Document:

EXHIBIT 10.17

                              PERFORMANCE GUARANTY

           This PERFORMANCE GUARANTY (this "Performance Guaranty"), dated as of
August 15, 2002, made by FOSTER WHEELER LTD., a Bermuda limited company (the
"Guarantor"), in favor of FOOTHILL CAPITAL CORPORATION, a California
corporation, as arranger and administrative agent for the Lenders referred to
below (in such capacity, the "Agent"). Capitalized terms not otherwise defined
herein that are defined in the Loan Agreement referred to below shall when used
herein have the meanings specified in the Loan Agreement.

                             PRELIMINARY STATEMENTS:

           Foster Wheeler Funding LLC, a Delaware limited liability company (the
"Borrower"), the lenders that are signatories thereto (each a "Lender" and
collectively, the "Lenders") and the Agent are entering into a Loan and Security
Agreement, dated as of August 15, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Loan Agreement"), pursuant to which the
Borrower may borrow certain revolving loans in an aggregate principal amount not
to exceed $40,000,000 in order to finance the purchase of the Subject Accounts
pursuant to the Purchase Agreement referred to below.

           Concurrently with the entering into of the Loan Agreement, Foster
Wheeler Constructors, Inc., a Delaware corporation ("FW Constructors"), Foster
Wheeler Energy Corporation, a Delaware corporation ("FW Energy"), Foster Wheeler
Energy Services, Inc., a California corporation ("FW Energy Services"), Foster
Wheeler Power Group, Inc., a Delaware corporation ("FW Power"), Foster Wheeler
USA Corporation, a Delaware corporation ("FW USA"), Foster Wheeler Zack, Inc., a
Delaware corporation ("FW Zack", and together with FW Constructors, FW Energy,
FW Energy Services, FW Power and FW USA collectively, the "Originators" and
individually, an "Originator"), Foster Wheeler Capital & Finance Corporation, a
Delaware corporation ("Foster Wheeler Capital"), as the initial Servicer (in
such capacity, the "Servicer"), and the Borrower, are entering into a Purchase,
Sale and Contribution Agreement, dated as of August 15, 2002 (as amended,
supplemented or otherwise modified from time to time, the "Purchase Agreement"),
pursuant to which the Originators have and will sell and/or contribute
Receivables and Related Rights (as defined in the Purchase Agreement) to the
Borrower.

           Concurrently with the entering into of the Loan Agreement and the
Purchase Agreement, the Borrower, the Agent and the Servicer are entering into
the Servicing Agreement, dated as of August 15, 2002 (as amended, supplemented
or otherwise modified from time to time, the "Servicing Agreement"), pursuant to
which Foster Wheeler Capital will be engaged as the Servicer of the Receivables
and Related Rights.

           NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as
follows:

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           SECTION 1. Unconditional Undertaking; Enforcement. (a) The Guarantor
hereby unconditionally and irrevocably undertakes and agrees with the Agent, for
the benefit of the Agent and the Lenders, that, in the event that the Servicer
or any Originator shall fail in any manner whatsoever to perform or observe any
of the terms, covenants, conditions, agreements and undertakings to be performed
or observed by Foster Wheeler Capital in its capacity as Servicer or any
Originator under the Purchase Agreement or the Servicing Agreement in accordance
with the terms thereof (all such terms, covenants, conditions, agreements and
undertakings on the part of the Servicer or any Originator to be performed or
observed being collectively called the "Guaranteed Obligations"), when the same
shall be required to be performed or observed under such agreement, then the
Guarantor shall guarantee and ensure that the Servicer, the Originators, or the
Guarantor or some other Person duly and punctually performs and observes each
Guaranteed Obligation. It shall not be a condition to the accrual of the
obligation of the Guarantor hereunder to guarantee and ensure the performance or
observance of any of the Guaranteed Obligations that the Agent shall have first
made any request of or demand upon or given any notice to the Guarantor or any
other Person or have instituted any action or proceeding against the Guarantor
or any other Person in respect thereof.

           (b) The Agent may proceed to enforce the obligations of the Servicer
or any Originator, as the case may be, under this Section 1 after their failure
to perform such obligations in accordance with the terms of the Purchase
Agreement or Servicing Agreement without first pursuing or exhausting any right
or remedy which the Agent may have against the Servicer, any Originator or any
other Person or with respect to the Receivables or the Related Security (each as
defined in the Purchase Agreement), as the case may be.

           SECTION 2. Obligation Absolute. The Guarantor undertakes and agrees
with and for the benefit of the Agent to ensure the performance of all
Guaranteed Obligations strictly in accordance with the terms of the Purchase
Agreement and the Servicing Agreement. The obligations of the Guarantor under
this Performance Guaranty are independent of the Guaranteed Obligations, and a
separate action or actions may be brought and prosecuted against the Guarantor
to enforce this Performance Guaranty, irrespective of whether any action is
brought against the Servicer or any Originator or whether the Servicer or any or
all of the Originators is joined in any such action or actions. The obligations
of the Guarantor under this Performance Guaranty shall be absolute and
unconditional irrespective of:

                  (i) any lack of validity or enforceability of the Purchase
         Agreement or the Servicing Agreement (other than as a result of any
         lack of validity or enforceability against the Agent);

                  (ii) any change in the time, manner or place of payment of, or
         in any other term of, all or any of the Guaranteed Obligations, or any
         other amendment or waiver of or any consent to departure from the
         Purchase Agreement or the Servicing Agreement;

                  (iii) any taking, exchange, release or non-perfection of any
         collateral, or any taking, release or amendment or waiver of or consent
         to departure from any other guaranty, for all or any of the Guaranteed
         Obligations;

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                  (iv) any manner of application of collateral, or proceeds
         thereof, to all or any of the Guaranteed Obligations, or any manner of
         sale or other disposition of any collateral for all or any of the
         Guaranteed Obligations or any other assets of the Servicer or any
         Originator;

                  (v) any change, restructuring or termination of the corporate
         structure or existence of the Servicer or any Originator;

                  (vi) the insolvency, bankruptcy or reorganization of the
         Servicer or any Originator, or any stay or discharge of any of the
         Guaranteed Obligations in connection therewith; or

                  (vii) any other circumstance which might otherwise constitute
         a defense (except for a valid defense of the Servicer or any
         Originator, as the case may be, not arising as a result of the
         Servicer's or any Originator's breach of its obligations under the
         Purchase Agreement or the Servicing Agreement, as applicable) available
         to, or a discharge of the Servicer or any Originator.

This Performance Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment or performance of any of the
Guaranteed Obligations is rescinded or must otherwise be returned by the Agent
or any Lender upon the insolvency, bankruptcy or reorganization of the Servicer
or any Originator or otherwise, all as though such payment had not been made.

           SECTION 3. Waiver. The Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Performance Guaranty and any requirement that the Agent
protect, secure, perfect or insure any security interest or lien or any property
subject thereto or exhaust any right or take any action against the Servicer,
any Originator or any other Person or any collateral.

           SECTION 4. Subrogation. The Guarantor will not exercise any rights
that it may acquire by reason of any payment or performance hereunder, whether
by way of subrogation, reimbursement or otherwise until all Guaranteed
Obligations have been discharged.

           SECTION 5. Consent to Jurisdiction; Waiver of Immunities.

                  (a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
PERFORMANCE GUARANTY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN
THE COUNTY OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS PERFORMANCE
GUARANTY, THE GUARANTOR CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GUARANTOR HEREBY IRREVOCABLY
APPOINTS FOSTER WHEELER, INC., PERRYVILLE CORPORATE PARK, CLINTON, NEW JERSEY
08809-4000, ATTENTION: VICE PRESIDENT AND GENERAL COUNSEL (THE "PROCESS AGENT"),
AS ITS AGENT TO RECEIVE ON BEHALF OF THE GUARANTOR AND ITS PROPERTY SERVICE OF
COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING (BY CERTIFIED

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OR REGISTERED MAIL, POSTAGE PREPAID AND RETURN RECEIPT REQUESTED) OR DELIVERING
A COPY OF SUCH PROCESS TO THE GUARANTOR IN CARE OF THE PROCESS AGENT AT THE
PROCESS AGENT'S ABOVE ADDRESS, AND THE GUARANTOR HEREBY IRREVOCABLY AUTHORIZES
AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. AS AN
ALTERNATIVE METHOD OF SERVICE, THE GUARANTOR ALSO IRREVOCABLY CONSENTS TO THE
SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES OF SUCH PROCESS TO THE GUARANTOR AT ITS ADDRESS SPECIFIED IN SECTION
10 HEREOF. THE GUARANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

                  (b) NOTHING IN THIS SECTION 5 SHALL AFFECT THE RIGHT OF THE
AGENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE
RIGHT OF THE AGENT TO BRING ANY ACTION OR PROCEEDING AGAINST THE GUARANTOR OR
ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS, INCLUDING, WITHOUT
LIMITATION, THE COURTS OF BERMUDA.

                  (c) THE GUARANTOR IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT
PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS PERFORMANCE GUARANTY OR ANY DOCUMENT RELATED HERETO. TO THE EXTENT THAT
THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.

                  SECTION 6. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:

                  (a) The Guarantor is a limited company duly organized and in
existence under the laws of Bermuda.

                  (b) The execution, delivery and performance by the Guarantor
of this Performance Guaranty are within the Guarantor's company powers and have
been duly authorized by all necessary company action and do not contravene (i)
the Guarantor's organizational documents or (ii) any law or contractual
restriction binding on or affecting the Guarantor.

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<PAGE>

                  (c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Guarantor of
this Performance Guaranty or any other document or instrument to be delivered in
connection herewith.

                  (d) This Performance Guaranty is the legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether
enforceability is considered in a proceeding in equity or at law.

                  (e) Except as set forth in the most recent Form 10-Q quarterly
reports and Form 10-K annual report of the Guarantor or FW LLC and in Schedule
5.6 to the Loan Agreement, to the Guarantor's knowledge, there are no pending or
threatened actions, suits or proceedings affecting the Guarantor or any of its
Subsidiaries before any court, governmental agency or arbitrator, which, if
decided adversely to the Guarantor or any of its Subsidiaries, could reasonably
be expected to materially adversely affect the ability of the Guarantor to
perform its obligations under this Performance Guaranty, or which purports to
affect the legality, validity or enforceability of this Performance Guaranty.

                  (f) There are no conditions precedent to the effectiveness of
this Performance Guaranty.

                  SECTION 7. Covenants. The Guarantor agrees that, until the
Purchase and Sale Termination Date (as defined in the Purchase Agreement), the
Guarantor will, unless the Agent shall otherwise consent in writing:

                  (a) Preserve and maintain its company existence, rights,
franchises and privileges in the jurisdiction of its organization, and qualify
and remain qualified in good standing as a foreign entity in each jurisdiction
where the failure to preserve and maintain such existence, rights, franchises,
privileges and qualification would materially adversely affect the ability of
the Guarantor to perform its obligations hereunder.

                  (b) Deliver to the Agent, with a copy to each Lender:

                  (i) as soon as available, but in any event within 90 days
after the end of each of the Guarantor's fiscal years, consolidated financial
statements of the Guarantor and its Subsidiaries for each such fiscal year,
audited by independent certified public accountants reasonably acceptable to the
Agent and certified, without any qualifications, by such accountants to have
been prepared in accordance with GAAP (such audited financial statements to
include a balance sheet, income statement, and statement of cash flow and, if
prepared, such accountants' letter to management),

                  (ii) as soon as available, but in any event within 45 days
after the end of each fiscal quarter during each of the Guarantor's fiscal
years:

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                  (A) a company prepared consolidated balance sheet,
consolidated income statement and consolidated statement of cash flow of the
Guarantor and its Subsidiaries for each such fiscal quarter, and

                  (B) a certificate signed by the chief financial officer of the
Guarantor, to the effect that the financial statements delivered under clause
(A) above have been prepared in accordance with GAAP (except for the lack of
footnotes and being subject to year-end audit adjustments) and fairly present in
all material respects, the financial condition of the Guarantor and its
Subsidiaries on a consolidated basis, and

                  (iii) as soon as available, but in any event within 10 days
after the end of each month during each of the Guarantor's fiscal years, a
statement of the cash position of the Guarantor and its Subsidiaries (both
domestic and foreign) as of the end of the preceding month.

                  SECTION 8. Amendments, Etc. No amendment or waiver of any
provision of this Performance Guaranty, and no consent to any departure by the
Guarantor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

                  SECTION 9. Expenses. The Guarantor will upon demand pay to the
Agent the amount of any and all reasonable expenses, including reasonable
attorneys' fees and expenses, which they may incur in connection with the
exercise or enforcement of any of their respective rights or interests
hereunder.

                  SECTION 10. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including by
facsimile) and mailed, telecopied, telegraphed, telexed, cabled or delivered to
it, if to the Guarantor, at its address at Perryville Corporate Park, Clinton,
New Jersey 08809-4000, Attention: Treasurer (facsimile (908) 713-2953), with a
copy to Foster Wheeler Capital & Finance Corporation, Perryville Corporate Park,
Clinton, New Jersey 08809-4000, and if to the Agent, at its address designated
in the Loan Agreement, or, as to any party, at such other address as shall be
designated by such party in a written notice to each other party. All such
notices and other communications shall, when mailed or faxed, be effective when
deposited in the mails or faxed, respectively.

                  SECTION 11. No Waiver; Remedies. No failure on the part of the
Agent to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.

                  SECTION 12. Continuing Agreement. This Performance Guaranty is
a continuing agreement and shall (i) remain in full force and effect until the
later of (x) the payment in full of the Guaranteed Obligations and all other
amounts payable under this Performance Guaranty and (y) one year and a day after
the Purchase and Sale Termination Date, (ii) be binding upon the Guarantor, its
successors and assigns, and (iii) inure to the benefit of, and be enforceable
by, the Agent, the Lenders and their respective successors, transferees and
assigns;

                                      -6-
<PAGE>

it being understood that this Performance Guaranty is not a guaranty of the
obligations of any Servicer that replaces Foster Wheeler Capital in such
capacity.

                  SECTION 13. GOVERNING LAW. THIS PERFORMANCE GUARANTY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES.

                  SECTION 14. WAIVER OF JURY TRIAL. THE GUARANTOR AND THE AGENT
HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS PERFORMANCE GUARANTY OR THE ACTIONS OF THE AGENT IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

                  SECTION 15. Currency; Judgment. This is an international
financial transaction in which the specification of a currency and payment to
the Agent's Account in New York City is of the essence. Unrestricted and
transferable lawful money of the United States of America ("Dollars") shall be
the currency of account in the case of all payments pursuant to or arising under
this Performance Guaranty, and all such payments shall be made to the Agent's
Account in New York City in immediately available funds. The obligations of the
Guarantor to the Agent under this Performance Guaranty shall not be discharged
by any amount paid in any other currency or in a place other than by deposit
into the Agent's Account in New York City to the extent that the amount so paid
after conversion under this Performance Guaranty and transfer to New York City
does not yield the amount of Dollars in New York City due under this Performance
Guaranty. If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder in Dollars into another currency (the
"Other Currency"), the rate of exchange used shall be that at which the Agent
could, in accordance with normal banking procedures, purchase Dollars with the
Other Currency on the Business Day preceding that on which final judgment is
given. The obligation of the Guarantor in respect of any such sum due from it to
the Agent or the Lenders hereunder shall, notwithstanding any judgment in such
Other Currency, be discharged only to the extent that, on the Business Day
immediately following the date on which the Agent receives any sum adjudged to
be so due in the Other Currency, the Agent may, in accordance with normal
banking procedures, purchase Dollars with the Other Currency. If the Dollars so
purchased are less than the sum originally due to the Agent in Dollars, the
Guarantor agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Agent and the Lenders against such loss, and if the
Dollars so purchased exceed the sum originally due to the Agent in Dollars, the
Agent agrees to remit to the Guarantor such excess.

                  IN WITNESS WHEREOF, the Guarantor has caused this Performance
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.

                                   FOSTER WHEELER LTD.

                                   By:
                                           Name:
                                           Title:

Accepted as of the
date hereof:

FOOTHILL CAPITAL CORPORATION, as Agent

By:
        Name:
        Title:

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<PAGE>SERVICING AGREEMENT

                           Dated as of August 15, 2002

                                      among

                           FOSTER WHEELER FUNDING LLC,

                          FOOTHILL CAPITAL CORPORATION,

                                       and

                  FOSTER WHEELER CAPITAL & FINANCE CORPORATION

<PAGE>

                               SERVICING AGREEMENT

                     THIS SERVICING AGREEMENT (this "AGREEMENT"), dated as of
August 15, 2002, is among FOSTER WHEELER CAPITAL &
FINANCE CORPORATION, a Delaware corporation ("FOSTER WHEELER CAPITAL" or "FOSTER
WHEELER"), as Servicer (in such capacity, the "Servicer"), FOOTHILL CAPITAL
CORPORATION, in its capacity as arranger and administrative agent under the Loan
and Security Agreement referred to below (in such capacities, the "Agent") and
FOSTER WHEELER FUNDING LLC, a Delaware limited liability company (the
"COMPANY"). Unless otherwise indicated, certain terms that are capitalized and
used throughout this Agreement are defined in (i) the Loan and Security
Agreement of even date herewith (as the same may be amended, supplemented or
otherwise modified from time to time, the "LOAN AND SECURITY AGREEMENT") among
the Company, the Lenders set forth therein and the Agent or (ii) if not defined
in the Loan and Security Agreement, the Purchase, Sale and Contribution
Agreement of even date herewith (as the same may be amended, supplemented or
otherwise modified from time to time, the "PURCHASE, SALE AND CONTRIBUTION
AGREEMENT") among the Company, the Servicer and the Originators set forth
therein.

                                   BACKGROUND

           1. The Company is a limited liability company, all of the outstanding
interests of which are owned by the Originators. Foster Wheeler Capital is a
wholly-owned subsidiary of Foster Wheeler Ltd. ("FWL"). Each Originator is a
wholly-owned subsidiary of FWL.

           2. The Originators generate Receivables in the ordinary course of
their respective businesses.

           3. The Originators, in order to finance their respective businesses,
are entering into the Purchase, Sale and Contribution Agreement. The Company
intends to finance the purchase of Receivables pursuant to the Loan and Security
Agreement.

           4. In order to facilitate the above transactions, the Company wishes
to engage Foster Wheeler Capital as Servicer of the Receivables.

           NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:

           Section 1.APPOINTMENT OF THE SERVICER. (a) The servicing,
administering and collection of the Pool Receivables shall be conducted by the
Person so designated from time to time as the Servicer in accordance with this
Section. Until the Agent gives notice to Foster Wheeler (in accordance with this
Section) of the designation of a new Servicer, Foster Wheeler is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Servicer pursuant to the terms hereof. Upon (i) the occurrence of an Event of
Default under the Loan and Security Agreement, (ii) a failure by the Servicer,
any Originator or the Company to perform or observe any term, covenant or
agreement under this Agreement, the Loan and Security Agreement or the Purchase,
Sale and Contribution Agreement, which failure continues for 10 days after
knowledge or notice thereof (or continues for such other grace period set forth

<PAGE>

in the applicable agreement) or (iii) the failure by the Company or the Servicer
to make any payment when due under this Agreement, the Loan and Security
Agreement or the Purchase, Sale and Contribution Agreement (each such event
under clauses (i)-(iii), a "Termination Event"), the Agent may designate as
Servicer any Person (including itself) to succeed Foster Wheeler or any
successor Servicer, on the condition in each case that any such Person so
designated shall agree to perform the duties and obligations of the Servicer
pursuant to the terms hereof.

           (b) Upon the designation of a successor Servicer as set forth in
CLAUSE (A), Foster Wheeler agrees that it will terminate its activities as
Servicer hereunder in a manner that the Agent determines will facilitate the
transition of the performance of such activities to the new Servicer, and Foster
Wheeler shall, at its own expense, cooperate with and assist such new Servicer.
Such cooperation shall include, upon reasonable notice and during regular
business hours, access to and transfer of related records and use by the new
Servicer of all licenses, hardware or software necessary or desirable to collect
the Pool Receivables and the Related Security.

           (c) Foster Wheeler acknowledges that, in making their decision to
execute and deliver the Loan and Security Agreement, the Agent, the Lenders and
the Company have relied on Foster Wheeler's agreement to act as Servicer
hereunder. Accordingly, without the prior written consent of the Agent (which
consent shall not be unreasonably withheld or delayed), Foster Wheeler agrees
that it will not voluntarily resign as Servicer.

           (d) The Servicer may delegate its duties and obligations hereunder to
any subservicer (each a "SUB-SERVICER"); PROVIDED, that, in each such
delegation: (i) the Agent consents, in writing, to such delegation, (ii) such
Sub-Servicer shall agree in writing to perform the duties and obligations of the
Servicer pursuant to the terms hereof, (iii) the Servicer shall remain primarily
liable for the performance of the duties and obligations so delegated, (iv) the
Company, the Agent and the Lenders shall have the right to look solely to the
Servicer for performance and (v) the terms of any agreement with any
Sub-Servicer shall provide that the Agent may terminate such agreement upon the
termination of the Servicer hereunder by giving notice of its desire to
terminate such agreement to the Servicer and each Sub-Servicer.

           Section 2.DUTIES OF THE SERVICER. (a) The Servicer shall take or
cause to be taken all such action as may be necessary or advisable to administer
and collect each Pool Receivable from time to time, all in accordance with this
Agreement, the Loan and Security Agreement and the Purchase, Sale and
Contribution Agreement and all applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and Collection
Policies. The Servicer shall cause the Collections to be deposited in the Cash
Management Accounts in accordance with the Loan and Security Agreement. The
Company shall deliver to the Servicer and the Servicer shall hold for the
benefit of the Company and the Agent (for the benefit of the Lenders and
individually), in accordance with their respective interests, all records and
documents (including computer tapes or disks) with respect to each Pool
Receivable. Notwithstanding anything to the contrary contained herein, the Agent
may direct the Servicer (whether the Servicer is Foster Wheeler or any other
Person) to commence or settle any legal action to enforce collection of any Pool
Receivable or to foreclose upon or repossess any Related Security; PROVIDED,
HOWEVER, that no such direction may be given unless a Purchase and Sale

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<PAGE>

Termination Event or Unmatured Purchase and Sale Termination Event has occurred
and is continuing.

           (b) The Servicer shall, as soon as practicable following actual
receipt of collected funds, turn over to the Company the collections of any
indebtedness that is not a Pool Receivable, less, if Foster Wheeler or an
Affiliate thereof is not the Servicer, all reasonable and appropriate
out-of-pocket costs and expenses of such Servicer of servicing, collecting and
administering such collections. The Servicer, if other than Foster Wheeler or an
Affiliate thereof, shall, as soon as practicable upon demand, deliver to the
Company all records in its possession that evidence or relate to any
indebtedness that is not a Pool Receivable, and copies of records in its
possession that evidence or relate to any indebtedness that is a Pool
Receivable.

           (c) The Servicer's obligations hereunder shall terminate on the later
of: (i) the date on which the Loan and Security Agreement has been terminated
and the Obligations thereunder have been paid in full and (ii) the date on which
all amounts required to be paid to the Lenders, the Agent and any other
Indemnified Party hereunder shall have been paid in full.

           After such termination, the Servicer, if Foster Wheeler or an
Affiliate thereof was not the Servicer on the date of such termination, shall
promptly deliver to the Company all books, records and related materials that
the Company previously provided to the Servicer, or that have been obtained by
the Servicer, in connection with this Agreement.

           Section 3.CASH MANAGEMENT ARRANGEMENTS. On the date hereof, the
Company shall enter into one or more agreements, consistent with the terms of
the Loan and Security Agreement, with all of the Cash Management Banks and
deliver original counterparts thereof to the Agent.

           Section 4.ENFORCEMENT RIGHTS. (a) At any time following the
occurrence of a Termination Event:

                     (i) the Agent may instruct the Company or the Servicer to
           direct the Obligors that payment of all amounts payable under any
           Pool Receivable is to be made directly to the Agent or its designee
           and the Company or the Servicer, as the case may be, shall give such
           direction at the expense of the Company or Servicer, as the case may
           be, PROVIDED, that if the Company or the Servicer, as the case may be
           fails to give such direction, the Agent (at the Company's or
           Servicer's, as the case may be, expense), may so direct the Obligors,

                     (ii) the Agent may instruct the Company or the Servicer to
           give notice of the Agent's interest in Pool Receivables to each
           Obligor, which notice shall direct that payments be made directly to
           the Agent or its designee, and the Company or the Servicer, as the
           case may be, shall give such notice at the expense of the Company or
           the Servicer, as the case may be; PROVIDED, that if the Company or
           the Servicer, as the case may be, fails to so notify each Obligor,
           the Agent (at the Company's expense) may so notify the Obligors, and

                     (iii) the Agent may request the Servicer to, and upon such
           request the Servicer shall, at its own expense: (A) assemble all of
           the records necessary or desirable to collect

                                      -3-
<PAGE>

           the Pool Receivables and the Related Security, and transfer or
           license to a successor Servicer the use of all software necessary or
           desirable to collect the Pool Receivables and the Related Security,
           and make the same available to the Agent or its designee at a place
           selected by the Agent, and (B) segregate all cash, checks and other
           instruments received by it from time to time constituting Collections
           in a manner acceptable to the Agent and, promptly upon receipt, remit
           all such cash, checks and instruments, duly endorsed or with duly
           executed instruments of transfer, to the Agent or its designee.

           (b) The Company hereby authorizes the Agent and the Servicer (with
the consent of the Agent), and irrevocably appoints each of the Agent and the
Servicer (with the consent of the Agent), to the extent permitted by applicable
law, as its attorney-in-fact with full power of substitution and with full
authority in the place and stead of the Company, which appointment is coupled
with an interest, to take any and all steps in the name of the Company and on
behalf of the Company necessary or desirable, in the determination of the Agent
or the Servicer (with the consent of the Agent), after the occurrence of a
Termination Event, or following the designation of a successor Servicer (if such
successor Servicer is not an Affiliate of Foster Wheeler) to collect any and all
amounts or portions thereof due under any and all Pool Assets, including
endorsing the name of the Company on checks and other instruments representing
Collections and enforcing such Pool Assets. Notwithstanding anything to the
contrary contained in this subsection, none of the powers conferred upon such
attorney-in-fact pursuant to the preceding sentence shall subject such
attorney-in-fact to any liability if any action taken by it shall prove to be
inadequate or invalid, nor shall they confer any obligations upon such
attorney-in-fact in any manner whatsoever.

           Section 5.RESPONSIBILITIES OF THE COMPANY. (a) Anything herein to the
contrary notwithstanding, the Company shall: (i) perform all of its obligations,
if any, under the Contracts related to the Pool Receivables to the same extent
as if interests in such Pool Receivables had not been transferred hereunder, and
the exercise by the Agent or the Lenders of their respective rights hereunder
shall not relieve the Company from such obligations, and (ii) pay when due any
taxes, including any sales taxes payable in connection with the Pool Receivables
and their creation and satisfaction. The Agent and the Lenders shall not have
any obligation or liability with respect to any Pool Asset, nor shall either of
them be obligated to perform any of the obligations of the Company, Foster
Wheeler or the Originators thereunder.

           (b) Foster Wheeler hereby irrevocably agrees that if at any time it
shall cease to be the Servicer hereunder, it shall act (if the then-current
Servicer so requests) as the data-processing agent of the Servicer and, in such
capacity, Foster Wheeler shall conduct the data-processing functions of the
administration of the Receivables and the Collections thereon in substantially
the same way that Foster Wheeler conducted such data-processing functions while
it acted as the Servicer.

           Section 6.SERVICING FEE. (a) The Servicer will receive a fee for its
services hereunder (the "Servicing Fee") in accordance with the Loan Agreement
and in an amount set forth in a fee letter, dated the date hereof, from the
Company, agreed and accepted by the Servicer, and in form and substance
satisfactory to the Agent.

                                      -4-
<PAGE>

           (b) If the Servicer ceases to be Foster Wheeler or an Affiliate
thereof, the Servicing Fee shall be the greater of (i) the amount set forth in
clause (a) above and (b) an amount specified by the successor Servicer not to
exceed 110% of the aggregate reasonable costs and expenses incurred by such
successor Servicer in connection with the performance of its obligations as
Servicer.

           (c) The Servicing Fee shall be subordinated in right of payment to
the payment in full of all of the Obligations under the Loan and Security
Agreement. No portion of the Servicing Fee shall be paid in the event that a
Purchase and Sale Termination Event or Unmatured Purchase and Sale Termination
Event has occurred and is continuing. In the event any Purchase and Sale
Termination Event or Unmatured Purchase and Sale Termination Event has occurred
and is continuing, the Servicing Fee will continue to accrue in accordance with
this Section 6 and shall be paid to the Servicer on the date on which such
Purchase and Sale Termination Event or Unmatured Purchase and Sale Termination
Event shall have been cured or waived.

           (d) In the event of any dissolution, winding up, liquidation,
readjustment, reorganization or other similar event relating to the Company,
whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency or receivership proceedings, or upon an assignment for
the benefit of creditors, or any other marshalling of the assets and liabilities
of the Company or any sale of all or substantially all of the assets of the
Company other than as permitted by the Purchase Agreement (such proceedings
being herein collectively called "Bankruptcy Proceedings"), the Obligations
under the Loan and Security Agreement shall first be paid and performed in full
and in cash before the Servicer shall be entitled to receive and to retain any
payment or distribution in respect of the Servicing Fee.

           (e) In the event that the Servicer receives any payment or other
distribution of any kind or character from the Company or from any other source
whatsoever, in respect of the Servicing Fee, other than as expressly permitted
by the terms of this Section 6, such payment or other distribution shall be
received in trust for the Agent and the Lenders under the Loan and Security
Agreement and shall be turned over by the Servicer to the Agent (for the benefit
of the Lenders) forthwith.

           (f) Notwithstanding any payments or distributions received by the
Agent and the Lenders under the Loan and Security Agreement in respect of the
Servicing Fee, the Servicer shall not be subrogated to any rights of the Agent
and the Lenders in respect of the Obligations until the Obligations have been
paid and performed in full and in cash.

           Section 7.INDEMNITIES BY THE SERVICER. Without limiting any other
rights that the Agent, the Lenders or any of their respective Affiliates,
employees, members, officers, directors, agents, counsel, successors,
transferees or assigns (each, an "INDEMNIFIED PARTY") may have hereunder or
under applicable law, the Servicer hereby agrees to indemnify each Indemnified
Party from and against any and all claims, damages, expenses, costs, losses and
liabilities actually incurred arising out of or resulting from (whether directly
or indirectly): (a) the failure of any information provided to the Lenders or
the Agent by, or on behalf of, the Servicer to be true and correct in any
material respect, (b) the failure of any representation, warranty or statement
made or deemed made by the Servicer (or any of its officers) under or in
connection with this Agreement, the Loan and Security Agreement or the Purchase,
Sale and Consolidation Agreement

                                      -5-
<PAGE>

to have been true and correct in any material respect as of the date made or
deemed made in all respects when made, (c) the failure by the Servicer to comply
in all material respects with any applicable law, rule or regulation with
respect to any Pool Receivable or the related Contract, (d) any dispute, claim,
offset or defense of the Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables Pool resulting from or related to the
collection activities with respect to such Receivable, or (e) any failure of the
Servicer to perform its duties or obligations in accordance with the provisions
hereof in all material respects.

           Section 8.COMPANY NOTE RECORDS. Servicer agrees to make all
appropriate record keeping entries with respect to Company Notes or otherwise to
reflect the payments made under Article III of the Purchase, Sale and
Contribution Agreement. Furthermore, Servicer shall hold the Company Notes for
the benefit of the Originators. Servicer will mark the Company Notes "CANCELLED"
and return such Company Notes to the Company upon the final payment thereof
after the occurrence of the Purchase and Sale Termination Date.

           Section 9.REPORTS. On the Closing Date and on each Tuesday thereafter
(by the close of business on such day), or if any Tuesday is not a Business Day,
on the immediately following Business Day (by the close of business on such
day), the Servicer shall deliver to the Company, the Agent and each Originator
(a) a Purchase Report, as set forth in the Purchase, Sale and Contribution
Agreement containing the information set forth therein and the Company's
purchases of, and/or the contribution of, Receivables from each Originator that
are to be made on the Closing Date or that were made during the preceding week,
as applicable, and (b) an accounting of all Collections received by the Company
on the Closing Date or during the preceding week, as applicable, and any
expenditures made by the Company on the Closing Date or during the preceding
week, as applicable. In addition, on the Closing Date and on each Business Day
thereafter (by the close of business on such day), the Servicer shall deliver to
the Company, the Agent and each Originator any other reports required to be
given by the Servicer or the Company on such date under the Loan and Security
Agreement.

                                      -6-
<PAGE>

                     IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date
first above written.

                           FOSTER WHEELER FUNDING LLC,

                          By:
                                  ----------------------------------------------
                                  Title:

                          FOOTHILL CAPITAL CORPORATION,
                          as Agent

                          By:
                          ------------------------------------------------------
                          Title:

                          FOSTER WHEELER CAPITAL & FINANCE CORPORATION,
                          as Servicer

                          By:
                           -----------------------------------------------------
                           Title:

                                      -7-
<PAGE>

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