Receivables Sale And Contribution Agreement

Exhibit 10.21


================================================================================ ================================================================================


FIFTH AMENDED AND RESTATED


RECEIVABLES SALE AND CONTRIBUTION AGREEMENT


Dated as of February 16, 2001


Between


FEDERAL-MOGUL CORPORATION,


as Parent


and


FEDERAL-MOGUL FUNDING CORPORATION,
as Buyer


=============================================================================== ===============================================================================


TABLE OF CONTENTS
-----------------


Page
---- ARTICLE I. AMOUNTS AND TERMS OF THE PURCHASES....................................... 2


Section 1.1 Purchases of Receivables............................................... 2 Section 1.2 Payment for the Purchases.............................................. 3 Section 1.3 Purchase Price Credit Adjustments...................................... 4 Section 1.4 Payments and Computations, Etc......................................... 5 Section 1.5 Transfer of Records.................................................... 5 Section 1.6 Characterization....................................................... 6


ARTICLE II. REPRESENTATIONS AND WARRANTIES.......................................... 6


Section 2.1 Parent's Representations and Warranties................................ 6


ARTICLE III. CONDITIONS OF PURCHASES................................................ 10


Section 3.1 Conditions Precedent to Initial Purchase............................... 10 Section 3.2 Conditions Precedent to All Purchases.................................. 10


ARTICLE IV. COVENANTS .............................................................. 10


Section 4.1 Affirmative Covenants of Parent........................................ 10 Section 4.2 Negative Covenants of Parent........................................... 15


ARTICLE V. ADMINISTRATION AND COLLECTION............................................ 16


Section 5.1 Designation of Sub-Servicer............................................ 16


ARTICLE VI. EVENTS OF PURCHASE AND SALE TERMINATION................................. 16


Section 6.1 Events of Purchase and Sale Termination................................ 16 Section 6.2 Remedies............................................................... 18


ARTICLE VII. INDEMNIFICATION........................................................ 18


Section 7.1 Indemnities by the Parent.............................................. 18 Section 7.2 Other Costs and Expenses............................................... 20


ARTICLE VIII. MISCELLANEOUS......................................................... 20


Section 8.1 Waivers and Amendments................................................. 20 Section 8.2 Notices................................................................ 20 Section 8.3 Protection of Buyer's Interests........................................ 21 Section 8.4 Confidentiality........................................................ 21 Section 8.5 Bankruptcy Petition.................................................... 22 Section 8.6 Limitation of Liability................................................ 22


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Section 8.7 CHOICE OF LAW.......................................................... 23 Section 8.8 CONSENT TO JURISDICTION................................................ 23 Section 8.9 WAIVER OF JURY TRIAL................................................... 23 Section 8.10 Binding Effect; Assignability.......................................... 23 Section 8.11 Subordination.......................................................... 24 Section 8.12 Integration; Survival of Terms......................................... 24 Section 8.13 Counterparts; Severability............................................. 24 EXHIBIT I DEFINITIONS.............................................................. 1 EXHIBIT II CHIEF EXECUTIVE OFFICE OF THE PARENT; LOCATIONS
OF RECORDS; TRADE NAMES; FEDERAL EMPLOYER
IDENTIFICATION NUMBER................................................ 1 EXHIBIT III COLLECTION ACCOUNTS.................................................... 1 EXHIBIT IV [RESERVED].............................................................. 5 EXHIBIT V FORM OF COLLECTION ACCOUNT AGREEMENT..................................... 1 EXHIBIT VI CREDIT POLICIES......................................................... 1 EXHIBIT VII [RESERVED]............................................................. 1 EXHIBIT VIII FORM OF SETTLEMENT DATE STATEMENT..................................... 1 EXHIBIT IX FORM OF SUBSCRIPTION AGREEMENT.......................................... 1 EXHIBIT X FORM OF SUBORDINATED NOTE................................................ 7


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THIS FIFTH AMENDED AND RESTATED RECEIVABLES SALE AND CONTRIBUTION AGREEMENT, dated as of February 16, 2001, is by and between FEDERAL-MOGUL CORPORATION, a Michigan corporation (the "Parent" or "Federal-Mogul") and FEDERAL-MOGUL FUNDING CORPORATION, a Michigan corporation (the "Buyer"), which amends and restates the Fourth Amended and Restated Receivables Sale and Contribution Agreement, dated as of June 26, 2001, between Federal-Mogul and the Buyer, which amended and restated the Amended and Restated Receivables Sale and Contribution Agreement, dated as of July 1, 1999, by and between Federal-Mogul and the Buyer, which amended and restated the Amended and Restated Receivables Sale and Contribution Agreement, dated as of April 19, 1999, by and among Federal-Mogul, CARTER AUTOMOTIVE COMPANY, INC., a Delaware corporation ("Carter"), FEDERAL-MOGUL CANADA LIMITED, a Canadian corporation ("Federal-Mogul Canada"), FEDERAL-MOGUL IGNITION COMPANY, a Delaware corporation, and the Buyer, which amended and restated the Receivables Sale and Contribution Agreement, dated as of November 20, 1998, by and among Federal-Mogul, Carter, Federal-Mogul Canada and the Buyer. Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I hereto.


PRELIMINARY STATEMENTS


The Parent now owns, and from time to time hereafter will own,
Receivables. The Parent wishes to sell and assign to the Buyer, and the
Buyer wishes to purchase from the Parent, all of the Parent's right, title
and interest in and to its Receivables now owned and existing and hereafter
arising.


The Parent and the Buyer believe that it is in their mutual best
interests for the Parent to sell its Receivables to the Buyer and for the
Buyer to purchase such Receivables.


The Buyer shall, on each applicable Purchase Date, purchase all of the
Parent's right, title and interest in and to its Receivables existing on
such date and all Related Security and Collections associated therewith.


The Parent and the Buyer intend the transactions contemplated hereby
to be true sales of its Receivables from the Parent to the Buyer, providing
the Buyer with the full benefits of ownership of such Receivables, and the
Parent and the Buyer do not intend these transactions to be, or for any
purpose to be characterized as, loans from the Buyer to the Parent.


Upon each purchase of Receivables from the Parent, the Buyer will sell
undivided interests therein and in the associated Related Security and
Collections pursuant to that certain Sixth Amended and Restated Receivable
Interest Purchase Agreement dated as of February 16, 2001 (as the same may
from time to time hereafter be amended, supplemented, restated or otherwise
modified, the "Purchase Agreement"), among the Buyer, as seller, Federal-
Mogul, as Servicer, Blue Ridge Asset Funding Corporation ("Blue Ridge") and
Falcon Asset Securitization Corporation ("Falcon"), as Conduits and
Purchasers, the financial institutions from time to time party thereto as
"Liquidity


Providers", Bank One, NA as Administrative Agent and Falcon Agent, and
Wachovia Bank, N.A., as Blue Ridge Agent.


ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES


Section 1.1 Purchases of Receivables.
-------------------------


(a) Effective on the date of the initial Purchase hereunder, in consideration for the Purchase Price and upon the terms and subject to the conditions set forth herein, the Parent does hereby sell, assign, transfer, set-over and otherwise convey to the Buyer, without recourse (except to the extent expressly provided herein), and the Buyer does hereby purchase from the Parent, all of the Parent's right, title and interest in and to all Receivables existing as of the date of such initial Purchase and all Receivables thereafter arising, together, in each case, with all Related Security relating thereto and all Collections and other proceeds thereof; provided, however, that in no event shall the Buyer purchase, or the Parent sell, any Receivable arising after the Termination Date; provided, further, that in no event shall the Buyer purchase, or the Parent sell, any Receivable arising on or after the date that the related Originator ceases to be a wholly-owned subsidiary of Federal-Mogul. On the date of the initial Purchase, the Buyer shall acquire all of the Parent's right, title and interest in and to all Receivables existing as of the close of business on the Business Day immediately prior to such Purchase, together with all Related Security relating thereto and all Collections and other proceeds thereof. On each Business Day thereafter through and including the Termination Date, the Buyer shall acquire all of the Parent's right, title and interest in and to all Receivables which were not previously purchased by the Buyer hereunder upon the creation of such Receivables (together with all Related Security relating thereto and all Collections and other proceeds thereof), provided that the acquisition by the Buyer of such right, title and interest of the Parent in connection with each Purchase hereunder is conditioned upon and subject to the Parent's receipt of the Purchase Price therefor in accordance with Section 1.2 below. In connection with consummation of any Purchase hereunder, the Buyer may request that the Parent deliver, and the Parent shall deliver, such approvals, opinions, information, reports or documents as the Buyer and/or any Agent (as the Buyer's assignee) may reasonably request.


(b) It is the intention of the parties hereto that each Purchase of Receivables made hereunder shall constitute a "sale of accounts" (as such term is used in Article 9 of the UCC) (for non-tax purposes), which sales are (for non-tax purposes) absolute and irrevocable and provide the Buyer with the full benefits of ownership of the Receivables. Except for the Purchase Price Credits owed pursuant to Section 1.3 hereof, each sale of Receivables hereunder is made without recourse to the Parent; provided, however, that (i) the Parent shall be liable to the Buyer for all representations, warranties and covenants made by the Parent individually and as Sub-Servicer, pursuant to the terms of the Transaction Documents to which the Parent and the Sub-Servicer is a party, and (ii) such sale (for non-tax purposes) does not constitute and is not intended to result in an assumption by the Buyer or any assignee thereof of any obligation of the Parent, any other Originator or any other Person arising in connection with the Receivables, the related Contracts and/or other Related Security or any other obligations of the Parent or any other Originator. In view of the intention of the parties hereto that the Purchases of Receivables made hereunder shall constitute sales (for non-tax purposes) of such Receivables rather than


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loans secured thereby, on or prior to the date hereof the Parent agrees to mark, and shall cause each other Originator to mark, its master data processing records relating to the Receivables with a legend acceptable to the Buyer and the Agents (as the Buyer's assignees), evidencing that the Buyer has purchased such Receivables as provided in this Agreement and to note in its financial statements that its Receivables have been assigned to the Buyer. Upon the request of the Buyer or any Agent (as the Buyer's assignee), the Parent shall execute and file, and shall cause each other Originator to execute and file, such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate to perfect and maintain the perfection of the Buyer's ownership interest in the Purchased Assets, or as the Buyer or any Agent (as the Buyer's assignee) may reasonably request.


Section 1.2 Payment for the Purchases.
--------------------------


(a) The Purchase Price for the initial Purchase of Receivables shall be payable in full by the Buyer to the Parent on the date of such initial Purchase, and shall be paid to the Parent in the following manner:


(i) by delivery of immediately available funds, to the extent of funds
made available to the Buyer in connection with its subsequent sale of an
interest in such Receivables to the Purchasers under the Purchase
Agreement; provided that, a portion of such funds shall be offset by
amounts owed by the Parent to the Buyer on account of the issuance of
equity in the manner contemplated in the Subscription Agreement and having
a total value of not less than $14,250,000, and


(ii) the balance with the proceeds of a Subordinated Loan.


The Purchase Price for each Purchase after the initial Purchase shall become due and owing in full by the Buyer to the Parent or its designee on the date of such Purchase (except that the Buyer may, with respect to any such Purchase, offset against such Purchase Price any amounts owed by the Parent to the Buyer hereunder and which have become due but remain unpaid) and shall be paid to the Parent in the manner provided in the following paragraphs (b), (c) and (d).


(b) With respect to any Purchase after the initial Purchase hereunder, on each Settlement Date, the Buyer shall pay to the Sub-Servicer the Sub-Servicer Fee and to the Parent the Purchase Price for each Purchase during the preceding Collection Period as follows:


first, by delivery of immediately available funds, to the extent of
funds available to the Buyer from its subsequent sale of an interest in
such Receivables to the Co-Agents for the benefit of their respective
Purchaser Groups under the Purchase Agreement or otherwise; provided that
Buyer shall make such payments of such Sub-Servicer Fee and Purchase Price
by delivery of immediately available funds to the Parent;


second, by borrowing from the Parent a subordinated revolving loan
(each, a "Subordinated Loan") from the Parent in an amount not to exceed
the lesser of (i) the remaining unpaid portion of such Purchase Price and
(ii) the maximum Subordinated Loan that could be borrowed without rendering
the Buyer's Net Worth less than the Required Capital Amount; and


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third, unless the Parent has declared the Termination Date to have
occurred, by accepting a contribution to its capital pursuant to the
Subscription Agreement in an amount equal to the remaining unpaid balance
of its Purchase Price.


Subject to the limitations set forth in the preceding clause second, the Parent irrevocably agrees to advance each Subordinated Loan requested by the Buyer on or prior to the Termination Date. The Subordinated Loans shall be evidenced by, and shall be payable in accordance with the terms and provisions of, the Subordinated Notes and shall be payable solely from funds which the Buyer is not required under the Purchase Agreement to set aside for the benefit of, or otherwise pay over to, the Purchasers.


(c) After the Termination Date, the Parent shall not (i) sell Receivables to the Buyer, or (ii) contribute Receivables to the Buyer's capital.


(d) On each Business Day during a Collection Period after the date of the initial Purchase, all Collections received shall be applied by the Parent as payments toward the Purchase Price of Receivables sold or to be sold by the Parent to the Buyer during such Collection Period. Although amounts shall be paid directly to the Parent on a daily basis in accordance with the first sentence of this paragraph, settlement of the Purchase Price between the Buyer and the Parent shall be effected on a monthly basis on Settlement Dates with respect to all Purchases within the same Collection Period and based on the information contained in the Settlement Date Statement or Interim Settlement Date Statement, as the case may be, for the Collection Period then most recently ended. In addition to such other information as may be included therein, each Settlement Date Statement shall set forth the following with respect to the related Collection Period: (i) the aggregate Outstanding Balance of Receivables created and conveyed in Purchases during such Collection Period, as well as the Net Receivables Balance (as defined in the Purchase Agreement) included therein, (ii) the aggregate Purchase Price payable to the Parent in respect of such Purchases, specifying the Discount Factor in effect for such Collection Period and the aggregate Purchase Price Credits deducted in calculating such aggregate Purchase Price, (iii) the aggregate amount of funds received by the Parent during such Collection Period which are to be applied toward the aggregate Purchase Price owing for such Collection Period pursuant to the first sentence of this paragraph, (iv) the increase or decrease in the amount outstanding under the applicable Subordinated Note as of the end of such Collection Period after giving effect to the application of funds toward the aggregate Purchase Price and the restrictions on Subordinated Loans set forth in paragraph (b) above, and (v) the amount of any capital contribution made by the Parent to the Buyer as of the end of such Collection Period pursuant to paragraph (c) above. Although settlement shall be effected on Settlement Dates, increases or decreases in the amount owing under any Subordinated Note made pursuant to paragraph (b) above and any contribution of capital by the Parent to the Buyer made pursuant to paragraph (c) above shall be deemed to have occurred and shall be effective as of the last Business Day of the Collection Period to which such settlement relates.


Section 1.3 Purchase Price Credit Adjustments. If on any day the
--------------------------------- Outstanding Balance of a Receivable is:


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(a) reduced as a result of any defective or damaged goods or services,
any cash discount or any adjustment by the applicable Originator (whether
individually or, in the case of Federal-Mogul, in its performance of its
duties as Sub-Servicer),


(b) reduced or canceled as a result of a setoff in respect of any
claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction and whether such claim relates to
an Originator or any Affiliate thereof), or


(c) is otherwise reduced as a result of any of the factors set forth
in the definition of "Dilutions,"


then, in such event, the Buyer shall be entitled to a credit (each, a "Purchase Price Credit") against the Purchase Price otherwise payable hereunder equal to the full amount of such reduction or cancellation. If such Purchase Price Credit exceeds the Original Balance of the Receivables to be sold hereunder on any Purchase Date, then the Parent shall pay the remaining amount of such Purchase Price Credit in cash within 5 Business Days thereafter; provided that if the Termination Date has not occurred, the Parent shall be allowed to deduct the remaining amount of such Purchase Price Credit from any indebtedness owed to it under the applicable Subordinated Note.


Section 1.4 Payments and Computations, Etc. All amounts to be paid or
------------------------------ deposited by the Buyer hereunder shall be paid or deposited in accordance with the terms hereof on the day when due in immediately available funds to the account of the Parent designated from time to time by the Parent or as otherwise directed by the Parent. In the event that any payment owed by any Person hereunder becomes due on a day which is not a Business Day, then such payment shall be made on the next succeeding Business Day. Any amount due hereunder which is not paid when due hereunder shall bear interest at the Base Rate as in effect from time to time until paid in full; provided, however, that such interest rate shall not at any time exceed the maximum rate permitted by applicable law. All computations of interest payable hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed.


Section 1.5 Transfer of Records.
--------------------


(a) In connection with the Purchases of Receivables hereunder, the Parent hereby sells, transfers, assigns and otherwise conveys to the Buyer all of its right and title to and interest in the Records relating to all of its Receivables sold hereunder, without the need for any further documentation in connection with any Purchase. In connection with such transfer, the Parent hereby grants to each of the Buyer, the Administrative Agent and the Servicer an irrevocable, non-exclusive license to use, without royalty or payment of any kind, all software used by the Parent to account for its Receivables, to the extent necessary to administer its Receivables, whether such software is owned by the Parent or is owned by others and used by the Parent under license agreements with respect thereto, provided that should the consent of any licensor of the Parent to such grant of the license described herein be required, the Parent hereby agrees that upon the request of the Buyer (or the Administrative Agent as the Buyer's assignee), the Parent will use its reasonable efforts to obtain the consent of such third-party licensor. The


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license granted hereby shall be irrevocable, and shall terminate on the date this Agreement terminates in accordance with its terms.


(b) The Parent (i) shall take such action requested by the Buyer and/or any Agent (as the Buyer's assignee), from time to time hereafter, that may be necessary or appropriate to ensure that the Buyer and its assigns under the Purchase Agreement have an enforceable ownership interest in the Records relating to the Receivables purchased from the Parent hereunder, and (ii) shall use its reasonable efforts to ensure that the Buyer, the Agents and the Servicer each has an enforceable right (whether by license or sublicense or otherwise) to use all of the computer software used to account for the Receivables and/or to recreate such Records.


Section 1.6 Characterization. If, notwithstanding the intention of
---------------- the parties expressed in Section 1.1(b), any sale or contribution by the Parent to the Buyer of Receivables hereunder shall be characterized as a secured loan and not a sale (for non-tax purposes), then this Agreement shall be deemed to constitute a security agreement under the UCC and other applicable law. Without being in derogation of the parties' intention that each sale of Receivables hereunder shall constitute a true sale (for non-tax purposes) thereof, the Parent hereby grants to the Buyer a duly perfected security interest in all of the Parent's right, title and interest, whether now owned or hereafter acquired, in, to and under the Purchased Assets, which security interest shall be prior to all other Adverse Claims thereto. After an Event of Purchase and Sale Termination, the Buyer and its assignees (including the Agents) shall have, in addition to the rights and remedies which they may have under this Agreement, all other rights and remedies provided to a secured creditor after default under the UCC and other applicable law, which rights and remedies shall be cumulative.


ARTICLE II.
REPRESENTATIONS AND WARRANTIES


Section 2.1 Parent's Representations and Warranties. The Parent
--------------------------------------- hereby represents and warrants, individually and in its capacity as the Sub-Servicer, to the Buyer and its assigns that:


(a) Corporate Existence and Power. The Parent and each other
----------------------------- Originator is a corporation or limited liability company duly organized or formed and validly existing and in good standing under the laws of the State of its incorporation or formation and has, in all material respects, full corporate or limited liability company power, authority and legal right to own its properties and conduct its business as such properties are presently owned and such business is presently conducted, and to execute, deliver and perform its obligations under the Transaction Documents to which it is a party.


(b) Due Qualification. The Parent and each other Originator is duly
----------------- qualified to do business and, where necessary, is in good standing as a foreign corporation (or is exempt from such requirement) and has obtained all necessary licenses and approvals in each jurisdiction in which the conduct of its business requires such qualification except where the failure to so qualify, be in good standing or obtain licenses or approvals would not have a Material Adverse Effect.


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(c) Due Authorization; No Conflict. The execution and delivery of the
------------------------------ Transaction Documents to which the Parent and each other Originator is a party, the performance of the transactions contemplated thereby and the fulfillment of the terms thereof, will not conflict with, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Parent or such Originator is a party or by which it or its properties are bound. The execution and delivery of the Transaction Documents to which the Parent or each other Originator is a party, the performance of the transactions contemplated thereby and the fulfillment of the terms thereof which are applicable to the Parent or such Originator, will not conflict with or violate any material Requirements of Law applicable to the Parent or such Originator.


(d) No Consents. Othe ...