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AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
dated as of February 1, 1997, among FEDERAL-MOGUL FUNDING
CORPORATION, a Michigan corporation, as Seller (the "Seller"),
FEDERAL-MOGUL CORPORATION, a Michigan corporation, as Servicer (the
"Servicer") and THE CHASE MANHATTAN BANK, formerly known as
Chemical Bank, a New York banking corporation, as trustee (the
"Trustee") amending and restating the POOLING AND SERVICING
AGREEMENT dated as of June 1, 1992, among the Seller, the Servicer
and the Trustee.
In consideration of the mutual agreements herein
contained, each party agrees as follows for the benefit of the
other parties and for the benefit of the Certificateholders and the
other Beneficiaries to the extent provided herein:
ARTICLE I
Definitions
SECTION 1.01. Definitions. Whenever used in this
Agreement, the following words and phrases shall have the following
meanings:
"Adjustments" shall mean with respect to any Collection
Period, the aggregate amount, if any, by which the balances of
Receivables were adjusted downward pursuant to Section 3.09 during
such Collection Period.
"Adjustment Payment" shall have the meaning specified in
Section 3.09.
"Affiliate" shall mean, with respect to any specified
Person, any other Person controlling or controlled by or under
common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of
such Person, directly or indirectly whether through the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" shall mean, with respect to any Series, the
Person so designated in the related Supplement.
"Agreement" shall mean this Amended and Restated Pooling
and Servicing Agreement, as the same may from time to time be
amended, modified or otherwise supplemented, including, with
respect to any Series or Class, the related Supplement.
"Allocable Miscellaneous Payments" shall mean, with
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respect to any Series and for any Collection Period, the product of
the amount of Miscellaneous Payments for such Collection Period and
a fraction, the numerator of which is the Invested Amount for such
Series immediately prior to the following Distribution Date and the
denominator of which is the Trust Invested Amount as of such time.
"Applicants" shall have the meaning specified in Section
6.07.
"Appointment Date" shall have the meaning specified in
Section 9.02.
"Authorized Newspaper" shall mean any newspaper or
newspapers of general circulation in New York City customarily
published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
"Available Subordinated Amount" shall mean, with respect
to any Series at any time of determination, an amount equal to the
available subordinated amount specified in the related Supplement
at such time.
"Bearer Certificates" shall have the meaning specified in
Section 6.01.
"Beneficiary" shall mean any of the holders of the
Investor Certificates and any Enhancement Provider.
"Benefit Plan" shall have the meaning specified in
Section 6.04(c).
"Book-Entry Certificates" shall mean beneficial interests
in the Investor Certificates, ownership and transfers of which
shall be made through book entries by a Depository as described in
Section 6.08.
"Business Day" shall mean any day other than (a) a
Saturday or a Sunday or (b) another day on which banking
institutions in the State of Michigan, the State of Illinois or the
State of New York or The Depository Trust Company is, authorized or
obligated by law, executive order or governmental decree to be
closed.
"Cedel" shall mean Centrale de Livraison de Valeurs
Mobilieres S.A.
"Certificate" shall mean any of the Investor Certificates
or the Seller's Certificates.
"Certificate Owner" shall mean, with respect to a Book-
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Entry Certificate, the Person who is the beneficial owner of a
Book-Entry Certificate.
"Certificate Rate" shall mean, with respect to any Series
or Class, the certificate rate specified therefor in the related
Supplement.
"Certificate Register" shall have the meaning specified
in Section 6.04(a).
"Certificateholder" or "Holder" shall mean an Investor
Certificateholder or a Person in whose name any one of the Seller's
Certificates is registered.
"Certificateholders' Interest" shall have the meaning
specified in Section 4.01.
"Class" shall mean, with respect to any Series, any one
of the classes of Investor Certificates of that Series.
"Closing Date" shall mean, with respect to any Series,
the Closing Date specified in the related Supplement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Collateral Security" shall mean, with respect to any
Receivable and subject to the terms of the related Receivables
Purchase Agreement, the security interest, if any, granted by or on
behalf of the related Obligor with respect thereto, including a
first priority perfected security interest in the merchandise
related to such Receivable.
"Collection Account" shall have the meaning specified in
Section 4.02.
"Collection Period" shall mean, with respect to any
Distribution Date, the calendar month preceding the month in which
such Distribution Date occurs.
"Collections" shall mean, without duplication, all
payments by or on behalf of Obligors received by the Servicer in
respect of the Receivables, in the form of cash, checks, wire
transfers or any other form of payment.
"Common Depositary" shall mean the Person specified in
the applicable Supplement, in its capacity as common depositary for
the respective accounts of any Foreign Clearing Agencies.
"Corporate Trust Office" shall mean the principal office
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of the Trustee in the City of New York, at which at any particular
time its corporate trust business shall be administered, which
office at the date of the execution of this Agreement is located at
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, Attention:
Vice President-Corporate Trust Administration.
"Coupon" shall have the meaning specified in Section
6.01.
"Cut-Off Date" shall mean May 31, 1992.
"Date of Processing" shall mean, with respect to any
transaction, the date on which such transaction is first recorded
on the Servicer's computer file of accounts receivable (without
regard to the effective date of such recordation).
"Defaulted Amount" on any Determination Date shall mean
an amount equal to (a) the amount of Receivables which became
Defaulted Receivables during the immediately preceding Collection
Period minus (b) the full amount of any such Defaulted Receivables
which are subject to reassignment or assignment to the Seller or
the Servicer in accordance with the terms of this Agreement;
provided, however, that, if an Insolvency Event occurs with respect
to the Seller, the amounts of such Defaulted Receivables which are
subject to reassignment to the Seller shall not be included in
clause (b) and, if an Insolvency Event occurs with respect to the
Servicer, the amount of such Defaulted Receivables which are
subject to assignment to the Servicer shall not be included in
clause (b).
"Defaulted Receivables" on any Determination Date shall
mean all Receivables which are charged off as uncollectible in
respect of the immediately preceding Collection Period in
accordance with the Servicer's customary and usual billing and
collection procedures or became more than 90 days delinquent during
the immediately preceding Collection Period.
"Definitive Certificates" shall have the meaning
specified in Section 6.08.
"Definitive Euro-Certificates" shall have the meaning
specified in Section 6.11.
"Deposit Date" shall mean each day on which the Servicer
deposits Collections in the Collection Account pursuant to Section
4.03 hereof.
"Depository" shall mean The Depository Trust Company, as
initial Depository, the nominee of which is CEDE & Co., or any
other organization registered as a "clearing agency" pursuant to
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Section 17A of the Securities Exchange Act of 1934, as amended.
The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the
State of New York.
"Depository Agreement" shall mean, with respect to any
Series or Class, the agreement among the Seller, the Trustee and
the initial Depository, dated as of the related Closing Date and
substantially in the form of Exhibit D.
"Depository Participant" shall mean a broker, dealer,
bank or other financial institution or other Person for whom from
time to time a Depository effects book-entry transfers and pledges
of securities deposited with the Depository.
"Determination Date" with respect to any Distribution
Date shall mean the day that is four days prior to such
Distribution Date or, if such fourth preceding day is not a
Business Day, the next succeeding Business Day or such other day as
is set forth in the Supplement for a Series.
"Discount Collections" shall mean, with respect to any
Receivables and each Series, that portion of Collections allocable
to Discount as set forth in Section 3.10. Discount Collections
shall include all Recoveries.
"Discount Rate" shall have the meaning specified in
Section 3.10.
"Distribution Date" shall mean the fifteenth day of each
month or, if such day is not a Business Day, the next succeeding
Business Day or with respect to any Series, such other day as is
set forth in the Supplement for a Series.
"Distribution Date Statement" shall mean, with respect to
any Series, a report prepared by the Servicer and delivered to the
Trustee on each Determination Date for the immediately preceding
Collection Period in substantially the form set forth in the
related Supplement.
"Early Amortization Event" shall have the meaning
specified in Section 9.01 and, with respect to any Series, shall
also mean any Early Amortization Event specified in the related
Supplement.
"Early Amortization Period" shall mean, with respect to
any Series, unless otherwise specified in the Supplement related to
such Series, the period beginning at the close of business on the
Business Day immediately preceding the day on which the Early
Amortization Event is deemed to have occurred, and in each case
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ending upon the earlier to occur of (a) the payment in full to the
Investor Certificateholders of such Series of the Invested Amount
with respect to such Series, (b) the Termination Date with respect
to such Series and (c) if such Early Amortization Period has
resulted from the occurrence of an Early Amortization Event
described in Section 9.01(f), the end of the first Collection
Period during which an Early Amortization Event would no longer be
deemed to exist pursuant to Section 9.01(f), so long as no other
Early Amortization Event with respect to such Series shall have
occurred and the scheduled termination of the Revolving Period with
respect to such Series shall not have occurred.
"Eligible Deposit Account" shall mean either (a) a
aggregated account with an Eligible Institution or (b) a segregated
trust account with the corporate trust department of a depository
institution or trust company organized under the laws of the United
States of America or any one of the states thereof, including the
District of Columbia (or any domestic branch of a foreign bank) or
any depository institution or trust company organized under the
laws of Canada, having corporate trust powers and acting as trustee
for funds deposited in such account, so long as any of the
securities of such depository institution or trust company shall
have a credit rating from each Rating Agency in one of its generic
rating categories which signifies investment grade.
"Eligible Institution" shall mean (a) the corporate trust
department of the Trustee or (b) a depository institution or trust
company organized under the laws of the United States of America or
any one of the states thereof, the District of Columbia (or any
domestic branch of a foreign bank) or any depository institution or
trust company organized under the laws of Canada, which at all
times (i) has either (A) a long-term unsecured debt rating of A2 or
better by Moody's and of AAA or better by Standard & Poor's or such
other rating that is acceptable to each Rating Agency, as evidenced
by a letter from such Rating Agency to the Trustee or (B) a
certificate of deposit rating of P-1 by Moody's and A-1+ by
Standard & Poor's or such other rating that is acceptable to each
Rating Agency, as evidenced by a letter from such Rating Agency to
the Trustee; provided, however, that with respect to an Eligible
Institution at which a Lockbox Account is maintained the
requirement of clause (B) above shall be a rating of A-1 by
Standard & Poor's and (ii) whose deposits are insured by the FDIC.
"Eligible Investments" shall mean book-entry securities,
negotiable instruments or securities represented by Instruments in
bearer or registered form (a) having original or remaining
maturities of 30 days or less, but in no event occurring later than
the Business Day immediately preceding the Distribution Date next
succeeding the Trustee's acquisition thereof or (b) which are
redeemable at par and without penalty not later than the Business
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Day immediately preceding such next succeeding Distribution Date
or, in the case of either clause (a) or (b), which mature or are
redeemable on or before 10:00 a.m. on such next succeeding
Distribution Date in the case of Eligible Investments on which the
Trustee is the obligor, which evidence:
(a) direct obligations of, and obligations fully guaranteed
as to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution or trust company incorporated under
the laws of the United States of America or any state thereof (or
any domestic branch of a foreign bank) and subject to supervision
and examination by Federal or state banking or depository
institution authorities; provided, however, that at the time of the
Trust's investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations
(other than such obligations the rating of which is based on the
credit of a person or entity other than such depository institution
or trust company) thereof shall have a credit rating from each of
the Rating Agencies in the highest investment category granted
thereby;
(c) commercial paper having, at the time of the Trust's
investment or contractual commitment to invest therein, a rating
from each of the Rating Agencies in the highest investment category
granted thereby;
(d) investments in money market funds having a rating from
each Rating Agency in the highest investment category granted
thereby or otherwise approved in writing thereby;
(e) demand deposits, time deposits and certificates of
deposit which are fully insured by the FDIC;
(f) bankers' acceptances issued by any depository institution
or trust company referred to in clause (b) above;
(g) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United
States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a
depository institution or trust company (acting as principal)
described in clause (b); and
(h) any other investment as may be permitted, as evidenced in
writing, by any Rating Agency without reducing or withdrawing the
rating of the Certificates of any Series.
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"Eligible Receivables" shall mean, unless otherwise defined in
any Supplement, each Receivable:
(a) which was originated or acquired by Federal-Mogul or any
subsidiary of Federal-Mogul in the ordinary course of business;
(b) as to which at the time of transfer to the Trust the
Obligor on which shall not have commenced, or have had commenced
against it, any proceeding under applicable bankruptcy law or, if
such Obligor is under the protection of a bankruptcy court, such
court has approved payment of such Receivable by such Obligor;
(c) which is owned by Federal-Mogul or any Subsidiary thereof
at the time of sale by Federal-Mogul to the Seller;
(d) which represents the obligation of a purchaser of goods
from Federal-Mogul or any subsidiary thereof (each, an "Obligor")
to pay for such goods in United States dollars or Canadian dollars;
(e) the Obligor on which is not an affiliate of Federal-Mogul;
(f) which was created in compliance in all respects with all
requirements of law applicable thereto;
(g) with respect to which all consents and governmental
authorizations required to be obtained by Federal-Mogul or the
Seller in connection with the creation of such Receivable or the
transfer thereof to the Trust have been duly obtained;
(h) as to which at all times following the transfer of such
Receivable to the Trust, the Trust will have good and marketable
title thereto free and clear of all liens arising from the actions
of the Seller or Federal-Mogul prior to the transfer or arising at
any time;
(i) which has been the subject of a valid transfer and
Assignment from the Seller to the Trust of all the Seller's
interest therein (including any proceeds thereof);
(j) which will at all times be the legal and assignable
payment obligation of the Obligor relating thereto, enforceable
against such Obligor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy or other
similar laws;
(k) which at the time of transfer to the Trust is not subject
to any right of rescission, setoff (other than an adjustment to
such Receivable's balance in the ordinary course of business),
dispute, claim, counterclaim or any other defense (including
defenses arising out of violations of usury laws) of the Obligor;
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(l) as to which, at the time of transfer of such Receivable
to the Trust, Federal-Mogul and the Seller have satisfied all their
respective obligations with respect to such Receivable required to
be satisfied at such time;
(m) as to which, at the time of transfer of such Receivable
to the Trust, neither Federal-Mogul nor the Seller has taken or
failed to take any action which would impair the rights of the
Trust or the certificateholders therein;
(n) which constitutes an "account" or a "general intangible"
as defined in Article 9 of the UCC as then in effect in the State
of Michigan;
(o) which at the time of transfer to the Trust is not past
due more than 90 days;
(p) which was created without fraud and in accordance with
the credit policies and guidelines of Federal-Mogul; and
(q) on which payment in full is due from the related Obligor
within 90 days of the date on which such Receivable is purchased by
the Trust, provided, however, that with respect to a Receivable on
which General Motors Corporation, Ford Motor Company or Genuine
Parts Company is the Obligor and to the extent the Obligor
Overconcentration for such Obligor is greater than 2%, payment in
full is due within 60 days of the date on which such Receivable is
purchased by the Trust.
"Eligible Servicer" shall mean the Trustee or an entity
which, at the time of its appointment as Servicer, (a) is legally
qualified and has the capacity to service the Receivables, (b) has
demonstrated the ability to professionally and competently service
a portfolio of similar accounts in accordance with high standards
of skill and care and (c) is qualified to use the software that is
then currently being used to service the Receivables or obtains the
right to use or has its own software which is adequate to perform
its duties under this Agreement.
"Enhancement" shall mean the rights and benefits provided
to the Investor Certificateholders of any Series or Class pursuant
to any letter of credit, surety bond, cash collateral account,
spread account, guaranteed rate agreement, maturity liquidity
facility, tax protection agreement, interest rate swap agreement or
other similar arrangement. The subordination of any Series or
Class to any other Series or Class or of the Seller's Interest to
any Series or Class shall be deemed to be an Enhancement.
"Enhancement Agreement" shall mean any agreement,
instrument or document governing the terms of any Enhancement or
pursuant to which any Enhancement is issued or outstanding.
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"Enhancement Provider" shall mean the Person providing
any Enhancement, other than any Certificateholders (including any
holders of the Seller's Certificates) the Certificates of which are
subordinated to any Series or Class.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"Escrow Agent" shall mean any escrow agent with respect
to an escrow account maintained for the benefit of the Investor
Certificateholders of any Series or Class.
"Euroclear Operator" shall mean Xxxxxx Guaranty Trust
Company of New York, Brussels office, as operator of the
Euroclear System.
"Excess Principal Collections" shall have the meaning
specified in Section 4.04.
"Excess Seller's Percentage" shall have the meaning
specified in each Supplement.
"Exchange Date" shall mean any date that is after the
Series Issuance Date, in the case of Definitive Euro-Certificates
in registered form, or upon presentation of certification of
non-United States beneficial ownership (as described in Section 6.11),
in the case of Definitive Euro-Certificates in bearer form.
"Excluded Obligor" shall have the meaning specified in
Section 2.07.
"FDIC" shall mean the Federal Deposit Insurance
Corporation or any successor entity thereto.
"Federal-Mogul" shall mean Federal-Mogul Corporation, a
Michigan corporation, and its successors in interest to the extent
permitted hereunder.
"Final Maturity Date" shall have the meaning specified in
Section 12.01.
"FMFC" shall mean Federal-Mogul Funding Corporation, a
Michigan corporation, and its successors in interest to the extent
permitted hereunder.
"FMFC Certificate" shall mean the certificate executed by
the Seller and authenticated by the Trustee, substantially in the
form of Exhibit A.
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"Foreign Clearing Agency" shall mean Cedel and the
Euroclear Operator.
"Global Certificate" shall have the meaning specified in
Section 6.11.
"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.
"Incremental Default Amount" on any Determination Date
shall mean (a) the sum of (i) the Overconcentration Default Amount
on such Determination Date and (ii) all the Ineligible Receivables
that became Defaulted Receivables during the immediately preceding
Collection Period minus (b) the full amount of any of such
Defaulted Receivables which are subject to a reassignment or
assignment to the Seller or the Servicer in accordance with the
terms of this Agreement (but not less than zero); provided,
however, that if an Insolvency Event occurs with respect to the
Seller, the amount of such Defaulted Receivables which are subject
to reassignment to the Seller shall not be so subtracted and, if an
Insolvency Event occurs with respect to the Servicer, the amount of
such Defaulted Receivables which are subject to assignment to the
Servicer shall not be so subtracted; provided, further, that the
Incremental Default Amount for any Determination Date shall not
exceed the Overconcentration Amount on such Determination Date.
"Ineligible Amount" on any date of determination shall
mean the amount of Ineligible Receivables included in the Trust on
such date pursuant to Section 2.06.
"Ineligible Receivable" shall mean any Receivable that
was not an Eligible Receivable at the time of its transfer to the
Trust and was transferred to the Trust in accordance with Section
2.06.
"Initial Invested Amount" shall mean, with respect to any
Series and for any date, an amount equal to the initial invested
amount specified in the related Supplement. The Initial Invested
Amount for any Series may be increased or decreased from time to
time as specified in the related Supplement.
"Insolvency Event" shall mean any event specified in
Section 9.01(a) or 9.01(b).
"Insolvency Proceeds" shall have the meaning specified in
Section 9.02.
Internal Revenue Code" shall mean the Internal Revenue
Code of 1986, as amended.
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"Invested Amount" shall mean, with respect to any Series
and for any date, an amount equal to the invested amount specified
in and calculated in accordance with the related Supplement;
provided, that the "Invested Amount" for a Series will be zero if
money or securities in an amount necessary to pay in full, by
redemption or when due, all principal of and accrued interest on
such Series will have been deposited with the Trustee, any Paying
Agent or any Escrow Agent in trust for the Certificateholders of
such Series.
"Investment Company Act" shall mean the Investment
Company Act of 1940, as amended.
"Investor Certificateholder" shall mean the Person in
whose name a Registered Certificate is registered in the
Certificate Register or the bearer of any Bearer Certificate (or
the Global Certificate, as the case may be) or Coupon.
"Investor Certificates" shall mean any one of the
certificates (including the Bearer Certificates, the Registered
Certificates or any Global Certificate) executed by the Seller and
authenticated by or on behalf of the Trustee, substantially in the
form attached to the related Supplement, other than the Seller's
Certificates.
"Investors' Servicing Fee" shall mean the portion of the
Servicing Fee allocable to the Investor Certificateholders pursuant
to the terms of the Supplements.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other),
preference, participation interest, priority or other security
agreement or preferential arrangement of any kind or nature
whatsoever.
"Lockbox Account" shall have the meaning specified in
Section 3.03(a)(ix).
"Manager" shall mean the lead manager, manager or co-manager
or Person performing a similar function with respect to an
offering of Definitive Euro-Certificates.
"Miscellaneous Payments" shall mean, with respect to any
Collection Period, the sum of (a) Adjustment Payments and Transfer
Deposit Amounts on deposit in the Collection Account on the related
Distribution Date and (b) Unallocated Principal Collections
available to be treated as Miscellaneous Payments pursuant to
Section 4.04 on such Distribution Date.
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"Monthly Servicing Fee" shall mean, with respect to any
Series, the amount specified therefor in the related Supplement.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., or
its successor.
"Net Pool Balance" shall mean, as of the time of
determination thereof, an amount equal to the Pool Balance on such
date divided by the sum of 1 and the Discount Rate on such date.
"Obligor" shall mean each Person who is obligated to pay
for merchandise purchased from, and which gave rise to an account
receivable with, Federal-Mogul or any Receivables Seller, including
any guarantor of such Person's obligations.
"Obligor Overconcentration" unless otherwise specified in
the Supplement for a Series, on any Determination Date shall mean
(i) the excess of (a) the aggregate of all amounts of Receivables
owned by the Trust and generated under accounts receivable with any
one Obligor as of the last day of the Collection Period immediately
preceding such Determination Date over (b) 2% of the Pool Balance
on the last day of such immediately preceding Collection Period;
provided, that the Obligor Overconcentration with respect to
General Motors Corporation, Ford Motor Company and Genuine Parts
Company (so long as the short-term debt of General Motors
Corporation and Ford Motor Company and Genuine Parts Company shall
be rated A-1 or higher by Standard & Poor's or other conditions
established by each Rating Agency have been satisfied) shall be the
applicable amount described in clause (a) in excess of 10%, 7% and
5%, respectively, of the Pool Balance on the last day of such
immediately preceding Collection Period; provided, however, that
the Seller may adjust (a) the amount of the Obligor
Overconcentrations specified, And (b) the Obligors included in, the
preceding proviso if such adjustment does not cause any Rating
Agency to lower or withdraw its rating of any Series of
Certificates and (ii) the excess of (x) the aggregate of all
amounts of Receivables owned by the Trust that are denominated in
Canadian dollars as of the last day of the Collection Period
immediately preceding such Determination Date over (y) 5% of the
Net Pool Balance on the last day of such immediately preceding
Collection Period; provided, that the Seller may adjust the
percentage of Canadian dollar-denominated Receivables permitted in
clause (y) above if such adjustment does not cause any Rating
Agency to lower or withdraw its rating of any Series of
Certificates.
"Officers' Certificate" with respect to any corporation
shall mean, unless otherwise specified in this Agreement, a
certificate signed by (a) the Chairman of the Board, Vice Chairman
of the Board, President or any Vice President and (b) a Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary of such
corporation.
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"Opinion of Counsel" shall mean a written opinion of
counsel, who may be counsel of the Seller or Federal-Mogul and who
shall be acceptable to the Trustee.
"Overconcentration Amount" on any date of determination
shall mean the sum of the Obligor Overconcentrations on such date.
"Overconcentration Default Amount" on any Determination
Date shall mean with respect to each Obligor as to which there
exists an Obligor Overconcentration during the immediately
preceding Collection Period, the lesser of (a) the portion of the
Defaulted Amount attributable to the Receivables of such Obligor
with respect to the immediately preceding Collection Period and (b)
the aggregate amount of such Obligor Overconcentrations on such
Determination Date.
"Paying Agent" shall mean any paying agent appointed
pursuant to Section 6.13 and shall initially be the Trustee.
"Permitted Transaction" shall have the meaning specified
in Section 2.05(e).
"Person" shall mean any legal person, including any
individual, corporation, partnership, limited liability company,
association, joint-stock company, trust, unincorporated
organization, governmental entity or other entity of similar
nature.
"Pool Balance" shall mean, as of the time of
determination thereof, the aggregate of Receivables in the Trust at
such time.
"Principal Collections" shall mean Collections under the
Receivables not deemed to be Discount Collections.
"Principal Terms" shall mean, with respect to any Series:
(a) the name or designation; (b) the initial principal amount (or
method for calculating such amount); (c) the Certificate Rate (or
method for the determination thereof); (d) the payment date or
dates and the date or dates from which interest shall accrue; (e)
the method for allocating collections to Investor
Certificateholders; (f) the designation of any Series Accounts and
the terms governing the operation of any such Series Accounts; (g)
the Monthly Servicing Fee and the Investors' Servicing Fee; (h) the
Enhancement Provider and terms of any form of Enhancement with
respect thereto; (i) the terms on which the Investor Certificates
of such Series may be exchanged for Investor Certificates of
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another Series, repurchased by the Seller or remarketed to other
investors; (j) the Termination Date; (k) the number of Classes of
Investor Certificates of such Series and, if more than one Class,
the rights and priorities of each such Class; (l) the extent to
which the Investor Certificates of such Series will be issuable in
temporary or permanent global form (and, in such case, the
depositary for such Global Certificate or certificate, the terms
and conditions, if any, upon which such Global Certificate may be
exchanged, in whole or in part, for Definitive Certificates, and
the manner in which any interest payable on a temporary or Global
Certificate will be paid); (m) whether the Investor Certificates of
such Series may be issued in bearer form and any limitations
imposed thereon; (n) the priority of such Series with respect to
any other Series; (o) whether such Series will be part of a group;
and (p) any other terms of such Series.
"Purchase Price" shall mean, with respect to any
Receivable for any date on which such Receivable is to be purchased
pursuant to Section 3.03, an amount equal to (a) the amount payable
by the Obligor in respect thereof as reflected in the records of
the Servicer as of the date of purchase, minus (b) the product of
the Discount Rate and such amount payable by the Obligor, plus (c)
interest at a rate equal to the Discount Rate on the amount
calculated in clauses (a) and (b) above from the Transfer Date for
such Receivable to the date such Receivable is purchased from the
Trust.
"Rating Agency" shall mean, with respect to any
outstanding Series or Class, each statistical rating agency
selected by the Seller to rate the Investor Certificates of such
Series or Class.
"Rating Agency Condition" shall mean, with respect to any
action, that each Rating Agency shall have notified the Seller, the
Servicer and the Trustee in writing that such action will not
result in a reduction or withdrawal of the rating of any
outstanding Series or Class with respect to which it is a Rating
Agency, provided, however, that if there is no Series outstanding
which is rated by a Rating Agency, the Rating Agency Condition need
not be satisfied.
"Receivables" shall mean all the U.S. dollar denominated
and all the Canadian dollar-denominated accounts receivable shown
on the records of Federal-Mogul or any subsidiary as of the Cut-Off
Date, and from time to time thereafter, arising from the sale of
merchandise by Federal-Mogul or any subsidiary in the ordinary
course of business; provided, however, that "Receivables" that
includes a Stock Lift shall be sold to the Trust net of any
adjustment with respect to such Stock Lift. Receivables which
become Defaulted Receivables will cease to be included as
16
Receivables on the day on which they become Defaulted Receivables.
The term "Receivables" shall not include Receivables with respect
to Excluded Obligors.
"Receivables Purchase Agreement" shall mean each
agreement between the Seller and the Seller named in each such
Agreement, in substantially the form attached hereto as Exhibit G,
dated as of the date hereof, governing the terms and conditions
upon which the Seller is acquiring the initial Receivables
transferred to the Trust on the Closing Date and all Receivables
acquired thereafter, as the same may from time to time be amended,
modified or otherwise supplemented.
"Receivables Seller" shall mean any Seller named in each
respective Receivables Purchase Agreement and "Receivables Sellers"
shall refer collectively to all the Receivables Sellers.
"Record Date" shall mean, with respect to any
Distribution Date, (a) the close of business on the day preceding
such Distribution Date, with respect to a Series for which Book-Entry
Certificates have been issued and (b) the last day of the
month preceding the month in which such Distribution Date occurs,
with respect to a Series for which Definitive Certificates or
definitive, fully registered Investor Certificates have been
issued.
"Recoveries" on any Determination Date shall mean all
amounts received by the Servicer during the Collection Period
immediately preceding such Determination Date with respect to
Receivables which have previously become Defaulted Receivables.
"Registered Certificateholder" shall mean the Holder of
a Registered Certificate.
"Registered Certificates" shall have the meaning
specified in Section 6.01.
"Related Documents" unless otherwise specified in the
Supplement for a Series, shall mean, collectively, the Receivables
Purchase Agreements and, with respect to any Series, any applicable
Enhancement Agreement.
"Required Participation Amount" shall mean, at any time
of determination, an amount equal to (a) the aggregate for each
Series of the product of (i) the sum of 100% plus the percentage
equivalent of a fraction the numerator of which is the sum of
(A) the Base Subordinated Percentage, (B) the Required
Participation Percentage and (C) the Excess Subordinated
Percentage, if any, and the denominator of which is 100% minus the
sum of (X) the Base Subordinated Percentage, (Y) the Required
17
Participation Percentage and (Z) the Excess Subordinated
Percentage, if any, and (ii) the Initial Principal Amount plus
(b) the sum of the Overconcentration Amount and the Ineligible
Amount as of the end of the immediately preceding Collection Period
minus (c) the aggregate for each Series of the excess, if any, of
the Initial Principal Amount over the Invested Amount (in the case
of clauses (b) and (c), after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the
Distribution Date following such Determination Date).
"Required Participation Percentage" shall mean, with
respect to any Series, the percentage specified therefor in the
related Supplement.
"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 cave 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).
"Responsible Officer" shall mean any officer in the
Corporate Trust Department of the Trustee with direct
responsibility for the administration of this Agreement.
"Revolving Period" shall mean with respect to any Series,
the period specified as such in the related Supplement.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Seller" shall mean Federal-Mogul Funding Corporation, a
Michigan corporation, and its successors in interest to the extent
permitted hereunder.
"Seller's Certificates" shall mean, collectively, the
FMFC Certificate and any outstanding Supplemental Certificates.
"Seller's Interest" shall have the meaning specified in
Section 4.01.
"Seller's Participation Amount" shall mean, at any time
of determination, an amount equal to the Net Pool Balance at such
time minus the aggregate Invested Amounts for all outstanding
Series at such time.
"Series" shall mean any series of Investor Certificates.
"Series Account" shall mean any deposit, trust, escrow,
reserve or similar account maintained for the benefit of the
18
Investor Certificateholders of any Series or Class, as specified in
any Supplement.
"Series Cut-Off Date" shall mean, with respect to any
Series, the date specified as such in the related Supplement.
"Series Issuance Date" shall mean, with respect to any
Series, the date on which the Investor Certificates of such Series
are to be originally issued in accordance with Section 6.03 and the
related Supplement.
"Servicer" shall initially mean Federal-Mogul, in its
capacity as Servicer under this Agreement, and after any Service
Transfer, the Successor Servicer.
"Servicer Default" shall have the meaning specified in
Section 10.01.
"Service Transfer" shall have the meaning specified in
Section 10.01.
"Servicing Fee" shall have the meaning specified in
Section 3.02.
"Servicing Officer" shall mean any officer of the
Servicer involved in, or responsible for, the administration and
servicing of the Receivables whose name appears on a list of
servicing officers furnished to the Trustee by the Servicer as such
list may from time to time be amended.
"Standard & Poor's" shall mean Standard & Poor's Ratings
Group or its successor.
"Stock Lift" shall mean 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.
"Successor Servicer" shall have the meaning specified in
Section 10.02(a).
"Supplement" shall mean, with respect to any Series, a
Supplement to this Agreement, executed and delivered in connection
with the original issuance of the Investor Certificates of such
Series pursuant to Section 6.03, and all amendments thereof and
supplements thereto.
"Supplemental Certificate" shall have the meaning
specified in Section 6.03(c).
19
"Tax Opinion" shall mean, with respect to any action, an
Opinion of Counsel to the effect that, for federal income and
Michigan state income and single business tax purposes, (a) such
action will not adversely affect the characterization of the
Investor Certificates of any outstanding Series or Class as debt of
FMFC, (b) such action will not cause or constitute a taxable event
with respect to any Investor Certificateholders or the Trust and
(c) in the case of Section 6.03(b), the Investor Certificates of
the new Series will be characterized as debt of FMFC.
"Termination Date" shall mean, with respect to any
Series, the termination date specified in the related Supplement.
"Termination Notice" shall have the meaning specified in
Section 10.01.
"Termination Proceeds" shall have the meaning specified
in Section 12.02(c).
"Transfer Agent and Registrar" shall have the meaning
specified in Section 6.04(a).
"Transfer Date" shall have the meaning specified in
Section 2.01.
"Transfer Deposit Amount" shall mean, with respect to any
Receivable reassigned or assigned to the Seller or the Servicer, as
applicable, pursuant to Section 2.04(c) or Section 3.03(c), the
amounts to be transferred by the Seller or the Servicer specified
in such Sections.
"Trust" shall mean the Federal-Mogul Trade Receivables
Master Trust created by this Agreement, the corpus of which shall
consist of the Trust Assets.
"Trust Assets" shall have the meaning specified in
Section 2.01.
"Trust Available Subordinated Amount" shall mean, at any
time of determination, the sum of the Available Subordinated
Amounts, if any, for all outstanding Series at such time.
"Trustee" shall mean The Chase Manhattan Bank, or its
successor in interest, or any successor trustee appointed as herein
provided.
"Trust Incremental Subordinated Amount" on any
Determination Date shall mean the excess, if any, of (a) the sum of
the Overconcentration Amount and the aggregate amount of Ineligible
Receivables, in each case, on such Determination Date over (b) the
Incremental Default Amount for such Determination Date.
20
"Trust Invested Amount" shall mean, at any time of
determination, the sum of the Invested Amounts for all outstanding
Series at such time.
"Trust Termination Date" shall have the meaning specified
in Section 12.01.
"UCC" shall mean the Uniform Commercial Code, as amended
from time to time, as in effect in any specified jurisdiction.
"Unallocated Principal Collections" shall have the
meaning specified in Section 4.04.
"Vice President" when used with respect to the Seller or
the Servicer shall mean any vice president whether or not
designated by a number or word or words added before or after the
title "vice president".
SECTION 1.02. Other Definitional Provisions. (a) All
terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or
other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Agreement or in any such
certificate or other document, and accounting terms partly defined
in this Agreement or in any such certificate or other document to
the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles. To the extent
that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or in any
such certificate or other document shall control.
(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; Section, Schedule and Exhibit references contained
in this Agreement are references to Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified; and
the term "including" shall mean "including without limitation".
(d) The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter
genders of such terms.
21
SECTION 1.03. Business Day Certificate. On the
Closing Date (with respect to the remainder of calendar year 1992)
and thereafter, within 15 days prior to the end of each calendar
year while this Agreement shall remain in effect, the Servicer
shall provide an Officer's Certificate to the Trustee specifying
with respect to the succeeding calendar year the days on which
banking institutions in the State of Michigan are authorized or
obligated by law, executive order or governmental decree to be
closed.
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables. By
execution of this Agreement, the Seller does hereby sell, transfer,
assign, set over and otherwise convey, without recourse (except as
expressly provided herein), to the Trust for the benefit of the
Certificateholders and the other Beneficiaries on the first Closing
Date (a) all of its right, title and interest in, to and under the
Receivables and all Collateral Security with respect thereto, if
any, owned by the Seller at the close of business on the Cut-Off
Date and all monies due or to become due and all amounts received
with respect thereto and all proceeds (including "proceeds"), as
defined in Section 9-306 of the UCC as in effect in the State of
Michigan, and Recoveries) thereof and (b) all of the Seller's
rights, remedies, powers and privileges with respect to such
Receivables under the Receivables Purchase Agreements. As of each
Business Day prior to the earlier of (i) the occurrence of an Early
Amortization Event specified in Section 9.01(a) or (b) and (ii) the
Trust Termination Date, on which Receivables are created (a
"Transfer Date"), the Seller does hereby sell, transfer, assign,
set over and otherwise convey, without recourse (except as
expressly provided herein), to the Trust for the benefit of the
Certificateholders and the other Beneficiaries, all of its right,
title and interest in, to and under the Receivables and all
Collateral Security with respect thereto, if any, owned by the
Seller at the close of business on such Transfer Date and not
theretofore conveyed to the Trust, all monies due or to become due
and all amounts received with respect thereto and all proceeds
(including "proceeds", as defined in Section 9-306 of the UCC as in
effect in the State of Michigan, and Recoveries) thereof. Such
property, together with all monies on deposit in, and Eligible
Investments credited to, the Collection Account or any Series
Account, and any Enhancements shall collectively constitute the
assets of the Trust (the "Trust Assets"). The foregoing sale,
transfer, assignment, set-over and conveyance and any subsequent
sales, transfers, assignments, set-overs and conveyances do not
constitute, and are not intended to result in, the creation or an
assumption by the Trust, the Trustee, any Agent or any Beneficiary
of any obligation of Federal-Mogul, the Seller or any other Person
in connection with the Receivables or under the Receivables
Purchase Agreements or any other agreement or instrument relating
thereto, including any obligation to any Obligors.
22
In connection with such sales, the Seller agrees to
record and file, at its own expense, a financing statement or
statements on form UCC-1 (and continuation statements when
applicable) with respect to the Receivables now existing and
hereafter created for the sale of accounts and general intangibles
(as defined in Section 9-106 of the UCC as in effect in any state
where the Seller's or Federal-Mogul's chief executive offices or
books and records relating to the Receivables are located) meeting
the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the sale and assignment
of the Receivables and all proceeds thereof to the Trust, and to
deliver a file-stamped copy of such financing statements or other
evidence of such filing to the Trustee on or prior to the first
Closing Date. The Trustee shall be under no obligation whatsoever
to file such financing statement or statements, or a continuation
statement to such financing statement or statements, or to make any
other filing under the UCC in connection with such sales.
In connection with such sales, the Seller further agrees,
at its own expense, on or prior to the Closing Date, to cause each
of Federal-Mogul and its subsidiaries to indicate in its computer
files, as required by the Receivables Purchase Agreements, that the
Receivables have been sold, and will continue to be sold, to the
Seller in accordance with the Receivables Purchase Agreements and
have been sold, and will continue to be sold, to the Trust pursuant
to this Agreement for the benefit of the Certificateholders and the
other Beneficiaries.
It is the intention of the parties hereto that the
conveyance be characterized as a sale. If, however, such
conveyance is not characterized as a sale, the Seller hereby grants
to the Trustee, for the benefit of the Investor Certificateholders,
a security interest in the property described in the first
paragraph of this Section 2.01.
SECTION 2.02. Acceptance by Trustee. (a) The Trustee
hereby acknowledges its acceptance, on behalf of the Trust, of all
right, title and interest previously held by the Seller to the
property, now existing and hereafter created, conveyed to the Trust
pursuant to Section 2.01 and declares that it shall maintain such
right, title and interest, upon the trust herein set forth, for the
benefit of the Certificateholders and the other Beneficiaries.
(b) The Trustee shall have no power to create, assume or
incur indebtedness or other liabilities in the name of the Trust
other than as contemplated in this Agreement.
SECTION 2.03. Representations and Warranties of the
Seller Relating to the Seller and the Agreement. The Seller hereby
represents and warrants to the Trust and to the Trustee as of each
Closing Date that:
(a) Organization and Good Standing. 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
23
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 this
Agreement and to execute and deliver to the Trustee pursuant hereto
the Certificates.
(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 license and approvals in each jurisdiction in which
the conduct of its business requires such qualification except
where the failure to so qualify or obtain licenses or approvals
would not have a material adverse effect on its ability to perform
its obligations hereunder.
(c) Due Authorization. The execution and delivery of
this Agreement and the applicable Supplement and the Related
Documents and the execution and delivery to the Trustee of the
Certificates by the Seller and the consummation of the transactions
provided for or contemplated by this Agreement and the applicable
Supplement and the Related Documents, have been duly authorized by
the Seller by all necessary corporate action on the part of the
Seller.
(d) No Conflict. The execution and delivery of this
Agreement, the applicable Supplement, the Related Documents and the
Certificates, the performance of the transactions contemplated by
this Agreement and the applicable Supplement and the Related
Documents and the fulfillment of the terms hereof and 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.
(e) No Violation. The execution and delivery of this
Agreement, the applicable Supplement, the Related Documents and the
Certificates, the performance of the transactions contemplated by
this Agreement and the applicable Supplement and the Related
Documents and the fulfillment of the terms hereof and thereof
applicable to the Seller, will not conflict with or violate any
material Requirements of Law applicable to the Seller.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of the Seller,
threatened against the Seller before any Governmental Authority (i)
asserting the invalidity of this Agreement, the applicable
Supplement, any of the Related Documents or the Certificates, (ii)
24
seeking to prevent the issuance of the Certificates or the
consummation of any of the transactions contemplated by this
Agreement and the Applicable Supplement or the Related Documents,
(iii)seeking any determination or ruling that, in the reasonable
judgment of the Seller, would materially and adversely affect the
performance by the Seller of its obligations under this Agreement
and the applicable Supplement or the Related Documents, (iv)
seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement
and the applicable Supplement, the Related Documents or the
Certificates or (v) seeking to affect adversely the income tax
attributes of the Trust under the United States Federal or any
State income, single business or franchise tax systems.
(g) All Consents Required. All appraisals,
authorizations, consents, orders, approvals or other actions of any
Person or of any governmental body or official required in
connection with the execution and delivery of this Agreement, the
applicable Supplement, the Related Documents and the Certificates,
the performance of the transactions contemplated by this Agreement,
the applicable Supplement and any of the Related Documents, and the
fulfillment of the terms hereof and thereof, have been obtained.
(h) Enforceability. This Agreement and the applicable
Supplement and the Related Documents each constitutes a legal,
valid and binding obligation of the Seller enforceable against the
Seller in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect affecting the enforcement of 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).
(i) Valid Transfer. This Agreement constitutes a valid
sale, transfer and assignment to the Trust of all right, title and
interest of the Seller in the Receivables and the proceeds thereof
and all of the Seller's rights, remedies, powers and privileges
with respect to the Receivables under the Receivables Purchase
Agreements. Except as otherwise provided in this Agreement,
neither the Seller nor any Person claiming through or under the
Seller has any claim to or interest in the Trust Assets.
(j) Investment Company Act. The Seller is not an
"investment company" within the meaning of the Investment Company
Act that is required to register under the Investment Company Act.
(k) Locations. The chief place of business and chief
executive office of the Seller, and the office where the Seller
keeps all of its books, records and documents evidencing
25
Receivables are located at the addresses specified in Schedule I
hereto (or at such other locations, identified to the Trustee in
accordance with Section 13.06 hereof, in jurisdiction with respect
to which all applicable action required by Section 13.02(b) or
13.02(c) hereof has been taken and completed).
(l) Information. Each certificate, report, information,
exhibit, financial statement, document, book, record or report
furnished by the Seller to the Trustee or the Servicer in
connection with this Agreement is accurate in all material respects
as of its date, when considered as a whole with all other such
documents, and no such document contains any material misstatement
of fact or omits to state a material fact or any fact necessary
to make the statements contained therein not materially misleading.
(m) Solvency. The Seller is solvent and will not
become insolvent after giving effect to the transactions
contemplated by this Agreement; the Seller is currently repaying
all of its indebtedness as such indebtedness becomes due; and,
after giving effect to the transactions contemplated by this
Agreement, the Seller will have adequate capital to conduct its
business.
The representations and warranties set forth in this
Section 2.03 shall survive the transfer and assignment of the
Receivables to the Trust and the issuance of the Certificates.
Upon discovery by the Seller, the Servicer, any Agent or a
Responsible Officer of the Trustee of a breach of any of the
foregoing representations and warranties, the party discovering
such breach shall give prompt written notice to the other parties,
any Agent and to any Enhancement Providers.
In the event of any breach of any of the representations
and warranties set forth in this Section 2.03 having a material
adverse effect on the interests of the Investor Certificateholders,
then either the Trustee or the Holders of Investor Certificates
evidencing not less than a majority in aggregate unpaid principal
amount of all outstanding Investor Certificates, by notice then
given in writing to the Seller (and to the Trustee, any Enhancement
Providers and the Servicer if given by the Investor
Certificateholders), may direct the Seller to purchase the
Certificateholders' Interest within 60 days of such notice (or
within such longer period as may be specified in such notice), and
the Seller shall be obligated to make such purchase on a
Distribution Date occurring within such 60-day period on the terms
and conditions set forth below; provided, however, that no such
purchase shall be required to be made if, by the end of such 60-day
period (or such longer period as may be specified), the
representations and warranties set forth in this Section 2.03 shall
be true and correct in all material respects, and any material
26
adverse effect on the Certificateholders' Interest caused thereby
shall have been cured.
The Seller shall deposit in the Collection Account in
immediately available funds on the Business Day preceding such
Distribution Date, in payment for such purchase, an amount equal to
the sum of the amounts specified therefor with respect to each
outstanding Series in the related Supplement. Notwithstanding
anything to the contrary in this Agreement, such amounts shall be
distributed to the Investor Certificateholders on such Distribution
Date in accordance with Article IV and the terms of each
Supplement. If the Trustee or the Investor Certificateholders give
notice directing the Seller to purchase the Certificateholders'
Interest as provided above, the obligation of the Seller to
purchase the Certificateholders' Interest pursuant to this Section
2.03 shall constitute the sole remedy respecting an event of the
type specified in the first sentence of this Section 2.03 available
to the Investor Certificateholders (or the Trustee on behalf of the
Investor Certificateholders).
SECTION 2.04. Representations and Warranties of the
Seller Relating to the Receivables. (a) Representations and
Warranties. The Seller hereby represents and warrants to the Trust
and the Trustee that:
(i) Each Receivable existing on the first Closing Date
and on each Transfer Date has been conveyed to the Trust free and
clear of any Lien (other than the Lien created by this Agreement in
favor of the Trustee on behalf of the Trust).
(ii) With respect to each Receivable existing on the
first Closing Date and on each Transfer Date, all consents,
licenses, approvals or authorizations of or registration or
declarations with any Governmental Authority required to be
obtained, effected or given by the Seller in connection with the
conveyance of such Receivable to the Trust have been duly obtained,
effected or given and are in full force and Seller shall accept a
reassignment of each such Receivable by directing the Servicer to
deduct, subject to the next sentence, the outstanding balance of
each such Receivable from the Pool Balance on or prior to the end
of the Collection Period in which such reassignment obligation
arises. If, following such deduction, the Net Pool Balance would
be less than the Required Participation Amount on the immediately
preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on
the Distribution Date following such Determination Date), then not
later than 12:00 noon on the day on which such reassignment occurs,
the Seller shall deposit in the Collection Account in immediately
available funds the amount (the "Transfer Deposit Amount") by which
the Net Pool Balance would be less than such Required Participation
27
Amount (up to the principal amount of such Receivables); provided
that if the Transfer Deposit Amount is not deposited as required by
this sentence, then the outstanding balances of such Receivables
shall be deducted from the Pool Balance only to the extent that the
Net Pool Balance is not reduced below the Required Participation
Amount and the Receivables the principal amounts of which have not
been so deducted shall not be reassigned to the Seller and shall
remain part of the Trust. Upon reassignment of any such
Receivable, but only after payment by the Seller of the Transfer
Deposit Amount, if any, the Trust shall automatically and without
further action be deemed to sell, transfer, assign, set over and
otherwise convey to the Seller, without recourse, representation or
warranty, all the right, title and interest of the Trust in and to
such Receivable and all moneys due or to become due with respect
thereto and all proceeds thereof. Upon the written request of the
Seller, the Trustee shall execute such documents and instruments of
transfer or assignment as shall be prepared by the Seller and shall
take such other actions as shall reasonably be requested by the
Seller to effect the conveyance of such Receivables pursuant to
this Section. The obligation of the Seller to accept a
reassignment of any such Receivable and to pay any related Transfer
Deposit Amount shall constitute the sole remedy respecting the
event giving rise to such obligation available to
Certificateholders (or the Trustee on behalf of
Certificateholders), any Agents and any Enhancement Providers.
SECTION 2.05. Covenants of the Seller. The Seller
hereby covenants that:
(a) No Liens. Except for the conveyances hereunder or
as provided in Section 6.03(c), the Seller will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur,
assume or suffer to exist any Lien on, any Receivable, whether now
existing or hereafter created, or any interest therein, or the
Seller's rights, remedies, powers or privileges with respect to the
Receivables under the Receivables Purchase Agreements, or the
Seller's Interest or the Seller's Certificates and the Seller
shall defend the right, title and interest of the Trust in, to and
under the Receivables, whether now existing or hereafter created,
and such rights, remedies, powers and privileges, against all
claims of third parties claiming through or under the Seller.
(b) Delivery of Collections. In the event that the
Seller, Federal-Mogul or any Affiliate thereof receives payment in
respect of Receivables, the Seller and Federal-Mogul agree to pay
or cause to be paid to the Servicer or any Successor Servicer all
payment received thereby in respect of the Receivables as soon as
practicable after receipt thereof, but in no event later than two
Business Days after the receipt by the Seller, Federal-Mogul or any
Affiliate thereof.
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(c) Notice of Liens. The Seller shall notify the
Trustee and any Agent promptly after becoming aware of any Lien on
any Receivable other than the conveyances hereunder.
(d) Compliance with Law. The Seller hereby agrees to
comply in all material respects with all Requirements of Law
applicable to the Seller.
(e) Activities of the Seller. The Seller will not
engage in any business or activity of any kind or enter into any
transaction other than (i) the businesses, activities and
transactions contemplated and authorized by this Agreement or the
Related Documents, (ii) acquiring, selling, financing, holding,
assigning, pledging and otherwise dealing with accounts receivables
arising out of the sale of merchandise by the Receivables Sellers,
(iii) transferring such receivables to trusts pursuant to a pooling
and servicing agreement or similar agreement or arrangement, (iv)
authorizing, selling and delivering any class of certificates or
other securities of any such trust, (v) engaging in any activity
and exercising any powers permitted to corporations under the laws
of the State of Michigan that are related or incidental to the
foregoing and necessary, convenient or advisable to accomplish the
foregoing, (vi) any other activity in connection with which the
Rating Agency Condition has been satisfied (such businesses,
activities and transactions, collectively, "Permitted
Transactions") and (vii) any other business, activities and
transactions contemplated and authorized by the Articles of
Incorporation of the Seller in furtherance of the other provisions
in this Paragraph (e).
(f) Indebtedness. The Seller will not create, incur or
assume any indebtedness or issue any securities or sell or transfer
any receivables to a trust or other Person which issues securities
in respect of any such receivables, unless (i) any such
indebtedness or securities have no recourse to any assets of the
Seller other than the specified assets to which such indebtedness
or securities relate and (ii) the Rating Agency Condition shall
have been satisfied in connection therewith prior to the incurrence
or issuance thereof.
(g) Guarantees. The Seller will not become or remain
liable, directly or contingently, in connection with any
indebtedness or other liability of any other Person, whether by
guarantee, endorsement (other than endorsements of negotiable
instruments for deposit or collection in the ordinary course of
business), agreement to purchase or purchase, agreement to supply
or advance funds, or otherwise, except in connection with Permitted
Transactions and unless the Rating Agency Condition shall have been
satisfied with respect thereto.
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(h) Investments. The Seller will not make or suffer to
exist any loans or advances to, or extend any credit to, or make
any investments (by way of transfer of property, contributions to
capital, purchase of stock or securities or evidences of
indebtedness, acquisition of the business or assets, or otherwise)
in, any Affiliate, unless prior thereto the Rating Agency Condition
shall have been satisfied with respect thereto; provided, however,
that the Seller shall not be prohibited under this Section 2.05(h)
from declaring or paying any dividends in respect of its common
stock.
(i) Stock; Merger. The Seller will not, (i) sell any
shares of any class of its capital stock to any Person (other than
Federal-Mogul), or enter into any transaction of merger or
consolidation unless (A) the surviving Person of such merger or
consolidation assumes all of the Seller's obligations under this
Agreement, (B) the Seller shall have given each Rating Agency and
the Trustee at least 10 days' prior notice and the Rating Agency
Condition shall have been satisfied with respect to such
transaction and (C) such merger or consolidation does not conflict
with any provisions of the Articles of Incorporation of the Seller,
or (ii) terminate, liquidate or dissolve itself (or suffer any
termination, liquidation or dissolution) unless in connection with
any merger or consolidation described in clause (i) of this
subsection, or (iii) acquire or be acquired by any Person, or
otherwise make (or suffer) any material change in the organization
of or method of conducting its business.
(j) Agreements. The Seller will not become a party to,
or permit any of its properties to be bound by, any indenture,
mortgage, instrument, contract, agreement, lease or other
undertaking, except this Agreement, the Related Documents and any
document relating to a Permitted Transaction, or amend or modify
its Certificate of Incorporation or cancel, terminate, mend,
supplement, modify or waive any of the provisions of the
Receivables Purchase Agreements or any of the other Related
Documents or request, consent or agree to or suffer to exist or
permit any such cancellation, termination, amendment, supplement,
modification or waiver unless, in any such case, the Rating Agency
Condition shall have been satisfied with respect thereto.
SECTION 2.06. Sale of Ineligible Receivables. The
Seller shall sell to the Trust on the Closing Date and on each
Transfer Date any and all Receivables that are Ineligible
Receivables, provided that the Trust Incremental Subordinated
Amount is adjusted in accordance with the definition thereof with
respect to such Ineligible Receivables.
SECTION 2.07. Exclusion of Obligors. (a) On each
Determination Date the Seller shall have the right to terminate the
30
sale to the Trust of Receivables relating to any Obligor (each, an
"Excluded Obligor") in the manner prescribed in Section 2.07(b)
(b) To terminate the sale of Receivables relating
to an Excluded Obligor, the Seller (or the Servicer on its behalf)
shall take the following actions and make the following
determinations:
(i) not less than five Business Days prior to the
date on which such sales are to terminate (the "Obligor Termination
Date"), furnish to the Trustee, any Agent, any Enhancement
Providers and the Rating Agencies a written notice (the
"Termination Notice") specifying the name of the Excluded Obligors
and Determination Date (which may be the Determination Date on
which such notice is given) on which sale of the related
Receivables will cease;
(ii) from and after such Obligor Termination
Date, cease to transfer to the Trust any and all receivables
arising with respect to such Excluded Obligor;
(iii) represent and warrant that the cessation of
sales of such receivables shall not, in the reasonable belief of
the Seller, cause an Early Amortization Event to occur or cause the
Net Pool Balance to be less than the Required Participation Amount;
(iv) represent and warrant that no selection
procedures reasonably believed by the Seller to be adverse to the
interests of the Beneficiaries were utilized in selecting the
Obligor to be excluded;
(v) represent and warrant that it has received
notice from each Rating Agency that such removal will not result in
a reduction or withdrawal of the rating of any outstanding Series
or Class by the applicable Rating Agency;
(vi) deliver to the Trustee, each Rating Agency,
any Agent and any Enhancement Providers a Tax Opinion, dated the
Obligor Termination Date, with respect to such removal; and
(vii) on or before the related Obligor
Termination Date, deliver to the Trustee, any Agent and any
Enhancement Providers an Officers' Certificate confirming the items
set forth in clauses (iii) through (v) above; the Trustee may
conclusively rely on such Officers' Certificate and shall have no
duty to make inquiries with regard to the matters set forth therein
and shall incur no liability in so relying.
No Obligor shall be excluded if such exclusion will result in a
reduction or withdrawal of the rating of any outstanding Series or
Class by the applicable Rating Agency.
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(c) On and after an Obligor Termination Date, the
Seller shall cease to sell to the Trust any Receivables relating to
the Excluded Obligor. Any Receivables owned by the Trust on such
Obligor Termination Date, and any Collections then held or
thereafter received by the Trust with respect to such Receivables,
shall remain the property of the Trust.
ARTICLE III
Administration and Servicing
of Receivables
SECTION 3.01. Acceptance of Appointment and Other
Matters Relating to the Servicer. (a) The Servicer shall service
and administer the Receivables, shall collect payments due under
the Receivables and shall charge-off as uncollectible Receivables,
all in accordance with its customary and usual billing and
collection procedures for servicing its portfolio of accounts
receivable. The Servicer shall have full power and authority,
acting alone or through any party properly designated by it
hereunder, to do any and all things in connection with such
servicing and administration which it may deem necessary or
desirable. Subject to the Supplement for any Series, without
limiting the generality of the foregoing and subject to Section
10.01, the Servicer is hereby authorized and empowered, unless such
power and authority is revoked by the Trustee on account of the
occurrence of a Servicer Default pursuant to Section 10.01, (i) to
instruct the Trustee to make withdrawals and payments from the
Collection Account and any Series Account as set forth in this
Agreement, (ii) to instruct the Trustee to take any action required
or permitted under any Enhancement, (iii) to execute and deliver,
on behalf of the Trust for the benefit of the Certificateholders
and the other Beneficiaries, any and all instruments of
satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to
the Receivables and, after the delinquency of any Receivable and to
the extent permitted under and in compliance with applicable
Requirements of Law, to commence enforcement proceedings with
respect to such Receivables, (iv) to make any filings, reports,
notices, applications, registrations with, and seek any consents or
authorizations from, the Securities and Exchange Commission and any
State securities authority on behalf of the Trust as may be
necessary or advisable to comply with any federal or state
securities laws or reporting requirement, and (v) to delegate
certain of its servicing, collection, enforcement and
administrative duties hereunder with respect to the Receivables to
any Person who agrees to conduct such duties in accordance with
this Agreement; provided, however, that the Servicer shall notify
the Trustee, the Rating Agencies, any Agent and any Enhancement
Providers in writing of any such delegation of its duties which is
not in the ordinary course of its business, that no delegation will
relieve the Servicer of its liability and responsibility with
32
respect to such duties and that the Rating Agency Condition shall
have been satisfied with respect to any such delegation. The
Trustee shall execute and return to the Servicer any powers of
attorney and other documents prepared by the Servicer reasonably
necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder.
(b) In the event that the Seller is unable for any
reason to transfer Receivables to the Trust in accordance with the
provisions of this Agreement (including by reason of the
application of the provisions of Section 9.02 or any court of
competent jurisdiction ordering that the Seller not transfer any
additional Receivables to the Trust), the Servicer agrees to give
prompt written notice thereof to the Trustee, any Enhancement
Providers, any Agent and each Rating Agency.
(c) The Servicer shall comply with and perform its
servicing obligations with respect to the Receivables in accordance
with its customary billing and collection procedures for its
accounts receivables portfolio.
SECTION 3.02. Servicing Compensation. As full
compensation for its servicing activities hereunder and
reimbursement for its expenses as set forth in the immediately
following paragraph, the Servicer shall be entitled to receive the
Servicing Fee on each Deposit Date on or prior to the Trust
Termination Date payable in arrears. The "Servicing Fee" shall be
the aggregate of the Monthly Servicing Fees specified in the
Supplements. The Servicing Fee shall be payable to the Servicer
solely to the extent amounts are available for payment in
accordance with the terms of the Supplements.
The Servicer's expenses include the amounts due to the
Trustee pursuant to Section 11.05 and the reasonable fees and
disbursements of independent accountants and all other expenses
incurred by the Servicer in connection with its activities
hereunder, and including all other fees and expenses of the Trust
not expressly stated herein to be for the account of the
Certificateholders. The Servicer shall be required to pay such
expenses for its own account, and shall not be entitled to any
payment therefor other than the Servicing Fee. The Servicer will
be solely responsible for all fees and expenses incurred by or on
behalf of the Servicer in connection herewith and the Servicer will
not be entitled to any fee or other payment from, or claim on, any
of the Trust Assets (other than the Servicing Fee).
SECTION 3.03. Representations; Warranties and Covenants
of the Servicer. (a) Federal-Mogul, as Servicer, hereby makes,
and any Successor Servicer by its appointment hereunder shall make,
on each Closing Date (and on the date of any such appointment) the
following representations, warranties and covenants:
(i) Organization and Good Standing. Such party is a
corporation duly organized, validly existing and in good standing
under the applicable laws of the state of its incorporation and
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has, in all material respects, full corporate power, authority and
legal rights to own its properties and conduct its accounts
receivable servicing business at such properties are presently
owned and as such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement and the
applicable Supplement.
(ii) Due Qualification. Such party is duly qualified
to do business and is in good standing as a foreign corporation (or
is exempt from such requirements) and has obtained all necessary
licenses and approvals in each jurisdiction in which the servicing
of the Receivables as required by this Agreement requires such
qualification except where the failure to so qualify or obtain
licenses or approvals would not have a material adverse effect on
its ability to perform its obligations hereunder.
(iii) Due Authorization. The execution, delivery, and
performance of this Agreement and the applicable Supplement has
been duly authorized by such party by all necessary corporate
action on the part thereof.
(iv) Binding Obligation. This Agreement and the
applicable Supplement constitutes a legal, valid and binding
obligation of such party, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect, affecting the enforcement of creditors'
rights and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or
in equity).
(v) No Violation. The execution and delivery of this
Agreement and the applicable Supplement by such party, the
performance of the transactions contemplated by this Agreement and
the applicable Supplement and the fulfillment of the terms hereof
and thereof applicable to such party will not conflict with,
violate, 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 Requirement of Law
applicable to such party or any indenture, contract, agreement,
mortgage, deed of trust, or other instrument to which such party is
a party or by which it is bound.
(vi) No proceedings. There are no proceedings or
investigations pending or, to the best knowledge of such party,
threatened against such party before any court, regulatory body,
administrative agency or other tribunal or governmental
instrumentality seeking to prevent the issuance of the Certificates
or the consummation of any of the transactions contemplated by this
Agreement and the applicable Supplement, seeking any determination
34
or ruling that, in the reasonable judgment of such party, would
materially and adversely affect the performance by such party of
its obligations under this Agreement and the applicable Supplement,
or seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement
and the applicable Supplement.
(vii) Compliance with Requirements of Law. Such party
shall duly satisfy all obligations on its part to be fulfilled
under or in connection with the Receivables, will maintain in
effect all qualifications required under Requirements of Law in
order to service properly the Receivables and will comply in all
material respects with all Requirements of Law in connection with
servicing the Receivables the failure to comply with which would
have a material adverse effect on the interests of Beneficiaries.
(viii) Protection of Beneficiaries Rights. Such party
shall take no action, nor omit to take any action, which would
impair the rights of Beneficiaries in the Receivables nor shall it
reschedule, revise or defer payments due on any Receivable except
in accordance with the credit and collection policies of Federal-Mogul;
and in no event will Federal-Mogul extend the date on which
payment in full of a Receivable is due more than 90 days beyond the
date on which such Receivable was sold to the Trust.
(ix) Servicer Lockbox Account. The Servicer maintains
deposit accounts (each, a "Lockbox Account") into which it shall
deposit all amounts paid by Obligors under the Receivables. Each
Lockbox Account shall be maintained by the Servicer in an Eligible
Deposit Account at a depository institution solely in the name of
the Trustee. The Servicer agrees (i) that it will not change this
method of collection without the prior written consent of each
Enhancement Provider and Agent and unless the Rating Agency
Condition shall have been satisfied; (ii) with respect to amounts
deposited into the Lockbox Accounts in respect of a particular day,
that it will not transfer such amounts from the Lockbox Accounts
until the Servicer has posted all Collections in respect of the
Receivables for such day and (iii) concurrently with the transfer
of amounts from the Lockbox Accounts in respect of a particular
day, the Servicer will make the deposits and transfers required by
the terms of this Agreement for such day.
(x) Negative Pledge. Except for the conveyance here
under to the Trustee, the Servicer will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or
suffer to exist any Lien on, any Receivable sold and assigned to
the Trust, whether now existing or hereafter created, or any
interest therein, and the Servicer shall defend the rights, title
and interest of the Trust in, to And under any Receivable sold and
assigned to the Trust, whether now existing or hereafter created,
against all claims of third parties claiming through or under the
Seller or the Servicer.
35
(b) Notice of Breach. The representations and
warranties set forth in this Section 3.03 shall survive the
transfer and assignment of the Receivables to the Trust and the
issuance of the Certificates. Upon discovery by the Seller, the
Servicer or a Responsible Officer of the Trustee of a breach of any
of the representations and warranties set forth in this Section
3.03, the party discovering such breach shall give prompt written
notice to the other parties and to any Agent and any Enhancement
Providers.
(c) Purchase. In the event any representation or
warranty under Section 3.03(a) (vii) or (viii) is not true and
correct in any material respect as of the date specified therein
with respect to any Receivable and such breach has a material
adverse effect on the Certificateholders' Interest in such
Receivable, then, within 30 days (or such longer period as may be
agreed to by the Trustee) of the earlier to occur of the discovery
of any such event by the Seller or the Servicer, or receipt by the
Seller or the Servicer of written notice of any such event given by
the Trustee or any Enhancement Provider, the Servicer shall
purchase such Receivable on the Determination Date immediately
succeeding the expiration of such 30-day period on the terms and
conditions set forth in the next succeeding paragraph; provided,
however, that no such purchase shall be required to be made with
respect to such Receivable if, by the end of such 30-day period (or
such longer period as may be agreed to by the Trustee) the breached
representation or warranty shall then be true and correct in all
material respects and any material adverse effect caused thereby
shall have been cured. The Servicer shall effect such purchase by
depositing in the Collection Account in immediately available funds
an amount equal to the Purchase Price of such Receivable. Any such
deposit of such Purchase Price into the Collection Account shall be
considered a Transfer Deposit Amount and shall be applied in
accordance with the terms of this Agreement.
Upon each such payment of such Purchase Price, the Trust
shall automatically and without further action be deemed to sell,
transfer, assign, set over and otherwise convey to the Servicer,
without recourse, representation or warranty, all right, title and
interest of the Trust in and to such Receivables, all monies due or
to become due with respect thereto and all proceeds thereof. Upon
the written request of the Servicer, the Trustee shall execute such
documents and instruments of transfer or assignment as shall be
prepared by the Servicer and take such other actions as shall be
reasonably requested by the Servicer to effect the conveyance of
any such Receivables pursuant to this Section. The obligation of
the Servicer to purchase such Receivables, and to make the deposits
required to be made to the Collection Account as provided in the
36
preceding paragraph, shall constitute the sole remedy respecting
the event giving rise to such obligation available to
Certificateholders (or the Trustee on behalf of
Certificateholders), any Agent or any Enhancement Provider.
SECTION 3.04. Reports and Records for the Trustee. (a)
On or before each Distribution Date, with respect to each
outstanding Series, the Servicer shall deliver to each Enhancement
Provider, each Rating Agency, the Trustee and each Investor
Certificateholder a Distribution Date Statement for such
Distribution Date substantially in the form set forth in the
related Supplement.
(b) The Servicer shall at all times maintain its
computer files with respect to the Receivables in such a manner so
that the Receivables as a group may be specifically identified.
Upon prior request of the Trustee, the Servicer shall make
available to the Trustee, at the office of the Servicer selected by
the Servicer on any Business Day during the Servicer's normal
business hours, any computer programs necessary to make such
identifications. Upon prior written notice by the Trustee, the
Servicer shall make available at the office of the Servicer
selected by the Servicer for inspection by the Trustee on any
Business Day during the Servicer's normal business hours its
records relating to its servicing of the Receivables.
SECTION 3.05. Annual Servicer's Certificate. The
Servicer will deliver to the Rating Agencies (insofar as Rating
Agencies are rating any outstanding Series), the Trustee, each
Agent and each Enhancement Provider on or before April 30 of each
calendar year, beginning with April 30, 1993, an Officers'
Certificate substantially in the form of Exhibit B stating that (a)
a review of the activities of the Servicer during the preceding
calendar year and of its performance under this Agreement was made
under the supervision of the officer signing such 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 this Agreement throughout such year, 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. A copy of such certificate may be obtained by
any Investor Certificateholder by a request in writing to the
Trustee addressed to the Corporate Trust Office.
SECTION 3.06. Annual Independent Public Accountants'
Servicing Report. The Servicer shall cause a nationally recognized
firm of independent certified public accountants, who may also
render other services to the Servicer or to the Seller, to deliver
to the Trustee, the Rating Agencies (insofar as Rating Agencies are
rating any outstanding Series), each Agent and each Enhancement
37
Provider on or before April 30 of each year, beginning April 30,
1993, a report addressed to the Board of Directors of the Servicer
and to the Trustee, to the effect that such firm has examined the
financial statements of the Servicer or, if applicable, the parent
corporation of the Servicer, and issued its report thereon and that
such examination: (a) was made in accordance with generally
accepted auditing standards, and accordingly included such tests of
the accounting records and such other auditing procedures as such
firm considered necessary in the circumstances, (b) included tests
relating to accounts receivable in accordance with generally
accepted auditing standards and (c) except as described in the
report, disclosed no exceptions or errors in the records relating
to accounts receivable that, in the firm's opinion, generally
accepted auditing standards requires such firm to report. A copy
of such report may be obtained by any Investor Certificateholder by
a request in writing to the Trustee addressed to the Corporate
Trust Office.
SECTION 3.07. Tax Treatment. The Seller has entered
into this Agreement and the Investor Certificates have been (or
will be) issued with the intention that the Investor Certificates
will qualify under applicable tax law as indebtedness of FMFC
secured by the Receivables. The Seller, each Beneficiary and each
Certificateholder and Certificate Owner, by the acceptance of its
Certificate or Book-Entry Certificate, as applicable, agrees to
treat, and to take no action inconsistent with the treatment of,
the Investor Certificates as indebtedness of FMFC secured by the
Receivables for federal income taxes, state and local income and
franchise taxes, Michigan Single Business tax and any other taxes
imposed on or measured by income.
SECTION 3.08. Notices to Federal-Mogul. In the event
Federal-Mogul is no longer acting as Servicer, any Successor
Servicer appointed pursuant to Section 10.02 shall deliver or make
available to Federal-Mogul, as the case may be, each certificate
and report required to be prepared, forwarded or delivered
thereafter pursuant to Sections 3.04, 3.05 or 3.06.
SECTION 3.09. Adjustments. (a) If the Servicer adjusts
downward the amount of any Receivable because of a rebate, price
adjustment, billing error or other reason (other than the
collectibility of such Receivable), then, in any such case, the
Pool Balance will be automatically reduced by the amount of the
adjustment. Furthermore, if following such a reduction the Net
Pool Balance would be less than the Required Participation Amount
on the immediately preceding Determination Date (after giving
effect to the allocation, distributions, withdrawals and deposits
to be made on the Distribution Date following such Determination
Date), then the Seller shall be required to pay an amount equal to
such deficiency (up to the amount of such adjustment) into the
38
Collection Account on the Business Day on which such adjustment or
reduction occurs (each such payment an "Adjustment Payment").
(b) If (i) the Servicer makes a deposit into the
Collection Account in respect of a Collection of a Receivable and
such Collection was received by the Servicer in the form of a check
which is not honored for any reason or (ii) the Servicer makes a
mistake with respect to the amount of any Collection and deposits
an amount that is less than or more than the actual amount of such
Collection, the Servicer shall appropriately adjust the amount
subsequently deposited into the Collection Account to reflect such
dishonored check or mistake. Any Receivable in respect of which a
dishonored check is received shall be deemed not to have been paid.
SECTION 3.10. Discount. The Trust will purchase
Eligible Receivables from the Seller at discounts from the
outstanding balances of such Receivables (with respect to each
Series, the "Discount Rate"). Subject to the Supplement for any
Series, it is intended that the Discount Rate for each Series will
be sufficient to pay interest on the Certificates at the
Certificate Rate and the Servicing Fee. The Discount Rate for each
Series will be specified in the related Supplement. With respect
to each Series and any date of determination, Collections will be
deemed collections of such discount ("Discount Collections") in an
amount equal to the product of the Discount Rate and the aggregate
Collections on such date of determination, provided, however, that
with respect to each Collection Period, all Collections shall be
first deemed Discount Collections allocable to the Investor
Certificateholders up to an amount equal to Monthly Interest to be
paid on the Distribution Date occurring in the month next
succeeding such Collection Period. The remainder of such
Collections will be deemed collections of principal ("Principal
Collections").
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ARTICLE IV
Rights of Certificateholders and
Allocation and Application of Collections
SECTION 4.01. Rights of Certificateholders. The
Investor Certificates shall represent fractional undivided
interests in the Trust, which, with respect to each Series, shall
consist of the right to receive, to the extent necessary to make
the required payments with respect to the Investor Certificates of
such Series at the times and in the amounts specified in the
related Supplement, the portion of Collections allocable to
Investor Certificateholders of such Series pursuant to this
Agreement and such Supplement, funds on deposit in the Collection
Account allocable to Certificateholders of such Series pursuant to
this Agreement and such Supplement, funds on deposit in any related
Series Account and funds available pursuant to any related
Enhancement (collectively, with respect to all Series, the
"Certificateholders' Interest"), it being understood that the
Investor Certificates of any Series or Class shall not represent
any interest in any Series Account or Enhancement for the benefit
of any other Series or Class. The Seller's Certificate shall
represent the ownership interest in the remainder of the Trust
Assets not allocated pursuant to this Agreement or any Supplement
to the Certificateholders' Interest, including the right to receive
Collections with respect to the Receivables and other amounts at
the times and in the amounts specified in this Agreement or in any
Supplement to be paid to the Seller on behalf of all holders of the
Seller's Certificates (the "Seller's Interest"); provided, however,
that the Seller's Certificates shall not represent any interest in
the Collection Account, any Series Account or any Enhancement,
except as specifically provided in this Agreement or any
Supplement.
SECTION 4.02. Establishment of the Collection Account.
The Servicer, for the benefit of the Certificateholders and,
subject to the rights of the Certificateholders, the other
Beneficiaries, shall cause to be established and maintained in the
name of the Trust an Eligible Deposit Account bearing a designation
clearly indicating that the funds deposited therein are held for
the benefit of the Certificateholders and, subject to the rights of
the Certificateholders, the other Beneficiaries (the "Collection
Account"). The Trustee shall possess all right, title and interest
in all funds from time to time on deposit in, and all Eligible
Investments credited to, the Collection Account and in all proceeds
thereof. Except as provided herein, the Collection Account shall
be under the sole dominion and control of the Trustee for the
benefit of the Certificateholders and the other Beneficiaries. If,
at any time, the Collection Account ceases to be an Eligible
40
Deposit Account, the Servicer shall establish a substitute Eligible
Deposit Account as the Collection Account, instruct the Trustee to
transfer any cash and/or any Eligible Investments to such new
Collection Account and, from the date any such substitute account
is established, such account shall be the Collection Account.
Except as provided herein, neither the Seller nor the Servicer, nor
any person or entity claiming by, through or under the Seller or
Servicer, shall have any right, title or interest in, or any right
to withdraw any amount from, the Collection Account. Pursuant to
the authority granted to the Servicer in Section 3.01, the Servicer
shall have the power, revocable by the Trustee, to instruct the
Trustee to make withdrawals and payments from the Collection
Account for the purposes of carrying out the Servicer's or
Trustee's duties specified in this Agreement.
All Eligible Investments shall be held by the Trustee for
the benefit of the Certificateholders and the other Beneficiaries.
Subject to the Supplement for any Series, funds on deposit in the
Collection Account shall at the direction of the Servicer be
invested by the Trustee solely in Eligible Investments that will
mature or be redeemable so that such funds (a), with respect to
amounts held for distribution on the next Distribution Date will be
available at the close of business on or before the Business Day
next preceding the following Distribution Date and (b), with
respect to all other amounts, will be available at the close of
business on or before the next Business Day (or on or before 10:00
a.m. on such next Distribution Date or Business Day as the case
may be in the case of Eligible Investments in respect of which the
Trustee is the obligor). Any request by the Servicer to invest
funds on deposit in the Collection Account shall be in writing and
shall certify that the requested investment is an Eligible
Investment which matures at or prior to the time required hereby.
As of each date on which Eligible Investments mature or are
redeemed, all interest and other investment earnings (net of losses
and investment expenses) on funds on deposit in the Collection
Account received on such date shall be credited to the Collection
Account. Schedule 2, which is hereby incorporated into and made
part of this Agreement, identifies the Collection Account by
setting forth the account number of such account, the account
designation of such account and the name and location of the
Institution with which such account has been established. If a
substitute Collection Account is established pursuant to this
Section 4.02, the Servicer shall provide to the Trustee an amended
Schedule 2, setting forth the relevant information for such
substitute Collection Account.
SECTION 4.03. Allocations and Applications of
Collections and Other Funds. (a) On or prior to March 31, 1997,
the Servicer shall cause all Collections deposited into a Lockbox
Account to be deposited directly into the Collection Account as
41
promptly as possible and in no event later than two Business Days
after receipt thereof in a Lockbox Account; provided, that payments
in a Lockbox Account in the form of a check shall be deposited in
the Collection Account no later than two Business Days after such
check becomes available funds.
(b) Subject to the Supplement for any Series and Section
4.04, but notwithstanding anything else in this Agreement to the
contrary, with respect to any Collection Period, (i) the Servicer
will only be required to deposit Collections into the Collection
Account up to the aggregate amount of Collections required to be
deposited into all Series Accounts or, without duplication,
distributed on the related Distribution Date to all Investor
Certificateholders, to each Agent or to each Enhancement Provider
pursuant to the terms of any Supplement or Enhancement Agreement
and (ii) if at any time prior to such Distribution Date the amount
of Collections deposited in the Collection Account exceeds the
amount required to be deposited pursuant to clause (i) above, the
Servicer will be permitted to withdraw the excess from the
Collection Account, including an amount equal to any Monthly
Servicing Fee then owing to it, as well as the Monthly Servicing
Fee payable on the next Distribution Date. In the event Federal-Mogul
becomes a debtor in a bankruptcy case, all collections
received by the Servicer with respect to the Receivables of a
specific obligor will be deposited by the Servicer into the
Collection Account as described herein, in the order in which such
Receivables were originated.
(c) Subject to the Supplement for any Series, Principal
Collections, Discount Collections, Collections of Defaulted
Receivables and Miscellaneous Payments will be allocated to each
Series from and after the related Series Cut-Off Date as specified
in the related Supplement, and amounts so allocated to any Series
will not, except as specified in the related Supplement, be
available to the Investor Certificateholders of any other Series.
Allocations thereof between the Certificateholders' Interest and
the Seller's Interest, among the Series in any group and among the
Classes in any Series shall be set forth in the related Supplement
or Supplements.
SECTION 4.04. Unallocated Principal Collections.
Subject to the Supplement for any Series, on each Distribution
Date, (a) the Servicer shall allocate Excess Principal Collections
(as described below) to each Series as set forth in the related
Supplement and (b) the Servicer shall instruct the Trustee to
withdraw from the Collection Account and pay to the Seller (i) an
amount equal to the excess, if any, of (x) the aggregate amount for
all outstanding Series of Principal Collections which the related
Supplements specify are to be treated as "Excess Principal
Collections" with respect to such Distribution Date over (y) the
aggregate amount for all outstanding Series which the related
42
Supplements specify are "Principal Shortfalls" with respect to such
Distribution Date and, without duplication, (ii) the aggregate
amount for all outstanding Series of that portion of Principal
Collections which the related Supplements specify are to be
allocated and paid to the Seller with respect to such Distribution
Date; provided, however, that, in the case of clauses (i) and (ii),
such amounts shall be paid to the Seller only if the Net Pool
Balance for such Distribution Date (determined after giving effect
to any Receivables transferred to the Trust on such date) exceeds
the Required Participation Amount for the immediately preceding
Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on such
Distribution Date). Any amount held in the Collection Account
pursuant to this paragraph because the Net Pool Balance does not
exceed the Required Participation Amount ("Unallocated Principal
Collection") shall be paid to the Seller at the time the Net Pool
Balance exceeds the Required Participation Amount for the
immediately preceding Determination Date (after giving effect to
the allocations, distributions, withdrawals and deposits to be made
on the Distribution Date immediately following such Determination
Date); provided, however, that any Unallocated Principal
Collections on deposit in the Collection Account at any time during
which any Series is in its amortization period, accumulation period
or Early Amortization Period shall be deemed to be "Miscellaneous
Payments" and shall be allocated and distributed in accordance with
Section 4.03 and the terms of each Supplement.
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ARTICLE V
Distributions and Reports to
Certificateholders
Distributions shall be made to, and reports shall be
provided to, Certificateholders as set forth in the applicable
Supplement.
ARTICLE VI
The Certificates
SECTION 6.01. The Certificates. The Investor
Certificates of any Series or Class may be issued in bearer form
("Bearer Certificates") with attached interest coupons and one or
more special coupons (collectively, the "Coupons") pursuant to
Section 6.11, or in fully registered form ("Registered
Certificates") and shall be substantially in the form of the
exhibits with respect thereto attached to the applicable
Supplement. The FMFC Certificate will be issued in registered
form, substantially in the form of Exhibit A, and shall upon issue,
be executed and delivered by the Seller to the Trustee for
authentication and redelivery as provided in Section 6.02. Except
as otherwise provided in any Supplement, Bearer Certificates shall
be issued in minimum denominations of $5,000, $50,000 and $100,000
and Registered Certificates shall be issued in minimum
denominations of $1,000,000 and in integral multiples of $1,000 in
excess thereof. If specified in any Supplement, the Investor
Certificates of any Series or Class shall be issued upon initial
issuance as a single certificate evidencing the aggregate original
principal amount of such Series or Class as described in Section
6.11. The FMFC Certificate shall be initially issued as a single
certificate and shall initially represent the entire Seller's
Interest. Unless otherwise indicated in any Supplement, each
Certificate shall be executed by manual or facsimile signature on
behalf of the Seller by its President or any Vice President.
Certificates bearing the manual or facsimile signature of the
individual who was, at the time when such signature was affixed,
authorized to sign on behalf of the Seller shall not be rendered
invalid, notwithstanding that such individual ceased to be so
authorized prior to the authentication and delivery of such
Certificates or does not hold such office at the date of such
Certificates. No Certificates shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by or on
behalf of the Trustee by the manual signature of a duly authorized
signatory (which may be a duly authorized signatory of an
authenticating agent appointed by the Trustee), and such
certificate upon any Certificate shall be conclusive evidence, and
the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Registered Certificates
and Seller's Certificates shall be dated the date of their
authentication. All Bearer Certificates shall be dated the date of
the applicable Series Issuance Date as provided in the related
Supplement.
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SECTION 6.02. Authentication of Certificates. The
Trustee shall authenticate and deliver the Investor Certificates of
each Series and Class that are issued upon original issuance to or
upon the order of the Seller against payment to the Seller of the
purchase price therefor. The Trustee shall authenticate and
deliver the FMFC Certificate to the Seller simultaneously with its
delivery of the Investor Certificates of the first Series to be
issued hereunder. If specified in the related Supplement for any
Series or Class, the Trustee shall authenticate and deliver outside
the United States the Global Certificate that is issued upon
original issuance thereof.
SECTION 6.03. New Issuances. (a) The Seller may from
time to time direct the Trustee, on behalf of the Trust, to issue
one or more new Series of Investor Certificates pursuant to a
Supplement. The Investor Certificates of all outstanding Series
shall be equally and ratably entitled as provided herein to the
benefit of this Agreement without preference, priority or
distinction, all in accordance with the terms and provisions of
this Agreement and the applicable Supplement except, with respect
to any Series or Class, as provided in the related Supplement.
(b) On or before the Series Issuance Date relating to
any new Series, the parties hereto will execute and deliver a
Supplement which will specify the Principal Terms of such new
Series. The terms of such Supplement may modify or amend the terms
of this Agreement solely as applied to such new Series. The
obligation of the Trustee to issue the Investor Certificates of
such new Series and to execute and deliver the related Supplement
is subject to the satisfaction of the following conditions:
(i) on or before the fifth Business Day immediately
preceding the Series Issuance Date, the Seller shall have given the
Trustee, the Servicer, each Rating Agency (insofar as Rating
Agencies are rating any outstanding Series), any Agent and any
Enhancement Provider written notice of such issuance and the Series
Issuance Date;
(ii) the Seller shall have delivered to the Trustee the
related Supplement, in form satisfactory to the Trustee, executed
by each party hereto other than the Trustee;
(iii) the Seller shall have delivered to the Trustee any
related Enhancement Agreement executed by each of the parties
thereto, other than the Trustee;
(iv) such issuance will not result in the occurrence of
an Early Amortization Event and the Seller shall have delivered to
the Trustee, any Agent and any Enhancement Provider an Officer's
45
Certificate, dated the Series Issuance Date (upon which the Trustee
may conclusively rely), to the effect that the Seller reasonably
believes that such issuance will not result in the occurrence of an
Early Amortization Event and is not reasonably expected to result
in the occurrence of an Early Amortization Event at any time in the
future;
(v) the Seller shall have delivered to the Trustee an
Opinion of Counsel to the effect that the issuance of the Investor
Certificates of such Series (A) has been, or need not be,
registered under the Securities Act of 1933, as amended, and will
not result in the requirement that any other Series of Investor
Certificates not registered under the Securities Act of 1933, as
amended, be so registered (unless the Seller has elected, in its
sole discretion, to register such Certificates), and (B) will not
result in the Trust becoming subject to registration as an
investment company under the Investment Company Act of 1940, as
amended, and (C) will not require this Agreement or the related
Supplement to be qualified under the Trust Indenture Act of 1939,
as amended;
(vi) the Seller shall have delivered to the Trustee and
any Enhancement Provider a Tax Opinion, dated the Series Issuance
Date, with respect to such issuance; and
(vii) Reserved
(viii) the Seller shall have delivered to the Trustee an
Officer's Certificate certifying that the result obtained by
multiplying (x) the Seller's Participation Amount by (y) the
percentage equivalent of the portion of the Seller's Interest
represented by the FMFC Certificate, shall not be less than 2% of
the Pool Balance, in each case as of the Series Issuance Date, and
after giving effect to such issuance.
Upon satisfaction of the above conditions, the Trustee shall
execute the Supplement and the Seller shall execute and deliver the
Investor Certificates of such Series for authentication and
redelivery to or upon the order of the Seller. Notwithstanding the
provisions of this Section 6.03(b), prior to the execution of any
Supplement, the Trustee shall be entitled to receive and rely upon
an Opinion of Counsel stating that the execution of such Supplement
is authorized or permitted by this Agreement and any Supplement
related to any outstanding Series. The Trustee may, but shall not
be obligated to, enter into any such Supplement which affects the
Trustee's own rights, duties or immunities under this Agreement.
(c) The Seller may surrender the FMFC Certificate to the
Trustee in exchange for a newly issued FMFC Certificate and a
second certificate (a "Supplemental Certificate"), the terms of
which shall be defined in a supplement to this Agreement (which
46
Supplement shall be subject to Section 13.01 hereof to the extent
that it amends any of the terms of this Agreement), to be delivered
to or upon the order of the Seller (or the holder of a Supplemental
Certificate, in the case of the transfer or exchange thereof, as
provided below), upon satisfaction of the following conditions:
(i) the Seller shall have delivered to the Trustee an
Officer's Certificate certifying that the result obtained by
multiplying (x) the Seller's Participation Amount by (y) the
percentage equivalent of the portion of the Seller's Interest
represented by the FMFC Certificate, shall not be less than 2% of
the Pool Balance, in each case as of the date of, and after giving
effect to, such exchange;
(ii) the Rating Agency Condition shall have been
satisfied with respect to such exchange (or transfer or exchange as
provided below); and
(iii) the Seller shall have delivered to the Trustee,
any Agent and any Enhancement Provider a Tax Opinion, dated the
date of such exchange (or transfer or exchange as provided below),
with respect thereto.
The FMFC Certificate will at all times be beneficially owned by the
Seller. Any Supplemental Certificate may be transferred or
exchanged only upon satisfaction of the conditions set forth in
clauses (ii) and (iii) above.
SECTION 6.04. Registration of Transfer and Exchange
of Certificates. (a) The Trustee shall cause to be kept at the
office or agency to be maintained in accordance with the provisions
of Section 6.04(b) a register (the "Certificate Register") in
which, subject to such reasonable regulations as it may prescribe,
a transfer agent and registrar (the "Transfer Agent and Registrar")
shall provide for the registration of the Registered Certificates
and of transfers and exchanges of the Registered Certificates as
herein provided. The Transfer Agent and Registrar shall initially
be the Trustee and any co-transfer agent and co-registrar chosen by
the Seller and acceptable to the Trustee. If any Investor
Certificate is issued as a Global Certificate, the Trustee may, or
if and so long as any Series of Investor Certificates are listed on
the Luxembourg Stock Exchange and such exchange shall so require,
the Trustee shall, appoint a co-transfer agent and co-registrar in
Luxembourg or another European city. Any reference in this
Agreement to the Transfer Agent and Registrar shall include any
co-transfer agent and co-registrar unless the context requires
otherwise.
Subject to paragraph (c) below, upon surrender for
registration of transfer of any Registered Certificate at any
47
office or agency of the Transfer Agent and Registrar maintained for
such purpose, one or more new Registered Certificates (of the same
Series and Class) in authorized denominations of like aggregate
fractional undivided interests in the Certificateholders' Interest
shall be executed, authenticated and delivered, in the name of the
designated transferee or transferees.
At the option of a Registered Certificateholder,
Registered Certificates may be exchanged for other Registered
Certificates (of the same Series and Class) of authorized
denominations of like aggregate fractional undivided interests in
the Certificateholders' Interest, upon surrender of the Registered
Certificates to be exchanged at any such office or agency
maintained for that purpose; Registered Certificates, including
Registered Certificates received in exchange for Bearer
Certificates, may not be exchanged for Bearer Certificates. At the
option of the Holder of a Bearer Certificate, subject to applicable
laws and regulations, Bearer Certificates may be exchanged for
other Bearer Certificates or Registered Certificates (of the same
Series and Class) of authorized denominations of like aggregate
fractional undivided interests in the Certificateholders' Interest,
upon surrender of the Bearer Certificates to be exchanged at an
office or agency of the Transfer Agent and Registrar located
outside the United States. Each Bearer Certificate surrendered
pursuant to this Section shall have attached thereto all unmatured
Coupons; provided that any Bearer Certificate, so surrendered after
the close of business on the Record Date preceding the relevant
Distribution Date after the expected final Distribution Date need
not have attached the Coupon relating to such Distribution Date (in
each case, as specified in the applicable Supplement).
The preceding provisions of this Section notwithstanding,
the Trustee or the Transfer Agent and Registrar, as the case may
be, shall not be required to register the transfer of or exchange
any Certificate for a period of 15 days preceding the due date for
any payment with respect to the Certificate.
Whenever any Investor Certificates are so surrendered for
exchange, the Seller shall execute, and the Trustee shall
authenticate and deliver (in the case of Bearer Certificates,
outside the United States) the Investor Certificates which the
Investor Certificateholder making the exchange is entitled to
receive. Every Investor Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a
written instrument of transfer in a form satisfactory to the
Trustee and the Transfer Agent and Registrar duly executed by the
Investor Certificateholder or the attorney-in-fact thereof duly
authorized in writing.
48
No service charge shall be made for any registration of
transfer or exchange of Investor Certificates, but the Transfer
Agent and Registrar may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in
connection with any such transfer or exchange.
All Investor Certificates (together with any Coupons)
surrendered for registration of transfer and exchange or for
payment shall be canceled and disposed of in a manner satisfactory
to the Trustee. The Trustee shall cancel and destroy any Global
Certificate upon its exchange in full for Definitive Euro-Certificates
and shall deliver a certificate of destruction to the
Seller. Such certificate shall also state that a certificate or
certificates of a Foreign Clearing Agency to the effect referred to
in Section 6.11 was received with respect to each portion of the
Global Certificate exchanged for Definitive Euro-Certificates.
The Seller shall execute and deliver to the Trustee
Bearer Certificates and Registered Certificates in such amounts and
at such times as are necessary to enable the Trustee to fulfill its
responsibilities under this Agreement and the Certificates.
(b) The Transfer Agent and Registrar will maintain at
its expense in the Borough of Manhattan, The City of New York, an
office or agency where Investor Certificates may be surrendered for
registration of transfer or exchange (except that Bearer
Certificates may not be surrendered for exchange at any such office
or agency in the United States).
(c) (i) Registration of transfer of Investor
Certificates containing a legend to the effect set forth on Exhibit
C-1 shall be effected only if such transfer is made pursuant to an
effective registration statement under the Securities Act, or is
exempt from the registration requirements under the Securities Act.
In the event that registration of a transfer is to be made in
reliance upon an exemption from the registration requirements under
the Securities Act, the transferor or the transferee shall deliver,
at its expense, to the Seller, the Servicer and the Trustee, (A) an
Opinion of Counsel to the effect that the proposed transfer is in
compliance with (or exempt from) such registration requirements or
(B) an investment letter from the transferee, substantially in the
form attached to the applicable Supplement, that such transfer is
being made pursuant to an exemption from the registration
requirements of the Securities Act (upon which the Trustee may
conclusively rely for purposes of verifying such exemption) and no
registration of transfer shall be made until such letter is so
delivered.
49
Investor Certificates issued upon registration of
transfer of, or Investor Certificates issued in exchange for,
Investor Certificates bearing the legend referred to above shall
also bear such legend unless the Seller, the Servicer, the Trustee
and the Transfer Agent and Registrar receive an Opinion of Counsel,
satisfactory to each of them, to the effect that such legend may be
removed.
Whenever an Investor Certificate containing the legend
referred to above is presented to the Transfer Agent and Registrar
for registration of transfer, the Transfer Agent and Registrar
shall promptly seek instructions from the Servicer regarding such
transfer and shall be entitled to receive and conclusively rely
upon instructions signed by a Servicing Officer prior to
registering any such transfer. The Seller hereby agrees to
indemnify the Transfer Agent and Registrar and the Trustee and to
hold each of them harmless against any loss, liability or expense
incurred without negligence or bad faith on their part arising out
of or in connection with actions taken or omitted by them in
relation to any such instructions furnished pursuant to this clause
(i).
(ii) Registration of transfer of Investor Certificates
containing a legend to the effect set forth on Exhibit C-2 shall be
effected only if such transfer is made to a Person which is not an
employee benefit plan, trust or account, including an individual
retirement account, that is subject to ERISA or that is described
in Section 4975(e)(1) of the Code or an entity whose underlying
assets include plan assets by reason of a plan's investment in such
entity (a "Benefit Plan"). By accepting and holding any such
Investor Certificate, an Investor Certificateholder shall be deemed
to have represented and warranted that it is not a Benefit Plan.
By acquiring any interest in a Book-Entry Certificate, a
Certificate Owner shall be deemed to have represented and warranted
that it is not a Benefit Plan.
(d) Notwithstanding any other provision of this Section
6.04, no registration of transfer of any Investor Certificate shall
be made unless the transferor or the transferee shall deliver, at
its expense, to the Seller, the Servicer and the Trustee, a
representation letter, substantially in the form attached to the
applicable Supplement, stating whether such transferee is a
"benefit plan investor" as defined in Section 2510.3-101(f)(2) of
the Labor Regulations promulgated under ERISA. The Transfer Agent
and Registrar will maintain, as a part of the Certificate Register,
a list of all Registered Certificateholders that are benefit plan
investors. The Transfer Agent and Registrar will not register the
transfer of any Investor Certificate if, immediately after the
registration of transfer of such Investor Certificate, more than
23% of the outstanding principal balance of the Investor
50
Certificates of all Series are held by benefit plan investors.
Notwithstanding anything else to the contrary herein, any purported
transfer of an Investor Certificate to a benefit plan investor in
violation of the preceding sentence shall be void and of no effect.
SECTION 6.05. Mutilated Destroyed Lost or Stolen
Certificates. If (a) any mutilated Certificate (together, in the
case of Bearer Certificates, with all unmatured Coupons (if any)
appertaining thereto) is surrendered to the Transfer Agent and
Registrar or the Transfer Agent and Registrar receives evidence to
its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and
Registrar and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the
absence of notice to the Trustee that such Certificate has been
acquired by a bona fide purchaser, the Seller shall execute, and
the Trustee shall authenticate and deliver (in the case of Bearer
Certificates, outside the United States), in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate,
a new Certificate of like tenor and aggregate fractional undivided
interest. In connection with the issuance of any new Certificate
under this Section, the Trustee or the Transfer Agent and Registrar
may require the payment by the Certificateholder of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and Transfer Agent and
Registrar) connected therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute complete and indefeasible
evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be
found at any time.
SECTION 6.06. Persons Deemed Owners. The Trustee, the
Transfer Agent and Registrar and any agent of any of them may
(a) prior to due presentation of a Registered Certificate for
registration of transfer, treat the Person or Persons in whose name
any Registered Certificate is registered as the owner of such
Registered Certificate for the purpose of receiving distributions
pursuant to the terms of the applicable Supplement and for all
other purposes whatsoever, and (b) treat the bearer of a Bearer
Certificate or Coupon as the owner of such Bearer Certificate or
Coupon for the purpose of receiving distributions pursuant to the
terms of the applicable Supplement and for all other purposes
whatsoever; and, in any such case, neither the Trustee, the
Transfer Agent and Registrar nor any agent of any of them shall be
affected by any notice to the contrary. Notwithstanding the
foregoing, in determining whether the Holders of the requisite
Investor Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Seller, the Servicer, any other Holder of
51
a Seller's Certificate or any Affiliate thereof, shall be
disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent
or waiver, only Certificates which a Responsible Officer of the
Trustee knows to be so owned shall be so disregarded. Certificates
so owned which have been pledged in good faith shall not be
disregarded and may be regarded as outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Certificates and that the pledgee is
not the Seller, the Servicer, any other holder of a Seller's
Certificate or any Affiliate thereof.
SECTION 6.07. Access to List of Registered
Certificateholders' Names and Addresses. The Trustee will furnish
or cause to be furnished by the Transfer Agent and Registrar to the
Servicer, within five Business Days after receipt by the Trustee of
a written request therefor, a list in such form as the Servicer may
reasonably require, of the names and addresses of the Registered
Certificateholders of any Series. If three or more Holders of
Investor Certificates (the "Applicants") apply to the Trustee, and
such application states that the Applicants desire to communicate
with other Investor Certificateholders with respect to their rights
under this Agreement or any Supplement or under the Investor
Certificates and is accompanied by a copy of the communication
which such Applicants propose to transmit, then the Trustee, after
having been indemnified to its reasonable satisfaction by such
Applicants for its costs and expenses, shall afford or shall cause
the Transfer Agent and Registrar to afford such Applicants access
during normal business hours to the most recent list of Registered
Certificateholders of such Series or all outstanding Series, as
applicable, held by the Trustee, within five Business Days after
the receipt of such application. Such list shall be as of a date
no more than 45 days prior to the date of receipt of such
Applicants' request.
Every Registered Certificateholder, by receiving and
holding a Registered Certificate, agrees with the Trustee that
neither the Trustee, the Transfer Agent and Registrar, nor any of
their respective agents, shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of
the Registered Certificateholders hereunder, regardless of the
sources from which such information was derived.
SECTION 6.08. Book-Entry Certificates. Unless otherwise
specified in the related Supplement for any Series or Class, the
Investor Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Investor Certificates
representing the Book-Entry Certificates, to be delivered to the
Depository, by, or on behalf of, the Seller. The Investor
52
Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no
Certificate Owner will receive a definitive certificate
representing such Certificate Owner's interest in the Investor
Certificates, except as provided in Section 6.10. Unless and until
definitive, fully registered Investor Certificates ("Definitive
Certificates") have been issued to the applicable Certificate
Owners pursuant to Section 6.10 or as otherwise specified in any
such Supplement:
(a) the provisions of this Section shall be in full
force and effect with respect to such Series;
(b) the Seller, the Servicer and the Trustee may deal
with the Depository and the Depository Participants for all
purposes (including the making of distributions) as the authorized
representatives of the respective Certificate Owners;
(c) to the extent that the provisions of this Section
conflict with any other provisions of this Agreement, the
provisions of this Section shall control; and
(d) the rights of the respective Certificate Owners of
each such Series shall be exercised only through the Depository
and the Depository Participants and shall be limited to those
established by law and agreements between such Certificate Owners
and the Depository and/or the Depository Participants. Pursuant to
the Depository Agreement applicable to such Series, unless and
until Definitive Certificates are issued pursuant to Section 6.10,
the Depository will make book-entry transfers among the Depository
Participants and receive and transmit distributions of principal
and interest on the related Investor Certificates to such
Depository Participants.
For purposes of any provision of this Agreement requiring
or permitting actions with the consent of, or at the direction of,
Investor Certificateholders evidencing a specified percentage of
the aggregate unpaid principal amount of Investor Certificates,
such direction or consent may be given by Certificate Owners
(acting through the Depository and the Depository Participants)
owning Investor Certificates evidencing the requisite percentage of
principal amount of Investor Certificates.
SECTION 6.09. Notices to Depository. Whenever any
notice or other communication is required to be given to Investor
Certificateholders of any Series or Class with respect to which
Book-Entry Certificates have been issued, unless and until
Definitive Certificates shall have been issued to the related
Certificate Owners, the Trustee shall give all such notices and
communications to the applicable Depository for distribution to
Certificateholders.
53
SECTION 6.10. Definitive Certificates. If Book-Entry
Certificates have been issued with respect to any Series or Class
and (a) the Seller Advises the Trustee that the Depository is no
longer willing or able to discharge properly its responsibilities
under the Depository Agreement with respect to such Series or Class
and the Trustee or the Seller is unable to locate a qualified
successor, (b) the Seller, at its option, advises the Trustee that
it elects to terminate the book-entry system with respect to such
Series or Class through the Depository or (c) after the occurrence
of a Servicer Default, Certificate Owners of such Series or Class
evidencing not less than 50% of the aggregate unpaid principal
amount of such Series or Class advise the Trustee and the
Depository through the Depository Participants that the
continuation of a book-entry system with respect to the Investor
Certificates of such Series or Class through the Depository is no
longer in the best interests of the Certificate Owners with respect
to such Certificates, then the Trustee shall notify all Certificate
Owners of such Certificates, through the Depository, of the
occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of any such Certificates by the
Depository, accompanied by registration instructions from the
Depository for registration, the Trustee shall authenticate and
deliver Such Definitive Certificates. Neither the Seller nor the
Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected
in relying on, such instructions. Upon the issuance of such
Definitive Certificates all references herein to obligations
imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates, and the
Trustee shall recognize the Holders of such Definitive Certificates
as Investor Certificateholders hereunder.
SECTION 6.11 Global Certificate; Exchange Date. (a) If
specified in the related Supplement for any Series or Class, the
Investor Certificates will initially be issued in the form of a
single temporary global Certificate (the "Global Certificate") in
bearer form, without interest coupons, in the denomination of the
entire aggregate principal amount of such Series or Class and
substantially in the form set forth in the exhibit with respect
thereto attached to the related Supplement. The Global Certificate
will be authenticated by the Trustee upon the same conditions, in
substantially the same manner and with the same effect as the
Definitive Certificates. The Global Certificates may be exchanged
as described below for Bearer or Registered Certificates in
definitive form (the "Definitive Euro-Certificates").
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(b) The Manager shall, upon its determination of the
date of completion of the distribution of the Investor Certificates
of such Series or Class, so advise the Trustee, the Seller, the
Common Depositary, and each Foreign Clearing Agency forthwith.
Without unnecessary delay, but in any event not prior to the
Exchange Date, the Seller will execute and deliver to the Trustee
at its London office or its designated agent outside the United
States definitive Bearer Certificates in an aggregate principal
amount equal to the entire aggregate principal amount of such
Series or Class. All Bearer Certificates so issued and delivered
will have Coupons attached. The Global Certificate may be
exchanged for an equal aggregate principal amount of Definitive
Euro-Certificates only on or after the Exchange Date. A United
States institutional investor may exchange the portion of the
Global Certificate beneficially owned by it only for an equal
aggregate principal amount of Registered Certificates bearing the
applicable legend set forth in the form of Registered Certificate
attached to the related Supplement and having a minimum
denomination of $500,000, which may be in temporary form if the
Seller so elects. The Seller may waive the $500,000 minimum
denomination requirement in writing if it so elects. Upon any
demand for exchange for Definitive Euro-Certificates in accordance
with this paragraph, the Seller shall direct the Trustee in writing
to authenticate and deliver the Definitive Euro-Certificates to the
Holder (x) outside the United States, in the case of Bearer
Certificates, and (y) according to the instructions of the
Holder,in the case of Registered Certificates, but in either case
only upon presentation to the Trustee of a written statement
substantially in the form of Exhibit E-1 with respect to the Global
Certificate or portion thereof being exchanged, signed by a Foreign
Clearing Agency and dated on the Exchange Date or a subsequent
date, to the effect that it has received in writing or by tested
telex a certification substantially in the form of (i) in the case
of beneficial ownership of the Global Certificate or a portion
thereof being exchanged by a United States institutional investor
pursuant to the second preceding sentence, the certificate in the
form of Exhibit E-2 signed by the Manager which sold the relevant
Certificates or (ii) in all other cases, the certificate in the
form of Exhibit E-3, the certificate referred to in this clause
(ii) being dated on the earlier of the first actual payment of
interest in respect of such Certificates and the date of the
delivery of such Certificate in definitive form. Upon receipt of
such certification, the Trustee shall cause the Global Certificate
to be endorsed in accordance with paragraph (d) below. Any
exchange as provided in this Section shall be made free of charge
to the Holders and the beneficial owners of the Global Certificate
and to the beneficial owners of the Definitive Euro-Certificates
issued in exchange, except that a Person receiving Definitive
Euro-Certificates must bear the cost of insurance, postage,
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transportation and the like in the event that such Person does not
receive such Definitive Euro-Certificates in person at the offices
of a Foreign Clearing Agency.
(c) The delivery to the Trustee by a Foreign Clearing
Agency of any written statement referred to above may be relied
upon by the Seller and the Trustee as conclusive evidence that a
corresponding certification or certifications has or have been
delivered to such Foreign Clearing Agency pursuant to the terms of
this Agreement.
(d) Upon any such exchange of all or a portion of the
Global Certificate for a Definitive Euro-Certificate or
Certificates, such Global Certificate shall be endorsed by or on
behalf of the Trustee to reflect the reduction of its principal
amount by an amount equal to the aggregate principal amount of such
Definitive Euro-Certificate or Certificates. Until so exchanged in
full, such Global Certificate shall in all respects be entitled to
the same benefits under this Agreement as Definitive Euro-Certificates
authenticated and delivered hereunder except that the
beneficial owners of such Global Certificate shall not be entitled
to receive payments of interest on the Certificates until they have
exchanged their beneficial interests in such Global Certificate for
Definitive Euro-Certificates.
SECTION 6.12. Meetings of Certificateholders. (a) If
at the time any Bearer Certificates are issued and outstanding with
respect to any Series or Class to which any meeting described below
relates, the Servicer or the Trustee may at any time call a meeting
of Investor Certificateholders of any Series or Class or of all
Series, to be held at such time and at such place as the Servicer
or the Trustee, as the case may be, shall determine, for the
purpose of approving a modification of or amendment to, or
obtaining a waiver of any covenant or condition set forth in, this
Agreement, any Supplement or the Investor Certificates or of taking
any other action permitted to be taken by Investor
Certificateholders hereunder or under any Supplement. Notice of
any meeting of Investor Certificateholders, setting forth the time
and place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be given in accordance with
Section 13.05, the first mailing and publication to be not less
than 20 nor more than 180 days prior to the date fixed for the
meeting. To be entitled to vote at any meeting of Investor
Certificateholders a Person shall be (i) a Holder of one or more
Investor Certificates of the applicable Series or Class or (ii) a
Person appointed by an instrument in writing as proxy by the Holder
of one or more such Investor Certificates. The only Persons who
shall be entitled to be present or to speak at any meeting of
Investor Certificateholders shall be the Persons entitled to vote
at such meeting and their counsel and any representatives of the
Seller, the Servicer and the Trustee and their respective counsel.
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(b) At a meeting of Investor Certificateholders, Persons
entitled to vote Investor Certificates evidencing a majority of the
aggregate unpaid principal amount of the applicable Series or Class
or all outstanding Series, as the case may be, shall constitute a
quorum. No business shall be transacted in the absence of a
quorum, unless a quorum is present when the meeting is called to
order. In the absence of a quorum at any such meeting, the meeting
may be adjourned for a period of not less than 10 days; in the
absence of a quorum at any such adjourned meeting, such adjourned
meeting may be further adjourned for a period of not less than 10
days; at the reconvening of any meeting further adjourned for lack
of a quorum, the Persons entitled to vote Investor Certificates
evidencing at least 25% of the aggregate unpaid principal amount of
the applicable Series or Class or all outstanding Series, as the
case may be, shall constitute a quorum for the taking of any action
set forth in the notice of the original meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided
above except that such notice must be given not less than five days
prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage of the aggregate principal
amount of the outstanding applicable Investor Certificates which
shall constitute a quorum.
(c) Any Investor Certificateholder who has executed an
instrument in writing appointing a Person as proxy shall be deemed
to be present for the purposes of determining a quorum and be
deemed to have voted; provided that such Investor Certificateholder
shall be considered as present or voting only with respect to the
matters covered by such instrument in writing. Subject to the
provisions of Section 13.01, any resolution passed or decision
taken at any meeting of Investor Certificateholders duly held in
accordance with this Section shall be binding on all Investor
Certificateholders whether or not present or represented at the
meeting.
(d) The holding of Bearer Certificates shall be proved
by the production of such Bearer Certificates or by a certificate,
satisfactory to the Servicer, executed by any bank, trust company
or recognized securities dealer, wherever situated, satisfactory to
the Servicer. Each such certificate shall be dated and shall state
that on the date thereof a Bearer Certificate bearing a specified
serial number was deposited with or exhibited to such bank, trust
company or recognized securities dealer by the Person named in such
certificate. Any such certificate may be issued in respect of one
or more Bearer Certificates specified therein. The holding by the
Person named in any such certificate of any Bearer Certificate
specified therein shall be presumed to continue for a period of one
year from the date of such certificate unless at the time of any
determination of such holding (i) another certificate bearing a
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later date issued in respect of the same Bearer Certificate shall
be produced, (ii) the Bearer Certificate specified in such
certificate shall be produced by some other Person or (iii) the
Bearer Certificate specified in such certificate shall have ceased
to be outstanding. The appointment of any proxy shall be proved by
having the signature of the Person executing the proxy guaranteed
by any bank, trust company or recognized securities dealer
satisfactory to the Trustee.
(e) The Trustee shall appoint a temporary chairman of
the meeting. A permanent chairman and a permanent secretary of the
meeting shall be elected by vote of the Holders of Investor
Certificates evidencing a majority of the aggregate unpaid
principal amount of Investor Certificates of the applicable Series
or Class or all outstanding Series, as the case may be, represented
at the meeting. No vote shall be cast or counted at any meeting in
respect of any Investors Certificate challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding.
The chairman of the meeting shall have no right to vote except as
an Investor Certificateholder or proxy. Any meeting of Investor
Certificateholders duly called at which a quorum is present may be
adjourned from time to time, and the meeting may be held as so
adjourned without further notice.
(f) The vote upon any resolution submitted to any
meeting of Investor Certificateholders shall be by written ballot
on which shall be subscribed the signatures of Investor
Certificateholders or proxies and on which shall be inscribed the
serial number or numbers of the Investor Certificates held or
represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at
the meeting for or against any resolution and who shall make and
file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in
duplicate of the proceedings of each meeting of Investor
Certificateholders shall be prepared by the secretary of the
Meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the meeting and
showing that said notice was published as provided above. The
record shall be signed and verified by the permanent chairman and
secretary of the meeting and one of the duplicates shall be
delivered to the Servicer and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified
shall be conclusive evidence of the matters therein stated.
SECTION 6.13. Appointment of Paying Agent. (a )The
Trustee may appoint one or more Paying Agents from time to time.
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The Paying Agent shall make distributions to Investor
Certificateholders pursuant to Article V. Any Paying Agent shall
have the revocable power to withdraw funds from the Collection
Account and any Series Accounts for the purpose of making
distributions referred to above. The Trustee may revoke such power
and remove the Paying Agent if the Trustee determines in its sole
discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The
Paying Agent shall initially be the Trustee. The Trustee shall be
permitted to resign as Paying Agent upon 30 days' written notice to
the Seller and the Servicer. In the event that the Trustee shall
no longer be the Paying Agent, the initial Seller or the Servicer
or, in the event that Successor Servicer shall have been appointed,
the Trustee, shall appoint a successor. The provisions of Sections
11.01, 11.02 and 11.03 shall apply to the Trustee also in its role
as Paying Agent, for so long as the Trustee shall act as Paying
Agent.
(b) The Trustee hereby agrees, and shall cause the
Paying Agent (if other than the Trustee) to execute and deliver to
the Trustee an instrument in which such Paying Agent shall agree
with the Trustee that the Paying Agent will hold all sums, if any,
held by it for payment to the Investor Certificateholders in trust
for the benefit of the Investor Certificateholders entitled thereto
until such sums shall be paid to such Certificateholders and shall
agree, and if the Trustee shall be the Paying Agent, it hereby
agrees, to comply with all requirements of the Code regarding the
withholding of payments in respect of federal income taxes by the
Trustee.
SECTION 6.14. Authenticating Agent. (a) The Trustee
may appoint one or more authenticating agents with respect to the
Certificates which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates in connection with the
issuance, delivery, registration of transfer, exchange or repayment
of the Certificates. Whenever reference is made in this Agreement
to the authentication of Certificates by the Trustee or the
Trustee's certificate of authentication, such reference shall be
deemed to include authentication on behalf of the Trustee by an
authenticating agent and a certificate of authentication executed
on behalf of the Trustee by an authenticating agent. Each
authenticating agent must be acceptable to the Seller and the
Servicer.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an
authenticating agent without the execution or filing of any paper
or any further act on the part of the Trustee or such
authenticating agent.
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(c) An authenticating agent may at any time resign by
giving written notice of resignation to the Trustee, the Seller and
the Servicer. The Trustee may at any time terminate the agency of
an authenticating agent by giving notice of termination to such
authenticating agent to the Seller and the Servicer. Upon receiving
such a notice of resignation or upon such a termination, or in case
at any time an authenticating agent shall cease to be acceptable to
the Trustee, the Seller and the Servicer, the Trustee promptly may
appoint a successor authenticating agent. Any successor
authenticating agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as
an authenticating agent. No successor authenticating agent shall
be appointed unless acceptable to the Trustee, the Seller and the
Servicer.
(d) The Seller agrees to pay each authenticating agent
from time to time reasonable compensation for its services under
this Section 6.14.
(e) The provisions of Sections 11.01, 11.02 and 11.03
shall be applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section
16.14, the Certificates may have endorsed thereon, in lieu of the
Trustee's certificate of authentication, an alternate certificate
of Authentication in substantially the following form:
Certificate of Authentication
This is one of the Certificates described in the
Pooling and Servicing Agreement.
------------------------------
[Name of Authenticating Agent]
as Authenticating Agent for
the Trustee,
By:---------------------------
Authorized Officer
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ARTICLE VII
Other Matters Relating
to the Seller
SECTION 7.01. Liabilities of the Seller. The Seller
shall be liable for all obligations, covenants, representations and
warranties of the Seller arising under or related to this
Agreement. Except as provided in the preceding sentence, the
Seller shall be liable only to the extent of the obligations
specifically undertaken by it in its capacity as Seller hereunder.
SECTION 7.02. Limitation on Liability of the Seller.
Subject to Section 7.03, neither the Seller nor any of the
directors or officers or employees or agents of the Seller in its
capacity as Seller shall be under any liability to the Trust, the
Trustee, the Certificateholders or any other Person for any action
taken or for refraining from the taking of any action in the
capacity as Seller pursuant to this Agreement whether arising from
express or implied duties under this Agreement; provided, however,
that this provision shall not protect the Seller or any such person
against any liability which would otherwise be imposed by reason of
wilful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Seller and any director or
officer or employee or agent of the Seller may rely in good faith
on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
SECTION 7.03. Seller Indemnification of the Trust and
the Trustee. The Seller shall indemnify and hold harmless the
Trust, for the benefit of the Certificateholders and the other
Beneficiaries, and the Trustee (including its directors, officers,
employees and agents), from and against any loss, liability,
expense, damage or injury suffered or sustained by reason of any
acts, omissions or alleged acts or omissions arising out of
activities of the Trust or the Trustee pursuant to this Agreement,
including any judgment, award, settlement, reasonable attorneys'
fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim;
provided, however, that the Seller shall not indemnify the Trust or
the Trustee if such acts, omissions or alleged acts or omissions
constitute fraud, gross negligence, breach of fiduciary duty or
wilful misconduct by the Trustee; and provided further that the
Seller shall not indemnify the Trust, the Trustee or the
Certificateholders or any other Beneficiaries for any liabilities,
cost or expense of the Trust with respect to any action taken by
the Trustee at the request of any such Certificateholders or other
Beneficiaries to the extent the Trustee is fully indemnified by
such Certificateholders or other Beneficiaries with respect to such
action or with respect to any federal, state or local income or
franchise taxes (or any interest or penalties with respect thereto)
61
required to be paid by the Trust or any Certificateholder or other
Beneficiary in connection herewith to any taxing authority. Any
indemnification pursuant to this Article VII shall only be from (i)
the excess of the Seller's Interest for any date of determination
over the Required Participation Amount as of such date and (ii) any
other assets of the Seller not pledged to third parties or
otherwise encumbered in a manner permitted by the Seller's
Certificate of Incorporation and shall only be made after payment
in full of any amounts that the Seller is obligated to deposit in
the Collection Account pursuant to this Agreement. Any
indemnification under this Article VII shall survive the
resignation or removal of the Trustee and the termination of this
Agreement.
ARTICLE VIII
Other Matters Relating
to the Servicer
SECTION 8.01. Liability of the Servicer. The Servicer
shall be liable under this Article VIII only to the extent of the
obligations specifically undertaken by the Servicer in its capacity
as Servicer.
SECTION 8.02. Merger or Consolidation of, or Assumption
of, the Obligations of the Servicer. The Servicer shall not
consolidate with or merge into any other corporation or convey or
transfer its properties and assets substantially as an entirety to
any Person, unless:
(a) the corporation formed by such consolidation or
into which the Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Servicer
substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America or any
State or the District of Columbia and, if the Servicer is not the
surviving entity, such corporation shall assume, without the
execution or filing of any paper or any further act on the part of
any of the parties hereto, the performance of every covenant and
obligation of the Servicer hereunder; and
(b) the Servicer has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating that
such consolidation, merger, conveyance or transfer comply with this
Section 8.02 and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 8.03. Limitation on Liability of the Servicer
and Others. Except as provided in Section 8.04, neither the
Servicer nor any of the directors or officers or employees or
agents of the Servicer, shall be under any liability to the Trust,
the Trustee, the Certificateholders or any other Person for any
action taken or for refraining from the taking of any action in its
62
capacity as Servicer pursuant to this Agreement; provided, however,
that this provision shall not protect the Servicer or any such
Person against any liability which would otherwise be imposed by
reason of wilful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Servicer and any director or
officer or employee or agent of the Servicer may rely in good faith
on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its
duties to service the Receivables in accordance with this Agreement
which in its reasonable opinion may involve it in any expense or
liability.
SECTION 8.04. Servicer Indemnification of the Trust and
the Trustee. The Servicer shall indemnify and hold harmless the
Trust, for the benefit of the Certificateholders and the other
Beneficiaries, and the Trustee (including its directors, officers,
employees and agents), from and against any loss, liability,
expense, damage or injury suffered or sustained by reason of any
acts, omissions or alleged acts or omissions arising out of
activities of the Servicer, the Trust or the Trustee pursuant to
this Agreement, including any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in
connection with the defense of any actual or threatened action,
proceeding or claim; provided, however, that the Servicer shall not
indemnify the Trust or the Trustee if such acts, omissions or
alleged acts or omissions constitute fraud, gross negligence,
breach of fiduciary duty or wilful misconduct by the Trustee; and
provided further that the Servicer shall not indemnify the Trust,
the Trustee or the Certificateholders or the other Beneficiaries
for any liabilities, cost or expense of the Trust with respect to
any action taken by the Trustee at the request of the
Certificateholders or any other Beneficiaries to the extent the
Trustee is fully indemnified by such Certificateholders or other
Beneficiaries with respect to such action or with respect to any
federal, state or local income or franchise taxes (or any interest
or penalties with respect thereto) required to be paid by the Trust
or the Certificateholders or the other Beneficiaries in connection
herewith to any taxing authority. Any indemnification under this
Article VIII shall survive the termination of this Agreement and
the resignation and removal of the Trustee.
SECTION 8.05. The Servicer Not to Resign. The Servicer
shall not resign from the obligations and duties hereby imposed on
it except upon determination that (a) the performance of its duties
hereunder is no longer permissible under applicable law and (b)
there is no reasonable action which the Servicer could take to make
the performance of its duties hereunder permissible under
applicable law. Any such determination permitting the resignation
of the Servicer shall be evidenced as to clause (a) above by an
Opinion of Counsel to such effect delivered to the Trustee. No
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such resignation shall become effective until the Trustee or a
Successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 10.02
hereof. If the Trustee is unable within 120 days of the date of
such determination to appoint a Successor Servicer, the Trustee
shall serve as Successor Servicer hereunder.
SECTION 8.06. Access to Certain Documentation and
Information Regarding the Receivables. The Servicer shall provide
to the Trustee access to the documentation regarding the
Receivables in such cases where the Trustee is required in
connection with the enforcement of the rights of the
Certificateholders, or by applicable statutes or regulations, to
review such documentation, such access being afforded without
charge but only (a) upon reasonable request, (b) during normal
business hours, (c) subject to the Servicer's normal security and
confidentiality procedures and (d) at offices designated by the
Servicer. Nothing in this Section 8.06 shall derogate from the
obligation of the Seller, the Trustee or the Servicer to observe
any applicable law prohibiting disclosure of information regarding
the Obligors and the failure of the Servicer to provide access as
provided in this Section 8.06 as a result of such obligation shall
not constitute a breach of this Section 8.06.
SECTION 8.07. Delegation of Duties. Subject to Section
3.01, in the ordinary course of business, the Servicer may at any
time delegate any duties hereunder to any Person who agrees to
conduct such duties in accordance with this Agreement. The
Servicer shall give prompt written notice of any such delegation of
a material function to the Trustee, any Rating Agency, any Agent
and any Enhancement Providers. Such delegation shall not relieve
the Servicer of its liability and responsibility with respect to
such duties, and shall not constitute a resignation within the
meaning of Section 8.05 and the Rating Agency Condition shall have
been satisfied with respect to such delegation prior to such
delegation.
SECTION 8.08. Examination of Records. The Seller and
the Servicer shall indicate generally in its computer files or
other records that the Receivables have been conveyed to the Trust
pursuant to this Agreement for the benefit of the
Certificateholders and the other Beneficiaries. The Seller and the
Servicer shall, prior to the sale or transfer to a third party of
any receivable held in its custody, examine its computer and other
records to determine that such receivable is not a Receivable.
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ARTICLE IX
Early Amortization Events
SECTION 9.01. Early Amortization Events. If any one of
the following events shall occur:
(a) the Seller or the Servicer (or Federal-Mogul, if it
is not the Servicer) shall file a petition commencing a voluntary
case under any chapter of the Federal bankruptcy laws; or the
Seller or the Servicer (or Federal-Mogul, as aforesaid) shall file
a petition or 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 the Seller or the Servicer (or
Federal-Mogul, as aforesaid) shall appoint, or consent 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 the
Seller or the Servicer (or Federal-Mogul, as aforesaid) shall make
an assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become
due;
(b) any order for relief against the Seller or the
Servicer (or Federal-Mogul, if it is not the Servicer) shall have
been entered by a court having jurisdiction in the premises under
any chapter of the Federal bankruptcy laws, and such order shall
have continued undischarged or unstayed for a period of 60 days; or
a decree or order by a court having jurisdiction in the premises
shall have been entered approving as properly filed a petition
seeking reorganization, arrangement, adjustment, or composition of
the Seller or the Servicer (or Federal-Mogul, as aforesaid) under
any other similar applicable federal law, and such decree or order
shall have continued undischarged or unstayed for a period of 120
days; or a decree or 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 the Seller or the Servicer (or
Federal-Mogul, as aforesaid) or of any substantial part of its
property or for the winding up or liquidation of its affairs, shall
have been entered, and such decree or order shall have remained in
force undischarged or unstayed for a period of 120 days;
(c) failure on the part of the Seller, the Servicer or
Federal-Mogul, as applicable, (i) to make any payment or deposit
(including any Transfer Deposit Amount or Adjustment Payment)
required by the terms of this Agreement or the Receivables Purchase
Agreements on or before the date occurring two Business Days after
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the date such payment or deposit is required to be made herein, or
(ii) With respect to any Series, to deliver a Distribution Date
Statement within five Business Days of the day such item is due to
be delivered under this Agreement, or (iii) duly to observe or
perform in any material respect the covenant of the Seller set
forth in Section 2.05(a) or (iv) duly to observe or perform in any
material respect any other covenants or agreements of the Seller or
the Servicer, as the case may be, set forth in this Agreement or
the Receivables Purchase Agreements, which failure in the case of
this clause (iv) has a materially adverse effect on the Investor
Certificate holder and continue unremedied for a period of 45 days
after the date on which written notice of such failure, requiring
the same to be remedied, shall have been received by the Seller
from the Trustee or by the Seller and the Trustee from any
Enhancement Provider;
(d) any representation or warranty made by Federal-Mogul
in the Receivables Purchase Agreements or the Seller in this
Agreement (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 60 days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Seller by the Trustee and (ii) as a
result of such incorrectness the interests of the Holders of the
Investor Certificates are materially and adversely affected;
provided, however, that an Early Amortization Event shall not be
deemed to have occurred under this paragraph if the Seller has
repurchased the related Receivable or all such Receivables, if
applicable, during such period in accordance with the provisions of
this Agreement; and
(e) the Trust or the Seller shall become an "investment
company" within the meaning of the Investment Company Act;
then, subject to applicable law, and after the applicable grace
period, if any, an amortization event (an "Early Amortization
Event") shall occur without any notice or other action on the part
of the Trustee, any Agent, the Certificateholders or any other
Beneficiary, immediately upon the occurrence of such event.
SECTION 9.02. Additional Rights Upon the Occurrence of
Certain Events. If an Insolvency Event occurs with respect to the
Seller or the Seller violates Section 2.05(a) for any reason, the
Seller shall on the day such Insolvency Event or violation occurs
(the "Appointment Date") immediately cease to transfer Receivables
to the Trust and shall promptly give written notice to the Trustee
of such Insolvency Event or violation. Notwithstanding any
cessation of the transfer to the Trust of additional Receivables,
Receivables transferred to the Trust prior to the occurrence of
such Insolvency Event or violation and Collections in respect of
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such Receivables whenever created or accrued in respect of such
Receivables, shall continue to be a part of the Trust. Within 15
days of its receipt of written notice of the Appointment Date, the
Trustee shall (i) publish a notice in an Authorized Newspaper that
an Insolvency Event or violation has occurred and that the Trustee
intends to sell, dispose of or otherwise liquidate the Receivables
on commercially reasonable terms and in a commercially reasonable
manner and (ii) give notice to Investor Certificateholders
describing the provisions of this Section and requesting
instructions from such Holders. Unless the Trustee shall have
received instructions wi-thin 90 days from the date notice pursuant
to clause (ii) above is first given from (x) Holders of Investor
Certificates evidencing more than 50% of the aggregate unpaid
principal amount of each Series or, with respect to any Series with
two or more Classes, of each Class, to the effect that such
Investor Certificateholders disapprove of the liquidation of the
Receivables and wish to continue having Receivables transferred to
the Trust as before such Insolvency Event or violation, and (y)
each Holder of a Supplemental Certificate to such effect, then,
unless prohibited from acting by applicable law, the Trustee shall
promptly sell, dispose of or otherwise liquidate the Receivables,
or cause to be sold, disposed of or otherwise liquidated, in a
commercially reasonable manner and on commercially reasonable
terms, which shall include the solicitation of competitive bids;
provided that if such sale, disposition or liquidation is being
made solely on account of the Seller's violation of Section
2.05(a), then the Trustee shall effect such sale, disposition or
liquidation, to be effected, only if the net proceeds of such sale,
disposition or liquidation, applied in accordance with Section
9.02(b), will be sufficient to pay accrued interest on each Series
of Certificates plus the excess of the outstanding principal
balance of each Series of Certificates over the unreimbursed
Investor Charge-Offs for such Series. The Trustee may obtain and
conclusively rely upon a prior determination from any applicable
conservator, receiver or liquidator that the terms and manner of
any proposed sale, disposition or liquidation are commercially
reasonable. The provisions of Sections 9.01 and 9.02 shall not be
deemed to be mutually exclusive.
(b) The proceeds from the sale, disposition or
liquidation of the Receivables pursuant to paragraph (a), after
payments of all costs and expenses of the Trustee incurred in
connection with such sale, disposition or liquidation ("Insolvency
Proceeds") shall be promptly deposited in the Collection Account.
The Trustee shall determine conclusively the amount of the
Insolvency Proceeds which are deemed to be Principal Collections
and Discount Collections. The Insolvency Proceeds shall be
allocated and distributed to Investor Certificateholders in
accordance with Article IV and the terms of each Supplement and the
Trust shall terminate immediately thereafter.
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ARTICLE X
Servicer Defaults
SECTION 10.01. Servicer Defaults. If any one of the
following events (a "Servicer Default") shall occur and be
continuing with respect to the Servicer:
(a) any failure by the Servicer to make any payment,
transfer or deposit or to give notice to the Trustee to make such
payment, transfer or deposit or to take any action required to be
taken under any Enhancement Agreement on or before the date
occurring five days after the date such payment, transfer or
deposit or such instruction or notice is required to be made or
given, as the case may be, under the terms of this Agreement or the
terms of any Enhancement Agreement;
(b) failure on the part of the Servicer duly to observe
or perform any other covenants or agreements of the Servicer set
forth in this Agreement which has a material adverse effect on the
Investor Certificateholders of any Series, which continues
unremedied for a period of 30 days after the date on which written
notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Trustee; or the Servicer
shall delegate its duties under this Agreement, except as permitted
by Sections 3.01 and 8.07;
(c) any representation, warranty or certification made
by the Servicer in this Agreement or in any certificate delivered
pursuant to this Agreement shall prove to have been incorrect when
made, which has a material adverse effect on the rights of the
Investor Certificateholders of any Series and which material
adverse effect continues for a period of 60 days after the date on
which written notice thereof, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee;
(d) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator or other similar official in
any bankruptcy, insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the
Servicer or of or relating to all or substantially all of its
property, or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment
of a conservator or receiver or liquidator or other similar
official in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up
or liquidation of its affairs, shall have been entered against
the Servicer and such decree or order shall have remained in force
undischarged or unstayed; or the Servicer shall admit in writing
its inability to pay its debts generally as they become due, file
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a petition to take advantage of any applicable bankruptcy,
insolvency or reorganization statute, make any assignment for the
benefit of its creditors or voluntarily suspend payment of its
obligations;
then, in the event of any Servicer Default, so long as the Servicer
Default shall not have been remedied, the Trustee, by notice then
given in writing to the Servicer (a "Termination Notice"), 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 this Agreement
and in and to the Receivables and the proceeds thereof. After
receipt by the Servicer of a Termination Notice, and on the date
that a Successor Servicer shall have been appointed by the Trustee
pursuant to Section 10.02, all authority and power of the Servicer
under this Agreement shall pass to and be vested in a Successor
Servicer (a "Service Transfer") and, without limitation, the
Trustee is hereby authorized and empowered (upon the failure of the
Servicer to cooperate) to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, all documents and other
instruments upon the failure of the Servicer to execute or deliver
such documents or instruments, and to do and accomplish all other
acts or things necessary or appropriate to effect the purposes of
such Service Transfer. The Servicer agrees to cooperate with the
Trustee and such Successor Servicer in effecting the termination of
the responsibilities and rights of the Servicer to conduct
servicing hereunder, including the transfer to such Successor
Servicer of all authority of the Servicer to service the
Receivables provided for under this Agreement, including all
authority over all Collections which shall on the date of transfer
be held by the Servicer for deposit, or which have been deposited
by the Servicer, in the Collection Account, or which shall
thereafter be received with respect to the Receivables, and in
assisting the Successor Servicer. The Servicer shall, at its
expense, promptly transfer a copy of its electronic records
relating to the Receivables to the Successor Servicer in such
electronic form as the Successor Servicer may reasonably request
and shall promptly transfer to the Successor Servicer all other
records, correspondence and documents necessary for the continued
servicing of the Receivables in the manner and at such times as the
Successor Servicer shall reasonably request. To the extent that
compliance with this Section 10.01 shall require the Servicer to
disclose to the Successor Servicer information of any kind which
the Servicer reasonably deems to be confidential, the Successor
Servicer shall be required to enter into such customary licensing
and confidentiality agreements as the Servicer shall deem necessary
to protect its interest.
Notwithstanding the foregoing, a delay in or failure of
performance under Section 10.01(a) for a period of 10 Business Days
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or under Section 10.01(b) or (c) for a period of 60 Business Days,
shall not constitute a Servicer Default if such delay or failure
could not be prevented by the exercise of reasonable diligence by
the Servicer and such delay or failure was caused by an act of God
or the public enemy, acts of declared or undeclared war, public
disorder, rebellion or sabotage, epidemics, landslides, lightning,
fire, hurricanes, earthquakes, floods or similar causes. The
preceding sentence shall not relieve the Servicer from using its
best efforts to perform its respective obligations in a timely
manner in accordance with the terms of this Agreement and the
Servicer shall provide the Trustee, any Agents, any Enhancement
Providers, the Seller and the Certificateholders with an Officers'
Certificate giving prompt notice of such failure or delay by it,
together with a description of its efforts to perform its
obligations. The Servicer shall immediately notify the Trustee in
writing of any Servicer Default.
SECTION 10.02. Trustee to Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a Termination
Notice pursuant to Section 10.01, the Servicer shall continue to
perform all servicing functions under this Agreement until the date
specified in the Termination Notice or otherwise specified by the
Trustee in writing or, if no such date is specified in such
Termination Notice, or otherwise specified by the Trustee, until a
date mutually agreed upon by the Servicer and the Trustee. The
Trustee shall as promptly as possible after the giving of a
Termination Notice appoint an Eligible Servicer as a successor
servicer (the "Successor Servicer"), subject to the consent of any
Enhancement Providers and any Agents, which consent shall not be
unreasonably withheld, and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the
Trustee. In the event that a Successor Servicer has not been
appointed or has not accepted its appointment at the time when the
Servicer ceases to act as Servicer, the Trustee without further
action shall automatically be appointed the Successor Servicer.
The Trustee may delegate any of its servicing obligations to an
affiliate or agent of the Trustee in accordance with Sections 3.01
and 8.07. Notwithstanding the above, the Trustee shall, if it is
legally unable so to act, petition a court of competent
jurisdiction to appoint any established institution having a net
worth of not less than $100,000,000 and whose regular business
includes the servicing of accounts receivable as the Successor
Servicer hereunder. The Trustee shall immediately give notice to
the Rating Agencies, any Enhancement Providers, any Agents and the
Certificateholders upon the appointment of a Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall
be the successor in all respects to the Servicer with respect to
servicing functions under this Agreement and shall be subject to
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all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof (except
as provided below and that the Successor Servicer shall not be
liable for any liabilities incurred by the predecessor Servicer),
and all references in this Agreement to the Servicer shall be
deemed to refer to the Successor Servicer, except for the
references in Sections 8.04 and 11.05, which shall then refer to
Federal-Mogul. If the Trustee becomes Successor Servicer, and the
Trustee's expenses as Successor Servicer exceed the Servicing Fee,
the Seller shall reimburse the Trustee to the extent of such excess
in an amount, with respect to each Collection Period not to exceed
the amount of the Excess Seller's Percentage of Collections that
would otherwise be available for release to the Seller. Any
Successor Servicer, by its acceptance of its appointment, will
automatically agree to be bound by the terms and provisions of any
Enhancement Agreement.
(c) In connection with any Termination Notice, the
Trustee will review any bids which it obtains from Eligible
Servicers and shall be permitted to appoint any Eligible Servicer
submitting such a bid as a Successor Servicer for servicing
compensation not in excess of the Servicing Fee (provided that if
all such bids exceed the Servicing Fee the Seller at its own
expense shall pay the amount of any compensation in excess of the
Servicing Fee, but not in an amount, with respect to each
Collection Period, exceeding the Excess Seller's Percentage of
Collections with respect to each Collection Period that would
otherwise be available for release to the Seller); provided,
however, that the Seller shall be responsible for payment of the
Seller's portion of the Servicing Fee as determined pursuant to
this Agreement and all other amounts in excess of the Investors'
Servicing Fee, and that no such monthly compensation paid out of
Collections shall be in excess of the Investors' Servicing Fee
permitted to the Servicer. The holders of the Seller's
Certificates agree that if Federal-Mogul (or any Successor
Servicer) is terminated as Servicer hereunder, the portion of
Collections to be paid to the Seller shall be reduced by an amount
sufficient to pay Seller's share of the compensation of the
Successor Servicer.
(d) All authority and power granted to the Successor
Servicer under this Agreement shall automatically cease and
terminate upon termination of the Trust pursuant to Section 12.01,
and shall pass to and be vested in the Seller and, without
limitation, the Seller is hereby authorized and empowered to
execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments,
and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing
rights. The Successor Servicer agrees to cooperate with the Seller
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in effecting the termination of the responsibilities and rights of
the Successor Servicer to conduct servicing on the Receivables.
The Successor Servicer shall transfer its electronic records
relating to the Receivables to the Seller in such electronic form
as the Seller may reasonably request and shall transfer all other
records, correspondence and documents to the Seller in the manner
and at such times as the Seller shall reasonably request. To the
extent that compliance with this Section 10.02 shall require the
Successor Servicer to disclose to the Seller information of any
kind which the Successor Servicer deems to be confidential, the
Seller shall be required to enter into such customary licensing and
confidentiality agreements as the Successor Servicer shall deem
necessary to protect its interests.
ARTICLE XI
The Trustee
SECTION 11.01. Duties of Trustee. (a) The Trustee,
prior to the occurrence of a Servicer Default of which it has
knowledge and after the curing of all Servicer Defaults which may
have occurred (the appointment of a Successor Servicer including
the Trustee, to constitute a cure for purposes of this Article),
undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement and no implied covenants
or obligations shall be read into this Agreement. If to the
knowledge of a Responsible Officer of the Trustee a Servicer
Default has occurred (which has not been cured or waived), the
Trustee shall exercise such of the rights and powers vested in it
by this Agreement and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs; provided,
however, that if the Trustee shall assume the duties of the
Servicer pursuant to Section 10.02, the Trustee in performing such
duties shall use the degree of skill and attention customarily
exercised by a servicer with respect to comparable receivables that
it services for itself or others. With respect to any Enhancement
Provider, the Trustee undertakes to perform or observe only such
covenants and obligations as are specifically set forth in this
Agreement or any Supplement and no implied covenants or obligations
with respect to any Enhancement Provider shall be read into this
Agreement or any Supplement against the trustee and nothing in this
Agreement or any Supplement shall be construed to establish any
fiduciary duty on the part of the Trustee to any enhancement
Provider.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee which are specifically
required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they
substantially conform to the requirements of this Agreement.
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(c) Subject to Section 11.01(a), no provision of this
Agreement shall be construed to relieve the Trustee from liability
for its own grossly negligent action, its own grossly negligent
failure to act or its own wilful misconduct; provided, however,
that:
(i) the Trustee shall not be personally liable for
an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be charged with
knowledge of any Servicer Default or the failure by the Servicer to
comply with the obligations of the Servicer referred to in Section
10.01(a) and (b) or any breach by the Servicer contemplated by
Section 10.01(c) unless a Responsible Officer of the Trustee
obtains actual knowledge of such failure;
(iii) the Trustee shall not be charged with
knowledge of an Early Amortization Event unless a Responsible
Officer of the Trustee obtains actual knowledge thereof;
(iv) the Trustee shall not be personally liable
with respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of the Holders
of Investor Certificates of any Series given pursuant to the terms
hereof relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee in relation to such
Series, under this Agreement; and
(v) in making a determination of any material and
adverse effect upon Certificateholders, the Investor Certificates
or any Enhancement Provider, the Trustee may, as to matters of law,
rely exclusively upon an Opinion of Counsel.
(d) The Trustee shall not be required to expend or risk
its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or under any Supplement
or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any obligations of
the Servicer under this Agreement except during such time, if any,
as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in
accordance with the terms of this Agreement. Notwithstanding the
prior sentence, the Trustee when acting as Successor Servicer, is
still entitled to indemnification under Sections 7.03 and 8.04.
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(e) Except as expressly provided in this Agreement, the
Trustee shall have no power to vary the corpus of the Trust
including the power to (i) accept any substitute obligation for a
Receivable initially assigned to the Trust under Section 2.01 (ii)
add any other investment, obligation or security to the Trust or
(iii) withdraw from the Trust any Receivables.
(f) In the event that the Transfer Agent and Registrar
shall fail to perform any obligation, duty or agreement in the
manner or on the day required to be performed by the Transfer Agent
and Registrar, as the case may be, under this Agreement, the
Trustee shall be obligated promptly upon the actual knowledge of a
Responsible Officer of the Trustee to perform such obligation, duty
or agreement in the manner so required.
(g) If the Seller has agreed to transfer any of its
receivables (other than the Receivables) to another Person, then
upon the written request of the Seller, the Trustee will enter into
such intercreditor agreements with the transferee of such
receivables as are customary and necessary to identify separately
the rights of the Trust and such other Person in the Seller's
accounts receivable; provided, however, that the Trustee shall not
be required to enter into any intercreditor agreement which could,
in the sole opinion of the Trustee, adversely affect the interests
of the Investor Certificateholders or the Trustee and, upon the
request of the Trustee, the Seller will deliver an Opinion of
Counsel on any matters relating to such intercreditor agreement,
reasonably requested by the Trustee.
(h) Notwithstanding any other provision contained
herein, the Trustee is not acting as, and shall not be deemed to
be, a fiduciary for any Enhancement Provider in its capacity as
such or as a Beneficiary, and the Trustee's sole responsibility
with respect to said parties shall be to perform those duties with
respect to said parties as are specifically set forth herein And no
implied duties or obligations shall be read into this Agreement
against the Trustee with respect to any such party.
(i) Notwithstanding anything in this Agreement to the contrary, the
Trustee shall not be liable for or in respect of any action taken,
suffered or omitted to be taken following an Early Amortization
Event, including, without limitation, the taking, suffering or
omitting to take any action during or with respect to the related
Early Amortization Period, unless and until the Trustee shall have
knowledge of the occurrence of such Early Amortization Event.
SECTION 11.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 11.01:
(a) the Trustee may rely on and shall be protected in
acting on, or in refraining from acting in accord with, any
resolution, Officers' Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or
document believed by it to be genuine and to have been signed or
presented to it pursuant to this Agreement by the proper party or
parties;
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(b) the Trustee may consult with counsel and any advice
or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by
it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation hereunder or in
relation hereto, at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
(d) the Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and believed
by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(e) the Trustee shall not be bound to make any
investigation into the facts of matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, consent order, approval, bond or other paper or document;
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian, and the Trustee shall
not be responsible for any misconduct or negligence on the part of
any such agent, attorney or custodian appointed with due care by it
hereunder; and
(g) except as may be required by Section 11.01(a)
hereof, the Trustee shall not be required to make any initial or
periodic examination of any documents or records related to the
Receivables for the purpose of establishing the presence or absence
of defects, the compliance by the Seller with its representations
and warranties or for any other purpose.
SECTION 11.03. Trustee Not Liable for Recitals in
Certificates. The Trustee assumes no responsibility for the
correctness of the recitals contained herein and in the
Certificates (other than the certificate of authentication on the
Certificates). Except as set forth in Section 11.14, the Trustee
makes no representations as to the validity or sufficiency of this
Agreement or of the Certificates (other than the certificate of
authentication on the Certificates) or of any Receivable or related
document or any security interest of the Trust therein. The Trustee
shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security
interest or lien granted to it hereunder or to prepare or file any
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Securities and Exchange Commission filing for the Seller, the
Servicer or the Trust or to record this Agreement or any
Supplement.
SECTION 11.04. Trustee May Own Certificates. The
Trustee in its individual or any other capacity may become the
owner or pledgee of Investor Certificates, and may otherwise deal
with the Seller, any Servicer or any Enhancement Provider, with the
same rights as it would have if it were not the Trustee.
SECTION 11.05. Servicer to Pay Trustee's Fees and
Expenses. The Servicer covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to receive,
reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by it in the execution of
the trust hereby created and in the exercise and performance of any
of the power and duties hereunder of the Trustee, and, subject to
Section 8.04, the Servicer will pay at own expense or reimburse the
Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
of the provisions of this Agreement (including the reasonable fees
and expenses of its agents, any co-trustee and counsel) except any
such expense, disbursement or advance as may arise from its gross
negligence or bad faith and except as provided in the second
following sentence. The Servicer's covenants to pay the expenses,
disbursements and advances provided for in the preceding sentence
shall survive the resignation or removal of the Trustee and the
termination of this Agreement. If the Trustee is appointed
Successor Servicer pursuant to Section 10.02, the provisions of
this Section 11.05 shall not apply to expenses, disbursements and
advances made or incurred by the Trustee in its capacity as
Successor Servicer, which shall be covered out of the Servicing
Fee; provided, however, if such expenses, disbursements and
advances incurred by the Trustee are in amount in excess of the
Servicing Fee, such excess amount shall be paid in full to the
Trustee by Federal-Mogul. To the extent, if any, that any federal,
state or local taxes are payable by the Trust, such taxes shall be
payable solely out of Trust Assets and not out of the personal
assets of the Trustee.
SECTION 11.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation organized
and doing business under the laws of the United States of America
or any state thereof authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by
Federal or state authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority,
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then for the purpose of this Section 11.06 the combined capital
and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition 80 published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this
Section 11.06, the Trustee shall resign immediately in the manner
and with the effect specified in Section 11.07.
SECTION 11.07. Resignation or Removal of Trustee. (a)
The Trustee may at any time resign and be discharged from
the trust hereby created by giving written notice thereof to the
Seller and the Servicer. Upon receiving such notice of
resignation, the Seller shall promptly appoint a successor trustee
by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of
a successor trustee.
(b) If at any time the Trustee shall cease to be
eligible in accordance with the provisions of Section 11.06 hereof
and shall fail to resign after written request therefor by the
Servicer, or if at any time the Trustee shall be legally unable to
act, or shall be adjudged a bankrupt or insolvent, or if a receiver
of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation
or liquidation, then the Servicer may remove the Trustee and
promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee.
(c) Any resignation or removal of the Trustee and
appointment of successor trustee pursuant to any of the provisions
of this Section shall not become effective until acceptance of
appointment by the successor trustee as provided in Section 11.08
hereof.
SECTION 11.08. Successor Trustee. (a) Any successor
trustee appointed as provided in Section 11.07 hereof shall
execute, acknowledge and deliver to the Seller and to its
predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become
fully vested with all the rights, powers, duties and obligations of
its predecessor hereunder, with like effect as if originally named
as Trustee herein. The predecessor Trustee shall deliver to the
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successor trustee all documents or copies thereof, at the expense
of the Servicer, and statements held by it hereunder; and the
Seller and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor
trustee all such rights, power, duties and obligations. The
Servicer shall immediately give notice to each Rating Agency and
the Certificateholders upon the appointment of a successor trustee.
(b) No successor trustee shall accept appointment as
provided in this Section 11.08 unless at the time of such
acceptance such successor trustee shall be eligible under the
provisions of Section 11.06 hereof.
SECTION 11.09. Merger or Consolidation of Trustee. Any
Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee shall be
a party, or any Person succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the successor
of the Trustee hereunder, provided such corporation shall be
eligible under the provisions of Section 11.06 hereof, without the
execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 11.10. Appointment of Co-Trustee or Separate
Trustee. (a) Notwithstanding any other provisions of this
Agreement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Trust may
at the time be located, the Trustee shall have the power and may
execute and deliver all instruments to appoint one or more Persons
to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof,
and, subject to the other provisions of this Section 11.10, such
powers, duties, obligations, rights and trusts as the Trustee may
consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 11.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 11.08 hereof.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed
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upon and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that
under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the
holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Trustee;
(ii) no trustee hereunder shall be personally
liable by reason of any act or omission of any other trustee
hereunder; and
(iii) the Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to
each of them. Every instrument appointing any separate trustee or
co-trustee shall refer to this Agreement and the conditions of this
Article XI. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the
estates or property specified in its instrument of appointment,
either jointly with the Trustee or separately, as may be provided
therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating
to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed
with the Trustee and a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee, its agent or attorney-in-fact, with full
power and authority, to the extent not prohibited by law, to do any
lawful act under or in respect of this Agreement on its behalf and
in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and
be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
SECTION 11.11. Tax Returns. In the event the Trust
shall be required to file tax returns, the Servicer shall prepare,
or shall cause to be prepared, and shall deliver, or shall cause to
be delivered, to the Trustee no later than five days immediately
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preceding any applicable due date and the Trustee shall execute, to
the extent it is the appropriate person to so execute, file any
such tax returns to be filed by the Trust. The Servicer in
accordance with the terms of the supplements shall also prepare or
shall cause to be prepared all tax information required by law to
be distributed to the Investor Certificateholders. The Trustee
will distribute or cause to be distributed such information to the
Investor Certificateholders. The Servicer, upon request, will
furnish the Trustee with all such information known to the Servicer
as may be reasonably required in connection with the distribution
of tax information to the Investor Certificateholders.
SECTION 11.12. Trustee May Enforce Claims Without
Possession of Certificates. All rights of action and claims under
this Agreement or the Certificates may be prosecuted and enforced
by the Trustee without the possession of any of the Certificates or
the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its
own name as trustee. Any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel,
be for the ratable benefit of the Certificateholders in respect of
which such judgment has been obtained.
SECTION 11.13. Suits for Enforcement. If a Servicer
Default shall occur and be continuing, the Trustee, in its
discretion may, subject to the provisions of Section 10.01, proceed
to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by suit, action or
proceeding in equity or at law or otherwise whether for the
specific performance of any covenant or agreement contained in this
Agreement or in aid of the execution of any power granted in this
Agreement or for the enforcement of any other legal, equitable or
other remedy as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the
Trustee or the Certificateholders. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Certificateholder any plan of
reorganization, arrangement adjustment or composition affecting
the Certificates or the rights of any Holder thereof, or authorize
the Trustee to vote in respect of the claim of any
Certificateholder in any such proceeding.
SECTION 11.14. Representations and Warranties of
Trustee. The Trustee represents and warrants that:
(i) the Trustee is a banking corporation organized,
existing and in good standing under the laws of the State of New
York;
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(ii) the Trustee has full power, authority and
right to execute, deliver and perform this Agreement, and has taken
all necessary action to authorize the execution, delivery and
performance by it of this Agreement; and
(iii) this Agreement has been duly executed and
delivered by the Trustee.
SECTION 11.15. Maintenance of Office or Agency. The
Trustee will maintain at its expense in the Borough of Manhattan,
The City of New York, an office or offices or agency or agencies
where notices and demands to or upon the Trustee in respect of the
Certificates and this Agreement may be served. The Trustee
initially designates its Corporate Trust Office as its office for
such purposes in New York. The Trustee will give prompt written
notice to the Servicer and to Holders of the Certificates of any
change in the location of the Certificate Register or any such
office or agency.
ARTICLE XII
Termination
SECTION 12.01. Termination of Trust. The Trust and the
respective obligations and responsibilities of the Seller, the
Servicer and the Trustee created hereby (other than the obligation
of the Trustee to make payments to Investor Certificateholders as
hereafter set forth) shall terminate, except with respect to the
duties described in Sections 7.03, 8.04, 11.05 and 12.02(b), upon
the earlier of (i) December 31, 2012 (the "Final Maturity Date"),
(ii) the day following the Distribution Date on which the Invested
Amount for all Series is zero and (iii) the time provided in
Section 9.02(b) (the "Trust Termination Date"). The Servicer will
give the Rating Agencies prompt notice of the termination of the
Trust.
SECTION 12.02. Final Distribution. (a) The Servicer
shall give the Trustee at least 30 days prior notice of the
Distribution Date on which the Investor Certificateholders of any
Series or Class may surrender their Investor Certificates for
payment of the final distribution on and cancellation of such
Investor Certificates (or, in the event of a final distribution
resulting from the application of Section 2.03 or 9.01, notice of
such Distribution Date promptly after the Servicer has determined
that a final distribution will occur, if such determination is made
less than 30 days prior to such Distribution Date, but in no event
less than five Business Days prior to the date on which the Trustee
is required to give notice to the Investor Certificateholders
referred to below). Such notice shall be accompanied by an
Officer's Certificate setting forth the information specified in
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Section 3.05 covering the period during the then-current calendar
year through the date of such notice and the information required
by clauses (i) and (ii) below. Not later than the fifth day of the
month in which the final distribution in respect of such Series or
Class is payable to Investor Certificateholders, the Trustee shall
provide notice to Investor Certificateholders of such Series or
Class specifying (i) the date upon which final payment of such
Series or Class will be made upon presentation and surrender of
Investor Certificates of such Series or Class at the office or
offices therein designated, (ii) the amount of any such final
payment and (iii) that the Record Date otherwise applicable to such
payment date is not applicable, payments being made only upon
presentation and surrender of such Investor Certificates at the
office or offices therein specified (which, in the case of Bearer
Certificate, shall be outside the United States). The Trustee
shall give such notice to the Transfer Agent and Registrar and the
Rating Agencies at the time such notice is given to Investor
Certificateholders.
(b) Notwithstanding a final distribution to the Investor
Certificateholders of any Series or Class (or the Termination of
the Trust), except as otherwise provided in this paragraph, all
funds then on deposit in the Collection Account and any Series
Account allocated to such Investor Certificateholders shall
continue to be held in trust for the benefit of such Investor
Certificateholders and the Trustee shall pay such funds to such
Investor Certificateholders upon surrender of their Investor
Certificates (and any excess shall be paid in accordance with the
terms of any Enhancement Agreement). In the event that all such
Investor Certificateholders shall not surrender their Investor
Certificates for cancellation within six months after the date
specified in the notice from the Trustee described in paragraph
(a), the Trustee shall give a second notice to the remaining such
Investor Certificateholders to surrender their Investor
Certificates for cancellation and receive the final distribution
with respect thereto (which surrender and payment, in the case of
Bearer Certificates, shall be outside the United States). If
within one year after the second notice all such Investor
Certificates shall not have been surrendered for cancellation, the
Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining such Investor
Certificateholders concerning surrender of their Investor
Certificates, and the cost thereof shall be paid out of the funds
in the Collection Account or any Series Account held for the
benefit of such Investor Certificateholders. The Trustee shall pay
to the Seller any monies held by it for the payment of principal or
interest that remain unclaimed for two years. After payment to the
Seller, Investor Certificateholders entitled to the money must look
to the Seller for payment as general creditors unless an applicable
abandoned property law designates another Person.
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(c) In the event that the Invested Amount with respect
to any Series is greater than zero on its Termination Date (after
giving effect to deposits and distributions otherwise to be made on
such Termination Date), the Trustee will sell or cause to be sold
on such Termination Date Receivables (or interests therein) in an
amount equal to the sum of (i) 110% of the Invested Amount with
respect to such Series on such Termination Date (after giving
effect to such deposits and distributions) and (ii) the Available
Subordinated Amount with respect to such Series on the preceding
Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the
Distribution Date following such Determination Date); provided,
however, that in no event shall such amount exceed such Series'
Allocation Percentage (as defined in the Series Supplements and for
the Collection Period in which such Termination Date occurs) of
Receivables on such Termination Date. The proceeds (the
"Termination Proceeds") from such sale shall be immediately
deposited into the Collection Account for the benefit of the
Investor Certificateholders of such Series. The Termination
Proceeds shall be allocated and distributed to the Investor
Certificateholders of such Series in accordance with the terms of
the applicable Supplement.
SECTION 12.03. Seller's Termination Rights. Upon the
termination of the Trust pursuant to Section 12.01 and the
surrender of the Seller's Certificates, the Trustee shall sell,
assign and convey to the Seller or its designee, without recourse,
representation or warranty, all right, title and interest of the
Trust in the Receivables, whether then existing or thereafter
created, all monies due or to become due and all amounts received
with respect thereto and all proceeds thereof, except for amounts
held by the Trustee pursuant to Section 12.02(b), and all of the
Seller's rights, remedies, powers and privileges with respect to
such Receivables under the Receivables Purchase Agreements. The
Trustee shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, representation or
warranty, as shall be reasonably requested by the Seller to vest in
the Seller or its designee all right, title and interest which the
Trust had in all such property.
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ARTICLE XIII
Miscellaneous Provisions
SECTION 13.01. Amendment. (a) Subject to the
Supplement for any Series, this Agreement or any Supplement may be
amended from time to time (including in connection with the
issuance of a Supplemental Certificate) by the Servicer, the Seller
and the Trustee without the consent of any of the
Certificateholders, provided that such action shall not, as
evidenced by an Opinion of Counsel (which counsel shall not be an
employee of Federal-Mogul or the Seller), for the Seller, addressed
and delivered to the Trustee, adversely affect in any material
respect the interests of any Investor Certificateholder.
Notwithstanding anything contained herein to the contrary, the
Trustee, with the consent of any Enhancement Providers may at any
time and from time to time amend, modify or supplement the form of
Distribution Date Statement.
(b) This Agreement or any Supplement may also be amended
from time to time (including in connection with the issuance of a
Supplemental Certificate) by the Servicer, the Seller and the
Trustee, with the consent of the Holders of Investor Certificates
evidencing not less than 66-2/3% of the aggregate unpaid principal
amount of the Investor Certificates of all adversely affected
Series, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement
or any Supplement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall
(i) reduce in any manner the amount of or delay the timing of any
distributions to be made to Investor Certificateholders or deposits
of amounts to be so distributed or the amount available under any
Enhancement without the consent of each affected Investor
Certificateholder, (ii) change the definition of or the manner of
calculating the interest of any Investor Certificateholder without
the consent of each affected Investor Certificateholder or (iii)
reduce the aforesaid percentage required to consent to any such
amendment, in the case of (i), without the consent of each such
affected Certificateholder and, in the case of (ii) and (iii),
without the consent of all Investor Certificateholders. Any
amendment to be effected pursuant to this paragraph shall be deemed
to adversely affect all outstanding Series, other than any Series
with respect to which such action shall not, as evidenced by an
Opinion of Counsel (which counsel shall not be an employee of, or
counsel for, Federal-Mogul or the Seller), addressed and delivered
to the Trustee, adversely affect in any material respect the
interests of any Investor Certificateholder of such Series.
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(c) Promptly after the execution of any such amendment
or consent (other than an amendment pursuant to paragraph (a)), the
Trustee shall furnish notification of the substance of such
amendment to each Investor Certificateholder, and the Servicer
shall furnish notification of the substance of such amendment to
each Rating Agency, each Agent and each Enhancement Provider.
(d) It shall not be necessary for the consent of
Investor Certificateholders under this Section to approve the
particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements
as the Trustee may prescribe.
(e) Notwithstanding anything in this Section to the
contrary, no amendment may be made to this Agreement or any
Supplement which would adversely affect in any material respect the
interests of any Enhancement Provider without the consent of such
Enhancement Provider.
(f) Any Supplement executed in accordance with the
provisions of Section 6.03 shall not be considered an amendment to
this Agreement for the purposes of this Section.
(g) Prior to the execution of any amendment to this
Agreement or any Supplement, the Trustee shall be entitled to
receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter
into any such amendment which affects the Trustee's own rights,
duties or immunities under this Agreement, any Supplement or
otherwise.
(h) If all amounts owing to the Holders of the Series
1992-1 Certificates and the Series 1993-1 Certificates have not
been paid in full, the Rating Agency rating such Investor
Certificates shall be notified of any proposed amendment to this
Agreement.
SECTION 13.02. Protection of Right, Title and Interest
to Trust. (a) The Servicer shall cause this Agreement, all
amendments hereto and/or all financing statements and continuation
statements and any other necessary documents covering the
Certificateholders' and the Trustee's right, title, and interest in
and to the Trust to be promptly recorded, registered and filed, and
at all times to be kept recorded, registered and filed, all in such
manner and in such places as may be required by law fully to
preserve and protect the right, title and interest of the
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Certificateholders and the Trustee hereunder to all property
comprising the Trust. The Servicer shall deliver to the Trustee
file-stamped copies of, or filing receipts for, any document
recorded, registered or filed as provided above, as soon as
available following such recording, registration or filing. The
Seller shall cooperate fully with the Servicer in connection with
the obligations set forth above and will execute any and all
documents reasonably required to fulfill the intent of this Section
13.02(a).
(b) Within 30 days after the Seller or the Servicer
makes any change in its name, identity or corporate structure which
would make any financing statement or continuation Statement filed
in accordance with Section 13.02(a) seriously misleading within the
meaning of Section 9-402(7) of the UCC as in effect in Michigan
(including as a result of a Designated Affiliate Transfer), the
Seller shall give the Trustee and any Agent notice of any such
change and shall file such financing statements or amendments as
may be necessary to continue the perfection of the Trust's security
interest in the Receivables and the proceeds thereof.
(c) The Seller and the Servicer will give the Trustee
and any Agent prompt written notice of any relocation of any office
from which it services Receivables or keeps records concerning the
Receivables or of its principal executive office and whether, as a
result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing
statement and shall file such financing statements or amendments as
may be necessary to perfect or to continue the perfection of the
Trust's security interest in the Receivables and the proceeds
thereof. The Seller and the Servicer shall at all times maintain
each office from which it services Receivables and its principal
executive officer within the United States of America.
(d) The Servicer will deliver to the Trustee, any Agent
and any Enhancement Provider: (i) upon the execution and delivery
of each amendment of this Agreement or any Supplement, an Opinion
of Counsel to the effect specified in Exhibit F-1; and (ii) on or
before April 30 of each year, beginning with April 30, 1993, an
Opinion of Counsel substantially in the form of Exhibit F-2.
SECTION 13.03. Limitation on Rights of
Certificateholders. (a) The death or incapacity of any
Certificateholder shall not operate to terminate this Agreement or
the Trust, nor shall such death or incapacity entitle such
Certificateholders' legal representatives or heirs to claim an
accounting or to take any action or commence any proceeding in any
court for a partition or winding-up of the Trust, nor otherwise
affect the rights, obligations and liabilities of the parties
hereto or any of them.
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(b) No Investor Certificateholder shall have any right
to vote (except as expressly provided in this Agreement) or in any
manner otherwise control the operation and management of the Trust,
or the obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the Certificates, be
construed so as to constitute the Investor Certificateholders from
time to time as partners or members of an association, nor shall
any Investor Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this
Agreement pursuant to any provision hereof.
(c) No Investor Certificateholder shall have any right
by virtue of any provisions of this Agreement to institute any
suit, action or proceeding in equity or at law upon or under or
with respect to this Agreement, unless such Investor
Certificateholder previously shall have made, and unless the
Holders of Investor Certificates evidencing more than 50% of the
aggregate unpaid principal amount of all Investor Certificates (or,
with respect to any such action, suit or proceeding that does not
relate to all Series, 50% of the aggregate unpaid principal amount
of the Investor Certificates of all Series to which such action,
suit or proceeding relates) shall have made, a request to the
Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee
such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the
Trustee, for 60 days after such request and offer of indemnity,
shall have neglected or refused to institute any such action, suit
or proceeding; it being understood and intended, and being
expressly covenanted by each Investor Certificateholder with every
other Investor Certificateholder and the Trustee, that no one or
more Investor Certificateholders shall have any right in any manner
whatever by virtue or by availing itself or themselves of any
provisions of this Agreement to affect, disturb or prejudice the
rights of the holders of any other of the Investor Certificates, or
to obtain or seek to obtain priority over or preference to any
other such Investor Certificateholder, or to enforce any right
under this Agreement, except in the manner herein provided and for
the equal, ratable and common benefit of all Investor
Certificateholders except as otherwise expressly provided in this
Agreement. For the protection and enforcement of the provisions of
this Section, each and every Investor Certificateholder and the
Trustee shall be entitled to such relief as can be given either at
law or in equity.
SECTION 13.04. No Petition. The Servicer, Federal-Mogul
(if it is no longer the Servicer) and the Trustee (not in its
individual capacity but solely as Trustee hereunder), by entering
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into this Agreement, each Investor Certificateholder, by accepting
an Investor Certificate, each holder of a Supplemental Certificate
by accepting a Supplemental Certificate and any Successor Servicer
and each other Beneficiary, by accepting the benefits of this
Agreement, hereby covenants and agrees that they will not at any
time institute against FMFC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or
similar law.
SECTION 13.05. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 13.06. Notices. (a) All demands, notices,
instructions, directions and communications (collectively,
"Notices") under this Agreement shall be in writing and shall be
deemed to have been duly given if personally delivered at or mailed
by certified mail, return receipt requested, to (i) in the case of
FMFC, 00000 Xxxxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
Attention: Secretary, (ii) in the case of Federal-Mogul, 00000
Xxxxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention:
Secretary, and (iii) in the case of the Trustee, 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Corporate Trust
Department; or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
Any notice or other document required to be delivered or mailed by
the Trustee to any Rating Agency, any Agent or any Enhancement
Provider shall be given on a best efforts basis and only as a
matter of courtesy and accommodation and the Trustee shall have no
liability for failure to deliver such notice or document to any
Rating Agency, any Agent or any Enhancement Provider.
(b) Any Notice required or permitted to be given to a
Holder of Registered Certificates shall be given by first-class
mail, postage prepaid, at the address of such Holder as shown in
the Certificate Register. No Notice shall be required to be mailed
to a Holder of Bearer Certificates or Coupons but shall be given as
provided below. Any Notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly
given, whether or not the Investor Certificateholder receives such
Notice. In addition, in the case of any Series or Class with
respect to which any Bearer Certificates are outstanding, any
Notice required or permitted to be given to Investor
Certificateholders of such Series or Class shall be published in an
Authorized Newspaper within the time period prescribed in this
Agreement.
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SECTION 13.07. Severability of Provisions. If any one
or more of the covenants, agreements, provisions or terms of this
Agreement shall for any reason whatsoever be held invalid, then
such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or
terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the
Certificates or rights of the Certificateholders.
SECTION 13.08. Assignment. Notwithstanding anything to
the contrary contained herein, except as provided in Section 8.02,
this Agreement may not be assigned by the Servicer.
SECTION 13.09. Certificates Nonassessable and Fully
Paid. It is the intention of the parties to this Agreement that
the Investor Certificateholders shall not be personally liable for
obligations of the Trust, that the interests in the Trust
represented by the Investor Certificates shall be nonassessable for
any losses or expenses of the Trust or for any reason whatsoever
and that Investor Certificates upon authentication thereof by the
Trustee are and shall be deemed fully paid.
SECTION 13.10. Further Assurances. The Seller and the
servicer agree to do and perform, from time to time, any and all
acts and to execute any and all further instruments required or
reasonably requested by the Trustee more fully to effect the
purposes of this Agreement, including the execution of any
financing statements or continuation statements relating to the
Receivables for filing under the provisions of the UCC of any
applicable jurisdiction.
SECTION 13.11. No Waiver; Cumulative Remedies. No
failure to exercise and no delay in exercising, on the part of the
Trustee or the Certificateholders, any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy,
power or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and
privileges provided under this Agreement are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided
by law.
SECTION 13.12. Counterparts. This Agreement may be
executed in two or more counterparts (and by different parties on
separate counterparts), each of which shall be an original, but all
of which together shall constitute one and the same instrument.
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SECTION 13.13. Third-Party Beneficiaries. This
Agreement will inure to the benefit of and be binding upon the
parties hereto, the Certificateholders and the other Beneficiaries
and their respective successors and permitted assigns. Except as
otherwise expressly provided in this Agreement, no other Person
will have any right or obligation hereunder.
SECTION 13.14. Actions by Certificateholders. Any
request, demand, authorization, direction, notice, consent, waiver
or other act by a Certificateholder shall bind such
Certificateholder and every subsequent holder of any Certificate
issued upon the registration of transfer of the Certificates of
such Certificateholder or in exchange therefor or in lieu thereof
in respect of anything done or omitted to be done by the Trustee or
the Servicer in reliance thereon, whether or not notation of such
action is made upon any such Certificate.
SECTION 13.15. Rule 144A Information. For so long as
any of the Investor Certificates of any Series or Class are
"restricted securities" within the meaning of Rule 144(a)(3) under
the Act, each of the Seller, the Trustee, the Servicer and any
Enhancement Providers agree to cooperate with each other to provide
to any Investor Certificateholder of such Series or Class and to
any prospective purchaser of Investor Certificates designated by
such an Investor Certificateholder, upon the request of such
Investor Certificateholder or prospective purchaser and at the
expense of the Servicer, any information required to be provided to
such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Act.
SECTION 13.16. Action by Trustee. Upon any application
or request by the Seller or Servicer to the Trustee to take any
action under any provision under this Agreement, the Seller or
Servicer, as the case may be, shall furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if
any, provided for in this Agreement relating to the proposed action
have been complied with and an Opinion of Counsel stating that in
the opinion of such Counsel all such conditions precedent, if any,
have been complied with. The Trustee shall be entitled to
conclusively rely on the Officer's Certificate or the Opinion of
Counsel, as the case may be, as authority for any action undertaken
in connection therewith.
SECTION 13.17. Merger and Integration. Except as
specifically stated otherwise herein, this Agreement sets forth the
entire understanding of the parties relating to the subject matter
hereof, and all prior understandings, written or oral, are
superseded by this Agreement. This Agreement may not be modified,
amended, waived, or supplemented except as provided herein.
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SECTION 13.18. Headings. The headings herein are for
purposes of reference only and shall not otherwise affect the
meaning or interpretation or any provision hereof.
IN WITNESS WHEREOF, the Seller, the Servicer and the
Trustee have caused this Agreement to be duly executed by their
respective officers as of the day and year first above written.
FEDERAL-MOGUL FUNDING CORPORATION,
Seller
By--------------------------------
Name:
Title:
FEDERAL-MOGUL CORPORATION,
Servicer
By--------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
Trustee
By-------------------------------
Name:
Title:
