exv4w1



 



Exhibit 4.1



FEDERAL-MOGUL ASBESTOS

PERSONAL INJURY TRUST AGREEMENT





 









 








FEDERAL-MOGUL




ASBESTOS PERSONAL INJURY SETTLEMENT TRUST AGREEMENT




TABLE OF CONTENTS




	 	 	 	 	 
	SECTION 1 — Agreement of Trust
	 	 	6	 
	 
	 	 	 	 
	1.1 Creation and Name
	 	 	6	 
	1.2 Purpose
	 	 	7	 
	1.3 Transfer of Assets
	 	 	7	 
	1.4 Acceptance of Assets and Assumption of Liabilities
	 	 	8	 
	1.5 Certain Obligations to the Pneumo Parties
	 	 	9	 
	 
	 	 	 	 
	SECTION 2 — Powers and Trust Administration
	 	 	10	 
	 
	 	 	 	 
	2.1 Powers
	 	 	10	 
	2.2 General Administration
	 	 	15	 
	2.3 Claims Administration
	 	 	21	 
	 
	 	 	 	 
	SECTION 3 — Accounts, Investments, and Payments
	 	 	21	 
	 
	 	 	 	 
	3.1 Subfunds and Accounts
	 	 	21	 
	3.2 Investments
	 	 	22	 
	3.3 Source of Payments
	 	 	24	 
	 
	 	 	 	 
	SECTION 4 — Trustees; Delaware Trustee
	 	 	24	 
	 
	 	 	 	 
	4.1 Number
	 	 	24	 
	4.2 Term of Service
	 	 	25	 
	4.3 Appointment of Successor Trustees
	 	 	26	 
	4.4 Liability of Trustees, the Delaware Trustee, Officers and Employees
	 	 	26	 
	4.5 Compensation and Expenses of Trustees and the Delaware Trustee
	 	 	27	 
	4.6 Indemnification of Trustees and Additional Indemnitees 
	 	 	28	 
	4.7 Trustees’ and the Delaware Trustee Lien 
	 	 	29	 
	4.8 Trustees’ Employment of Experts; Delaware Trustee’s
Employment of Counsel 
	 	 	29	 
	4.9 Trustees’ Independence 
	 	 	30	 
	4.10 Bond 
	 	 	30	 
	4.11 Delaware Trustee 
	 	 	30	 






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	SECTION 5 — Trust Advisory Committee 
	 	 	32	 
	 
	 	 	 	 
	5.1 Members 
	 	 	32	 
	5.2 Duties 
	 	 	32	 
	5.3 Term of Office 
	 	 	33	 
	5.4 Appointment of Successor 
	 	 	33	 
	5.5 TAC’s Employment of Professionals 
	 	 	34	 
	5.6 Compensation and Expenses of TAC 
	 	 	35	 
	5.7 Procedures for Consultation with and Obtaining the
Consent of the TAC 
	 	 	36	 
	(a) Consultation Process 
	 	 	36	 
	(b) Consent Process 
	 	 	37	 
	 
	 	 	 	 
	SECTION 6 — The Future Claimants Representative 
	 	 	38	 
	 
	 	 	 	 
	6.1 Duties 
	 	 	38	 
	6.2 Term of Office 
	 	 	38	 
	6.3 Appointment of Successor 
	 	 	39	 
	6.4 Future Claimants Representative’s Employment of Professionals
	 	 	39	 
	6.5 Compensation and Expenses of the Future Claimants
Representative 
	 	 	41	 
	6.6 Procedures for Consultation with and Obtaining the
Consent of the Future Claimants Representative 
	 	 	41	 
	(a) Consultation Process 
	 	 	41	 
	(b) Consent Process 
	 	 	42	 
	 
	 	 	 	 
	SECTION 7 — General Provisions 
	 	 	44	 
	 
	 	 	 	 
	7.1 Irrevocability 
	 	 	44	 
	7.2 Termination 
	 	 	44	 
	7.3 Amendments 
	 	 	45	 
	7.4 Procedures for Obtaining the Consent of the Lead Insurer 
	 	 	46	 
	7.5 Meetings 
	 	 	47	 
	7.6 Severability 
	 	 	47	 
	7.7 Notices 
	 	 	47	 
	7.8 Successors and Assigns 
	 	 	49	 
	7.9 Limitation on Claim Interests for Securities Laws Purposes 
	 	 	50	 
	7.10 Entire Agreement; No Waiver 
	 	 	50	 
	7.11 Headings 
	 	 	50	 
	7.12 Governing Law 
	 	 	50	 
	7.13 Federal-Mogul’s Representations and Cooperation 
	 	 	51	 
	7.14 Dispute Resolution 
	 	 	51	 
	7.15 Enforcement and Administration 
	 	 	51	 
	7.16 Effectiveness 
	 	 	52	 
	7.17 Counterpart Signatures 
	 	 	52	 







3









 








FEDERAL-MOGUL

ASBESTOS PERSONAL INJURY TRUST AGREEMENT





     This Federal-Mogul Asbestos Personal Injury Trust Agreement, as may be amended pursuant to the
Pneumo Abex Addendum to the U.S. Asbestos Personal Injury Trust Agreement attached hereto as
Exhibit A, (as so amended, the “U.S. Asbestos Trust Agreement”), dated the date set forth
on the signature page hereof and effective as of the Effective Date, is entered into by
Federal-Mogul Corporation (“Federal-Mogul”), the Debtor and debtor-in-possession in
jointly-administered cases docketed under Case No. 01-10578 RTL in the United States Bankruptcy
Court for the District of Delaware, on behalf of itself and the other Protected Parties; the Future
Claimants Representative; the Official Committee of Asbestos Claimants (the “Committee”);
the Trustees (the “Trustees”), Wilmington Trust Company (the “Delaware Trustee”)
and the members of the Trust Advisory Committee (the “TAC”), who are further identified on
the signature pages hereof and appointed at Confirmation pursuant to the Federal-Mogul Fourth
Amended Joint Plan of Reorganization, as such Plan may be amended, modified or supplemented from
time to time (the “Plan”). All capitalized terms not otherwise defined herein shall have
their respective meanings as set forth in the Plan, and such definitions are incorporated herein by
reference. All capitalized terms not defined herein or defined in the Plan, but defined in the
Bankruptcy Code or Rules, shall have the meanings ascribed to them by the Bankruptcy Code and
Rules, and such definitions are incorporated herein by reference.



     WHEREAS, at the time of the entry of the order for relief in the Chapter 11 case,
Federal-Mogul and the other Protected Parties were named as defendants in actions involving
Asbestos Personal Injury Claims; and



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     WHEREAS, the Plan has been confirmed by the Bankruptcy Court; and



     WHEREAS, the CVAs have been approved by an English Court; and



     WHEREAS, the Plan provides, inter alia, for the creation of the Federal-Mogul Asbestos
Personal Injury Trust (the “U.S. Asbestos Trust”); and



     WHEREAS, pursuant to the Plan, Federal-Mogul will make certain contributions to the U.S.
Asbestos Trust; and



     WHEREAS, pursuant to the Plan, the U.S. Asbestos Trust will use the Trust Assets to pay all
Asbestos Personal Injury Claims, caused by exposure to asbestos-containing products for which
Federal-Mogul and/or its wholly owned direct or indirect subsidiary Turner & Newell (“T&N”)
and its direct or indirect subsidiaries, Gasket Holdings Inc. (“Flexitallic”) and Ferodo
America Inc. (“Ferodo”) (collectively, the “T&N Entities”); Federal-Mogul Products
Inc. (“FMP”); Felt Products Mfg. Co. (“Fel-Pro”); and Federal-Mogul’s former
division Vellumoid (“Vellumoid”); and their successors, and assigns (each a
“Federal-Mogul Entity,” and collectively, the “Federal-Mogul Entities”) have legal
responsibility under applicable tort law, as provided in and by the Plan and the U.S. Asbestos
Trust Agreement; and



     WHEREAS, it is the intent of the Debtors, the Trustees, the TAC, and the Future Claimants’
Representative that the U.S. Asbestos Trust be administered, maintained, and
operated at all times through mechanisms that provide reasonable assurance that the U.S.
Asbestos Trust will satisfy Asbestos Personal Injury Claims pursuant to the Asbestos Personal
Injury Trust Distribution Procedures (the “U.S. TDP”) that are attached to the Plan in a



5









 







substantially similar manner, and in strict compliance with the terms of this U.S. Asbestos Trust
Agreement; and



     WHEREAS, pursuant to the Plan, the U.S. Asbestos Trust shall establish four (4) separate
Subfunds (the “Subfunds”), which shall include the T&N Subfund, which shall process,
liquidate and make payments pursuant to the U.S. TDP to holders of Asbestos Personal Injury Claims
for which the T&N Entities have legal liability as provided in the Plan, the FMP Subfund, the
Fel-Pro Subfund and the Vellumoid Subfund, which shall pay claims from proceeds of insurance
available to the corresponding Federal-Mogul Entity; and



     WHEREAS, pursuant to the Plan, the U.S. Asbestos Trust is intended to qualify as a “qualified
settlement fund” within the meaning of Section 1.468B-1 et seq. of the Treasury Regulations
promulgated under Section 468B of the Internal Revenue Code (the “IRC”); and



     WHEREAS, the Bankruptcy Court has determined that the U.S. Asbestos Trust and the Plan satisfy
all the prerequisites for the issuance of an injunction pursuant to section 524(g) of the
Bankruptcy Code, and such injunction has been entered in connection with the Confirmation Order.



     NOW, THEREFORE, it is hereby agreed as follows:



SECTION 1




AGREEMENT OF TRUST




     1.1 Creation and Name. Federal-Mogul hereby creates a trust known as the
“Federal-Mogul Asbestos Personal Injury Trust,” which is the Trust provided for and referred to



6









 







in
the Plan. The Trustees of the U.S. Asbestos Trust may transact the business and affairs of the
U.S. Asbestos Trust in the name of the U.S. Asbestos Trust. It is the intention of the parties
hereto that the trust created hereby constitute a statutory trust under Chapter 38 of title 12 of
the Delaware Code, 12 Del. C. § 3801 et seq. (the “Act”) and that this document, together
with the bylaws described in Section 2.2, constitute the governing instruments of the U.S. Asbestos
Trust. The Trustees and the Delaware Trustee are hereby authorized and directed to execute and
file a Certificate of Trust with the Delaware Secretary of State in the form attached hereto as
Exhibit A.



     1.2 Purpose. The purpose of the U.S. Asbestos Trust is to assume the liabilities of
the Debtors and the other Protected Parties, for and with respect to all Asbestos Personal Injury
Claims, and to use the assets contributed to the U.S. Asbestos Trust pursuant to the Plan and any
other assets that may be contributed to or acquired by the U.S. Asbestos Trust from time to time
and the proceeds and income from such assets to pay the holders of all Asbestos Personal Injury
Claims in accordance with this U.S. Asbestos Trust Agreement, the U.S. TDP, and the CIP Agreement
in such a way that such holders of Asbestos Personal Injury Claims are treated fairly, equitably
and reasonably in light of the limited assets available to satisfy such claims, and to
otherwise comply in all respects with the requirements of a trust set forth in Section
524(g)(2)(B) of the Bankruptcy Code.



     1.3 Transfer of Assets. Pursuant to the Plan, the Trust Assets will be transferred and
assigned to the U.S. Asbestos Trust to settle and discharge all Asbestos Personal Injury Claims and
to permit the U.S. Asbestos Trust to satisfy the obligations of the Trust under Section 8.22 of the
Plan. Pursuant to the Plan, Federal-Mogul and the other Protected Parties, from and after the



7









 







Effective Date, and others may also transfer and assign additional assets to the U.S. Asbestos
Trust from time to time to be added to the Trust Assets described above. Except as otherwise
provided in the Plan, the Plan Documents, or the CIP Agreement, any and all assets transferred to
the U.S. Asbestos Trust shall be free and clear of any liens or other claims by any Protected
Party, any creditor, or any other entity. Federal-Mogul, Reorganized Federal-Mogul, and any other
transferors shall also execute and deliver such documents to the U.S. Asbestos Trust as the
Trustees reasonably request to transfer and assign the Trust Assets to the U.S. Asbestos Trust.



     1.4 Acceptance of Assets and Assumption of Liabilities



          (a) In furtherance of the purposes of the U.S. Asbestos Trust, the Trustees, on behalf of the
U.S. Asbestos Trust, hereby expressly accept the transfer and assignment to the U.S. Asbestos Trust
of the Trust Assets in the time and manner contemplated in the Plan.




          (b) In furtherance of the purposes of the U.S. Asbestos Trust, the Trustees, on behalf of the
U.S. Asbestos Trust, expressly assume all liability for all Asbestos Personal Injury Claims.
Subject to and as otherwise provided in the Plan and exhibits thereto, the U.S. Asbestos Trust also
shall have all defenses available to any Protected Party and all Trust Causes of Action.
Regardless of the foregoing, however, a claimant must meet otherwise applicable federal, state and
foreign statutes of limitations and repose, except as otherwise provided in Section 5.1(a)(2) of
the U.S. TDP.




          (c) No provision herein or in the U.S. TDP shall be construed to mandate distributions on any
claims or other actions that would contravene the Trust’s compliance with the requirements of a
qualified settlement fund within the meaning of section 1.468B-1 et seq. of the Treasury
Regulations promulgated under section 468B of the IRC.





8









 








          (d) The U.S. Asbestos Trust shall indemnify the Protected Parties to the extent set forth in
the Plan.




          (e) Nothing in this U.S. Asbestos Trust Agreement shall be construed in any way to limit the
scope, enforceability, or effectiveness of the Section 524(g) injunction issued in connection with
the Plan or the U.S. Asbestos Trust’s assumption of all liability for Asbestos Personal Injury
Claims.




          (f) Nothing in this Section 1.4 shall affect the rights and obligations set forth in the CIP
Agreement.




     1.5 Certain Obligations to the Pneumo Parties. The U.S. Asbestos Trust expressly
acknowledges (a) its obligations under the Plan with respect to the Plan B Settlement Amount in the
event that the Plan B Date occurs after the Effective Date but prior to the Date of Finality and
(b) its obligations under the Unwind Agreement dated as of the date hereof among the U.S.
Asbestos Trust and the Pneumo Parties to preserve and return, as provided therein, the assets
funded by the Pneumo Parties upon the occurrence of the Plan A Date in the event that the Plan B
Date occurs after the Plan A Date but prior to the Date of Finality. The U.S. Asbestos Trust
further agrees to cause the funds held pursuant to the Cooper/Pneumo Escrow Agreement to be
released from the Cooper/Pneumo Escrow Account and paid over to Cooper LLC and PCT, as applicable,
in satisfaction of the obligation to pay the Plan B Settlement Amount pursuant to the Plan and the
Plan B Settlement Agreement if the Plan B Date occurs prior to the Date of Finality.



9









 





SECTION 2




POWERS AND TRUST ADMINISTRATION




     2.1 Powers.



          (a) The Trustees are and shall act as the fiduciaries to the U.S. Asbestos Trust in accordance
with the provisions of this U.S. Asbestos Trust Agreement and the Plan and shall have the power, on
behalf of the Trust, to exercise all rights and fulfill all obligations of the Trust under the Plan
and the Plan Documents. The Trustees shall, at all times, administer the U.S. Asbestos Trust and
the Trust Assets in accordance with the purposes set forth in Section 1.2 above. Subject to the
limitations set forth in this U.S. Asbestos Trust Agreement, the Trustees shall have the power to
take any and all actions that, in the judgment of the Trustees, are necessary or proper to fulfill
the purposes of the U.S. Asbestos Trust, including, without limitation, each power expressly
granted in this Section 2.1, any power reasonably incidental thereto, and any trust power now or
hereafter permitted under the laws of the State of Delaware.




          (b) Except as required by applicable law or otherwise specified herein, the Trustees need not
obtain the order or approval of any court in the exercise of any power or discretion conferred
hereunder.




          (c) In addition to the powers set forth in Section 7.3 below, and without limiting the
generality of Section 2.1(a) above, and except as limited below, the Trustees shall have the power
to:




               (i) receive and hold the Trust Assets, vote the Reorganized Federal-Mogul common stock, and
exercise all rights with respect to, and sell, any securities issued by



10









 







Reorganized Federal-Mogul
that are included in the Trust Assets, subject to any restrictions set forth in the Restated
Certificate of Reorganized Federal-Mogul;



               (ii) allocate all Trust Assets, including insurance proceeds, received as of the Effective
Date and thereafter, to the various Trust Subfunds that are liable for the Asbestos Personal Injury
Claims payable from those assets in accordance with the Plan and U.S. TDP;



               (iii) invest the monies held from time to time by the U.S. Asbestos Trust;



               (iv) sell, transfer, or exchange any or all of the Trust Assets at such prices and upon such
terms as the Trustees may consider proper, consistent with the other terms of this U.S. Asbestos
Trust Agreement;



               (v) enter into leasing and financing agreements with third parties to the extent such
agreements are reasonably necessary to permit the U.S. Asbestos Trust to operate;



               (vi) subject to provisions of the Plan, pay liabilities and expenses of the U.S. Asbestos
Trust, including, but not limited to, Trust Expenses;



               (vii) establish the T&N Subfund, the FMP Subfund, the Fel-Pro Subfund and the Vellumoid
Subfund and such other funds, reserves and accounts with the Trust Assets, as deemed by the
Trustees to be useful in carrying out the purposes of the U.S. Asbestos Trust;



               (viii) sue and be sued and participate, as a party or otherwise, in any judicial,
administrative, arbitrative, or other proceeding;



11









 





               (ix) establish, supervise and administer the U.S. Asbestos Trust in accordance with the U.S.
TDP and the terms thereof;



               (x) appoint such officers and hire such employees and engage such legal, financial,
accounting, investment, auditing and forecasting, and other consultants and agents as the business
of the U.S. Asbestos Trust requires, and delegate to such persons such powers and authorities as
the fiduciary duties of the Trustees permit and as the Trustees, in their discretion, deem
advisable or necessary in order to carry out the terms of the U.S. Asbestos Trust;



               (xi) pay employees, legal, financial, accounting, investment, auditing, and forecasting, and
other consultants, advisors, and agents, including those engaged by the U.S. Asbestos Trust in
connection with its alternative dispute resolution activities, reasonable compensation;



               (xii) compensate the Trustees, the Delaware Trustee, the TAC members, and the Future Claimants
Representative as provided below, and their employees, legal, financial, accounting, investment and
other advisors, consultants, independent contractors, and agents, and reimburse the Trustees, the
Delaware Trustee, the TAC members and the Future Claimants Representative all reasonable
out-of-pocket costs and expenses incurred by such persons in connection with the performance of
their duties hereunder;



               (xiii) execute and deliver such instruments as the Trustees consider proper in administering
the U.S. Asbestos Trust;



12









 





               (xiv) enter into such other arrangements with third parties as are deemed by the Trustees to
be useful in carrying out the purposes of the U.S. Asbestos Trust, provided such arrangements do
not conflict with any other provision of this U.S. Asbestos Trust Agreement;



               (xv) in accordance with Section 4.6 below, defend, indemnify and hold harmless (and
purchase
insurance indemnifying) (A) the Trustees and (B) the TAC, the Future Claimants Representative, the
officers and employees of the U.S. Asbestos Trust, and any agents, advisors and consultants of the
U.S. Asbestos Trust, the TAC or the Future Claimants Representative (the “Additional
Indemnitees”), to the fullest extent that a corporation or trust formed under the Act is from
time to time entitled to indemnify and/or insure its directors, trustees, officers, employees,
agents, advisors and representatives;



               (xvi) delegate any or all of the authority herein conferred with respect to the investment of
all or any portion of the Trust Assets to any one or more reputable individuals or recognized
institutional investment advisors or investment managers without liability for any action taken or
omission made because of any such delegation, except as provided in Section 4.4 below;



               (xvii) consult with Reorganized Federal-Mogul, the TAC and the Future Claimants Representative
at such times and with respect to such issues relating to the conduct of the U.S. Asbestos Trust as
the Trustees consider desirable; and



               (xviii) make, pursue (by litigation or otherwise), collect, compromise or settle, in the name
of the U.S. Asbestos Trust or in the name of the appropriate Reorganized Debtor any claim, right,
action, or cause of action included in the Trust Assets including, but not



13









 







limited to, insurance
recoveries, before any court of competent jurisdiction; provided that settlement of actions before
the Bankruptcy Court require the approval of the Bankruptcy Court after notice to Reorganized
Federal-Mogul as the case may be.



          (d) The Trustees shall not have the power to cause the U.S. Asbestos Trust to guarantee any
debt of other persons.




          (e) The Trustees shall give the TAC and the Future Claimants Representative prompt notice of
any act performed or taken pursuant to Sections 2.1(c)(i), (iv), or (xvi) above, and any act
proposed to be performed or taken pursuant to Section 2.2(f) and 7.3 below.




          (f) Notwithstanding anything to the contrary in the foregoing, the powers of the Trustees are
subject to the terms of the CIP Agreement with respect to Fel-Pro Claims, Vellumoid Claims, or
Federal-Mogul Asbestos Claims (as that term is defined in the CIP Agreement) and encompassed by the
CIP Agreement and nothing in this Section 2.1 shall affect the rights and obligations set forth in
the CIP Agreement.




          (g) Subject to any restrictions set forth in the Plan, the Trustees, in consultation with the
TAC and Future Claimants Representative, shall have the power to allocate the administrative
expenses of the U.S. Asbestos Trust among the various Subfunds on a reasonable basis that takes
into account the relative assets and liabilities of each such Subfund. The Trustees may also,
subject to the provisions of the Plan, advance funds from one Subfund to another Subfund to pay the
latter Subfund’s administrative expenses, including the costs of insurance litigation; provided,
however, that the Subfund that received the advance shall reimburse the Subfund that made the
advance as soon as the monies are available for such reimbursement.




14









 








     2.2 General Administration.



          (a) The Trustees shall adopt and act in accordance with the U.S. Asbestos Trust Bylaws. To
the extent not inconsistent with the terms of this U.S. Asbestos Trust Agreement, the U.S. Asbestos
Trust Bylaws shall govern the affairs of the U.S. Asbestos Trust. In the event of an inconsistency
between the U.S. Asbestos Trust Bylaws and this U.S. Asbestos Trust Agreement, the U.S. Asbestos
Trust Agreement shall govern.




          (b) The Trustees shall (i) timely file such income tax and other returns and statements and
shall timely pay all taxes required to be paid, (ii) comply with all withholding obligations, as
required under the applicable provisions of the IRC and of any state law and the regulations
promulgated thereunder, (iii) meet without limitation all requirements necessary to qualify and
maintain qualification of the U.S. Asbestos Trust as a qualified settlement fund within the meaning
of Section 1.468B-1 et seq. of the Treasury Regulations promulgated under Section 468B of the IRC,
and (iv) take no action that could cause the U.S. Asbestos Trust to fail to qualify as a qualified
settlement fund within the meaning of Section 1.468B-1 et seq. of the Treasury Regulations
promulgated under Section 468B of the IRC.




          (c) The Trustees shall timely account to the Bankruptcy Court as follows:




               (i) The Trustees shall cause to be prepared and filed with the Bankruptcy Court, as soon as
available, and in any event within one hundred and twenty (120) days following the end of each
fiscal year, an annual report containing inter alia financial statements of the U.S. Asbestos Trust
(including, without limitation, a balance sheet of the U.S. Asbestos Trust as of the end of such
fiscal year and a statement of operations for such fiscal year) audited by a firm of independent
certified public accountants selected by the Trustees and



15









 







accompanied by an opinion of such firm as
to the fairness of the financial statements’ presentation of the cash and investments available for
the payment of claims and as to the conformity of the financial statements with generally accepted
accounting principles. The Trustees shall provide a copy of such report to the TAC, the Future
Claimants Representative, and Reorganized Federal-Mogul when such reports are filed with the
Bankruptcy Court.



               (ii) Simultaneously with delivery of each set of financial statements referred to in Article
2.2(c)(i) above, the Trustees shall cause to be prepared and filed with the Bankruptcy Court a
report containing a summary regarding the number and type of claims disposed of during the period
covered by the financial statements. The Trustees shall provide a copy of such report to the TAC,
the Future Claimants Representatives, and Reorganized Federal-Mogul when such report is filed.



               (iii) All materials required to be filed with the Bankruptcy Court by this Section 2.2(c)
shall be available for inspection by the public in accordance with procedures established by the
Bankruptcy Court and shall be filed with the Office of the United States Trustee for the District
of Delaware.



          (d) The Trustees shall cause to be prepared as soon as practicable prior to the commencement
of each fiscal year a budget and cash flow projections covering such fiscal year and the succeeding
four fiscal years. The budget and cash flow projections shall include
determining the Maximum Annual Payment pursuant to Section 2.4 of the U.S. TDP, and the Claims
Payment Ratio pursuant to Section 2.5 of the U.S. TDP. The Trustees shall provide a copy of the
budget and cash flow projections to the TAC and the Future Claimants Representative.




16









 








          (e) The Trustees shall consult with the TAC and the Future Claimants Representative (i) on the
general implementation and administration of the U.S. Asbestos Trust; (ii) on the general
implementation and administration of the U.S. TDP; and (iii) on such other matters as may be
required under this U.S. Asbestos Trust Agreement and the U.S. TDP.




          (f) The Trustees shall be required to obtain the consent of the TAC and the Future Claimants
Representative pursuant to the Consent Process set forth in Section 5.7(b) and 6.6(b) below, in
addition to any other instances elsewhere enumerated, but subject to the provisions of Section 19.8
and 19.9 of the CIP Agreement with respect to the Fel-Pro Subfund, the Vellumoid Subfund, Fel-Pro
Claims, Vellumoid Claims or Federal-Mogul Asbestos Claims (as that term is defined in the CIP
Agreement) encompassed by the CIP Agreement in order to take any of the following actions:




               (i) to change the Claims Payment Ratio described in Section 2.5 of the U.S. TDP in the
event
that the requirements for such a change as set forth in said provision have been met;



               (ii) to change the Disease Levels, Medical/Exposure Criteria set forth in
Section 5.3(a)(1)(C)
of the U.S. TDP, and/or the Scheduled, Average and/or Maximum Values set forth in Sections
5.3(a)(3) of the U.S. TDP;



               (iii) to change the Payment Percentage described in Section 4.2 of the U.S. TDP;



17









 





               (iv) to establish and/or to change the Proof of Claim Forms and other claims materials to be
provided holders of Asbestos Personal Injury Claims under Section 6.1 of the U.S. TDP;



               (v) to require that claimants provide additional kinds of medical or exposure evidence
pursuant to Section 5.7 of the U.S. TDP;



               (vi) to change the form of release to be provided pursuant to Section 7.8 of the U.S. TDP,
provided that the release must be consistent with the requirements of the Plan;



               (vii) to establish a separate valuation matrix for any Foreign Claims at such time as the U.S.
Asbestos Trust has sufficient historical settlement, verdict and other valuation data for claims
from a particular foreign jurisdiction pursuant to Section 5.3(a)(2)(B) of the U.S. TDP;



               (viii) to develop methods for auditing the reliability of medical evidence, including
additional reading of X-rays, CT scans and verification of pulmonary function tests, as
well as the reliability of evidence of exposure to asbestos, including exposure to
asbestos-containing products manufactured or distributed by pursuant to Section 5.8 of the U.S.
TDP;



               (ix) to terminate the U.S. Asbestos Trust pursuant to Section 7.2 below;



               (x) to settle the liability of any insurer under any insurance policy or legal action related
thereto;



18









 





               (xi) to change the compensation of the members of the TAC, the Future Claimants Representative
or Trustees, other than to reflect cost-of-living increases or changes approved by the Bankruptcy
Court as otherwise provided herein;



               (xii) to take structural or other actions to minimize any tax on the Trust Assets;



               (xiii) to amend the U.S. Asbestos Trust Bylaws in accordance with the terms thereof;



               (xiv) to amend any provision of the U.S. Asbestos Trust Agreement or the U.S. TDP in
accordance with the terms thereof;



               (xv) subject to such restrictions as may exist in the Plan Documents, to vote the shares of
Reorganized Federal-Mogul Common Stock held by the U.S. Asbestos Trust for purposes of electing
members of the Board of Directors of Reorganized Federal-Mogul and such other matters as may be
submitted to shareholders; and



               (xvi) to merge any asbestos claims resolution organization formed by the U.S. Asbestos Trust
with another asbestos claims resolution organization, or to contract with another asbestos claims
resolution organization or other entity, or permit any other party to join in any asbestos claims
resolution organization that is formed by the U.S. Asbestos Trust; provided that such merger,
contract or joinder shall not (a) subject Reorganized Federal-Mogul or the other Protected Parties
or any successors in interest thereto, to any risk of having any U.S. Asbestos Trust Claim asserted
against it or them, or (b) otherwise jeopardize the validity or enforceability of the Section
524(g) injunction; and provided further that the terms of such



19









 







merger or contract will require the
surviving organization or other asbestos claims resolution organization to make decisions about the
allowability and value of claims in accordance with Section 2.1 of the U.S. TDP which requires that
such decisions be based on the provisions of the U.S. TDP.



          (g) The Trustees shall meet with the TAC and the Future Claimants Representative no less often
than quarterly. The Trustees shall meet in the interim with the TAC and the Future Claimants
Representative when so requested by either.




          (h) The Trustees, upon notice from either the TAC or the Future Claimants Representative, if
practicable in view of pending business, shall at their next meeting with the TAC or the Future
Claimants Representative consider issues submitted by the TAC or the Future Claimants
Representative.




          (i) Periodically, but not less often than once a year, the Trustees shall make available to
claimants and other interested parties the number of claims by disease levels that have been
resolved both by individual review and by arbitration, as well as by trial, indicating the amounts
of the awards and the averages of the awards by jurisdiction pursuant to Section 7.10 of the U.S.
TDP.




          (j) Notwithstanding anything to the contrary in the foregoing, the administration of the Trust
is subject to the terms of the CIP Agreement with respect to Federal-Mogul Asbestos Claims (as that
term is defined in the CIP Agreement), Vellumoid Claims and Fel-Pro Claims encompassed by the CIP
Agreement and nothing in this Section 2.2 shall affect the rights and obligations set forth in the
CIP Agreement.




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     2.3 Claims Administration.



          The Trustees shall promptly proceed to implement the U.S. TDP.




SECTION 3




ACCOUNTS, INVESTMENTS, AND PAYMENTS




     3.1 Subfunds and Accounts.



          (a) The Trustees shall create the T&N Subfund, the FMP Subfund, the Fel-Pro Subfund and the
Vellumoid Subfund as provided above, and may, from time to time, create such other funds, accounts
and reserves within the U.S. Asbestos Trust estate as they may deem necessary, prudent, or useful
in order to provide for the payment of expenses and payment of Asbestos Personal Injury Claims, and
may, with respect to any such fund, account or reserve, restrict the use of monies therein. The
assets of each such Subfund shall be held by the Trustees as a separate, segregated account, shall
not be co-mingled with the assets of any other Subfund, and, except as provided herein and in the
Plan, shall not be used for any purpose other than paying claims asserted against such Subfund, as
well as expenses incurred by the U.S. Asbestos Trust in the administration of the Subfund.




          (b) Funding of the Vellumoid and Fel-Pro Subfunds and Escrow Account. The Trustees
shall (i) cause the Escrow Account to be established and funded as required by the Plan and CIP
Agreement; (ii) allocate funds to the Vellumoid Subfund and the Fel-Pro Subfund as required by the
Plan and the CIP Agreement; and (iii) maintain the funding levels of the Fel-Pro and Vellumoid
Subfunds as required by the Plan and the CIP Agreement.





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     3.2 Investments. Investment of monies held in the U.S. Asbestos Trust shall be
administered in a manner consistent with the standards set forth in the Uniform Prudent Investor
Act, subject to the following limitations and provisions:



          (a) The U.S. Asbestos Trust shall not acquire, directly or indirectly, equity in any entity
(other than Reorganized Federal-Mogul or any successor to Reorganized Federal-Mogul) or business
enterprise if, immediately following such acquisition, the U.S. Asbestos Trust would hold more than
5% of the equity in such entity or business enterprise. The U.S. Asbestos Trust shall not hold,
directly or indirectly, more than 10% of the equity in any entity
(other than Reorganized Federal-Mogul or any successor to Reorganized Federal-Mogul) or
business enterprise.




          (b) Except as expressly contemplated by or provided for in the Plan, the U.S. Asbestos Trust
shall not acquire or hold any long-term debt securities unless (i) such securities are included in
the Trust Assets under the Plan, (ii) such securities are rated “Baa” or higher by Moody’s, “BBB”
or higher by Standard & Poor’s (“S&P’s”), or have been given an equivalent investment grade
rating by another nationally recognized statistical rating agency, or (iii) have been issued or
fully guaranteed as to principal and interest by the United States of America or any agency or
instrumentality thereof.




          (c) The U.S. Asbestos Trust shall not acquire or hold for longer than ninety (90) days any
commercial paper unless such commercial paper is rated “Prime-1” or higher by Moody’s or “A-1” or
higher by S&P’s or has been given an equivalent rating by another nationally recognized statistical
rating agency.




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          (d) Excluding any securities of the Debtor or Reorganized Federal-Mogul, the U.S. Asbestos
Trust shall not acquire or hold any common or preferred stock or convertible securities unless such
stock or securities are rated “A” or higher by Moody’s or “A” or higher by S&P’s or have been given
an equivalent investment grade rating by another nationally recognized statistical rating agency.




          (e) Except as expressly contemplated by or provided for in the Plan, the U.S. Asbestos Trust
shall not acquire any debt securities or other instruments issued by any entity (other than debt
securities or other instruments issued or fully guaranteed as to principal and interest by the
United States of America or any agency or instrumentality thereof) if, following such acquisition,
the aggregate market value of all debt securities and instruments issued by such entity held by the
U.S. Asbestos Trust would exceed 2% of the aggregate value of the Trust Assets. Except as
expressly contemplated by or provided for in the Plan, the U.S. Asbestos Trust shall not hold any
debt securities or other instruments issued by any entity (other than debt securities or other
instruments issued or fully guaranteed as to principal and interest by the United States of America
or any agency or instrumentality thereof and other than debt securities or other instruments of
Reorganized Federal-Mogul or any successor to Reorganized Federal-Mogul) to the extent that the
aggregate market value of all securities and instruments issued by such entity held by the U.S.
Asbestos Trust would exceed 5% of the aggregate value of the Trust Assets.




          (f) The U.S. Asbestos Trust shall not acquire or hold any certificates of deposit unless all
publicly held, long-term debt securities, if any, of the financial institution issuing the
certificate of deposit and the holding company, if any, of which such financial institution is a
subsidiary, meet the standards set forth in Section 3.2(b) above.





23









 








          (g) The U.S. Asbestos Trust may acquire and hold any securities or instruments issued by
Reorganized Federal-Mogul or any successor to Reorganized Federal-Mogul, or obtained as proceeds of
litigation or otherwise to resolve disputes, without regard to the limitations set forth in
Subsections (a)-(f) above.




          (h) The U.S. Asbestos Trust shall not acquire or hold any repurchase obligations unless, in
the opinion of the Trustees, they are adequately collateralized.




          (i) The U.S. Asbestos Trust shall not acquire or hold any options.




     3.3 Source of Payments. Subject to the terms of the CIP Agreement, all U.S. Asbestos
Trust expenses and all liabilities with respect to Asbestos Personal Injury Claims shall be payable
solely by the Trustees out of the Trust Assets. None of the Debtors, Reorganized Debtors, or other
Protected Parties, nor the Trustees, the TAC or Future Claimants Representative, or any of their
officers, agents, advisors, or employees shall be liable for the payment of any U.S. Asbestos Trust
expense or any other liability of the U.S. Asbestos Trust; provided, however, that nothing in this
Section 3.3 shall relieve the Trust or the Reorganized Debtors of their obligations under the CIP
Agreement.



SECTION 4




TRUSTEES; DELAWARE TRUSTEE




     4.1 Number. In addition to the Delaware Trustee appointed pursuant to Section 4.11
below, there shall be three (3) Trustees. The initial Trustees shall be those persons named on the
signature page hereof. At their first meeting, the initial Trustees shall designate one of their
number to serve as the Managing Trustee of the U.S. Asbestos Trust, with such administrative



24









 







duties
as the Trustees may determine. The Trustees may change the designation of the individual to serve
as Managing Trustee from time to time as circumstances warrant.



     4.2 Term of Service.



          (a) The initial Trustees named pursuant to Article 4.1 above shall serve the staggered terms
of three (3), four (4) and five (5) years as shown on the signature page hereof. Thereafter each
term of service shall be five (5) years. The initial Trustees shall serve from the Effective Date
until the earliest of (i) the end of his or her term, (ii) his or her death, (iii) his or her
resignation pursuant to Section 4.2(b) below, (iv) his or her removal pursuant to Section 4.2(c)
below, or (v) the termination of the U.S. Asbestos Trust pursuant to Section 7.2 below.




          (b) A Trustee may resign at any time by written notice to the remaining Trustees, the TAC and
the Future Claimants Representative. Such notice shall specify a date when such resignation shall
take place, which shall not be less than 90 days after the date such notice is given, where
practicable.




          (c) A Trustee may be removed by unanimous vote of the Trustees in the event that he or she
becomes unable to discharge his or her duties hereunder due to accident or physical or mental
deterioration, or for other good cause. Good cause shall be deemed to include, without limitation,
any substantial failure to comply with the general administration provisions of Section 2.2 above,
a consistent pattern of neglect and failure to perform or participate in performing the duties of
the Trustees hereunder, or repeated non-attendance at scheduled meetings. Such removal shall
require the approval of the Bankruptcy Court and shall take effect at such time as the Bankruptcy
Court shall determine.




25









 





     4.3 Appointment of Successor Trustees.



          (a) In the event of a vacancy in the position of a Trustee, whether by death, term expiration,
resignation or removal, the remaining Trustees shall consult with the TAC and the Future Claimants
Representative concerning appointment of a successor Trustee (a “Successor Trustee"). The
vacancy shall be filled by the unanimous vote of the remaining Trustees unless a majority of the
TAC or the Future Claimants Representative vetoes the appointment. In the event that the remaining
Trustees cannot agree on a Successor Trustee, or a majority of the TAC or the Future Claimants
Representative vetoes the appointment of the proposed successor Trustee, the Bankruptcy Court shall
make the appointment. Nothing shall prevent the reappointment of a Trustee for an additional term
or terms.




          (b) Immediately upon the appointment of any Successor Trustee, all rights, titles, duties,
powers and authority of the predecessor Trustee hereunder shall be vested in, and undertaken by,
the Successor Trustee without any further act. No Successor Trustee shall be liable personally for
any act or omission of his or her predecessor Trustees.




          (c) Each Successor Trustee shall serve until the earliest of (i) the end of a full term of
five (5) years if the predecessor Trustee completed his or her term, (ii) the end of the remainder
of the term of the Trustee whom he or she is replacing if said predecessor Trustee did not complete
said term, (iii) his or her death, (iv) his or her resignation pursuant to Section 4.2(b) above,
(v) his or her removal pursuant to Section 4.2(c) above, or (vi) the termination of the U.S.
Asbestos Trust pursuant to Section 7.2 below.




     4.4 Liability of Trustees, the Delaware Trustee, Officers and Employees. The
Trustees, the Delaware Trustee, and the individuals identified as Additional Indemnitees in



26









 







Section
2.1(c)(xv) above shall not be liable to the U.S. Asbestos Trust, to any individual holding an
asbestos claim, or to any other person, except for such individual’s own breach of trust committed
in bad faith or willful misappropriation. In addition, the Trustees, the Delaware Trustee, and the
Additional Indemnitees shall not be liable for any act or omission of any other Trustee, the
Delaware Trustee, or Additional Indemnitee unless such person acted with bad faith in the selection
or retention of such other Trustee or Additional Indemnitee.



     4.5 Compensation and Expenses of Trustees and the Delaware Trustee.



          (a) The Trustees shall receive compensation from the U.S. Asbestos Trust for their services as
Trustees in the amount of $75,000 per annum for the Managing Trustee and $60,000 per annum for the
other Trustees, plus a per diem allowance for meetings or other U.S. Asbestos Trust business
performed in the amount of $1,500 for each Trustee. For purposes of the per diem allowance, U.S.
Asbestos Trust business includes, but is not limited to, attendance at meetings of Reorganized
Federal-Mogul’s Board of Directors. For purposes of Section 7.5 below, the Trustees shall
determine the scope and duration of activities that constitute a meeting and, if the Trustees elect
to provide for payment for activities of less than a full day’s duration, may provide for partial
payment of per diem amounts on a proportional basis for activities of less than a full day’s
duration. The per annum and per diem compensation payable to the Trustees hereunder shall be
reviewed every three (3) years and appropriately adjusted for changes in the cost of living. Any
other changes in compensation of the Trustees shall be made subject to the
approval of the Bankruptcy Court. The Delaware Trustee shall be paid from the U.S. Asbestos Trust
an initial fee of $3,500.00 upon entry into this U.S. Asbestos Trust Agreement and an annual
fee of $3,000.00 (USD), the first payment for which shall be due on
December 27, 2007.





27









 








          (b) The U.S. Asbestos Trust will promptly reimburse the Trustees and the Delaware Trustee for
all reasonable out-of-pocket costs and expenses incurred by the Trustees or the Delaware Trustee in
connection with the performance of their duties hereunder.




          (c) The U.S. Asbestos Trust shall include a description of the amounts paid under this
Section 4.5 in the accounts to be filed with the Bankruptcy Court and provided to the TAC, the
Future Claimants Representative, and Reorganized Federal-Mogul pursuant to Section 2.2(c)(i).




     4.6 Indemnification of Trustees and Additional Indemnitees.



          (a) The U.S. Asbestos Trust shall indemnify and defend each Trustee, the Delaware Trustee and
each Additional Indemnitee in the performance of its, his or her duties hereunder to the fullest
extent that a statutory trust organized under the laws of the State of Delaware is from time to
time entitled to indemnify and defend such Person (as defined in the Act) against any and all
liabilities, expenses, claims, damages or losses incurred by or on behalf of it, him or her in the
performance of its, his or her duties. Notwithstanding the foregoing, no Trustee, Delaware Trustee
or Additional Indemnitee shall be indemnified or defended in any way for any liability, expense,
claim, damage or loss for which it, he or she is ultimately liable under Section 4.4 above.




          (b) Any fees and expenses reasonably incurred by or on behalf of a Trustee, the Delaware
Trustee or an Additional Indemnitee in connection with any action, suit or proceeding, whether
civil, administrative or arbitrative, from which it, he or she is indemnified by the U.S. Asbestos


28









 







Trust pursuant to Section 4.6(a) above, including without limitation out-of-pocket fees and
expenses and attorneys’ fees and expenses, shall be paid by the U.S. Asbestos Trust in advance of
the final disposition thereof upon receipt of an undertaking, by or on behalf of the Trustee,
Delaware Trustee or Additional Indemnitee, as the case may be, to repay such amount in the event
that it shall be determined by a Final Order that such Trustee, Delaware Trustee or Additional
Indemnitee is not entitled to be indemnified by the U.S. Asbestos Trust.




          (c) The Trustees may purchase and maintain reasonable amounts and types of insurance on behalf
of an individual who is or was a Trustee, and, if requested, shall purchase insurance on behalf of
the TAC, the Future Asbestos Claimants Representative, and such officers or employees of the TAC,
and Future Asbestos Claimants Representative who are typically insured under standard policy forms
(the “Insured Individuals”), including for liability asserted against or incurred by such
individual in that capacity or arising from his or her status with regard to the U.S. Asbestos
Trust. If so requested, by any Insured Individual, the Trustees shall keep Insured Individuals
continuously insured, to the fullest extent available for errors and omissions, in such total
amounts and with such terms as the Trustees, TAC and Future Asbestos Claimants Representative may
reasonably agree upon from time to time.




     4.7 Trustees’ and the Delaware Trustee Lien. The Trustees, the Delaware Trustee and
the Additional Indemnities shall have a first priority lien upon the Trust Assets to secure the
payment of any amounts payable to them pursuant to Sections 4.5 and 4.6 above.



     4.8 Trustees’ Employment of Experts; Delaware Trustee’s Employment of Counsel.



          (a) The Trustees may, but shall not be required to, retain and/or consult with counsel,
accountants, appraisers, auditors and forecasters, and other parties deemed by the Trustees to be
qualified as experts on the matters submitted to them, and the written opinion of or


29









 







information
provided by any such parties on any matters submitted to them by the Trustees shall be full and
complete authorization and protection in respect of any action taken or not taken by the Trustees
hereunder in good faith and in accordance with the written opinion of or information provided by
any such party.




          (b) The Delaware Trustee shall be permitted to retain counsel only in such circumstances as
required in the exercise of its obligations hereunder and compliance with the advice of such
counsel shall be full and complete authorization and protection for actions taken or not taken by
the Delaware Trustee in good faith in compliance with such advice.




     4.9 Trustees’ Independence. The Trustees shall not, during the term of their service,
hold a financial interest in, act as attorney or agent for, or serve as any other professional for
Reorganized Federal-Mogul. Notwithstanding the foregoing, any Trustee may serve, without any
additional compensation other than the per diem compensation to be paid by the U.S. Asbestos Trust
pursuant to Section 4.5(a) above, as a director of Reorganized Federal-Mogul. No Trustee shall act
as an attorney for any person who holds an asbestos claim. For the avoidance of doubt, this
Section shall not be applicable to the Delaware Trustee.



     4.10 Bond. Neither the Trustees nor the Delaware Trustee shall be required to post
any bond or other form of surety or security unless otherwise ordered by the Bankruptcy Court.



     4.11 Delaware Trustee.



          (a) There shall at all times be a Delaware Trustee. The Delaware Trustee shall satisfy the
requirements of Section 3807(a) of the Act (or any successor section) as in effect from time to
time. If at any time the Delaware Trustee shall cease to be eligible in accordance with the
provisions of this Section 4.11, it shall resign immediately in the manner and with the


30









 







effect
hereinafter specified in Section 4.11(c) below. For the avoidance of doubt, the Delaware Trustee
will only have such rights and obligations as expressly provided by reference to the Delaware
Trustee hereunder no reference in this U.S. Asbestos Trust Agreement to the Trustees shall be
construed to refer to or include the Delaware Trustee.




          (b) The Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware
Trustee have any of the duties and responsibilities, of the Trustees set forth herein. The Delaware
Trustee shall be one of the trustees of the U.S. Asbestos Trust for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Act and for taking such actions as are required
to be taken by a Delaware Trustee under the Act. The duties (including fiduciary duties),
liabilities and obligations of the Delaware Trustee shall be limited to (i) accepting legal process
served on the U.S. Asbestos Trust in the State of Delaware and (ii) the
execution of any certificates required to be filed with the Secretary of State of the State of
Delaware that the Delaware Trustee is required to execute under Section 3811 of the Act and there
shall be no other duties (including fiduciary duties) or obligations, express or implied, at law or
in equity, of the Delaware Trustee.




          (c) The Delaware Trustee shall serve until such time as the Trustees remove the Delaware
Trustee or the Delaware Trustee resigns and a successor Delaware Trustee is appointed by the
Trustees in accordance with the terms of Section 4.11(d) below. The Delaware Trustee may resign at
any time upon the giving of at least 60 days’
advance written notice to the Trustees; provided,
that such resignation shall not become effective unless and until a successor Delaware Trustee
shall have been appointed by the Trustees in accordance with Section 4.11(d) below. If the Trustees
have not appointed a successor Delaware Trustee within such 60-day


31









 







period, the Delaware Trustee may
apply to the Court of Chancery of the State of Delaware for the appointment of a successor Delaware
Trustee.




          (d) Upon the resignation or removal of the Delaware Trustee, the Trustees shall appoint a
successor Delaware Trustee by delivering a written instrument to the outgoing Delaware Trustee.
Any successor Delaware Trustee must satisfy the requirements of Section 3807(a) of the Act (or any
successor section) as in effect from time to time. Any resignation or removal of the Delaware
Trustee and appointment of a successor Delaware Trustee shall not become effective until a written
acceptance of appointment is delivered by the successor Delaware Trustee to the outgoing Delaware
Trustee and the Trustees and any fees and expenses due to the outgoing Delaware Trustee are paid.
Following compliance with the preceding sentence, the successor Delaware Trustee shall become fully
vested with all of the rights, powers, duties and obligations of the outgoing Delaware Trustee
under this U.S. Asbestos Trust Agreement, with like effect as if originally named as Delaware
Trustee, and the outgoing Delaware Trustee shall be discharged of its duties and obligations under
this U.S. Asbestos Trust Agreement.




SECTION 5




TRUST ADVISORY COMMITTEE




     5.1 Members. The TAC shall consist of four (4) members, who shall initially be the
persons named on the signature page hereof.



     5.2 Duties. The members of the TAC shall serve in a fiduciary capacity representing
all holders of present Asbestos Personal Injury Claims. The Trustees must consult with the TAC on
matters identified in Section 2.2(e) above and in other provisions herein, and must obtain the



32









 







consent of the TAC on matters identified in Section 2.2(f) above. Where provided in the U.S. TDP,
certain other actions by the Trustees are also subject to the consent of the TAC.



     5.3 Term of Office.



          (a) A member of the TAC shall serve until the earliest of (i) his or her death, (ii) his or
her resignation pursuant to Section 5.3(b) below, (iii) his or her removal pursuant to Section
5.3(c) below, or (iv) termination of the U.S. Asbestos Trust pursuant to Section 7.2 below.




          (b) A member of the TAC may resign at any time by written notice to the other members of the
TAC, the Trustees and the Future Claimants Representative. Such notice shall specify a date when
such resignation shall take effect, which shall not be less than ninety (90) days after the date
such notice is given, where practicable.




          (c) A member of the TAC may be removed in the event that he or she becomes unable to discharge
his or her duties hereunder due to accident, physical deterioration, mental incompetence, or a
consistent pattern of neglect and failure to perform or to participate in performing the duties of
such member hereunder, such as repeated non-attendance at scheduled meetings, or other good cause.
Such removal shall be made at the recommendation of the remaining members of the TAC with the
approval of the Bankruptcy Court.




     5.4 Appointment of Successor.



          (a) In the event of a vacancy caused by the resignation or death of a TAC member, his or her
successor shall be pre-selected by the resigning or deceased TAC member, or by his or her law firm
in the event that such member has not pre-selected a successor. If neither


33









 







the member nor the law
firm exercises the right to make such a selection, the successor shall be chosen by a majority vote
of the remaining TAC members. If a majority of the remaining TAC members cannot agree, the
Bankruptcy Court shall appoint the successor. In the event of a vacancy caused by the removal of a
TAC member, the remaining members of the TAC by majority vote shall name the successor. If the
majority of the remaining members of the TAC cannot reach agreement, the Bankruptcy Court shall
appoint the successor.




          (b) Each successor TAC member shall serve until the earliest of (i) his or her death,
(ii) his or her resignation pursuant to Section 5.3(b) above, (iii) his or her removal pursuant to
Section 5.3(c) above, or (iv) the termination of the U.S. Asbestos Trust pursuant to Section 7.2
below.




     5.5 TAC’s Employment of Professionals.



          (a) The TAC may but is not required to retain and/or consult counsel, accountants, appraisers,
auditors, forecasters, experts, and financial and investment advisors, and such other parties
deemed by the TAC to be qualified as experts on matters submitted to the TAC (the “TAC
Professionals”). The TAC and the TAC Professionals shall at all times have complete access
to the U.S. Asbestos Trust’s officers, employees and agents, as well as to the Professionals
retained by the U.S. Asbestos Trust, and shall also have complete access to all information
generated by them or otherwise available to the U.S. Asbestos Trust or the Trustees. In the
absence of the TAC’s gross negligence in selecting a TAC Professional, the written opinion of or
information provided by any TAC Professional deemed by the TAC to be qualified as an expert on the
particular matter submitted to the TAC shall be full and complete


34









 







authorization and protection in
support of any action taken or not taken by the TAC in good faith and in accordance with the
written opinion of or information provided by the TAC Professional.




          (b) The U.S. Asbestos Trust shall promptly reimburse, or pay directly if so instructed by the
TAC, the TAC for all reasonable fees and costs associated with the TAC’s employment of legal
counsel pursuant to this provision in connection with the TAC’s
performance of its duties hereunder. The U.S. Asbestos Trust shall also promptly reimburse, or pay
directly if so instructed by the TAC, the TAC for all reasonable fees and costs associated with the
TAC’s employment of any other TAC Professional pursuant to this provision in connection with the
TAC’s performance of its duties hereunder; provided, however, that (i) the TAC has first submitted
to the U.S. Asbestos Trust a written request for such reimbursement setting forth the reasons (A)
why the TAC desires to employ the TAC Professional, and (B) why the TAC cannot rely on
Professionals retained by the U.S. Asbestos Trust to meet the need of the TAC for such expertise or
advice, and (ii) the U.S. Asbestos Trust has approved the TAC’s request for reimbursement in
writing. If the U.S. Asbestos Trust agrees to pay for the TAC Professional, such reimbursement
shall be treated as an U.S. Asbestos Trust Expense. If the U.S. Asbestos Trust declines to pay for
the TAC Professional, it must set forth its reasons in writing. If the TAC still desires to employ
the TAC Professional at the U.S. Asbestos Trust’s expense, the TAC and the Trustees shall resolve
their dispute pursuant to Section 7.14 below.




     5.6 Compensation and Expenses of TAC.



          The members of the TAC shall receive compensation from the U.S. Asbestos Trust for their
services as TAC members in the form of a reasonable hourly rate set by the Trustees for attendance
at meetings or other conduct of U.S. Asbestos Trust business. The


35









 







members of the TAC shall also be
reimbursed promptly for all reasonable out-of-pocket costs and expenses incurred by the TAC members
in connection with the performance of their duties hereunder. Such reimbursement or direct payment
shall be deemed an U.S. Asbestos Trust expense. The U.S. Asbestos Trust shall include a
description of the amounts paid under this Section 5.6 in the accounts to be filed with the
Bankruptcy Court and provided to the Trustees, the Future Claimants Representative, and Reorganized
Federal-Mogul pursuant to Section 2.2(c)(i).




     5.7 Procedures for Consultation with and Obtaining the Consent of the TAC.



          (a) Consultation Process.




               (i) In the event the Trustees are required to consult with the TAC pursuant to
Section 2.2(e)
above or on other matters as provided herein, the Trustees shall provide the TAC with written
advance notice of the matter under consideration, and with all relevant information concerning the
matter as is reasonably practicable under the circumstances. The Trustees shall also provide the
TAC with such reasonable access to Professionals and other experts retained by the U.S. Asbestos
Trust and its staff (if any) as the TAC may reasonably request during the time that the Trustees
are considering such matter, and shall also provide the TAC the opportunity, at reasonable times
and for reasonable periods of time, to discuss and comment on such matter with the Trustees.



               (ii) The Trustees shall take into consideration the time required for the TAC, if its members
so wish, to engage and consult with its own independent financial or investment advisors as to such
matter.



36









 





          (b) Consent Process.




               (i) In the event the Trustees are required to obtain the consent of the TAC pursuant to
Section 2.2(f) above, the Trustees shall provide the TAC with a written notice stating that their
consent is being sought pursuant to that provision, describing in detail the nature and scope of
the action the Trustees propose to take, and explaining in detail the reasons why the Trustees
desire to take such action. The Trustees shall provide the TAC as much relevant additional
information concerning the proposed action as is reasonably practicable under the circumstances.
The Trustees shall also provide the TAC with such reasonable access to Professionals and other
experts retained by the U.S. Asbestos Trust and its staff (if any) as the TAC may reasonably
request during the time that the Trustees are considering such action, and shall also provide the
TAC the opportunity, at reasonable times and for reasonable periods of time, to discuss and comment
on such action with the Trustees.



               (ii) The TAC must consider in good faith and in a timely fashion any request for its consent
by the Trustees, and must in any event advise the Trustees in writing of its consent or its
objection to the proposed action within 30 days of receiving the original request for consent from
the Trustees. The TAC may not withhold its consent unreasonably. If the TAC decides to withhold
its consent, it must explain in detail its objections to the proposed action. If the TAC does not
advise the Trustees in writing of its consent or its objections to the action within 30 days of
receiving notice regarding such request, the TAC’s consent to the proposed actions shall be deemed
to have been affirmatively granted.



               (iii) If, after following the procedures specified in this Section 5.7(b), the TAC
continues
to object to the proposed action and to withhold its consent to the proposed



37









 







action, the Trustees
and/or the TAC shall resolve their dispute pursuant to Section 7.14. However, the burden of proof
with respect to the validity of the TAC’s objection and withholding of its consent shall be on the
TAC.



SECTION 6




THE FUTURE CLAIMANTS REPRESENTATIVE




     6.1 Duties. The Future Claimants Representative shall be the individual identified on
the signature pages hereto. He or she shall serve in a fiduciary capacity, representing the
interests of the holders of future Asbestos Personal Injury Claims for the purpose of protecting
the rights of such persons. The Trustees must consult with the Future Claimants Representative on
matters identified in Section 2.2(e) above and on certain other matters provided herein, and must
obtain the consent of the Future Claimants Representative on matters identified in Section 2.2(f)
above. Where provided in the U.S. TDP, certain other actions by the Trustees are also subject to
the consent of the Future Claimants Representative.



     6.2 Term of Office.



          (a) The Future Claimants Representative shall serve until the earlier of (i) his or her death,
(ii) his or her resignation pursuant to Section 6.2(b) below, (iii) his or her removal pursuant to
Section 6.2(c) below, or (iv) the termination of the U.S. Asbestos Trust pursuant to Section 7.2
below.




          (b) The Future Claimants Representative may resign at any time by written notice to the
Trustees. Such notice shall specify a date when such resignation shall take effect,


38









 







which shall
not be less than ninety (90) days after the date such notice is given, where practicable.




          (c) The Future Claimants Representative may be removed by the Bankruptcy Court in the event he
or she becomes unable to discharge his or her duties hereunder due to accident, physical
deterioration, mental incompetence, or a consistent pattern of neglect and failure to perform or to
participate in performing the duties hereunder, such as repeated non-attendance at scheduled
meetings.




     6.3 Appointment of Successor. A vacancy caused by death or resignation shall be filled
with an individual nominated prior to the effective date of the resignation or the death by the
resigning or deceased Future Claimants Representative, and a vacancy caused by removal of the
Future Claimants Representative shall be filled with an individual nominated by the Trustees in
consultation with the TAC, subject to the approval of the Bankruptcy Court.. In the event a
majority of the Trustees cannot agree, or a nominee has not been pre-selected, the successor shall
be chosen by the Bankruptcy Court.



     6.4 Future Claimants Representative’s Employment of Professionals.



          (a) The Future Claimants Representative may but is not required to retain and/or consult
counsel, accountants, appraisers, auditors, forecasters, experts, and financial and investment
advisors, and such other parties deemed by the Future Claimants Representative to be qualified as
experts on matters submitted to the Future Claimants Representative (the “FCR
Professionals”). The Future Claimants Representative and his or her experts shall at all
times have complete access to the U.S. Asbestos Trust’s officers, employees and agents, as well as
to the Professionals retained by the U.S. Asbestos Trust, and shall also have complete access to
all


39









 







information generated by them or otherwise available to the U.S. Asbestos Trust or the
Trustees. In the absence of gross negligence, the written opinion of or information provided by
any FCR Professional deemed by the Future Claimants Representative to be qualified as an expert on
the particular matter submitted to the Future Claimants Representative shall be full and complete
authorization and protection in support of any action taken or not taken by the Future Claimants
Representative in good faith and in accordance with the written opinion of or information provided
by the FCR Professional.




          (b) The U.S. Asbestos Trust shall promptly reimburse, or pay directly if so instructed, the
Future Claimants Representative for all reasonable fees and costs associated with the Future
Claimants Representative’s employment of legal counsel pursuant to this provision in connection
with the Future Claimants Representative’s performance of his or her duties hereunder. The U.S.
Asbestos Trust shall also promptly reimburse, or pay directly if so instructed, the Future
Claimants Representative for all reasonable fees and costs associated with the Future Claimants
Representative’s employment of any other FCR Professionals pursuant to this provision in connection
with the Future Claimants Representative’s performance of his or her duties hereunder; provided,
however, that (i) the Future Claimants Representative has first submitted to the U.S. Asbestos
Trust a written request for such reimbursement setting forth the reasons (A) why the Future
Claimants Representative desires to employ the FCR Professional,
and (B) why the Future Claimants Representative cannot rely on Professionals retained by the U.S.
Asbestos Trust to meet the need of the Future Claimants Representative for such expertise or
advice, and (ii) the U.S. Asbestos Trust has approved the Future Claimants Representative’s request
for reimbursement in writing. If the U.S.


40









 







Asbestos Trust agrees to pay for the FCR’s Professional,
such reimbursement shall be treated as an U.S. Asbestos Trust Expense. If the U.S. Asbestos Trust
declines to pay for the FCR’s Professional, it must set forth its reasons in writing. If the
Future Claimants Representative still desires to employ the FCR Professional at U.S. Asbestos Trust
expense, the Future Claimants Representative and the Trustees shall resolve their dispute pursuant
to Section 7.14 below.




     6.5 Compensation and Expenses of the Future Claimants Representative.



          (a) The Future Claimants Representative shall receive compensation from the U.S. Asbestos
Trust in the form of the Future Claimants Representative’s normal hourly rate for services
performed. The U.S. Asbestos Trust will promptly reimburse the Future Claimants Representative for
all reasonable out-of-pocket costs and expenses incurred by the Future Claimants Representative in
connection with the performance of his or her duties hereunder. Such reimbursement or direct
payment shall be deemed an U.S. Asbestos Trust expense. The U.S. Asbestos Trust shall include a
description of the amounts paid under this Section 6.5 in the accounts to be filed with the
Bankruptcy Court and provided to the Trustees, the Future Claimants Representative, and Reorganized
Federal-Mogul pursuant to Section 2.2(c)(i).




     6.6 Procedures for Consultation with and Obtaining the Consent of the Future Claimants
Representative.



          (a) Consultation Process.




               (i) In the event the Trustees are required to consult with the Future Claimants Representative
pursuant to Section 2.2(e) above or on any other matters specified herein, the Trustees shall
provide the Future



41









 







Claimants Representative with written advance notice of the matter under
consideration, and with all relevant information concerning the matter as is reasonably practicable
under the circumstances. The Trustees shall also provide the Future Claimants Representative with
such reasonable access to Professionals and other experts retained by the U.S. Asbestos Trust and
its staff (if any) as the Future Claimants Representative may reasonably request during the time
that the Trustees are considering such matter, and shall also provide the Future Claimants
Representative the opportunity, at reasonable times and for reasonable periods of time, to discuss
and comment on such matter with the Trustees.



               (ii) The Trustees shall take into consideration the time required for the Future Claimants
Representative, if he or she so wishes, to engage and consult with his or her own independent
financial or investment advisors as to such matter.



     (b) Consent Process.



               (i) In the event the Trustees are required to obtain the consent of the Future Claimants
Representative pursuant to Section 2.2(f) above, the Trustees shall provide the Future Claimants
Representative with a written notice stating that his or her consent is being sought pursuant to
that provision, describing in detail the nature and scope of the action the
Trustees propose to take, and explaining in detail the reasons why the Trustees desire to take
such action. The Trustees shall provide the Future Claimants Representative as much relevant
additional information concerning the proposed action as is reasonably practicable under the
circumstances. The Trustees shall also provide the Future Claimants Representative with such
reasonable access to Professionals and other experts retained by the U.S. Asbestos Trust and its
staff (if any) as the Future Claimants Representative may reasonably request during the time that
the Trustees are considering such action, and shall also provide the Future Claimants
Representative the opportunity, at reasonable times and for reasonable periods of time, to discuss
and comment on such action with the Trustees.



42









 





               (ii) The Future Claimants Representative must consider in good faith and in a timely fashion
any request for his or her consent by the Trustees, and must in any event advise the Trustees in
writing of his or her consent or objection to the proposed action within 30 days of receiving the
original request for consent from the Trustees. The Future Claimants Representative may not
withhold his or her consent unreasonably. If the Future Claimants Representative decides to
withhold consent, he or she must explain in detail his or her objections to the proposed action.
If the Future Claimants Representative does not advise the Trustees in writing of his or her
consent or objections to the proposed action within 30 days of receiving the notice from the
Trustees regarding such consent, the Future Claimants Representative’s consent shall be deemed to
have been affirmatively granted.



               (iii) If, after following the procedures specified in this Section 5.7(b), the Future
Claimants Representative continues to object to the proposed action and to withhold its consent to
the proposed action, the Trustees and/or the Future Claimants Representative shall resolve their
dispute pursuant to Section 7.14. However, the burden of proof with respect to the validity of the
Future Claimants Representative’s objection and withholding of his or her consent shall be on the
Future Claimants Representative.



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SECTION 7




GENERAL PROVISIONS




     7.1 Irrevocability. The U.S. Asbestos Trust is irrevocable.



     7.2 Termination.



          (a) The U.S. Asbestos Trust shall automatically terminate on the date ninety (90) days after
the first to occur of the following events (the “Termination Date”):




               (i) the Trustees decide to terminate the U.S. Asbestos Trust because (A) they deem it
unlikely
that new Asbestos Personal Injury Claims will be filed against the U.S. Asbestos Trust, (B) all
Asbestos Personal Injury Claims duly filed with the U.S. Asbestos Trust have been liquidated and
paid to the extent provided in this U.S. Asbestos Trust Agreement and the U.S. TDP or disallowed by
a final, non-appealable order, to the extent possible based upon the funds available through the
Plan, and (C) twelve (12) consecutive months have elapsed during which no new Asbestos Personal
Injury Claim has been filed with the U.S. Asbestos Trust; or



               (ii) if the Trustees have procured and have in place irrevocable insurance policies and have
established claims handling agreements and other necessary arrangements with suitable third parties
adequate to discharge all expected remaining obligations and expenses of the U.S. Asbestos Trust in
a manner consistent with this U.S. Asbestos Trust Agreement and the U.S. TDP, the date on which the
Bankruptcy Court enters an order approving such insurance and other arrangements and such order
becomes a Final Order; or



44









 





               (iii) to the extent that any rule against perpetuities shall be deemed applicable to the U.S.
Asbestos Trust, twenty-one (21) years less ninety-one (91) days pass after the death of the last
survivor of all of the descendants of Joseph P. Kennedy, Sr., of Massachusetts, father of the late
President John F. Kennedy, living on the date hereof.



          (b) On the Termination Date, after payment of all the U.S. Asbestos Trust’s liabilities have
been provided for, all monies remaining in the U.S. Asbestos Trust estate shall be given to such
organization(s) exempt from federal income tax under Section 501(c)(3) of the Internal Revenue
Code, which tax-exempt organization(s) shall be selected by the Trustees using their reasonable
discretion; provided, however, that (i) if practicable, the activities of the selected tax-exempt
organization(s) shall be related to the treatment of, research on, or the relief of suffering of
individuals suffering from asbestos related lung disorders, and (ii) the tax-exempt organization(s)
shall not bear any relationship to Reorganized Federal-Mogul within the meaning of Section
468B(d)(3) of the Internal Revenue Code. Notwithstanding any contrary provision of the Plan and
related documents, this Section 7.2(b) cannot be modified or amended.




     7.3 Amendments. The Trustees, after consultation with the TAC and the Future
Claimants Representative, and subject to the consent of the TAC and the Future Claimants
Representative, may modify or amend this U.S. Asbestos Trust Agreement; provided, however, that the
Trustees must also obtain the prior express written consent of the Lead Insurer (as that term is
defined in the CIP Agreement), as provided in the CIP Agreement, in order to modify or amend this
U.S. Asbestos Trust Agreement with respect to the Fel-Pro Subfund, the Vellumoid Subfund, Fel-Pro
Claims, Vellumoid Claims or Federal-Mogul Asbestos Claims (as that term is defined in the CIP
Agreement) encompassed by the CIP Agreement. The Trustees, after consultation with the TAC and the
Future Claimants Representative, and subject to the consent



45









 







of the TAC and the Future Claimants
Representative, may also modify or amend the U.S. TDP; provided, however, that the Trustees must
also obtain the prior express written consent of the Lead Insurer (as that term is defined in the
CIP Agreement), as provided in the CIP Agreement, in order to modify or amend this U.S. Asbestos
Trust Agreement with respect to the Fel-Pro Subfund, the Vellumoid Subfund, Fel-Pro Claims,
Vellumoid Claims or Federal-Mogul Asbestos Claims (as that term is defined in the CIP Agreement)
encompassed by the CIP Agreement, and provided further that no amendment to the U.S. TDP shall be
inconsistent with the limitations on amendments provided therein, and, in particular, the
provisions limiting amendment of the Claims Payment Ratio set forth in Section 2.5 of the U.S. TDP
and of the Payment Percentage set forth in Section 4.2 of the U.S. TDP. Any modification or
amendment made pursuant to this Article must be done in writing, and must be described in the
annual report to be filed by the U.S. Asbestos Trust with the Bankruptcy Court pursuant to Section
2.2(c)(i). Notwithstanding anything contained in this U.S. Asbestos Trust Agreement to the
contrary, neither this U.S. Asbestos Trust Agreement, the U.S. Asbestos Trust Bylaws, the U.S. TDP,
nor any document annexed to the foregoing shall be modified or amended in any way that could
jeopardize, impair,
or modify the applicability of Section 524(g) of the Bankruptcy Code, the efficacy or
enforceability of the injunction entered thereunder, or the U.S. Asbestos Trust’s qualified
settlement fund status under Section 468B of the Internal Revenue Code, or any of the indemnity
obligations of the Trust provided under the Plan.



     7.4 Procedures for Obtaining the Consent of the Lead Insurer. In the event the
Trustees are required to obtain the express written consent of the Lead Insurer pursuant to the
terms of the U.S. TDP or this agreement, the Trustees shall follow the Consent Process set forth in
Section 5.7(b) (describing the Consent Process for the TAC) and Section 6.6(b) (describing



46









 







the
Consent Process for the Future Claimants’ Representative) and 7.14 (describing Dispute Resolution).



     7.5 Meetings. The Trustees, the TAC, and the Future Claimants Representative, shall
be deemed to have attended a meeting in the event such person spends at least four (4) hours of the
day conferring, in person or by telephone conference call, on U.S. Asbestos Trust matters with the
TAC, the Future Claimants Representative, or Trustees, as applicable. A Trustee shall also be
deemed to have attended a meeting in the event he or she spends at least four (4) hours of the day
engaging in activities related to Reorganized Federal-Mogul, including attendance at its Board of
Directors meetings. The Trustees, the TAC and the Future Claimants Representative shall have
discretion to determine whether a meeting, as described herein, occurred for purposes of Sections
4.5, 5.6, and 6.5 above.



     7.6 Severability. Should any provision in this U.S. Asbestos Trust Agreement be
determined to be unenforceable, such determination shall in no way limit or affect the
enforceability and operative effect of any and all other provisions of this U.S. Asbestos Trust
Agreement.



     7.7 Notices. Notices to persons asserting claims shall be given by first class mail,
postage prepaid, at the address of such person, or, where applicable, such person’s Future
Claimants Representative, in each case as provided on such person’s claim form submitted to the
U.S. Asbestos Trust with respect to his or her U.S. Asbestos Trust Claim.



           (a) Any notices or other communications required or permitted hereunder to the following
parties shall be in writing and delivered at the addresses designated below, or sent by telex,
telecopy or facsimile pursuant to the instructions listed below, or mailed by registered



47









 







or
certified mail, return receipt requested, postage prepaid, addressed as follows, or to such other
address or addresses as may hereafter be furnished in writing to each of the other parties listed
below in compliance with the terms hereof.



To the U.S. Asbestos Trust through the Trustees:



Edward D. Robertson, Esq.

Bartimus, Frickleton, Robertson & Gorney, P.C.

715 Swifts Highway

Jefferson City, MO 65101




Stephen M. Snyder, Esq.

Snyder Miller & Orton, LLP

111 Sutter Street, Suite 1950

San Francisco, CA 94104




Kirk P. Watson, Esq.

Hughes & Luce, LLP

111 Congress Avenue, Suite 900

Austin, Texas 78701




With a copy to Counsel:




Stanley E. Levine, Esq.

1700 Grant Building

Pittsburgh, PA 15219




Marla R. Eskin, Esq.

800 North King Street, Suite 300

Wilmington, DE 19801




To the Delaware Trustee:




Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, DE 19890




48









 





To Reorganized Federal-Mogul:




Federal-Mogul Corporation

Attn: General Counsel

26555 Northwestern Highway

Southfield, MI 48034

Telephone: (248) 354-7055

Facsimile: (248) 354-8103




With a copy to Counsel:




Sidley Austin, LLP

James F. Conlan, Esq.

Larry J. Nyhan, Esq.

Kenneth P. Kansa, Esq.

One South Dearborn Street

Chicago, IL 60603

Telephone: (312) 853-7000

Facsimile: (312) 853-7036




To the TAC:




Perry Weitz, Esq.

Weitz & Luxenberg, PC

180 Maiden Lane

New York, NY 10038

Telephone: 212-558-5500

Facsimile: 212-344-0994




Russell W. Budd, Esq.

Baron & Budd, PC

3102 Oak Lawn Avenue

Suite 1100

Dallas, TX 75219

Telephone: 214-521-3605

Facsimile: 214-520-1181




Steven Kazan, Esq.

Kazan, McClain, Edises, Abrams, Fernandez, Lyons & Farrise

171 12th Street, Third Floor

Oakland, CA 94607

Telephone: 510-465-7728 ext.1055




49









 





Facsimile: 510-835-4913




Joseph F. Rice, Esq.

Motley Rice LLC

28 Bridgeside Blvd., PO Box 1792

Mt. Pleasant, SC 29465

Telephone: 843-216-9159

Facsimile: 843-216-9290




With a copy to Counsel:




Elihu Inselbuch, Esq.

Ann C. McMillan, Esq.

Peter Van N. Lockwood, Esq.

Caplin & Drysdale, Chartered

375 Park Avenue, 35th Floor

New York, NY 10152

Telephone: (212) 319-7125

Telephone: (202) 862-5080

Telephone: (202) 862-5065

Facsimile: (212) 644-6755




To the Future Claimants Representative:




Eric D. Green, Esq.

Resolutions, LLC

222 Berkeley Street, Suite 1060

Boston, MA 02116




With a copy to Counsel:




Edwin J. Harron, Esq.

Young Conaway Stargatt & Taylor LLP

The Brandywine Building

1000 West Street, 17th Floor

P.O. Box 391

Wilmington, DE 19899-0391

Telephone: (302) 571-6600

Facsimile: (302) 571-1253




50









 





          (b) All such notices and communications if mailed shall be effective when physically delivered
at the designated addresses or, if electronically transmitted, when the communication is received
at the designated addresses and confirmed by the recipient by return transmission.




     7.8 Successors and Assigns. The provisions of this U.S. Asbestos Trust Agreement
shall be binding upon and inure to the benefit of Federal-Mogul, the other Protected Parties, the
U.S. Asbestos Trust, the Trustees, except that neither any of the Protected Parties, the U.S.
Asbestos Trust and the Trustees nor Reorganized Federal-Mogul may assign or otherwise transfer any
of its, or their, rights or obligations under this U.S. Asbestos Trust Agreement whether
voluntarily or involuntarily, directly or indirectly, except by will or under the laws of descent
and distribution; provided, however, that nothing in this Section 7.8 shall prohibit or limit any
action by except, in the case of the U.S. Asbestos Trust and the Trustees, as contemplated by
Section 2.1 above.



     7.9 Limitation on Claim Interests for Securities Laws Purposes. Asbestos Personal
Injury Claims, and any interests therein (a) shall not be assigned, conveyed, hypothecated, pledged
or otherwise transferred, voluntarily or involuntarily, directly or indirectly, except by will or
under the laws of descent and distribution; (b) shall not be evidenced by a certificate or other
instrument; (c) shall not possess any voting rights; and (d) shall not be entitled to receive any
dividends or interest; provided, however, that clause (a) of this Section 7.9 shall not apply to
the holder of a claim that is subrogated to a U.S. Asbestos Trust Claim as a result of its
satisfaction of such U.S. Asbestos Trust Claim.



51









 





     7.10 Entire Agreement; No Waiver. The entire agreement of the parties relating to the
subject matter of this U.S. Asbestos Trust Agreement is contained herein and in the documents
referred to herein, and this U.S. Asbestos Trust Agreement and such documents supersede any prior
oral or written agreements concerning the subject matter hereof. No failure to exercise or delay
in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege hereunder preclude any further
exercise thereof or of any other right, power or privilege. The rights and remedies herein
provided are cumulative and are not exclusive of rights under law or in equity.



     7.11 Headings. The headings used in this U.S. Asbestos Trust Agreement are inserted
for convenience only and do not constitute a portion of this U.S. Asbestos Trust Agreement, nor in
any manner affect the construction of the provisions of this U.S. Asbestos Trust Agreement.



     7.12 Governing Law. This U.S. Asbestos Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard to Delaware
conflict of law principles.



     7.13 Federal-Mogul’s Representations and Cooperation. Federal-Mogul, on behalf of
itself and its subsidiaries, is hereby authorized to take any action required of a beneficial
owner, as defined in the Act, in connection with this U.S. Asbestos Trust Agreement. The Debtors
and Reorganized Debtors agree to cooperate in implementing the goals and objectives of this U.S.
Asbestos Trust.



     7.14 Dispute Resolution. Any disputes that arise under this U.S. Asbestos Trust
Agreement or under the U.S. TDP shall be resolved by submission of the matter to an alternative
dispute resolution (“ADR”) process mutually agreeable to the parties involved except that
this



52









 







ADR procedure shall not apply to any disputes between the Trust and any Pneumo Protected
Party. Should any party to the ADR process be dissatisfied with the decision of the arbitrator(s),
that party may apply to the Bankruptcy Court for a judicial determination of the matter. In either
case, if the dispute arose pursuant to the consent provision set forth in Section 5.7(b) (in the
case of the TAC) or Section 6.6(b) (in the case of the Future Claimants Representative), the burden
of proof shall be on the party or parties who withheld consent to show that the objection was
valid. Should the dispute not be resolved by ADR process within thirty (30) days after submission,
the parties are relieved of the requirement to pursue ADR prior to application to the Bankruptcy
Court. Notwithstanding anything else herein contained, to the extent any provision of this U.S.
Asbestos Trust Agreement is inconsistent with any provision of the Plan or the U.S. TDP, the Plan
or the U.S. TDP shall control.



     7.15 Enforcement and Administration. The provisions of this U.S. Asbestos Trust
Agreement and the U.S. TDP attached hereto shall be enforced by the Bankruptcy Court pursuant to
the Plan. The parties hereby further acknowledge and agree that the Bankruptcy Court shall have
exclusive jurisdiction over the settlement of the accounts of the Trustees and over any disputes
hereunder not resolved by alternative dispute resolution in accordance with Section 7.13 above.



     7.16 Effectiveness. This U.S. Asbestos Trust Agreement shall not become effective
until it has been executed and delivered by all the parties hereto.



     7.17 Counterpart Signatures. This U.S. Asbestos Trust Agreement may be executed in
any number of counterparts, each of which shall constitute an original, but such counterparts shall
together constitute but one and the same instrument.



53









 





     IN WITNESS WHEREOF, the parties have executed this U.S. Asbestos Trust Agreement this 27th day
of December, 2007.



	 	 	 	 	 
	 	Federal-Mogul

 	 
	 	By:  	/s/  Robert L. Katz
 	 
	 	Name:  	Robert L. Katz 	 
	 	Title:  	Senior Vice President and General Counsel 	 
	 
	 	Wilmington Trust Company, Delaware Trustee

 	 
	 	By:  	/s/ Erik E. Overcash
 	 
	 	Name:  	Erik E. Overcash 	 
	 	Title:  	Financial Services Officer 	 
	 
	 	TRUSTEES

 	 
	 	/s/ Edward D. Robertson, Jr.
 	 
	 	Edward D. Robertson, Jr. (Five Year Term) 	 
	 	 	 
	 
	 	 	 
	 	                                                     /s/ Stephen M. Snyder
 	 
	 	Stephen M. Snyder (Four Year Term) 	 
	 	 	 
	 
	 	 	 
	 	                                                     /s/ Kirk Watson
 	 
	 	Kirk Watson (Three Year Term) 	 
	 	 	 
	 
	 	ASBESTOS CREDITORS COMMITTEE

 	 
	 	By:  	/s/ Peter Lockwood
 	 
	 	 	Peter Lockwood 	 
	 	 	 	 



54









 






	 	 	 	 	 



	 	 	 	 	 
	 	TRUST ADVISORY COMMITTEE

 	 
	 	/s/ Russell W. Budd
 	 
	 	Russell W. Budd 	 
	 	 	 
	 
	 	 	 
	 	                                                     /s/ Steven Kazan
 	 
	 	Steven Kazan 	 
	 	 	 
	 
	 	 	 
	 	                                                     /s/ Joseph F. Rice
 	 
	 	Joseph F. Rice 	 
	 	 	 
	 
	 	 	 
	 	                                                     /s/ Perry Weitz
 	 
	 	Perry Weitz 	 
	 	 	 
	 
	 	

FUTURE CLAIMANTS REPRESENTATIVE

 	 
	 	/s/ Eric D. Green
 	 
	 	Eric D. Green 	 
	 	 	 
	 




55