory notes of the Conduits issued by
the Conduits in the commercial paper market.
"Conduit" has the meaning assigned to that term in the preamble to
this Agreement.
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"Confidential Information" means, in relation to any Person, any
written information delivered or made available by or on behalf of another
Person (or its Affiliates or subsidiaries) in connection with or pursuant to the
Transaction Documents or the transactions contemplated thereby which is
proprietary in nature and clearly marked or identified in writing as being
confidential information, other than information (a) which was publicly known,
or otherwise known to such Person, at the time of disclosure (except pursuant to
disclosure in connection with the Transaction Documents), (b) which subsequently
becomes publicly known through no act or omission by such Person, or (c) which
otherwise becomes known other than through disclosure by the Person to whom it
pertains or one of its Affiliates or subsidiaries.
"Constituents" means (a) with respect to the Blue Ridge Agent, Blue
Ridge and the Blue Ridge Liquidity Providers, and (b) with respect to the Falcon
Agent, Falcon and the Falcon Liquidity Providers.
"Contractual Dilution Balance" means, as of any Report Date or Interim
Report Date, the sum of (a) 2% of North American aftermarket sales during the
immediately preceding Collection Period, (b) the greater of (i) the accrual for
obsolescence and (ii) two times the aggregate amount of Credit Memos issued
during such Collection Period due to obsolescence, (c) 1.5 times the aggregate
amount of Credit Memos issued during such Collection Period due to Stock Lifts
and (d) the total rebates and adjustments currently owed to Obligors as of the
end of such Collection Period (as reflected in the Customer Program Balances in
the books and records of the Servicer).
"Coverage Shortfall" means, as of any Report Date or Interim Report
Date, the excess, if any, of (a) outstanding Capital as of such Report Date or
Interim Report Date, over (b) the Available Receivables determined as of such
Report Date or Interim Report Date minus the Aggregate Reserves determined as of
such Report Date or Interim Report Date.
"CP Costs" means, with respect to either Conduit, for each day, the
sum of (i) discount accrued on Pooled Commercial Paper on such day, plus (ii)
any and all accrued commissions in respect of placement agents and Commercial
Paper dealers, and issuing and paying agent fees incurred, in respect of such
Pooled Commercial Paper for such day, plus (iii) other costs associated with
funding small or odd-lot amounts with respect to all receivable purchase
facilities which are funded by Pooled Commercial Paper for such day, minus (iv)
any accrual of income net of expenses received on such day from investment of
collections received under all receivable purchase facilities funded
substantially with Pooled Commercial Paper, minus (v) any payment received on
such day net of expenses in respect of Broken Funding Costs related to the
prepayment of any Receivables Interest of such Conduit pursuant to the terms of
any receivable purchase facilities funded substantially with Pooled Commercial
Paper. In addition to the foregoing costs, if the Seller shall request any
Incremental Purchase during any period of time determined by the Blue Ridge
Agent or the Falcon Agent, as applicable, in its sole discretion to result in
incrementally higher CP Costs applicable to such Incremental Purchase, the
Capital associated with any such Incremental Purchase shall, during such period,
be deemed to be funded by such Conduit in a special pool (which may include
capital associated with other receivable purchase facilities) for purposes of
determining such additional CP Costs applicable only to such special pool and
charged each day during such period against such Capital.
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"CP Rate" shall mean with respect to each Conduit for any CP Tranche
Period, the rate equivalent to its CP Costs.
"CP Tranche Period" shall mean, with respect to each Conduit, an
Accrual Period.
"Credit Agreement" means the Fourth Amended and Restated Credit
Agreement, dated as of December 29, 2000, among Federal-Mogul, the Foreign
Subsidiary Borrowers (as defined therein), the several banks and other financial
institutions from time to time parties thereto, and the Chase Manhattan Bank, as
Administrative Agent, as amended, modified, supplemented or amended and restated
and in effect from time to time.
"Credit Memo" means any credit memo relating to (a) the North American
Aftermarket obsolescence, (b) the North American Aftermarket Stock Lifts, (c)
the North American Aftermarket core deposits, (d) the North American Aftermarket
billing adjustments, (e) the North American Aftermarket customer accommodation
returns, (f) the North American Aftermarket other and (g) original equipment
manufacturers.
"Credit Policies" has the meaning assigned to that term in Section
7.10.
"Customer Program Balances" means rebates owed to customers by an
Originator based upon prior purchases.
"Deductions" means any Receivable that is created due to the related
Obligor making a partial payment on an invoice, and the outstanding amount of
such newly created Receivable shall be an amount equal to that portion of the
invoice that has not been paid by such Obligor.
"Deemed Collections" means the aggregate of all amounts the Seller
shall have been deemed to have received as a Collection of a Receivable. The
Seller shall be deemed to have received a Collection in full of a Receivable if
at any time (i) the Outstanding Balance of any such Receivable is either (x)
reduced as a result of any defective or rejected goods or services, any discount
or any adjustment or otherwise by the Seller (other than cash Collections on
account of the Receivables) or (y) reduced or cancelled as a result of a setoff
in respect of any claim by any Person (whether such claim arises out of the same
or a related transaction or an unrelated transaction) or (ii) the
representations or warranties in Sections 4.01(i), (j), (l), (n) or (o) are no
longer true with respect to any Receivable. The Seller hereby agrees to pay all
Deemed Collections immediately to the Servicer for application in accordance
with the terms and conditions hereof.
"Default Fee" means with respect to any amount due and payable by the
Seller hereunder or under the Fee Letter and which is not otherwise accruing
Yield at the Post-Amortization Rate, an amount equal to interest on any such
amount at a rate per annum equal to 2% above the applicable Base Rate; provided,
however, that such interest rate will not at any time exceed the maximum rate
permitted by applicable law.
"Defaulted Receivable" means a Receivable: (i) as to which any
payment, or part thereof, remains unpaid for 90 days or more from the original
due date for such payment; (ii) an
8
Insolvency Event has occurred with respect to the Obligor thereof; (iii) as to
which the Obligor thereof, if a natural person, is deceased; or (iv) which has
been identified by the Seller as uncollectible.
"Delinquency Ratio" means, as of any Report Date or Interim Report
Date, the percentage equivalent of a fraction, (i) the numerator of which is the
sum of (x) the aggregate amount of Receivables as of the last Business Day of
the immediately preceding Collection Period that are 61 or more days past due
and (y) the Placed Accounts Balance, and (ii) the denominator of which is the
Pool Balance as of such Business Day.
"Dilution Horizon Ratio" or "DHR" means, for any Report Date or
Interim Report Date, a fraction, the numerator of which is the sum of the
aggregate amounts of all new Receivables generated during the two immediately
preceding Collection Periods and the denominator of which is the Available
Receivables as of such Report Date.
"Dilution Ratio" means, as of any Report Date or Interim Report Date,
the percentage equivalent of a fraction, the numerator of which is all non-cash
reductions to the Pool Balance, not related to the credit-worthiness of the
Obligor, including, but not limited to, the aggregate amount of Credit Memos
issued during the immediately preceding Collection Period, adjustments related
to 2/10 discounts (i.e., cash discounts related to prompt payments) made during
the immediately preceding Collection Period, and other adjustments made during
the immediately preceding Collection Period and the denominator of which is the
Pool Balance as of such Business Day.
"Discount Rate" means, with respect to any Receivable Interest, a CP
Rate, LIBO Rate, Base Rate or Post-Amortization Rate, as applicable.
"Downgraded Liquidity Provider" means a Liquidity Provider that has
been the subject of a Downgrading Event.
"Downgrading Event" with respect to any Liquidity Provider means the
lowering of the rating with regard to the short-term securities of such
Liquidity Provider to below (i) A-1 by S&P or (ii) P-1 by Moody's.
"Eligible Assignee" means (a) any "bankruptcy remote" special purpose
entity which is administered by Wachovia or Bank One (or any Affiliate of the
foregoing) that is in the business of acquiring or financing receivables,
securities and/or financial assets and which issues commercial paper notes that
are rated at least A-1 by S&P and P-1 by Moody's, (b) any Qualifying Liquidity
Provider having a combined capital and surplus of at least $250,000,000, or (c)
any Downgraded Liquidity Provider whose liquidity commitment has been fully
drawn by the applicable Conduit or its Co-Agent and funded into a collateral
account.
"Eligible Originator" means Federal-Mogul and each other Originator at
any time while it is wholly-owned by Federal-Mogul; provided, however, any such
Person shall not be an Eligible Originator upon the occurrence of an Insolvency
Event with respect to such Person.
"Eligible Receivable" means each Receivable which meets the following
criteria:
9
(1) the obligation is denominated and payable in U.S. dollars in the
United States, or, if a Canadian Receivable, is denominated and payable in
Canadian dollars (provided that for purposes of any reporting and/or
calculations hereunder Canadian dollars shall be reflected as U.S. dollars
based upon the Bloomberg exchange rate used for Federal-Mogul's month end
accounting close); or is related to an original equipment manufacturer
export and is denominated in U.S. dollars;
(2) the related Obligor is a resident of the United States or Canada;
(3) the related Obligor is not an Affiliate of any of the parties
hereto;
(4) the contract terms of the Receivables call for payment within 90
days of original billing date, except for up to 3% of the Pool Balance
which may have terms that call for payment within 91 to 180 days of
original billing date;
(5) the Receivable is neither a Defaulted Receivable nor in a Placed
Accounts Balance;
(6) the Receivable is an "account" under Section 9-106 of the Uniform
Commercial Code;
(7) the Receivable is a legal, valid and binding obligation of the
related Obligor;
(8) the terms of the contract for the Receivable do not require the
consent of the Obligor to sell or assign such Receivable;
(9) no Co-Agent has notified the Seller that the Receivable is not
acceptable;
(10) the Receivable was generated in the ordinary course of business
by an Eligible Originator;
(11) the Receivable satisfies all applicable requirements of the
Credit Policies of an Eligible Originator and the Seller;
(12) with respect to Receivables for the related Obligor which
represent in the aggregate 3.00% or more of the Pool Balance, there are no
offset arrangements with respect to such Obligor;
(13) the contract for the Receivable represents all or a part of the
sales price of merchandise, insurance and services within the meaning of
(S)3(c)(5) of the Investment Company Act of 1940, as amended; and
(14) the Receivable has not been materially extended, modified or
converted to a long term obligation;
10
provided, however, that if, as of any Report Date or Interim Report Date, the
aggregate amount of Receivables for an Obligor represent 2.00% or more of the
Pool Balance and 30.00% or more of such Receivables are 91 days or more past
due, all Receivables relating to such Obligor shall not constitute "Eligible
Receivables"; provided, further, that any Deductions that are 60 days or more
past due shall not constitute "Eligible Receivables."
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Excess Concentration Amount" means, as of any Report Date or Interim
Report Date, the sum of the Obligor Overconcentrations on such date.
"Existing Agreement" has the meaning assigned to that term in the
preamble of this Agreement.
"Expected Floating Dilution Ratio" or "EFD" means, as of any Report
Date or Interim Report Date, the average of the Floating Dilution Ratios for the
twelve immediately preceding Collection Periods.
"Facility Account" means the Seller's Account No. 55-73688 at Bank
One.
"Facility Termination Date" means the earliest of (i) the Liquidity
Termination Date, (ii) the date the Seller shall exercise its right to
repurchase the outstanding Receivable Interests pursuant to Section 2.10, (iii)
any date selected by the Seller on not less than 30 days' prior written notice
to the Co-Agents pursuant to Section 2.01(b); provided that such date shall not
be between Settlement Periods, and provided further that if any Person then
acting as Administrative Agent hereunder shall have elected or been required to
resign as Administrative Agent and the Blue Ridge Agent is not appointed as the
successor Administrative Agent pursuant to Section 10.08, the Seller may elect,
by written notice to the Agents given promptly following notice to the Seller of
such resignation, to have the Facility Termination Date occur on the effective
date of such resignation, (iv) the date of the occurrence of an Amortization
Event involving the Seller and of the type described in Section 8.01(a), (v) any
date following the occurrence, and during the continuance, of any other
Amortization Event which the Co-Agents declare in writing to be the Facility
Termination Date, (vi) the date on which Federal-Mogul ceases selling and/or
contributing Receivables to the Seller pursuant to the Sale Agreement and/or the
Subscription Agreement referred to therein and (vii) the Termination Date.
"Falcon" has the meaning assigned to that term in the preamble to this
Agreement and includes such entity's successors and assigns.
"Falcon Agent" has the meaning assigned to that term in the preamble
of this Agreement.
"Falcon Group" has the meaning assigned to that term in the preamble
of this Agreement.
"Falcon Group Commitment" means, for each Falcon Liquidity Provider,
the commitment of such Falcon Liquidity Provider to purchase its Pro Rata Share
of Receivable
11
Interests from (i) the Seller and (ii) Falcon, such Pro Rata Share not to
exceed, in the aggregate, the amount set forth opposite such Falcon Liquidity
Provider's name on the signature pages of this Agreement, as such amount may be
modified in accordance with the terms hereof.
"Falcon Liquidity Agreement" means the Liquidity Agreement dated as of
June 26, 2000, among Falcon, the Falcon Agent, and the Falcon Liquidity
Providers from time to time party thereto, as amended, restated, supplemented,
replaced or otherwise modified from time to time.
"Falcon Liquidity Providers" has the meaning assigned to that term in
the preamble of this Agreement.
"Falcon Purchase Limit" means, collectively, the aggregate of the
Falcon Group Commitments of the Falcon Liquidity Providers hereunder (which
aggregate amount is $220,000,000 as of the date of this Agreement).
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period equal to (i) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Governments Securities; or (ii) if such rate is not so
published for any day which is a Business Day, the Federal Funds Effective Rate
for such day shall be the average rate charged to the applicable Co-Agent on
such day on such transactions, as reasonably determined by such Co-Agent.
"Federal-Mogul" means Federal-Mogul Corporation, a Michigan
corporation, and its successors in interest to the extent permitted hereunder.
"Fee Letter" means that certain letter agreement dated as of December
27, 2000, by and among the Seller, Falcon, the Falcon Agent, Blue Ridge and the
Blue Ridge Agent, as amended, modified, supplemented or amended and restated and
in effect from time to time.
"Fee Reserve Percentage" means (a) as of any Report Date or Interim
Report Date when Turnover Days have been less than or equal to 60 days during
the immediately preceding Collection Period, 1.5%, and (b) as of any Report Date
or Interim Report Date when Turnover Days have been greater than 60 days during
the immediately preceding Collection Period, 2.0%.
"Fees" means, collectively, the Administration Fee, Program Fee and
Default Fees.
"Finance Charges" means, with respect to an invoice, any finance,
interest, late payment charges or similar charges owing by an Obligor pursuant
to such invoice.
"Financial Covenants" means Section 11.1, Section 11.2 and/or Section
11.3 of the Credit Agreement, as amended, modified, supplemented or amended and
restated from time to time, in each case, with the prior written consent of each
Co-Agent.
12
"Floating Dilution" means, as of any Report Date or Interim Report
Date, the aggregate amount of Credit Memos issued during the immediately
preceding Collection Period relating to the (i) North American Aftermarket core
deposits, (ii) the North American Aftermarket billing adjustments, (iii) the
North American Aftermarket customer accommodation returns, (iv) the North
American Aftermarket other and (v) original equipment manufacturers.
"Floating Dilution Ratio" means, as of any Report Date or Interim
Report Date, the percentage equivalent of a fraction, the numerator of which
shall be the Floating Dilution determined as of such Report Date or Interim
Report Date and the denominator of which shall be the aggregate amount of new
Receivables transferred to the Seller pursuant to the Sale Agreement during the
second immediately preceding Collection Period.
"Floating Dilution Reserve Percentage" or "FDRP" shall equal, as of
any Report Date or Interim Report Date, the greater of:
(a) 7.0%, and
(b) 1.75 X EFD X DHR + [ (FDS-EFD) x FDS ]
EFD
where:
FDR = Floating Dilution Ratio
EFD = Expected Floating Dilution Ratio
FDS = Floating Dilution Spike Ratio
DHR = Dilution Horizon Ratio
"Floating Dilution Spike Ratio" or "FDS" means, as of any Report Date
or Interim Report Date, the highest average of the Floating Dilution Ratio for
any two consecutive Collection Periods that occurred during the twelve
immediately preceding Collection Periods.
"Funding Agreement" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of any
Conduit.
"Funding Source" means (i) any Liquidity Provider or (ii) any
insurance company, bank or other financial institution providing liquidity,
credit enhancement or back-up purchase support or facilities to any Conduit.
"FX Reserve Percentage" means, as of any Report Date or Interim Report
Date, the percentage equivalent of a fraction, the numerator of which shall be
an amount equal to the product of (i) 6.5% and (ii) the Outstanding Balance of
all Canadian Receivables that do not exceed the Obligor Overconcentration
relating to Canadian Receivables, and the denominator of which shall be the Net
Receivables Balance.
"Governmental Authority" shall mean the United States of America, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
13
"Guaranty" means any guaranty by any Person of Indebtedness or other
obligations of any other Person that is not a consolidated subsidiary of such
Person or any assurance with respect to the financial condition of any other
Person that is not a consolidated subsidiary of such Person (including, without
limitation, any purchase or repurchase agreement, any indemnity or any keep-
well, take-or-pay, through-put or other arrangement having the effect of
assuring or holding harmless any third Person against loss with respect to any
Indebtedness or other obligation of such other Person) except endorsements of
negotiable instruments for collection in the ordinary course of business.
"Incremental Purchase" means a purchase of one or more Receivable
Interests which increases the total outstanding Capital of the Purchasers
pursuant to Section 2.02.
"Indebtedness" means any (a) indebtedness for borrowed money or for
the deferred purchase price of property or services, (b) obligations under
leases which, in accordance with generally accepted accounting principles, are
to be recorded as capital leases, (c) obligations which are evidenced by notes,
acceptances or other instruments, (d) net liabilities under interest rate swap,
foreign currency swap, commodity swap, exchange or cap agreements and (e)
obligations, whether or not assumed, secured by Liens or payable out of proceeds
or production from property now or hereafter owned or acquired; provided,
however, that the term "Indebtedness" shall not include short-term obligations
payable to suppliers incurred in the ordinary course of business.
"Indemnified Amounts" shall have the meaning assigned to such term in
Section 9.01.
"Indemnified Party" shall have the meaning assigned to such term in
Section 9.01.
"Independent Director" shall have the meaning assigned to such term in
the Sale Agreement.
"Insolvency Event" means, with respect to any Person, the occurrence
of any of the following:
(a) such Person files a petition commencing a voluntary
case under any chapter of the Federal bankruptcy laws; or such
Person files a petition, answer or consent seeking
reorganization, arrangement, adjustment, or composition under any
other similar applicable federal law, or shall consent to the
filing of any such petition, answer, or consent; or such Person
appoints, or consents to the appointment of, a custodian,
receiver, liquidator, trustee, assignee, sequestrator or other
similar official in bankruptcy or insolvency of it or of any
substantial part of its property; or such Person makes an
assignment for the benefit of creditors, or admits in writing its
inability to pay its debts generally as they become due; or
(b) an order for relief is entered against such Person by a
court having jurisdiction in the premises under any chapter of
the Federal bankruptcy laws; a decree or an order by a court
having jurisdiction in the premises is entered approving as
properly filed a petition seeking reorganization, arrangement,
14
adjustment, or composition of such Person under any other similar
applicable federal law; or a decree or an order of a court having
jurisdiction in the premises for the appointment of a custodian,
receiver, liquidator, trustee, assignee, sequestrator, or other
similar official in bankruptcy or insolvency of such Person or of
any substantial part of its property or for the winding up or
liquidation of its affairs, is entered (each of the foregoing
events in this clause (b), an "Involuntary Insolvency Event").
"Intended Characterization" means, for income tax purposes, the
characterization of the acquisition by the Purchasers of Receivable Interests as
a loan or loans by the Purchasers to the Seller secured by the Receivables, the
Related Security, the Collection Accounts and the Collections.
"Interim Report Date " means for each month (i) during the month of
December 2000, December 31, 2000, (ii) during the months of January 2001,
February 2001 and March 2001, the date that is five (5) Business Days
immediately succeeding the 15th calendar day of such month, and (iii) for each
month succeeding the month of March 2001, the date that is three (3) Business
Days immediately succeeding the 15th calendar day of such month.
"Interim Settlement Date Statement" means a report in substantially
the form of Exhibit I hereto (appropriately completed), furnished by the
Servicer to the Co-Agents pursuant to Section 7.05.
"Invoice" means, collectively, with respect to any Receivable, any and
all instruments, bills of lading, invoices or other writings which evidence such
Receivable or the goods underlying such Receivable.
"LIBO Rate" means the rate per annum equal to the sum of (i)(a) the
rate at which deposits in U.S. Dollars are offered by the Reference Bank to
first-class banks in the London interbank market at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of the relevant Tranche
Period such deposits being in the approximate amount of the Capital of the
Receivable Interest to be funded or maintained, divided by (b) one minus the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal or other reserves) which is imposed against the Reference Bank in
respect of Eurocurrency liabilities, as defined in Regulation D of the Board of
Governors of the Federal Reserve System as in effect from time to time
(expressed as a decimal), applicable to such Tranche Period plus (ii) 0.75% per
annum. The LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of
1%.
"LIBO Tranche Period" has the meaning set forth in clause (a) of the
definition of "Tranche Period".
"Liquidity Agreements" means the Blue Ridge Liquidity Agreement and
the Falcon Liquidity Agreement.
"Liquidity Funding" means, with respect to either Conduit: (i) any put
by such Conduit to its Liquidity Providers or other Funding Sources of all or
any portion of its Capital, (ii) any sale of a participation by such Conduit to
its Liquidity Providers or other Funding Sources in all or any portion of its
Capital, (iii) any borrowing by such Conduit from any
15
Funding Source to pay or refinance Commercial Paper issued by such Conduit to
fund all or any portion of its Capital, (iv) any draw, demand or claim by such
Conduit upon or under any letter of credit, surety bond or insurance policy
issued by any Funding Source to support the payment or refinancing of any
Commercial Paper issued by such Conduit to fund all or any portion of its
Capital, and/or (v) any election pursuant to Section 2.01 of this Agreement to
have such Conduit's Liquidity Providers purchase any Receivable Interest.
"Liquidity Providers" means, collectively, the Blue Ridge Liquidity
Providers and the Falcon Liquidity Providers.
"Liquidity Termination Date" means June 22, 2001, unless such date is
extended by mutual written agreement of the Seller, the Agents and each of the
Purchasers.
"Loss Reserve Percentage" means, as of any Report Date or Interim
Report Date, the greater of (a) 9.0% and (b) 3 times the Loss-to-Liquidation
Ratio.
"Loss-to-Liquidation Ratio" means, as of any Report Date or Interim
Report Date, a fraction, the numerator of which equals the sum of (a) the
aggregate of Receivables that were 61 to 90 days past due as of the last day of
the immediately preceding Collection Period and (b) the excess, if any, of (i)
the aggregate amount of Placed Accounts Balance during the immediately preceding
Collection Period over (ii) the aggregate amount of Placed Accounts Balance
during the second immediately preceding Collection Period, and the denominator
of which is Collections received during the immediately preceding Collection
Period.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition, business or operations of the Seller or any Originator,
(ii) the ability of the Seller or any Originator to perform its obligations
under any Transaction Document, (iii) the legality, validity or enforceability
of this Agreement, any Transaction Document or any Collection Account Agreement
or Collection Notice relating to a Collection Account into which a material
portion of Collections are deposited, (iv) the Seller's or any Purchaser's
interest in the Receivables generally or in any significant portion of the
Receivables, the Related Security or the Collections with respect thereto, or
(v) the collectibility of the Receivables generally or of any material portion
of the Receivables.
"Minimum Enhancement Amount" means, as of any Report Date or Interim
Report Date, an amount equal to the greater of: (a) an amount equal to the
product of (i) the Aggregate Reserve Percentage as of such Report Date or
Interim Report Date and (ii) a fraction the numerator of which is equal to
outstanding Capital as of such Report Date or Interim Report Date and the
denominator of which is 1 minus such Aggregate Reserve Percentage plus (iii) the
Contractual Dilution Balance as of such Report Date or Interim Report Date and
(b) $15,800,000.
"Monthly Servicing Fee" shall have the meaning specified in Section
7.11.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Receivables Balance" means, at anytime, the aggregate Outstanding
Balance of all Eligible Receivables at such time, reduced by the Excess
Concentration Amount.
16
"New Concentration Account" has the meaning assigned to that term in
Section 6.01(k).
"Obligations" means, collectively, (i) all Yield, (ii) all Fees (which
fees shall be sufficient to pay all fees owing to the Liquidity Providers),
(iii) all amounts payable as Deemed Collections (which shall be applied to
reduce outstanding Capital hereunder in accordance with Section 2.06 and 2.07),
(iv) all amounts payable pursuant to Article IX, if any, (v) all Servicer costs
and expenses in connection with servicing, administering and collecting the
Receivables, (vi) all Broken Funding Costs and (vii) all Default Fees.
"Obligor" means a Person obligated to make payments pursuant to an
Invoice.
"Obligor Overconcentration" means, as of any Report Date or Interim
Report Date, the excess of (a) the aggregate of all amounts of Eligible
Receivables owned by the Seller and generated under accounts receivable with any
one Obligor or type of Receivable as of the last day of the Collection Period
immediately preceding such Report Date or Interim Report Date over (b) 3.0% of
the Eligible Receivables on the last day of such immediately preceding
Collection Period; provided that the Obligor Overconcentration with respect to
the following Obligors or types of Receivables, shall be the applicable amount
described in clause (a) in excess of the following percentages respectively, of
the Eligible Receivables on the last day of such immediately preceding
Collection Period:
Obligor/Receivable Type Percentage
----------------------- ----------
Chrysler 7%
Ford 7%
General Motors 7%
Auto Zone 7%
Genuine Parts 6%
Canadian Receivables 6%
provided, further, that, other that with respect to Genuine Parts, on or after
the date of any downgrade of the short-term debt rating or long-term debt rating
of any Obligor referenced in the immediately preceding table by S&P or ▇▇▇▇▇'▇,
either Co-Agent, in its sole discretion, by written notice to the Seller and the
Servicer, may decrease the percentage relating to such Obligor in the
immediately preceding table to a percentage that is mutually agreed upon by the
Co-Agents in their sole discretion (for the avoidance of doubt, any reduction in
a modifier (e.g. "+", "1", "2" or "3") to a short-term debt rating or long-term
debt rating shall constitute a downgrade by S&P or ▇▇▇▇▇'▇, as applicable);
provided, further, that, with respect to Genuine Parts, on or after the date of
the occurrence of any event or condition that may have a material adverse effect
on the business, assets, property, condition (financial or otherwise) or
prospects of Genuine Parts, either Co-Agent, in its sole discretion, by written
notice to the Seller and the Servicer, may decrease the percentage relating to
Genuine Parts in the immediately preceding table to a percentage that is
mutually agreed upon by the Co-Agents in their sole discretion.
"Originator" means each of (a) Federal-Mogul; (b) Federal-Mogul Canada
Limited; (c) Federal-Mogul Piston Rings, Inc.; (d) Federal-Mogul Flowery Branch,
LLC;
17
(e) Federal-Mogul Powertain, Inc.; (f) Federal-Mogul Sealing Systems, Inc.; (g)
Federal-Mogul Carolina, Inc.; (h) Federal-Mogul South Bend, Inc.; (i) Federal-
Mogul LaGrange, Inc.; (j) Federal-Mogul Sintered Products, Inc.; (k) Federal-
Mogul Sintered Products-Waupun, Inc.; (l) Federal-Mogul Engineered Bearings,
Inc.; (m) Federal-Mogul Camshafts, Inc.; (n) Federal-Mogul Aviation, Inc.; (o)
Federal-Mogul Ignition Company; (p) Federal-Mogul Products, Inc.; (q) Federal-
Mogul Systems Protection Group, Inc.; and shall include any other wholly-owned
Subsidiary of Federal-Mogul which the Agents and the Purchasers unanimously
approve.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof, and shall exclude any interest or finance
charges thereon, without regard to whether any of the same shall have been
capitalized.
"Participant" shall have the meaning assigned to such term in Section
12.02.
"Percentage" means, (a) with respect to the Blue Ridge Group, the
percentage equivalent of a fraction, the numerator of which shall be the
aggregate Blue Ridge Group Commitments and the denominator of which shall be the
Aggregate Commitment and (b) with respect to Falcon, the percentage equivalent
of a fraction, the numerator of which shall be the aggregate Falcon Group
Commitments and the denominator of which shall be the Aggregate Commitment.
"Person" means an individual, partnership, corporation, association,
trust, limited liability company, joint venture or any other entity, or
organization, including a Governmental Authority or other government or
political subdivision or agent or instrumentality thereof.
"PBGC" means the Pension Benefit Guaranty Corporation created under
Section 4002(a) of ERISA or any successor thereto.
"Placed Accounts Balance" means the aggregate Outstanding Balance of
any Receivables that have been moved to a separate credit manager code in
accordance with the Credit Policies.
"Plan" means any defined benefit plan maintained or contributed to by
the Originator or any Subsidiary of the Originator or by any trade or business
(whether or not incorporated) under common control with the Originator or any
Subsidiary of the Originator as defined in Section 4001(b) of ERISA and insured
by the PBGC under Title IV of ERISA.
"Pledge Agreement" means the Second Amended and Restated Domestic
Pledge Agreement, dated as of December 29, 2000, as amended, modified,
supplemented or amended and restated from time to time, made by each of the
signatories thereto, as the Grantors, in favor of First Union National Bank, a
national banking association, as Trustee (the "Trustee") under the Second
Amended and Restated Trust Agreement, dated as of December 29, 2000, as amended,
modified, supplemented or amended and restated from time to time, among Federal-
Mogul, the subsidiaries of Federal-Mogul parties thereto and the Trustee.
"Pool Balance" means, as of the time of determination thereof, the
aggregate Outstanding Balance of all Receivables owned by the Seller at such
time.
18
"Pooled Commercial Paper" means Commercial Paper notes of either
Conduit subject to any particular pooling arrangement by either Conduit, but
excluding Commercial Paper issued by either Conduit for a tenor and in an amount
specifically requested by any Person in connection with any agreement effected
by either Conduit.
"Post-Amortization Rate" means, for all Capital of each Purchaser, the
sum of its applicable Base Rate plus 2% per annum.
"Potential Amortization Event" means an event which, with the passage
of time or the giving of notice, or both, would constitute an Amortization
Event.
"Principal Amount" means, with respect to Blue Ridge's Commercial
Paper, the actual net cash proceeds received by Blue Ridge upon issuance of its
Commercial Paper.
"Pro Rata Share" means, for each Liquidity Provider, the ratio which
its liquidity commitment to purchase its pro rata share of Receivable Interests
pursuant to the terms of this Agreement, which is the amount set forth next to
such Liquidity Provider's name on the signature pages to this Agreement, bears
to the Blue Ridge Group Commitment or the Falcon Group Commitment, as
applicable.
"Program Fee" shall have the meaning specified in the Fee Letter.
"Proposed Reduction Date" has the meaning assigned to that term in
Section 2.03.
"Purchase Date" means the date of the sale by Seller, and the purchase
by the Conduits or the Co-Agents on behalf of the Liquidity Providers, of any
Receivables Interests hereunder.
"Purchase Limit" means (i) the aggregate of the Falcon Purchase Limit
and the Blue Ridge Purchase Limit (which aggregate amount is $420,000,000 as of
the date of this Agreement); (ii) with respect to Falcon, the Falcon Purchase
Limit; and (iii) with respect to Blue Ridge, the Blue Ridge Purchase Limit, in
each case, as applicable.
"Purchase Notice" shall have the meaning specified in Section 2.02.
"Purchase Price" means, with respect to any Incremental Purchase by a
Purchaser Group of a Receivable Interest, the least of:
(a) such Purchaser Group's Percentage of the aggregate
amount of Capital requested by the Seller from both Purchaser
Groups,
(b) the remaining unused portion of the Blue Ridge Purchase
Limit or the Falcon Purchase Limit, as applicable, and
(c) the maximum amount by which the aggregate outstanding
Capital of such Purchaser Group could be increased such that
after giving effect to such increase in such Purchaser Group's
aggregate outstanding Capital, such Purchaser
19
Group's Percentage of the Net Receivables Balance will equal or
exceed the product of (A) such Purchaser Group's Percentage and
(B) sum of (i) (x) Capital relating to all Receivable Interests
divided by (y) 1 minus the Aggregate Reserve Percentage, plus
(ii) the Contractual Dilution Balance.
"Purchaser" means Blue Ridge, Falcon and/or any Liquidity Provider, as
applicable.
"Purchaser Group" means the Falcon Group or the Blue Ridge Group.
"Qualifying Liquidity" means a Liquidity Provider with a rating of its
short term securities equal to or higher than (i) A-1 by S&P and (ii) P-1 by
▇▇▇▇▇'▇.
"Purchasing Liquidity Provider" has the meaning specified in Section
12.01(b).
"Reassignment Amount" means, with respect to each Purchaser Group on
any Settlement Date, after giving effect to any deposits and distributions
otherwise to be made on such Settlement Date, the sum of (i) the Capital
outstanding from such Purchaser Group on such Settlement Date, (ii) the amount
of accrued and unpaid Yield relating to Capital, and (iii) the amount of any
accrued and unpaid Fees and Broken Funding Costs.
"Receivable" means all the U.S. dollar denominated and all the
Canadian dollar-denominated accounts receivable shown on the records of Federal-
Mogul or any other Originator, and from time to time thereafter, arising from
the sale of merchandise by Federal-Mogul or any other Originator in the ordinary
course of business that has been sold, assigned, transferred, set-over or
otherwise conveyed to the Seller pursuant to the terms of the Sale Agreement;
provided, however, that "Receivable" that includes a Stock Lift shall be sold to
Seller net of any adjustment with respect to such Stock Lift.
"Receivable Interest" means, at any time, for either of the Purchaser
Groups, an undivided percentage ownership interest (computed as set below)
associated with a designated amount of Capital, Discount Rate and Tranche Period
selected pursuant to the terms and conditions hereof in: (a) all Receivables
transferred to or otherwise acquired or held by the Seller and arising prior to
the time of the most recent computation or recomputation of such undivided
interest, (b) all Related Security with respect to such Receivables, and (c) all
Collections with respect to, and other proceeds of, such Receivables. Such
undivided percentage interest shall equal:
C
-------------------------------
(PX AVR) - (P X AR)
where:
C = the Capital of such Receivable Interest.
P = the applicable Purchaser Group's Percentage.
AVR = the Available Receivables.
20
AR = the Aggregate Reserves.
"Receivables Purchase Agreement" means the Second Amended and Restated
Receivables Purchase Agreement dated as of February 16, 2001, by and between
Federal-Mogul, as Purchaser, and the other Originators, as sellers, as amended,
modified, supplemented or amended and restated from time to time.
"Records" means, with respect to any Receivable, all invoices and
other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.
"Reduction Notice" has the meaning assigned to such term in Section
2.03.
"Reference Bank" means (a) with respect to the Falcon Group, Bank One,
Michigan, or such other bank as the Falcon Agent shall designate with the
consent of the Seller, and (b) with respect to the Blue Ridge Group, Wachovia,
or such other bank as the Blue Ridge Agent shall designate with the consent of
the Seller.
"Reinvestment" has the meaning assigned to that term in Section 2.06.
"Related Security" means, with respect to any Receivable:
(i) all of the Seller's interest in the goods, the
shipment of which gave rise to such Receivable,
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure
payment of such Receivable, whether pursuant to the Contract
related to such Receivable or otherwise, together with all
financing statements and security agreements describing any
collateral securing such Receivable,
(iii) all guaranties, insurance and other agreements or
arrangements of whatever character from time to time supporting
or securing payment of such Receivable whether pursuant to the
invoice related to such Receivable or otherwise,
(iv) all Records related to such Receivables,
(v) all of the Seller's right, title and interest in, to
and under the Sale Agreement and the Receivables Purchase
Agreement and, with respect to such Agreement, each ▇▇▇▇ of
lading, instrument, document or agreement executed in connection
therewith in favor of or otherwise for the benefit of the Seller;
and
(vi) all proceeds of any of the foregoing.
21
"Report Date" means the eleventh day of each month, or if such day is
not a Business Day, the next succeeding Business Day.
"Required Notice Period" means the number of days required notice set
forth below applicable to the Aggregate Reduction indicated below:
Aggregate Reduction Required Notice Period
------------------- ----------------------
*$100,000,000 two Business Days
$100,000,000 to $250,000,000 five Business Days
**$250,000,000 ten Business Days
* less than
** greater than
"Requirements of Law" for any Person shall mean the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or Governmental Authority, in each case applicable to or binding upon
such Person or to which such Person is subject, whether Federal, state or local
(including usury laws and the Federal Truth in Lending Act).
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of the Seller now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock or in any junior class of stock
to any Originator, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of capital stock of the Seller now or hereafter outstanding,
(iii) any payment or prepayment of principal of, premium, if any, or interest,
fees or other charges on or with respect to, and any redemption, purchase,
retirement, defeasance, sinking fund or similar payment and any claim for
rescission with respect to the Indebtedness evidenced by the Subordinated Notes
(as defined in the Sale Agreement), (iv) any payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of capital stock of the
Seller now or hereafter outstanding, and (v) any payment of management fees by
the Seller.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies.
"Sale Agreement" means that certain Fifth Amended and Restated
Receivables Sale and Contribution Agreement dated as of February 16, 2001,
between the Seller, as purchaser, and Federal-Mogul, as seller, as the same may
be amended, restated, supplemented or otherwise modified from time to time.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Security Agreement" means that certain Security Agreement, dated as
of December 29, 2000, made by Federal-Mogul and certain of its subsidiaries in
favor of Wilmington Trust Company, as trustee, as amended, modified,
supplemented or amended and restated from time to time.
22
"Seller" has the meaning assigned to such term in the preamble of this
Agreement.
"Servicer" has the meaning assigned to such term in the preamble of
this Agreement and any successor Servicer authorized pursuant to Article VII to
service, administer and collect Receivables.
"Settlement Date" means, (a) prior to the earlier to occur of (i) an
Amortization Event or (ii) the Facility Termination Date, (1) the second
Business Day immediately succeeding each Report Date, (2) the second Business
Day immediately succeeding the Interim Report Date if the related Interim
Settlement Date Statement indicated that Capital exceeds the Available Funding
Amount and (3) the last day of the relevant Tranche Period in respect of each
Receivable Interest of the Liquidity Providers, and (b) from and after the
earlier to occur of (i) an Amortization Event or (ii) the Facility Termination
Date, (x) the twentieth (20th) day of each month or, if such day is not a
Business Day, the next succeeding Business Day, (y) the last day of the relevant
Tranche Period in respect of each Receivable Interest of the Liquidity Providers
and (z) or any other Business Day designated by the Co-Agents.
"Settlement Date Statement" means a report, in substantially the form
of Exhibit C hereto (appropriately completed), furnished by the Servicer to the
Co-Agents pursuant to Section 7.05.
"Settlement Period" means (A) in respect of each Receivable Interest
of a Conduit, the immediately preceding Accrual Period, and (B) in respect of
each Receivable Interest of the Liquidity Providers, the entire Tranche Period
of such Receivable Interest.
"Stock Lift" means an account receivable, or portion thereof, as to
which Federal-Mogul or one of its subsidiaries has issued a credit in an amount
equal to the balance of such account receivable or portion thereof.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Seller.
"Surety Documents" means, collectively, (i) the Contract of Indemnity,
dated as of December 29, 2000, made by Federal-Mogul and certain of its
subsidiaries in favor of National Fire Insurance Company of Hartford and
Continental Casualty Company, relating to Bond number 929182983, (ii) the
Contract of Indemnity, dated as of December 29, 2000, made by Federal-Mogul and
certain of its subsidiaries in favor of SAFECO Insurance Company of America,
relating to Bond number 6066092, (iii) the Contract of Indemnity, dated as of
December 29, 2000, made by Federal-Mogul and certain of its subsidiaries in
favor of Travelers Casualty & Surety Company of America, relating to Bond number
103529229, and (iv) the Contract of Indemnity, dated as of December 29, 2000,
made by Federal-Mogul and certain of its
23
subsidiaries in favor of Travelers Casualty & Surety Company of America,
relating to Bond number 103529126, in the case of clauses (i), (ii), (iii) and
(iv), as amended, modified, supplemented or amended and restated from time to
time.
"Taxes" shall have the meaning set forth in Section 9.04.
"Tranche Period" means, with respect to any Receivable Interest:
(a) if Yield for such Receivable Interest is calculated on
the basis of the LIBO Rate, a period of one, two, three or six
months, or such other period as may be mutually agreeable to the
applicable Co-Agent and the Seller, commencing on a Business Day
selected by the Seller and agreed to by the applicable Co-Agent
pursuant to this Agreement. Such Tranche Period shall end on the
day in the applicable succeeding calendar month which corresponds
numerically to the beginning day of such Tranche Period;
provided, however, that if there is no such numerically
corresponding day in such succeeding month, such Tranche Period
shall end on the last Business Day of such succeeding month (each
period described in this clause (a), a "LIBO Tranche Period");
(b) if Yield for such Receivable Interest is calculated on
the basis of the Base Rate, a period commencing on a Business Day
selected by the Seller and agreed to by the applicable Co-Agent,
provided no such period shall exceed 30 days; and
(c) if Yield for such Receivable Interest is calculated on
the basis of Blue Ridge's or Falcon's CP Rate, a CP Tranche
Period.
If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day; provided, however,
that in the case of LIBO Tranche Periods, if such next succeeding Business Day
falls in a new month, such LIBO Tranche Period shall end on the immediately
preceding Business Day. In the case of any Tranche Period for any Receivable
Interest which commences before the Facility Termination Date and would
otherwise end on a date occurring after the Facility Termination Date, such
Tranche Period shall end on the Facility Termination Date. The duration of each
Tranche Period which commences after the Facility Termination Date shall be of
such duration as selected by the Co-Agents.
"Transaction Documents" means, collectively, this Agreement, the Sale
Agreement, the Subscription Agreement, the Subordinated Notes (as defined in the
Sale Agreement), the Fee Letter, each Collection Agreement, each Collection
Notice, the Receivables Purchase Agreement, the Liquidity Agreements and all
other instruments, documents and agreements executed and delivered by the Seller
or any Originator in connection herewith.
"Trust Agreement" means the Second Amended and Restated Trust
Agreement dated as of December 29, 2000, among Federal-Mogul, the subsidiaries
of Federal-Mogul from time to time parties thereto, and First Union National
Bank, as Trustee, as amended, modified, supplemented or amended and restated
from time to time.
24
"Turnover Days" means, as of any Report Date or Interim Report Date,
an amount equal to the Pool Balance as of the last day of the immediately
preceding Collection Period divided by Collections relating to the immediately
preceding Collection Period times 30.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
"Voting Block" has the meaning assigned to that term in Section 11.04.
"Wachovia" has the meaning assigned to that term in the preamble of
this Agreement.
"Wachovia Roles" has the meaning assigned to that term in Section
13.13(b).
"Waiver Letter" means that certain letter agreement, dated December
27, 2000 among Federal Mogul, the Seller, the Co-Agents and the Purchasers.
"Weekly Settlement Date" has the meaning assigned to that term in
Section 7.07.
"Weekly Report" has the meaning assigned to that term in Section 7.07.
"Yield" means, for any Tranche Period:
--- ---
DR x C x AD
---------
360
--- ---
where:
DR = the Discount Rate for such Tranche Period;
C = the portion of the Capital allocated to such Tranche Period; and
AD = the actual number of days elapsed during such Tranche Period;
provided that no provision of this Agreement shall require the payment or permit
the collection of Yield in excess of the maximum permitted by applicable law;
and provided, further, that Yield for any Tranche Period shall not be considered
paid by any distribution to the extent that at any time all or a portion of such
distribution is rescinded or must otherwise be returned for any reason.
Section 1.02 Other Definitional Provisions.
-----------------------------
(a) All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles in effect
in the United States from time to time.
25
(b) All terms used in Article 9 of the UCC in the State of New York,
and not specifically defined herein, are used herein as defined in such Article
9.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) Meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
ARTICLE II.
PURCHASE ARRANGEMENTS; PAYMENTS AND COLLECTIONS
Section 2.01 Purchase Facility. Upon the terms and subject to the
------------------
conditions hereof during the period from the date hereof to but not including
the Facility Termination Date:
(a) The Seller may, at its option, sell and assign Receivable
Interests to the Co-Agents, for the benefit of their respective Constituents.
Each such sale and assignment of a Receivable Interest to the Blue Ridge Agent
shall be made simultaneously with a sale and assignment of a Receivable Interest
to the Falcon Agent, and the amount of Capital associated with the Receivable
Interests offered shall be ratable in accordance with the Purchaser Groups'
respective Percentages. In accordance with the terms and conditions set forth
herein:
(i) Blue Ridge may, at its option, instruct the Blue Ridge
Agent to purchase Receivable Interests on behalf of Blue Ridge or
if Blue Ridge shall decline to make any such purchase, the Blue
Ridge Agent shall purchase such Receivable Interests on behalf of
the Blue Ridge Liquidity Providers; and
(ii) Falcon may, at its option, instruct the Falcon Agent to
purchase Receivable Interests on behalf of Falcon or if Falcon
shall decline to make any such purchase, the Falcon Agent shall
purchase such Receivable Interests on behalf of the Falcon
Liquidity Providers;
provided, however, that in no event shall the aggregate Capital of the
Receivable Interests of the Blue Ridge Group at any one time outstanding exceed
the Blue Ridge Purchase Limit, and in no event shall the aggregate Capital of
the Receivable Interests of the Falcon Group at any one time outstanding exceed
the Falcon Limit.
(b) The Seller may, upon at least 30 days' prior written irrevocable
notice to the Co-Agents terminate in whole or permanently reduce in part, the
unused portion of the Purchase Limit; provided, however, that each reduction of
the Purchase Limit shall be made ratable between the Purchaser Groups in
accordance with their respective Percentages, and shall be applied ratably
amongst the Liquidity Providers within a given Purchaser Group based upon their
respective Pro Rata Shares); and provided further that each partial reduction of
the Purchase Limit shall be in a minimum amount equal to $2,000,000 or a larger
integral multiple of $1,000,000.
26
Section 2.02 Increases. The Seller shall provide the Co-Agents with
---------
at least three Business Days' prior notice in either the form set forth as
Exhibit A hereto of each Incremental Purchase or in a Settlement Date Statement
---------
(each such form and/or Settlement Date Statement, a "Purchase Notice"). Each
Purchase Notice shall be subject to Section 5.02 and, except as set forth below,
shall be irrevocable and shall specify the requested Tranche Period and Purchase
Price (which shall not be less than $2,000,000 for either Purchaser Group) and
date of purchase (which, in the case of any Incremental Purchase (after the
initial purchase hereunder), shall only be on a Settlement Date, provided that
an Incremental Purchase shall not be made on a Settlement Date within the
meaning of clause (a)(2) of the definition of "Settlement Date") and, in the
case of an Incremental Purchase to be funded by the Liquidity Providers, the
requested Discount Rate. Following receipt of a Purchase Notice, the Blue Ridge
Agent shall determine whether Blue Ridge agrees to make the purchase of the
Receivable Interest offered to the Blue Ridge Agent, and the Falcon Agent shall
determine whether Falcon agrees to make the purchase of the Receivable Interest
offered to the Falcon Agent. If Blue Ridge or Falcon declines to make a proposed
purchase, the Seller may cancel the Purchase Notice as to both Purchaser Groups.
In the absence of such a cancellation, the Incremental Purchase of any
Receivable Interest which Blue Ridge declines to purchase shall be made by the
Blue Ridge Liquidity Providers in accordance with their respective Pro Rata
Shares, and the Incremental Purchase of any Receivable Interest which Falcon
declines to purchase shall be made by the Falcon Liquidity Providers in
accordance with their respective Pro Rata Shares. On the date of each
Incremental Purchase, upon satisfaction of the applicable conditions precedent
set forth in Article V, each Conduit or its Liquidity Providers, as applicable,
shall deposit to the Facility Account, in immediately available funds, no later
than 12:00 noon (Chicago time), an amount equal to (i) in the case of each
Conduit, the aggregate Purchase Price of the Receivable Interests such Conduit
is then purchasing or (ii) in the case of a Liquidity Provider, such Liquidity
Provider's Pro Rata Share of the aggregate Purchase Price of the Receivable
Interests the related Liquidity Providers are purchasing.
Section 2.03 Decreases. The Seller shall provide the Co-Agents with
---------
prior written notice, substantially in the form of Exhibit H, in conformity with
the Required Notice Period of any reduction of Capital from Collections
requested by the Seller (a "Reduction Notice"). Such Reduction Notice shall
designate:
(i) the date (the "Proposed Reduction Date") upon which
any such reduction of Capital shall occur (which date shall give
effect to the applicable Required Notice Period),
(ii) the aggregate amount of Capital of both Purchaser
Groups to be reduced (the "Aggregate Reduction"), and
(iii) whether all or any portion of such Aggregate Reduction
is to be applied to Receivable Interests of the Liquidity
Providers.
Only one (1) Reduction Notice may be outstanding at any time. Each Aggregate
Reduction shall be allocated between the Purchaser Groups ratably in accordance
with their respective Percentages and once so allocated, if any portion of
either Purchaser Group's share of such amount is to be applied to Receivable
Interests of the Liquidity Providers, shall be allocated
27
amongst the Liquidity Providers in each Purchaser Group ratably in accordance
with their respective Pro Rata Shares.
Section 2.04 Payment Requirements. All amounts to be paid or
--------------------
deposited by the Seller pursuant to any provision of this Agreement shall be
paid or deposited in accordance with the terms hereof no later than 11:00 a.m.
(Chicago time) on the day when due in immediately available funds, and if not
received before 11:00 a.m. (Chicago time) shall be deemed to be received on the
next succeeding Business Day. If such amounts are payable to Blue Ridge or the
Blue Ridge Liquidity Providers they shall be paid to the Blue Ridge Agent, for
the account of Blue Ridge or the Blue Ridge Liquidity Providers, at the Blue
Ridge General and Administrative Account, Account No. 0531-00494 until otherwise
notified by the Blue Ridge Agent. If such amounts are payable to Falcon or the
Falcon Liquidity Providers they shall be paid to the Falcon Agent, for the
account of Falcon or the Falcon Liquidity Providers at ▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ until otherwise notified by the Falcon Agent. Upon
notice to the Seller, the Falcon Agent may debit the Facility Account for all
amounts due and payable hereunder. All computations of Yield (including, without
limitation, all per annum fees calculated as part of Falcon's CP Costs) and all
per annum Fees shall be made on the basis of a year of 360 days for the actual
number of days elapsed. If any amount hereunder shall be payable on a day which
is not a Business Day, such amount shall be payable on the next succeeding
Business Day.
Section 2.05 Payments. Notwithstanding any limitation on recourse
--------
contained in this Agreement, the Seller shall immediately pay to the Co-Agents
when due, for the account of the relevant Conduit and its related Liquidity
Providers on a full recourse basis, the Obligations. If any Person fails to pay
any of the Obligations when due, such Person agrees to pay, on demand, the
Default Fee in respect thereof until paid. Notwithstanding the foregoing, no
provision of this Agreement or the Fee Letter shall require the payment or
permit the collection of any amounts hereunder in excess of the maximum
permitted by applicable law. If at any time the Seller receives any Collections
or is deemed to receive any Collections, the Seller shall immediately pay such
Collections or Deemed Collections to the Servicer and, at all times prior to
such payment, such Collections shall be held in trust by the Seller for the
exclusive benefit of the Purchasers and the Agents.
Section 2.06 Collections Prior to Amortization. Prior to the Facility
---------------------------------
Termination Date, any Collections received by the Servicer (after the initial
purchase of a Receivable Interest hereunder and on or prior to the Facility
Termination Date of such Receivable Interest) shall be set aside and held in
trust by the Servicer for the payment of any accrued and unpaid Aggregate
Unpaids or for a Reinvestment as provided in this Section 2.06. If at any time
any Collections are received by the Servicer prior to the Facility Termination
Date, the Seller hereby requests and the Purchasers in each Purchaser Group
hereby agree to make, simultaneously with such receipt, a reinvestment (each a
"Reinvestment") with that portion of each and every Collection received by the
Servicer that is part of any Receivable Interest of that Purchaser Group, such
that after giving effect to such Reinvestment, the amount of Capital of such
Receivable Interest immediately after such receipt and corresponding
Reinvestment shall be equal to the amount of Capital immediately prior to such
receipt, but after giving effect to any reduction of Capital pursuant to Section
2.03 and reduction in Purchase Limit pursuant to Section 2.01 to be effected on
such date. On each Settlement Date prior to the occurrence of the
28
Facility Termination Date, the Servicer shall remit to the Co-Agents' accounts
their Purchaser Groups' respective Percentages of the amounts set aside during
the related Settlement Period and apply such amounts (if not previously paid in
accordance with Section 2.05) to reduce unpaid Obligations. If such Obligations
shall be reduced to zero, any additional Collections received by the Servicer
shall (i) if applicable, be remitted to the Co-Agents' accounts, ratably in
accordance with their respective Purchaser Group's Percentages, no later than
11:00 a.m. (Chicago time) to the extent required to fund any Aggregate Reduction
on such Settlement Date and (ii) thereafter be remitted from the Servicer to the
Seller on such Settlement Date.
Section 2.07 Collections Following Amortization. On the Facility
----------------------------------
Termination Date and on each day thereafter, the Servicer shall set aside and
hold in trust, for the holder(s) of each Receivable Interest, all Collections
received on such day. On and after the Facility Termination Date, the Servicer
shall, on each Settlement Date and at any other time requested by (or pursuant
to standing instructions from) the Co-Agents (i) remit to the Co-Agents'
accounts their Purchaser Groups' respective Percentages of the amounts set aside
pursuant to the preceding sentence, and (ii) apply such amounts to reduce the
Aggregate Unpaids.
Section 2.08 Application of Collections. If there shall be
--------------------------
insufficient funds on deposit for the Servicer to distribute funds in payment in
full of the aforementioned amounts pursuant to Section 2.06 or 2.07 (as
applicable), the Servicer shall distribute funds:
first, to the payment of the Servicer's reasonable out-of-
-----
pocket costs and expenses in connection with servicing,
administering and collecting the Receivables if the Seller or one
of its Affiliates is not then acting as the Servicer;
second, to the reimbursement of the Agents' costs of
------
collection and enforcement of this Agreement, pro rata based upon
the respective amounts of such costs of collection and
enforcement;
third, ratably to the payment of all accrued and unpaid Fees
-----
under the Fee Letter and Yield;
fourth, (if applicable) in reduction of Capital of the
------
Receivable Interests;
fifth, for the ratable payment of all other unpaid
-----
Obligations, provided that to the extent such Obligations relate
to the payment of Servicer costs and expenses when the Seller or
one of its Affiliates is acting as the Servicer, such costs and
expenses shall not be paid until after the payment in full of all
other Obligations; and
sixth, after the Aggregate Unpaids have been indefeasibly
-----
reduced to zero, to the Seller.
Collections applied to the payment of Aggregate Unpaids shall be distributed in
accordance with the aforementioned provisions, and, giving effect to each of the
priorities set forth in this Section 2.08, shall be shared ratably (within each
priority) among the Agents and the Purchasers in accordance with the amount of
such Aggregate Unpaids owing to each of them in respect of each such priority.
29
Section 2.09 Payment Recission. No payment of any of the Aggregate
-----------------
Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. The Seller shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and shall promptly
pay to the Co-Agents (for application to the Person or Persons who suffered such
recission, return or refund) the full amount thereof, plus the Default Fee from
the date of any such recission, return or refunding.
Section 2.10 Clean Up Call. In addition to the Seller's rights
-------------
pursuant to Section 2.03, the Seller shall have the right (after providing
written notice to the Co-Agents in accordance with the Required Notice Period),
at any time following the reduction of the Capital to a level that is less than
10.0% of the original Purchase Limit, to repurchase from the Purchasers all, but
not less than all, of the then outstanding Receivable Interests. The purchase
price in respect thereof shall be an amount equal to the Aggregate Unpaids
through the date of such repurchase, payable in immediately available funds.
Such repurchase shall be without representation, warranty or recourse of any
kind by, on the part of, or against any Purchaser or the Agents.
ARTICLE III.
YIELD
Section 3.01 Accrual and Payment of Yield. Yield shall accrue on the
----------------------------
Capital relating to each Receivable Interest for each day occurring during its
applicable Tranche Period. On each Settlement Date, the Servicer shall pay to
each Co-Agent an amount equal to the accrued and unpaid Yield owing to such Co-
Agent's Constituents for all Tranche Periods ending on or prior to such
Settlement Date, together with any Broken Funding Costs for any such Tranche
Periods. Upon the occurrence of an Amortization Event, all existing outstanding
Tranche Periods shall terminate, each Purchasers' Capital shall be automatically
allocated to a new Tranche Period accruing Yield at the Post-Amortization Rate,
and the Seller shall pay to the Co-Agents, for the account of their applicable
Purchasers, any Broken Funding Costs arising from such early termination of
their existing Tranche Periods.
Section 3.02 Falcon's CP Yield; Notification of CP Costs. Except as
-------------------------------------------
otherwise provided in Section 3.06, Falcon's Capital shall accrue Yield at
Falcon's CP Rate and shall be allocated to a single Receivable Interest. On or
before the 5th day preceding each Settlement Date (excluding, however, any
Settlement Date within the meaning of clause (a)(2) of the definition of
"Settlement Date"), the Falcon Agent shall notify the Servicer of Falcon's Yield
and Broken Funding Costs, if any, that will be owing to Falcon on the next
succeeding Settlement Date.
Section 3.03 Blue Ridge's CP Yield; Notification of CP Costs. Except
-----------------------------------------------
as otherwise provided in Section 3.06, Blue Ridge's Capital shall accrue Yield
at Blue Ridge's CP Rate and shall be allocated to a single Receivable Interest.
On or before the 5th day preceding each Settlement Date (excluding, however, any
Settlement Date within the meaning of clause (a)(2) of the definition of
"Settlement Date"), the Blue Ridge Agent shall notify the Servicer of
30
the Blue Ridge's Yield and Broken Funding Costs, if any, that will be owing to
Blue Ridge on the next succeeding Settlement Date.
Section 3.04 Base Rate Yield. Except as otherwise provided in
---------------
Section 3.05, all Capital of each of the Liquidity Providers shall accrue Yield
at the Base Rate applicable to its Purchaser Group. Notwithstanding the
foregoing, the Seller (or the Servicer on the Seller's behalf) shall give the
applicable Co-Agents irrevocable written notice not later than 11:00 a.m.
(Chicago time) not later than one (1) Business Day prior to the expiration of
each Tranche Period with respect to which the applicable Base Rate is being
requested as a new Discount Rate.
Section 3.05 LIBO Rate Yield and Unavailability of the LIBO Rate.
---------------------------------------------------
With respect to each Liquidity Provider's Capital, the Seller (or the Servicer
on the Seller's behalf) may from time to time, with the consent of the
applicable Co-Agent, select a LIBO Rate as the Discount Rate to be applicable to
all or any portion of such Liquidity Provider's Capital for a LIBO Tranche
Period by irrevocable written notice delivered to the applicable Co-Agent not
later than 11:00 a.m. (Chicago time) on the third Business Day prior to the
commencement of each such requested LIBO Tranche Period; provided, however, that
in no event may less than $1,000,000 be allocated to any LIBO Tranche Period of
any Liquidity Provider. If either Co-Agent shall fail to receive such prior
written notice on a timely basis, all such Capital of the Liquidity Providers in
its Purchaser Group will accrue Yield at the applicable Base Rate from and after
the expiration of any existing LIBO Tranche Period until notice of a new
Discount Rate and Tranche Period selection is given in accordance with this
Section 3.05. If either Co-Agent notifies the Seller (or the Servicer on the
Seller's behalf) that one or more of its Liquidity Providers has determined that
funding its share of Capital at a LIBO Rate would violate any applicable law,
rule, regulation, or directive, whether or not having the force of law, or has
determined that: (i) deposits of a type and maturity appropriate to match-fund
its investment in a Receivable Interest at the LIBO Rate are not available, or
(ii) such LIBO Rate does not accurately reflect the cost of making or
maintaining such investment at such LIBO Rate, then such Co-Agent shall suspend
the availability of the LIBO Rate for the Liquidity Providers in its Purchaser
Group and require the Seller (or the Servicer on the Seller's behalf) to select
the applicable Base Rate for any Tranche Period of such Purchaser Group that is
accruing Discount at such LIBO Rate.
Section 3.06 Liquidity Funding. If either Conduit determines that it
-----------------
cannot maintain or that it is undesirable to maintain its Capital at a CP Rate
and notifies its Co-Agent and the Seller (or the Servicer on the Seller's
behalf) that it has availed itself of a Liquidity Funding for all or any portion
of its Capital allocated to a CP Tranche Period for which Yield is being
computed with respect to a CP Rate, such CP Tranche Period shall automatically
terminate, the portion of Capital allocated to such CP Tranche Period shall be
automatically allocated to a new Tranche Period accruing Yield at the applicable
Base Rate, and the Seller shall pay to such Co-Agent, for the account of such
Conduit, any Broken Funding Costs arising from early termination of such CP
Tranche Period.
31
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.01 Seller Representations and Warranties. The Seller
-------------------------------------
hereby represents and warrants to the Agents and the Purchasers that:
(a) Corporate Existence and Power. The Seller is a corporation duly
-----------------------------
organized and validly existing and in good standing under the law of the State
of Michigan and has, in all material respects, full corporate power, authority
and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under the Transaction Documents to
which it is a party.
(b) Due Qualification. The Seller is duly qualified to do business
-----------------
and, where necessary, is in good standing as a foreign corporation (or is exempt
from such requirement) and has obtained all necessary licenses and approvals in
each jurisdiction in which the conduct of its business requires such
qualification except where the failure to so qualify, be in good standing or
obtain licenses or approvals would not have a Material Adverse Effect.
(c) Due Authorization; No Conflict. The execution and delivery of the
------------------------------
Transaction Documents to which the Seller is a party, the performance of the
transactions contemplated thereby and the fulfillment of the terms thereof, will
not conflict with, result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
material default under, any indenture, contract, agreement, mortgage, deed of
trust, or other instrument to which the Seller is a party or by which it or its
properties are bound. The execution and delivery of the Transaction Documents to
which the Seller is a party, the performance of the transactions contemplated
thereby and the fulfillment of the terms thereof which are applicable to the
Seller, will not conflict with or violate any material Requirements of Law
applicable to the Seller.
(d) No Consents. Other than the filing of the financing statements
-----------
required hereunder, no authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority or regulatory body is
required for the due execution, delivery and performance by the Seller of the
Transaction Documents to which it is a party, other than authorizations,
approvals, actions, notices or filings the failure to obtain or perform would
not reasonably be expected to have a Material Adverse Effect.
(e) Binding Effect. The Transaction Documents to which the Seller is
--------------
a party have been duly executed and delivered by the Seller and constitute the
legal, valid and binding obligations of the Seller enforceable against the
Seller in accordance with their respective terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(f) No Proceedings. There are no actions, suits or proceedings
--------------
pending, or to the best of the Seller's knowledge, threatened, against or
affecting the Seller or any Originator,
32
or any of the respective properties of the Seller or any Originator, in or
before any court, arbitrator or other body, which are reasonably likely to have
a Material Adverse Effect. Neither the Seller nor any Originator is in default
with respect to any order of any court, arbitrator or Governmental Authority.
(g) Accuracy of Information. All information heretofore furnished by
-----------------------
the Seller or any of its Affiliates to the Agents or the Purchasers for purposes
of or in connection with this Agreement, any of the other Transaction Documents
or any transaction contemplated hereby or thereby is, and all such information
hereafter furnished by the Seller or any of its Affiliates to the Purchasers
will be, true and accurate in every material respect, on the date such
information is stated or certified and does not and will not contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
(h) Use of Proceeds. No proceeds of any purchase hereunder will be
---------------
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the United States Federal Reserve System as now and from time to
time hereafter in effect or for any purpose which violates the provisions of the
Regulations of such Board of Governors (including but not limited to the
provisions of Regulation U and Regulation X) or any similar rule of any other
Governmental Authority.
(i) Title to Receivables. Each Receivable has been purchased by the
--------------------
Seller from Federal-Mogul in accordance with the terms of the Sale Agreement,
and the Seller has thereby irrevocably obtained all legal and equitable title
to, and has the legal right to sell and encumber, such Receivable, its
Collections and the Related Security. Each such Receivable has been transferred
to the Seller free and clear of any Adverse Claim. Without limiting the
foregoing, there has been duly filed all financing statements or other similar
instruments or documents necessary under the UCC of all appropriate
jurisdictions (or any comparable law) to perfect the Seller's ownership interest
in such Receivable.
(j) Good Title; Perfection. Immediately prior to each purchase
----------------------
hereunder, the Seller shall be the legal and beneficial owner of the Receivables
and Related Security with respect thereto, free and clear of any Adverse Claim,
except as created by the Transaction Documents. This Agreement is effective to,
and shall, upon each purchase hereunder, transfer to the relevant Purchaser or
Purchasers (and such Purchaser or Purchasers shall acquire from the Seller) a
valid and perfected first priority undivided percentage ownership interest in
each Receivable existing or hereafter arising and in the Related Security and
Collections with respect thereto, free and clear of any Adverse Claim, except as
created by the Transactions Documents.
(k) Places of Business. The principal places of business and chief
------------------
executive office of the Seller and the offices where the Seller keeps all its
Records are located at the address(es) listed on Exhibit D or such other
locations notified to the Agent in accordance with Section 6.02(a) in
jurisdictions where all action required by Section 6.02(a) has been taken and
completed. The Seller's Federal Employer Identification Number is correctly set
forth on Exhibit D.
33
(l) Collection Banks; etc. Except as otherwise notified to the
---------------------
Administrative Agent in accordance with Section 6.02(b):
(i) the Seller has instructed, or has required the
Originators and the Servicer to instruct, all Obligors to pay all
Collections directly to a segregated lock-box identified on
Exhibit E hereto,
(ii) in the case of all proceeds remitted to any such lock-
box which is now or hereafter established, such proceeds will be
deposited directly by the applicable Collection Bank into a
concentration account or a depository account listed on Exhibit
E,
(iii) the names and addresses of all Collection Banks,
together with the account numbers of the Collection Accounts of
the Seller at each Collection Bank, are listed on Exhibit E, and
(iv) each lock-box and Collection Account to which
Collections are remitted shall be subject to a Collection Account
Agreement that is then in full force and effect.
In the case of lock-boxes and Collection Accounts identified on Exhibit E which
were established by any Originator or by any Person other than the Seller,
exclusive dominion and control thereof has been transferred to the Seller. The
Seller has not granted any Person, other than the Administrative Agent as
contemplated by this Agreement, dominion and control of any lock-box or
Collection Account, or the right to take dominion and control of any lock-box or
Collection Account at a future time or upon the occurrence of a future event.
(m) Names. In the past five years, the Seller has not used any
-----
corporate names, trade names or assumed names other than the name in which it
has executed this Agreement.
(n) Credit Policies. With respect to each Receivable, each of the
----------------
Originators, the Seller and the Servicer has complied in all material respects
with the Credit Policies.
(o) Payments to Federal-Mogul. With respect to each Receivable
-------------------------
transferred to the Seller, the Seller has given reasonably equivalent value to
Federal-Mogul in consideration for such transfer of such Receivable and the
Related Security with respect thereto under the Sale Agreement and such transfer
was not made for or on account of an antecedent debt. No transfer or
contribution by Federal-Mogul of any Receivable is or may be voidable under any
Section of the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. (S)(S)101 et
seq.), as amended.
(p) Ownership of the Seller. Federal-Mogul directly owns 100% of the
-----------------------
issued and outstanding capital stock of the Seller. Such capital stock is
validly issued, fully paid and nonassessable and there are no options, warrants
or other rights to acquire securities of the Seller.
(q) Not an Investment Company. The Seller is not an `investment
-------------------------
company" within the meaning of the Investment Company Act of 1940, as amended
from time to time, or any successor statute.
34
(r) Purpose. The Seller has determined that, from a business
-------
viewpoint, the purchase of Receivables and related interests from Federal-Mogul
under the Sale Agreement, and the sale of Receivable Interests to the Purchasers
and the other transactions contemplated herein, are in the best interest of the
Seller.
(s) Net Receivables Balance. Both before and after giving effect to
-----------------------
each Incremental Purchase and Reinvestment, the Net Receivables Balance equals
or exceeds the sum of (i) (x) Capital divided by (y) 1 minus the Aggregate
Reserve Percentage, and (ii) the Contractual Dilution Balance.
Section 4.02 Liquidity Provider Representations and Warranties.
-------------------------------------------------
Each Liquidity Provider hereby represents and warrants to the Agents, the other
Purchasers and the Seller that:
(a) Existence and Power. Such Liquidity Provider is a corporation or
-------------------
a banking association duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization, and has all
corporate power to perform its obligations hereunder.
(b) No Conflict. The execution, delivery and performance by such
-----------
Liquidity Provider of this Agreement are within its corporate powers, have been
duly authorized by all necessary corporate action, do not contravene or violate
(i) its certificate or articles of incorporation or association or by-laws, (ii)
any material law, rule or regulation applicable to it, (iii) any restrictions
under any material agreement, contract or instrument to which it is a party or
any of its property is bound, or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting it or its property, and do not
result in the creation or imposition of any Adverse Claim on its assets. This
Agreement has been duly authorized, executed and delivered by such Liquidity
Provider.
(c) Governmental Authorization. No authorization or approval or other
--------------------------
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
such Liquidity Provider of this Agreement.
(d) Binding Effect. This Agreement constitutes the legal, valid and
--------------
binding obligation of such Liquidity Provider enforceable against such Liquidity
Provider in accordance with its terms, except as such enforcement may be limited
by applicable bankruptcy, insolvency, reorganization or other similar laws
relating to or limiting creditors' rights generally.
ARTICLE V.
CONDITIONS OF PURCHASES
Section 5.01 Conditions Precedent to Initial Purchase. The initial
----------------------------------------
purchase of a Receivable Interest under this Agreement is subject to the
conditions precedent that (a) the Agents shall have received on or before the
date of such purchase those documents listed on Schedule A hereto, and (b) the
Agents shall have been paid all fees required to be paid on such date pursuant
to the terms of the Fee Letter.
35
Section 5.02 Conditions Precedent to All Purchases and Reinvestments.
-------------------------------------------------------
Each purchase of a Receivable Interest and each Reinvestment shall be subject to
the further conditions precedent that:
(a) in the case of each Incremental Purchase, the Servicer shall
have delivered to the Co-Agents on or prior to the Purchase Date all Settlement
Date Statements and all Interim Settlement Date Statements and when due under
Section 7.05;
(b) on the date of each Incremental Purchase or Reinvestment, the
following statements shall be true both before and after giving effect to such
purchase or Reinvestment (and acceptance of the proceeds of such purchase or
Reinvestment shall be deemed a representation and warranty by the Seller that
such statements are then true):
(i) the representations and warranties set forth in Section 4.01 are
correct on and as of the date of such purchase or Reinvestment as though
made on and as of such date;
(ii) no event has occurred, or would result from such purchase or
Reinvestment, that will constitute an Amortization Event, and no event has
occurred and is continuing, or would result from such purchase or
Reinvestment, that would constitute a Potential Amortization Event; and
(iii) neither the Liquidity Termination Date nor the Facility
Termination Date shall have occurred, the aggregate Capital of all
Receivable Interests shall not exceed the Purchase Limit and the aggregate
Receivable Interests shall not exceed 100%; and
(iv) if the proposed date of such purchase or Reinvestment is a
Settlement Date, the Seller shall have paid immediately available funds in
the amount of any Coverage Shortfall that will exist after giving effect to
such purchase or Reinvestment to the Agent for distribution to the
Purchasers; and
(c) the Co-Agents shall have received such other approvals, opinions
or documents as it may reasonably request.
ARTICLE VI.
COVENANTS OF THE SELLER AND SERVICER
Section 6.01 Affirmative Covenants of Seller and the Servicer. Until
------------------------------------------------
the date on which the Aggregate Unpaids have been indefeasibly paid in full,
each of the Seller and Servicer (for the avoidance of doubt, the Servicer
covenants and agrees only to Section 6.01(m) and Section 6.01(o)) hereby
covenants and agrees that:
(a) Notices. Except as set forth in clauses (vii) and (viii) below,
-------
the Seller will notify the Co-Agents in writing of any of (A) the events
specified below in clauses (i) and (iv) immediately, and (B) the events
specified in clauses (ii), (iii), (v) and (vi) within three Business Days, in
each case, upon learning of the occurrence thereof, describing the same and, if
applicable, the steps being taken with respect thereto:
36
(i) Amortization Events or Potential Amortization Events. The
----------------------------------------------------
occurrence of each Amortization Event (including, but not limited to, any
failure to satisfy the Financial Covenants pursuant to Section 6.02(j)) or
Potential Amortization Event, by a statement of the Chief Financial
Officer, the Treasurer or the Assistant Treasurer of the Seller;
(ii) Judgment. The entry of any judgment or decree against the
--------
Seller;
(iii) Litigation. The institution of any litigation, arbitration
----------
proceeding or governmental proceeding against the Seller or to which
the Seller becomes party;
(iv) Termination Date under Sale Agreement. The declaration by
-------------------------------------
Federal-Mogul of the "Termination Date" under the Sale Agreement; and/or
(v) Downgrade. Any downgrade in the rating of any Indebtedness of
---------
Federal-Mogul by S&P or by ▇▇▇▇▇'▇ setting forth the Indebtedness and the
nature of such change.
(vi) Copies of Notices, Etc. under Sale Agreement and Other
------------------------------------------------------
Transaction Documents. Forthwith upon its receipt of any notice, request
---------------------
for consent, financial statements of Federal-Mogul, certification, report
or other communication under or in connection with any Transaction Document
from any Person other than the Agents or the Conduits, copies of the same.
(vii) Change in Credit Policies. At least 30 days prior to the
-------------------------
effectiveness of any material change in or amendment to the Credit
Policies, a copy of the Credit Policies then in effect and a notice
indicating such change or amendment.
(viii) Other Information. As soon as reasonably practicable, such
-----------------
other information (including non-financial information) as any Agent or any
Purchaser may from time to time reasonably request.
(b) Compliance with Laws. The Seller will comply in all material
-----------------
respects with all applicable laws, rules, regulations, orders writs, judgments,
injunctions, decrees or awards to which it may be subject.
(c) Audits; Inspection Rights. The Seller will, or will require the
-------------------------
Originators and the Servicer to, furnish to any Co-Agent from time to time such
information with respect to it and the Receivables as such Co-Agent may
reasonably request. The Seller shall, from time to time during regular business
hours as requested by any Co-Agent upon reasonable notice, permit such Co-Agent,
or its agents or representatives (and shall require the Originators and the
Servicer to permit such Co-Agent or its agents or representatives) (i) to
examine and make copies of and abstracts from all Records in the possession or
under the control of the Seller or any Originator relating to Receivables and
the Related Security, including, without limitation, the related invoices, and
(ii) to visit the offices and properties of the Seller or the Originators for
the purpose of examining such materials described in clause (i) above, and to
discuss matters relating to the Seller's or any Originator's financial condition
or the Receivables and the Related Security or the Seller's performance
hereunder, or any Originator's performance under any of the other Transaction
Documents, or the Seller's or any Originator's performance under the invoices
with
37
any of the officers or employees of the Seller or any Originator having
knowledge of such matters.
(d) Keeping and Marking of Records and Books.
-----------------------------------------
(i) The Seller will, and will require the Originators and the
Servicer to, maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records
and other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation, records
adequate to permit the immediate identification of each new Receivable
and all Collections of and adjustments to each existing Receivable).
The Seller will, and will require the Originators and the Servicer to,
give the Co-Agents notice of any material change in the administrative
and operating procedures referred to in the previous sentence.
(ii) The Seller will, and will require the Originators and the
Servicer to: (a) on or prior to the date hereof, ▇▇▇▇ its master data
processing records and other books and records, if any, relating to the
Receivable Interests with a legend, acceptable to the Agents,
describing the Receivable Interests and (b) upon the request of any
Agent following an Amortization Event: (A) ▇▇▇▇ each invoice with a
legend describing the Receivable Interests and (B) deliver to the
Administrative Agent all invoices (including, without limitation, all
multiple originals of any such invoice) relating to the Receivables.
(e) Compliance with Invoices and Credit Policies; Taxes. The
---------------------------------------------------
Seller will, and will require the Originators and the Servicer to, timely and
fully (i) perform and comply with all provisions, covenants and other promises
required to be observed by it under the invoices (other than bills of lading)
related to the Receivables, and (ii) comply in all material respects with any
bills of lading included in the invoices and with the Credit Policies. The
Seller will, and will require the Originators to, pay when due any taxes payable
in connection with the Receivables.
(f) Purchase of Receivables from the Originators. With respect
--------------------------------------------
to each Receivable purchased under the Sale Agreement, the Seller shall (or
shall require the Originators and the Servicer to) take all actions necessary to
vest legal and equitable title to such Receivable and the Related Security
irrevocably in the Seller, including, without limitation, the filing of all
financing statements or other similar instruments or documents necessary under
the UCC of all appropriate jurisdictions (or any comparable law) to perfect the
Seller's interest in such Receivable and such other action to perfect, protect
or more fully evidence the interest of the Seller as any Agent may reasonably
request.
(g) Ownership Interest. The Seller shall take all necessary
------------------
action to establish and maintain a valid and perfected first priority undivided
percentage ownership interest in the Receivables and the Related Security and
Collections with respect thereto, to the full extent contemplated herein, in
favor of the Administrative Agent and the Purchasers, including, without
limitation, taking such action to perfect, protect or more fully evidence the
interest of the Administrative Agent and the Purchasers hereunder as the
Administrative Agent may reasonably request.
38
(h) Payment to Federal-Mogul. With respect to any Receivable
------------------------
purchased by the Seller from Federal-Mogul, such sale shall be effected under,
and in strict compliance with the terms of, the Sale Agreement, including,
without limitation, the terms relating to the amount and timing of payments to
be made to Federal-Mogul in respect of the purchase price for such Receivable.
(i) Performance and Enforcement of Sale Agreement. The Seller
---------------------------------------------
shall timely perform the obligations required to be performed by the Seller, and
shall vigorously enforce the rights and remedies accorded to the Seller, under
the Sale Agreement. The Seller shall take all actions to perfect and enforce its
rights and interests (and the rights and interests of the Purchasers and the
Agents, as assignees of the Seller) under the Sale Agreement as any Agent may
from time to time reasonably request, including, without limitation, making
claims to which it may be entitled under any indemnity, reimbursement or similar
provision contained in the Sale Agreement.
(j) Purchasers' Reliance. The Seller acknowledges that the
--------------------
Agents and the Purchasers are entering into the transactions contemplated by
this Agreement in reliance upon the Seller's identity as a legal entity that is
separate from each of the Originators. Therefore, from and after the date of
execution and delivery of this Agreement, the Seller shall take all reasonable
steps including, without limitation, all steps that any Agent or any Purchaser
may from time to time reasonably request to maintain the Seller's identity as a
separate legal entity and to make it manifest to third parties that the Seller
is an entity with assets and liabilities distinct from those of each of the
Originators and any Affiliates thereof and not just a division of an Originator.
Without limiting the generality of the foregoing and in addition to the other
covenants set forth herein, the Seller shall:
(i) maintain its own separate books and records and bank
accounts;
(ii) at all times hold itself out to the public as a legal
entity separate from the Servicer, the Originators, any Affiliates
thereof or any other Person;
(iii) at all times have at least one member of its Board of
Directors who is an Independent Director;
(iv) file its own tax returns, if any, as may be required under
applicable law, to the extent not part of a consolidated group filing a
consolidated return or returns, and pay any taxes so required to be
paid under applicable law;
(v) not commingle its assets with assets of any other Person
(except as contemplated by the Transaction Documents);
(vi) conduct its business in its own name;
(vii) maintain separate financial statements;
(viii) pay its own liabilities only out of its own funds;
(ix) maintain an arm's length relationship with its Affiliates;
39
(x) pay the salaries of its own employees, if any;
(xi) not guarantee or become obligated for the debts of any
other Person or hold out its credit as being available to satisfy the
obligations of others;
(xii) allocate fairly and reasonably any overhead for shared
office space;
(xiii) use separate stationery, invoices and checks;
(xiv) not pledge its assets for the benefit of any other Person
or make any loans or advances to any Person (except as contemplated by
the Transaction Documents);
(xv) correct any known misunderstanding regarding its separate
identity;
(xvi) maintain adequate capital in light of its contemplated
business purposes; and
(xvii) cause its Board of Directors to meet at least annually or
act pursuant to written consent and keep minutes of such meetings and
actions and observe all other Michigan corporate formalities;
(k) Collections. The Seller shall instruct all Obligors, or
-----------
require the Originators and the Servicer to instruct, all Obligors to pay all
Collections directly to a segregated lock-box or other Collection Account listed
on Exhibit E, each of which is subject to a Collection Account Agreement. In the
case of payments remitted to any such lock-box, the Seller shall require all
proceeds from such lock-box to be deposited directly by a Collection Bank into a
Collection Account listed on Exhibit E, which is subject to a Collection Account
Agreement. The Seller shall maintain exclusive dominion and control (subject to
the terms of this Agreement) to each such Collection Account. In the case of any
Collections received by the Seller or an Originator, the Seller shall remit (or
shall require the Originators and the Servicer to remit) such Collections to a
Collection Account not later than the Business Day immediately following the
date of receipt of such Collections, and, at all times prior to such remittance,
the Seller shall itself hold (or, if applicable, shall require the Originators
and the Servicer to hold) such Collections in trust, for the exclusive benefit
of the Purchasers and the Agents. In the case of any remittances received by the
Seller in any such Collection Account that shall have been identified, to the
satisfaction of the Servicer, to not constitute Collections or other proceeds of
the Receivables or the Related Security, the Seller shall promptly remit such
items to the Person identified to it as being the owner of such remittances.
From and after the date the Administrative Agent delivers to any of the
Collection Banks a Collection Notice pursuant to Section 7.03, the
Administrative Agent may request that the Seller, and the Seller thereupon
promptly shall and shall direct the Originators to, direct all Obligors on
Receivables to remit all payments thereon to a new depositary account (the "New
Concentration Account") specified by the Administrative Agent and, at all times
thereafter the Seller shall not deposit or otherwise credit, and shall not
permit any Originator or any other Person to deposit or otherwise credit to the
New Concentration Account any cash or payment item other than Collections.
Alternatively, the Administrative Agent may request that the Seller, and the
Seller thereupon promptly shall, direct all Persons then making remittances to
any Collection Account listed on Exhibit E which
40
remittances are not payments on Receivables to deliver such remittances to a
location other than an account listed on Exhibit E.
(l) Minimum Net Worth. The Seller shall at all times maintain total
-----------------
assets which exceed its total liabilities by not less than $14,250,000.
(m) Credit Agreement/Pledge Agreement/Security Agreement/Surety
-----------------------------------------------------------
Documents/Trust Agreement. Within three Business Days of the date of the
-------------------------
execution and delivery of any amendment, modification, supplement or amendment
and restatement of the Credit Agreement, the Pledge Agreement, the Security
Agreement, any Surety Document or the Trust Agreement, the Servicer shall
deliver a copy of thereof to each Co-Agent, and, upon the request of either Co-
Agent, shall also deliver a copy thereof marked to show all changes.
(n) [Reserved]
(o) Certificate of Responsible Officer Pursuant to Credit Agreement.
---------------------------------------------------------------
The Servicer shall deliver to each Co-Agent the certificate specified in Section
10.2 of the Credit Agreement contemporaneously with the delivery of such
certificate to the Lenders (as such term is defined in the Credit Agreement)
pursuant to Section 10.2 of the Credit Agreement.
Section 6.02 Negative Covenants of Seller. Until the date on which the
----------------------------
Aggregate Unpaids have been indefeasibly paid in full, the Seller hereby
covenants, individually and in its capacity as Servicer, that:
(a) Name Change, Offices, Records and Books of Accounts. The Seller
---------------------------------------------------
will not change its name, identity or corporate structure (within the meaning of
Section 9-402(7) of any applicable enactment of the UCC) or relocate its chief
executive office or any office where Records are kept unless it shall have: (i)
given the Administrative Agent at least 45 days prior notice thereof (or such
lesser number of days as the parties hereto may agree upon) and (ii) delivered
to the Administrative Agent all financing statements, instruments and other
documents requested by the Administrative Agent in connection with such change
or relocation.
(b) Change in Payment Instructions to Obligors. The Seller will not
------------------------------------------
add or terminate any bank as a Collection Bank from those listed in Exhibit E,
or make any change in its instructions to Obligors regarding payments to be made
to the Seller or payments to be made to any lock-box, Collection Account or
Collection Bank, unless the Administrative Agent shall have received, at least
fifteen (15) Business Days before the proposed effective date therefor:
(i) written notice of such addition, termination or change, and
(ii) with respect to the addition of a lock-box, Collection Account or
Collection Bank, an executed account agreement and an executed Collection
Account Agreement from such Collection Bank relating thereto;
provided, however, that the Seller may make changes in instructions to Obligors
regarding payments if such new instructions require such Obligor to make
payments to another existing lock-box or Collection Account that is subject to a
Collection Account Agreement then in effect.
41
(c) Modifications to Credit Policies. The Seller will not make any
--------------------------------
change to the Credit Policies which would be reasonably likely to adversely
affect the collectibility of any material portion of the Receivables or decrease
the credit quality of any newly created Receivables. Except as provided in
Section 7.02(c), the Seller, acting as Servicer or otherwise, will not extend,
amend or otherwise modify the terms of any Receivable or any invoice related
thereto other than in accordance with the Credit Policies.
(d) Sales, Liens, Etc. The Seller shall not sell, assign (by
-----------------
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, or create or suffer to exist any Adverse Claim upon (including,
without limitation, the filing of any financing statement) or with respect to,
any Receivable, Related Security or Collections, or upon or with respect to any
invoice under which any Receivable arises, or any lock-box or Collection Account
or assign any right to receive income in respect thereof (other than, in each
case, the creation of the interests therein in favor of the Administrative
Agent, the Purchasers and the Co-Agents provided for herein), and the Seller
shall defend the right, title and interest of the Administrative Agent, the
Purchasers and the Co-Agents in, to and under any of the foregoing property,
against all claims of third parties claiming through or under the Seller or any
Originator.
(e) Nature of Business; Other Agreements; Other Indebtedness. The
--------------------------------------------------------
Seller shall not engage in any business or activity of any kind or enter into
any transaction or indenture, mortgage, instrument, agreement, contract, lease
or other undertaking other than the transactions contemplated and authorized by
this Agreement and the Sale Agreement. Without limiting the generality of the
foregoing, the Seller shall not create, incur, guarantee, assume or suffer to
exist any indebtedness or other liabilities, whether direct or contingent, other
than:
(i) as a result of the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business,
(ii) the incurrence of obligations under this Agreement,
(iii) the incurrence of obligations, as expressly contemplated
in the Sale Agreement, to make payment to Federal-Mogul thereunder for
the purchase of Receivables from Federal-Mogul under the Sale
Agreement, and
(iv) the incurrence of operating expenses in the ordinary
course of business of the type otherwise contemplated in Section
6.01(j) of this Agreement.
In the event the Seller shall at any time borrow a "Subordinated Loan" under the
Sale Agreement, the obligations of the Seller in connection therewith shall be
subordinated to the obligations of the Seller to the Purchasers and the Agents
under this Agreement, on such terms as shall be satisfactory to the Co-Agents.
(f) Amendments to Sale Agreement. The Seller shall not, without the
----------------------------
prior written consent of the Co-Agents:
(i) cancel or terminate the Sale Agreement,
(ii) give any consent, waiver, directive or approval under the
Sale Agreement,
42
(iii) waive any default, action, omission or breach under the
Sale Agreement, or otherwise grant any indulgence thereunder, or
(iv) amend, supplement or otherwise modify any of the terms of
the Sale Agreement.
(g) Amendments to Corporate Documents. The Seller shall not
amend its Certificate of Incorporation or By-Laws in any respect that would
impair its ability to comply with the terms or provisions of any of the
Transaction Documents, including, without limitation, Section 6.01(j) of this
Agreement.
(h) Merger. The Seller shall not merge or consolidate with or
------
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions, and except as otherwise contemplated
herein) all or substantially all of its assets (whether now owned or hereafter
acquired) to, or acquire all or substantially all of the assets of, any Person.
(i) Restricted Junior Payments. The Seller shall not make any
---------------------------
Restricted Junior Payment if an Amortization Event or a Potential Amortization
Event exists or would result therefrom.
(j) Financial Covenants Under Credit Agreement Incorporated by
----------------------------------------------------------
Reference. The Financial Covenants are hereby incorporated by reference in this
---------
Agreement and shall be an integral part of this Agreement as if such Financial
Covenants were fully set forth in this Agreement. For the avoidance of doubt, in
the event that any Financial Covenant is amended, modified, supplemented or
amended and restated without the prior written consent of each Co-Agent, then
the Financial Covenants in effect prior to such amendment, modification,
supplement or amendment and restatement shall continue to be an integral part of
this Agreement and shall remain in full force and effect.
ARTICLE VII.
SERVICING, ADMINISTRATION AND COLLECTION OF THE RECEIVABLES
Section 7.01 Designation of Servicer. (a) The servicing,
-----------------------
administration and collection of the Receivables shall be conducted by such
Person (the "Servicer") so designated from time to time in accordance with this
Section 7.01. Federal-Mogul is hereby designated as, and hereby agrees to
perform the duties and obligations of, the Servicer pursuant to the terms of
this Agreement. Either Co-Agent may at any time following the occurrence of an
Amortization Event designate as Servicer any Person to succeed Federal-Mogul or
any successor Servicer.
(a) Without the prior written consent of the Co-Agents, Federal-
Mogul shall not be permitted to delegate any of its duties or responsibilities
as Servicer to any Person other than the other Originators. If at any time the
Co-Agents shall designate as Servicer any Person other than Federal-Mogul, all
duties and responsibilities theretofore delegated by Federal-Mogul to any other
Originator may, at the discretion of the Co-Agents, be terminated forthwith on
notice given by the Co-Agents to Federal-Mogul and to the Seller.
(b) Notwithstanding the foregoing subsection (b), (i) Federal-
Mogul shall be and remain primarily liable to the Agents and the Purchasers for
the full and prompt performance
43
of all duties and responsibilities of the Servicer hereunder and (ii) the Agents
and the Purchasers shall be entitled to deal exclusively with Federal-Mogul in
matters relating to the discharge by the Servicer of its duties and
responsibilities hereunder. The Agents and the Purchasers shall not be required
to give notice, demand or other communication to any Person other than Federal-
Mogul in order for communication to the Servicer and its sub-servicer or other
delegate with respect thereto to be accomplished. Federal-Mogul, at all times
that it is the Servicer, shall be responsible for providing any sub-servicer or
other delegate of the Servicer with any notice given to the Servicer under this
Agreement.
Section 7.02 Duties of Servicer.
------------------
(a) The Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Receivable from time to
time, all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the applicable invoices
and the Credit Policies.
(b) The Servicer shall administer the Collections in accordance
with the procedures described herein and in Article II. The Servicer shall set
aside and hold in trust for the account of the Seller and the Purchasers their
respective shares of the Collections of Receivables in accordance with Sections
2.06 and 2.07. The Servicer shall upon the request of the Co-Agents after the
occurrence of an Amortization Event segregate, in a manner acceptable to the Co-
Agents, all cash, checks and other instruments received by it from time to time
constituting Collections from the general funds of the Servicer or the Seller
prior to the remittance thereof in accordance with Section 2.07. If the Servicer
shall be required to segregate Collections pursuant to the preceding sentence,
the Servicer shall segregate and deposit with a bank designated by the Co-Agents
such allocable share of Collections of Receivables set aside for the Purchasers
on the first Business Day following receipt by the Servicer of such Collections,
duly endorsed or with duly executed instruments of transfer.
(c) The Servicer, may, in accordance with the Credit Policies,
extend the maturity of any Receivable or adjust the Outstanding Balance of any
Receivable as the Servicer may determine to be appropriate to maximize
Collections thereof; provided, however, that such extension or adjustment shall
not alter the status of such Receivable as a Defaulted Receivable or limit the
rights of the Agents or the Purchasers under this Agreement. Notwithstanding
anything to the contrary contained herein, from and after the occurrence of an
Amortization Event, the Co-Agents shall have the absolute and unlimited right to
direct the Servicer to commence or settle any legal action with respect to any
Receivable or to foreclose upon or repossess any Related Security.
(d) The Servicer shall hold in trust for the Seller and the
Purchasers, in accordance with their respective interests in the Receivables,
all Records that evidence or relate to the Receivables, the related invoices and
Related Security or that are otherwise necessary or desirable to collect the
Receivables and shall, as soon as practicable upon demand of any Agent following
the occurrence of an Amortization Event, deliver or make available to the
Administrative Agent all such Records to such location as the Administrative
Agent may designate in writing. The Servicer shall, as soon as practicable
following receipt thereof, turn over to the Seller: (i) that portion of
Collections of Receivables representing the Seller's
44
undivided fractional ownership interest therein, less, in the event that
Federal-Mogul or one of its Affiliates is not then acting as the Servicer, all
reasonable out-of-pocket costs and expenses of the Servicer of servicing,
administering and collecting the Receivables, and (ii) any cash collections or
other cash proceeds received with respect to indebtedness not constituting
Receivables. The Servicer shall, from time to time at the request of any Co-
Agent or any Purchaser, furnish to such Co-Agent for distribution to the
Purchasers (promptly after any such request) a calculation of the amounts set
aside for the Purchasers pursuant to Section 2.07.
(e) Any payment by an Obligor in respect of any indebtedness owed by
it to the Seller shall, except as otherwise specified by such Obligor or
otherwise required by contract or law and unless otherwise instructed by the Co-
Agents, be applied as a Collection of any Receivable of such Obligor (starting
with the oldest such Receivable) to the extent of any amounts then due and
payable thereunder before being applied to any other receivable or other
obligation of such Obligor.
Section 7.03 Collection Notices. At any time, either of the Co-Agents
------------------
is hereby authorized to direct the Administrative Agent, and the Administrative
Agent is hereby authorized and directed to comply with such direction, to
deliver to the Collection Banks a Collection Notice under any Collection Account
Agreement. The Seller hereby transfers to the Administrative Agent for the
benefit of the Purchasers, effective when the Administrative Agent delivers such
notice, the exclusive ownership and control of the Collection Accounts. In case
any authorized signatory of the Seller whose signature appears on a Collection
Account Agreement shall cease to have such authority before the delivery of such
notice, such Collection Notice shall nevertheless be valid as if such authority
had remained in force. The Seller hereby authorizes the Administrative Agent,
and agrees that the Administrative Agent shall be entitled to (i) endorse the
Seller's and/or any Originator's name on checks and other instruments
representing Collections, (ii) enforce the Receivables, the related invoices and
the Related Security and (iii) take such action as shall be necessary or
desirable to cause all cash, checks and other instruments constituting
Collections of Receivables to come into the possession of the Administrative
Agent rather than the Seller.
Section 7.04 Responsibilities of the Seller. Anything herein to the
------------------------------
contrary notwithstanding, the exercise by the Agents and the Purchasers of their
rights hereunder shall not release the Servicer or the Seller from any of their
duties or obligations with respect to any Receivables or under the related
invoices. None of the Agents or the Purchasers shall have no obligation or
liability with respect to any Receivables or related invoices, nor shall any of
them be obligated to perform the obligations of the Seller.
Section 7.05 Settlement Date Statements/Interim Settlement Date
--------------------------------------------------
Statements. On or prior to the Report Date, the Servicer will provide to the Co-
----------
Agents a Settlement Date Statement substantially in the form of Exhibit C, and
on each Settlement Date the Co-Agents shall forward to its respective Purchaser
Group such Statement. On or prior to each Interim Report Date, the Servicer will
provide to the Co-Agents an Interim Settlement Date Statement substantially in
the form of Exhibit I and the Co-Agents shall forward to its respective Purchase
Group such Statement.
45
Section 7.06 Quarterly Servicer's Certificate. The Servicer shall
--------------------------------
deliver to the Co-Agents on or prior to the Report Date occurring in the month
immediately succeeding each of the first three calendar quarters of each year, a
certificate signed by a senior financial officer of the Servicer stating that
(a) a review of the activities of the Servicer during the preceding calendar
quarter and of its performance under the Transaction Documents was made under
the supervision of the officer signing such Compliance Certificate and (b) to
the best of such officer's knowledge, based on such review, the Servicer has
performed in all material respects its obligations under the Transaction
Documents throughout such quarter, or, if there has been a material default in
the performance of any such obligation, specifying each such default known to
such officer and the nature and status thereof.
Section 7.07 Weekly Report and Distribution. Notwithstanding any other
------------------------------
provision of any of the Transaction Documents, any Co-Agent, at its sole option,
may provide a written notice to the Seller, the Servicer and the Purchasers to
the effect that the Servicer shall deliver a weekly report (the "Weekly Report")
and distributions shall be made to the Purchasers on a weekly basis, in each
case, as described below. Upon receipt of such notice, on Friday of each week,
or if such day is not a Business Day, the next succeeding Business Day, the
Servicer shall deliver the Weekly Report to the Co-Agents. Each Weekly Report
shall provide the following information: (i) the aggregate Collections deposited
in the Collection Account during the current week, or the preceding week, as
applicable, (ii) the aggregate amount of Receivables as of the date of the
Weekly Report, and (iii) the amount to be distributed on the second Business Day
immediately succeeding the date of such report (the "Weekly Settlement Date").
On each Weekly Settlement Date the Co-Agents, in accordance with the Weekly
Report delivered by the Servicer, shall make a distribution to its related
Purchasers. The amounts to be distributed on each Weekly Settlement Date shall
be a pro rata portion of the amounts specified in the Transaction Documents
based upon the actual number of days in the preceding week and a 30-day month.
Section 7.08 Reporting Covenants of the Servicer.
-----------------------------------
(a) Financial Reporting. The Servicer, for so long as Federal-Mogul
-------------------
is to Servicer and any Aggregate Unpaids remain outstanding, hereby covenants
that it shall maintain, for itself and each of its Subsidiaries, a system of
accounting established and administered in accordance with generally accepted
accounting principles, and furnish to the Co-Agents:
(i) Annual Reporting. As soon as available, but in any event within
----------------
120 days after the close of each fiscal year of the Servicer, an audit
report not qualified for anything under the control of the Servicer,
certified by independent public accountants acceptable to the Co-Agents
(which until the Co-Agents notify the Servicer in writing to the contrary
may be Ernst & Young LLP, public accountants), prepared in accordance with
generally accepted accounting principles on a consolidated basis for the
Servicer and its Subsidiaries including consolidated balance sheets as of
the end of such period, and related profit and loss and reconciliation of
the surplus statements;
(ii) Quarterly Reporting. As soon as available, but in any event
-------------------
within 60 days after the close of the first three quarterly periods of each
fiscal year of the Servicer, for the Servicer and its Subsidiaries,
consolidated unaudited balance sheets as at the close
46
of each such period and consolidated profit and loss and reconciliation of
surplus statements for the period beginning from the beginning of such
fiscal year to the end of such quarter; and
(iii) Securities and Exchange Commission Filings. The Servicer shall
------------------------------------------
provide the Co-Agents, promptly after the same are available, copies of all
proxy statements, financial statements and reports as the Servicer shall
send or make available generally to any of its public security holders, and
copies of all regular and period reports and of all registration statements
which the Servicer may file with the Securities and Exchange Commission or
with any securities exchange.
(b) Notices. The Servicer shall promptly notify the Co-Agents in
-------
writing of any of the following immediately upon learning of the occurrence
thereof, describing the same, and if applicable, the steps being taken with
respect thereto; (i) the occurrence of each Amortization Event and each
Potential Amortization Event, by a statement of the corporate comptroller or
senior financial officer of the Servicer, (ii) the entry of one or more
judgments or decrees against the Servicer or any of its Subsidiaries if the
aggregate amount of all such judgments and decrees outstanding (not paid or
fully covered by insurance as to which the insurance carrier has admitted
liability) equals or exceeds $30,000,000, (iii) the occurrence of any Insolvency
Event with respect to the Servicer, (iv) the occurrence of any Insolvency Event
with respect to the Seller or any Originator of which the Servicer becomes
aware, and (v) the occurrence of any other event of which the Servicer becomes
aware that has, or could reasonably be expected to have, a Material Adverse
Effect or that constitutes an Amortization Event or a Potential Amortization
Event.
Section 7.09 Inspection Rights. The Servicer shall provide any Co-Agent,
-----------------
and any of its agents and representatives, with access to (a) any books,
records, files and documents (including, without limitation, computer tapes and
discs) relating to the Transaction Documents, the Receivables and the servicing
of the Receivables, and such Co-Agent and such representatives and agents shall
be permitted to make copies of and abstracts from the foregoing and (b) the
officers, directors and auditors of the Servicer to discuss the business and
operations of the Servicer relating to the Transaction Documents and the
Receivables and the Servicer's performance under the Transaction Documents, but
only (i) upon reasonable request, (ii) during normal business hours, (iii)
subject to the Servicer's normal security and confidentiality procedures and
(iv) at reasonably accessible offices designated by the Servicer.
Section 7.10 Credit Policies. The Servicer shall timely and fully (a)
---------------
perform and comply with all provisions and covenants and other promises required
to be observed by it under terms of such Receivable and (b) comply in all
material respects with the credit and collection policies and procedures in
effect on the date hereof (the "Credit Policies") with respect to the
Receivables, a copy of which is attached hereto as Exhibit G. The Servicer shall
not amend, modify or supplement the Credit Policies in any material adverse
respect without the prior written consent of the Co-Agents, which consent shall
not be unreasonably withheld. Upon any amendment, modification or supplement to
the Credit Policies consented to by the Co-Agents, the Servicer shall deliver to
the Co-Agents, for distribution to the related Purchasers, such amendment,
modification or supplement and Exhibit G shall be deemed to be amended by such
amendment, modification or supplement.
47
Section 7.11 Servicing Compensation. The monthly servicing fee (the
----------------------
"Monthly Servicing Fee") shall be payable to the Servicer, either (a) through
withdrawals from Collections as provided in Sections 2.08 or (b) shall be
payable in arrears, on each Settlement Date in respect of any Collection Period
(or portion thereof) occurring prior to the earlier of the first Settlement Date
following reduction of the Pool Balance to zero and the first Settlement Date on
which Capital is zero. The Monthly Servicing Fee shall be an amount equal to the
product of (a) 0.50% per annum and (b) the Pool Balance and (c) a fraction, the
numerator of which is the actual number of days in the preceding Collection
Period and the denominator of which is 360. The Monthly Servicing Fee shall be
payable to the Servicer solely to the extent amounts are available for
distribution in accordance with the terms of Sections 2.06 and 2.07.
ARTICLE VIII.
AMORTIZATION EVENTS
Section 8.01 Amortization Events. If any one or more of the
-------------------
following events (each, an "Amortization Event") shall occur:
(a) Insolvency Events. An Insolvency Event shall occur with respect
-----------------
to the Seller, the Servicer or an Originator, and, in the case of an Involuntary
Insolvency Event concerning an Originator, shall have continued undischarged or
unstayed for a period of 60 days;
(b) Failure to Make Payments and Deposits. Failure on the part of
-------------------------------------
the Seller, Federal-Mogul, the Servicer or any other Originator, as applicable,
to make any payment or deposit required by the terms of any of the Transaction
Documents;
(c) Settlement Date Statements/Interim Settlement Date Statements.
-------------------------------------------------------------
Failure on the part of the Servicer to deliver a Settlement Date Statement or an
Interim Settlement Date Statement within 5 days of the date such item is due to
be delivered under any of the Transaction Documents;
(d) Other Covenants. (A) Other than with respect to Section 6.02(j),
---------------
failure on the part of the Seller, the Servicer, Federal-Mogul or any other
Originator, as applicable, to duly observe or perform in any material respect
any of their other respective covenants or agreements set forth in the
Transaction Documents, which failure continues unremedied for a period of ten
days after the earlier of (i) the date on which the Seller, the Servicer,
Federal-Mogul or such Originator, as applicable, becomes aware of such failure
and (ii) the date on which written notice of such failure, requiring the same to
be remedied, shall have been received by the Seller, the Servicer, Federal-Mogul
or such Originator, as applicable; and (B) and with respect to Section 6.02(j)
of this Agreement, failure on the part of Servicer to duly observe or perform
any of its covenants or agreements set forth therein;
(e) Material Misrepresentations. Any representation or warranty made
---------------------------
by the Seller, Federal-Mogul or any other Originator in any Transaction Document
to which it is a party: (i) shall prove to have been incorrect in any material
respect when made, and shall continue to be incorrect in any material respect
for a period of 10 days after the earlier to occur of (A) the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Seller by any Agent, or (B) the date on which the Seller, the
Servicer,
48
Federal-Mogul or such Originator, as applicable, becomes aware of such failure,
and (ii) as a result of such incorrectness, a Material Adverse Effect occurs;
provided, however, that an Amortization Event shall not be deemed to have
occurred under this paragraph if the misrepresentation related to a specific
Receivable and the Seller has repurchased the related Receivable or all such
Receivables, if applicable, during such period in accordance with the provisions
of this Agreement;
(f) Investment Company. The Seller or any Originator shall become an
------------------
"investment company" within the meaning of the Investment Company Act;
(g) Delinquency Ratio. The Delinquency Ratio for any two consecutive
-----------------
Collection Periods is a rate equal to or greater than 9.00%;
(h) Loss-to-Liquidation Ratio. The average Loss-to-Liquidation Ratio
-------------------------
for any three consecutive Collection Periods is a rate equal to or greater than
6.00%;
(i) Dilution Ratio. The average Dilution Ratio for any three
--------------
consecutive Collection Periods is a rate equal to or greater than 7.00%;
(j) Nonpayment of Coverage Shortfall. The Coverage Shortfall, if any,
--------------------------------
relating to any Settlement Date is not paid to the Purchasers on the applicable
Settlement Date;
(k) Minimum Enhancement Amount. The sum of Contractual Dilution and
--------------------------
Aggregate Reserves is less than the Minimum Enhancement Amount;
(l) Change of Control. A Change of Control shall occur;
-----------------
(m) Event of Default in Material Debt. Failure of the Servicer or any
---------------------------------
of its Subsidiaries to pay any Indebtedness in excess of $25,000,000 in
aggregate principal amount ("Material Debt") when due; or the default by the
Servicer or any of its Subsidiaries in the performance of any term, provision or
condition contained in any agreement under which any Material Debt was created
or is governed, the effect of which is to cause, or to permit the holder or
holders of such Material Debt to cause, such Material Debt to become due prior
to its stated maturity; or any Material Debt of the Servicer or any of its
Subsidiaries shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the date of maturity
thereof;
(n) Judgments. A final judgment shall have been entered against the
---------
Seller or one or more final judgments shall be entered against any Originator or
any of its Subsidiaries for the payment of money in the aggregate amount of
$30,000,000, or the equivalent thereof in another currency, or more on claims
not covered by insurance or as to which the insurance carrier has denied its
responsibility, and such judgment shall continue unsatisfied and in effect for
thirty (30) consecutive days without a stay of execution;
(o) ERISA. Any Plan of the Seller or any Originator or any of its
-----
Subsidiaries shall be terminated within the meaning of Title IV of ERISA except
as permitted by Section 4044(d) of ERISA, or a trustee shall be appointed by the
appropriate U.S. District Court to administer any Plan of the Seller or any
Originator or any of its Subsidiaries, or the PBGC shall
49
institute proceedings to terminate any Plan of the Seller or any Originator or
any of its Subsidiaries or to appoint a trustee to administer any such Plan and
each such event, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect; then, subject to applicable law, and after
the applicable grace period, if any, an Amortization Event shall occur without
any notice or other action on the part of any Agent or any of the Purchasers,
immediately upon the occurrence of such event and the Co-Agents, by notice then
given in writing to the Seller and the Servicer, may terminate all but not less
than all of the rights and obligations (other than its obligations that have
accrued up to the time of such termination) of the Servicer as Servicer under
the Transaction Documents and the Co-Agents shall appoint a successor Servicer
hereunder, provided, however, that the provisions of this sentence should not be
applicable if any Amortization Event occurs with respect to any Originator or a
group of Originators (other than Federal-Mogul) that individually or as a group
have originated less than 5.0% of the aggregate Outstanding Balances of all
Eligible Receivables as of the date of such Amortization Event, and the Co-
Agents receive notice from the Seller within 3 days of the occurrence of such
Amortization Event, that the Receivables originated by such Originator or such
group of Originators with respect to which the Amortization Event occurred (i)
shall not constitute Eligible Receivables as of the date of such Amortization
Event, and (ii) the Seller shall not purchase any Receivables from Federal-Mogul
pursuant to the Sale Agreement that have been originated by such Originator or
group of Originators. For purposes of the immediately preceding sentence, an
Amortization Event shall be deemed to have occurred with respect to a "group of
Originators" if any Amortization Event occurs with respect to two or more
Originators within any period of time.
All authority and power granted to the Servicer or any successor
Servicer under the Transaction Documents shall automatically cease and terminate
upon payment in full of the Aggregate Unpaids.
ARTICLE IX.
INDEMNIFICATION
Section 9.01 Indemnities by the Seller. Without limiting any
-------------------------
other rights which the Agents or any Purchaser may have hereunder or under
applicable law, the Seller hereby agrees to indemnify the Agents and each
Purchaser and their respective officers, directors, agents and employees (each,
an "Indemnified Party") from and against any and all damages, losses, claims,
taxes, liabilities, costs, expenses and for all other amounts payable, including
reasonable attorneys' fees (which attorneys may be employees of the Agents or
such Purchaser) and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts") awarded against or incurred by any of them
arising out of or as a result of this Agreement or the acquisition, either
directly or indirectly, by a Purchaser of an interest in the Receivables,
excluding, however:
(a) Indemnified Amounts to the extent final judgment of a court of
competent jurisdiction holds such Indemnified Amounts resulted from gross
negligence or willful misconduct on the part of the Indemnified Party seeking
indemnification;
50
(b) Indemnified Amounts to the extent the same includes losses in
respect of Receivables which are uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor; or
(c) taxes imposed on such Indemnified Party to the extent that the
computation of such taxes is consistent with the Intended Characterization;
provided, however, that nothing contained in this sentence shall limit the
liability of the Seller or the Servicer or limit the recourse of the Purchasers
to the Seller or Servicer for amounts otherwise specifically provided to be paid
by the Seller or the Servicer under the terms of this Agreement. Without
limiting the generality of the foregoing indemnification, the Seller shall
indemnify the Agents and the Purchasers for Indemnified Amounts (including,
without limitation, losses in respect of uncollectible receivables, regardless
of whether reimbursement therefor would constitute recourse to the Seller or the
Servicer) relating to or resulting from:
(i) any representation or warranty made by the Seller, any
Originator or the Servicer (or any officers of the Seller, an Originator or
the Servicer) under or in connection with this Agreement, any other
Transaction Document, any Settlement Date Statement, any Interim Settlement
Date Statement or any other information or report delivered by the Seller,
any Originator or the Servicer pursuant hereto or thereto, which shall have
been false or incorrect when made or deemed made;
(ii) the failure by the Seller, any Originator or the Servicer to
comply with any applicable law, rule or regulation with respect to any
Receivable or invoice related thereto, or the nonconformity of any
Receivable or invoice included therein with any such applicable law, rule
or regulation;
(iii) any failure of the Seller, any Originator or the Servicer to
perform its duties or obligations in accordance with the provisions of this
Agreement or any other Transaction Document;
(iv) RESERVED;
(v) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of any Obligor to the payment of any Receivable
(including, without limitation, a defense based on such Receivable or the
related invoice not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any other
claim resulting from the sale of the merchandise or service related to such
Receivable or the furnishing or failure to furnish such merchandise or
services;
(vi) the commingling of Collections of Receivables at any time with
other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby or thereby, the use of the proceeds of a
purchase, the ownership of the Receivable Interests or any other
investigation, litigation or proceeding relating to the Seller or any
Originator in which any Indemnified Party becomes involved as a result of
any of the transactions
51
contemplated hereby or thereby other than (a) litigation between the Seller
on the one hand and any Agent and one or more of the Liquidity Providers on
the other hand in which the Seller prevails or (b) any investigation or
proceeding arising from (i) the gross negligence or willful misconduct of
any Agent or one or more Liquidity Providers or (ii) the unlawful conduct
of any Agent or one or more Liquidity Providers;
(viii) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being immune from
civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding; or
(ix) any Insolvency Event with respect to the Servicer.
Section 9.02 Increased Cost and Reduced Return.
----------------------------------
(a) If after the date hereof, any Funding Source shall be charged
any fee, expense or increased cost on account of the adoption of any applicable
law, rule or regulation (including any applicable law, rule or regulation
regarding capital adequacy) or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency (a
"Regulatory Change"): (i) which subjects any Funding Source to any charge or
withholding on or with respect to any Funding Agreement or a Funding Source's
obligations under a Funding Agreement, or on or with respect to the Receivables,
or changes the basis of taxation of payments to any Funding Source of any
amounts payable under any Funding Agreement (except for changes in the rate of
tax on the overall net income of a Funding Source) or (ii) which imposes,
modifies or deems applicable any reserve, assessment, insurance charge, special
deposit or similar requirement against assets of, deposits with or for the
account of a Funding Source, or credit extended by a Funding Source pursuant to
a Funding Agreement or (iii) which imposes any other condition the result of
which is to increase the cost to a Funding Source of performing its obligations
under a Funding Agreement, or to reduce the rate of return on a Funding Source's
capital as a consequence of its obligations under a Funding Agreement, or to
reduce the amount of any sum received or receivable by a Funding Source under a
Funding Agreement or to require any payment calculated by reference to the
amount of interests or loans held or interest received by it, then, upon demand
by the Agent, the Seller shall pay to the applicable Co-Agent, for the benefit
of the relevant Funding Source, such amounts charged to such Funding Source or
compensate such Funding Source for such reduction.
(b) Payment of any sum pursuant to Section 9.02(a) shall be made by
the Seller to the applicable Co-Agent, for the benefit of the relevant Funding
Source, not later than ten (10) days after any such demand is made. A
certificate of any Funding Source, signed by an authorized officer claiming
compensation under this Section 9.02 and setting forth the additional amount to
be paid for its benefit and explaining the manner in which such amount was
determined shall be conclusive evidence of the amount to be paid, absent
manifest error.
52
(c) Each Liquidity Provider will promptly notify the Seller and the
applicable Co-Agent of any event of which it has knowledge which is reasonably
likely to entitle such Liquidity Provider to compensation pursuant to this
Section 9.02; provided, however, that no failure to give or delay in giving such
notification shall adversely affect the rights of any Liquidity Provider to such
compensation.
Section 9.03 Costs and Expenses Relating to this Agreement. The
---------------------------------------------
Seller shall pay to the Agents, Blue Ridge and/or Falcon on demand all
reasonable costs and out-of-pocket expenses in connection with the preparation,
execution, delivery and administration of this Agreement, the transactions
contemplated hereby and the other documents to be delivered hereunder, including
without limitation, the reasonable cost of the Administrative Agent's auditors
auditing the books, records and procedures of the Seller and the Servicer,
reasonable fees and out-of-pocket expenses of legal counsel for Blue Ridge,
Falcon and/or the Agents (which such counsel may be employees of Blue Ridge,
Falcon and/or the Agents) with respect thereto and with respect to advising Blue
Ridge, Falcon and/or the Agents as to their respective rights and remedies under
this Agreement. The Seller shall pay to the Agents on demand any and all costs
and expenses of the Agents and the Purchasers, if any, including reasonable
counsel fees and expenses in connection with the enforcement of this Agreement
and the other documents delivered hereunder and in connection with any
restructuring or workout of this Agreement or such documents, or the
administration of this Agreement following an Amortization Event.
Section 9.04 Taxes.
------
(a) Any and all payments and deposits required to be made hereunder
or under any other Transaction Document by the Seller or the Servicer to or for
the benefit of the Conduits or any Liquidity Provider shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding taxes imposed on, or measured by reference to, the net income
of, franchise taxes imposed on, and taxes (other than withholding taxes) imposed
on the receipts or gross receipts that are imposed on any Conduit or such
Liquidity Provider by any of (i) the United States or any State thereof, (ii)
the state jurisdiction under the laws of which any Conduit or such Liquidity
Provider is organized or in which it is otherwise doing business or (iii) any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Seller or the Servicer shall be required by law to deduct
any Taxes from or in respect of any sum required to be paid or deposited
hereunder or under any instrument delivered hereunder to or for the benefit of
any Conduit or any Liquidity Provider, (A) such sum shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums required to be paid or deposited under this
Section 9.04) the amount received by the Conduits or the relevant Liquidity
Provider, or otherwise deposited hereunder or under such instrument, shall be
equal to the sum which would have been so received or deposited had no such
deductions been made, (B) the Seller or the Servicer (as appropriate) shall make
such deductions and (c) the Seller or the Servicer (as appropriate) shall pay
the full amount of such deductions to the relevant taxation authority or other
authority in accordance with applicable law.
(b) The Seller will indemnify each of the Purchasers for the full
amount of Taxes (including, without limitation, any Taxes imposed by any
jurisdiction on amounts payable
53
under this Section 9.04) paid by such Purchaser and any liability (including
penalties, interest and expenses) arising therefrom or required to be paid with
respect thereto. Each of the Purchasers agrees to promptly notify the Seller of
any payment of Taxes made by it and, if practicable, any request, demand or
notice received in respect thereof prior to such payment. Each of the Purchasers
shall be entitled to payment of this indemnification, as owner of Receivable
Interests within 30 days from the date such Purchaser makes written demand
therefor to the applicable Co-Agent and the Seller. A certificate as to the
amount of such indemnification submitted to the Seller and the applicable Co-
Agent by any Purchaser, setting forth the calculation thereof, shall (absent
manifest error) be conclusive and binding for all purposes.
(c) Within 30 days after the date of any payment of Taxes, the Seller
or the Servicer (as the case may be) will furnish to the applicable Co-Agent the
original or a certified copy of a receipt evidencing payment thereof.
(d) Notwithstanding the foregoing and any other provisions of this
Section 9.04, the obligations of the Servicer under this Section 9.04 shall be
payable only out of Collections.
(e) Each Liquidity Provider that is organized under the laws of a
jurisdiction other than the United States or a state thereof hereby agrees to
complete, execute and deliver to the related Co-Agent from time to time prior to
the initial Settlement Date on which the related Co-Agent, acting on behalf of
such Liquidity Provider, will be entitled to receive distributions pursuant to
this Agreement, Internal Revenue Service Forms 1001 or 4224 (or any successor
form), as applicable, or such other forms or certificates as may be required
under the laws of any applicable jurisdiction in order to permit the Seller or
the Servicer to make payments to, and deposit funds to or for the account of,
the related Co-Agent, acting on behalf of such Liquidity Provider, hereunder and
under the other Transaction Documents without any deduction or withholding for
or on account of any tax or with such withholding or deduction at a reduced
rate.
ARTICLE X.
THE ADMINISTRATIVE AGENT
Section 10.01 Authorization and Action. Each Purchaser and each
------------------------
Co-Agent hereby designates and appoints Bank One, NA, to act as its
Administrative Agent hereunder and under each other Transaction Document, and
authorizes the Administrative Agent to take such actions as agent on its behalf
and to exercise such powers as are delegated to the Administrative Agent by the
terms of the Transaction Documents together with such powers as are reasonably
incidental thereto. The Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in any other
Transaction Document, or any fiduciary relationship with any Purchaser or any
Co-Agent, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of the Administrative Agent shall be read
into this Agreement or any other Transaction Document or otherwise exist for the
Administrative Agent. In performing its functions and duties hereunder and under
the other Transaction Documents, the Administrative Agent shall act solely as
agent for the Purchasers and the Co-Agents and does not assume nor shall be
deemed to have assumed any obligation or relationship of trust or agency with or
for the Seller or any of its successors or assigns. The Administrative Agent
shall not be required to take any action which exposes the Administrative
54
Agent to personal liability or which is contrary to this Agreement, any other
Transaction Document or applicable law. The appointment and authority of the
Administrative Agent hereunder shall terminate upon the indefeasible payment in
full of all Aggregate Unpaids. Each Purchaser and each Co-Agent hereby
authorizes the Administrative Agent to execute on behalf of such Purchaser and
each Co-Agent (the terms of which shall be binding on such Purchaser and such
Co-Agent) each of the Uniform Commercial Code financing statements, together
with such other instruments or documents determined by the Administrative Agent
to be necessary or desirable in order to perfect, evidence or more fully protect
the interest of the Purchasers and the Co-Agents contemplated hereunder.
Section 10.02 Delegation of Duties. The Administrative Agent may
--------------------
execute any of its duties under this Agreement and each other Transaction
Document by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
Section 10.03 Exculpatory Provisions. Neither the Administrative
----------------------
Agent nor any of its directors, officers, agents or employees shall be (i)
liable for any action lawfully taken or omitted to be taken by it or them under
or in connection with this Agreement or any other Transaction Document (except
for its, their or such Person's own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Purchasers or any Co-Agent for any
recitals, statements, representations or warranties made by the Seller contained
in this Agreement, any other Transaction Document or any certificate, report,
statement or other document referred to or provided for in, or received under or
in connection with, this Agreement, or any other Transaction Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, or any other Transaction Document or any other document
furnished in connection herewith or therewith, or for any failure of the Seller
to perform its obligations hereunder or thereunder, or for the satisfaction of
any condition specified in Article V, or for the perfection, priority,
condition, value or sufficiency or any collateral pledged in connection
herewith. The Administrative Agent shall not be under any obligation to any
Purchaser or any Co-Agent to ascertain or to inquire as to the observance or
performance of any of the agreements or covenants contained in, or conditions
of, this Agreement or any other Transaction Document, or to inspect the
properties, books or records of the Seller. The Administrative Agent shall not
be deemed to have knowledge of an Amortization Event or a Potential Amortization
Event unless the Administrative Agent has received notice from the Seller or a
Purchaser.
Section 10.04 Reliance by Administrative Agent. The Administrative
--------------------------------
Agent shall in all cases be entitled to rely, and shall be fully protected in
relying, upon any document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Seller), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent shall in all cases be fully
justified in failing or refusing to take any action under this Agreement or any
other Transaction Document unless it shall first receive such advice or
concurrence of Blue Ridge, Falcon, the Co-Agents and/or all of the Purchasers,
as applicable, as it deems appropriate and it shall first be indemnified to its
satisfaction by the Purchasers, provided that unless and until the
Administrative Agent shall have
55
received such advice, the Administrative Agent may take or refrain from taking
any action, as the Administrative Agent shall deem advisable and in the best
interests of the Purchasers and the Co-Agents. The Administrative Agent shall in
all cases, be fully protected in acting, or in refraining from acting, in
accordance with a request of Blue Ridge, Falcon, the Co-Agents and/or all of the
Purchasers, as applicable, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Purchasers and the Co-Agents.
Section 10.05 Non-Reliance on Administrative Agent and Other Purchasers.
---------------------------------------------------------
Each Purchaser and each Co-Agent expressly acknowledges that neither the
Administrative Agent, nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Administrative Agent hereafter taken, including, without
limitation, any review of the affairs of the Seller, shall be deemed to
constitute any representation or warranty by the Administrative Agent. Each
Purchaser and each Co-Agent represents and warrants to the Administrative Agent
that it has and will, independently and without reliance upon the Administrative
Agent, any other Purchaser or any Co-Agent and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of the Seller and made its own decision to
enter into this Agreement, the other Transaction Documents and all other
documents related hereto or thereto.
Section 10.06 Reimbursement and Indemnification. The Liquidity Providers
---------------------------------
agree to reimburse and indemnify the Administrative Agent and its officers,
directors, employees, representatives and agents ratably according to their Pro
Rata Shares, to the extent not paid or reimbursed by the Seller (i) for any
amounts for which the Administrative Agent, acting in its capacity as
Administrative Agent, is entitled to reimbursement by the Seller hereunder and
(ii) for any other expenses incurred by the Administrative Agent, in its
capacity as Administrative Agent and acting on behalf of the Purchasers and the
Co-Agents, in connection with the administration and enforcement of the
Transaction Documents.
Section 10.07 Administrative Agent in its Individual Capacity. The
-----------------------------------------------
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Seller or any Affiliate of
the Seller as though the Administrative Agent were not the Administrative Agent
hereunder. With respect to the acquisition of Receivable Interests pursuant to
this Agreement, the Administrative Agent shall have the same rights and powers
under this Agreement as any Purchaser and may exercise the same as though it
were not the Administrative Agent, and the terms "Liquidity Provider,"
"Purchaser," "Liquidity Providers" and "Purchasers" shall include the
Administrative Agent in its individual capacity if applicable.
Section 10.08 Successor Administrative Agent. The Administrative Agent
------------------------------
may, upon ten days' notice to the Seller, the Purchasers and the Co-Agents, and
the Administrative Agent will, upon the direction of all of the Purchasers
(other than the Administrative Agent, in its individual capacity) resign as
Administrative Agent. If the Administrative Agent shall resign, then the Co-
Agents during such five-day period shall appoint from among the Purchasers a
successor agent. If for any reason no successor Administrative Agent is
appointed by the Co-Agents during such five-day period, then effective upon the
termination of such five day period,
56
the Purchasers shall perform all of the duties of the Administrative Agent
hereunder and under the other Transaction Documents and the Seller shall make
all payments in respect of the Aggregate Unpaids directly to the applicable
Purchasers and for all purposes shall deal directly with the Purchasers. After
the effectiveness of any retiring Administrative Agent's resignation hereunder
as Administrative Agent, the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder and under the other Transaction
Documents and the provisions of this Article X and Article IX shall continue in
effect for its benefit with respect to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement and under the other
Transaction Documents.
ARTICLE XI.
THE CO-AGENTS
Section 11.01 Authorization and Action. Each of Blue Ridge and the Blue
------------------------
Ridge Liquidity Providers hereby designates and appoints Wachovia Bank, N.A., to
act as its Co-Agent hereunder and under each other Transaction Document, and
authorizes such Co-Agent to take such actions as agent on its behalf and to
exercise such powers as are delegated to such Co-Agent by the terms of the
Transaction Documents together with such powers as are reasonably incidental
thereto. Each of Falcon and the Falcon Liquidity Providers hereby designates and
appoints Bank One, NA, to act as its Co-Agent hereunder and under each other
Transaction Document, and authorizes such Co-Agent to take such actions as agent
on its behalf and to exercise such powers as are delegated to such Co-Agent by
the terms of the Transaction Documents together with such powers as are
reasonably incidental thereto. The Co-Agents shall not have any duties or
responsibilities, except those expressly set forth herein or in any other
Transaction Document, or any fiduciary relationship with any Purchaser, any
Liquidity Provider or any other Agent, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of such Co-
Agent shall be read into this Agreement or any other Transaction Document or
otherwise exist for such Co-Agent. In performing its functions and duties
hereunder and under the other Transaction Documents, each Co-Agent shall act
solely as the agent for its respective Conduit and its respective Liquidity
Providers, and does not assume nor shall be deemed to have assumed any
obligation or relationship of trust or agency with or for the Seller or any of
its successors or assigns. Each Co-Agent shall not be required to take any
action which exposes such Co-Agent to personal liability or which is contrary to
this Agreement, any other Transaction Document or applicable law. The
appointment and authority of each Co-Agent hereunder shall terminate upon the
indefeasible payment in full of all Aggregate Unpaids.
Section 11.02 Delegation of Duties. Each Co-Agent may execute any of its
--------------------
duties under this Agreement and each other Transaction Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Neither Co-Agent shall be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 11.03 Exculpatory Provisions. No Co-Agent nor any of its
----------------------
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers, any of the Liquidity Providers or any
57
other Agent for any recitals, statements, representations or warranties made by
the Seller contained in this Agreement, any other Transaction Document or any
certificate, report, statement or other document referred to or provided for in,
or received under or in connection with, this Agreement, or any other
Transaction Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or any other Transaction
Document or any other document furnished in connection herewith or therewith, or
for any failure of the Seller to perform its obligations hereunder or
thereunder, or for the satisfaction of any condition specified in Article V, or
for the perfection, priority, condition, value or sufficiency or any collateral
pledged in connection herewith. No Co-Agent shall be under any obligation to any
Purchaser, to any Liquidity Provider or any other Agent to ascertain or to
inquire as to the observance or performance of any of the agreements or
covenants contained in, or conditions of, this Agreement or any other
Transaction Document, or to inspect the properties, books or records of the
Seller. No Co-Agent shall be deemed to have knowledge of an Amortization Event
or a Potential Amortization Event unless such Co-Agent has received notice from
the Seller or a Purchaser.
Section 11.04 Reliance by Co-Agents. Each Co-Agent shall in all cases be
---------------------
entitled to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Seller and each
Liquidity Provider), independent accountants and other experts selected by such
Co-Agent. Each Co-Agent shall in all cases be fully justified in failing or
refusing to take any action under this Agreement or any other Transaction
Document unless it shall first receive such advice or concurrence of its
respective Voting Block, as it deems appropriate under the relevant
circumstances and it shall first be indemnified to its satisfaction by its
respective Liquidity Banks, provided that unless and until such Co-Agent shall
have received such advice, such Co-Agent may take or refrain from taking any
action, as such Co-Agent shall deem advisable and in the best interests of its
respective Conduit and its respective Liquidity Providers. Each Co-Agent shall
determine with its Conduit and, as applicable, its respective Liquidity
Providers, the number of such Persons that shall be required to request or
direct such Co-Agent to take action, or refrain from taking action, under this
Agreement on behalf of such Persons and whether any consent of the rating
agencies who rate such Conduit's Commercial Paper is required (such Persons and,
if applicable, rating agencies, a "Voting Block"). Each Co-Agent shall in all
cases, be fully protected in acting, or in refraining from acting, in accordance
with a request of its respective Voting Block, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of such Co-
Agent's Constituents.
Section 11.05 Non-Reliance on Agents and other Purchasers. Each Purchaser
-------------------------------------------
and each Liquidity Provider expressly acknowledges that no Co-Agent, nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates has
made any representations or warranties to it and that no act by such Co-Agent
hereafter taken, including, without limitation, any review of the affairs of the
Seller, shall be deemed to constitute any representation or warranty by such Co-
Agent. Each Purchaser and each Liquidity Provider represents and warrants to the
Co-Agents that it has and will, independently and without reliance upon the Co-
Agents, any other Purchaser or any other Liquidity Provider and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of
58
the Seller and made its own decision to enter into this Agreement, the other
Transaction Documents and all other documents related hereto or thereto.
Section 11.06 Reimbursement and Indemnification. Each Liquidity Provider
---------------------------------
agrees to reimburse and indemnify its Co-Agent and such Co-Agent's, officers,
directors, employees, representatives and agents ratably according to their Pro
Rata Shares, to the extent not paid or reimbursed by the Seller (i) for any
amounts for which such Co-Agent, acting in its capacity as Co-Agent, is entitled
to reimbursement by the Seller hereunder and (ii) for any other expenses
incurred by such Co-Agent, in its capacity as Co-Agent and acting on behalf of
its respective Conduit and its respective Liquidity Providers, in connection
with the administration and enforcement of the Transaction Documents.
Section 11.07 Co-Agents in their Individual Capacities. Each Co-Agent and
----------------------------------------
its Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Seller, the Servicer or any Affiliate of the
Seller or the Servicer as though such Co-Agent were not a Co-Agent hereunder.
With respect to the acquisition of Receivable Interests pursuant to this
Agreement, each Co-Agent shall have the same rights and powers under this
Agreement as any Purchaser and may exercise the same as though it were not a Co-
Agent, and the terms "Liquidity Provider," "Purchaser," "Liquidity Providers"
and "Purchasers" shall include such Co-Agent in its individual capacity if
applicable.
ARTICLE XII.
ASSIGNMENTS; PARTICIPATIONS
Section 12.01 Assignments.
------------
(a) The Seller and each Liquidity Provider hereby agrees and consents to
the complete or partial assignment by any Conduit of all of its rights under,
interest in, title to and obligations under this Agreement to its Liquidity
Providers (or to its Co-Agent for the ratable benefit of its Liquidity
Providers) or to any other Person, and upon such assignment, such Conduit shall
be released from its obligations so assigned. Further, the Seller and each
Liquidity Provider hereby agrees that any assignee of any Conduit of this
Agreement or all or any of the Receivable Interests of such Conduit shall have
all of the rights and benefits under this Agreement as if the term "Conduit"
explicitly referred to such party, and no such assignment shall in any way
impair the rights and benefits of the Conduits hereunder. The Seller shall not
have the right to assign its rights or obligations under this Agreement.
(b) Any Liquidity Provider may at any time and from time to time assign to
one or more Persons ("Purchasing Liquidity Providers") all or any part of its
rights and obligations under this Agreement pursuant to an assignment or an
agreement, that is substantially in the form required by the applicable
Liquidity Agreement (the "Assignment Agreement"), executed by such Purchasing
Liquidity Provider and such selling Liquidity Provider. The consent of the
related Conduit shall be required prior to the effectiveness of any such
assignment. Each assignee of a Liquidity Provider shall be an Eligible Assignee.
Upon delivery of the executed Assignment Agreement to the applicable Co-Agent,
such selling Liquidity Provider shall be released from its obligations hereunder
to the extent of such assignment. Thereafter the Purchasing Liquidity Provider
shall for all purposes be a Liquidity Provider party to this
59
Agreement and shall have all the rights and obligations of a Liquidity Provider
under this Agreement to the same extent as if it were an original party hereto
and no further consent or action by the Seller, the Purchasers or the Agents
shall be required.
(c) Each of the Liquidity Providers agrees that in the event that it is
the subject of a Downgrading Event. (an "Affected Liquidity Provider"), such
Affected Liquidity Provider shall be obliged, at the request of the related
Conduit or the related Co-Agent, to assign all of its rights and obligations
hereunder to (x) another Liquidity Provider or (y) another financial institution
nominated by the related Co-Agent and acceptable to the related Conduit, and
willing to participate in this Agreement through the Liquidity Termination Date
in the place of such Affected Liquidity Provider; provided that the Affected
Liquidity Provider receives payment in full, pursuant to an Assignment and
Acceptance, of an amount equal to such Liquidity Provider's Pro Rata Share of
the Capital and Yield owing to the Liquidity Providers and all accruing but
unpaid fees and other costs and expenses payable in respect of its Pro Rata
Share of the Receivable Interests.
Section 12.02 Participations. A Liquidity Provider may, in the ordinary
--------------
course of its business at any time sell to one or more Persons (each, a
"Participant") participating interests in its Pro Rata Share of the Receivable
Interests of the Liquidity Providers, or any other interest of such Liquidity
Provider hereunder. Notwithstanding any such sale by a Liquidity Provider of a
participating interest to a Participant, such Liquidity Provider's rights and
obligations under this Agreement shall remain unchanged, such Liquidity Provider
shall remain solely responsible for the performance of its obligations
hereunder, and the Seller, the Conduits and the Agents shall continue to deal
solely and directly with such Liquidity Provider in connection with such
Liquidity Provider's rights and obligations under this Agreement. Each Liquidity
Provider agrees that any agreement between such Liquidity Provider and any such
Participant in respect of such participating interest shall not restrict such
Liquidity Provider's right to agree to any amendment, supplement, waiver or
modification to this Agreement, except for any amendment, supplement, waiver or
modification described in clause (i) of Section 13.01(b) and except as set forth
in the Liquidity Agreements.
ARTICLE XIII.
MISCELLANEOUS
Section 13.01 Waivers and Amendments.
-----------------------
(a) No failure or delay on the part of any party hereto in exercising any
power, right or remedy under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or remedy
preclude any other further exercise thereof or the exercise of any other power,
right or remedy. The rights and remedies herein provided shall be cumulative and
nonexclusive of any rights or remedies provided by law. Any waiver of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which given.
(b) No provision of this Agreement may be amended, supplemented, modified
or waived except in writing in accordance with the provisions of this Section
13.01(b). The Conduits, the Seller, the Administrative Agent and, with the
consent of their respective Voting
60
Blocks, the Co-Agents may enter into written modifications or waivers of any
provisions of this Agreement, provided, however, that no such modification or
waiver shall:
(i) without the consent of each affected Purchaser: (A) extend the
Liquidity Termination Date or the date of any payment or deposit of
Collections by the Seller or the Servicer, (B) reduce the rate or extend
the time of payment of Yield (or any component thereof), (C) reduce any fee
payable to the Agents for the benefit of the Purchasers or extend the time
for payment thereof, (D) except pursuant to Article Xl hereof, change the
amount of the Capital of any Purchaser, a Liquidity Provider's Pro Rata
Share or a Liquidity Provider's Commitment, (E) amend, modify or waive any
provision of this Section 13.01(b), (F) consent to or permit the assignment
or transfer by the Seller of any of its rights and obligations under this
Agreement, (G) change the definition of "Eligible Receivable," "Floating
Dilution Ratio" "Dilution Reserve", "Discount Reserve," "Loss Reserve
Percentage," "Aggregate Reserve Percentage," or "Obligor
Overconcentration", (H) amend or modify Section 2.08 hereof or (I) amend or
modify any defined term (or any defined term used directly or indirectly in
such defined term) used in clauses (A) through (H) above in a manner which
would circumvent the intention of the restrictions set forth in such
clauses; or
(ii) without the written consent of any Agent, amend, modify or waive
any provision of this Agreement if the effect thereof is to affect the
rights or duties of such Agent.
Notwithstanding the foregoing, (i) the Agents may, with the consent of the
Seller, amend this Agreement solely to increase the Purchase Limit and/or add
additional Persons as Liquidity Providers hereunder and revise the definitions
of "Available Funding Amount", "Purchase Limit", "Blue Ridge Purchase Limit",
"Falcon Purchase Limit" and any other definition in order to increase the
Purchase Limit and (ii) without the consent of the Seller, the Agents and the
Conduits may enter into amendments to modify any of the terms or provisions of
Article III, Article X, Article XI, Article XII or Section 13.13 provided that
such amendment has no negative impact upon the Seller. Any modification or
waiver made in accordance with this Section 13.01 shall apply to each of the
Purchasers equally and shall be binding upon the Seller, the Purchasers and the
Agents.
(c) Neither the Seller nor the Co-Agents shall consent to any
amendment of the Sale Agreement without the prior written consent of the
applicable Voting Block if such amendment would have a material adverse effect
on any Liquidity Provider.
(d) The parties hereto acknowledge that, before entering into any
amendment, supplement or modification or granting any waiver, each of the Co-
Agents shall be required to obtain the approval of its respective Voting Block.
Section 13.02 Notices.
-------
(a) Except as provided in subsection (b) below, all communications
and notices provided for hereunder shall be in writing (including bank wire,
telecopy or electronic facsimile transmission or similar writing) and shall be
given to the other parties hereto at their
61
respective addresses or telecopy numbers set forth on the signature pages
hereof. All such communications and notices shall, when mailed, telecopied,
telegraphed, telexed or cabled, be effective when received through the mails,
transmitted by telecopy, delivered to the telegraph company, confirmed by telex
answerback or delivered to the cable company, respectively, except that
communications and notices to the Co-Agents or any Purchaser pursuant to Article
II or III shall not be effective until received by the intended recipient.
(b) The Seller hereby authorizes the Co-Agents to effect purchases
and Tranche Period, CP Tranche Period and Discount Rate selections based on
telephonic notices made by any Person whom the Co-Agents in good faith believes
to be acting on behalf of the Seller. The Seller agrees to deliver promptly to
the Co-Agents a written confirmation of each telephonic notice signed by an
authorized officer of the Seller. However, the absence of such confirmation
shall not affect the validity of such notice. If the written confirmation
differs from the action taken by the Co-Agents, the records of the Co-Agents
shall govern absent manifest error.
Section 13.03 Ratable Payments. If any Purchaser, whether by setoff
----------------
or otherwise, has payment made to it with respect to any portion of the
Aggregate Unpaids owing to such Purchaser (other than payments received pursuant
to Section 9.02 or 9.03) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of the Aggregate Unpaids held by the other Purchasers so that
after such purchase each Purchaser will hold its ratable proportion of the
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
Section 13.04 Protection of Ownership Interests of the Administrative
-------------------------------------------------------
Agent on behalf of the Purchasers and Co-Agents.
-----------------------------------------------
(a) The Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that any Agent may request, to
perfect, protect or more fully evidence the Receivable Interests, or to enable
the Agents or the Purchasers to exercise and enforce their rights and remedies
hereunder. The Administrative Agent may, or the Administrative Agent may direct
the Seller to, notify the Obligors of Receivables, at any time following the
replacement of the Seller as Servicer and at the Seller's expense, of the
ownership interests of the Purchasers under this Agreement and may also direct
that payments of all amounts due or that become due under any or all Receivables
be made directly to the Administrative Agent or its designee. The Seller shall,
at any Purchaser's written request, withhold the identity of such Purchaser in
any such notification.
(b) If the Seller or the Servicer fails to perform any of its
obligations hereunder, any Agent or any Purchaser may (but shall not be required
to) perform, or cause performance of, such obligation; and the Agent's, the Co-
Agents' or such Purchaser's costs and expenses incurred in connection therewith
shall be payable by the Seller (if the Servicer that fails to so perform is the
Seller or an Affiliate thereof) as provided in Section 9.03, as applicable. The
62
Seller and the Servicer each irrevocably authorizes the Administrative Agent at
any time and from time to time in the sole discretion of the Administrative
Agent, and appoints the Administrative Agent as its attorney-in-fact, to act on
behalf of the Seller and the Servicer (i) to execute on behalf of the Seller as
debtor and to file financing statements necessary or desirable in the
Administrative Agent's sole discretion to perfect and to maintain the perfection
and priority of the interest of the Purchasers in the Receivables and (ii) to
file a carbon, photographic or other reproduction of this Agreement or any
financing statement with respect to the Receivables as a financing statement in
such offices as the Administrative Agent in its sole discretion deems necessary
or desirable to perfect and to maintain the perfection and priority of the
interests of the Purchasers in the Receivables. This appointment is coupled with
an interest and is irrevocable.
Section 13.05 Confidentiality. Each of the Seller, Federal-Mogul, the
---------------
Servicer (if other than Federal-Mogul), the Agents and the Purchasers agrees to
use it best efforts, and to cause its agents and representatives to use their
best efforts, to hold in confidence all Confidential Information; provided that
nothing herein shall prevent any Agent or any Purchaser from delivering copies
of any financial statements and other documents constituting Confidential
Information, or disclosing any other Confidential Information, to:
(i) any Agent's, any Purchaser's or any Funding Source's respective
directors, officers, employees, agents, accountants, professional
consultants and enhancement providers,
(ii) any other Purchaser,
(iii) any other Funding Source or any Person to which such Purchaser
offers to sell or assign or sells or assigns such Purchaser or any part
thereof or any rights associated therewith so long as such other Funding
Source or Person shall have agreed to hold in confidence all Confidential
Information,
(iv) any federal or state regulatory authority having jurisdiction
over any Agent, such Purchaser or any Funding Source,
(v) any nationally recognized rating agency that requires access to
such Purchaser's investment portfolio and any Funding Source's investment
portfolio,
(vi) any other Person to which such delivery or disclosure may be
necessary or appropriate: (a) in compliance with any law, rule, regulation
or order applicable to any Agent, any Purchaser or any Funding Source, (b)
in response to any subpoena or other legal process or (c) in connection
with any litigation to which any Agent, any Purchaser or any Funding Source
is a party, or
(vii) if any Amortization Event has occurred and is continuing, to the
extent any Agent or such Purchaser may reasonably determine that such
delivery and disclosure is necessary or appropriate in the enforcement or
for the protection of the rights and remedies under the Transaction
Documents.
The Agents and the Purchasers shall provide written notice to the Seller
whenever any such disclosure is made except to the extent prohibited by law and
shall use their best efforts to
63
provide the Seller with five day's advance notice of any disclosure pursuant to
clause (vi) of this Section 13.05.
Section 13.06 Bankruptcy Petition. Each of the Seller and the Agents
-------------------
hereby covenants and agrees that, prior to the date which is one year and one
day after the payment in full of all outstanding senior indebtedness of Blue
Ridge or Falcon, it will not institute against, or join any other Person in
instituting against, Blue Ridge or Falcon any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
Section 13.07 Limitation of Liability. Except with respect to any
-----------------------
claim arising out of the willful misconduct or gross negligence of the Conduits
or the Agents, no claim may be made by the Seller, the Servicer or any other
Person against the Conduits, the Agents or their respective Affiliates,
directors, officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement, or any act, omission or event occurring in
connection therewith; and the Seller hereby waives, releases, and agrees not to
▇▇▇ upon any claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favor.
Section 13.08 CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
NEW YORK.
Section 13.09 CONSENT TO JURISDICTION. EACH OF THE SELLER AND THE
-----------------------
SERVICER HEREBY: (A) IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE TRANSACTION
DOCUMENTS AND (B) IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF ANY AGENT OR ANY
PURCHASER TO BRING PROCEEDINGS AGAINST THE SELLER OR THE SERVICER IN THE COURTS
OF ANY OTHER JURISDICTION WHEREIN ANY ASSETS OF THE SELLER, THE SERVICER OR ANY
ORIGINATOR MAY BE LOCATED. ANY JUDICIAL PROCEEDING BY THE SELLER OR THE SERVICER
AGAINST ANY AGENT OR ANY PURCHASER OR ANY AFFILIATE OF ANY AGENT OR A PURCHASER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THE TRANSACTION DOCUMENTS SHALL BE BROUGHT ONLY IN A COURT
IN NEW YORK, NEW YORK.
Section 13.10 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
--------------------
HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
64
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THE TRANSACTION DOCUMENTS OR THE RELATIONSHIPS ESTABLISHED THEREUNDER.
Section 13.11 Integration; Survival of Terms. The Transaction
------------------------------
Documents contain the final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof superseding all prior oral or written understandings. The
provisions of Article IX and Section 13.06 shall survive any termination of this
Agreement.
Section 13.12 Counterparts; Severability. This Agreement may be
--------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 13.13 Bank One Roles and Wachovia Roles.
----------------------------------
(a) Each of the Liquidity Providers acknowledges that Bank One and
certain of its Affiliates including (Bank One Capital Markets, Inc.) act, or may
in the future act, (i) as administrative agent for Falcon, (ii) as issuing and
paying agent for Falcon, (iii) to provide credit or liquidity enhancement for
the timely payment for Falcon's Commercial Paper and (iv) to provide other
services from time to time for Falcon (collectively, the "Bank One Roles").
Without limiting the generality of this Section 13.13, each of the Agents and
the Liquidity Providers hereby acknowledges and consents to any and all Bank One
Roles and agrees that in connection with any Bank One Role, Bank One may take,
or refrain from taking, any action which it, in its discretion, deems
appropriate.
(b) Each of the Liquidity Providers acknowledges that Wachovia and
certain of its Affiliates act, or may in the future act, (i) as administrative
agent for Blue Ridge, (ii) as issuing and paying agent for Blue Ridge, (iii) to
provide credit or liquidity enhancement for the timely payment for Blue Ridge's
Commercial Paper and (iv) to provide other services from time to time for Blue
Ridge (collectively, the "Wachovia Roles"). Without limiting the generality of
this Section 13.13, each of the Agents and the Liquidity Providers hereby
acknowledges and consents to any and all Wachovia Roles and agrees that in
connection with any Wachovia Role, Wachovia may take, or refrain from taking,
any action which it, in its discretion, deems appropriate.
Section 13.14 Characterization.
-----------------
(a) It is the intention of the parties hereto that, except for tax
purposes, each purchase hereunder shall constitute an absolute and irrevocable
sale (for non-tax purposes),
65
which purchase shall provide the applicable Purchaser with the full benefits of
ownership of the applicable Receivable Interest. Except as specifically provided
in this Agreement, each sale (for non-tax purposes) of a Receivable Interest
hereunder is made without recourse to the Seller; provided, however, that (i)
the Seller shall be liable to each Purchaser and the Agents for all
representations, warranties and covenants made by the Seller pursuant to the
terms of this Agreement, and (ii) such sale (for non-tax purposes) does not
constitute and is not intended to result in an assumption by any Purchaser or
any Agent or any assignee thereof of any obligation of the Seller or any
Originator or any other person arising in connection with the Receivables, the
Related Security, or the related invoices, or any other obligations of the
Seller or such Originator.
(b) If the conveyance by the Seller to the Purchasers of interests in
Receivables hereunder shall be characterized as a secured loan and not a sale
for any purpose in addition to tax purposes, it is the intention of the parties
hereto that this Agreement shall constitute a security agreement under
applicable law, and that the Seller shall be deemed to have granted to the
Administrative Agent for the ratable benefit of the Purchasers and the Agents a
duly perfected security interest in all of the Seller's right, title and
interest, now owned or hereafter acquired, in, to and under the Receivables, the
Collections, each Collection Account, all Related Security, all payments on or
with respect to such Receivables, all other rights relating to and payments made
in respect of the Receivables, the Receivables Purchase Agreement, and all
proceeds of any thereof prior to all other liens on and security interests
therein. After an Amortization Event, the Administrative Agent, the Purchasers
and the Co-Agents shall have, in addition to the rights and remedies which they
may have under this Agreement, all other rights and remedies provided to a
secured creditor after default under the UCC and other applicable law, which
rights and remedies shall be cumulative.
It is the intention of all parties hereto that each purchase hereunder
shall be characterized as a secured loan for income tax purposes. It is the
intention of all parties hereto that each party will act in a manner consistent
with the treatment of each purchase as a secured loan for income tax purposes.
Section 13.15 Acknowledgments. The Seller hereby acknowledges that:
---------------
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement;
(b) none of the Agents or any Purchaser has any fiduciary
relationship with or fiduciary duty to the Seller arising out of or in
connection with this Agreement, and the relationship between the Agents and the
Purchasers, on the one hand, and the Seller, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or otherwise exists by virtue
of the transactions contemplated hereby among the Purchasers or among the Seller
and the Purchasers or among the Seller and the Agents.
66
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
hereof.
Seller: FEDERAL-MOGUL FUNDING CORPORATION
By:_____________________________________________
Name:
Title:
Address for Notices:
Federal-Mogul Funding Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasury Department
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Servicer: FEDERAL-MOGUL CORPORATION
By:_____________________________________________
Name:
Title:
Address for Notices:
Federal-Mogul Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasury Department
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Receivables Interest Purchase Agreement
Agents: BANK ONE, NA (CHICAGO OFFICE) (formerly known as The
First National Bank of Chicago), as Administrative
Agent and as Falcon Agent
By:_____________________________________________
Name:
Title:
Address for Notices:
Bank One, NA
Mail Code IL1-0079
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
68
WACHOVIA BANK, N.A.,
as Blue Ridge Agent
By:______________________________________
Name:
Title:
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇/▇▇/ ▇▇▇▇▇
▇▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
69
The Conduits: FALCON ASSET SECURITIZATION CORPORATION
By:______________________________________
Authorized Signatory
Address for Notices:
Falcon Asset Securitization Corporation
c/o Bank One, NA
Asset-Backed Finance
Mail Code IL1-0594
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Portfolio Management
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
70
BLUE RIDGE ASSET FUNDING CORPORATION
By: Wachovia Bank, N.A.
as Attorney-in-Fact
By:______________________________________
Name:
Title:
Address for Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Blue Ridge Asset Funding Corporation
c/o AMACAR Group, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
71
Falcon Liquidity Providers:
Commitment BANK ONE, NA (CHICAGO OFFICE) (formerly
known as The First National Bank of
Chicago)
$220,000,000 By:__________________________________
Name:
Title:
Address for Notices:
Bank One, NA
Mail Code IL1-0594
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Portfolio Management
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
72
Blue Ridge Liquidity Providers:
Commitment WACHOVIA BANK, N.A.
$204,000,000 By:_________________________________
Name:
Title:
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇/▇▇/ ▇▇▇▇▇
▇▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
73
EXHIBIT A
---------
FORM OF PURCHASE NOTICE
[Date]
Wachovia Bank, N.A.,
as Blue Ridge Agent for certain
Purchasers parties to the Receivables
Purchase Agreement referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇/▇▇/ ▇▇▇▇▇
▇▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Bank One, NA,
as Falcon Agent for certain Purchasers parties
to the Receivables Purchase Agreement
referred to below
1 Bank One Plaza
Mail Code Il1-0079
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Asset-Backed Finance
Gentlemen:
The undersigned, Federal-Mogul Funding Corporation, refers to the
Sixth Amended and Restated Receivables Interest Purchase Agreement, dated as of
February 16, 2001 (the "Receivables Purchase Agreement", the terms defined
therein being used herein as therein defined), among the undersigned, Federal-
Mogul Corporation, Blue Ridge Asset Funding Corporation ("BLUE RIDGE"), Falcon
Asset Securitization Corporation ("FALCON"), certain financial institutions from
time to time parties thereto, as Liquidity Providers, Bank One, NA, as
Administrative Agent and Falcon Agent, and Wachovia Bank, N.A., as Blue Ridge
Agent, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the
Receivables Purchase Agreement that the undersigned hereby requests a purchase
of Receivables Interests under the Receivables Purchase Agreement, and in that
connection sets forth below the information relating to such purchase (the
"Proposed Purchase") as required by Section 2.02 of the Receivables Purchase
Agreement:
(i) The Business Day of the Proposed Purchase is , 20.
(ii) The requested Purchase Price in respect of the Proposed
Purchase is $ .
(iii) The requested Purchaser[s] in respect of the Proposed
Purchase [is FALCON $ amount] [Blue Ridge $ amount] [are the Falcon
Liquidity Providers][are the Blue Ridge Liquidity Providers].
(iv) The duration of the initial Tranche Period for the Proposed
Purchase is ____________ [days] [months].
(v) The Discount Rate related to such initial Tranche Period is
requested to be the [LIBOR] [Base] Rate. (If Purchasers are the Liquidity
Providers).
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Purchase
(before and after giving effect to the Proposed Purchase):
(A) the representations and warranties set forth in Section 4.01 of
the Receivables Purchase Agreement are correct on and as of such date, as though
made on and as of such date;
(B) no event has occurred, or would result from the Proposed Purchase
that will constitute an Amortization Event, and no event has occurred and is
continuing, or would result from such Proposed Purchase, that would constitute a
Potential Amortization Event; and
(C) the Facility Termination Date has not occurred, the aggregate
Capital of all Receivable Interests does not and will not exceed the Purchase
Limit and the aggregate Receivable Interests do not and will not exceed 100%.
Very truly yours,
FEDERAL-MOGUL FUNDING CORPORATION
By:_____________________________________
Name:
Title:
2
EXHIBIT B
---------
FORM OF COLLECTION ACCOUNT
AGREEMENT
[Letterhead of Federal-Mogul Funding Corporation]
_____________, 20__
[Date]
[Collection Bank Name and Address]
Attention: ________________
Re: Federal-Mogul Funding Corporation
Federal-Mogul Corporation
----------------------------------
Ladies and Gentlemen:
You have exclusive control of P.O. Box ___________, [city], [state]
[zip] (the "Lock-Box") for the purpose of receiving mail and processing payments
therefrom pursuant to that certain lock-box services agreement dated
____________, 20__ between you and Federal-Mogul Corporation (the "Agreement").
You hereby confirm your agreement to perform the services described therein.
Among the services you have agreed to perform therein is to endorse all checks
and other evidences of payment, and credit such payments to checking account no.
_________ maintained with you in the name of Federal-Mogul Corporation (the
"Existing Account").
_________________________ (the "Originator") hereby transfers and
assigns all of its right, title and interest in and to, and exclusive ownership
and control over, the Lock-Box to Federal-Mogul Funding Corporation ("SPC").
Originator and SPC hereby request that from and after June 26, 2000, the
Existing Account be retitled in the name of "Federal-Mogul Funding Corporation
(so retitled, the "Lock-Box Account") for the purposes of certain Sixth Amended
and Restated Receivable Interest Purchase Agreement dated as of February 16,
2001 among SPC, as seller, Federal-Mogul Corporation, as servicer, Blue Ridge
Asset Funding Corporation, as a conduit, Falcon Asset Securitization
Corporation, as a conduit, certain financial institutions from time to time a
party thereto, as liquidity providers, Bank One, NA, as Administrative Agent and
Falcon Agent, and Wachovia Bank, N.A., as Blue Ridge Agent, as amended,
modified, supplemented or restated from time to time.
SPC hereby irrevocably instructs you, and you hereby agree, that upon
receiving notice from Bank One, NA, as Administrative Agent (the "Administrative
Agent") in the form attached hereto as Annex A: (i) the name of the Lock-Box
Account will be changed to "Bank One, NA, as Administrative Agent" (or any
designee of the Administrative Agent), and the Administrative Agent will have
exclusive ownership of and access to such Lock-Box Account, and neither
Originator, SPC nor any of their respective affiliates will have any control of
such Lock-Box Account or any access thereto, (ii) you will either continue to
send the funds from the Lock-Box to the Lock-Box Account, or will redirect the
funds as the Administrative Agent may otherwise request, (iii) you will transfer
monies on deposit in the Lock-Box Account, at any time, as directed by the
Administrative Agent, (iv) all services to be performed by you under the
Agreement will be performed on behalf of the Administrative Agent, and (v) all
correspondence or other mail which you have agreed to send to either Originator
or SPC will be sent to the Administrative Agent at the following address:
Bank One, NA, as Administrative Agent
Mail Code IL1-0079
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Moreover, upon such notice, the Administrative Agent will have all
rights and remedies given to Originator or SPC under the Agreement. Each of
Originator and SPC agrees, however, to continue to pay all fees and other
assessments due thereunder at any time.
You hereby acknowledge that monies deposited in the Lock-Box Account
or any other account established with you by the Administrative Agent for the
purpose of receiving funds from the Lock-Box are subject to the liens of the
Administrative Agent for itself and as agent under the Receivables Purchase
Agreement, and will not be subject to deduction, set-off, banker's lien or any
other right you or any other party may have against Originator or SPC, except
that you may debit the Lock-Box Account for any items deposited therein that are
returned or otherwise not collected and for all charges, fees, commissions and
expenses incurred by you in providing services hereunder, all in accordance with
your customary practices for the charge back of returned items and expenses.
This letter agreement and the rights and obligations of the parties
hereunder will be governed by and construed and interpreted in accordance with
the laws of the State of Illinois. This letter agreement may be executed in any
number of counterparts and all of such counterparts taken together will be
deemed to constitute one and the same instrument.
This letter agreement contains the entire agreement between the
parties, and may not be altered, modified, terminated or amended in any respect,
nor may any right, power or privilege of any party hereunder be waived or
released or discharged, except upon execution by all parties hereto of a written
instrument so providing. In the event that any provision in this letter
agreement is in conflict with, or inconsistent with, any provision of the
Agreement, this letter agreement will exclusively govern and control. Each
party agrees to take all actions reasonably requested by any other party to
carry out the purposes of this letter agreement or to preserve and protect the
rights of each party hereunder.
2
Please indicate your agreement to the terms of this letter agreement
by signing in the space provided below. This letter agreement will become
effective immediately upon execution of a counterpart of this letter agreement
by all parties hereto.
Very truly yours,
FEDERAL-MOGUL CORPORATION
By:________________________________________
Name:
Title:
FEDERAL-MOGUL FUNDING CORPORATION
By:________________________________________
Name:
Title:
Acknowledged and agreed to
this _______ day of ___________, 20__:
[COLLECTION BANK]
By: ___________________________________
Name:
Title:
_________________________, as Agent
By_____________________________________
Authorized Agent
3
ANNEX A
FORM OF COLLECTION NOTICE
[On letterhead of the Administrative Agent]
[Date]
[Collection Bank Name and Address]
Attention: ________________
Re: Federal-Mogul Funding Corporation
Federal-Mogul Corporation
---------------------------------
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights pursuant to
that certain letter agreement among Federal-Mogul Corporation, Federal-Mogul
Funding Corporation, you and us, to have the name of, and to have exclusive
ownership and control of, account number ________________ (the "Lock-Box
Account") maintained with you, transferred to "_________________________, as
Agent." [The Lock-Box Account will henceforth be a zero-balance account, and
funds deposited in the Lock-Box Account should be sent at the end of each day to
_________________]. You have further agreed to perform all other services you
are performing under that certain agreement dated between you and
Federal-Mogul Corporation on our behalf.
We appreciate your cooperation in this matter.
Very truly yours,
BANK ONE, NA,
as Administrative Agent
By:________________________________________
Authorized Agent
4
EXHIBIT C
---------
FORM OF SETTLEMENT DATE STATEMENT
I. Receivables Rollforward
Beginning Balance ----------------
+ New Receivables ----------------
- Cash Collections ----------------
- Credit Memos ----------------
- Gross Chargeoffs ----------------
+/- Adjustments ----------------
+/- Unreconciled Balance ----------------
Ending Balance ----------------
II. Receivables Aging
Amount Percent
------ -------
Total ----------------
Current ----------------
0-30 days past due ----------------
31-60 days past due ----------------
61-90 days past due ----------------
91-120 days past due ----------------
120+ days past due ----------------
Placed accounts ----------------
III. Calculation of Funding (see Schedule A)
Pool Balance
Less Ineligibles (input all #s as negatives) :
Balances * 90 dpd (incl. all Placed Accts)
(48,970,000)
Contra Accounts ** 91 dpd subject to 3% threshold
Cross-agings ** 91 dpd (30%*91dpd) subject to 2% threshold
(21,060,000)
Terms over 90 but less than 180 ---------------- subject to 3% basket
Terms over 180 ----------------
Deductions * 61 dpd & ** 91 dpd
Less Intercompany Receivables ** 91 dpd
Currencies other than US$ and CAN$
Non-OEM export receivables ----------------
Other ineligibles (e.g. unreconciled) ----------------
Eligible Receivables ----------------
Excess Concentrations ---------------- subject to 3% threshold
Net Receivables Balance
Contractual Dilution ----------------
Available Receivables
Aggregate Reserve Percentage
Aggregate Reserves
Available Funding Amount (max $420 MM) ------------------
Falcon Available Funding (max $220 MM)
Blue Ridge Available Funding (max $200 MM)
IV. Early Amortization Events
* Greater than
** Less than
Delinquency Ratio Trigger
- greater than or equal to 9.0% for two
consecutive months?
Current Prior Month
------- -----------
* 60 dpd/Total
Loss-to-Liquidation Ratio Trigger
- 3-month rolling average greater than or
equal to 6.00%?No
Current Prior Month 2 months prior 3-month avg
------- ----------- -------------- -----------
61-90 days past due
Change in placed accounts
Cash collections
Loss/Liquidation Ratio
Dilution Ratio Trigger
- 3-month rolling average greater than or
equal to 7.00%?No
Current Prior Month 2 months prior 3-month avg
------- ----------- -------------- -----------
NAA Credit Memos
OEM Credit Memos
Dilutive adjustments
Pool Balance
Dilution Ratio
Coverage Amount
=Capital minus Available Funding Amount
_______________
Capital Outstanding _______________
Available Funding Amount _______________
Coverage Amount to be paid on Distribution Date
V. Calculation of Capital
Falcon Blue Ridge
------ ----------
Available Funding Amount
_______________ ______________
Outstanding Capital _______________ ______________
Required principal paydown
Available Increase
Requested Increase
Optional Repayment ________________ _____________
Fees/Discount due ________________ _____________
___________________________________
Net credit to FMFC Concentration Account
Net paydown due to Conduits
* Greater than
2
VI. Payment Instructions
Payment instructions to pay Interest and Fees
Amounts due Conduits:
---------------------
Falcon/Bank One to debit Federal-Mogul Funding
Corp's account # 55-73688
39,829,890.22
FMFC to wire funds to Blue Ridge:
ABA #
Account #
Ref: Federal-Mogul Funding
Amount due Federal-Mogul Funding:
---------------------------------
Falcon to Credit Federal-Mogul Funding II's
account # 55-73688
-
Blue Ridge to wire money to:
ABA # 71000013
Account # 55-73688
Ref: Federal-Mogul Funding
3
Other wiring instructions:
[insert]
The undersigned hereby represents and warrants that the foregoing is a true and
accurate accounting in accordance with the Sixth Amended and Restated Receivable
Interest Purchase Agreement dated as of February 16, 2001, as amended, modified,
supplemented or restated from time to time (the "Agreement") and that all
representations and warranties are restated and reaffirmed with the exception
that, information pertaining to months prior to May 2000 may contain good faith
estimates and proforma numbers, which the undersigned believes to be accurate in
all material respects for the purposes of calculating the financial ratios
required under the Agreement.
___________________
Name:
Title:
4
EXHIBIT D
---------
PRINCIPAL PLACES OF BUSINESS, CHIEF EXECUTIVE
OFFICE, OFFICES FOR RECORDS, FEDERAL EMPLOYEE
IDENTIFICATION NUMBER
Principal Place of Business,
Chief Executive Office,
and Offices for Records
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Federal Employee Identification Number: ▇▇-▇▇▇▇▇▇▇
EXHIBIT E
---------
Bank/Lox Box Location Account # Box #
Comerica Bank 1000013027 148901 and 30401
▇.▇. ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
BANK ONE CORPORATION 200011003677 771327
Dept. 771327
▇ ▇ ▇▇▇▇▇▇ Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
BANK ONE CORPORATION 182953 771128
Dept. 771128
Supermet Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
First National Bank of Chicago 59-36047 730113
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
First National Bank of Chicago 55-56872 73696
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
First Maryland National Bank ▇▇▇-▇▇▇▇-▇ N/A
▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
First Maryland National Bank ▇▇▇-▇▇▇▇-▇ 64899
▇▇ ▇▇▇▇▇▇ LaGrange
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
First Maryland National Bank ▇▇▇-▇▇▇▇-▇ 64011
Deva Engineered Bearings
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Bank of America 7304749 96347
Comtech Manufacturing Co.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Bank of America 7311095 99543
Glacier Clevite Heavywall Bearings
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Comerica 185068964 108901
Glacier Clevite Heavywall Bearings
P. O. Box 6700.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Bank of America 7710925 98966
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Inc
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Comerica 185068964 109001
Department 109001
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Inc
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Nations ▇▇▇▇▇▇ 3750324114 100220
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Nations ▇▇▇▇▇▇ 3750324114 277964
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Nations ▇▇▇▇▇▇ 3750324114 277969
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Royal Bank of Canada ▇▇▇▇▇▇▇ 2026
Federal-Mogul Funding Corp.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
2
Royal Bank of Canada ▇▇▇▇▇▇▇ 2676
Federal-Mogul Funding Corp.
P.O. Box 2676
Post Station A
Toronto Ontario Canada M5W 2N7
Royal Bank of Canada ▇▇▇▇▇▇▇ 6590
Federal-Mogul Funding Corp.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Bank of America NT&SA 3751359162 2219
Federal-Mogul Funding Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
3
EXHIBIT F
---------
FORM OF COMPLIANCE CERTIFICATE
To: Bank One, NA, as Falcon Agent
Wachovia Bank, N.A., as Blue Ridge Agent
This Compliance Certificate is furnished pursuant to that certain
Sixth Amended and Restated Receivable Interest Purchase Agreement dated as of
February 16, 2001, among Federal-Mogul Funding Corporation (the "Seller"),
Federal-Mogul Corporation, the Purchasers party thereto, the financial
institutions from time to time party thereto, as liquidity providers, Bank One,
NA, as Administrative Agent and Falcon Agent, and Wachovia Bank, N.A., as Blue
Ridge Agent (as amended, modified, supplemented or restated from time to time,
the "Agreement").
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected of the Seller;
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Seller during the accounting period covered
by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
an Amortization Event or potential Amortization Event, as each such term is
defined under the Agreement, during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Seller has taken, is taking, or proposes to
take with respect to each such condition or event:
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ____ day of
_____________, 19__.
FEDERAL-MOGUL FUNDING CORPORATION
By__________________________________
Name:
Title:
4
SCHEDULE I TO COMPLIANCE REPORT
A. Schedule of Compliance of Federal-Mogul Funding Corporation, Sections _____
and _____ of the Agreement. Unless otherwise defined herein, the terms used
in this Compliance Certificate have the meanings ascribed thereto in the
Purchase Agreement.
This schedule relates to the month ended: _____________________
EXHIBIT G
---------
CREDIT POLICIES
CUSTOMER CREDIT
Purpose
-------
This policy outlines requirements for creation and monitoring customer credit.
Customer Credit Limits
----------------------
The establishment and monitoring of a limit or maximum level of credit sales to
each individual customer serves to reduce the risk of a significant loss due to
uncollectible accounts. A credit limit represents the level of credit sales
(including previous outstanding accounts receivable) above which additional
credit will not be extended.
Credit limits should be established after consideration is given to the payment
history of each customer and an assessment of the customer's financial
condition. Independent outside sources of credit history available locally (e.g.
Dun & Bradstreet in the U.S.), credit references and or customer financial
statements should be evaluated to establish customer credit limits and for
updating credit limits on a periodic basis.
Credit Hold Routines
--------------------
Routines should be established to preclude shipping product to customers that
exceeds the customer credit limit. Specific approval by a designated
finance/customer credit individual of any deviation from the established
routines.
INTRODUCTION
CENTRALIZED SOUTHFIELD ENVIRONMENT
. Supporting the Following
. OEM--United States
. Aftermarket--United States
. Aftermarket--Canada
. Specific Responsibilities
. Credit approval
. Collection
. Receivable management
. Billing--NAA only
. Dispute resolution
. Department Organization Chart
. 85 total employees
. 5 part-time/associate
. 80 full-time company employees (74% 4-year degrees)
. Software Utilized
. CARMS--receivable management
. Lotus Notes--communication and dispute management
. Maxretriever--document management
. UPS--proof of deliveries
. PRC--scanner utilization
. Internally developed--AMS, MAPS, STRAP
. Aggressive Reengineering Initiative
. Relentless pursuit of superior customer service
. Eliminate deductions
. Continuous investigation of electronic options in our daily operations
. Review of document delivery options for invoices and statements
. Resolve customer inquiries with one call methodology
. Investigation of order to cash possibilities at manufacturing plants
CREDIT POLICY AND PROCEDURE
. Determination of Credit Limits
. Credit limits are set at approximately 2.5 times estimated month sales
for new accounts.
. Existing account credit limits are adjusted according to payment
habits and financial stability. An account that shows a pattern of
paying their account past due will have their credit limit adjusted
downward to 1 - 1 1/2 times monthly sales.
. New Account Procedure
. The following information is requested for new open accounts:
- trade credit references
- bank credit reference
- Credit reporting agency report (optional)
- Verbal credit references from industry credit group members
(optional)
. Requests for additional credit are evaluated by reviewing payment
history (prompt %/discount % vs. late %), review of current financial
statements and amount of additional credit requested compared to the
current year high credit.
. Levels of Credit Granting Approval
. Two step process for new credit approval, after Sales has requested
the account be given open account status. Review and approval/reject
is given first by the Credit Analyst, then by the Area Credit Manager.
. Increases in credit for current customers are reviewed by the Credit
Analyst.
. Use of Security Documents and Personal Guarantees
. Personal guarantees are included in the customer's Credit Application.
While a personal guarantee is not required for all new accounts, it is
required in cases of higher than usual financial risk.
. UCC-1's, UCC-3's, and Purchase Money Security Agreements are taken (or
continued) on customers with large projected or current sales volumes
(*$150,000) or when a customer's financial condition is deteriorating.
. Training of Credit Granting Personnel
. Each Credit Analyst undergoes a 5 day training schedule, reviewing a
formal training agenda with each of the Credit Analysts. Items covered
include:
- A/R management software and systems (CARMS, MAPS & STRAP)
- New account/account maintenance procedures
- Special payment terms request approval and rejection
- Security documents
- Credit and collection procedures
* Greater than
2
. Credit Files
. A file is kept for each customer account. An example of information in
this file is:
- Original credit application
- Notes from phone conversations and meeting with customers
- Copies of written correspondence
- Information from creditor discussion groups
- Personal guarantee (optional)
. These files are kept in a central location in the Customer Financial
Services Department
. Additionally, notes are kept concerning Credit Analyst discussions
with the customer on CARMS. Examples of this information are:
- Customer commitments to send checks
- Date customers are put on hold
- Miscellaneous comments noted by the Credit Analyst that may be of
value in future credit decisions
3
. Payment Terms
. Standard terms for OEM customers are either net 10th and net 25th prox
or net 30 days on the date in the month in which the product is
shipped. For net 10th and net 25th prox, if the product is shipped in
the first 15 days of the month, payment is due by the 10th day of the
following month. If shipped later in the month, payment is due by the
25th day of the following month. Customers are sent an invoice or an
ASN for each shipment.
. Standard terms for the FM Aftermarket and Retail are based on a
shipping month of the 26th to the 25th and qualify for a 2% prompt
payment discount if the invoice is paid by the 10th of the following
month, otherwise, full payment for the Aftermarket is due by the 25th
of the following month and for Retail, full payment is due the 25th of
the 2nd month following. Gasket, ignition, chassis and brake terms in
general are 2% 2nd 10th net 25th prox. In addition, there are
negotiated terms for Retailers and selected buying groups which can
range from 2% 2nd 10th to net 90 days.
. Determinants of Price
. Prices for the Aftermarket are published on product line price sheets.
. Prices for Retail and OEM accounts are negotiated and specified on a
pricing agreement for a given period of time and are supported by a
purchase order or vendor agreement.
. Cash In Advance/Cash On Account
. Used at the Credit Analyst's discretion in the following situations:
- Account consistently pays past due and is judged to be a credit
risk
- Bankruptcy
- New account with credit references judged unsatisfactory
. Notes Receivable
. Used at the Credit Analyst's discretion and reviewed monthly for
payment. As of May, 1999 month end, there were 4 open Notes Receivable
for a total of $463,604.45.
4
CREDIT AND COLLECTION
. Account Maintenance
. The Credit and Accounts Receivable Management System (CARMS) produces
an action list on a daily basis, which lists accounts that require
attention due to a change in status (account over credit limit,
account past due, etc).
. Action lists are reviewed by credit analysts for resolution.
. Summary past due reports are generated on a monthly basis and are
reviewed by the analysts for credit restriction.
. Credit analysts continue follow up by making timely collection calls
to customers on past due invoices until payment is received.
. Sales is contacted to assist with collection of past due items and the
resolution of customer disputes.
. If payment is not received or a mutual payment arrangement cannot be
made, the customer is sent a final demand notice, which details the
debt and allows the customer ten working days to make acceptable
payment arrangements.
. If payment is still not received and no payment agreement has been
made, the account is referred to the Area Credit Manager for further
disposition.
. Collection Agencies / Bankruptcies
. Accounts which are seriously past due may be referred to FM's legal
counsel for action or placed with an outside collection agency.
Accounts are moved to a separate credit manager code for follow-up.
. Accounts that have filed for bankruptcy are moved to a separate credit
manager code for follow-up and are written off quarterly.
5
AFTERMARKET - CUSTOMER BASE OVERVIEW
. Number of Aftermarket and Retail Accounts
. 5,548 active Aftermarket accounts
. 187 active Retail accounts
. Product Portfolio
. Powertrain Systems - power cylinder systems, engine bearings, pistons,
piston rings, piston pins, piston liners, connecting rods, bushings,
washers, spark plugs, ignition wires and cables, ignition coils, and
ceramic insulators.
. Sealing Systems - total engine sealing, total transmission sealing,
total axle sealing, cylinder head gaskets, ancillary gaskets, dynamic
seals, bonded pistons, wiper products, heat ▇▇▇▇▇▇▇, noise and
vibration sealing systems.
. General Products - camshafts, brake and friction products, chassis
products, driveline products, fuel pumps, carburetors, emission
control products, strobes, marker lights, reflective tape, sintered
products, and systems protection products.
. Method of Order Placement and Shipment
. Orders can be placed electronically via EDI or through Federal-Mogul's
Customer Service/Order Entry via phone or fax.
. Aftermarket orders are usually shipped from one of our Service Centers
located in the U.S. and Canada. Larger orders may be shipped from one
of three main Distribution Centers located in Jacksonville, AL,
Maysville, KY and Skokie, IL.
. Customer Operations
. Aftermarket customers consist mainly of warehouse distributors that
buy product for downstream sales to independent or warehouse owned
auto parts stores. Examples are NAPA, MAWDI and Pittsburgh Crankshaft.
. Retail customers buy product for resale in their own company owned
store. Examples are CSK Automotive, Advance and AutoZone.
6
ORIGINAL EQUIPMENT MARKET AND EXPORT OVERVIEW
. OE Export Customer Base
. 1,344 active OEM accounts
. 208 active Export accounts
. Customer Operations
. OE & Export customers consist primarily of automotive, heavy duty
vehicle, farm equipment and industrial equipment manufacturers.
. Major customers include Ford, General Motors and Chrysler.
. Product Portfolio
. Powertrain Systems - power cylinder systems, engine bearings, pistons,
piston rings, piston pins, piston liners, connecting rods, bushings,
washers, spark plugs, ignition wires and cables, ignition coils, and
ceramic insulators.
. Sealing Systems - total engine sealing, total transmission sealing,
total axle sealing, cylinder head gaskets, ancillary gaskets, dynamic
seals, bonded pistons, wiper products, heat ▇▇▇▇▇▇▇, noise and
vibration sealing systems.
. General Products - camshafts, brake and friction products, chassis
products, driveline products, fuel pumps, carburetors, emission
control products, strobes, marker lights, reflective tape, sintered
products, and system protection products.
. Order Process
. Decentralized customer service - one at each of our plant locations.
. Orders are scheduled in advance by large OEM Customers (such as Ford,
GM, Chrysler) and the accum's are adjusted as product is shipped,
material release forecasts updated weekly.
. Smaller OEM's send purchase orders in advance with date required.
Purchase orders reviewed at plant before orders are scheduled.
7
ACCOUNTS RECEIVABLE DILUTIONS
. Cash Discount
. 1.8% of NAA Sales
. Doubtful Accounts
. Written off quarterly as approved by the department manager
. Continual follow up until financial conclusion
. Credit Memos
. Stocklift returns
. Obsolescence returns
. 30 day returns
. Warranty
. Price
. Policy allowance
. Checks Issued
. Rebates for volume incentives
. Invoices/Statements
. The invoices generated from a plant sale can be mailed or sent
electronically through EDI.
. The Aftermarket invoices that are not sent via EDI are mailed at least
weekly.
. Monthly statements are sent to customers based on the 25th or month-
end cutoff based on the customer.
. Reconciliations
. monthly reconciliation is completed of CARMS to the General Ledger
balance.
. Typical reconciliation items can be cash or ▇▇▇▇▇▇▇▇ due to different
closing schedules.
8
EXHIBIT H
---------
FORM OF REDUCTION NOTICE
[Date]
Wachovia Bank, N.A.
as Blue Ridge Agent for certain
Purchasers parties to the Receivables
Purchase Agreement referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇/▇▇/ ▇▇▇▇▇
▇▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Bank One, NA
as Falcon Agent for the certain Purchasers parties
to the Receivables Purchase Agreement
referred to below
Mail IL1-0079
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Asset-Backed Finance
Gentlemen:
The undersigned, Federal-Mogul Funding Corporation, refers to the
Sixth Amended and Restated Receivable Interest Purchase Agreement, dated as of
February 16, 2001 (the "Receivables Purchase Agreement", the terms defined
therein being used herein as therein defined), among the undersigned, Federal-
Mogul Corporation, Blue Ridge Asset Funding Corporation ("BLUE RIDGE"), Falcon
Asset Securitization Corporation ("FALCON"), certain financial institutions from
time to time party thereto, as Liquidity Providers, Bank One, NA, as
Administrative Agent and Falcon Agent, and Wachovia Bank, N.A., as Blue Ridge
Agent, and hereby gives you notice, irrevocably, pursuant to Section 2.03 of the
Receivables Purchase Agreement that the undersigned hereby requests a reduction
of Capital under the Receivables Purchase Agreement, and in that connection sets
forth below the information relating to such reduction (the "Proposed
Reduction") as required by Section 2.03 of the Receivables Purchase Agreement:
(i) The Proposed Reduction Date is _________, ____.
(ii) The Aggregate Reduction is $____________. The Falcon share of
the Aggregate Reduction is $______________. The Blue Ridge share of the
Aggregate Reduction is $____________.
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Reduction
(before and after giving effect to the Proposed Reduction):
(A) the representations and warranties set forth in Section 4.01 of
the Receivables Purchase Agreement are correct on and as of such date, as though
made on and as of such date;
(B) no event has occurred, or would result from the Proposed
Reduction that will constitute an Amortization Event, and no event has occurred
and is continuing, or would result from such Proposed Reduction, that would
constitute a Potential Amortization Event; and
(C) the Facility Termination Date has not have occurred, the
aggregate Capital of all Receivable Interests does not and will not exceed the
Purchase Limit and the aggregate Receivable Interests do not and will not exceed
100%.
Very truly yours,
FEDERAL-MOGUL FUNDING CORPORATION
By: _____________________________
Name:
Title:
2
EXHIBIT I
---------
FORM OF INTERIM SETTLEMENT DATE STATEMENT
[LOGO] FEDERAL
MOGUL
Federal-Mogul Funding II Trade Receivable Interest Purchase Agreement
Distribution Date Statement for Purchase Agreement dated June ____ 2000
The input fields are "boxed" and numbers are in blue. All other fields are
calculated
----------------
Month Ended
-------------------------------------------------------------------------------------------------------
I. Receivables Rollforward
(Updated/new numbers as of the 15th for Moog and S.F., Static numbers (from prior monthly report)
for Aviation & Blazer)
________________
Beginning Balance ________________
+ New Receivables ________________
- Cash Collections ________________
- Credit Memos ----------------
- Gross Chargeoffs
+/- Adjustments ________________
+/- Unreconciled Balance - 0
Ending Balance ________________ 0
II. Receivables Aging - (Use Static Percentages from prior month's full report)
Amount Percent
------------- ----------------
Total
Current
0-30 days past due
31-60 days past due
61-90 days past due
91-120 days past due
120+ days past due
Placed accounts
III. Calculation of Funding (see Schedule A)
Pool Balance -
Less Ineligibles (input all #s
as negatives) :
Balances * 90 dpd (incl. all (To be updated from Section II above)
Placed Accts)
Contra Accounts ** 91 dpd #REF! subject to 3% Static #s from prior
threshold monthly report
Cross-agings ** 91 dpd #REF! subject to 2% Static #s from prior
(30%*91dpd) threshold monthly report
Terms over 90 but less than 180 subject to 3% Static #s from prior
basket monthly report
---------------
Terms over ▇▇▇ ▇▇▇▇▇▇ #▇ from prior
monthly report
Deductions * 61 dpd & ** 91 dpd Static #s from prior
monthly report
---------------
Less Intercompany Receivables Static #s from prior
** 91 dpd monthly report
Currencies other than US$ and Static #s from prior
CAN$ monthly report
---------------
Less Ineligible Export Static #s from prior
Receivables ** 90 dpd monthly report
Other ineligibles (e.g. Static #s from prior
unreconciled) monthly report
---------------
Eligible Receivables #REF!
Exc . subject to 3% Static #s from prior
ess Concentrations threshold monthly report
---------------
Net Receivables Balance #REF!
Contractual Dilution
---------------
Available Receivables #REF!
Aggregate Reserve Percentage
Aggregate Reserves #REF!
---------------------------
Available Funding Amount (max 0
$420 MM)
---------------
Falcon Available Funding (max $220 MM) 0
Blue Ridge Available Funding (max 0
$200 MM)
*Greater than
** Less than
IV. Coverage Amount
=Capital minus Available Funding Amount
Capital Outstanding
Available Funding Amount
Coverage Amount to be paid on Distribution Date
V. Calculation of Capital
Falcon Blue Ridge
Available Funding Amount - -
--------------------------------------------
Outstanding Capital
--------------------------------------------
Required principal paydown - -
--------------------------------------------
Optional Repayment - -
--------------------------------------------
Net paydown due to Conduits - -
VI. Payment Instructions
Payment instructions to pay Interest and Fees
Amounts due Conduits:
--------------------
Falcon/Bank One to debit Federal-Mogul
Funding Corp's account # 55-73688
FMFC II to wire funds to Blue Ridge:
ABA #
Account #
Ref: Federal-Mogul Funding
The undersigned hereby represents and warrants that the foregoing is a true and
accurate accounting in accordance with the Amended and Restated Receivable
Interest Purchase Agreement dated as of July 1, 1999, as amended, modified,
supplemented or restated from time to time (the Agreement) and that all
representations and warranties are restated and reaffirmed with the exception
that, information pertaining to months prior to May 1999 may contain good faith
estimates and proforma numbers, which the undersigned believes to be accurate in
all material respects for the purposes of calculating the financial ratios
required under the Agreement.
-------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
Treasurer
2
SCHEDULE A
LIST OF CLOSING DOCUMENTS
List of Participants
--------------------
Participant Abbreviation
----------- ------------
Federal-Mogul Corporation FMC
Federal-Mogul Canada Limited FM Canada
Federal-Mogul Piston Rings, Inc. FM Piston
Federal-Mogul Flowery Branch, LLC FM Flowery
Federal-Mogul Powertrain, Inc. FM Powertrain
Federal-Mogul Sealing Systems, Inc. FM Sealing
Federal-Mogul Carolina, Inc. FM Carolina
Federal-Mogul South Bend, Inc. FM South Bend
Federal-Mogul LaGrange, Inc. FM LaGrange
Federal-Mogul Sintered Products, Inc. FM Sintered
Federal-Mogul Sintered Products - Waupun, Inc. FM Waupun
Federal-Mogul System Protection Group, Inc. FM System
Federal-Mogul Engineered Bearings, Inc. FM Engineered
Federal-Mogul Camshafts, Inc. FM Camshafts
Federal-Mogul Aviation, Inc. FM Aviation
Federal-Mogul Ignition Company "Blazer" FM Blazer
Federal-Mogul Products, Inc. "Moog" FM Moog
Federal-Mogul Funding Corporation FMFC
Falcon Asset Securitization Corporation Falcon
Financial Institutions Liquidity Providers
Bank One, NA Administrative Agent/
Falcon Agent
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ B&M
▇▇▇▇▇ & Wood B&W
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L&W
Wachovia Bank, N.A. Blue Ridge Agent
International Securitization Corporation ISC
Index of Closing Documents
--------------------------
Document Tab No. Responsibility
-------- ------- --------------
STEP I - Sale from the Originators to FMC
-----------------------------------------
First Amended and Restated Receivables Purchase 1.0 B&W
Agreement
Subordinated Note executed by FMC in favor of each 2.0 B&W
Originator (other than FMC)
Secretary's Certificate for each Originator (other than 3.0 B&W
FMC), as to organizational document certified by, and
good standing certificate issued by, Secretary of
State of the State of incorporation, By-Laws,
resolutions and specimen signatures:
FM Canada 3.1 B&W
FM Piston 3.2 B&W
FM Flowery 3.3 B&W
FM Powertrain 3.4 B&W
FM Sealing 3.5 B&W
FM Carolina 3.6 B&W
FM South Bend 3.7 B&W
FM LaGrange 3.8 B&W
FM Sintered 3.9 B&W
FM Waupun 3.10 B&W
FM System 3.11 B&W
FM Engineered 3.12 B&W
FM Camshafts 3.13 B&W
FM Aviation 3.14 B&W
FM Blazer 3.15 B&W
2
Document Tab No. Responsibility
-------- ------- --------------
FM Moog 3.16 B&W
Officer's Certificate of each Originator (other than 4.0 B&W
FMC), dated as of June __, 2000 Re: No Event of
Purchase and Sale Termination or Potential Event of
Purchase and Sale Termination, and absence of Material
Adverse Effect since March 31, 2000.
FM Canada 4.1 B&W
FM Piston 4.2 B&W
FM Flowery 4.3 B&W
FM Powertrain 4.4 B&W
FM Sealing 4.5 B&W
FM Carolina 4.6 B&W
FM South Bend 4.7 B&W
FM LaGrange 4.8 B&W
FM Sintered 4.9 B&W
FM Waupun 4.10 B&W
FM System 4.11 B&W
FM Engineered 4.12 B&W
FM Camshafts 4.13 B&W
FM Aviation 4.14 B&W
FM Blazer 4.15 B&W
FM Moog 4.16 B&W
UCC-3 Financing Statement to be filed in connection 5.0 L&W
with First Amended and Restated Receivables Purchase
Agreement, each Originator (other than FMC) as debtor
and Bank One N.A., as secured party:
3
Documnet Tab No. Responsibility
-------- ------- --------------
FM Canada 5.1 L&W
- Ontario
FM Piston 5.2 L&W
- Secretary of State of Michigan
- Secretary of State of Wisconsin
FM Flowery 5.3 L&W
- Hall County (Georgia)
FM Powertrain 5.4 L&W
- Secretary of State of Minnesota
- Secretary of State of Ohio
- ▇▇▇▇▇▇ County
FM Sealing 5.5 L&W
- Secretary of State of Alabama
FM Carolina 5.6 L&W
- Secretary of State of South Carolina
FM South Bend 5.7 L&W
- Secretary of State of Indiana
FM LaGrange 5.8 L&W
- ▇▇▇▇▇ County (Georgia)
FM Sintered 5.9 L&W
- Secretary of State of Ohio
- ▇▇▇▇▇▇▇▇▇▇ County
FM Waupun 5.10 L&W
- Secretary of State of Wisconsin
FM System 5.11 L&W
- Secretary of State of Pennsylvania
- ▇▇▇▇▇▇▇ County
FM Engineered 5.12 L&W
- Secretary of State of Ohio
- ▇▇▇▇▇ County
- Summit County
FM Camshafts 5.13 L&W
- Secretary of State of Michigan
4
Documnet Tab No. Responsibility
-------- ------- --------------
FM Aviation 5.14 L&W
- Secretary of State of South Carolina
FM Blazer 5.15 L&W
- Secretary of State of Illinois
- Secretary of State Michigan
FM Moog 5.16 L&W
- Secretary of State of Missouri
- St. Louis City
UCC Lien and Related Searches for each Originator 6.0 B&W
(other than FMC)
FM Canada 6.1 B&W
- Ontario
FM Piston 6.2 B&W
- Secretary of State of Michigan
- Kent County
- Secretary of State of Wisconsin
- Marathon County
- Manitowoc County
FM Flowery 6.3 B&W
- Secretary of State of Georgia (Central Index)
- Hall County
FM Powertrain 6.4 B&W
- Secretary of State of Minnesota
- Wabasha County
- ▇▇▇▇▇▇▇ County
- Secretary of State of Ohio
- ▇▇▇▇▇▇ County
FM Sealing 6.5 B&W
- Secretary of State of Alabama
- Limestone County
FM Carolina 6.6 B&W
- Secretary of State of South Carolina
- Sumter County
5
Documnet Tab No. Responsibility
-------- ------- --------------
FM South Bend 6.7 B&W
- Secretary of State of Indiana
- St. ▇▇▇▇▇▇ County
FM LaGrange 6.8 B&W
- Secretary of State of Georgia (Central Index)
- ▇▇▇▇▇ County
FM Sintered 6.9 B&W
- Secretary of State of Ohio
- ▇▇▇▇▇▇▇▇▇▇ County
FM Waupun 6.10 B&W
- Secretary of State of Wisconsin
- Dodge County
- Fond du Lac County
FM System 6.11 B&W
- Secretary of State of Pennsylvania
- ▇▇▇▇▇▇▇ County
FM Engineered 6.12 B&W
- Secretary of State of Ohio
- ▇▇▇▇▇ County
- Summit County
FM Camshafts 6.13 B&W
- Secretary of State of Michigan
- Ottawa County
FM Aviation 6.14 B&W
- Secretary of State of South Carolina
- ▇▇▇▇▇▇▇ County
FM Blazer 6.15 B&W
- Secretary of State of Illinois
- ▇▇▇▇ County
FM Moog 6.16 B&W
- Secretary of State of Missouri
- St. Louis County
- St. Louis City
6
Documnet Tab No. Responsibility
-------- ------- --------------
STEP II - Sale from FMC to FMFC
-------------------------------
Fourth Amended and Restated Receivables Sale and 7.0 L&W
Contribution Agreement ("Receivables Sale Agreement").
--------------------------
Stockholder and Subscription Agreement 8.0 L&W
Subordinated Note executed by FMC 9.0 L&W
Secretary's Certificate of FMC, as to good standing 10.0 B&W
certificate issued by, and Certificate of
Incorporation certified by, Secretary of State of
Michigan, By-Laws, resolutions and specimen signatures.
Officer's Certificate of FMC Re: No Event of Purchase 11.0 B&W
and Sale Termination or Potential Event of Purchase
and Sale Termination, and absence of Material Adverse
Effect since March 31, 2000.
UCC-3 Financing Statement to be filed in connection 12.0 L&W
with Receivables Sale Agreement, FMC as debtor and
FMFC as secured party and Administrative Agent, as
Assignee:
- Secretary of State of Michigan
UCC Lien and Related Searches for the FMC 13.0 B&W
- Secretary of State of Michigan
- Oakland County
STEP III - Sale from FMFC to Falcon, Blue Ridge and the Liquidity Providers
---------------------------------------------------------------------------
Fourth Amended and Restated Receivables Interest 14.0 L&W
Purchase Agreement (the "Receivables Interest Purchase
-----------------------------
Agreement")
---------
Blue Ridge Liquidity Asset Purchase Agreement 15.0 L&W
Falcon Liquidity Agreement 16.0 L&W
Blue Ridge Fee Letter 17.0 L&W
Falcon Fee Letter 18.0 L&W
7
Documnet Tab No. Responsibility
-------- ------- --------------
Assignment Agreement between ISC and Blue Ridge 19.0 L&W
Assignment Agreement between Falcon and Blue Ridge 20.0 L&W
Assignment Agreement between Bank One, Michigan and 21.0 L&W
Wachovia Bank, N.A.
Secretary's Certificate of FMFC, as to good standing 22.0 B&W
certificate issued by, and Certificate of
Incorporation certified by, Secretary of State of
Michigan, By-Laws, resolutions and specimen signatures.
Officer's Certificate of FMFC Re: No Amortization 23.0 B&W
Event or Potential Amortization Event, and absence of
Material Adverse Effect since March 31, 1999.
Certificate Re: B&W True Sale/Nonconsolidation Opinion 24.0 B&W
signed by each of the Originators (other than FMC)
(Step I)
FMC Certificate Re: B&W True Sale/Nonconsolidation 25.0 B&W
Opinion (Step II)
FMFC Certificate Re: B&W True Sale/Nonconsolidation 26.0 B&W
Opinion (Step II)
True Sale/Nonconsolidation Opinion of B&W (Step I and 27.0 B&W
Step II).
Corporate Opinion of B&W (including perfection and 28.0 B&W
priority), counsel to Originators, FMC and FMFC (Step
I, Step II and Step III)
Corporate Opinion of in-house (including perfection and 29.0 B&W
priority), counsel to Originators, FMC and FMFC (Step
I, Step II and Step III)
Corporate Opinion of B&M, Canadian counsel for FM 30.0 B&W/B&M
Canada (Step I)
UCC-3 Financing Statement to be filed in connection 31.0 L&W
with Receivables Interest Purchase Agreement, FMFC as
debtor and Agent as secured party:
- Secretary of State of Michigan
8
Documnet Tab No. Responsibility
-------- ------- --------------
UCC Lien and Related Searches for FMFC 32.0 B&W
- Secretary of State of Michigan
- Oakland County
9