Second Amended and Restated Purchase and Sale Agreement

Dated as of September 19, 2005

among

ArvinMeritor OE, LLC and Various Affiliates,

as Originators,

and

ArvinMeritor Receivables Corporation,

as Buyer

 

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Table of Contents

Section

Heading

Page

Section 1.

Definitions and Related Matters

1

Section 1.1.

Defined Terms

1

Section 1.2.

Other Interpretive Matters

2

Section 2.

Agreement to Contribute, Purchase and Sell

2

Section 2.1.

Purchase and Sale

2

Section 2.2.

Timing of Contribution, Purchases

2

Section 2.3.

Purchase Price

2

Section 2.4.

No Recourse or Assumption of Obligations

3

Section 3.

Administration and Collection

3

Section 3.1.

Collection Agent

3

Section 3.2.

Deemed Collections

4

Section 3.3.

Application of Collections

4

Section 3.4.

Responsibilities of Originator

4

Section 4.

Representations and Warranties

5

Section 4.1.

Mutual Representations and Warranties

5

Section 4.2.

Additional Representations by Each Originator

5

Section 5.

General Covenants

7

Section 5.1.

Covenants

7

Section 5.2.

Organizational Separateness

10

Section 6.

Termination of Purchases

10

Section 6.1.

Voluntary Termination

10

Section 6.2.

Automatic Termination

10

Section 7.

Indemnification

10

Section 7.1.

Originators’ Indemnity

10

Section 7.2.

Indemnification Due to Failure to Consummate Purchase

11

Section 8.

Miscellaneous

11

Section 8.1.

Amendments, Waivers, etc

11

Section 8.2.

Assignment of Receivables Purchase Agreement

11

Section 8.3.

Binding Effect; Assignment

12

Section 8.4.

Survival

12

Section 8.5.

Costs, Expenses and Taxes

12

Section 8.6.

Execution in Counterparts; Integration

12

Section 8.7.

Governing Law; Submission to Jurisdiction

12

Section 8.8.

No Proceedings

12

Section 8.9.

Loans by Buyer to Originators

13

Section 8.10.

Notice

13

Section 8.11.

Entire Agreement

13

 

Exhibit A

Purchase Price

 

 

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THIS SECOND AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT dated as of
September 19, 2005 (this “Agreement”) is among ARVINMERITOR OE, LLC, a Delaware
limited liability company, EUCLID INDUSTRIES, LLC, a Delaware limited liability
company, MERITOR HEAVY VEHICLE BRAKING SYSTEMS (USA), INC., a Delaware
corporation, MERITOR HEAVY VEHICLE SYSTEMS, LLC, a Delaware limited liability
company, ARVINMERITOR EMISSIONS TECHNOLOGIES SPARTANBURG, INC. (f/k/a Zeuna
Staerker USA, Inc.), a South Carolina corporation (all of the foregoing,
collectively, the “Existing Continuing Originators”), AVM, INC., a South
Carolina corporation (“AVM”), GABRIEL RIDE CONTROL PRODUCTS, INC., a Delaware
corporation (“Gabriel”), MAREMONT EXHAUST PRODUCTS, INC., a Delaware corporation
(“Maremont”), PUROLATOR PRODUCTS NA, INC., a Delaware corporation (together with
AVM, Gabriel and Maremont, the “Existing Withdrawing Originators”), MERITOR
TRANSMISSION CORPORATION, a Delaware corporation (“Transmission”), ARVINMERITOR
ASSEMBLY LLC, a Delaware limited liability company (together with Transmission,
the “New Originators”), and ARVINMERITOR RECEIVABLES CORPORATION, a Delaware
corporation (“Buyer”). The parties agree as follows:

Preliminary Statement

The Buyer, the Existing Continuing Originators and the Existing Withdrawing
Originators are parties to an Amended and Restated Purchase and Sale Agreement,
dated as of September 27, 2001 (the “Existing Agreement”); and

Subject to and upon the terms and conditions set forth herein, the parties
desire to amend and restate the Existing Agreement in the form of this
Agreement;

NOW, THEREFORE, in consideration of the mutual agreements contained herein and
the other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:

Section 1.

Definitions and Related Matters.

Section 1.1.           Defined Terms. In this Agreement, unless otherwise
specified or defined herein: (a) capitalized terms are used as defined in the
Loan Agreement dated as of the date hereof (as amended or modified from time to
time, the “Second Tier Agreement”) among Buyer, ArvinMeritor, Inc., as
collection agent (the “Initial Collection Agent”), the Co-Agents and Lenders
from time to time party thereto, and SunTrust Capital Markets, Inc., as
Administrative Agent, as such agreement may be amended or modified from time to
time; and (b) terms defined in Article 9 of the UCC and not otherwise defined
herein are used as defined in such Article 9 as in effect on the date hereof.

In addition, the following terms will have the meanings specified below:

“Available Funds” is defined in Section 2.3(b) hereof.

“Closing Date” means the date on which this Agreement and the Second Tier
Agreement become effective in accordance with their terms.

“Excluded Losses” is defined in Section 7.1 hereof.

“Initial Funding Date” means September 19, 2005.

“Originator” means each Existing Continuing Originator and each New Originator.
From and after the Closing Date, the Existing Withdrawing Originators shall no
longer be parties to this Agreement.

“Parent” means ArvinMeritor, Inc., an Indiana corporation.

“Settlement Date” means each Distribution Date (under and as defined in the
Second Tier Agreement).

“Settlement Period” means a calendar month (or, in the case of the first
Settlement Period, the period from the Initial Funding Date to the end of the
next succeeding calendar month following the calendar month in which the Initial
Funding Date occurs).

 

 

 

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“Trigger Event” means that (x) the aggregate outstanding principal amounts of
the Subordinated Notes exceeds the value of Buyer’s interest in the Receivables
(determined in accordance with GAAP), and (y) such condition has continued for
five Business Days.

Section 1.2.           Other Interpretive Matters. In this Agreement, unless
otherwise specified: (a) references to any Section or Annex refer to such
Section of, or Annex to, this Agreement, and references in any Section or
definition to any subsection or clause refer to such subsection or clause of
such Section or definition; (b) “herein,” “hereof,” “hereto,” “hereunder” and
similar terms refer to this Agreement as a whole and not to any particular
provision of this Agreement; (c) “including” means including without limitation,
and other forms of the verb “to include” have correlative meanings; (d) the word
“or” is not exclusive; and (e) captions are solely for convenience of reference
and shall not affect the meaning of this Agreement.

Section 2.

Agreement to Contribute, Purchase and Sell.

Section 2.1.           Purchase and Sale. On the terms and subject to the
conditions set forth in this Agreement, each Originator hereby sells to Buyer,
and Buyer hereby purchases from each Originator, all of such Originator’s right,
title and interest in, to and under the Receivables originated by such
Originator, all Related Security, Lock-Box Accounts and all proceeds thereof
(including all Collections with respect thereto), in each case whether now
existing or hereafter arising or acquired.

Section 2.2.           Timing of Contribution, Purchases. All of the Receivables
and Related Security that have not previously been sold to Buyer under the
Existing Agreement and existing at the opening of the Originators’ business on
the Initial Funding Date are hereby sold to Buyer as of the Initial Funding
Date. After the Initial Funding Date, each Receivable and Related Security shall
be deemed to have been sold to Buyer immediately (and without further action by
any Person) upon the creation of such Receivable. The proceeds with respect to
each Receivable (including all Collections with respect thereto) shall be sold
at the same time as such Receivable, whether such proceeds (or Collections)
exist at such time or arise or are acquired thereafter.

Section 2.3.           Purchase Price. (a) The aggregate purchase price for the
Receivables originated by an Originator sold on the Initial Funding Date shall
be such amount as agreed upon prior to the Initial Funding Date between such
Originator and Buyer to be the fair market value of such Receivables on such
date, which shall equal the excess of the (i) estimated aggregate outstanding
balance of such Receivables over (ii) an amount agreed upon by Buyer and such
Originator representing the uncertainty of payment and cost of purchase of such
Receivables. The purchase price for Receivables subsequently sold during any
Settlement Period shall be calculated in accordance with the provisions set
forth in Exhibit A hereto.

(b)           On the Initial Funding Date, Buyer shall pay each Originator the
purchase price for the Receivables originated by it sold on that date. On each
Business Day after the Initial Funding Date on which an Originator sells any
Receivables originated by it to Buyer pursuant to the terms of Section 2.1,
until the termination of the purchase and sale of Receivables under Section 6
hereof, Buyer shall pay to such Originator the purchase price of such
Receivables (i) by depositing into such account as such Originator shall specify
immediately available funds from monies then held by or on behalf of Buyer
solely to the extent that such monies do not constitute Collections that are
required to be identified or are deemed to be held by the Collection Agent
pursuant to the Second Tier Agreement for the benefit of, or required to be
distributed to, the Agent or the Purchasers pursuant to the Second Tier
Agreement or required to be paid to the Collection Agent as the Collection Agent
Fee, or otherwise necessary to pay current expenses of Buyer (in its reasonable
discretion) (such available monies, the “Available Funds”) and provided that
such Originator has paid all amounts then due by such Originator hereunder or
(ii) by increasing the principal amount owed to such Originator under a
promissory note (as amended or modified from time to time, each a “Subordinated
Note” and collectively the “Subordinated Notes”) executed and delivered by Buyer
to the order of such Originator as of the Initial Funding Date. The outstanding
principal amount owed to an Originator under the related Subordinated Note may
be reduced from time to time as provided in Section 3.2 hereof or by payments
made by Buyer from Available Funds, provided that such Originator has paid all
amounts then due by such Originator hereunder. Each Originator shall make all
appropriate record keeping entries with respect to amounts due to such
Originator under the related Subordinated Note to reflect payments by Buyer
thereon and increases of the principal amount thereof, and such Originator’s
books and records shall constitute rebuttably presumptive evidence of the
principal amount of and accrued interest owed to such Originator under the
related Subordinated Note.

 

 

 

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Section 2.4.           No Recourse or Assumption of Obligations. Except as
specifically provided in this Agreement, the contribution, purchase and sale of
Receivables under this Agreement shall be without recourse to the Originators.
Each Originator and Buyer intend the transactions hereunder to constitute true
sales of Receivables by such Originator to Buyer, providing Buyer with the full
risks and benefits of ownership of the Receivables originated by such Originator
(such that the Receivables would not be property of such Originator’s estate in
the event of such Originator’s bankruptcy). If, however, despite the intention
of the parties, the conveyances provided for in this Agreement are determined
not to be “true sales” of Receivables from the Originators to Buyer, then this
Agreement shall also be deemed to be a “security agreement” within the meaning
of Article 9 of the UCC and each Originator hereby grants to Buyer a “security
interest” within the meaning of Article 9 of the UCC in all of such Originator’s
right, title and interest in and to the Receivables, all Related Security,
Lock-Box Accounts and all proceeds thereof (including all Collection with
respect thereto) originated by it, now existing and thereafter created, to
secure a loan in an amount equal to the aggregate purchase prices therefor and
each of such Originator’s other payment obligations under this Agreement.

Buyer shall not have any obligation or liability with respect to any Receivable,
nor shall Buyer have any obligation or liability to any Obligor or other
customer or client of an Originator (including any obligation to perform any of
the obligations of such Originator under any Receivable).

Section 3.

Administration and Collection.

Section 3.1.           Collection Agent. The Initial Collection Agent shall be
responsible for the servicing, administration and collection of the Receivables,
all on the terms set out in (and subject to any rights to terminate the Initial
Collection Agent as Collection Agent pursuant to) the Second Tier Agreement.
Pursuant to the terms of the Second Tier Agreement, the Initial Collection Agent
has the right to appoint one or more Affiliates of the Initial Collection Agent
to perform certain services set forth in Article XI of the Second Tier
Agreement. The Initial Collection Agent has appointed each Originator as a
sub-collection agent with respect to the Receivables originated by it to perform
certain duties as more fully set forth in the Letter Agreement, dated as of the
Closing Date, between the Initial Collection Agent and the Originators.

Section 3.2.           Deemed Collections. If on any day the outstanding balance
of a Receivable is reduced or cancelled as a result of any defective or rejected
goods or services, any cash discount or adjustment (including any adjustment
resulting from the application of any special refund or other discounts or any
reconciliation), any setoff or credit (whether such claim or credit arises out
of the same, a related, or an unrelated transaction) or other reason not arising
from the financial inability of the Obligor to pay undisputed indebtedness, the
applicable Originator shall be deemed to have received on such day a Collection
on such Receivable in the amount of such reduction or cancellation. If on any
day any representation, warranty, covenant or other agreement of an Originator
related to a Receivable is not true or is not satisfied, (i) such Originator
shall be deemed to have received on such day a Collection in the amount of the
outstanding balance of such Receivable and (ii) such Receivable shall thereupon
be, or be deemed to be reconveyed to such Originator. Not later than the first
Settlement Date after an Originator is deemed pursuant to this Section 3.2 to
have received any Collections, such Originator shall transfer to Buyer, in
immediately available funds, the amount of such deemed Collections; provided,
however, that if no such application is required under the Second Tier
Agreement, Buyer and such Originator may agree to reduce the outstanding
principal amount of the Subordinated Note in lieu of all or part of such
transfer. To the extent that Buyer subsequently collects any payment with
respect to any “receivable” that is deemed to have been reconveyed to an
Originator pursuant to this Section 3.2, Buyer shall pay the applicable
Originator an amount equal to the amount so collected, such amount to be payable
not later than the first Settlement Date after Buyer has so collected such
amount.

Section 3.3.           Application of Collections. Any payment by an Obligor in
respect of any indebtedness owed by it to the related Originator shall, except
as otherwise specified by such Obligor (including by reference to a particular
invoice), or required by the related contracts or law, be applied, first, as a
Collection of any Receivable or Receivables then outstanding of such Obligor in
the order of the age of such Receivables, starting with the oldest of such
Receivables, and, second, to any other indebtedness of such Obligor to such
Originator.

Section 3.4.           Responsibilities of Originator. Each Originator shall pay
when due all Taxes payable in connection with the Receivables originated by it
or their creation or satisfaction (excluding Taxes on, or measured by, the
overall net income or gross receipts of the Buyer). Each Originator shall
perform all of its obligations under agreements related to the Receivables
originated by it to the same extent as if interests in such Receivables had not

 

 

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been transferred hereunder. The Agent’s or any Purchaser’s exercise of any
rights hereunder or under the Second Tier Agreement shall not relieve any
Originator from such obligations. Neither the Agent nor any Purchaser shall have
any obligation to perform any obligation of any Originator in connection with
the Receivables.

Section 4.

Representations and Warranties.

Section 4.1.           Mutual Representations and Warranties. Each of the
Originators and Buyer represents and warrants to the others as follows:

(a)           Existence and Power. It is a corporation or limited liability
company, as applicable, duly organized, validly existing and in good standing
under the laws of its state of organization and in each jurisdiction in which
the conduct of its business requires that it be qualified to do business in such
jurisdiction and has all company power and authority and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted, except
where failure to obtain such license, authorization, consent or approval would
not have a material adverse effect on (i) its ability to perform its obligations
under, or the enforceability of, any Transaction Document to which it is a
party, (ii) its business or financial condition, (iii) the interests of Buyer or
its assigns under the Transaction Documents or (iv) the enforceability or
collectibility of a material portion of the Receivables.

(b)           Authorization and No Contravention. Its execution, delivery and
performance of each Transaction Document to which it is a party (i) are within
its powers, (ii) have been duly authorized by all necessary company action,
(iii) do not contravene or constitute a default under: (A) any applicable law,
rule or regulation, (B) its charter or by-laws or operating agreement, as
applicable, or (C) any material agreement, order or other instrument to which it
is a party or its property is subject and (iv) will not result in any Adverse
Claim on any Receivable, Related Security or Collection or give cause for the
acceleration of any of its indebtedness.

(c)           No Consent Required. Other than the filing of financing statements
no approval, authorization or other action by, or filings with, any Governmental
Authority or other Person is required in connection with the execution, delivery
and performance by it of any Transaction Document to which it is a party or any
transaction contemplated thereby.

(d)           Binding Effect. Each Transaction Document to which it is a party
constitutes the legal, valid and binding obligation of such Person enforceable
against that Person in accordance with its terms, except as limited by
bankruptcy, insolvency, or other similar laws of general application relating to
or affecting the enforcement of creditors’ rights generally and subject to
general principles of equity.

(e)           Accounting for Sale. It will not account for or otherwise treat
the transactions contemplated hereby other than as a sale of Receivables or
inconsistent with the Buyer’s ownership interest in the Receivables, Related
Security and Collections.

Section 4.2.           Additional Representations by Each Originator. Each
Originator further represents and warrants to Buyer as follows:

(a)           Perfection of Ownership Interest. Immediately preceding its sale
of Receivables to Buyer, such Originator was the owner of, and effectively sold,
such Receivables to Buyer. Buyer owns the Receivables free and clear of any
Adverse Claim other than the interests of the Lenders and the Agent therein that
are created by the Second Tier Agreement and, in the case of Receivables not
designated as Eligible Receivables, other Adverse Claims. Buyer’s ownership
interest in the Receivables originated by such Originator, together with the
associated Related Security and Collections, is perfected.

(b)           Accuracy of Information. All information furnished by each
Originator in writing in connection with any Transaction Document, or any
transaction contemplated thereby, is true and accurate in all material respects
(and was not incomplete by omitting to state a material fact necessary to make
such information not materially misleading).

(c)           No Actions, Suits. There are no actions, suits or other
proceedings (including matters relating to environmental liability) pending or
threatened against or affecting any Originator or any

 

 

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of its properties, that (i) if adversely determined (individually or in the
aggregate), is likely to have a material adverse effect on the financial
condition of the Parent and its subsidiaries, on a consolidated basis or on the
collectibility of a material portion of the Receivables or (ii) involve any
Transaction Document or any transaction contemplated thereby. No Originator is
in default of any contractual obligation or in violation of any material order,
rule or regulation of any Governmental Authority, which default or violation is
likely to have a material adverse effect upon (i) the financial condition of the
Parent and its subsidiaries, on a consolidated basis or (ii) the collectibility
of a material portion of the Receivables.

(d)           No Material Adverse Change. Since December 31, 2004, there has
been no material adverse change in (i) such Originator’s financial condition,
business, operations or prospects or (ii) such Originator’s ability to perform
its obligations under any Transaction Document.

(e)           Sales by Originator. Each sale by such Originator to Buyer of an
interest in Receivables has been made for “reasonably equivalent value” (as such
term is used in Section 548 of the Bankruptcy Code) and not for or on account of
“antecedent debt” (as such term is used in Section 547 of the Bankruptcy Code)
owed by such Originator to Buyer.

(f)            No Significant Event. No Significant Event or Unmatured
Significant Event has occurred and is continuing.

(g)           Eligible Receivables. Each Receivable included in the Aggregate
Eligible Balance on the date of any Advance or listed as an Eligible Receivable
on a Monthly Report or Borrowing Base Certificate is an Eligible Receivable.

(h)           Underwriting Collection Practices. To the extent that the Buyer is
the Collection Agent and the relevant Originator is a sub-collection agent, it
has complied with the Credit and Collection Policy in all material respects, and
such policy has not changed in any material respect since the date hereof.

Section 5.

General Covenants.

Section 5.1.           Covenants. Each Originator hereby covenants and agrees to
comply with the following covenants and agreements, unless Buyer (with the
consent of the Agent) shall otherwise consent:

(a)           Financial Reporting. Each Originator will maintain a system of
accounting established and maintained in accordance with GAAP and will furnish
to Buyer:

(i)            Within 105 days after each fiscal year of the Parent copies of
Parent’s annual audited financial statements (including a consolidated balance
sheet, consolidated statement of income and retained earnings and statement of
cash flows, with related footnotes) certified by independent certified public
accountants of nationally recognized standing and prepared on a consolidated
basis in conformity with GAAP;

(ii)           Within 55 days after each (except the last) fiscal quarter of
each fiscal year of the Parent, copies of the Parent’s unaudited financial
statements (including at least a consolidated balance sheet as of the close of
such quarter and related statement of consolidated income and statement of cash
flow for the period from the beginning of the fiscal year to the close of such
quarter) prepared in accordance with GAAP;

(iii)          with reasonable promptness such other information (including
non-financial information) as Buyer may reasonably request.

(b)           Notices. Promptly and in any event within three Business Days
after a Authorized Officer of an Originator obtains knowledge of any of the
following, such Originator will notify Buyer and provide a description of:

(i)            Significant Events. The occurrence of any Significant Event or
Unmatured Significant Event;

 

 

 

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(ii)           Representations and Warranties. The failure of any
representations or warranty herein to be true when made in any material respect;

(iii)          Litigation. The institution of any litigation, arbitration
proceeding or governmental proceeding which is reasonably likely to be material
to such Originator or the collectibility or quality of a material portion of the
Receivables; or

(iv)          Judgments. The entry of any uninsured judgment or decree against
such Originator if the aggregate amount of all such uninsured judgments then
outstanding against such Originator exceeds $10,000,000.

(c)           Conduct of Business. Each Originator will perform all actions
necessary to remain duly incorporated or organized, validly existing and in good
standing in its jurisdiction of incorporation or organization and to maintain
good standing and all requisite authority to conduct its business in each
jurisdiction in which it conducts business.

(d)           Compliance with Laws. Each Originator will comply in all material
respects with all laws, regulations, judgments and other directions or orders
imposed by any Governmental Authority to which each Originator or any
Receivable, any Related Security or Collection may be subject.

(e)           Furnishing Information and Inspection of Records. Each Originator
will furnish to Buyer such information concerning the Receivables originated by
it and any Related Security as Buyer may reasonably request, subject to any
confidentiality restrictions. Each Originator will permit, at any time during
regular business hours, Buyer (or any representatives thereof) (i) to examine
and make copies of all Records, (ii) to visit the offices and properties of such
Originator or office of any other Person for the purpose of examining the
Records and (iii) to discuss matters relating hereto with any of such
Originator’s officers, directors, employees or independent public accountants
having knowledge of such matters. Once a year or at any time after the
occurrence and during the continuance of a Termination Event relating to a
particular Originator, Buyer may (at the expense of the applicable Originator)
have an independent public accounting firm conduct an audit of the Records or
make test verification of the Receivables and Collections in connection with the
audit and test verifications conducted on behalf of the Agent under the Second
Tier Agreement.

(f)            Keeping Records. (i) Each Originator will have and maintain (A)
administrative and operating procedures (including an ability to recreate
Records if originals are destroyed), (B) adequate facilities, personnel and
equipment and (C) all Records and other information necessary or advisable for
collecting the Receivables originated by it (including Records adequate to
permit the immediate identification of each new Receivable originated by it and
all Collections of, and adjustments to, each existing Receivable originated by
it). Each Originator will give Buyer prior notice of any material change in such
administrative operating procedures.

(ii)           Each Originator will, (A) at all times from and after the date
hereof, clearly and conspicuously mark its computer and master data processing
books and records with a legend describing Buyer’s interest in the Receivables
originated by it and the Collections and (B) upon the request of the Buyer, so
mark each contract relating to a Receivable and deliver to the Buyer all such
contracts (including all multiple originals of such contracts), with any
appropriate endorsement or assignment, or segregate (from all other receivables
then owned or being serviced by it) the Receivables and all contracts relating
to each Receivable and hold in trust and safely keep such contracts so legended
in separate filing cabinets or other suitable containers at such locations as
the Buyer may specify.

(g)           Perfection. (i) Each Originator will at its expense, promptly
execute and deliver all instruments and documents and take all action necessary
or reasonably requested by the Buyer (including the execution and filing of
financing or continuation statements, amendments thereto or assignments thereof)
to enable the Buyer to exercise and enforce all its rights against the
Receivables originated by it and to vest and maintain vested in the Buyer a
valid, first priority perfected security interest in such Receivables, the
Related Security and the Collections, and proceeds thereof (and a perfected
ownership interest in such Receivables, Related Security and Collections to the
extent of the Sold Interest), which security interest or ownership interest in
Eligible Receivables shall be free and clear of any Adverse

 

 

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Claim created by or arising through the Originator. To the extent permitted by
applicable law, the Buyer will be permitted to sign and file any financing
statements, continuation statements, amendments thereto and assignments thereof
without the Originator’s signature.

(ii)           No Originator will change its name, identity or corporate
structure or relocate its state of organization or its chief executive office or
the Records except after thirty (30) days advance notice to the Buyer and the
delivery to the Buyer of all financing statements, instruments and other
documents (including direction letters) requested by the Buyer.

(iii)         Each Originator will at all times maintain its chief executive
offices within a jurisdiction in the USA in which Article 9 of the UCC (as it
may be amended from time to time) is in effect. If any Originator moves its
chief executive office to a location that imposes Taxes, fees or other charges
to perfect the Buyer’s interests hereunder, such Originator will pay all such
amounts and any other costs and expenses incurred in order to maintain the
enforceability of the Transaction Documents, the Sold Interest and the interests
of the Buyer in the Receivables, the Related Security and Collections.

(h)           Payments on Receivables, Lock-Box Accounts. Each Originator will
at all times instruct all Obligors to deliver payments on the Receivables
(including Deemed Collections) to a Lock-Box a Lock-Box Account and will not
change any such instructions without the prior written consent of the Buyer. If
any such payments or other Collections are received by an Originator, it shall
hold such payments in trust for the benefit of the Buyer and promptly (but in
any event within two Business Days after receipt) remit such funds at the
direction of the Buyer. After the occurrence of a Significant Event, such
Originator will not, and will not permit any Collection Agent or other Person
to, commingle Collections or other funds to which the Buyer is entitled with any
other funds.

(i)            Sales and Adverse Claims Relating to Receivables or Related
Security. Except as otherwise permitted herein, no Originator will (by operation
of law or otherwise) dispose of or otherwise transfer, or create or suffer to
exist any Adverse Claim upon, any Receivable, Related Security and Collections,
or any proceeds thereof.

(j)            Extension or Amendment of Receivables. Except as otherwise
permitted in the Second Tier Agreement and then subject to Section 3.2 of this
Agreement, no Originator will extend, amend, rescind or cancel any Receivable.

(k)           Performance of Duties. Each Originator will perform its duties or
obligations in accordance with the provisions of each of the Transaction
Documents to which it is a party. Each Originator (at its expense) will (i)
fully and timely perform in all material respects all agreements, if any,
required to be observed by it in connection with each Receivable originated by
it, (ii) comply in all material respects with the Credit and Collection Policy,
and (iii) refrain from any action that may impair the rights of Buyer in the
Receivables, Collections or Lock-Box Accounts.

(l)            Change in Credit and Collection Policy. No Originator will make
any change in its Credit and Collection Policy which change would impair the
collectibility of any Receivable.

(m)          Accounting for Sale. No Originator will account for, or otherwise
treat, the transactions contemplated hereby other than as a sale of Receivables
or inconsistent with the Purchasers’ ownership interests in the Receivables
Related Security and Collections.

(n)           Certain Agreements. Except as otherwise permitted by this
Agreement, no Originator will amend, modify, waive, revoke or terminate any
Transaction Document to which it is a party.

Section 5.2.           Organizational Separateness. Each Originator agrees not
to take any action that would cause Buyer to violate its articles of
incorporation or certificate of incorporation, as appropriate, and bylaws. Buyer
agrees to conduct its business in a manner consistent with its articles of
incorporation or certification of incorporation, as appropriate, and bylaws or
its limited liability company agreement or operating agreement, as applicable.

Section 6.

Termination of Purchases.

 

 

 

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Section 6.1.           Voluntary Termination. The purchase and sale of
Receivables pursuant to this Agreement may be terminated by any party, upon at
least five Business Days’ prior written notice to the other parties.

Section 6.2.           Automatic Termination. The purchase and sale of
Receivables pursuant to this Agreement shall automatically terminate upon the
occurrence of (i) an Event of Bankruptcy with respect to any Originator, (ii) a
Trigger Event or (iii) the Commitment Termination Date.

Section 7.

Indemnification.

Section 7.1.           Originators’ Indemnity. Without limiting any other rights
any Person may have hereunder or under applicable law, each Originator, jointly
and severally, hereby indemnifies and holds harmless Buyer and its officers,
directors, agents and employees (each an “Indemnified Party”) from and against
any and all damages, losses, claims, liabilities, penalties, Taxes, costs and
expenses (including reasonable attorneys’ fees and court costs actually
incurred) (all of the foregoing collectively, the “Indemnified Losses”) at any
time imposed on or incurred by any Indemnified Party arising out of or otherwise
relating to any Transaction Document, the transactions contemplated thereby, or
any action taken or omitted by any of the Indemnified Parties, whether arising
by reason of the acts to be performed by such Originator hereunder or otherwise,
excluding only Indemnified Losses (“Excluded Losses”) to the extent (a) a final
judgment of a court of competent jurisdiction holds such Indemnified Losses
resulted solely from gross negligence or willful misconduct of the Indemnified
Party seeking indemnification, (b) solely due to the credit risk or financial
inability to pay of the Obligor and for which reimbursement would constitute
recourse to such Originator or the Collection Agent for uncollected or
uncollectible Receivables or (c) such Indemnified Losses include Taxes on, or
measured by, the overall net income or gross receipts of the Buyer. Without
limiting the foregoing indemnification, but subject to the limitations set forth
in clauses (a), (b) and (c) of the previous sentence, each Originator, jointly
and severally, shall indemnify each Indemnified Party for Indemnified Losses
relating to or resulting from:

(i)            any representation or warranty made by or on behalf of an
Originator under or in connection with this Agreement, any Monthly Report, any
Borrowing Base Certificate or any other information or report delivered by an
Originator pursuant to the Transaction Documents, which shall have been false or
incorrect in any material respect when made or deemed made;

(ii)           the failure by an Originator to comply with any applicable law,
rule or regulation related to any Receivable, or the nonconformity of any such
Receivable with any such applicable law, rule or regulation;

(iii)          the failure of an Originator to vest and maintain vested in
Buyer, a perfected ownership or security interest in the Receivables and the
other property conveyed pursuant hereto, free and clear of any Adverse Claim
(except to the extent permitted hereunder);

(iv)          any commingling of funds to which Buyer is entitled hereunder with
any other funds;

(v)           any failure of a Lock-Box Bank to comply with the terms of the
applicable Lock-Box Letter;

(vi)          any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor or financial inability of the Obligor to pay) of the
Obligor to the payment of any Receivable, or any other claim resulting from the
sale or lease of goods or the rendering of services related to such Receivable
or the furnishing or failure to furnish any such goods or services;

(vii)         any failure of an Originator to perform its duties or obligations
in accordance with the provisions of this Agreement or any other Transaction
Document to which an Originator is a party; or

(viii)        any environmental liability claim, products liability claim or
personal injury or property damage suit or other similar or related claim or
action of whatever sort, arising out of or in connection with any Receivable or
any other suit, claim or action of whatever sort relating to any of any
Originator’s obligations under the Transaction Documents.

 

 

 

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Section 7.2.           Indemnification Due to Failure to Consummate Purchase.
Each Originator will indemnify Buyer on demand and hold it harmless against all
costs (including, without limitation, breakage costs) and expenses incurred by
Buyer resulting from any failure by such Originator to consummate a sale of
Receivables after Buyer has requested an Advance for the purposes of funding the
purchase price of such Receivables under the terms of the Second Tier Agreement.

Section 8.

Miscellaneous.

Section 8.1.           Amendments, Waivers, etc. No amendment of this Agreement
or waiver of any provision hereof or consent to any departure by either party
therefrom shall be effective without the written consent of the party that is
sought to be bound. Any such waiver or consent shall be effective only in the
specific instance given. No failure or delay on the part of either party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law. Each Originator agrees that the Lenders may rely upon
the terms of this Agreement, and that the terms of this Agreement may not be
amended, nor any material waiver of those terms be granted, without the consent
of the Agent; provided that such Originator and Buyer may agree to an adjustment
of the purchase price for any Receivable originated by such Originator without
the consent of the Agent provided that the purchase price paid for such
Receivable shall be an amount not less than adequate consideration that
represents fair value for such Receivable.

Section 8.2.           Assignment of Receivables Purchase Agreement. Each
Originator hereby acknowledges that on the date hereof Buyer has collaterally
assigned for security purposes all of its right, title and interest in, to and
under this Agreement to the Agent for the benefit of the Lenders pursuant to the
Second Tier Agreement and that the Agent and the Lenders are third party
beneficiaries hereof. Each Originator hereby further acknowledges that after the
occurrence and during the continuation of a Significant Event, all provisions of
this Agreement shall inure to the benefit of the Agent and the Lenders,
including the enforcement of any provision hereof to the extent set forth in the
Second Tier Agreement, but that neither the Agent nor any Lender shall have any
obligations or duties under this Agreement. Each Originator hereby further
acknowledges that the execution and performance of this Agreement are conditions
precedent for the Agent and the Lenders to enter into the Second Tier Agreement
and that the agreement of the Agent and Lenders to enter into the Second Tier
Agreements will directly or indirectly benefit such Originator and constitutes
good and valuable consideration for the rights and remedies of the Agent and
each Lender with respect hereto.

Section 8.3.           Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns and shall also, to the extent provided herein, inure to
the benefit of the parties to the Second Tier Agreement. Each Originator
acknowledges that Buyer’s rights under this Agreement are being assigned to the
Agent under the Second Tier Agreement and consents to such assignment and to the
exercise of those rights directly by the Agent, to the extent permitted by the
Second Tier Agreement.

Section 8.4.           Survival. The rights and remedies with respect to any
breach of any representation and warranty made by an Originator or Buyer
pursuant to Section 4, the provisions of Section 3.2 and the indemnification
provisions of Section 7 shall survive any termination of this Agreement.

Section 8.5.           Costs, Expenses and Taxes. In addition to the obligations
of the Originators under Section 7, each party (the Originators being one party
and the Buyer the other party) hereto agrees to pay on demand all costs and
expenses incurred by the other party and its assigns (other than Excluded
Losses) in connection with the enforcement of, or any actual or claimed breach
of, this Agreement, including the reasonable fees and expenses of counsel to any
of such Persons incurred in connection with any of the foregoing or in advising
such Persons as to their respective rights and remedies under this Agreement in
connection with any of the foregoing. Each Originator, jointly and severally,
also agrees to pay on demand all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing, and
recording of this Agreement.

Section 8.6.           Execution in Counterparts; Integration. This Agreement
may be executed in any number of counterparts and by the different parties in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement.

 

 

 

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Section 8.7.           Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal laws (and
not the law of conflicts) of the State of New York. Each Originator hereby
submits to the nonexclusive jurisdiction of the United States District Court for
the Southern District of New York and of any New York state court sitting in New
York, New York, for purposes of all legal proceedings arising out of, or
relating to, the Transaction Documents or the transactions contemplated thereby.
Each Originator hereby irrevocably waives, to the fullest extent permitted by
law, any objection it may now or hereafter have to the venue of any such
proceeding and any claim that any such proceeding has been brought in an
inconvenient forum. Nothing in this Section 8.7 shall affect the right of Buyer
to bring any action or proceeding against an Originator or its property in the
courts of other jurisdictions.

Section 8.8.           No Proceedings. Each Originator agrees, for the benefit
of the parties to the Second Tier Agreement, that it will not institute against
Buyer, or join any other Person in instituting against Buyer, any proceeding of
a type referred to in the definition of “Event of Bankruptcy” until one year and
one day after no investment, loan or commitment is outstanding under the Second
Tier Agreement.

In addition, all amounts payable by Buyer to an Originator pursuant to this
Agreement shall be payable solely from funds available for that purpose (after
Buyer has satisfied all obligations then due and owing under the Second Tier
Agreement).

Section 8.9.           Loans by Buyer to Originators. Buyer may make Demand
Loans to an Originator from time to time if so agreed between such parties and
to the extent that Buyer has funds available for that purpose after satisfying
its obligations under this Agreement and the Second Tier Agreement. Any such
Demand Loan shall be payable upon demand and shall bear interest at such market
rate as Buyer and such Originator shall from time to time agree.

Section 8.10.         Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth in the Second Tier Agreement or at such other address
or telecopy number as such Person may specify, and effective when received at
the address specified by such Person.

Section 8.11.         Entire Agreement. This Agreement constitutes the entire
understanding of the parties thereto concerning the subject matter thereof. Any
previous or contemporaneous agreements, whether written or oral, concerning such
matters are superseded thereby.

<Signature pages follow>

 

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

ARVINMERITOR OE, LLC, as an Existing Continuing Originator

By /s/ Brian P. Casey

Name: Brian P. Casey

Title: Vice President and Treasurer

ArvinMeritor Assembly LLC, as a New Originator

 

By

/s/ Brian P. Casey

Name: Brian P. Casey

Title: Vice President and Treasurer

ArvinMeritor Emissions Technologies Spartanburg, Inc., as an Existing Continuing
Originator

By /s/ Brian P. Casey

Name: Brian P. Casey

Title: Vice President and Treasurer

AVM, INC., as an Existing Withdrawing Originator

By /s/ Brian P. Casey

Name: Brian P. Casey

Title: Vice President and Treasurer

EUCLID INDUSTRIES, LLC, as an Existing Continuing Originator

By /s/ Brian P. Casey

Name: Brian P. Casey

Title: Vice President and Treasurer

GABRIEL RIDE CONTROL PRODUCTS, INC., as an Existing Withdrawing Originator

By /s/ Brian P. Casey

Name: Brian P. Casey

Title: Vice President and Treasurer

MAREMONT EXHAUST PRODUCTS, INC., as an Existing Withdrawing Originator

By /s/ Brian P. Casey

Name: Brian P. Casey

Title: Vice President and Treasurer

 

Signature Page for

Purchase and Sale Agreement

 

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Meritor Heavy Vehicle Braking Systems (USA), Inc., as an Existing Continuing
Originator

 

By

/s/ Brian P. Casey

Name: Brian P. Casey

Title: Vice President and Treasurer

MERITOR HEAVY VEHICLE SYSTEMS, LLC, as an Existing Continuing Originator

By /s/ Brian P. Casey

Name: Brian P. Casey

Title: Vice President and Treasurer

Meritor Transmission Corporation, as a New Originator

By /s/ Brian P. Casey

Name: Brian P. Casey

Title: Vice President and Treasurer

PUROLATOR PRODUCTS NA, INC., as an Existing Withdrawing Originator

By /s/ Brian P. Casey

Name: Brian P. Casey

Title: Vice President and Treasurer

ArvinMeritor Receivables Corporation, as Buyer

 

By

/s/ Brian P. Casey

Name: Brian P. Casey

Title: President and Treasurer

The undersigned has caused this Agreement to be executed by its officers
thereunto duly authorized, as of the date first above written solely for the
purposes set forth in Section 3.1 of this Agreement.

ArvinMeritor, Inc.

By /s/ Brian P. Casey

Name: Brian P. Casey

Title: Vice President and Treasurer

 

Signature Page for

Purchase and Sale Agreement

 

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Exhibit A

Purchase Price

The purchase price for the Receivables shall be calculated as follows:

The Outstanding Balance of the Receivables,

Less:       a discount of 64 basis points, representing a fair discount for
uncertainty of payment and time value of money.

 

Equals:

99.36% of such Outstanding Balance for the Receivables.

 

 

 

 

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