EXHIBIT 2.2
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AMENDMENT NO. 1
TO THE
STOCK AND ASSET PURCHASE AGREEMENT
BY AND BETWEEN
AFFINIA GROUP INC.
(F/K/A "AAG OPCO CORP.")
AND
▇▇▇▇ CORPORATION
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NOVEMBER 1, 2004
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DOCUMENT TAB
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Amendment No. 1 to the Stock and Asset Purchase Agreement ................ I
Exhibit 1: Schedule 1.2(o) .......................................... I
Exhibit 2: Form of Note ............................................. II
Exhibit 3: Foreign Sub Cash Allocation .............................. III
Exhibit 4: Executed Equity Commitment Letter ........................ IV
Exhibit 5: Executed Debt Commitment Letters ......................... V
Exhibit 6: IP License Term Sheets ................................... VI
Exhibit 7: Form of DCC Guaranty ..................................... VII
Exhibit 8: Transition and Ancillary Services Term Sheet ............. VIII
Exhibit 9: Product Returns .......................................... IX
Exhibit 10: Purchase Price Allocation ............................... X
Exhibit 11: Section 4.7 of Seller Disclosure Schedule (Material
Adverse Effect) ......................................... XI
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AMENDMENT NO. 1
TO THE
STOCK AND ASSET PURCHASE AGREEMENT
AMENDMENT NO. 1, dated as of November 1, 2004 (this "AMENDMENT"),
to the Stock and Asset Purchase Agreement, dated as of July 8, 2004 (the
"AGREEMENT"), by and between Affinia Group Inc. (f/k/a "AAG Opco Corp."), a
Delaware corporation, and ▇▇▇▇ Corporation, a Virginia corporation.
Capitalized terms used herein but not defined herein shall have the
meanings ascribed to such terms in the Agreement.
W I T N E S S E T H :
WHEREAS, the parties to the Agreement desire to amend and
supplement certain terms of the Agreement as described herein.
NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements hereinafter set forth, and
of other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be bound hereby, the parties hereby
agree as follows:
1. Section 1.2 (Purchase and Sale of the Purchased Assets). Section
1.2 of the Agreement is hereby amended to add the following at the end thereof:
"(o) the existing assets set forth on Schedule 1.2(o)."
A new Schedule 1.2(o) is hereby added to the schedules to the
Agreement in the form attached hereto as Exhibit 1.
2. Section 2.1 (Amount and Form of Consideration). Section 2.1 of
the Agreement is hereby amended to read in its entirety as follows:
"Section 2.1. Amount and Form of Consideration. The consideration
to be paid by Purchaser to Seller and its Subsidiaries (other than
an Acquired Company) in full consideration of the Purchased Shares
and the Purchased Assets shall consist of:
(a) U.S.$1,024.5 million, consisting of (i) U.S.$950 million (the
"INITIAL CASH CONSIDERATION") in cash, subject to adjustment as set
forth in Section 2.3 (the Initial Cash Consideration, as so
adjusted, the "FINAL CASH CONSIDERATION"), to be paid
in the manner and at the time set forth in Sections 2.2 and 2.3,
and (ii) a note issued by Affinia Group Holdings Inc., a Delaware
corporation and the indirect parent of Purchaser ("Parent"),
substantially in the form attached hereto as Exhibit K in the
principal amount of U.S.$74.5 million (the "NOTE"), subject to
adjustment as set forth in Section 2.3, to be delivered by
Purchaser to Seller at the Closing; and
(b) the assumption by Purchaser on and as of the Closing Date of
the Assumed Liabilities."
A new Exhibit K is hereby added to the Agreement in the form attached as Exhibit
2 to this Amendment.
3. Section 2.3 (Purchase Price Adjustment).
(i) Section 2.3(a) of the Agreement is hereby amended to read in its
entirety as follows:
"(a) At least three Business Days prior to the Closing Date, Seller
shall prepare, or cause to be prepared, and deliver to Purchaser a
statement (the "ESTIMATED CLOSING DATE WORKING CAPITAL STATEMENT")
containing a certificate setting forth a good-faith estimate of Working
Capital as of the opening of business on the Closing Date (the
"ESTIMATED CLOSING DATE WORKING CAPITAL") and a good-faith estimate of
the Closing Date Cash (the "ESTIMATED CLOSING DATE CASH") (provided
that the calculation of "Estimated Closing Date Cash" shall exclude any
Foreign Sub Cash in excess of U.S.$10,000,000). The Estimated Closing
Date Working Capital Statement shall be prepared in accordance with
GAAP, as modified by the accounting policies specified on Schedule
2.3(a) (the "SPECIFIED ACCOUNTING POLICIES"), consistent with the
accounting principles, procedures, policies and methods that were
employed in preparing the Benchmark Balance Sheet. The Initial Cash
Consideration shall be (i)(A) increased dollar for dollar in an amount
not to exceed U.S.$45 million to the extent the Estimated Closing Date
Working Capital exceeds the Target Working Capital, or (B) decreased
dollar for dollar to the extent the Estimated Closing Date Working
Capital is less than the Target Working Capital by more than U.S.$74.5
million, (ii)(A) increased dollar for dollar to the extent that the
Estimated Closing Date Cash is greater than U.S.$0 or (B) decreased
dollar for dollar to the extent that the Estimated Closing Date Cash is
less than U.S.$0 and (iii) decreased by U.S.$12.5 million (the Initial
Cash Consideration, as adjusted pursuant to this sentence, the "CLOSING
DATE CASH CONSIDERATION")."
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(ii) Section 2.3(f) of the Agreement is hereby amended to read in its
entirety as follows:
"(f) The Closing Date Cash Consideration shall be (i) subject to the
last two sentences of this Section 2.3(f), (A) increased dollar for
dollar to the extent the Final Closing Date Working Capital exceeds the
lesser of the Estimated Closing Date Working Capital and U.S.$656
million, or (B) decreased dollar for dollar to the extent the Final
Closing Date Working Capital is less than the lesser of the Estimated
Closing Date Working Capital and U.S.$656 million and (ii)(A) increased
dollar for dollar to the extent that the Final Closing Date Cash is
greater than the Estimated Closing Date Cash or (B) decreased dollar
for dollar to the extent that the Final Closing Date Cash is less than
the Estimated Closing Date Cash. Any adjustments in cash to the Closing
Date Cash Consideration made pursuant to this Section 2.3(f) shall be
paid by wire transfer of immediately available funds (together with
interest thereon at the Applicable Rate from and including the Closing
Date to, but excluding, the date of such payment) to the account or
accounts specified by Seller, if Seller is owed payment, or to the
account or accounts specified by Purchaser, if Purchaser is owed
payment, within five Business Days after the Final Closing Date Working
Capital and Final Closing Date Cash are agreed to by Purchaser and
Seller or any remaining disputed items are ultimately determined by the
Neutral Auditors. In the event that Final Closing Date Working Capital
exceeds Target Working Capital by an amount in excess of U.S.$45
million, then the amount of such excess over U.S.$45 million will be
paid by Purchaser to Seller by way of a corresponding increase in the
principal amount of the Note (and corresponding adjustments to the
prepayment amounts), effective as of the Closing Date. In the event
that Final Closing Date Working Capital is less than Target Working
Capital, then the amount of such shortfall will be paid by Seller to
Purchaser first by way of a corresponding decrease in the principal
amount of the Note (and corresponding adjustments to the prepayment
amounts), effective as of the Closing Date (provided that the principal
amount of the Note may not be reduced below zero) and, then, if and to
the extent the Final Closing Date Working Capital is less than
U.S.$536.5 million, by wire transfer of immediately available funds
(with interest at the Applicable Rate) as contemplated above."
(iii) Section 2.3(g) of the Agreement is hereby amended to read in its
entirety as follows:
"(g) Seller shall
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take appropriate steps so that the Foreign Sub Cash at Closing is
allocated to each of the non-U.S. Acquired Companies in the manner
described on Schedule 2.3(g)."
(iv) A new Schedule 2.3(g) is hereby added to the Agreement in the form
attached as Exhibit 3 to this Amendment.
(v) The Agreement is hereby amended by adding a new Section 2.3(h) as
follows:
"(h) In addition to the adjustments set forth in Section 2.3(f), the
Closing Date Cash Consideration shall be increased by an amount equal
to U.S.$12.5 million on the 180th day after the Closing Date. Any
adjustments to the Closing Date Cash Consideration made pursuant to
this Section 2.3(h) shall be paid by wire transfer of immediately
available funds (without interest) to the account or accounts specified
by Seller on the 180th day after the Closing Date (or, if such date is
not a Business Day, the next succeeding Business Day)."
4. Section 3.1 (Closing Date). Section 3.1 of the Agreement is
hereby amended to add the following at the end thereof:
"Subject to the terms and conditions of this Agreement, Seller and
Purchaser shall use their reasonable best efforts to cause the Closing
to occur on November 30, 2004. If the Closing is not completed on such
date, the parties shall, subject to the terms and conditions of this
Agreement, use their reasonable best efforts to cause the Closing to
occur as soon thereafter as practicable."
5. Section 3.3 (Deliveries by Purchaser to Seller). Section 3.3 of
the Agreement is hereby amended and supplemented to include a clause (h), which
reads in its entirety as follows:
"(h) the Note, duly executed by Parent."
6. Section 5.5 (Financing). The equity commitment letter and the
debt commitment letters and related term sheets set forth on Section 5.5 of the
Purchaser Disclosure Schedule are hereby replaced with the equity commitment
letter and the debt commitment letters attached as Exhibits 4 and 5,
respectively, to this Amendment (the "REPLACEMENT FINANCING COMMITMENTS"), and
Seller hereby waives any rights it may have had with respect to the original
Financing Commitments. Seller agrees that the representations and warranties set
forth in Section 5.5 of the Agreement shall be deemed to apply, as of the date
hereof, to the Replacement Financing
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Commitments, and Purchaser hereby restates and reaffirms such representations
and warranties as of the date hereof with respect to such Replacement Financing
Commitments.
7. Section 5.10. The Agreement is hereby amended by adding a new
Section 5.10 as follows:
"Section 5.10. Note. Purchaser, on behalf of itself and Parent,
represents and warrants that the Note, upon execution and delivery at
the Closing, will constitute a valid obligation of Parent, enforceable
against Parent in accordance with its terms."
8. Section 6.12. The Agreement is hereby amended by adding a new
Section 6.12 as follows:
"Section 6.12. European and South American Restructuring and Related
Matters.
(a) Prior to Closing, Seller shall, or shall cause its Subsidiaries to,
(i) transfer ownership of (A) all of the share capital of ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Automotive Limited, (B) two ordinary shares of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Belgium SA, (C) one ordinary share of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Espana S.A., (D)
95% of the share capital of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Italia Spa., (E) all of the
share capital of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Deutschland GmbH and (F) all of the
share capital of ▇. ▇▇▇▇▇▇▇ GmbH, in each case, to Brake Parts, Inc.;
(ii) transfer ownership of 5% of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Italia Spa. to ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Automotive Limited or another entity selected by Purchaser;
(iii) transfer all of the share capital of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ France S.A.S.
to Affinia Holdings S.A.S. a French holding company to be incorporated
as a direct Subsidiary of Seller prior to Closing; (iv) transfer
ownership of all of the share capital of Wix Filtron sp. zo.o to a
Dutch holding Company to be incorporated as a direct Subsidiary of
Seller prior to Closing ("Dutch Holdco"); (v) transfer all of the share
capital of Affinia Holdings S.A.S to Brake Parts Inc.; (vi) transfer
all of the share capital of Dutch Holdco to Brake Parts Inc. (the
equity interests described in clauses (i)-(vi) are referred to as the
"QH INTERESTS") and (vii) at Seller's option, cause ▇▇▇▇ Automotive
Limited to transfer to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Automotive Limited the following
real property interests (the "QH REAL ESTATE") in the manner indicated
and for the amounts specified below (the transfers described in clause
(vii) are referred to as the "QH REAL ESTATE TRANSFERS"):
(A) "Unit 1 Nuneaton" - the land and buildings on the north side of the
Harefield Lane, Nuneaton, the leasehold of which is registered under title
number
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WK240156: ▇▇▇▇ Automotive Limited will grant to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Automotive
Limited a sub-underlease of Unit 1 Nuneaton for a term of years commencing
on the date of Closing and expiring on 15 March 2096. The rent payable
under such sub-underlease shall be an amount equal to the rent payable by
▇▇▇▇ Automotive Limited under the terms of its underlease of Unit 1
Nuneaton and such sub-underlease shall be granted to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Automotive Limited for a premium of GBP 3.8 million plus value added tax
(if any); and
(B) "Unit 2 Nuneaton" - the land and buildings on the west side of
Bermuda Road, Nuneaton, the leasehold of which is registered under title
number WK247227: ▇▇▇▇ Automotive Limited will grant to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Automotive Limited a sub-underlease of Unit 2 for a term of years
commencing on the date of Closing and expiring on 15 March 2096. The rent
payable under such sub-underlease shall be an amount equal to the rent
payable by ▇▇▇▇ Automotive Limited under the terms of its underlease of
Unit 2 Nuneaton and such sub-underlease shall be granted to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Automotive Limited for a premium of GBP 920,000 plus value added tax (if
any).
All of the transactions described in clauses (i)-(vi) of this Section 6.12
(the "QH TRANSFERS") shall occur unless Purchaser shall have notified
Seller otherwise on or before November 8, 2004. All of the transactions
described in clause (vii) of this Section 6.12 shall occur unless Seller
shall have notified Purchaser otherwise on or before the third Business Day
prior to the Closing.
(b) South American Restructuring and Related Matters. Prior to Closing,
Seller shall, or shall cause its Subsidiaries to, (i) transfer all of
the right, title and interest of Seller, or the applicable Subsidiary
or Subsidiaries of Seller (other than an Acquired Company), in, to and
under all of the assets, properties, rights, Contracts and claims of
Seller, or such Subsidiary or Subsidiaries, located in Argentina,
whether tangible or intangible, real, personal or mixed, in each case,
Related to the Business but excluding the Excluded Assets, to Brake
Parts Argentina S.A. (the "ARGENTINE TRANSFER"); (ii) transfer all of
the right, title and interest of Seller, or the applicable Subsidiary
or Subsidiaries of Seller (other than an Acquired Company), in, to and
under all of the assets, properties, rights, Contracts and claims of
Seller, or such Subsidiary or Subsidiaries, located in Venezuela,
whether tangible or intangible, real, personal or mixed, in each case,
Related to the Business but excluding the Excluded Assets, to Echlin de
Venezuela C.A.; (the "VENEZUELAN TRANSFER"), (iii) transfer all of the
right, title and interest of Seller, or the applicable Subsidiary or
Subsidiaries of Seller (other than an Acquired Company), in, to and
under all of the assets, properties, rights, Contracts and claims of
Seller, or such Subsidiary or Subsidiaries, located in Brazil, whether
tangible or intangible, real, personal or mixed, in each case, Related
to the Business but excluding the Excluded Assets, to AAG
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Brasil Ind. E Com. de Autopecas (the "BRAZILIAN TRANSFER"). In
connection with the foregoing transfers, Seller shall cause (A) Brake
Parts Argentina S.A. to agree to assume and be liable for, and to pay,
perform and discharge when due, all obligations and Liabilities of
Seller and its Subsidiaries (other than Acquired Companies), whether
occurring or accruing before, on or after the date of the Argentine
Transfer, whether known or unknown, fixed or contingent, asserted or
unasserted, and not satisfied or extinguished as of the date of the
Argentine Transfer, primarily relating to, primarily arising out of or
primarily resulting from the Business in Argentina; (B) Echlin de
Venezuela C.A. to agree to assume and be liable for, and to pay,
perform and discharge when due, all obligations and Liabilities of
Seller and its Subsidiaries (other than Acquired Companies), whether
occurring or accruing before, on or after the date of the Venezuelan
Transfer, whether known or unknown, fixed or contingent, asserted or
unasserted, and not satisfied or extinguished as of the date of the
Venezuelan Transfer, primarily relating to, primarily arising out of or
primarily resulting from the Business in Venezuela; and (C) AAG Brasil
Ind. E Com. de Autopecas to agree to assume and be liable for, and to
pay, perform and discharge when due, all obligations and Liabilities of
Seller and its Subsidiaries (other than Acquired Companies), whether
occurring or accruing before, on or after the date of the Brazilian
Transfer, whether known or unknown, fixed or contingent, asserted or
unasserted, and not satisfied or extinguished as of the date of the
Brazilian Transfer, primarily relating to, primarily arising out of or
primarily resulting from the Business in Brazil.
(c) Transfer Taxes. Notwithstanding anything to the contrary in Section
14.9:
(i) Purchaser shall be responsible for and shall pay Transfer
Taxes, regardless of the Person liable for such Taxes under applicable
Law, arising out of the QH Transfers;
(ii) to the extent (A) the sum of (1) the Transfer Taxes arising
out of the QH Transfers plus (2) the Transfer Taxes resulting from the
direct or indirect transfers of the QH Interests under Article I of
this Agreement at the Closing exceeds (B) the Transfer Taxes that would
otherwise have resulted from the direct or indirect transfers of the QH
Interests under Article I of this Agreement in the absence of the QH
Transfers, such excess shall not count against the U.S.$1 million
Transfer Tax threshold set forth in Section 14.9(a) of this Agreement,
(iii) Seller shall be responsible for and shall pay Transfer Taxes,
regardless of the Person liable for such Taxes under applicable Law,
arising
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out of the QH Real Estate Transfers, to the extent (A) the sum of (1)
the Transfer Taxes arising out of the QH Real Estate Transfers plus (2)
the Transfer Taxes resulting from the direct or indirect transfers of
the QH Real Estate under Article I of this Agreement at the Closing
exceeds (B) the Transfer Taxes that would otherwise have resulted from
the direct or indirect transfers of the QH Real Estate under Article I
of this Agreement in the absence of the QH Real Estate Transfers (it
being understood that any amount not in excess of such amount shall
count against the U.S.$1 million Transfer Tax threshold set forth in
Section 14.9(a) of this Agreement).
The parties hereto shall reasonably cooperate to reduce or eliminate
any potential Transfer Taxes arising out of these transactions,
including obtaining available Transfer Tax exemption certificates (such
as sales and use Tax blanket exemption certificates) from the
applicable state, local or foreign taxing jurisdictions."
9. Section 6.13. The Agreement is hereby amended by adding a new
Section 6.13 as follows:
"Section 6.13. Echlin Name. Seller shall use reasonable best efforts to
obtain for the Business from Standard Motor Products ("SMP") an
exclusive, royalty-free license to use the "Echlin" name as part of the
company name for any Acquired Companies that use it as of the date of
this Agreement and to sell current Echlin packaged inventory through
December 31, 2004; provided, however, that in using its reasonable
efforts Seller shall not be required by this Section 6.13 to incur any
cost, expense, obligation or liability or to give up any rights in
order to obtain any license (but, to the extent necessary to obtain
SMP's consent to the foregoing, Seller and its Subsidiaries shall
promptly pay to SMP all amounts owed to SMP)."
10. Section 7.7(f) (Use of Seller Name).
(vi) Section 7.7(f) of the Agreement is hereby amended to read in its
entirety as follows:
"(f) at the Closing, Seller will enter into an agreement with Purchaser
to grant, or cause its Subsidiaries to grant, Purchaser licenses,
effective as of Closing, to use the "▇▇▇▇▇▇", "Urba" and "Brosol" brand
names on the terms set forth on Schedule 7.7(f);"
(vii) Schedule 7.7(f) to the Agreement is hereby replaced with the term
sheet attached as Exhibit 6.
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11. Section 7.10.
(viii) The Agreement is hereby amended by adding a new Section 7.10 as
follows:
"Section 7.10. Other Agreements. At the Closing, Purchaser shall enter
into guarantees substantially in the forms attached as Schedule 7.10."
(ix) A new Schedule 7.10 is hereby added to the Agreement in the form
attached as Exhibit 7 to this Amendment.
12. Section 10.1(f)(iv) (Long-Term Disability).
(x) Section 10.1(f)(iv) of the Agreement is hereby amended to read in
its entirety as follows:
"(iv) Notwithstanding anything herein to the contrary, Seller and its
Subsidiaries shall retain all Liabilities for benefits under any
long-term disability plan of Seller and its Subsidiaries in respect of
any current or former employees of the Business who are receiving, or
are eligible to receive, such benefits as of the Closing (the "LTD
EMPLOYEES")."
(xi) Section 10.1(f)(iv) of the Seller Disclosure Schedule is hereby
deleted in its entirety.
13. Section 10.2 (Transition Agreements; Ancillary Agreements).
(xii) Section 10.2 of the Agreement is hereby amended to read in its
entirety as follows:
"Section 10.2. Transition Agreements; Ancillary Agreements. Effective
at the Closing, Purchaser and Seller, or such of their respective
Subsidiaries as appropriate, shall enter into one or more transition
services agreements substantially in the form of Exhibit H (the
"Transition Services Agreements" and together with the Transition
Intellectual Property License Agreement, the "Transition Agreements").
On and after the date hereof and until the Closing, Purchaser and
Seller agree to negotiate in good faith to enter into agreements on the
terms and conditions set forth in the schedule of ancillary agreements
attached as Exhibit I (the "Schedule of Ancillary Agreements").
Purchaser and Seller hereby agree that the final terms and conditions
of the Transition Agreements and the
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agreements described in the Schedule of Ancillary Agreements (the
"ANCILLARY AGREEMENTS") will be consistent with the terms set forth in
the term sheet attached hereto as Schedule 10.2."
(xiii) A new Schedule 10.2 is hereby added to the schedules to the
Agreement in the form attached hereto as Exhibit 8.
14. Section 10.3 (Further Assurances). Section 10.3(f) of the
Agreement is hereby amended to add the following at the end thereof:
"Notwithstanding anything to the contrary herein, Seller shall cause
all insurance proceeds owing to Seller or its Affiliates (including the
Acquired Companies and including proceeds payable by any of its
Affiliates) in respect of a fire that occurred at Echlin Mexicana's
facilities in November 2003 to be paid to Seller or its Affiliates, as
applicable, prior to the Closing."
15. Products. Purchaser and Seller hereby agree to enter into a
letter agreement on the terms and conditions set forth in Exhibit 9.
16. Section 10.4. The Agreement is hereby amended by adding a new
Section 10.4 as follows:
"Section 10.4. Acquisition Financing. Without limiting the generality
of Section 6.10 or Section 7.5(b):
(a) Seller shall use its reasonable best efforts to provide to Purchaser
not later than November 7, 2004 information concerning the Business (the
"UPDATED INFORMATION") sufficient to (i) update all of the financial
information contained in the preliminary offering circular dated as of
November 1, 2004 (the "PRELIMINARY OFFERING CIRCULAR") as of, and for the
six- and twelve-month periods ended, June 30, 2004, and for the six-month
period ended June 30, 2003, and to reflect financial information as of, and
for the nine- and twelve-month periods ended, September 30, 2004, and for
the nine-month period ended September 30, 2003 including all such
information contained in the sections captioned "Summary--Summary
Historical and Pro Forma Financial Data", "Unaudited Pro Forma Combined
Financial Information", "Selected Historical Financial Data", "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and "Combined Financial Statements" and (ii) permit PricewaterhouseCoopers
LLP to provide a comfort letter customary for transactions similar to those
contemplated by the Preliminary Offering Circular with respect to the
Updated Information, with comfort levels that are consistent with those
that PricewaterhouseCoopers LLP has indicated it would be prepared to
provide with respect
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to the financial information being replaced by the Updated Information.
Updated Information sufficient to satisfy the conditions described in the
foregoing clauses (i) and (ii) shall be referred to as "SUFFICIENT UPDATED
INFORMATION").
(b) Purchaser shall (subject to the other terms and conditions of this
Agreement) use its reasonable best efforts to enter into a definitive
purchase agreement (the "NOTE PURCHASE Agreement") on or before November
12, 2004 with one or more initial purchasers providing for the offer and
sale of up to U.S.$300 million of senior subordinated notes (the "SENIOR
SUBORDINATED NOTES") on terms and conditions customary for financing
acquisitions of this nature and including the following terms:
(i) if Seller shall have delivered to Purchaser Sufficient Updated
Information on or before November 7, 2004:
(A) that the sale of the Senior Subordinated Notes shall be
conditioned upon the simultaneous consummation of the Closing under this
Agreement; and
(B) that delivery of, and payment for, the Senior Subordinated
Notes shall occur on or about November 30, 2004.
(ii) if Seller shall not have delivered to Purchaser Sufficient Updated
Information on or before November 7, 2004:
(A) that the sale of the Senior Subordinated Notes shall not be
conditioned upon the simultaneous consummation of the Closing under this
Agreement;
(B) that delivery of, and payment for, the Senior Subordinated
Notes shall occur on or about November 17, 2004;
(C) that the net proceeds (after fees, discounts and expenses) for
the Senior Subordinated Notes shall be deposited by the initial purchasers
into an escrow account and that such proceeds will only be released to the
Purchaser (1) if such proceeds are to be used to fund the simultaneous
consummation of the Closing under this Agreement and (ii) if no default or
event of default would occur under the instruments governing the Senior
Subordinated Notes;
(D) that Purchaser will be required to redeem the Senior
Subordinated Notes if the Closing under this Agreement does not occur by
the Outside Date or this Agreement is terminated prior to such Closing (any
such redemption, a "MANDATORY EARLY REDEMPTION"); and
(E) unless Seller consents, that a Mandatory Early Redemption shall
not require the payment of any premium or penalty on the face amount of the
Senior Subordinated Notes in excess of 0.1% of such face amount.
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(c) Subject to the last sentence of this Section 10.4(c), Seller hereby
agrees to indemnify, defend and hold the Purchaser Indemnified Group
harmless from and against any and all Losses arising out of or resulting
from a Mandatory Early Redemption. The foregoing indemnity shall in no way
limit the Purchaser's rights and remedies in respect of any breach of this
Agreement (other than a breach of Section 10.4(a)). Notwithstanding the
foregoing, in the event of a termination of this Agreement pursuant to
Section 13.1(c), any portion of the Initial Deposit not returned to Seller
following a Mandatory Redemption (other than such portion attributable to
interest that has accrued on the Senior Subordinated Notes prior to
redemption) shall constitute a "Loss" of Seller for purposes of Section
11.2(b)(ii) of this Agreement.
(d) If Seller shall not have delivered to Purchaser Sufficient Updated
Information on or before November 7, 2004, then Seller shall be required,
as a condition to Purchaser's obligation to sell the Senior Subordinated
Notes, to deposit into an escrow account for the benefit of the purchasers
and holders of the Senior Subordinated Notes an amount (the "INITIAL
DEPOSIT") in U.S. Dollars equal to the sum of (i) the maximum possible
redemption price under the Note Purchase Agreement (the "NOTE PROCEEDS")
less (ii) the net proceeds (after fees, discounts and expenses) to be paid
into the escrow account under the Note Purchase Agreement. In the event of
a Mandatory Early Redemption, the Initial Deposit will be available for use
in redeeming the Senior Subordinated Notes; provided that the Initial
Deposit shall be applied to such redemption only if and to the extent that
the Note Proceeds (together with any interest earned on such amount while
held in escrow) are insufficient to redeem the Senior Subordinated Notes,
and the remaining balance of the Initial Deposit (if any) after such
redemption shall be promptly returned to Seller. If the Closing under this
Agreement occurs, the Initial Deposit will be used to pay Purchaser an
amount equal to the interest that has accrued on the Senior Subordinated
Notes prior to the Closing under this Agreement and the remainder, if any,
shall be returned to Seller (together with any interest earned on such
amount while held in escrow). Seller shall pay all costs and expenses
related to the escrow, including fees and expenses of the escrow agent, if
any; provided that, notwithstanding the foregoing, in the event of a
termination of this Agreement pursuant to Section 13.1(c), any such costs
and expenses (other than interest that has accrued on the Senior
Subordinated Notes prior to redemption) shall constitute a "Loss" of Seller
for purposes of Section 11.2(b)(ii) of this Agreement."
17. Section 14.1 (Tax Indemnification). Clause (ii) of Section
14.1(b) is hereby amended to read in its entirety as follows:
"(ii) Transfer Taxes and VAT required to be borne by Purchaser
pursuant to Section 6.12(c) and Section 14.9,"
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18. Section 15.1 (Definitions). Section 15.1 is hereby amended (i)
in the definition of "Closing Date Cash," to replace "$5,126,419" with
U.S.$10,000,000 and (ii) to add the following definitions in the appropriate
alphabetical location:
"'Final Consideration' means the sum of the Final Cash Consideration,
the Final Note Principal Amount and the Assumed Liabilities (other than
liabilities or obligations of the Acquired Companies).
"'Final Note Principal Amount' means the principal amount of the Note,
as adjusted pursuant to Section 2.3(f).
"'Note' has the meaning set forth in Section 2.1(a)."
19. Section 15.2 (Entire Agreement). Section 15.2 is hereby amended
to add the following at the end thereof:
"Nothing contained in any Transfer Deed shall be deemed to modify or
limit any of the terms and provisions of this Agreement, including the
provisions of Article XI."
20. Schedule 1.2(g) (Intellectual Property). Annex A to Schedule
1.2(g) is hereby amended by deleting each trademark listed therein that contains
either the name "URBA" or the name "BROSOL."
21. Schedule 2.4 (Purchase Price Allocation). Schedule 2.4 to the
Agreement is hereby replaced with Exhibit 10 to this Amendment.
22. Section 4.7 of the Seller Disclosure Schedule (Material Adverse
Changes). Section 4.7 of the Seller Disclosure Schedule is hereby amended by the
addition of the items set forth on Exhibit 11 to this Amendment. The disclosures
set forth on Exhibit 11 shall be deemed for all purposes of the Agreement to
have been disclosed as of the date of this Amendment, except for purposes of
determining whether any representation or warranty of Seller set forth in the
Agreement (a) is true and correct for purposes of Section 8.1 and (b) is
accurate or has been breached for purposes of Section 11.2(a)(i) (in each of
which cases, the disclosures set forth on Exhibit 11 shall be deemed to have
been disclosed as of the date of the Agreement).
23. Material Adverse Changes. As an inducement to Purchaser to
enter into this Amendment and to consummate the transactions contemplated
hereby, Seller hereby represents and warrants to Purchaser that, except as
contemplated by the Agreement or as set forth on Section 4.7(a) of the Seller
Disclosure Schedule (as amended hereby), since December 31, 2003, (i) the
business of the Acquired Companies and the Business has been conducted in all
material respects in the ordinary course of business consistent with past
practice (except as expressly requested by
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Purchaser), and (ii) there has not been and does not exist any change or event
or effect that, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect.
24. Waiver. As an inducement to both Parties to enter into this
Amendment and to consummate the transactions contemplated hereby, each Party
hereby waives all claims of breach or potential breach of the Agreement asserted
in writing to the other Party or its Representatives prior to the date of this
Amendment, and all such claims of breach or potential breach are hereby deemed
cured.
25. Miscellaneous. All terms set forth in Article XV of the
Agreement are restated herein in full with the exception that references to
"this Agreement" shall be references to "this Amendment."
26. Remainder of Agreement. Except as expressly set forth herein,
this Amendment shall not by implication or otherwise alter, modify, amend or in
any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Agreement, all of which shall continue to be in full
force and effect.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed as of the date first above written.
AFFINIA GROUP INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President