Exhibit 10.5
RECEIVABLES PURCHASE AGREEMENT
dated as of November 30, 2004
among
AFFINIA RECEIVABLES LLC, as Finance Subsidiary,
AFFINIA GROUP INC., a Delaware corporation, as
Servicer,
PARK AVENUE RECEIVABLES COMPANY LLC
and
JPMORGAN CHASE BANK, N.A.,
as Agent
TABLE OF CONTENTS
Page
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ARTICLE I
PURCHASE ARRANGEMENTS
Section 1.1 Purchase
Facility.................................................1
Section 1.2
Increases.........................................................2
Section 1.3
Decreases.........................................................2
Section 1.4 Payment
Requirements..............................................2
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 Payments; Due Dates of
Payments...................................3
Section 2.2 Collections Prior to
Amortization.................................4
Section 2.3 Collections Following
Amortization................................4
Section 2.4 Application of
Collections........................................4
Section 2.5 Payment
Rescission................................................5
Section 2.6 Maximum Purchaser
Interests.......................................5
Section 2.7 Clean Up
Call.....................................................5
ARTICLE III
CONDUIT FUNDING
Section 3.1 CP Costs
.........................................................6
Section 3.2 Calculation of CP
Costs...........................................6
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution
Funding.....................................6
Section 4.2 Yield
Payments....................................................6
Section 4.3 Selection and Continuation of Tranche
Periods.....................6
Section 4.4 Financial Institution Discount
Rates..............................7
Section 4.5 Suspension of the LIBO
Rate.......................................7
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of The Seller
Parties..............7
Section 5.2 Financial Institution Representations and
Warranties.............12
ARTICLE VI
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial Incremental
Purchase.............13
Section 6.2 Conditions Precedent to All
Purchases............................13
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants of The Seller
Parties......................14
Section 7.2 Negative Covenants of The Seller
Parties.........................22
ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of
Servicer..........................................24
Section 8.2 Duties of
Servicer...............................................24
Section 8.3 Control
Notices..................................................25
Section 8.4 Responsibilities of Finance
Subsidiary...........................26
Section 8.5 Reporting
Periods................................................26
Section 8.6 Reports
.........................................................26
Section 8.7 Servicing
Fees...................................................26
ARTICLE IX
AMORTIZATION EVENTS
Section 9.1 Amortization
Events..............................................27
Section 9.2 Remedies
........................................................29
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnities by The Seller
Parties...............................29
Section 10.2 Increased Cost and Reduced
Return...............................31
Section 10.3 Other Costs and
Expenses........................................32
ARTICLE XI
THE AGENT
Section 11.1 Authorization and
Action........................................32
Section 11.2 Delegation of
Duties............................................33
Section 11.3 Exculpatory
Provisions..........................................33
Section 11.4 Reliance by
Agent...............................................33
Section 11.5 Non-Reliance on Agent and Other
Purchasers......................34
Section 11.6 Reimbursement and
Indemnification...............................34
Section 11.7 Agent in its Individual
Capacity................................34
Section 11.8 Successor
Agent.................................................34
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS
Section 12.1
Assignments.....................................................35
Section 12.2
Participations..................................................35
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ARTICLE XIII
MISCELLANEOUS
Section 13.1 Waivers and
Amendments..........................................36
Section 13.2
Notices.........................................................37
Section 13.3 Ratable
Payments................................................37
Section 13.4 Protection of Ownership Interests of the
Purchasers.............37
Section 13.5
Confidentiality.................................................38
Section 13.6 Bankruptcy
Petition.............................................38
Section 13.7 Limitation of
Liability.........................................38
Section 13.8 CHOICE OF
LAW...................................................39
Section 13.9 CONSENT TO
JURISDICTION.........................................39
Section 13.10 WAIVER OF JURY
TRIAL...........................................39
Section 13.11 Integration; Binding Effect; Survival of
Terms.................39
Section 13.12 Counterparts; Severability; Section
References.................40
Section 13.13 JPMorgan
Roles.................................................40
Section 13.14
Characterization...............................................40
Schedules and Exhibits
Schedule A Definitions
Schedule B Commitments of Financial Institutions
Schedule C Documents to be Delivered to the Agent
at or before
the Initial Purchase
Schedule D UCC Search; Filing Information; Location
of Records
Schedule E Contact Information for Notices
Schedule F Lockboxes and Collection Accounts
Schedule G Agreed Upon Amounts for Calculations
Schedule H Credit and Collection Policy
Exhibit I Form of Purchase Notice
Exhibit II Form of Compliance Certificate
Exhibit III Form of Control Agreement
Exhibit IV Form of Assignment Agreement
Exhibit V Form of Periodic Report
Exhibit VI Form of Performance Undertaking
AFFINIA RECEIVABLES LLC
RECEIVABLES PURCHASE AGREEMENT
This Receivables Purchase Agreement dated as of
November 30,
2004 is among Affinia Receivables LLC, a Delaware limited liability
company
("Finance Subsidiary"), Affinia Group Inc., a Delaware corporation
("Affinia
Group"), as initial Servicer (the "Servicer" and Performance
Guarantor, and
together with Finance Subsidiary, the "Seller Parties" and each a
"Seller
Party"), the entities identified on the signature pages of this
Agreement as a
"Financial Institution" (together with any of their respective
successors and
assigns hereunder, the "Financial Institutions"), Park Avenue
Receivables
Company LLC ("Conduit", and together with the Financial
Institutions, the
"Purchasers") and JPMorgan Chase Bank, N.A., as agent for the
Purchasers
hereunder or any successor agent hereunder (together with its
successors and
assigns hereunder, the "Agent"). Unless defined elsewhere herein,
capitalized
terms used in this Agreement shall have the meanings assigned to
such terms in
Schedule A.
PRELIMINARY STATEMENTS
Finance Subsidiary desires to transfer and assign
Purchaser
Interests to the Purchasers from time to time.
Conduit may, in its absolute and sole discretion,
purchase
Purchaser Interests from Finance Subsidiary from time to time.
In the event that Conduit declines to make any
purchase, the
Financial Institutions shall, at the request of Finance Subsidiary,
purchase
Purchaser Interests from time to time.
JPMorgan has been requested and is willing to act
as Agent on
behalf of Conduit and the Financial Institutions in accordance with
the terms
hereof.
ARTICLE I
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility.
(a) Upon the terms and subject to the conditions
hereof,
Finance Subsidiary may, at its option, sell and assign Purchaser
Interests to
the Agent for the benefit of one or more of the Purchasers. In
accordance with
the terms and conditions set forth herein, Conduit may, at its
option, instruct
the Agent to purchase on behalf of Conduit, or if Conduit shall
decline to
purchase, the Agent shall purchase, on behalf of the Financial
Institutions,
Purchaser Interests from time to time in an aggregate amount not to
exceed at
such time the lesser of (i) the Purchase Limit and (ii) the
aggregate amount of
the Commitments from time to time during the period from the date
hereof to but
not including the Scheduled Amortization Date.
(b) Finance Subsidiary may, upon at least 5
Business Days'
notice to the Agent, terminate in whole or reduce in part, ratably
among the
Financial Institutions, the unused portion of the Purchase Limit;
provided that
each partial reduction of the Purchase Limit shall be in an amount
equal to
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.
Section 1.2 Increases. Finance Subsidiary shall
provide the
Agent with at least one Business Day's prior notice in a form set
forth as
Exhibit I hereto of each Incremental Purchase (a "Purchase
Notice"). Each
Purchase Notice shall be subject to Section 6.2 hereof and, except
as set forth
below, shall be irrevocable and shall specify the requested
Purchase Price
(which shall not be less than $100,000) and date of purchase, and
in the case of
an Incremental Purchase to be funded by the Financial Institutions,
the
requested Discount Rate and Tranche Period. Following receipt of a
Purchase
Notice, the Agent will determine whether Conduit agrees to make the
purchase. If
Conduit declines to make a proposed purchase, Finance Subsidiary
may cancel the
Purchase Notice or, in the absence of such a cancellation, the
Incremental
Purchase of the Purchaser Interest will be made by the Financial
Institutions.
On the date of each Incremental Purchase, upon satisfaction of the
applicable
conditions precedent set forth in Article VI, Conduit or the
Financial
Institutions, as applicable, shall deposit to the account
designated by Finance
Subsidiary, in immediately available funds, no later than 12:00
Noon (New York
time), an amount equal to (i) in the case of Conduit, the aggregate
Purchase
Price of the Purchaser Interests Conduit is then purchasing or (ii)
in the case
of a Financial Institution, such Financial Institution's Pro Rata
Share of the
aggregate Purchase Price of the Purchaser Interests the Financial
Institutions
are purchasing.
Section 1.3 Decreases. Finance Subsidiary shall
provide the
Agent with prior written notice in conformity with the Required
Notice Period (a
"Reduction Notice") of any proposed reduction of Aggregate Capital
from
Collections other than reductions following the occurrence of an
Amortization
Event. Such Reduction Notice shall designate (i) the date (the
"Proposed
Reduction Date") upon which any such reduction of Aggregate Capital
shall occur
(which date shall give effect to the applicable Required Notice
Period), and
(ii) the amount of Aggregate Capital to be reduced which shall be
applied
ratably to the Purchaser Interests of Conduit and the Financial
Institutions in
accordance with the amount of Capital (if any) owing to Conduit, on
the one
hand, and the amount of Capital (if any) owing to the Financial
Institutions
(ratably, based on their respective Pro Rata Shares), on the other
hand (the
"Aggregate Reduction"). Only one (1) Reduction Notice shall be
outstanding at
any time.
Section 1.4 Payment Requirements. All amounts to
be paid or
deposited by any Seller Party pursuant to any provision of this
Agreement shall
be paid or deposited in accordance with the terms hereof no later
than 12:00
noon (New York time) on the day when due in immediately available
funds, and if
not received before 12:00 noon (New York time) shall be deemed to
be received on
the next succeeding Business Day. If such amounts are payable to a
Purchaser
they shall be paid to the Agent, for the account of such Purchaser,
at the
address that the Agent may specify from time to time, until
otherwise notified
by the Agent. All computations of Yield, per annum fees calculated
as part of
any CP Costs, per annum fees hereunder and per annum fees under the
Fee Letter
shall be made on the basis of a year of 360 days for the actual
number of days
elapsed. If any amount hereunder shall be payable on a day which is
not a
Business Day, such amount shall be payable on the next succeeding
Business Day.
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ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 Payments; Due Dates of Payments. (a)
Notwithstanding any limitation on recourse contained in this
Agreement, Finance
Subsidiary shall immediately pay to the Agent when due, for the
account of the
relevant Purchaser or Purchasers on a full recourse basis,
(i) such fees as set forth in the Fee Letter
(which fees shall
be sufficient to pay all fees owing to the Financial
Institutions);
(ii) all CP Costs in accordance with Section 3.1;
(iii) all amounts payable as Yield for each
completed Tranche
Period;
(iv) all amounts payable as Deemed Collections
(which shall be
immediately due and payable by Finance Subsidiary and
applied to reduce
outstanding Aggregate Capital hereunder in accordance with
Sections 2.2
and 2.3 hereof) to the extent necessary to reduce the
Purchaser
Interest to the Maximum Purchaser Interest;
(v) all amounts payable to reduce the Purchaser
Interest, if
required, pursuant to Section 2.6;
(vi) all amounts payable pursuant to Article X,
if any;
(vii) the Servicer's reasonable out-of-pocket
costs and
expenses in connection with servicing, administering and
collecting the
Receivables, including the Servicing Fee;
(viii) all of the Agent's costs of collection and
enforcement
of this Agreement;
(ix) all Broken Funding Costs; and
(x) all Default Fees (collectively, the
"Obligations").
If any Person fails to pay any of the Obligations when due, such
Person agrees
to pay, on demand, the Default Fee in respect thereof until paid.
Notwithstanding the foregoing, no provision of this Agreement or
the Fee Letter
shall require the payment or permit the collection of any amounts
hereunder in
excess of the maximum permitted by applicable law. If at any time
Finance
Subsidiary receives any Collections or is deemed to receive any
Collections,
Finance Subsidiary shall immediately pay such Collections or Deemed
Collections
to the Servicer for application in accordance with the terms and
conditions
hereof and, at all times prior to such payment, such Collections or
Deemed
Collections shall be held in trust by Finance Subsidiary for the
exclusive
benefit of the Purchasers and the Agent.
(b) (i) Monthly Payments. The payments referred
to in clauses
(a)(i), (ii), (iii) and (vii), and (ix) with respect to any Accrual
Period will
be due and payable three (3) Business Days after the last day of
such Accrual
Period.
3
(ii) End of Reporting Period Payments. Subject
to clause
(b)(iv), the payments referred to in clauses (a)(iv)
and (v) with respect to any Reporting Period will be due and
payable one (1)
Business Day after the last day of such Reporting Period.
(iii) Payments on Demand. The payments
referred to in
clauses (a)(vi), (viii), (ix) and (x) will be due and
payable on demand by the Agent.
(iv) Proposed Reduction Date. The amount
specified in any
Reduction Notice shall be due and payable on the
Proposed Reduction Date specified in such Reduction Notice.
(v) Early Amortization Date. Notwithstanding
anything in
this Agreement to the contrary, on and after either the
day an Amortization Event set forth in Section 9.1(d)(ii) occurs
(and if not a
Business Day, on the next succeeding Business Day), or the Business
Day
specified in a written notice from the Agent following the
occurrence of any
other Early Amortization Event, all payments referred to in clauses
(a)(i),
(ii), (iii), (iv), (v) and (vii) will be due and payable on each
Business Day.
(c) All payments shall be remitted to the Agent's
account no
later than 12:00 noon (New York time) on the date on which they are
due and
payable.
Section 2.2 Collections Prior to Amortization.
Prior to the
Amortization Date, any Collections and/or Deemed Collections
received by the
Servicer shall be set aside and held in trust by the Servicer for
the payment of
any accrued and unpaid Aggregate Unpaids or for a Reinvestment as
provided in
this Section 2.2. If at any time any Collections are received by
the Servicer
prior to the Amortization Date, Finance Subsidiary hereby requests
and the
Purchasers hereby agree to make, simultaneously with such receipt,
a
reinvestment (each a "Reinvestment") with that portion of the
balance of each
and every Collection received by the Servicer that is part of any
Purchaser
Interest, such that after giving effect to such Reinvestment, the
amount of
Capital of such Purchaser Interest immediately after such receipt
and
corresponding Reinvestment shall be equal to the amount of Capital
immediately
prior to such receipt. Each Reinvestment shall, unless otherwise
directed by the
Agent or any Purchaser, occur automatically on each day that the
Servicer shall
receive any Collections without the requirement that any further
action be taken
on the part of any Person. On each Business Day before the
Amortization Date,
the Servicer shall remit to the Agent's account the amounts of
Collections
received on such Business Day that have not been subject to a
Reinvestment to
the extent necessary to reduce Capital to the Maximum Purchaser
Interest.
Section 2.3 Collections Following Amortization.
On the
Amortization Date and on each Business Day thereafter, (a) the
Servicer shall
set aside and hold in trust, for the holder of each Purchaser
Interest, all
Collections received on such day in accordance with Section 2.1,
and (b) the
Servicer shall, at any time upon the request from time to time by
(or pursuant
to standing instructions from) the Agent remit to the Agent's
account the
amounts set aside pursuant to clause (a).
Section 2.4 Application of Collections. If there
shall be
insufficient funds on deposit for the Servicer to distribute funds
in payment in
full of the aforementioned amounts
4
pursuant to Section 2.2 or 2.3 (as applicable) to the extent that
such amounts
are due and payable, the Servicer shall distribute funds:
first, to the payment of the Servicer's
reasonable
out-of-pocket costs and expenses in connection with
servicing,
administering and collecting the Receivables , including
the Servicing
Fee, to the extent such amounts are due and payable;
second, to the reimbursement of the Agent's costs
of
collection and enforcement of this Agreement, to the
extent such
amounts are due and payable;
third, ratably to the payment of all accrued and
unpaid fees
under the Fee Letter, CP Costs and Yield, to the extent
such amounts
are due and payable;
fourth, (to the extent applicable) to the ratable
reduction of
the Aggregate Capital, to the extent such amounts are due
and payable;
fifth, for the ratable payment of all other
unpaid Obligations
and
sixth, after the Aggregate Unpaids have been
indefeasibly
reduced to zero, to Finance Subsidiary.
Collections applied to the payment of Aggregate
Unpaids shall
be distributed in accordance with the aforementioned provisions,
and, giving
effect to each of the priorities set forth in Section 2.4 above,
shall be shared
ratably (within each priority) among the Agent and the Purchasers
in accordance
with the amount of such Aggregate Unpaids owing to each of them in
respect of
each such priority.
Section 2.5 Payment Rescission. No payment of any
of the
Aggregate Unpaids shall be considered paid or applied hereunder to
the extent
that, at any time, all or any portion of such payment or
application is
rescinded by application of law or judicial authority, or must
otherwise be
returned or refunded for any reason. Finance Subsidiary shall
remain obligated
for the amount of any payment or application so rescinded, returned
or refunded,
and shall promptly pay to the Agent (for application to the Person
or Persons
who suffered such rescission, return or refund) the full amount
thereof, plus
the Default Fee from the date of any such rescission, return or
refunding;
provided, however, that such obligation shall be limited in
recourse to any
payment, payment right or collateral that Finance Subsidiary
receives as a
result of such rescission, return or refund.
Section 2.6 Maximum Purchaser Interests. If the
aggregate of
the Purchaser Interests of the Purchasers exceeds the Maximum
Percentage
Interest, Finance Subsidiary shall pay to the Agent within one (1)
Business Day
an amount to be applied to reduce the Aggregate Capital (as
allocated by the
Agent), such that after giving effect to such payment the aggregate
of the
Purchaser Interests equals or is less than the Maximum Percentage
Interest, such
amount to be paid out of Collections.
Section 2.7 Clean Up Call. In addition to Finance
Subsidiary's
rights pursuant to Section 1.3, Finance Subsidiary shall have the
right (after
providing written notice to the
5
Agent in accordance with the Required Notice Period), at any time
following the
reduction of the Aggregate Capital to a level that is less than
10.0% of the
original Purchase Limit, to repurchase from the Purchasers all, but
not less
than all, of the then outstanding Purchaser Interests. The purchase
price in
respect thereof shall be an amount equal to the Aggregate Unpaids
through the
date of such repurchase, payable in immediately available funds.
Such repurchase
shall be without representation, warranty or recourse of any kind
by, on the
part of, or against any Purchaser or the Agent.
ARTICLE III
CONDUIT FUNDING
Section 3.1 CP Costs. Finance Subsidiary shall
pay CP Costs
with respect to the Capital associated with each Purchaser Interest
of Conduit
for each day that any Capital in respect of such Purchaser Interest
is
outstanding. Each Purchaser Interest funded substantially with
Pooled Commercial
Paper will accrue CP Costs each day on a pro rata basis, based upon
the
percentage share the Capital in respect of such Purchaser Interest
represents in
relation to all assets held by Conduit and funded substantially
with Pooled
Commercial Paper.
Section 3.2 Calculation of CP Costs. On the third
(3) Business
Day immediately preceding each monthly payment date referred to in
Section
2.1(b)(i), Conduit shall calculate the aggregate amount of CP Costs
for the
applicable Accrual Period and shall notify Finance Subsidiary of
such aggregate
amount.
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding. Each
Purchaser
Interest of the Financial Institutions shall accrue Yield for each
day during
its Tranche Period at either the LIBO Rate or the Base Rate in
accordance with
the terms and conditions hereof. Until Finance Subsidiary gives
notice to the
Agent of another Discount Rate in accordance with Section 4.4, the
initial
Discount Rate for any Purchaser Interest transferred to the
Financial
Institutions pursuant to the terms and conditions hereof shall be
the Base Rate.
Section 4.2 Yield Payments. Finance Subsidiary
shall pay to
the Agent (for the benefit of the Financial Institutions) an
aggregate amount
equal to the accrued and unpaid Yield for each completed Tranche
Period of each
such Purchaser Interest in accordance with Article II.
Section 4.3 Selection and Continuation of Tranche
Periods.
(a) Finance Subsidiary shall from time to time
request Tranche
Periods for the Purchaser Interests of the Financial Institutions.
(b) Finance Subsidiary, upon notice to the Agent
received at
least three (3) Business Days prior to the end of a Tranche Period
(the
"Terminating Tranche") for any Purchaser Interest, may, effective
on the last
day of the Terminating Tranche: (i) divide any such
6
Purchaser Interest into multiple Purchaser Interests, (ii) combine
any such
Purchaser Interest with one or more other Purchaser Interests that
have a
Terminating Tranche ending on the same day as such Terminating
Tranche or (iii)
combine any such Purchaser Interest with a new Purchaser Interest
to be
purchased on the day such Terminating Tranche ends.
Section 4.4 Financial Institution Discount Rates.
Finance
Subsidiary may select the LIBO Rate or the Base Rate for each
Purchaser Interest
of the Financial Institutions. Finance Subsidiary shall by 12:00
noon (New York
time): (i) at least three (3) Business Days prior to the expiration
of any
Terminating Tranche with respect to which the LIBO Rate is being
requested as a
new Discount Rate and (ii) at least one (1) Business Day prior to
the expiration
of any Terminating Tranche with respect to which the Base Rate is
being
requested as a new Discount Rate, give the Agent irrevocable notice
of the new
Discount Rate for the Purchaser Interest associated with such
Terminating
Tranche. Until Finance Subsidiary gives notice to the Agent of
another Discount
Rate, the initial Discount Rate for any Purchaser Interest
transferred to the
Financial Institutions pursuant to the terms and conditions hereof
shall be the
Base Rate.
Section 4.5 Suspension of the LIBO Rate.
(a) If any Financial Institution notifies the
Agent that it
has determined that funding its Pro Rata Share of the Purchaser
Interests of the
Financial Institutions at a LIBO Rate would violate any applicable
law, rule,
regulation, or directive of any governmental or regulatory
authority, whether or
not having the force of law, or that (i) deposits of a type and
maturity
appropriate to match fund its Purchaser Interests at such LIBO Rate
are not
available or (ii) such LIBO Rate does not accurately reflect the
cost of
acquiring or maintaining a Purchaser Interest at such LIBO Rate,
then the Agent
shall suspend the availability of such LIBO Rate and require
Finance Subsidiary
to select the Base Rate for any Purchaser Interest accruing Yield
at such LIBO
Rate.
(b) If less than all of the Financial
Institutions give a
notice to the Agent pursuant to Section 4.5(a), each Financial
Institution which
gave such a notice shall be obliged, at the request of Finance
Subsidiary,
Conduit or the Agent, to assign all of its rights and obligations
hereunder to
(i) another Financial Institution or (ii) another funding entity
nominated by
Finance Subsidiary or the Agent that is acceptable to Conduit and
willing to
participate in this Agreement in the place of such notifying
Financial
Institution; provided that (i) the notifying Financial Institution
receives
payment in full, pursuant to an Assignment Agreement, of an amount
equal to such
notifying Financial Institution's Pro Rata Share of the Capital and
Yield owing
to all of the Financial Institutions and all accrued but unpaid
fees and other
costs and expenses payable in respect of its Pro Rata Share of the
Purchaser
Interests of the Financial Institutions, and (ii) the replacement
Financial
Institution otherwise satisfies the requirements of Section
12.1(b).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the
Seller
Parties. Each Seller Party hereby represents and warrants to the
Agent and the
Purchasers, as to itself, severally and
7
not jointly, as of the date hereof, and as of the date of each
Incremental
Purchase and the date of each Reinvestment that:
(a) Organization; Power. Such Seller Party (a) is
duly
organized, validly existing and in good standing under the laws of
the
jurisdiction of its organization, (b) has all requisite power and
authority to
own its assets, to carry on its business as now conducted and as
proposed to be
conducted and to execute, deliver and perform its obligations under
each
Transaction Document to which it is a party and (c) except where
the failure to
do so, individually or in the aggregate, could not reasonably be
expected to
result in a Material Adverse Effect, is qualified to do business
in, and is in
good standing in, every jurisdiction where such qualification is
required.
(b) Power and Authority; Due Authorization,
Execution and
Delivery. The Transactions to be entered into by each Seller Party
have been
duly authorized by all necessary corporate or other action and, if
required,
stockholder action. This Agreement has been duly executed and
delivered by each
Seller Party and constitutes, and each other Transaction Document
to which any
Seller Party is to be a party, when executed and delivered by such
Seller Party,
will constitute, a valid and legally binding obligation of such
Seller Party, as
applicable, enforceable in accordance with its terms, subject to
applicable
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting
creditors' rights generally and subject to general principles of
equity,
regardless of whether considered in a proceeding in equity or at
law.
(c) Governmental Approvals, No Conflict. The
execution and
delivery by such Seller Party of this Agreement and each other
Transaction
Document to which it is a party, and the performance of its
obligations
hereunder and thereunder (i) do not require any consent or approval
of,
registration or filing with, or any other action by, any
Governmental Authority,
except such as have been obtained or made and are in full force and
effect and
except filings necessary to perfect security interests created
under the
Transaction Documents, (ii) do not contravene or violate, as the
case may be,
its certificate of incorporation or by-laws, or its certificate of
formation or
limited liability company agreement; (iii) do not require
compliance with any
bulk sales act or similar law, (iv) will not violate any
Requirement of Law
applicable to any Seller Party, (v) will not violate or result in a
default
under any indenture or other material agreement or instrument
binding upon any
Seller Party or any of their respective assets, or give rise to a
right
thereunder to require any payment to be made by any Seller Party or
give rise to
a right of, or result in, termination, cancellation or acceleration
of any
material obligation thereunder, and (vi) will not result in the
creation or
imposition of any Lien on any asset of any Seller Party except
Liens created
under the Transaction Documents.
(d) Actions, Suits. There are no actions, suits
or proceedings
pending, or to the best of such Seller Party's knowledge,
threatened, against or
affecting such Seller Party, or any of its properties, in or before
any court,
arbitrator or other body, that could reasonably be expected
individually or in
the aggregate to have a Material Adverse Effect. Such Seller Party
is not in
default with respect to any material order of any court, arbitrator
or
governmental body.
(e) Accuracy of Information. All information
heretofore
furnished by such Seller Party or any of its Affiliates to the
Agent or the
Purchasers for purposes of or in connection with this Agreement,
any of the
other Transaction Documents or any transaction
8
contemplated hereby or thereby is, and all such information
hereafter furnished
by such Seller Party or any of its Affiliates to the Agent or the
Purchasers
will be, true and accurate in all material respects on or as of the
date such
information is stated or certified.
(f) Use of Proceeds. No proceeds of any purchase hereunder
will be used
(i) for a purpose that violates, or would be inconsistent with,
Regulation T, U
or X promulgated by the Board of Governors of the Federal Reserve
System from
time to time or (ii) to acquire any security in any transaction
which is subject
to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as
amended.
(g) Good Title. Immediately prior to each purchase
hereunder, Finance
Subsidiary shall be the legal and beneficial owner of the
Receivables and
Related Security with respect thereto, free and clear of any Lien,
except as
created by the Transaction Documents. There have been duly filed
all financing
statements or other similar instruments or documents necessary
under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect
Finance
Subsidiary's ownership interest in each Receivable, its Collections
and the
Related Security.
(h) Perfection. This Agreement, together with the filing
of the
financing statements contemplated hereby, is effective to, and
shall, upon each
purchase hereunder, transfer to the Agent for the benefit of the
relevant
Purchaser or Purchasers (and the Agent for the benefit of such
Purchaser or
Purchasers shall acquire from Finance Subsidiary) a valid and
perfected first
priority undivided percentage ownership or security interest in
each Receivable
existing or hereafter arising and in the Related Security and
Collections with
respect thereto, free and clear of any Lien, except as created by
the
Transactions Documents. There have been duly filed all financing
statements or
other similar instruments or documents necessary under the UCC (or
any
comparable law) of all appropriate jurisdictions to perfect the
Agent's (on
behalf of the Purchasers) ownership or security interest in the
Receivables, the
Related Security and the Collections.
(i) UCC Search; Filing Information; Location of Records.
The name (as
it appears in the public records of the relevant jurisdiction of
organization),
the Federal tax identification number, the organizational
identification number,
the type of organization, the jurisdiction of organization, the
mailing address
and the address of the location of the Records of such Seller Party
and Finance
Subsidiary are correctly set forth on Schedule D.
(j) Collections. The conditions and requirements set forth
in Section
7.1(j) and Section 8.2 have at all times been satisfied and duly
performed. The
names and addresses of all Lockbox Banks and Collection Banks,
together with the
account numbers of the Lockboxes, and Collection Accounts of
Finance Subsidiary
at each Collection Bank and the post office box number of each
Lockbox, are
listed on Schedule F. Finance Subsidiary has not granted any
Person, other than
the Agent as contemplated by this Agreement, dominion and control
of any Lockbox
or Collection Account, or the right to take dominion and control of
any such
Lockbox or Collection Account at a future time or upon the
occurrence of a
future event.
(k) Material Adverse Effect. (i) The initial Servicer
represents and
warrants that no event has occurred that would have a material
adverse effect on
the financial condition or
9
operations of the initial Servicer and its Subsidiaries, the
collection of
Receivables or the ability of the initial Servicer to perform its
obligations
under this Agreement, and (ii) Finance Subsidiary represents and
warrants that
since the date of this Agreement, no event has occurred that would
have a
material adverse effect on (A) the financial condition or
operations of Finance
Subsidiary, (B) the ability of Finance Subsidiary to perform its
obligations
under the Transaction Documents, or (C) the collectibility of the
Receivables
generally or any material portion of the Receivables.
(l) Names. No Seller Party has used any corporate
names, trade
names or assumed names other than the name in which it has executed
this
Agreement, and, in the case of Affinia Group, AAG OPCO Corp.
(m) Ownership of Finance Subsidiary. Affinia Group
owns, directly
or indirectly, 100% of the issued and outstanding capital stock of
Finance
Subsidiary, free and clear of any Lien except as set forth in the
Collateral
Agreement. Such capital stock is validly issued, fully paid and
nonassessable,
and there are no options, warrants or other rights to acquire
securities of
Finance Subsidiary.
(n) Investment and Holding Company Status. No Seller
Party is (a)
an "investment company" as defined in, or subject to regulation
under, the
Investment Company Act of 1940 or (b) a "holding company" as
defined in, or
subject to regulation under, the Public Utility Holding Company Act
of 1935.
(o) Compliance with Credit and Collection Policy.
Such Seller
Party and the initial Servicer has complied in all material
respects with the
Credit and Collection Policy with regard to each Receivable and the
related
Contract, and has not made any change to such Credit and Collection
Policy,
except (i) those changes approved with the prior written consent of
the Agent,
or (ii) such material change as to which the Agent has been
notified in
accordance with Section 7.1(a)(vii).
(p) Payments to Sellers. With respect to each
Receivable
transferred to Finance Subsidiary under the Receivables Sale
Agreement, Finance
Subsidiary has given reasonably equivalent value to Affinia Group
for the
account of the applicable Seller in consideration thereof and such
transfer was
not made for or on account of an antecedent debt. No transfer by
any Seller of
any Receivable under the Receivables Sale Agreement is or may be
voidable under
any section of the Bankruptcy Reform Act of 1978 (11 U.S.C.
Sections 101 et
seq.), as amended.
(q) Enforceability of Contracts. Each Contract with
respect to
each Receivable is effective to create, and has created, a valid
and legally
binding obligation of the related Obligor to pay the Outstanding
Balance of the
Receivable created thereunder and any accrued interest thereon,
enforceable
against the Obligor in accordance with its terms, except as such
enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or
other similar
laws relating to or limiting creditors' rights generally and by
general
principles of equity (regardless of whether enforcement is sought
in a
proceeding in equity or at law).
10
(r) Eligible Receivables. Each Receivable included in
the Net
Receivables Balance as an Eligible Receivable on the date of its
purchase under
the Receivables Sale Agreement was an Eligible Receivable on such
purchase date.
(s) Net Receivables Balance. Finance Subsidiary has
determined
that, immediately after giving effect to each purchase hereunder,
the Net
Receivables Balance is at least equal to the sum of (i) the
Aggregate Capital,
plus (ii) the Aggregate Reserves.
(t) Accounting. The manner in which such Seller Party
accounts for
the transactions contemplated by this Agreement and the Receivables
Sale
Agreement does not jeopardize the true sale analysis.
(u) Litigation and Environmental Matters. There are
no actions,
suits or proceedings by or before any arbitrator or Governmental
Authority
pending against or, to the knowledge of such Seller Party
threatened against or
affecting such Seller Party that could reasonably be expected,
individually or
in the aggregate, to adversely affect in any material respect the
ability of the
parties to the Agreement to consummate the Transactions.
Except with respect to any other matters that,
individually or in
the aggregate, could not reasonably be expected to result in a
Material Adverse
Effect, neither Seller Party (i) has failed to comply with any
Environmental Law
or to obtain, maintain or comply with any permit, license or other
approval
required under any Environmental Law, (ii) has become subject to
any
Environmental Liability, (iii) has received notice of any claim
with respect to
any Environmental Liability or (iv) knows of any basis for any
Environmental
Liability.
(v) Compliance with Laws and Agreements. Such Seller
Party is in
compliance with all material Requirements of Law applicable to it
or its
property and all material indentures, agreements and other
instruments binding
upon it or its property. No Amortization Event has occurred and is
continuing.
(w) Taxes. Such Seller Party has timely filed or
caused to be
filed all Tax returns and reports required to have been filed and
has paid or
caused to be paid all Taxes required to have been paid by it,
except (a) any
Taxes that are being contested in good faith by appropriate
proceedings and for
which such Seller Party has set aside on its books adequate
reserves or (b) to
the extent that the failure to do so could not reasonably be
expected to result
in a Material Adverse Effect.
(x) Disclosure. No reports, financial statements,
certificates or
other information furnished by or on behalf of such Seller Party to
the Agent or
of the Purchasers in connection with the negotiation of this
Agreement or any
other Transaction Document or delivered hereunder or thereunder (as
modified or
supplemented by other information so furnished) contains any
material
misstatement of fact or omits to state any material fact necessary
to make the
statements therein, in the light of the circumstances under which
they were
made, not misleading, provided that, with respect to projected
financial
information, such Seller Party represents only that such
information was
prepared in good faith based upon assumptions believed by it to be
reasonable at
the time delivered and, if such projected financial information was
delivered
prior to November 30, 2004, as of November 30, 2004.
11
(y) Solvency. Immediately after the consummation of
the
Transactions to occur on the date hereof (taking into account each
Seller
Party's right to contribution and rights of subrogation) (a) the
fair value of
the assets of such Seller Party, at a fair valuation, will exceed
its debts and
liabilities, subordinated, contingent or otherwise, (b) the present
fair
saleable value of the property of such Seller Party will be greater
than the
amount that will be required to pay the probable liability of its
debts and
other liabilities, subordinated, contingent or otherwise, as such
debts and
other liabilities become absolute and matured, (c) such Seller
Party will be
able to pay its debts and liabilities, subordinated, contingent or
otherwise, as
such debts and liabilities become absolute and matured, and (d)
such Seller
Party will not have unreasonably small capital with which to
conduct the
business in which it is engaged as such business is now conducted
and is
proposed to be conducted following the date hereof.
(z) Collateral Matters. When executed and delivered,
this
Agreement will be effective to create in favor of the Agent for the
ratable
benefit of the Purchasers a valid and enforceable security interest
in the
Receivables and the Related Security described therein and when
financing
statements in appropriate form are filed, the Agreement will
constitute a fully
perfected Lien on and security interest in all right, title and
interest of
Finance Subsidiary in the Collateral described therein to the
extent perfection
can be obtained by filing UCC financing statements, prior and
superior to the
rights of any other Person.
(aa) ERISA. No ERISA Event has occurred or is
reasonably expected
to occur that, when taken together with all other such ERISA Events
for which
liability is reasonably expected to occur, could reasonably be
expected to
result in a Material Adverse Effect. The present value of all
accumulated
benefit obligations of all underfunded Plans (based on the
assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did
not, as of
the date of the most recent financial statements reflecting such
amounts, exceed
the fair market value of the assets of all such underfunded Plans
by an amount
that could reasonably be expected to result in a Material Adverse
Effect.
Section 5.2 Financial Institution Representations and
Warranties.
Each Financial Institution hereby represents and warrants to the
Agent and
Conduit that:
(a) Existence and Power. Such Financial Institution
is a
corporation or a banking association duly organized, validly
existing and in
good standing under the laws of its jurisdiction of incorporation
or
organization, and has all corporate power to perform its
obligations hereunder.
(b) No Conflict. The execution and delivery by such
Financial
Institution of this Agreement and the performance of its
obligations hereunder
are within its corporate powers, have been duly authorized by all
necessary
corporate action, do not contravene or violate (i) its certificate
or articles
of incorporation or association or by-laws, (ii) any law, rule or
regulation
applicable to it, (iii) any restrictions under any agreement,
contract or
instrument to which it is a party or any of its property is bound,
or (iv) any
order, writ, judgment, award, injunction or decree binding on or
affecting it or
its property, and do not result in the creation or imposition of
any Lien on its
assets. This Agreement has been duly authorized, executed and
delivered by such
Financial Institution.
12
(c) Governmental Authorization. No authorization or
approval or
other action by, and no notice to or filing with, any governmental
authority or
regulatory body is required for the due execution and delivery by
such Financial
Institution of this Agreement and the performance of its
obligations hereunder.
(d) Binding Effect. This Agreement constitutes the
valid and
legally binding obligation of such Financial Institution
enforceable against
such Financial Institution in accordance with its terms, except as
such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization
or other similar laws relating to or limiting creditors' rights
generally and by
general principles of equity (regardless of whether such
enforcement is sought
in a proceeding in equity or at law).
ARTICLE VI
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial
Incremental Purchase.
The initial Incremental Purchase of a Purchaser Interest under this
Agreement is
subject to the conditions precedent that the Agent shall have
received on or
before the date of such purchase those documents listed on Schedule
C and the
Agent shall have received all fees and expenses required to be paid
on such date
pursuant to the terms of this Agreement, the Fee Letter.
Section 6.2 Conditions Precedent to All Purchases.
Each making of
an Incremental Purchase shall be subject to the following
conditions precedent
(and acceptance of the proceeds of such Incremental Purchase shall
be deemed a
representation and warranty by Finance Subsidiary that such
conditions precedent
have been satisfied):
(i) the representations and warranties set forth in
Section 5.1
are true and correct on and as of the date of such
Incremental Purchase
as though made on and as of such date;
(ii) no Amortization Date has occurred;
(iii) no event has occurred and is continuing, or
would result
from such Incremental Purchase, that will constitute an
Amortization
Event or Potential Amortization Event;
(iv) the Aggregate Capital does not exceed the
Purchase Limit and
the aggregate Purchaser Interests do not exceed the
Maximum Percentage
Interest;
(v) all periodic reports required to be delivered
pursuant to
Section 7.1 and Section 8.6 hereof shall have been
delivered to the
Agent, in form and substance satisfactory to the Agent,
and upon the
Agent's request, the Servicer shall have delivered to the
Agent at
least three (3) days prior to such purchase an interim
report showing
the amount of Eligible Receivables; and
(vi) the Agent shall have received such other
approvals, opinions
or documents as it may reasonably request
13
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants of the Seller
Parties. Until the
date on which the Aggregate Unpaids have been indefeasibly paid in
full and this
Agreement terminates in accordance with its terms, each Seller
Party hereby
covenants, as to itself, as set forth below:
(a) Financial Statements and Other Information. Each
Seller Party
will furnish to the Agent (for distribution to each Purchaser):
(i) within 90 days after the end of each fiscal
year of each
Seller Party, its audited consolidated balance sheet and
consolidated
statements of income, retained earnings, stockholders'
equity and cash
flows as of the end of and for such fiscal year, and the
related notes
thereto, setting forth in each case in comparative form
the figures for
the previous fiscal year, all reported on by independent
public
accountants of recognized national standing (without a
"going concern"
or like qualification or exception and without any
qualification or
exception as to the scope of such audit) to the effect
that such
consolidated financial statements present fairly in all
material
respects the financial condition and results of operations
of each
Seller Party on a consolidated basis in accordance with
GAAP
consistently applied;
(ii) within 45 days after the end of each of the
first three
fiscal quarters of each fiscal year of each Seller Party,
its
consolidated balance sheet and consolidated statements of
income,
retained earnings, stockholders' equity and cash flows as
of the end of
and for such fiscal quarter and the then-elapsed portion
of the fiscal
year, setting forth in each case in comparative form the
figures for
the corresponding period or periods of (or, in the case of
the balance
sheet, as of the end of) the previous fiscal year, all
certified by a
Financial Officer as presenting fairly in all material
respects the
financial condition and results of operations of each
Seller Party on a
consolidated basis in accordance with GAAP consistently
applied,
subject to normal year-end audit adjustments and the
absence of
footnotes;
(iii) within 90 days after the end of each fiscal
year of the
Finance Subsidiary, its balance sheet and statements of
income,
retained earnings, stockholders' equity and cash flows as
of the end of
and for such fiscal year, setting forth in each case in
comparative
form the figures for the previous fiscal year, all
certified by a
Financial Officer of the Servicer as presenting fairly in
all material
respects the financial condition and results of operations
of Finance
Subsidiary on a stand-alone basis in accordance with GAAP
consistently
applied;
(iv) As set forth in Section 8.6 hereto, the
Servicer shall
deliver Periodic Reports and other reports.
(v) concurrently with any delivery of financial
statements
under paragraph (i), (ii) or (iii) above, a compliance
certificate of a
Financial Officer substantially in the form of Exhibit II
hereto (i)
certifying as to whether an Amortization Event has
occurred and, if an
Amortization Event has occurred, specifying the details
thereof and any
action taken
14
or proposed to be taken with respect thereto, and (ii)
stating whether
any change in GAAP or in the application thereof has
occurred since
November 30, 2004 and, if any such change has occurred,
specifying the
effect of such change on the financial statements
accompanying such
certificate;
(vi) concurrently with any delivery of financial
statements
under paragraph (1) above, a certificate of the accounting
firm that
reported on such financial statements stating whether they
obtained
knowledge during the course of their examination of such
financial
statements of any Amortization Event and, if such
knowledge has been
obtained, describing such Amortization Event (which
certificate may be
limited to the extent required by accounting rules or
guidelines);
(vii) within 60 days after the commencement of
each fiscal
year of each Seller Party, a detailed consolidated budget
for such
fiscal year (including a projected consolidated balance
sheet and
consolidated statements of income, stockholders' equity
and cash flows
as of the end of and for such fiscal year and setting
forth the
assumptions used for purposes of preparing such budget)
and, promptly
when available, any significant revisions of such budget;
(vii) promptly after the same become publicly
available,
copies of all periodic and other reports, proxy statements
and other
materials filed by any Seller Party with the SEC or with
any national
securities exchange, as applicable; and
(ix) promptly following any request therefor,
such other
information regarding the operations, business affairs and
financial
condition of each Seller Party, or compliance with the
terms of any
Transaction Document, as the Agent or any Purchaser may
reasonably
request.
(x) promptly upon its receipt of any notice,
request for
consent, financial statements, certification, report or
other
communication under or in connection with any Transaction
Document from
any Person other than the Agent or Conduit, copies of the
same.
(xi) At least thirty (30) days prior to the
effectiveness of
any material change in or material amendment to the Credit
and
Collection Policy, a copy of the Credit and Collection
Policy then in
effect and a notice (A) indicating such change or
amendment, and (B) if
such proposed change or amendment would be reasonably
likely to
adversely affect the collectibility of the Receivables or
decrease the
credit quality of any newly created Receivables,
requesting the Agent's
consent thereto.
(b) Notices of Material Events. Each Seller Party
will furnish to
the Agent (for distribution to each Purchaser), prompt written
notice of the
following:
(i) the occurrence of each Amortization Event and
each
Potential Amortization Event, by a statement of an
Authorized Officer
of such Seller Party;
(ii) the entry of any judgment or decree against
the Servicer
or any of its
15
respective Subsidiaries if the aggregate amount of all
judgments and decrees then outstanding against the
Servicer and its
Subsidiaries exceeds $5,000,000 and (2) the filing or
commencement of
any action, suit or proceeding by or before any arbitrator
or
Governmental Authority against or affecting any Seller
Party that, if
adversely determined, could reasonably be expected to
result in a
Material Adverse Effect; and (3) the entry of any judgment
or decree or
the institution of any litigation, arbitration proceeding
or
governmental proceeding against Finance Subsidiary;
(iii) any other development that results in, or
could
reasonably be expected to result in, a Material Adverse
Effect;
(iv) the occurrence of the "Amortization Date"
under and as
defined in the Receivables Sale Agreement;
(v) the occurrence of a default or an event of
default under
any other financing arrangement pursuant to which such
Seller Party is
a debtor or an obligor;
(vi) any downgrade in the rating of any
Indebtedness of
Affinia Group or any Seller by Standard & Poor's
Ratings Group or by
Moody's Investors Service, Inc., setting forth the
Indebtedness
affected and the nature of such change;
(vii) the occurrence of any ERISA Event or any
fact or
circumstance that gives rise to a reasonable expectation
that any ERISA
Event will occur that, in either case, alone or together
with any other
ERISA Events that have occurred, could reasonably be
expected to result
in liability of the Finance Subsidiary in an aggregate
amount exceeding
$5,000,000;
Each notice delivered under this Section shall be
accompanied
by a statement of a Financial Officer setting forth the details of
the event or
development requiring such notice and any action taken or proposed
to be taken
with respect thereto.
(c) Information Regarding Collateral. Each Seller
Party as to
itself will furnish to the Agent prompt written notice of any
change (i) in the
Seller Party's corporate name, (ii) in the jurisdiction of
incorporation or
organization of any Seller Party or (iii) in any Seller Party's
organizational
identification number. The Seller Party agrees not to effect or
permit any
change referred to in the preceding sentence unless all filings
have been made
under the UCC or otherwise that are required in order for the Agent
to continue
at all times following such change to have a valid, legal and
perfected security
interest in all the Collateral (as defined in the Collateral
Agreement). Each
Seller Party also agrees promptly to notify the Agent if any
material portion of
the Collateral is damaged or destroyed.
(d) Existence; Conduct of Business. Each Seller
Party will do
or cause to be done all things necessary to preserve, renew and
keep in full
force and effect its legal existence and the rights,
qualifications, permits,
approvals, authorizations, licenses, franchises, patents,
copyrights, trademarks
and trade names material to the conduct of its business, provided
that the
foregoing shall not prevent each Seller Party from causing or
permitting the
expiration, abandonment, impairment or invalidation of any rights,
qualifications, permits, approvals,
16
authorizations, licenses, franchises, patents, copyrights,
trademarks or
tradenames, or from failing to renew, abandoning, impairing or
permitting to
expire any applications or registrations for any of such item, if,
in such
Seller Party's reasonable good faith judgment, such item is no
longer material
to the conduct of its business.
(e) Audits. Such Seller Party will furnish to the
Agent from
time to time such information with respect to it and the
Receivables as the
Agent may reasonably request. Such Seller Party will, from time to
time during
regular business hours as requested by the Agent upon reasonable
notice, permit
the Agent, or its agents or representatives (and shall cause each
Seller to
permit the Agent or its agents or representatives), (i) to examine
and make
copies of and abstracts from all Records in the possession or under
the control
of such Person relating to the Receivables and the Related
Security, including,
without limitation, the related Contracts, and (ii) to visit the
offices and
properties of such Person for the purpose of examining such
materials described
in clause (i) above, and to discuss matters relating to such
Person's financial
condition or the Receivables and the Related Security or any
Person's
performance under any of the Transaction Documents or any Person's
performance
under the Contracts and, in each case, with any of the officers or
employees of
Finance Subsidiary or the Servicer having knowledge of such
matters. Before the
occurrence of an Early Amortization Event, the first two of such
examinations
and related visits during each calendar year shall be at the sole
cost of such
Seller Party. After the occurrence of an Early Amortization Event,
all
examinations and related visits shall be at the sole cost of such
Seller Party.
(f) Books and Records; Inspection and Audit
Rights.
(i) Each Seller Party will keep proper books
of record and
account in accordance with GAAP, consistently applied, and
in
accordance with its internal controls. Each Seller Party
will permit
any representatives designated by the Agent or any
Purchaser, upon
reasonable prior notice, to visit and inspect its
properties during
normal business hours, to examine and make extracts from
its books and
records, and to discuss its affairs, finances and
condition with its
officers and independent accountants, all at such
reasonable times and
as often as reasonably requested (subject to reasonable
requirements of
confidentiality, including requirements imposed by law or
by contract),
provided that an officer of each Seller Party may attend
any such
discussions with such accountants.
(ii) Affinia Group will (and will cause each
Seller to)
maintain and implement administrative and operating
procedures
(including, without limitation, an ability to recreate
records
evidencing Receivables in the event of the destruction of
the originals
thereof), and keep and maintain all documents, books,
records and other
information reasonably necessary or advisable for the
collection of all
Receivables (including, without limitation, records
adequate to permit
the immediate identification of each new Receivable and
all Collections
of and adjustments to each existing Receivable). Affinia
Group will
(and will cause each Seller to) give the Agent notice of
any material
change in the administrative and operating procedures
referred to in
the previous sentence.
(iii) Affinia Group will (and will cause each
Seller to)
(A) on or prior to the date hereof, mark its master data
processing
records and other books and records
17
relating to the Purchaser Interests with a legend,
acceptable to the
Agent, describing the Purchaser Interests and (B) upon the
request of
the Agent (x) mark each Contract with a legend describing
the
Purchaser Interests and (y) deliver to the Agent all
Contracts
(including, without limitation, all multiple originals of
any such
Contract) relating to the Receivables.
(g) Compliance with Laws. Each Seller Party will
comply with
all Requirements of Law, including Environmental Laws, applicable
to it or its
property, except where the failure to do so, individually or in the
aggregate,
could not reasonably be expected to result in a Material Adverse
Effect.
(h) Compliance with Contracts and Credit and
Collection
Policy. Such Seller Party will (and will cause each Seller to)
timely and fully
(i) perform and comply with all provisions, covenants and other
promises
required to be observed by it under the Contracts related to the
Receivables,
and (ii) comply in all respects with the Credit and Collection
Policy in regard
to each Receivable and the related Contract.
(i) Performance and Enforcement of Receivables
Sale Agreement.
Finance Subsidiary will, and will require each Seller to, perform
each of their
respective obligations and undertakings under and pursuant to the
Receivables
Sale Agreement, will purchase Receivables thereunder in strict
compliance with
the terms thereof and will vigorously enforce the rights and
remedies accorded
to Finance Subsidiary under the Receivables Sale Agreement. Finance
Subsidiary
will take all actions to perfect and enforce its rights and
interests (and the
rights and interests of the Agent and the Purchasers as assignees
of Finance
Subsidiary) under the Receivables Sale Agreement as the Agent may
from time to
time reasonably request, including, without limitation, making
claims to which
it may be entitled under any indemnity, reimbursement or similar
provision
contained in the Receivables Sale Agreement.
(j) Ownership. Finance Subsidiary will (or will
cause each
Seller to) take all necessary action to (i) vest legal and
equitable title to
the Receivables, the Related Security and the Collections purchased
under the
Receivables Sale Agreement irrevocably in Finance Subsidiary, free
and clear of
any Liens other than Liens in favor of the Agent and the Purchasers
(including,
without limitation, the filing of all financing statements or other
similar
instruments or documents necessary under the UCC (or any comparable
law) of all
appropriate jurisdictions to perfect Finance Subsidiary's interest
in such
Receivables, Related Security and Collections and such other action
to perfect,
protect or more fully evidence the interest of Finance Subsidiary
therein as the
Agent may reasonably request), and (ii) establish and maintain, in
favor of the
Agent, for the benefit of the Purchasers, a valid and perfected
first priority
security interest in all Receivables, Related Security and
Collections to the
full extent contemplated herein, free and clear of any Liens other
than Liens in
favor of the Agent for the benefit of the Purchasers (including,
without
limitation, the filing of all financing statements or other similar
instruments
or documents necessary under the UCC (or any comparable law) of all
appropriate
jurisdictions to perfect the Agent's (for the benefit of the
Purchasers)
interest in such Receivables, Related Security and Collections and
such other
action to perfect, protect or more fully evidence the interest of
the Agent for
the benefit of the Purchasers as the Agent may reasonably request).
18
(k) Purchasers' Reliance. Finance Subsidiary
acknowledges that
the Purchasers are entering into the transactions contemplated by
this Agreement
in reliance upon Finance Subsidiary's identity as a legal entity
that is
separate from Affinia Group and each Seller. Therefore, from and
after the date
of execution and delivery of this Agreement, Finance Subsidiary
shall take all
reasonable steps, including, without limitation, all steps that the
Agent or any
Purchaser may from time to time reasonably request, to maintain
Finance
Subsidiary's identity as a separate legal entity and to make it
manifest to
third parties that Finance Subsidiary is an entity with assets and
liabilities
distinct from those of Affinia Group and each Seller and any
Affiliates thereof
and not just a division of Affinia Group or any Seller or any such
Affiliate.
Without limiting the generality of the foregoing and in addition to
the other
covenants set forth herein, Finance Subsidiary will:
(A) conduct its own business in its own
name and
require that all full-time employees of
Finance Subsidiary,
if any, identify themselves as such and not as
employees of
Affinia Group or any Seller (including,
without limitation,
by means of providing appropriate employees
with business
or identification cards identifying such
employees as
Finance Subsidiary's employees);
(B) compensate all employees, consultants
and agents
directly, from Finance Subsidiary's own funds,
for services
provided to Finance Subsidiary by such
employees,
consultants and agents and, to the extent any
employee,
consultant or agent of Finance Subsidiary is
also an
employee, consultant or agent of Affinia Group
or any
Seller or any Affiliate thereof, allocate the
compensation
of such employee, consultant or agent between
Finance
Subsidiary on one hand and Affinia Group, such
Seller or
such Affiliate, as applicable, on the other
hand, on a
basis that reflects the services rendered to
Finance
Subsidiary and Affinia Group, such Seller or
such
Affiliate, as applicable;
(C) clearly identify its offices (by
signage or
otherwise) as its offices and, if such office
is located in
the offices of Affinia Group or any Seller,
Finance
Subsidiary shall lease such office at a fair
market rent;
(D) have a separate telephone number,
which will be
answered only in its name and separate
stationery, invoices
and checks in its own name;
(E) conduct all transactions with Affinia
Group, each
Seller and the Servicer (including, without
limitation, any
delegation of its obligations hereunder as
Servicer)
strictly on an arm's-length basis, allocate
all overhead
expenses (including, without limitation,
telephone and
other utility charges) for items shared
between Finance
Subsidiary on one hand and Affinia Group and
any Seller, on
the other hand, on the basis of actual use to
the extent
practicable and, to the extent such allocation
is not
practicable, on a basis reasonably related to
actual use;
19
(F) at all times have a Board of
Directors consisting
of three members, at least one member of which
is an
Independent Director;
(G) observe all corporate formalities as
a distinct
entity, and ensure that all corporate actions
relating to
(A) the selection, maintenance or replacement
of the
Independent Director, (B) the dissolution or
liquidation of
Finance Subsidiary or (C) the initiation of,
participation
in, acquiescence in or consent to any
bankruptcy,
insolvency, reorganization or similar
proceeding involving
Finance Subsidiary, are duly authorized by
unanimous vote
of its Board of Directors (including the
Independent
Director);
(H) maintain Finance Subsidiary's books
and records
separate from those of Affinia Group, the
Sellers and any
Affiliate thereof and otherwise readily
identifiable as its
own assets rather than assets of Affinia
Group, any Seller
or any Affiliate thereof;
(I) prepare its financial statements
separately from
those of Affinia Group and the Sellers and
insure that any
consolidated financial statements of Affinia
Group and the
Sellers or any Affiliate thereof that include
Finance
Subsidiary and that are filed with the
Securities and
Exchange Commission or any other governmental
agency have
notes clearly stating that Finance Subsidiary
is a separate
corporate entity and that its assets are not
available to
satisfy the claims of creditors of the Affinia
Group and
the Sellers;
(J) except as herein specifically
otherwise provided,
maintain the funds or other assets of Finance
Subsidiary
separate from, and not commingled with, those
of Affinia
Group, any Seller or any Affiliate thereof and
only
maintain bank accounts or other depository
accounts to
which Finance Subsidiary alone is the account
party, into
which Finance Subsidiary alone makes deposits
and from
which Finance Subsidiary alone (or the Agent
in accordance
with this Agreement) has the power to make
withdrawals;
(K) pay all of Finance Subsidiary's
operating expenses
from Finance Subsidiary's own assets (except
for certain
payments by Affinia Group or the Seller or
other Persons
pursuant to allocation arrangements that
comply with the
requirements of this Section 7.1(k));
(L) operate its business and activities
such that: it
does not engage in any business or activity of
any kind, or
enter into any transaction or indenture,
mortgage,
instrument, agreement, contract, lease or
other
undertaking, other than the transactions
contemplated and
authorized by this Agreement and the
Receivables Sale
Agreement; and does not create, incur,
guarantee, assume or
suffer to exist any indebtedness or other
liabilities,
whether direct or contingent, other than
20
(1) as a result of the endorsement of
negotiable
instruments for deposit or collection or
similar
transactions in the ordinary course of
business, (2) the
incurrence of obligations under this
Agreement, (3) the
incurrence of obligations, as expressly
contemplated in
the Receivables Sale Agreement, to make
payment to the
Sellers thereunder for the purchase of
Receivables from
the Sellers under the Receivables Sale
Agreement, and
(4) the incurrence of operating expenses in
the ordinary
course of business of the type otherwise
contemplated by
this Agreement;
(M) maintain its organizational documents
in
conformity with this Agreement, such that it
does not
amend, restate, supplement or otherwise modify
its
certificate of formation or limited liability
company
agreement in any respect that would impair its
ability to
comply with the terms or provisions of any of
the
Transaction Documents, including, without
limitation,
Section 7.1(k) of this Agreement;
(N) maintain the effectiveness of, and
continue to
perform under the Receivables Sale Agreement
and the
Performance Undertaking, such that it does not
amend,
restate, supplement, cancel, terminate or
otherwise modify
the Receivables Sale Agreement or the
Performance
Undertaking, or give any consent, waiver,
directive or
approval thereunder or waive any default,
action, omission
or breach under the Receivables Sale Agreement
or the
Performance Undertaking or otherwise grant any
indulgence
thereunder, without (in each case) the prior
written
consent of the Agent;
(O) maintain its corporate separateness
such that it
does not merge or consolidate with or into, or
convey,
transfer, lease or otherwise dispose of
(whether in one
transaction or in a series of transactions,
and except as
otherwise contemplated herein) all or
substantially all of
its assets (whether now owned or hereafter
acquired) to, or
acquire all or substantially all of the assets
of, any
Person, nor at any time create, have, acquire,
maintain or
hold any interest in any Subsidiary.
(P) refrain from making any dividend,
distribution,
redemption of capital stock or payment of any
subordinated
indebtedness which would cause the Minimum Net
Worth as of
the end of any Calculation Period (as defined
in the
Receivables Sale Agreement) to cease to be
maintained; and
(Q) take such other actions as are
necessary on its
part to ensure that the facts and assumptions
set forth in
the opinion issued by Simpson Thacher &
Bartlett LLP, as
counsel for Finance Subsidiary, in connection
with the
closing or initial Incremental Purchase under
this
Agreement and relating to substantive
consolidation issues,
and in the certificates accompanying such
opinion, remain
true and correct in all material respects at
all times.
21
(l) Collections. Such Seller Party will cause (1)
all proceeds
from all Lockboxes to be directly deposited by a Collection Bank
into a
Collection Account and (2) each Lockbox and Collection Account to
be subject at
all times to a Control Agreement that is in full force and effect.
In the event
any payments relating to Receivables are remitted directly to
Finance Subsidiary
or any Affiliate of Finance Subsidiary, Finance Subsidiary will
remit (or will
cause all such payments to be remitted) directly to a Collection
Bank and
deposited into a Collection Account within two (2) Business Days
following
receipt thereof, and, at all times prior to such remittance,
Finance Subsidiary
will itself hold or, if applicable, will cause such payments to be
held in trust
for the exclusive benefit of the Agent and the Purchasers. Finance
Subsidiary
will maintain exclusive ownership, dominion and control (subject to
the terms of
this Agreement) of each Lockbox and Collection Account and shall
not grant the
right to take dominion and control of any Lockbox or Collection
Account at a
future time or upon the occurrence of a future event to any Person,
except to
the Agent as contemplated by this Agreement.
(m) Payment of Taxes. Each Seller Party will pay
its Tax
liabilities, before the same shall become delinquent or in default,
except where
(a) the validity or amount thereof is being contested in good faith
by
appropriate proceedings, (b) such Seller Party has set aside on its
books
adequate reserves with respect thereto in accordance with GAAP, (c)
such contest
effectively suspends collection of the contested obligation and the
enforcement
of any Lien securing such obligation and (d) the failure to make
payment pending
such contest could not reasonably be expected to result in a
Material Adverse
Effect. Finance Subsidiary will pay when due any taxes payable in
connection
with the Receivables, exclusive of taxes on or measured by income
or gross
receipts of Conduit, the Agent or any Financial Institution.
(n) Insurance. Finance Subsidiary at its own
expense will
maintain, with financially sound and reputable insurance companies,
(a)
insurance in such amounts (with no greater risk retention) and
against such
risks as are customarily maintained by companies of established
repute engaged
in the same or similar businesses operating in the same or similar
locations and
(b) all insurance required to be maintained pursuant to the
Transaction
Documents. The Finance Subsidiary will furnish to the Purchasers,
upon request
of the Agent, information in reasonable detail as to the insurance
so
maintained. The foregoing requirements shall not be construed to
negate, reduce
or modify, and are in addition to, Finance Subsidiary's obligations
hereunder.
(o) Payment to Sellers. With respect to any
Receivable
purchased by Finance Subsidiary from Sellers, such sale shall be
effected under,
and in strict compliance with the terms of, the Receivables Sale
Agreement,
including, without limitation, the terms relating to the amount and
timing of
payments to be made to Affinia Group for the account of the
applicable Seller in
respect of the purchase price for such Receivable.
Section 7.2 Negative Covenants of the Seller
Parties. Until
the date on which the Aggregate Unpaids have been indefeasibly paid
in full and
this Agreement terminates in accordance with its terms, each Seller
Party hereby
covenants, as to itself, that:
(a) Name Change, Offices and Records. Such Seller
Party will
not take any action that would cause any financing statement to
become
"seriously misleading" under Section
22
9-507 of the UCC or change its location as specified in Section
9-307 of the UCC
unless it shall have: (i) given the Agent at least thirty (30)
days' prior
written notice thereof and (ii) delivered to the Agent all
financing statements,
instruments and other documents requested by the Agent in
connection with such
change or relocation.
(b) Change in Payment Instructions to Obligors.
Except as may
be required by the Agent pursuant to Section 8.2(b), such Seller
Party will not
add or terminate any bank as a Collection Bank, or make any change
in the
instructions to Obligors regarding payments to be made to any
Lockbox or
Collection Account, unless the Agent shall have received, at least
ten (10) days
before the proposed effective date therefor, (i) written notice of
such
addition, termination or change and (ii) with respect to the
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