Exhibit 10.3
EXECUTION COPY
RECEIVABLES SALE AGREEMENT
DATED AS OF NOVEMBER 30, 2004
among
AFFINIA GROUP INC., as Seller Agent,
CERTAIN SUBSIDIARIES THEREOF,
as Sellers
AND
AFFINIA RECEIVABLES LLC,
as Finance Subsidiary
TABLE OF CONTENTS
Page
ARTICLE I AMOUNTS AND TERMS
1
Section 1.1 Purchase of
Receivables..................................1
Section 1.2 Payment for the
Purchase.................................2
Section 1.3 Purchase Price Credit Adjustments. If on any
day:.......4
Section 1.4 Payments and Computations,
Etc...........................4
Section 1.5 Transfer of
Records......................................6
Section 1.6
Characterization.........................................6
Section 1.7 No
Repurchase............................................7
Section 1.8 Intercompany
Note........................................7
ARTICLE II REPRESENTATIONS AND WARRANTIES
8
Section 2.1 Representations and Warranties of Seller
Parties.........8
Section 2.2 Representations and Warranties of Finance
Subsidiary....11
ARTICLE III CONDITIONS OF PURCHASE
12
Section 3.1 Conditions Precedent to Initial
Purchase................12
Section 3.2 Conditions Precedent to all Purchases by
Finance
Subsidiary.......
....................................12
Section 3.3 Conditions Precedent to all Sales by
Sellers............12
ARTICLE IV COVENANTS
13
Section 4.1 Affirmative Covenants of Seller
Parties.................13
Section 4.2 Negative Covenants of
Sellers...........................17
ARTICLE V AMORTIZATION EVENTS
18
Section 5.1 Amortization
Events.....................................18
Section 5.2
Remedies................................................19
ARTICLE VI INDEMNIFICATION
19
Section 6.1 Indemnities by
Sellers..................................19
Section 6.2 Other Costs and
Expenses................................21
ARTICLE VII MISCELLANEOUS
22
Section 7.1 Waivers and
Amendments..................................22
Section 7.2
Notices.................................................22
Section 7.3 Protection of Ownership Interests of Finance
Subsidiary.22
Section 7.4
Confidentiality.........................................23
Section 7.5 Bankruptcy
Petition.....................................23
Section 7.6 CHOICE OF
LAW...........................................23
Section 7.7 CONSENT TO
JURISDICTION.................................23
Section 7.8 WAIVER OF JURY
TRIAL....................................24
Section 7.9 Integration; Binding Effect; Survival of
Terms..........24
Section 7.10 Counterparts; Severability; Section
References..........24
2
Schedules and Exhibits
Schedule A Definitions
Schedule B UCC Search; Filing Information; Location of
Records
Schedule C Collection Banks, Collection Accounts and
Lockboxes
Schedule D Documents to be Delivered to the Agent at or
before the
Initial Purchase
Schedule E Credit and Collection Policy
Exhibit I Form of Compliance Certificate
Exhibit II Form of Subordinated Note
Exhibit III Form of Stockholder and Subscription Agreement
3
RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of
November 30,
2004, is by and among each of the Sellers listed on the signature
pages hereto
(each, a "Seller"), AFFINIA GROUP INC., a Delaware Corporation
("Affinia Group")
in its capacity as agent for the Sellers hereunder (in such
capacity, the
"Seller Agent", and together with the Sellers, the "Seller
Parties") and AFFINIA
RECEIVABLES LLC, a Delaware limited liability company ("Finance
Subsidiary").
Unless defined elsewhere herein, capitalized terms used in this
Agreement shall
have the meanings assigned to such terms in Schedule A.
PRELIMINARY STATEMENTS
Each of the Sellers now owns, and from time to time hereafter
will own,
Receivables. Each Seller wishes to sell and assign to Finance
Subsidiary, and
Finance Subsidiary wishes to purchase from each Seller, all of such
Seller's
right, title and interest in and to such Receivables, together with
the Related
Security and Collections with respect thereto.
Each Seller and Finance Subsidiary intend the transactions
contemplated
hereby to be true sales of the Receivables from the applicable
Seller to Finance
Subsidiary, providing Finance Subsidiary with the full benefits of
ownership of
the Receivables, and the Sellers and Finance Subsidiary do not
intend these
transactions to be, or for any purpose to be characterized as,
loans from
Finance Subsidiary to any Seller.
Following the purchase of Receivables from the Sellers,
Finance Subsidiary
will sell undivided interests therein and in the associated Related
Security and
Collections pursuant to that certain Receivables Purchase Agreement
dated as of
November 30, 2004 (as the same may from time to time hereafter be
amended,
supplemented, restated or otherwise modified, the "Receivables
Purchase
Agreement") among Finance Subsidiary, Affinia Group, as Servicer,
Park Avenue
Receivables Company LLC ("PARCO"), the financial institutions from
time to time
party thereto as "Financial Institutions" and JPMorgan Chase Bank,
N.A., or any
successor agent appointed pursuant to the terms of the Receivables
Purchase
Agreement, as agent for PARCO and such Financial Institutions (in
such capacity,
the "Agent").
ARTICLE I
AMOUNTS AND TERMS
Section 1.1 Purchase of Receivables.
(a) Effective on the date hereof, in consideration for the
Purchase Price
and upon the terms and subject to the conditions set forth herein,
each Seller
hereby sells, assigns, transfers, sets over and otherwise conveys
to Finance
Subsidiary, without recourse (except to the extent expressly
provided herein),
and Finance Subsidiary does hereby purchase from each
Seller, all of each such Seller's right, title and interest in and
to all of
such Seller's Receivables existing as of the close of business on
the Business
Day immediately prior to the date hereof and all of such Seller's
Receivables
thereafter arising through and including the Amortization Date,
together, in
each case, with all Related Security relating thereto and all
Collections
thereof. In accordance with the preceding sentence, on the date
hereof Finance
Subsidiary shall acquire all of each Seller's right, title and
interest in and
to all of such Seller's Receivables existing as of the close of
business on the
Business Day immediately prior to the date hereof and thereafter
arising through
and including the Amortization Date, together with all Related
Security relating
thereto and all Collections thereof; provided, that, Finance
Subsidiary shall be
obligated to pay the Purchase Price therefor in accordance with
Section 1.2.
(b) It is the intention of the parties hereto that the
Purchase of
Receivables made hereunder shall constitute a "sale of accounts"
(as such term
is used in Article 9 of the UCC), which sale is absolute and
irrevocable and
provides Finance Subsidiary with the full benefits of ownership of
the
Receivables. Except for the Purchase Price Credits owed pursuant to
Section 1.3,
the sale of Receivables hereunder is made without recourse to any
Seller;
provided, however, that (i) each Seller shall be liable to Finance
Subsidiary
for all representations, warranties and covenants made by such
Seller pursuant
hereto, and (ii) such sale does not constitute and is not intended
to result in
an assumption by Finance Subsidiary or any assignee thereof of any
obligation of
any Seller or any other Person arising in connection with the
Receivables, the
related Contracts and/or other Related Security or any other
obligations of any
Seller. In view of the intention of the parties hereto that the
Purchase of
Receivables made hereunder shall constitute a sale of such
Receivables rather
than loans secured thereby, each of the Sellers will, on or prior
to the date
hereof and in accordance with Section 4.1(e)(ii), (i) indicate
clearly and
unambiguously in its computer files that all Receivables have been
or will be
conveyed to Finance Subsidiary pursuant to this Agreement and (ii)
note in its
accounting records that the Receivables have been sold to Finance
Subsidiary.
Upon the request of Finance Subsidiary or the Agent (as Finance
Subsidiary's
assignee), each Seller will execute and file such financing or
continuation
statements, or amendments thereto or assignments thereof, and such
other
instruments or notices, as may be necessary or appropriate to
perfect and
maintain the perfection of Finance Subsidiary's ownership interest
in the
Receivables and the Related Security and Collections with respect
thereto, or as
Finance Subsidiary or the Agent (as Finance Subsidiary's assignee)
may
reasonably request.
Section 1.2 Payment for the Purchase.
(a) The Purchase Price for each Purchase from a Seller shall
be payable in
full by Finance Subsidiary to such Seller or its designee on each
Purchase Date
and shall be paid to such Seller in the manner provided in this
Article I;
provided that for purposes of the initial Purchase Date, the
Purchase Price for
the Receivables existing on such date shall be based on the
Receivables of each
Seller existing as of the Cut-Off Date (the "Initial Effective Date
Purchase
Price"). On the first Settlement Date occurring after the Closing
Date (the
"Initial Settlement Date"), each Seller shall determine the
Purchase Price for
the Receivables existing on the Closing Date based on the
Receivables existing
on the Closing Date (the "Actual Effective Date Purchase Price").
If the Initial
Effective Date Purchase Price paid by Finance Subsidiary on the
Closing Date is
greater than the Actual Effective Date Purchase Price with respect
to any
Seller,
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such Seller shall pay to Finance Subsidiary an amount equal to such
excess on
the Initial Settlement Date. If the Initial Effective Date Purchase
Price paid
by Finance Subsidiary on the Closing Date is less than the Actual
Effective Date
Purchase Price with respect to any Seller, Finance Subsidiary shall
pay to such
Seller an amount equal to such difference on the Initial Settlement
Date by
increasing the outstanding principal amount of the Intercompany
Note for the
account of such Seller in the amount of the difference.
(b) Upon the fulfillment of the conditions set forth in
Article III, the
Purchase Price for Receivables shall be paid or provided for
(without
duplication) by Finance Subsidiary in the manner provided in
Section 1.2(c) on
the date of the initial Purchase from the applicable Seller and on
each Purchase
Date thereafter until the Amortization Date.
(c) The Purchase Price for Receivables shall be paid by
Finance Subsidiary
on each Purchase Date (including the initial Purchase Date) as
follows:
(i) by netting the amount of any Purchase Price Credits
then due to
Finance Subsidiary against such Purchase Price;
(ii) to the extent available for such purpose (as
determined by Finance
Subsidiary), in cash;
(iii) on the initial Purchase Price only, by transferring
to the
relevant Seller a Capital Note (such Capital Note to be valued
at par)
indorsed in favor of such Seller; and
(iv) by means of an addition to the principal amount of
the
Intercompany Note in an aggregate amount up to the remaining
portion of the
Purchase Price (after subtraction of the amounts paid in
accordance with
clauses (i), (ii) and (iii) of this subsection (c). Any such
addition to
the principal amount of the Intercompany Note shall be
allocated among the
Sellers (pro rata according to the aggregate purchase price
for the
Receivables sold by each Seller on such day) by the Seller
Agent in
accordance with the provisions of this Section 1.2(c)(iii) and
Section 1.8.
The Seller Agent may evidence such additional principal
amounts by
recording the date and amount thereof on the grid attached to
the
Intercompany Note; provided, however, that the failure to make
any such
recordation or any error in such grid shall not adversely
affect any
Seller's rights.
(d) The Seller Agent shall be responsible, in accordance with
Section
1.2(a), for allocating among the Sellers the payment of the
Purchase Price for
Receivables and any amounts netted therefrom pursuant to Section
1.2(c)(i) or
credited to the Seller Agent pursuant to Section 1.2(c)(ii) or in
the form of
cash to be paid pursuant to Sections 1.2(c)(ii) or in the form of a
Capital Note
(if such Capital Note shall be payable to the order of the Seller
Agent for the
account of the Sellers) in accordance with Section 1.2(c)(iii) or
in the form of
an addition to the principal amount of the Intercompany Note
pursuant to Section
1.2(c)(iv). All amounts payable by Finance Subsidiary in respect of
the Purchase
Price of Receivables shall be paid by Finance Subsidiary to an
account of the
Seller Agent for allocation by the Seller Agent to the respective
Sellers
(ratably in accordance with the portion of such Purchase Price
owing to each).
Each of
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the Sellers hereby appoints the Seller Agent as its agent for
purposes of
receiving such payments, making such allocations and taking any
other actions
hereunder on its behalf and hereby authorizes Finance Subsidiary to
make all
payments due to such Seller directly to, or as directed by, the
Seller Agent.
The Seller Agent hereby accepts and agrees to such appointment. Any
such payment
by Finance Subsidiary to or at the direction of the Seller Agent
shall
constitute a full and complete discharge of Finance Subsidiary's
liability for
the amounts so paid, whether or not the proceeds of such payment
are properly
distributed by the Seller Agent to the applicable Seller for whose
account such
payment was made.
Section 1.3 Purchase Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable is:
(i) reduced as a result of any defective or rejected goods
or services,
any discount or any adjustment or otherwise by any applicable
Seller (other
than cash Collections on account of the Receivables),
(ii) reduced or canceled as a result of a setoff in
respect of any
claim by any Person (whether such claim arises out of the same
or a related
transaction or an unrelated transaction), or
(b) any of the representations and warranties set forth in
Article II are
no longer true with respect to any Receivable,
then, in such event, Finance Subsidiary shall be entitled to a
credit (each, a
"Purchase Price Credit") against the Purchase Price otherwise
payable hereunder
equal to the Outstanding Balance of such Receivable. If the
aggregate Purchase
Price Credits in respect of any Seller exceeds the Purchase Price
in respect of
the Receivables of such Seller payable on any Purchase Date, then
such Seller
agrees to pay the remaining amount of such Purchase Price Credit to
Finance
Subsidiary in cash on or prior to the Settlement Date with respect
to the
Settlement Period during which such Purchase Price Credit arises.
Simultaneously
with the granting or payment of any Purchase Price Credit by any
Seller in
respect of a Receivable under Section 1.3(b), such Receivable shall
immediately
and automatically be sold, assigned, transferred and reconveyed
(without
recourse) by Finance Subsidiary to such Seller without any further
action by
Finance Subsidiary or any other Person.
Section 1.4 Payments and Computations, Etc.
(a) All amounts to be paid or deposited by Finance Subsidiary
hereunder
shall be paid or deposited in accordance with the terms hereof on
the day when
due in immediately available funds to the account of the Seller
Agent designated
from time to time by the Seller Agent or as otherwise directed by
the Seller
Agent; provided that to the extent Collections during any
Settlement Period that
are available to fund the Purchase Price of Receivables sold during
such period
are less than the full amount of such Purchase Price, the unpaid
portion thereof
shall be paid or provided for on the related Settlement Date in
accordance with
Section 1.4(c). In the event that any payment owed by any Person
hereunder
becomes due on a day that is not a Business Day, then such payment
shall be made
on the next succeeding Business Day. If any
4
Person fails to pay any amount hereunder when due, such Person
agrees to pay, on
demand, the Default Fee in respect thereof until paid in full;
provided,
however, that such Default Fee shall not at any time exceed the
maximum rate
permitted by applicable law. All computations of interest payable
hereunder
shall be made on the basis of a year of 360 days for the actual
number of days
(including the first but excluding the last day) elapsed.
(b) Each Seller hereby agrees that the Seller Agent is
authorized to
receive amounts due from Finance Subsidiary to such Seller
hereunder. All
amounts so received shall be applied in the following order of
payment during
each Settlement Period:
(i) first, to pay any amounts payable pursuant to
1.2(c)(ii); and
(ii) second, to make payments of interest on, and then
principal of the
Intercompany Note in accordance with Section 1.8 and the
Intercompany Note.
(c) On each Settlement Date:
(i) the Seller Agent shall determine the aggregate
Purchase Price (the
"Aggregate Purchase Price") for all Receivables conveyed by
the Sellers to
Finance Subsidiary during the preceding Settlement Period or,
in the case
of the Amortization Date, during the period from the end of
the preceding
calendar week to the Amortization Date (each such period, a
"Purchase
Settlement Period"); provided, that the final Purchase
Settlement Period
shall commence on the day following the most recently ended
Purchase
Settlement Period and shall end on the Amortization Date;
(ii) if on any Settlement Date, the Aggregate Purchase
Price for the
related Purchase Settlement Period minus the aggregate amount
of Purchase
Price Credits for such Purchase Settlement Period (such
difference, the
"Modified Aggregate Purchase Price") exceeds the amount of
cash payments
received by the Seller Agent on behalf of the Sellers as
provided herein
for such Purchase Settlement Period (such amount, the "Cash
Payments"), the
Seller Agent shall, subject to the terms of this Agreement and
to the
extent it has not already done so, record such excess as an
increase in the
principal amount outstanding under the Intercompany Note
(subject to the
limitation set forth in Section 1.8(c)), and if any excess
remains after
giving effect to the permissable increase in the principal
amount of the
Intercompany Note, the Sellers may declare the Amortization
Date to have
occurred with respect to all Sellers by delivering notice to
that effect to
Finance Subsidiary and the Agent;
(iii) if on any Settlement Date, the Cash Payments for the
related
Purchase Settlement Period exceed the Modified Aggregate
Purchase Price for
such Purchase Settlement Period, the Seller Agent shall,
subject to the
terms of this Agreement, record the application of that
excess, (x) first,
to the payment of unpaid and accrued interest on the
Intercompany Note, as
applicable, (y) second, as a reduction in the principal amount
of the
Intercompany Note, as applicable,
5
and, (z) third, cause the Sellers to pay any remaining excess
to Finance
Subsidiary.
Section 1.5 Transfer of Records.
(a) In connection with the Purchase of Receivables hereunder,
each Seller
Party hereby sells, transfers, assigns and otherwise conveys to
Finance
Subsidiary all of such Seller Party's right and title to and
interest in the
Records relating to all Receivables sold hereunder, without the
need for any
further documentation in connection with the Purchase. In
connection with such
transfer, each Seller Party hereby grants to each of Finance
Subsidiary, the
Agent and the Servicer an irrevocable, non-exclusive license to
use, without
royalty or payment of any kind, all software used by such Seller
Party to
account for the Receivables, to the extent necessary to administer
the
Receivables, whether such software is owned by such Seller Party or
is owned by
others and used by such Seller Party under license agreements with
respect
thereto, provided that should the consent of any licensor of such
Seller Party
to such grant of the license described herein be required, such
Seller Party
hereby agrees that upon the request of Finance Subsidiary (or the
Agent as
Finance Subsidiary's assignee), such Seller Party will use its
reasonable
efforts to obtain the consent of such third-party licensor. The
license granted
hereby shall be irrevocable, and shall terminate on the date this
Agreement
terminates in accordance with its terms.
(b) The Seller Agent and each Seller (i) shall take such
action requested
by Finance Subsidiary and/or the Agent (as Finance Subsidiary's
assignee), from
time to time hereafter, that may be necessary or appropriate to
ensure that
Finance Subsidiary and its assigns under the Receivables Purchase
Agreement have
an enforceable ownership interest in the Records relating to the
Receivables
purchased from such Seller hereunder, and (ii) shall use its
reasonable efforts
to ensure that Finance Subsidiary, the Agent and the Servicer each
has an
enforceable right (whether by license or sublicense or otherwise)
to use all of
the computer software used to account for the Receivables and/or to
recreate
such Records.
Section 1.6 Characterization. This agreement constitutes a
"security
agreement" as defined in the UCC that the parties intend provides
for the
"security interest" of a buyer of accounts under the UCC. If,
notwithstanding
the intention of the parties expressed in Section 1.1(b), any sale
by any Seller
to Finance Subsidiary of Receivables hereunder shall be
characterized as a loan
by the Sellers to Finance Subsidiary and not a true sale of
accounts or such
sale shall for any reason be ineffective or unenforceable, then
this Agreement
shall be deemed to constitute a security agreement in respect of
such loan under
the UCC and other applicable law. For this purpose and without
being in
derogation of the parties' intention that the sale of Receivables
hereunder
shall constitute a true sale thereof, each Seller hereby grants to
Finance
Subsidiary a security interest in all of such Seller's right, title
and interest
in, to and under all Receivables now existing and hereafter
arising, all
Collections, Related Security and Records with respect thereto, and
all proceeds
of the foregoing, to secure such loan, which security interest
shall be prior to
all other Adverse Claims thereto. After the occurrence of an
Amortization Event,
Finance Subsidiary and its assigns shall have, in addition to the
rights and
remedies specified in this Agreement, all other rights and remedies
provided to
a secured party
6
after default in a transaction which is a sale of accounts under
the UCC and
other applicable law, which rights and remedies shall be
cumulative.
Section 1.7 No Repurchase. Except to the extent expressly set
forth herein,
no Seller shall have any right or obligation under this Agreement,
by
implication or otherwise, to repurchase from Finance Subsidiary any
Receivables
or to rescind or otherwise retroactively affect any Purchase of any
Receivable
after it is sold to Finance Subsidiary hereunder.
Section 1.8 Intercompany Note.
(a) On the date of the initial Purchase, Finance Subsidiary
shall issue to
the Seller Agent, for the account of the Sellers as their
respective interests
may appear, a note substantially in the form of Exhibit II (as
amended,
supplemented or otherwise modified from time to time, the
"Intercompany Note").
The aggregate principal amount of the Intercompany Note at any time
shall be
equal to the difference between (i) the aggregate principal amount
on the
issuance thereof and each addition to the principal amount of the
Intercompany
Note with respect to each Seller pursuant to the terms of Section
1.2(c)(iii)
and Section 1.4 as of such time, minus (ii) the aggregate amount of
all payments
made in respect of the principal of the Intercompany Note as of
such time. All
payments made in respect of the Intercompany Note shall be
allocated, first, to
pay accrued and unpaid interest thereon, and second, to pay the
outstanding
principal amount thereof. Interest on the outstanding principal
amount of the
Intercompany Note shall accrue at a rate per annum equal to the
Base Rate in
effect from time to time from and including the date of issuance to
but
excluding the day on which it is paid in full and shall, subject to
the terms
and conditions hereof and thereof, be paid (x) on each Settlement
Date with
respect to the principal amount of the Intercompany Note
outstanding from time
to time during the Purchase Settlement Period immediately preceding
such
Settlement Date (but only to the extent Finance Subsidiary has
funds available
to make such payment) and (y) on the maturity date thereof;
provided, however,
that, to the maximum extent permitted by law, accrued interest on
the
Intercompany Note which is not so paid shall be added to the
principal amount of
the Intercompany Note. Upon receipt of any such payment, the Seller
Agent shall
distribute such payment to the Sellers ratably based on their
respective
interests in the Intercompany Note as described in Section 1.8(b).
Principal of
the Intercompany Note not paid or prepaid pursuant to the terms
thereof shall be
payable on the maturity date thereof. Notwithstanding anything to
the contrary
contained in this Agreement, any payments to be made by Finance
Subsidiary in
respect of the Intercompany Note shall be made solely from funds
available to
Finance Subsidiary that are not otherwise required to be applied or
set-aside
for the payment of any obligations of Finance Subsidiary under the
Receivables
Purchase Agreement, shall be non-recourse other than with respect
to such funds
and shall not constitute a claim against Finance Subsidiary to the
extent that
insufficient funds exist to make such payment.
(b) Each addition to the principal amount of the Intercompany
Note on any
Purchase Date pursuant to Section 1.2(c) (including on the date of
the initial
Purchase hereunder) shall be allocated among the Sellers by the
Seller Agent
ratably in proportion to the Purchase Price owing to each on such
Purchase Date.
(c) Anything herein to the contrary notwithstanding, Finance
Subsidiary may
not make any payment of any Purchase Price on any Purchase Date by
increasing
the aggregate
7
principal amount of the Intercompany Note outstanding unless the
aggregate
principal amount of the Intercompany Note outstanding on such
Purchase Date
(after giving effect to all repayments thereof on or before such
Purchase Date)
would not exceed 25% of the aggregate Outstanding Balance of the
Receivables on
such Purchase Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Seller Parties.
Each Seller
Party hereby represents and warrants to Finance Subsidiary, as to
itself,
severally and not jointly, as of the date hereof, and with respect
to the
representations and warranties set forth in Sections 2.1(a), (b),
(c), (d), (e),
(f), (s), and (u), as of the date of each Incremental Purchase, and
with respect
to the other representations and warranties set forth in this
Section 2.1, as of
the date such Receivables are purchased hereunder, that:
(a) Corporate Existence and 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
execution, delivery and performance by such Seller Party of the
Transaction
Documents to which it is a party have been duly authorized by all
necessary
corporate action or other action and, if required, stockholder
action. This
Agreement has been duly executed and delivered by such Seller Party
and
constitutes, and each other Transaction Document to which such
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 except to
the extent such violations, individually or in the aggregate, could
not
reasonably be expected to result in a Material Adverse Effect, (v)
will not
violate or result in a
8
default under any material 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 to have a Material
Adverse
Effect. Such Seller Party is not in default with respect to any
order of any
court, arbitrator or governmental body.
(e) Accuracy of Information. All information heretofore
furnished by
Affinia Group or any of its Affiliates to Finance Subsidiary (or
its assigns)
for purposes of or in connection with this Agreement, any of the
other
Transaction Documents or any transaction contemplated hereby or
thereby is, and
all such information hereafter furnished by Affinia Group or any of
its
Affiliates to Finance Subsidiary (or its assigns) will be, true and
accurate in
every material respect on the date such information is stated or
certified.
(f) Use of Proceeds. No proceeds of the 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. At the time each Receivable of such Seller
came into
existence, such Seller was the legal and beneficial owner of each
such
Receivables and Related Security with respect thereto, free and
clear of any
Lien, except as created by the Transaction Documents.
(h) Perfection. This Agreement, together with the filing of
the financing
statements contemplated hereby, is effective to, and shall, upon
each Purchase,
transfer to the Finance Subsidiary (and the Finance Subsidiary
shall acquire
from the Seller) a valid and perfected first priority ownership
interest in each
Receivable that is the subject of such Purchase, together with 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
Finance Subsidiary's ownership 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 Schedule B.
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(j) Collections. The names and addresses of all Collection
Banks as of the
date of this Agreement, together with the account numbers of the
Collection
Accounts at each Collection Bank and the post office box number of
each Lockbox,
are listed on Schedule C.
(k) Names. Within the last five years, such Seller has not
used any
corporate names, trade names or assumed names other than that on
the signature
page of this Agreement.
(l) Ownership of Finance Subsidiary. Affinia Group owns,
directly or
indirectly, 100% of membership interests in Finance Subsidiary,
free and clear
of any Lien except as set forth in the Collateral Agreement.
(m) Investment and Holding Company Status. Such Seller is not
(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.
(n) Compliance with Credit and Collection Policy. Such Seller
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 changes as to
which the
Agent has been notified in accordance with Section 7.1(a)(xii) of
the
Receivables Purchase Agreement.
(o) Good Faith Transfers. The transfers of Receivables by such
Seller to
Finance Subsidiary pursuant to this Agreement, and all other
transactions
between such Seller and Finance Subsidiary, have been and will be
made in good
faith and without intent to hinder, delay or defraud creditors of
such Seller.
(p) 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).
(q) Eligible Receivables. Each Receivable sold by such Seller
hereunder and
included in the Net Receivables Balance as an Eligible Receivable
on the date it
came into existence was an Eligible Receivable on such date.
(r) Amortization Event. No Amortization Event has occurred and
is
continuing.
(s) Taxes. Such Seller 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 has set aside on its books adequate reserves or (b) to the
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extent that the failure to do so could not reasonably be expected
to result in a
Material Adverse Effect.
(t) Solvency. Immediately after the consummation of the
Transactions to
occur on the date hereof (a) the fair value of the assets of such
Seller, 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
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 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 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.
(u) 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 2.2 Representations and Warranties of Finance
Subsidiary. Finance
Subsidiary represents and warrants as follows:
(a) Finance Subsidiary is a limited liability company duly
formed, validly
existing and in good standing under the laws of the jurisdiction of
its
formation and is duly qualified in good standing as a foreign
limited liability
company in each jurisdiction where the failure to be so qualified,
individually
or in the aggregate, could not reasonably be expected to have a
material adverse
effect on the ability of Finance Subsidiary to perform its
obligations
hereunder.
(b) The execution, delivery and performance by Finance
Subsidiary of this
Agreement (i) have been duly authorized by all necessary limited
liability
company action and (ii) will not (A) violate (1) Finance
Subsidiary's
certificate of formation or limited liability company agreement,
(2) any
Requirement of Law applicable to Finance Subsidiary or (3) any
provision of any
indenture, certificate of designation for preferred stock,
agreement or other
instrument to which Finance Subsidiary is a party or by which it or
any of its
property is or may be bound or (B) be in conflict with, result in a
breach of or
constitute (alone or with notice or lapse of time or both) a
default under, give
rise to a right of or result in any cancellation of a material
right or
acceleration of any material payment obligations under any such
indenture,
certificate of designation for preferred stock, agreement or other
instrument,
where any such conflict, violation, breach or default referred to
in clause (ii)
or this Section 2.2(b), could reasonably be expected to have,
individually or in
the aggregate, a material adverse effect on the ability of Finance
Subsidiary to
perform its obligations hereunder and (iii) will not result in the
creation or
imposition of any Lien except Liens created under the Transaction
Documents.
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(c) No authorization or approval or other action by, and no
notice to or
filing with, any Governmental Authority is required for the due
execution,
delivery and performance by Finance Subsidiary of this Agreement,
except (i)
such as have been obtained or made and are in full force and effect
and (ii) for
such authorizations, approvals or actions the failure of which to
obtain or take
could not reasonably be expected to have a material adverse effect
on the
ability of Finance Subsidiary to perform its obligations hereunder.
(d) This Agreement has been duly executed and delivered by
Finance
Subsidiary and is the legal, valid and binding obligation of
Finance Subsidiary,
enforceable in accordance with its terms, subject to (i) the
effects of
bankruptcy, insolvency, moratorium, reorganization or other similar
laws
affecting creditors' rights generally, (ii) general principles of
equity
(regardless of whether such enforceability is considered in a
proceeding in
equity or at law) and (iii) implied covenants of good faith and
fair dealing.
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Initial Purchase. The
initial Purchase
under this Agreement is subject to the conditions precedent that
(a) Finance
Subsidiary shall have received on or before the date of such
purchase those
documents listed on Schedule D and (b) all of the conditions to the
initial
purchase under the Receivables Purchase Agreement shall have been
satisfied or
waived in accordance with the terms thereof.
Section 3.2 Conditions Precedent to all Purchases by Finance
Subsidiary.
Finance Subsidiary's obligation to purchase Receivables on each
Purchase Date
from a Seller shall be subject to the further conditions precedent
that (a) the
Amortization Date shall not have occurred and (b) the
representations and
warranties set forth in Article II with respect to such Seller that
are required
to be made on such Purchase Date are true and correct on and as of
such date.
Notwithstanding the foregoing, unless otherwise specified by
Finance
Subsidiary (with a copy to the Agent) in a written notice to the
Seller Agent,
each Purchase from a Seller shall occur automatically on each day
prior to the
Amortization Date, with the result that the title to all
Receivables of such
Seller shall vest in Finance Subsidiary automatically on the date
each such
Receivable arises and without any further action of any kind by
Finance
Subsidiary, any Seller or the Seller Agent, whether or not the
conditions
precedent specified above were in fact satisfied on such date and
notwithstanding any delay in making payment of the Purchase Price
for such
Receivables (but without impairing Finance Subsidiary's obligation
to pay such
Purchase Price in accordance with the terms hereof).
Section 3.3 Conditions Precedent to all Sales by Sellers. The
obligation of
each Seller to sell any Receivable generated by it on any date
shall be subject
to the further condition precedent that on such date no voluntary
or involuntary
case or proceeding is pending against such Seller or Finance
Subsidiary under
the Federal Bankruptcy Code.
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ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Seller Parties. Until the
date on
which this Agreement terminates in accordance with its terms, each
Seller Party
hereby covenants as set forth below:
(a) Financial Statements and Other Information. Affinia Group
will maintain
for itself and each of its Subsidiaries, a system of accounting
established and
administered in accordance with generally accepted accounting
principles, and
furnish to the Finance Subsidiary (or its assigns):
(i) within 90 days after the end of each of its respective
fiscal
years, 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 fis
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