ESSEX FUNDING INC.
LOAN AND SECURITY AGREEMENT
dated as of April 29, 1998
THREE RIVERS FUNDING CORPORATION
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS......................................
1.1 Defined Terms....................................
1.2 Accounting and Other Terms.......................
SECTION 2. TERMS OF THE LOANS...............................
2.1 The Loans........................................
2.2 The Note.........................................
2.3 Initial Loan Request.............................
2.4 Commitment.......................................
2.5 Mandatory and Optional Prepayments...............
2.6 Settlement Date Statements; Interest;
Fees.............................................
2.7 Proceeds.........................................
2.8 Taxes............................................
2.9 Increased Cost and Reduced Return................
SECTION 3. REPRESENTATIONS AND WARRANTIES...................
3.1 Representations and Warranties of
the Borrower...................................
SECTION 4. CONDITIONS PRECEDENT.............................
4.1 Conditions Precedent to the Initial
Loan...........................................
4.2 Conditions Precedent to Each Loan................
SECTION 5. AFFIRMATIVE COVENANTS............................
5.1 Financial Statements.............................
5.2 Certificates; Other Information..................
5.3 Payment of Obligations...........................
5.4 Conduct of Business and Maintenance
of Existence...................................
5.5 Inspection of Properties, Books and
Records, Discussions ..........................
5.6 Notices..........................................
5.7 Delivery of Other Reports........................
5.8 Servicing Matters................................
5.9 Further Assurances...............................
5.10 Separate Corporate Existence.....................
5.11 Net Worth........................................
5.12 Collections......................................
5.13 Enforcement of Sales and Servicing
Agreement......................................
SECTION 6. NEGATIVE COVENANTS...............................
6.1 Limitation on Debt...............................
6.2 Limitation on Liens..............................
6.3 Limitation on Fundamental Changes................
6.4 Limitation on Sale of Assets.....................
6.5 Receivables......................................
6.6 Limitation on Dividends..........................
6.7 Limitation on Capital Expenditures...............
6.8 Limitation on Investments, Loans and
Advances.......................................
6.9 Transactions with Affiliates.....................
6.10 Corporate Documents..............................
6.11 Capital Stock....................................
6.12 Fiscal Year......................................
6.13 Limitation on Negative Pledge Clauses............
6.14 Agreements.......................................
6.15 Successor Servicer...............................
6.16 Change in Payment Instructions
to Obligors....................................
6.17 Maintenance of Office or Agency;
Chief Executive Office.........................
SECTION 7. REMEDIES.........................................
SECTION 8. GRANT OF SECURITY INTEREST.......................
8.1 Grant of Security Interest.......................
8.2 Remedies.........................................
8.3 Application of Money Collected...................
8.4 Restoration of Rights and Remedies...............
8.5 Rights and Remedies Cumulative...................
8.6 Delay or Omission Not Waiver.....................
8.7 Waiver of Stay or Extension Laws.................
8.8 Sale of Collateral...............................
8.9 Protection of Collateral; Further
Assurances.....................................
8.10 Opinions as to Collateral........................
SECTION 9. MISCELLANEOUS.....................................
9.1 Amendments and Waivers...........................
9.2 Notices..........................................
9.3 Survival of Representations and
Warranties.....................................
9.4 Payment of Expenses and Taxes....................
9.5 Successors and Assigns; Participations...........
9.6 Termination......................................
9.7 Counterparts.....................................
9.8 Severability.....................................
9.9 Integration......................................
9.10 GOVERNING LAW....................................
9.11 SUBMISSION TO JURISDICTION; WAIVERS..............
9.12 Acknowledgments..................................
9.13 WAIVER OF JURY TRIAL.............................
9.14 No Bankruptcy Petition Against Lender............
9.15 Non-Recourse.....................................
9.16 No Recourse Against the Borrower's
Stockholders...................................
EXHIBITS
EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF INITIAL LOAN REQUEST
EXHIBIT C FORM OF BORROWING BASE CERTIFICATE
EXHIBIT D-1 FORM OF ENFORCEABILITY AND PERFECTION
OPINION
EXHIBIT D-2 FORM OF TRUE SALE AND NONCONSOLIDATION
OPINION
EXHIBIT E FORM OF LOCK-BOX AGREEMENT
LOAN AND SECURITY AGREEMENT
LOAN AND SECURITY AGREEMENT, dated as of April 29, 1998
(the "Loan Agreement"), between ESSEX FUNDING INC., a Delaware
corporation and a wholly-owned subsidiary of Essex Group, Inc.
(the "Borrower"), and THREE RIVERS FUNDING CORPORATION, a
Delaware corporation (the "Lender").
WITNESSETH:
WHEREAS, pursuant to the Sales and Servicing Agreement,
the Borrower has agreed to purchase certain Receivables from
Essex Group, Inc., a Michigan corporation ("Essex"), Diamond Wire
& Cable Co., an Illinois corporation ("Diamond"), and Interstate
Industries, Inc., a Mississippi corporation ("Interstate"; and
together with Essex and Diamond, the "Originators"), and Essex
has agreed to act as Servicer of the Receivables;
WHEREAS, the Borrower has requested that the Lender
make Loans to the Borrower, the proceeds of which shall be used
by the Borrower to make payment to the Originators for the
Receivables transferred under the Sales and Servicing Agreement
and to make payment of fees and expenses hereunder;
WHEREAS, as collateral security for its obligations
under this Loan Agreement, the Borrower shall collaterally assign
all of its right, title and interest in and to the Receivables,
its rights under the Sales and Servicing Agreement, all of its
right, title, interest in and to the Collections and certain
other collateral to the Lender pursuant to this Loan Agreement;
WHEREAS, the Lender intends to fund the Loans by (a)
the issuance of Commercial Paper or (b) if the Lender is unable
for any reason to issue Commercial Paper, by borrowings under the
Liquidity Agreements; and
WHEREAS, subject to the terms and conditions set forth
herein, the Lender is willing to make the Loans to the Borrower.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. The capitalized terms used herein
shall, unless otherwise defined herein, have the following
meanings:
"Account Balance" shall mean, in respect of each
Receivable, all amounts shown as owing by the related Obligor on
the accounting records of the applicable Originator, and all
other amounts which are shown on the most recent Settlement
Statement, in respect of which the related Obligor is obligated.
"Accounting Period" means, with respect to any
Settlement Date (and the Determination Date with respect
thereto), the calendar month prior to the month in which such
Settlement Date occurs.
"Accumulated Funding Deficiency" means a funding
deficiency described in Section 302 of ERISA.
"Actual Dilutions" means, with respect to any
Settlement Date, the aggregate amount of all Dilutions during the
full Accounting Period immediately preceding such Settlement
Date.
"Affected Party" means the Lender and each Person
providing liquidity or credit support to the Lender pursuant to a
Liquidity Agreement or a Program Support Agreement and each of
their respective Affiliates and assigns; provided, however, that,
solely for purposes of this definition of "Affected Party", the
term "Affiliate" shall include only those Persons set forth in
clause (i) of the definition of Affiliate.
"Affiliate" means, with respect to any specified
Person, any other Person (i) which directly or indirectly,
controls, or whose directors or officers directly or indirectly
control, or which is controlled by, or which is under common
control with, such specified Person, (ii) which beneficially owns
or holds, or whose directors or officers own or hold, 10% or more
of any class of the voting stock (or, in the case of an entity
that is not a corporation, 10% of the equity interest) of such
specified Person, or (iii) 10% or more of the voting stock (or,
in the case of an entity that is not a corporation, 10% of the
equity interest) of which is owned or held by such specified
Person. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.
"Authorized Officer" means, with respect to any matter,
any officer of or other Person representing the Borrower, an
Originator or the Servicer, as the case may be, who is authorized
to act for the Borrower, such Originator or the Servicer, as the
case may be.
"Bankruptcy Code" means, the United States Bankruptcy
Code, 11 U.S.C. ss. 101 et seq., as amended.
"Borrower" means Essex Funding Inc., a Delaware
corporation and any successor corporation.
"Borrower Order" or "Borrower Request" means a written
order or request delivered to the Lender and signed in the name
of the Borrower by an Authorized Officer.
"Borrowing Base" means, as of any date, the aggregate
Account Balances of all Eligible Receivables, minus (i) the
Credit Enhancement Reserve, (ii) the aggregate Excess
Concentration, (iii) the Servicer's Compensation Reserve, (iv)
the Cost of Funds Reserve, (v) the Cash Discount Reserve, and
(vi) the Competitive Price Accrual.
"Business Day" means any day that is not a Saturday,
Sunday or other day on which commercial banking institutions in
New York, New York, Fort Xxxxx, Indiana or Pittsburgh,
Pennsylvania are authorized or obligated by law or executive
order to remain closed.
"Capital Stock" means, with respect to any Person, any
and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and
all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any
of the foregoing.
"Cash Discount Reserve" means, with respect to any
Settlement Date, an amount equal to the sales allowance reserve
as shown on the books and records of the Originators with respect
to the Contracts as of the last day of the Accounting Period
immediately preceding such Settlement Date.
"Chief Executive Office" shall mean, with respect to
any Person, the place where such Person is located, within the
meaning of Section 9-103(c)(2) of the Uniform Commercial Code as
in effect in the jurisdiction whose laws governs the perfection
of the Borrower's ownership interest in any Receivable or the
Lender's security interest in any Receivable, as the case may be,
or any analogous provision thereof
"Closing Date" means April 30, 1998.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Collateral" has the meaning given such term in the
Section 8.1 of this Loan Agreement.
"Collection Account" means the account or accounts by
that name established and maintained by the Lender pursuant to
Section 7 of this Loan Agreement.
"Collections" means with respect to any Receivable as
of any date, (i) the sum of all amounts, whether in the form of
cash, checks, drafts, or other instruments (excluding promissory
notes), received by the Borrower, an Originator or the Servicer
or in a Lock-Box Account in payment of, or applied to, any amount
owed by an Obligor on account of such Receivable (including but
not limited to all amounts received on account of any Defaulted
Receivable), including, without limitation, all amounts received
on account of such Receivable, and (ii) all amounts deemed to
have been received by the Borrower, an Originator or the Servicer
as a Collection pursuant to the Sales and Servicing Agreement.
"Commercial Paper" means the commercial paper notes of
the Lender issued in the United States commercial paper market.
"Commitment" means the obligation of the Lender to make
Loans to the Borrower under this Loan Agreement in a maximum
principal amount outstanding at any time equal to $150,000,000,
as such amount may be reduced in accordance with the provisions
of Section 2.4.
"Commitment Expiration Date" means the earliest of (i)
April 28, 1999, which may be extended from time to time for an
additional period or periods commencing on the then scheduled
Commitment Expiration Date, by written notice of request given by
the Borrower to the Lender, specifying the duration of the period
of extension requested, at least 120 days before such scheduled
Commitment Expiration Date, and by written notice of acceptance
(which acceptance may be given or withheld by the Lender in its
sole discretion) by the Lender to the Borrower not later than
ninety (90) days prior to such scheduled Commitment Expiration
Date; provided, that the new scheduled Commitment Expiration Date
shall in no event result in a remaining term of the commitment
that exceeds 360 days, (ii) the date that the Lender shall give
notice of the termination of the Commitment pursuant to Section 7
of this Loan Agreement, and (iii) the first date on which there
shall no longer be any Liquidity Agreement or Program Support
Agreement (to the extent that liquidity support for the
Commercial Paper issued to fund the Loans is being provided by a
Program Support Agreement) in effect (as to which the Lender
shall promptly notify the Borrower after obtaining notice of such
termination); provided, further, that if any Commitment
Expiration Date is not a Business Day it shall occur on the next
preceding Business Day.
"Competitive Price Accrual" means, with respect to any
Settlement Date, an amount equal to the competitive price accrual
as the same is shown in the books and records of the Originators
as of the last day of the Accounting Period immediately preceding
such Settlement Date.
"Concentration Limit" means, with respect to all
Eligible Receivables owing from a single Obligor and its
Affiliates, 2.5% of the aggregate Account Balances of all
Eligible Receivables; provided, however, that with respect to
each of Consolidated Electrical Distributors and Graybar Electric
and its respective Affiliates, the Concentration Limit means 4%
of the aggregate Account Balances of all Eligible Receivables.
"Contract" means a written or oral contract between an
Originator and an Obligor which gives rise to a Receivable
arising from the sale by such Originator of goods or services in
the ordinary course of such Originator's business; provided,
however, that "Contract" shall not include any written or oral
contract between an Originator and (i) an Obligor who is not
located in the United States, (ii) an Obligor who is located in
Puerto Rico, or (iii) an Obligor which is the United States, any
state or municipality or any agency or instrumentality or
political subdivision thereof.
"Contractual Obligation" means as to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or other undertaking to which such Person
is a party or by which it or any of its property is bound.
"Cost of Funds" means, with respect to any Settlement
Period, an amount, as notified in writing by the Lender to the
Borrower on or prior to the related Determination Date, equal to
the interest, discount or carrying cost for funding the Loans
hereunder during such Settlement Period, either from the issuance
of Commercial Paper, the taking of loans, the sale of interests
in the Loans made hereunder or otherwise, computed by reference
to the weighted average Cost of Funds Rate for such Settlement
Period.
"Cost of Funds Amount" means, with respect to each
Settlement Period, the sum of (a) the Cost of Funds for such
Settlement Period, plus (b) the product of (1) the Program Fee
Rate times the average Outstanding Principal Amount during such
Settlement Period times (2) a fraction, the numerator of which is
the actual number of days in such Settlement Period and the
denominator of which is 360, plus (c) the product of (1) the
Facility Fee Rate times the average Commitment in effect during
such Settlement Period and (2) a fraction, the numerator of which
is the actual number of days in such Settlement Period and the
denominator of which is 360.
"Cost of Funds Rate" means, with respect to the
computation of the Cost of Funds for a Settlement Period, (i) to
the extent the funding for the Loans during such Settlement
Period is obtained through the issuance of Commercial Paper, the
effective yield of such Commercial Paper (including any dealer's
discount or fees) during such Settlement Period, (ii) to the
extent funding for the Loans during such Settlement Period is
obtained through the sale of interests in the Loans pursuant to a
Liquidity Agreement, the sum of the LIBOR Rate for such
Settlement Period plus .625% per annum, and (iii) to the extent
funding for the Loans during such Settlement Period is obtained
through the taking of loans or otherwise or pursuant to any
Program Support Agreement, the rate provided in the operative
documents governing the same during such Settlement Period.
"Cost of Funds Reserve" means, with respect to a
Settlement Date, an amount equal to the product of (i) the
Outstanding Principal Amount on the Determination Date with
respect to such Settlement Date multiplied by (A) to the extent
that the Loans are funded by Commercial Paper on such
Determination Date, the sum of (1) the average effective yield on
Commercial Paper for the Settlement Period immediately preceding
the Determination Date plus (2) .30% plus (3) the Facility Fee
Rate plus (4) the Program Fee Rate, (B) to the extent that the
Loans are funded by a "funding institution" under any Liquidity
Agreement on such Determination Date, the LIBOR Rate plus .625%
per annum, or (C) to the extent that the Loans are funded by a
"funding institution" under any Program Support Agreement on such
Determination Date, the rate provided therein, in each case
during such Settlement Period, (ii) 1.5, and (iii) the Days Sales
Outstanding divided by 360.
"Credit and Collection Policy" means the Originators'
Credit and Collection Policy as set forth on Exhibit B to the
Sales and Servicing Agreement, as the same may be amended or
modified from time to time.
"Credit Enhancement Floor" shall mean, with respect to
any Settlement Date, the sum of (a) 10.5%, plus (b) the Dilution
Reserve for such Settlement Date.
"Credit Enhancement Reserve" shall mean, with respect
to any Settlement Date the product of (A) the greater of (1) the
sum of (x) the greater of (i) the Dilution Reserve as of such
Settlement Date and (ii) Actual Dilutions as of such Settlement
Date, plus (y) the Credit Loss Reserve as of such Settlement Date
and (2) the Credit Enhancement Floor as of such Settlement Date,
and (B) the positive result, if any, of (1) the aggregate Account
Balances of all Eligible Receivables as of the last day of the
full Accounting Period immediately preceding such Settlement
Date, minus (2) the sum of (v) the Cost of Funds Reserve as of
such Settlement Date, plus (w) the Servicer's Compensation
Reserve as of such Settlement Date, plus (x) the Cash Discount
Reserve as of such Settlement Date, plus (y) the Excess
Concentration as of such Settlement Date, plus (z) the
Competitive Price Accrual as of such Settlement Date.
"Credit Loss Reserve" shall mean, with respect to any
Settlement Date, the product, expressed as a percentage, of (i)
1.5, (ii) the Loss Ratio as of such Settlement Date and (iii) the
Loss Horizon Ratio as of such Settlement Date.
"Cut-Off Date" means with respect to the Receivables
acquired by the Borrower with the proceeds of the Loan made on
the Closing Date, March 31, 1998.
"Days Sales Outstanding" shall mean, at any time of
determination, the sum of (A) the product of (i) the quotient,
expressed as a percentage, the numerator of which is the
aggregate Account Balances on the last day of the most recent
Accounting Period less the aggregate net sales under the
Contracts in such Accounting Period and the denominator of which
is the net sales under the Contracts in the prior Accounting
Period and (ii) the number of days in the Accounting Period prior
to such Accounting Period plus (B) the number of days in such
Accounting Period.
"Debt" means, with respect to a Person on any day, the
sum on such day of (a) indebtedness for borrowed money or for the
deferred purchase price of property or services, or evidenced by
bonds, notes or other similar instruments, (b) obligations as
lessee under leases which shall have been or should be, in
accordance with GAAP, recorded as capital leases, and (c)
obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss
in respect of, indebtedness or obligations of others of the kinds
referred to in clause (a) or (b) above.
"Default Ratio" shall mean, with respect to any
Settlement Date, a fraction, expressed as a percentage, the
numerator of which is the aggregate Account Balances of all
Eligible Receivables as of the first day of the full Accounting
Period immediately preceding such Settlement Date and which
became Defaulted Receivables during such Accounting Period and
the denominator of which is the aggregate amount of net sales of
the Originators under the Contracts during the fifth full
Accounting Period immediately preceding such Settlement Date.
"Defaulted Receivable" shall mean a Receivable (a) the
Obligor of which is not entitled to purchase additional
merchandise or services from any Originator, by reason of any
default or nonperformance by such Obligor, under the terms of the
Credit and Collection Policy, (b) which has become uncollectible
or has been written off the books of any Originator by reason of
such Obligor's inability to pay, as determined by the Borrower or
the Servicer, in either case in accordance with the Credit and
Collection Policy, (c) in respect of which an Event of Bankruptcy
has occurred with respect to the related Obligor or (d) which
remains unpaid for more than 90 days past its due date.
"Determination Date" means, with respect to any
Settlement Date, the second Business Day immediately preceding
such Settlement Date.
"Diamond" means Diamond Wire & Cable Co., an Illinois
corporation.
"Dilution" means a reduction of the Account Balance of
an Eligible Receivable given to an Obligor in accordance with the
Credit and Collection Policy as a result of a Dilution Factor.
"Dilution Factor" means, without duplication, credits,
cancellations, cash discounts, volume discounts, allowances,
disputes, rebates, charge backs, and other allowances,
adjustments and deductions (including, without limitation, any
special or other discounts) that are given to an Obligor in
accordance with the Credit and Collection Policy.
"Dilution Horizon Ratio" means, as of any Settlement
Date, the greater of (i) the ratio of (A) the aggregate amount of
net sales of the Originators under the Contracts during the full
Accounting Period immediately preceding such Settlement Date
divided by (B) the aggregate Account Balances of all Eligible
Receivables as of the last day of the full Accounting Period
immediately preceding such Settlement Date, and (ii) 1.
"Dilution Ratio" shall mean, as of any Settlement Date,
the quotient, expressed as a percentage, of the aggregate dollar
amount of Dilutions recognized by the Originators during the full
Accounting Period immediately preceding such Settlement Date
(excluding cash discounts and volume discounts) divided by the
aggregate amount of net sales of the Originators under the
Contracts during the Accounting Period immediately preceding such
Settlement Date.
"Dilution Reserve" shall mean, as of any Settlement
Date, the product of (a) the sum of (i) 1.5 times the Expected
Dilution Ratio as of such Settlement Date, plus (ii) the product
of (x) the positive result, if any, of the Dilution Spike Ratio
minus such Expected Dilution Ratio, and (y) a fraction, the
numerator of which is such Dilution Spike Ratio as of such
Settlement Date and the denominator of which is such Expected
Dilution Ratio, and (b) the Dilution Horizon Ratio as of such
Settlement Date.
"Dilution Spike Ratio" shall mean, as of any Settlement
Date, the highest average Dilution Ratio for any two (2)
consecutive full Accounting Periods during the period of twelve
(12) full Accounting Periods immediately preceding such
Settlement Date.
"Dispute" shall mean any dispute, deduction, claim,
offset, defense, counterclaim, set-off or obligation of any kind,
contingent or otherwise, relating to a Receivable, including,
without limitation, any dispute relating to goods or services
already paid for.
"Dollar", "Dollars" and the symbol "$" shall mean
lawful money of the United States of America.
"Duff" shall mean Duff & Xxxxxx Credit Rating Co.
"Eligible Receivable" means any Receivable which:
(a) complies with all applicable laws and other legal
requirements, whether Federal, state or local;
(b) constitutes an "account" or a "general intangible"
as defined in the Uniform Commercial Code as in
effect in the jurisdiction whose law governs the
perfection of the Borrower's ownership interest
and the Lender's security interest in such
Receivable;
(c) (i) was originated by an Originator which is
directly or indirectly wholly-owned by Essex
International in the ordinary course of such
Originator's business in a transaction which
complied with the Credit and Collection Policy in
all material respects, or (ii) was originated by a
business subsequently acquired by or merged into
an Originator in a transaction which complied in
all material respects with the policies and
procedures of such business in effect at the time
such Receivable was originated; provided that, in
the case of clause (ii), the eligibility of the
class of Receivables to which such Receivable
belongs is approved in advance in writing by the
Lender or the Referral Agent;
(d) arises from a Contract (the form of which has been
approved by the Lender or the Referral Agent) and
has been billed, or will be billed to the related
Obligor, or in respect of which the related
Obligor is otherwise liable, in accordance with
the terms of such Contract;
(e) constitutes a legal, valid and binding payment
obligation of the related Obligor, enforceable in
accordance with its terms, except as
enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of
creditors' rights generally and by general
equitable principles (whether enforcement is
sought by proceedings in equity or law);
(f) provides for payment in Dollars by the related
Obligor;
(g) is payable into a Lock-Box Account;
(h) is not a Defaulted Receivable;
(i) has an Obligor who is entitled to purchase
additional merchandise from an Originator under
the terms of the Credit and Collection Policy;
provided, that a Receivable which has an Obligor
who is not entitled to purchase additional
merchandise from an Originator because such
Obligor has reached the credit limit established
by such Originator shall be deemed to satisfy this
paragraph (i);
(j) which was not originated in, or subject to the
laws of, any jurisdiction under which the
transfer, sale, conveyance and assignment thereof
and the Collections therefrom the Originators to
the Borrower and the Grant of a security interest
and collateral assignment therein by the Borrower
to the Lender would be unlawful, void or voidable;
(k) is owned solely by the Borrower free and clear of
all Liens, except for Permitted Liens;
(l) no rejection or return of the goods or services
which give rise to such Receivable has occurred
and all goods and services in connection therewith
have been performed or delivered to and accepted
by the related Obligor without Dispute;
(m) is not an obligation of the United States, any
state or municipality or any agency or
instrumentality or political subdivision thereof;
(n) is not subject to any contractual right of
set-off;
(o) is an obligation representing part or all of the
sales price of merchandise or services;
(p) has an Obligor who is located in the United
States;
(q) has an Obligor who is not an Affiliate of any
Originator;
(r) was acquired by the Borrower from an Originator
pursuant to and in accordance with the terms of
the Sales and Servicing Agreement;
(s) the Obligor of which has not been deemed to be
ineligible by the Lender, in accordance with the
Lender's customary credit policies;
(t) is payable within 60 days of the billing date if
generated by the Magnet Wire Automotive and
Communications and Distribution business units and
payable within 100 days of the billing date if
generated by the Building Wire/Industrial Products
business unit, unless otherwise individually
approved by the Lender;
(u) which does not require the consent, authorization
or approval of or notice to, the Obligor thereof
(except for such consents, authorizations,
approvals or notices which have already been
obtained) in connection with the conveyance
thereof (including, without limitation, any rights
to the payments in respect thereof and all
security interests, guaranties and property
securing or supporting payment thereof) from the
Originators to the Borrower and the Grant of a
security interest therein by the Borrower to the
Lender under this Loan Agreement.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA Affiliate" means, with respect to any Person (a)
any corporation which is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Code)
as such Person, (b) a partnership or other trade or business
(whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Code) with such Person or (c) a
member of the same affiliated service group (within the meaning
of Section 414(m) of the Code) as such Person, any corporation
described in clause (a) above or any partnership or other trade
or business described in clause (b) above.
"Essex" shall mean Essex Group, Inc., a Michigan
corporation.
"Essex International" shall mean Essex International
Inc., a Delaware corporation.
"Event of Bankruptcy" shall mean, for any Person:
(a) if such Person shall fail generally to, or shall
admit in writing its inability to, pay its debts as they become
due;
(b) a proceeding shall have been instituted in a court
having jurisdiction in the premises seeking a decree or order for
relief in respect of such Person in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator,
conservator (under the Bank Conservation Act, as amended, or
otherwise) or other similar official of such Person or for any
substantial part of its property, or for the winding-up or
liquidation of its affairs, and such proceeding shall not be
dismissed within thirty (30) days of the institution thereof;
(c) the commencement by such Person of a voluntary case
under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or such Person's consent to the entry
of an order for relief in an involuntary case under any such law,
or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator,
conservator (under the Bank Conservation Act, as amended, or
otherwise) or other similar official of such Person or for any
substantial part of its property, or the making of any general
assignment for the benefit of creditors, or, if a corporation or
similar entity, the taking of any corporate action in furtherance
of any of the foregoing; or
(d) a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator, or conservator in any insolvency,
readjustment of debt, marshaling of assets and liabilities, or
similar proceedings, shall have been entered against such Person.
"Event of Termination" means the occurrence of any of
the following events, provided that any condition set forth
therein, if any, has been satisfied:
(a) any Originator or the Borrower fails to pay or
deposit when due any amount payable under any of the Operative
Agreements; provided, however, that in the event that such
failure to pay or deposit shall have resulted from the actions or
inactions of any third party, no Event of Termination shall
result if the Borrower or such Originator, as applicable,
remedies such failure within one (1) Business Day after the due
date thereof;
(b) (i) any Originator or the Borrower shall default in
the performance of, or breach, any covenant set forth in any
Operative Agreement (other than any default or breach referred to
in clause (a) above or in clause (ii) below) and any such default
or breach shall continue for a period of 30 days after the
earlier of (1) the date that any officer of such Originator or
the Borrower first acquires knowledge thereof and (2) the date
that the Lender or the Referral Agent gives written notice
thereof to such Originator or the Borrower, as the case may be;
(ii) the Borrower shall default in the performance
of, or breach, any covenant set forth in Sections 5.6, 6.1, 6.3,
6.10, 6.11, 6.14, or 6.16;
(c) any representation or warranty of the Borrower or
any Originator made in any Operative Agreement or any other
writing provided to the Referral Agent or the Lender shall be
incorrect in any material respect as of the time when the same
shall have been made or deemed made; provided, however, that, in
the event that such misrepresentation or breach is capable of
being cured within such period, if the Borrower shall cure such
misrepresentation or breach to the reasonable satisfaction of the
Lender within thirty (30) days of the earlier of (1) the date
that any officer of such Originator or the Borrower first
acquires knowledge thereof and (2) the date that the Lender or
the Referral Agent gives written notice thereof to such
Originator or the Borrower, as the case may be, no Event of
Termination shall result therefrom;
(d) an Event of Bankruptcy shall have occurred with
respect to the Borrower or any Originator;
(e) any Originator or the Borrower shall (i) default in
any payment of principal of or interest on any Debt (in excess of
$5,000,000 with respect to such Originator) beyond the period of
grace, if any, provided in the instrument or agreement under
which such Debt was created or (ii) default in the observance or
performance of any other material agreement or condition relating
to any Debt (in excess of $5,000,000 with respect to such
Originator) or contained in any instrument or agreement
evidencing, securing or relating thereto the effect of which is
to cause (or permit the holder of such Debt to cause) such Debt
to be accelerated, unless waived or cured;
(f) for any reason, the Sales and Servicing
Agreement shall not or shall cease to create in the Borrower a
valid and perfected ownership interest in the Receivables,
subject to no Liens other than Permitted Liens, or any other
Operative Agreement shall cease to be in full force and effect
or
cease to be the legal, valid, binding and enforceable obligation
of any party thereto;
(g) for any reason, this Loan Agreement shall not or
shall cease to create in the Lender a valid and perfected
security interest in the Receivables transferred or purported to
be transferred to the Borrower, subject to no Liens other than
Permitted Liens;
(h) (i) one or more final and non-appealable judgments
or decrees for the payment of money in excess of $5,000,000 in
the aggregate shall have been entered against any Originator or
any of its subsidiaries (other than the Borrower) and is not
paid, bonded or stayed within 30 days after the entry thereof or
covered by insurance in full, or (ii) one or more final and
non-appealable judgments or decrees for the payment of money in
excess of $10,000 in the aggregate shall have been entered
against the Borrower and is not paid, bonded or stayed within 5
days after the entry thereof or covered by insurance in full;
(i) (i) any of the Borrower, any Originator or any
ERISA Affiliate thereof shall engage in any Prohibited
Transaction, (ii) any Accumulated Funding Deficiency, whether or
not waived, shall exist with respect to any Pension Plan which is
a Single Employer Plan, (iii) a Reportable Event shall occur with
respect to, or proceedings shall be commenced by the PBGC to have
a trustee appointed, or a trustee shall be so appointed, to
administer or to terminate, any Single Employer Plan, and which
Reportable Event, commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Lender, likely to
result in the termination of such Pension Plan for purposes of
Title IV of ERISA, (iv) the incurrence of any liability by any
Originator, the Borrower or any ERISA Affiliate (other than for
taxes owing on any surplus reversion) in connection with the
termination of any Single Employer Plan under Title IV of ERISA,
(v) any Originator or the Borrower or any ERISA Affiliate shall,
or in the reasonable opinion of the Lender is likely to, incur
any liability in connection with a withdrawal from, or the
insolvency or reorganization of, a Multiemployer Plan within the
meaning of Title IV of ERISA or (vi) any other event or condition
shall occur or exist, with respect to a Pension Plan; and in each
case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, is
likely to subject any Originator or the Borrower or any ERISA
Affiliate to any tax (other than as provided in clause (iv)
above, penalty or other liabilities in relation to the business,
operations, property or financial or other condition of any
Originator or the Borrower where such event or condition would
have a Material Adverse Effect with respect to the Borrower or
the Originator, as the case may be;
(j) any financial statement delivered pursuant to the
Operative Agreements and reported on by independent certified
public accountants of nationally recognized standing shall
contain a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit;
(k) the Borrower or any Originator shall become an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of
1940, as amended;
(l) the Servicer resigns in violation of the Sales and
Servicing Agreement;
(m) any change in ownership or control of the Borrower,
other than any change that results in the Borrower being
wholly-owned, either directly or indirectly, by Essex
International;
(n) the average Default Ratio for any three consecutive
Accounting Periods is greater than 2.5%;
(o) the occurrence of a Servicer Event of Default;
(p) any Lock-Box Bank shall (i) fail to maintain the
Lock-Box Account as a segregated account, (ii) commingle the
funds deposited in the Lock-Box Account with any other funds of
the Borrower, the Servicer or any of the Originators, or (iii)
fail to deposit any funds from the Lock-Box to the Lock-Box
Account within the time periods set forth in the Lock-Box
Servicing Agreement and such failure shall not have been cured
within fifteen (15) days after the earlier of (1) the date that
any officer of the Borrower or the Servicer first acquires
knowledge thereof and (2) the date that the Lender or the
Referral Agent gives written notice thereof to the Servicer and
the Lock-Box Bank;
(q) after giving effect to any prepayment under Section
2.5 of this Loan Agreement, the Outstanding Principal Amount (as
determined on the Determination Date with respect to any
Settlement Date) shall exceed the Borrowing Base (as determined
on such Determination Date) on such Settlement Date and the
immediately succeeding two (2) days; or
(r) the average Days Sales Outstanding for any three
consecutive Accounting Periods is greater than 60.
"Excess Concentration" means the sum of the aggregate
amount by which the Account Balances of all of the Eligible
Receivables due from each single Obligor and such Obligor's
Affiliates exceeds the Concentration Limit for such Obligor.
"Excluded Taxes" shall have the meaning set forth in
Section 2.8 of this Loan Agreement.
"Expected Default Ratio" means, with respect to any
Settlement Date, the average of the Default Ratios for the three
(3) consecutive full Accounting Periods immediately preceding
such Settlement Date.
"Expected Dilution Ratio" means, as of any Settlement
Date, a fraction, expressed as a percentage, the numerator of
which is the sum of the Dilution Ratios for each of the twelve
full Accounting Periods immediately preceding such Settlement
Date and the denominator of which is 12.
"Facility Fee" means, with respect to any Settlement
Date, the monthly fee payable by the Borrower to the Lender on
such Settlement Date computed on the basis of the Facility Fee
Rate and the Commitment with respect to the related Settlement
Period.
"Facility Fee Rate" means the rate per annum set forth
in a separate letter agreement between the Borrower and the
Lender.
"Financing Statement" means a document duly signed and
in proper form under applicable law to perfect the interest of
the secured party named therein in the personal property
described therein, which is filed with the appropriate filing
officials in the jurisdiction in which the Chief Executive Office
of an Originator or the Borrower, as applicable, is located.
"GAAP" means generally accepted accounting principles
in effect from time to time in the United States of America.
"Grant" means bargain, sell, convey, assign, transfer,
mortgage, pledge, create and grant a security interest in and
right of set-off against, deposit, set over and confirm. The
Grant of a security interest in the Collateral effected by this
Loan Agreement shall include a collateral assignment of all
rights, powers, and options (but none of the obligations) of the
Borrower with respect thereto, including, without limitation, the
immediate and continuing right to claim for, collect, receive,
and give receipts for payments in respect of the Receivables and
all other moneys payable thereunder, to give and receive notices
and other communications, to make waivers or other agreements, to
exercise all rights and options, to bring judicial proceedings in
the name of the Borrower or otherwise, and generally to do and
receive anything that the Borrower is or may be entitled to do or
receive thereunder or with respect thereto.
"Independent Director" has the meaning set forth in
Section 5.10 of this Loan Agreement.
"Initial Loan Request" shall have the meaning set forth
in Section 2.3 of this Loan Agreement.
"Interstate" means Interstate Industries, Inc., a
Mississippi corporation.
"Lender" means Three Rivers Funding Corporation, a
Delaware corporation, in its capacity as lender under this Loan
Agreement.
"LIBOR Rate" means, with respect to any date of
determination, the rate at which deposits in dollars for a period
of thirty (30) days are offered to the Referral Agent in the
London Interbank market on such date in an amount approximately
equal to the principal amount of the Loan or Loans being funded
by a "funding institution" under any Liquidity Agreement.
"Lien" shall mean, in respect of the property of any
Person, any ownership interest of any other Person, any mortgage,
deed of trust, hypothecation, pledge, lien, security interest,
grant of a power to confess judgment, preference, right to
priority of payment, charge or other encumbrance or security
arrangement of any nature whatsoever, including without
limitation, any conditional sale or title retention arrangement,
and any assignment, deposit arrangement, consignment or lease
intended as, or having the effect of, security, and the filing of
any financing statement in connection with any of the foregoing.
"Liquidity Agreements" means, collectively, all
liquidity agreements, funding agreements, credit agreements,
letter of credit agreements, surety agreements, letters of credit
and all other agreements providing liquidity or credit support in
respect of this Loan Agreement which may be in effect from time
to time.
"Loan" means each of the loans made pursuant to, and as
defined in, Section 2.1 of this Loan Agreement.
"Loan Agreement" means this Loan and Security
Agreement, as the same may be amended or modified from time to
time in accordance with the provisions hereof.
"Lock-Box Account" means each account maintained at the
Lock-Box Bank for the purpose of receiving Collections, and with
respect to which a Lock-Box Agreement is in effect.
"Lock-Box Agreement" means each agreement, in
substantially the form of Exhibit E, among the Borrower, the
Servicer, the Lender and the Lock-Box Bank, which agreement sets
forth the rights of the Lender, the Borrower, the Servicer and
the Lock-Box Bank with respect to the disposition and application
of the Collections received into the Lock-Boxes (as such term is
defined in the Sales and Servicing Agreement) and/or the Lock-Box
Accounts, including, without limitation, the right of the Lender
to direct the Lock-Box Bank to remit all Collections of
Receivables directly to the Lender after the occurrence of an
Event of Termination.
"Lock-Box Bank" means Xxxxxx Trust and Savings Bank and
its successors or assigns under the Lock-Box Agreement, or any
other financial institution reasonably acceptable to the Lender
acting as a lock-box bank under a Lock-Box Agreement at any time.
"Loss Horizon" means with respect to any Settlement
Date, the most recently ended four (4) full Accounting Periods.
"Loss Horizon Ratio" means, with respect to any
Settlement Date, a fraction, expressed as a percentage, the
numerator of which is the aggregate amount of net sales of the
Originators under Contracts during the Loss Horizon with respect
to such Settlement Date and the denominator of which is the
aggregate Account Balances of all Eligible Receivables as of the
last day of the full Accounting Period immediately preceding such
Settlement Date.
"Loss Ratio" shall mean, with respect to any Settlement
Date, the highest Expected Default Ratio for any full Accounting
Period during the period of twelve (12) consecutive full
Accounting Periods immediately preceding such Settlement Date.
"Material Adverse Effect" shall mean, with respect to
any Person, any materially adverse effect upon the business,
assets, liabilities, financial condition or results of operation
of such Person or upon the ability of such Person to perform its
obligations under any of the Operative Agreements to which it is
a party.
"Monthly Servicer Report" means the report to be
provided by the Servicer pursuant to Section 4.02 of the Sales
and Servicing Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a "Multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which any Originator or
any of its ERISA Affiliates is making or accruing an obligation
to make contributions, or has within any of the preceding five
plan years made or accrued an obligation to make contributions.
"Note" has the meaning set forth in Section 2.2 of this
Loan Agreement.
"Obligations" has the meaning set forth in Section 8.1
of this Loan Agreement.
"Obligor" means, with respect to any Receivable, the
Person who purchased goods or services under a Contract giving
rise to such Receivable and who is obligated to make payments to
any Originator on such Contract in respect of such Receivable.
"Officers' Certificate" means a certificate delivered
to the Lender and signed by the President, a Vice President or
the Director, Treasury Services, and by another Vice President,
the Treasurer, an Assistant Treasurer, the Controller, the
Secretary, or an Assistant Secretary of the Borrower, any
Originator or the Servicer, as the case may be, who is not the
same person as the other officer signing such certificate.
"Official Body" shall mean any government or political
subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality of either, or any
court, tribunal, grand jury or arbitrator, in each case whether
foreign or domestic.
"Operative Agreements" means this Loan Agreement, the
Sales and Servicing Agreement and the Lock-Box Agreement.
"Opinion of Counsel" means a written opinion, which
shall be reasonably satisfactory in form and substance to the
Lender, of counsel who shall be reasonably satisfactory to the
Lender.
"Originators" means Essex, Diamond and Interstate,
collectively, and their respective successors, and "Originator"
means any of such Persons.
"Originator Entity" has the meaning set forth in
Section 5.10 of this Loan Agreement.
"Other Sellers" shall have the meaning set forth in
Section 2.9(a) of this Agreement.
"Outstanding Principal Amount" means, with respect to
any day, the aggregate principal amount of the Loans outstanding
on such day.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Pension Plan" has the meaning set forth in Section
2.10 of the Sales and Servicing Agreement.
"Permitted Liens" means Liens for (i) taxes,
assessments or other governmental charges or levies which (A) are
not yet due and payable, (B) which are thereafter payable without
penalty, or (C) which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves
in accordance with generally accepted accounting principles have
been set aside on such Person's books and records, and (ii) the
Lien in favor of the Lender arising in connection with this
Agreement.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint
stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or
political subdivision thereof.
"Program Fee" means, with respect to any Settlement
Date, the monthly fee payable by the Borrower to the Lender on
such Settlement Date computed on the basis of the Program Fee
Rate and the Outstanding Principal Amount with respect to the
related Settlement Period.
"Program Fee Rate" means the rate per annum set forth
in a separate letter agreement between the Borrower and the
Lender.
"Program Support Agreement" means, collectively, all
liquidity agreements, funding agreements, credit agreements,
letter of credit agreements, surety agreements, letter of credit
and all other agreements which may be in effect from time to time
and which provide liquidity or credit support in respect of the
Commercial Paper.
"Prohibited Transaction" means any transaction
described in Section 406 of ERISA which is not exempt by reason
of Section 408 of ERISA or the transitional rules set forth in
Section 414(c) of ERISA and any transaction described in Section
4975(c) of the Code which is not exempt by reason of Section
4975(c)(2) or Section 4975(d) of the Code, or the transitional
rules of Section 2003(c) of ERISA.
"Rating Agency" means each of Moody's, S&P and Duff and
any other nationally recognized statistical rating organization
at any time providing a rating for the Commercial Paper.
"Receivable" means, with respect to any Contract, all
receivables, contract rights, general intangibles, accounts,
chattel paper, instruments (including, without limitation,
promissory notes), amounts due and to become due to the
Originator arising under such Contract (including but not limited
to finance charges accrued with respect to such amounts and
fees), and all other rights, powers and privileges of the
Originator arising thereunder or related thereto and in the
merchandise (including returned goods) and contracts relating
thereto, assertable against any Person whatsoever, all security
interests, guaranties and property securing or supporting payment
of such Receivable, all Records relating to such Receivable and
all proceeds and products of any of the foregoing.
"Records" means all documents, books, records and other
information (including without limitation, computer programs,
tapes, discs, punch cards, data processing software and related
property and rights) maintained with respect to the Receivables
and the related Obligors.
"Referral Agent" means Mellon Bank, N.A., together with
its successors and assigns.
"Regulatory Change" has the meaning set forth in
Section 2.9 of this Loan Agreement.
"Related Person" means any Person (whether or not
incorporated) which is under common control with any Originator
within the meaning of Section 414(c) of the Internal Revenue Code
of 1986, as amended, or of Section 4001(b) of ERISA.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, a
withdrawal from a Pension Plan described in Section 4063 of
ERISA, or a cessation of operations described in Section 4062(e)
of ERISA.
"Requirement of Law" means as to any Person, the
Certificate of Incorporation and By-laws or other organizational
or governing documents of such Person and any law, treaty, rule
or regulation or determination of any arbitrator or a court or
other Official Body, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any
of its property is subject.
"S&P" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., its successors and
assigns.
"Sales and Servicing Agreement" means the Sales and
Servicing Agreement dated as of the Closing Date between the
Borrower and the Originators, as the same may be amended or
modified from time to time in accordance with the provisions
thereof and with the consent of the Lender.
"Servicer" means Essex Group, Inc., a Michigan
corporation, and any successor thereto acting as the servicer in
accordance with the provisions of the Sales and Servicing
Agreement.
"Servicer Event of Default" has the meaning given such
term in the Sales and Servicing Agreement.
"Servicer's Compensation Reserve" means, as of any
Settlement Date, an amount equal to the product of (i) .50%, (ii)
the aggregate Account Balances of all Eligible Receivables as of
the last day of the full Accounting Period immediately preceding
such Settlement Date, and (iii) a fraction, the numerator of
which is the product of (a) the Days Sales Outstanding at the
close of business as of the last day of such Accounting Period
and (b) three, and the denominator of which is 360.
"Servicing Fee" means, with respect to any Settlement
Date, the monthly fee payable to the Servicer on such Settlement
Date pursuant to Section 3.04 of the Sales and Servicing
Agreement, equal to the product of (i) 0.50%, times (ii) the
actual number of days in the full Accounting Period immediately
preceding such Settlement Date divided by 360, times (iii) the
aggregate Account Balances of all Eligible Receivables as of the
last day of the most recently completed Accounting Period.
"Settlement Date" means the 20th day of each calendar
month or, if such day is not a Business Day, the next succeeding
Business Day.
"Settlement Period" means, with respect to a Settlement
Date, the period commencing on the second Determination Date
immediately preceding such Settlement Date (or the Closing Date,
in the case of the first Settlement Date) and ending on the day
preceding the first Determination Date preceding such Settlement
Date.
"Single Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, which (a) is maintained
for employees of the Originator or an ERISA Affiliate thereof and
no Person other than the Originator and their ERISA Affiliates or
(b) was so maintained and in respect of which the Originator or
any ERISA Affiliate thereof could have liability under Title IV
of ERISA in the event such plan has been or were to be
terminated.
"Taxes" has the meaning set forth in Section 2.8 of
this Loan Agreement.
"Trade Name" shall have the meaning set forth in
Section 3.1(w) of this Loan Agreement.
"Uniform Commercial Code or UCC" means, with respect to
a particular jurisdiction, the Uniform Commercial Code, as in
effect from time to time in such jurisdiction, or any successor
statute thereto.
"Unmatured Event" means any of the events specified in
the definition of Event of Termination, whether or not any
requirement for the giving of notice, the lapse of time, or both,
has been satisfied.
"Upfront Fee" means the fee set forth in a separate
letter agreement between the Borrower and the Referral Agent.
"Year 2000 Problem" shall have the meaning set forth in
Section 5.8 of this Loan Agreement.
1.2 Accounting and Other Terms. (a) Accounting terms
used but not defined herein shall have the respective meanings
given to them under GAAP.
(b) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Loan Agreement shall
refer to this Loan Agreement as a whole and not to any particular
provision of this Loan Agreement, and section, subsection,
schedule and exhibit references are to this Loan Agreement unless
otherwise specified.
(c) Capitalized terms used herein, in this Loan
Agreement and the Note shall be equally applicable to both the
singular and plural forms of such terms.
SECTION 2. TERMS OF THE LOANS
2.1 The Loans. Subject to the terms and conditions
hereof, the Lender hereby agrees that it will, from time to time
prior to the Commitment Expiration Date, make one or more loans
(each a "Loan" and, collectively, the "Loans") to the Borrower
subject to the immediately succeeding sentence. Notwithstanding
anything contained in this Loan Agreement to the contrary, the
Lender shall not be obligated to make any Loan in a principal
amount which exceeds the positive result, if any, of
(a) the lesser of (i) the Borrowing Base and (ii) the Commitment,
less (b) the Outstanding Principal Amount on the proposed date of
the making of such Loan. The Lender shall remit the proceeds of
each Loan to the Borrower in accordance with the disbursement
instructions set forth in the related Loan Request.
2.2 The Note. The Loans shall be evidenced by a
promissory note of the Borrower, substantially in the form of
Exhibit A hereto (the "Note"). The Note shall be payable to the
order of the Lender and shall mature on the Commitment Expiration
Date. The Note shall be dated the Closing Date and provide for
the payment of principal and interest in accordance with Section
2.6. The Borrower hereby authorizes the Lender to make the
appropriate notations on the schedule annexed to the Note for
purposes of recording any Loan made thereon and any payments or
prepayments made with respect thereto (provided that any failure
by the Lender to make any such notation shall not affect the
obligations of the Borrower hereunder or under the Note in
respect of such Loan). The Borrower agrees that each notation
made by the Lender on the schedule annexed to the Note shall be
final and conclusive absent demonstrable error. The Outstanding
Principal Amount at any time shall constitute the principal
amount of the Note at such time.
2.3 Initial Loan Request. (a) The Borrower shall
deliver to the Lender a written request, in substantially the
form of Exhibit B (the "Initial Loan Request"), for the Loan to
be made by the Lender to the Borrower on the Closing Date, no
later than 11:00 A.M., New York City time, at least two Business
Days prior to the Closing Date. The Initial Loan Request shall
specify (i) the principal amount of the Loan to be made on the
Closing Date (which shall be no less than $10,000,000 or such
lesser amount which the Lender shall have approved), and (ii) the
disbursement instructions for the proceeds of such Loan. The
Initial Loan Request submitted by the Borrower shall be an
affirmation by the Borrower that (x) the representations and
warranties of the Borrower set forth in Section 3 of this Loan
Agreement are on the date of such Initial Loan Request, and will
be on the Closing Date, true and correct in all material respects
as if made on and as of such dates, except to the extent any such
representation or warranty relates specifically to an earlier
date, and (y) no Unmatured Event or Event of Termination shall
have occurred and be continuing on either of such dates. The
Initial Loan Request given pursuant hereto shall be irrevocable.
(b) The Initial Loan Request delivered to the Lender
hereunder shall be accompanied by a Borrowing Base Certificate
and a Monthly Servicer Report dated of even date therewith,
demonstrating compliance with the provisions of Section 2.1 of
this Loan Agreement, together with such other information
reasonably requested by the Lender.
(c) Requests for Loans to be made on any Settlement
Date subsequent to the Closing Date, if any, shall be made by the
Borrower by indicating the amount of such desired Loan and the
disbursement instructions for such Loan on the Borrowing Base
Certificate delivered on the related Determination Date.
2.4 Commitment. (a) The Borrower may, upon at least
thirty (30) days' prior written notice to the Lender, terminate
in whole or permanently reduce in part the unused portion of the
Commitment; provided, that (i) such termination shall not be
effective unless and until the Outstanding Principal Amount has
been reduced to zero and all Cost of Funds Amount and all other
fees or amounts due to the Lender hereunder or under any other
Operative Agreement have been paid in full, (ii) each partial
reduction shall be in the amount of at least $10,000,000 or an
integral multiple thereof, and (iii) any partial reduction of the
Commitment which would result in the remaining Commitment being
less than $25,000,000 shall be deemed to be a termination in
whole of the Commitment.
(b) If any bank or financial institution which is a
party to any Liquidity Agreement does not consent to the
extension of the expiration date of its commitment under such
Liquidity Agreement or its commitment thereunder expires or is
terminated for any reason, to the extent such bank or financial
institution is not replaced on or prior to such expiration date,
then the Commitment shall be reduced by such amount as shall be
necessary to cause the Commitment to be equal to the aggregate of
all commitments of banks and/or financial institutions under the
Liquidity Agreement(s) after giving effect to such termination or
expiration. If any Program Support Agreement providing liquidity
support for the Commercial Paper being issued to fund the Loans
is terminated for any reason, to the extent such Program Support
Agreement is not replaced on or prior to such termination, then
the Commitment shall be reduced by an amount equal to the share
of liquidity support provided thereunder which is allocable to
the Loans hereunder.
2.5 Mandatory and Optional Prepayments. (a) The
Borrower may at any time and from time to time prepay the Loans,
in whole or in part, on any Settlement Date, without premium or
penalty, upon at least 30 days' irrevocable prior written notice
to the Lender in the case of a prepayment in whole or at least
three (3) Business Days' irrevocable prior written notice to the
Lender in the case of a partial prepayment; provided, that each
partial prepayment shall be in the amount of at least $10,000,000
or an integral multiple thereof; provided, further, that the
Borrower shall (i) simultaneously pay to the Lender, and
indemnify the Lender and hold the Lender harmless from, all costs
and expenses incurred by the Lender in connection with such
prepayment, and (ii) indemnify the Lender and hold the Lender
harmless from any funding loss (in an amount equal to the amount
of interest the Lender would have received but for such
prepayment less the interest earned on investing such funds) and
expense which the Lender may sustain or incur as a consequence of
such prepayment. Any such prepayment of the Loans shall be
accompanied by, without duplication of the preceding sentence, a
payment of all accrued but unpaid interest on the Loans through
the date of prepayment, plus all accrued but unpaid fees,
expenses and other amounts due to the Lender arising under or in
connection with this Loan Agreement and the Note through the date
of prepayment.
(b) If, on the Determination Date relating to any
Settlement Date, after giving effect to transfers of Receivables
made during the Settlement Period immediately preceding such
Settlement Date by the Originator to the Borrower under the Sales
and Servicing Agreement, the Outstanding Principal Amount shall
exceed the Borrowing Base, the Borrower shall on such Settlement
Date make a prepayment in respect of the principal of the Loans
in an amount at least equal to such excess, accompanied by a
payment of all accrued but unpaid interest on such amount through
the date of prepayment.
(c) If, after giving effect to any reduction of the
Commitment pursuant to Section 2.4(b) above, the Outstanding
Principal Amount shall exceed the Commitment, the Borrower shall,
within three (3) Business Days of its receipt of written notice
of the reduction of the Commitment, make a prepayment in respect
of the principal of the Loans in an amount equal to the excess of
the Outstanding Principal Amount over the Commitment as so
reduced, accompanied by a payment of all accrued but unpaid
interest on such amount through the date of such prepayment.
2.6 Settlement Date Statements; Interest; Fees.
(a) No later than the Determination Date with respect
to each Settlement Date, the Borrower shall deliver to the Lender
(i) a Monthly Servicer Report and (ii) a Borrowing Base
Certificate in the form of Exhibit C hereto, in each case as of
the last day of the immediately preceding Accounting Period.
(b) On each Settlement Date, the Borrower shall make,
or cause the Servicer to make the following cash payments:
(i) to the Lender as interest on the Loans, all
accrued and unpaid Cost of Funds Amount;
(ii) to the Lender, all accrued and unpaid amounts
due and payable to the Lender under this Loan Agreement not
described in clause (i) above or clause (iii) below, including
without limitation, the Program Fee and the Facility Fee;
(iii) to the Lender, the amounts, if any, required
to be paid pursuant to Section 2.5 above; and
(iv) to the Servicer, the accrued and unpaid
amount of the Servicing Fee.
2.7 Proceeds. The proceeds of each Loan shall be used
by the Borrower solely to purchase Receivables from the
Originators pursuant to the Sales and Servicing Agreement.
2.8 Taxes. All payments made by the Borrower under this
Loan Agreement and the Note shall be made free and clear of, and
without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, hereafter
imposed, levied, collected, withheld or assessed by the
Government of the United States or any political subdivision
thereof having taxing authority, excluding (i) income and
withholding taxes (including, without limitation, branch profits
taxes, minimum taxes and taxes computed under alternative
methods, at least one of which is based on net income) and
franchise taxes (imposed in lieu of income taxes) imposed on the
net income of the Lender as a result of any present or former
connection between the jurisdiction imposing such tax or any
political subdivision or taxing authority thereof or therein and
the Lender; and (ii) any Taxes that would not have been imposed
but for the failure of the Lender to provide and keep current any
certification or other documentation required to qualify for an
exemption from or reduction in the rate of any Tax (all such
excluded taxes described in clause (i) or (ii) above being
hereinafter called "Excluded Taxes" and all such non-Excluded
Taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"). If any Taxes are
required to be deducted or withheld from any amounts payable to
or under the Note, the amounts so payable to the Lender shall be
increased to the extent necessary to yield to the Lender (after
payment of all Taxes on such increased amounts) the amount that
would have otherwise been received by the Lender had not such
deduction or withholdings been imposed. Whenever any Taxes are
payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Lender a certified copy of an original
official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Lender the
required receipts or other required documentary evidence, the
Borrower shall indemnify the Lender for any incremental Taxes,
interest or penalties that the Lender is legally required to pay
as a result of any such failure. If the Lender receives any
refund or credit in respect of any Taxes with respect to which
the Borrower has made full payment to the Lender pursuant to this
Section 2.8, it shall pay over such refund and remit such credit
to the Borrower, net of all out-of-pocket expenses incurred by
the Lender in obtaining such refund or credit. The agreements in
this subsection shall survive the termination of this Loan
Agreement and the payment of the Note.
2.9 Increased Cost and Reduced Return. (a) If any
Affected Party shall be charged any fee, expense or increased
cost other than relating to Taxes or Excluded Taxes on account of
the adoption after the date hereof of any applicable law, rule,
regulation or guideline (including any applicable law, rule,
regulation or guideline regarding capital adequacy) or any change
therein after the date hereof, or any change after the date
hereof in the interpretation or administration thereof by any
Official Body, central bank or comparable agency (a "Regulatory
Change"): (i) which subjects such Affected Party to any charge or
withholding on or with respect to a Liquidity Agreement or a
Program Support Agreement, as the case may be, or such Affected
Party's obligations under a Liquidity Agreement or Program
Support Agreement, as the case may be, or on or with respect to
this Loan Agreement or the Loans, or changes the basis of
taxation to any Affected Party of any amounts payable under a
Liquidity Agreement, a Program Support Agreement or this Loan
Agreement (except for changes in the rate of tax on the overall
net income of such Affected Party), or (ii) which imposes,
modifies or deems applicable any reserve, assessment, insurance
charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, an
Affected Party under a Liquidity Agreement or a Program Support
Agreement, as the case may be, or (iii) which imposes any other
condition the result of which is (x) to increase the cost to such
Affected Party of performing its obligations, or (y) to reduce
the rate of return on such Affected Party's capital as a
consequence of its obligations, in each case under a Liquidity
Agreement or Program Support Agreement, as the case may be, or to
reduce the amount of any sum received or receivable by such
Affected Party, or to require any payment calculated by reference
to the amount of interests or loans held or interest received by
it, in each case under a Liquidity Agreement or Program Support
Agreement, as the case may be, then, upon demand by the Lender,
the Borrower shall be obligated to immediately pay to the Lender,
for the benefit of such Affected Party, such amounts charged to
such Affected Party or to compensate such Affected Party for such
increase, reduction or imposition; provided, that the Borrower
and any other Persons who from time to time sell receivables or
interests therein to the Lender or grant security interests
therein to the Lender to secure indebtedness of such Person to
the Lender (the "Other Sellers") each shall be liable for such
amount ratably in accordance with the usage under their
respective facilities; provided, further, that (i) any portion of
such amount is attributable to the Borrower and not attributable
to any Other Seller, the Borrower shall be solely liable for such
portion, and (ii) if any portion of such amount is attributable
to any Other Seller and not attributable to the Borrower in any
way, the Borrower shall not be liable for any such portion. The
Lender's determination with respect to the allocation of such
amounts among the Borrower and Other Sellers shall be binding on
the Borrower, absent manifest error.
(b) The Lender agrees that it shall use reasonable
efforts to take any action that will avoid the need to pay, or
reduce the amount of, any increased amounts referred to in this
Section 2.9; provided that the Lender shall not be obligated to
take any actions that would, in the Lender's sole discretion, be
materially disadvantageous to the Lender. In the event that any
Affected Party claims any increased costs referred to in this
Section 2.9, the Lender will furnish to the Borrower a
certificate setting forth the basis and amount of each request by
such Affected Party for any such increased amounts referred to in
paragraph (a) of this Section 2.9. Determinations by the Lender
of any increased amounts referred to in paragraph (a) of this
Section 2.9 shall be conclusive, absent manifest error.
SECTION 3. REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Borrower. To
induce the Lender to enter into this Loan Agreement and to make
the Loans, the Borrower hereby represents and warrants to Lender
as of the date hereof, as of each Settlement Date and as of the
date of delivery of each Monthly Servicer Report hereunder that:
(a) Financial Condition. The Borrower does not have any
Debt, contingent liability or liability for taxes, except for
taxes which (i) are not yet due and payable, (ii) which are
thereafter payable without penalty, or (iii) which are being
diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with generally accepted
accounting principles have been set aside on such Person's books
and records, or any long-term lease or unusual forward or
long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction, other than
as contemplated or permitted by the Operative Agreements.
(b) Corporate Existence; Compliance with Law. The
Borrower (i) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization,
(ii) has the corporate power and authority, and the legal right,
to own and operate its property, and to conduct the business in
which it is currently engaged, (iii) is duly qualified as a
foreign corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property
or the conduct of its business requires such qualification and
(iv) is in compliance with all Requirements of Law, except, in
the case of clauses (iii) and (iv) where the failure to be so
qualified and in good standing or to be in such compliance would
not have a Material Adverse Effect with respect to the Borrower.
(c) Corporate Power; Authorization; Enforceable
Obligations. The Borrower has the corporate power and authority,
and the legal right, to make, deliver and perform each Operative
Agreement to which it is a party and to borrow hereunder, and has
taken all necessary corporate action to authorize the execution,
delivery and performance of each Operative Agreement to which it
is a party; and all consents or authorizations of, filings with
or other acts by or in respect of, any Official Body or any other
Person required to be obtained, made or given by it in connection
with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Loan Agreement or
the other Operative Agreements to which the Borrower is a party
have been so obtained, made or received, except where the failure
to have such power, to take such action or to obtain, make or
take such consent, authorization, filing or other action would
not have a Material Adverse Effect with respect to the Borrower.
This Loan Agreement and each other Operative Agreement to which
the Borrower is a party has been duly executed and delivered on
behalf of the Borrower. Each Operative Agreement to which the
Borrower is a party constitutes a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower, in
accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at
law).
(d) No Legal Bar. The execution, delivery and
performance of this Loan Agreement and the other Operative
Agreements, the borrowings hereunder and the use of the proceeds
thereof will not violate any Requirement of Law applicable to, or
Contractual Obligation of, the Borrower and will not result in,
or require, the creation or imposition of any Lien (except for
Permitted Liens) on any of its properties or revenues pursuant to
any such Requirement of Law or Contractual Obligation, except
where such violation would not have a Material Adverse Effect
with respect to the Borrower.
(e) No Material Litigation. No litigation,
investigation or proceeding of or before any arbitrator or
Official Body is pending or threatened by or against the Borrower
or any of its properties or revenues (i) asserting the invalidity
of this Loan Agreement or the other Operative Agreements or any
of the transactions contemplated hereby or thereby, or (ii) which
could reasonably be expected to have a Material Adverse Effect on
the Borrower.
(f) No Default. The Borrower is not in default under or
with respect to any of its Contractual Obligations in any respect
except for any default which would not have a Material Adverse
Effect with respect to the Borrower. No Event of Termination or
Unmatured Event has occurred and is continuing.
(g) No Burdensome Restrictions. The Borrower is not a
party to or subject to any Contractual Obligation (other than the
Operative Agreements) except for any Contractual Obligation which
would not have a Material Adverse Effect with respect to the
Borrower.
(h) Taxes. The Borrower has (i) filed or caused to be
filed all Federal, state and other tax returns which are
required to be filed by it, (ii) paid all taxes shown to be due
and payable on said returns, and (iii) paid any Federal, state
and other taxes, fees or other charges imposed on it or any of
its property by any Official Body having taxing power. No tax
Lien has been filed against the Borrower or with respect to any
of its property (except for tax Liens described in subsection
6.2(a) hereof), and no claim is being asserted by any Official
Body with respect to any Federal, state or other tax, fee or
other charge relating to the Borrower or any of its property.
(i) ERISA. Neither the Borrower nor any ERISA
Affiliate of the Borrower has participated in any Multiemployer
Plan in the past five years other than the Central States
Southeast and Southwest Areas Pension Fund. Except for the
Originators, neither the Borrower nor any ERISA Affiliate of
the Borrower has maintained any Single Employer Plan. No
Reportable Event has occurred during the five-year period prior
to the date
on which this representation is made or deemed made with respect
to any Pension Plan of any Originator, and each
such Pension Plan has complied with the applicable provisions
of ERISA and the Code other than ministerial errors or
omissions with resulted or may have resulted in an immaterial
liability with respect to any Pension Plan. The present value
of all accrued benefits under each such Pension Plan (based on
those assumptions used to fund the Pension Plans) did not, as
of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of
the assets of such Pension Plan allocable to such accrued
benefits. With respect to each Multiemployer Plan, (i) there
are no contributions due thereto which either the Originators
or the Borrower or any ERISA Affiliate have failed to make,
(ii) neither the Borrower nor any Originator or ERISA Affiliate
has received notice from such plan that it is in reorganization
or insolvent (within the respective meanings of Section 4241
and 4245 of ERISA) or that such plan is not qualified under
Section 401(a) of the Code and (iii) based upon the best
information available and due inquiry by the Originators and
the Borrower, it is the best estimate of the Borrower and the
Originators, that the aggregate potential withdrawal liability
of the Borrower, the Originators or any ERISA Affiliate with
respect to such Multiemployer Plans would not exceed
$1,000,000.
(j) Investment Company Act; Other Regulations. The
Borrower is not an "investment company", or a company
"controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended. The Borrower is
not subject to regulation under any Federal or State statute or
regulation which limits its ability to incur Debt.
(k) Subsidiaries. The Borrower has no subsidiaries.
(m) No Deduction. The Borrower is not required to
make any deduction or withholding from payments to be made by
it to the Lender under this Loan Agreement or the other
Operative Agreements, and the execution and performance of this
Loan Agreement and any of the other Operative Agreements does
not make the Borrower liable for any registration tax, stamp
duty or similar tax or duty imposed by any Official Body of or
within its jurisdiction of incorporation, which tax or duty has
not been, or will not be, paid when due.
(n) No Priority Claims. Except for the obligations
and transactions contemplated by the Operative Agreements, the
Borrower has no liability in respect of any unsecured Debt
under which the lender, creditor or lessor or the Person in
whose favor such Debt is issued has any right, by operation of
law or otherwise, to have any claim in respect of such
obligation or guarantee first satisfied out of the general
assets of the Borrower in priority to the claims of its general
creditors.
(o) Title; Liens. Except for Permitted Liens, the
Borrower owns each item of the Collateral free and clear of any
and all Liens or claims of others. No security agreement,
financing statement or other public notice with respect to all
or any part of the Collateral is on file or of record in any
public office, except such as may have been filed in favor of
the Lender pursuant to this Loan Agreement or in respect of
Permitted Liens. Pursuant to this Loan Agreement, the Lender
holds a valid security interest in and to the Collateral, which
is perfected with respect to the Collateral, subject to no
other Liens other than Permitted Liens. Fully executed Uniform
Commercial Code Financing Statements or other appropriate
filings containing a description of the Collateral have been
filed of record in every governmental, municipal or other
office in every jurisdiction in which filings are necessary to
publish notice of and protect the validity of and to establish
a valid and perfected security interest in favor of the Lender
in respect of the Collateral, and no further or subsequent
filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as
provided under applicable law with respect to the filing of
continuation statements or amendments necessary to reflect any
changes to the name, identity or corporate structure of the
Borrower which, absent such amendments, would make the
Financing Statements filed hereunder seriously misleading, or
which are necessary to reflect any change in the Chief
Executive Office of the Borrower. No financing statement
listing the Borrower or any Trade Name of the Borrower as
debtor (other than any which may have been filed for the
benefit of the Lender) covering any of the Collateral is on
file in any public office. The Borrower has not previously
created any security interest in the Collateral or any part
thereof.
(p) Ownership of Receivables. The purchase by the
Borrower of the Receivables from the Originators constitutes a
true sale of such Receivables to the Borrower and creates in
favor of the Borrower a perfected ownership interest in such
Receivables, which ownership interest is not subject to any
Lien other than Permitted Liens.
(q) No Petition. The Borrower has no intent to file a
voluntary petition under the federal bankruptcy laws with
respect to the Borrower.
(r) Separate Corporate Existence. The Borrower is a
special purpose corporation whose primary activities are
restricted in its certificate of incorporation to purchasing
Receivables from the Originators, entering into agreements for
the servicing thereof, borrowing funds secured thereby and
conducting such other activities as necessary or appropriate to
carry out its primary activities. The Borrower's certificate of
incorporation provides for at least one Independent Director as
set forth at Section 5.10 hereof, and requires, inter alia, the
unanimous vote of its Board of Directors to take corporate
action to institute, file or consent to insolvency or
bankruptcy proceedings with respect to the Borrower.
(s) Places of Business. The Chief Executive Office of
the Borrower and the office where the Borrower keeps its
records concerning the Receivables are located at 0000 Xxxx
Xxxxxx, Xxxx Xxxxx, Xxxxxxx; the Chief Executive Office of
Essex is located at 0000 Xxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx, and
the office where Essex keeps its records concerning the
Receivables is located at 0000 Xxxx Xxxxxx, Xxxx Xxxxx,
Xxxxxxx; the Chief Executive Office of Diamond is located at
0000 Xxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx, and the office where
Diamond keeps its records concerning the Receivables is located
at 0000 Xxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx; and the Chief
Executive Office of Interstate is located at 0000 Xxxx Xxxxxx,
Xxxx Xxxxx, Xxxxxxx, and the office where Interstate keeps its
records concerning the Receivables is located at Attala
Industrial Park, Kosciusko, Mississippi.
(t) Lock-Box Bank; Lock-Box Account. The name and
address of the Lock-Box Bank, together with the account numbers
of the Lock-Box Accounts, are specified in Schedule 1.
(u) Franchises, Licenses, Trademarks and other
Rights. The Borrower has all franchises, permits, licenses and
other authority as are necessary to enable it to conduct its
businesses as currently being conducted and as proposed to be
conducted, and it is not in default under any of such
franchises, permits,
licenses or other authority, except where such failure to
possess such franchise, permit, license or other authority or
such default under any such franchise, permit, license or
authority would not have a Material Adverse Effect with respect
to the Borrower. To the best of the Borrower's knowledge, the
Borrower possesses all patents, patent rights, trademarks,
trademark rights, Trade Names, trade name rights, copyrights
and other intellectual property rights necessary to conduct its
businesses as currently being conducted and as proposed to be
conducted, without, to the best of the Borrower's knowledge,
conflict with any valid rights of others, except where such
failure to possess such patent, patent right, trademark,
trademark right, Trade Name, trade name right, copyright or
other intellectual property or such conflict would not have a
Material Adverse Effect with respect to the Borrower.
(v) Capital Stock. Essex owns, beneficially and of
record, 100% of the issued and outstanding capital stock of the
Borrower. No Person has the right to require the Borrower
(other than its parent) to issue to such Person or any other
Person any capital stock, other equity securities or any other
ownership interest in (including, without limitation, stock or
securities exchangeable for or convertible into Capital Stock,
other equity securities or ownership interests) the Borrower.
(w) Trade Names, etc. The Borrower (a) does not
conduct or transact, nor has it ever conducted or transacted,
business in any jurisdiction under any assumed name, fictitious
name, trade name or alternate corporate name (each a "Trade
Name"), and (b) has not made any filing or application with or
otherwise sought the approval of any Official Body with respect
to the use by the Borrower of a Trade Name in any jurisdiction.
The Borrower has not at any time (i) incurred any Indebtedness
under any Trade Name, (ii) granted any security interest or
permitted or suffered any Lien to exist against the Borrower or
any portion of its assets or property, whether real or personal
(including, without limitation, any of the Collateral) under
any Trade Name, (iii) executed or filed any financing statement
as a debtor under the Uniform Commercial Code as in effect in
any jurisdiction under any Trade Name, except pursuant to this
Loan Agreement, or (iv) had any judgment entered or rendered
against it under any Trade Name.
(x) Receivables. Each Receivable identified on a
Borrowing Base Certificate as an Eligible Receivable shall be
an
Eligible Receivable at the time of acquisition thereof by the
Borrower.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions Precedent to the Initial Loan. The
agreement of the Lender to make the initial Loan hereunder is
subject to the satisfaction, immediately prior to or
concurrently with the making of such Loan on the Closing Date,
of the following conditions precedent:
(a) Operative Agreements. The Lender shall have
received (i) this Loan Agreement executed and delivered by a
duly authorized officer of the Borrower, (ii) the Note executed
and delivered by a duly authorized officer of the Borrower,
(iii) copies of all the other Operative Agreements, executed by
all parties thereto and in form and substance satisfactory to
the Lender, and (iv) such other documents or instruments as may
be reasonably requested by the Lender.
(b) Corporate Proceedings. The Lender shall have
received a copy of the resolutions, in form and substance
satisfactory to the Lender, of the Board of Directors of each
of the Originators and the Borrower authorizing the execution,
delivery and performance of the Operative Agreements to which
each is a party certified by the Secretary or an Assistant
Secretary of each such corporation, as of the Closing Date,
which certificate shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded
and shall be in form and substance satisfactory to the Lender.
(c) Corporate Documents; Incumbency. The Lender shall
have received (i) copies of the certificate of incorporation
and by-laws of each of the Originators and the Borrower
certified as of the Closing Date as complete and correct copies
thereof by its Secretary or Assistant Secretary, and (ii) an
Officer's Certificate of each of the Originators and the
Borrower, certifying the names and true signatures of the
officers of each Originator and the Borrower authorized to sign
the Operative Agreements to which it is a party.
(d) Fees. The Lender shall have received in
immediately available funds any fees due and payable to it which
have been invoiced, all as set forth herein, and the Referral
Agent shall have received in immediately available funds the
Upfront Fee.
(e) Legal Opinions. The Lender shall have received
the executed legal opinions of counsel to the Originators and
the Borrower, substantially in the form of Exhibit X-0, Xxxxxxx
X-0, xxx Xxxxxxx X-0 hereto, to the effect that, among other
things, (A) the Borrower would not be substantively
consolidated with any Originator for purposes of the Bankruptcy
Code in the case of a bankruptcy of such Originator, (B) that
each purchase by the Borrower of Receivables constitutes a true
sale of the Receivables to the Borrower, (C) the Sales and
Servicing Agreement creates a valid, perfected security
interest, within the meaning of the UCC, granted by the
Originators in the Receivables, (D) this Loan Agreement creates
a valid, perfected security interest, within the meaning of the
UCC, granted by the Borrower in the Receivables and (E) such
other matters incident to the transactions contemplated by this
Loan Agreement and the other Operative Agreements as the Lender
may require.
(f) Lien Certificate. The Lender shall have received
a certificate of an Authorized Officer of each of the
Originators and the Borrower to the effect that the Receivables
are not subject to any Lien, except for Permitted Liens.
(g) UCC Searches. The Lender shall have received (i)
lien searches and other evidence as to the absence, except for
Permitted Liens, of any Lien on or security interest in the
Receivables in form and substance satisfactory to the Lender,
and (ii) Certified copies of Requests for Information or Copies
(Form UCC-11) (or a similar search report certified by a party
acceptable to the Lender), dated a date reasonably near to the
date of the initial Loan, listing all effective financing
statements which name the Borrower or any Originator (under
their respective present names and any previous names) as
debtor and which are filed with any jurisdiction in which a
filing would be necessary in order to perfect an ownership or
security interest in the Collateral, together with copies of
such financing statements. Any termination statements or
releases reasonably requested by the Lender to be filed with
respect to the Receivables shall have been filed.
(h) UCC Financing Statements. The Lender shall have
received signed copies of proper Financing Statements
satisfactory to the Lender for all jurisdictions that the
Lender
may deem necessary or desirable in order to perfect the ownership
interest of the Borrower created by the Sales and Servicing
Agreement and the security interests created by this Loan
Agreement, all other filings, notifications, consents and
recordings necessary to consummate the transactions contemplated
hereunder and under the other Operative Agreements shall be
accomplished and the Lender shall have received evidence of such
filings, notifications, consents and recordings satisfactory in
form and substance to the Lender.
(i) Diligence. The operation of the Originators'
billing, collection and information systems with respect to the
Receivables shall be reasonably satisfactory to the Lender.
(j) Credit and Collection Policy. The Credit and
Collection Policy shall be reasonably satisfactory to the Lender
in all material respects.
(k) Internal Controls. The Lender shall be reasonably
satisfied that the Servicer has implemented all necessary
internal and other systems and procedures to monitor collections
on account of the Receivables in order to gather all information
and furnish all reports required under the Operative Agreements
and to monitor compliance with the Operative Agreements.
(l) Consents. The Lender shall have received copies of
all consents, licenses and approvals, if any, reasonably required
in connection with the execution, delivery and performance by the
Borrower and the validity and enforceability against the Borrower
of the Operative Agreements to which it is a party and such
consents, licenses and approvals shall be in full force and
effect.
4.2 Conditions Precedent to Each Loan. The
agreement of the Lender to make the any Loan hereunder is
subject to the satisfaction, immediately prior to or
concurrently with the making of such Loan on its closing
date, of the following conditions precedent: (i) each of the
representations and warranties made by the Borrower and each
Originator in or pursuant to any of the Operative Agreements
shall be true and correct in all material respects on and as
of such date as if made on and as of such date, unless such
representation or warranty specifically relates to an earlier
date, (ii) no Event of Termination or Unmatured Event shall
have occurred and be
continuing, and (iii) the Lender shall have received a
certification from an Authorized Officer of the Borrower as
to the matters in clauses (i) and (ii).
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as this Loan
Agreement remains in effect, the Borrower shall:
5.1 Financial Statements. Furnish to the Lender:
(a) as soon as available, but in any event within 90
days after the end of each fiscal year of the Borrower and
Essex International, a copy of the balance sheet of Essex
International as at the end of such year and the related
statements of income and of cash flows for such year, setting
forth in each case in comparative form the figures for the
previous year , reported on by independent certified public
accountants of nationally recognized standing, and, a copy of
the unaudited balance sheet of the Borrower as at the end of
such year and the related statements of income and of cash
flows for such year, setting forth in each case in comparative
form the figures for the previous year (except for the
Borrower's first fiscal year for which there are no comparative
figures for the previous fiscal year); and
(b) as soon as available, but in any event not later
than 45 days after the end of each fiscal quarter of the
Borrower and Essex International, the unaudited balance sheet
of such Person as at the end of such quarterly period and the
related unaudited statements of income and of cash flows of
such Person for such period and the portion of the fiscal year
through the end of such period, setting forth in each case in
comparative form the figures for the previous year (except for
the Borrower's first fiscal year for which there are no
comparative figures for the previous fiscal year), certified by
an Authorized Officer as being fairly stated in all respects
(subject to normal year-end audit adjustments).
All such financial statements referred to above must
be complete and correct in all material respects and are to be
prepared in accordance with GAAP applied consistently
throughout the periods reflected therein and with prior periods
(except as approved by such accountants or officer, as the case
may be, and
disclosed therein and subject to normal year-end audit
adjustments).
5.2 Certificates; Other Information. Furnish to the
Lender:
(a) concurrently with the delivery of the financial
statements of Essex International referred to in subsection
5.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that
in making its normal examination for purposes of its annual
audit, no knowledge was obtained of any Event of Termination or
Unmatured Event, except as specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 5.1(a) and 5.1(b), a
certificate of an Authorized Officer of each of the Borrower
and Essex International stating that, to such Authorized
Officer's knowledge, the Borrower and the Originators have
each, during such period, observed or performed in all material
respects all of its respective covenants and other agreements,
and satisfied in all material respects every condition,
contained in each Operative Agreement to be observed, performed
or satisfied by it, and that such Authorized Officer has
obtained no knowledge of any Unmatured Event or Event of
Termination, in each case, except as disclosed in such
certificate;
(c) within five Business Days after the same are
sent, copies of all financial statements, reports and other
communications that the Borrower, Essex International or any
Originator may make to, or file or have with, the Securities
and Exchange Commission or any state securities commission; and
(d) promptly, such additional financial and other
information with respect to the Borrower or any Originator as
the Lender may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or
otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its payment obligations.
5.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same type as permitted
hereunder as of the date hereof and preserve, renew and keep in
full force and effect its corporate existence and take
all action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business;
and comply with all Contractual Obligations and Requirements of
Law applicable to it, except where such failure to so engage,
preserve, renew, keep and take would not have a Material
Adverse Effect with respect to the Borrower.
5.5 Inspection of Properties, Books and Records,
Discussions. Keep proper books of records and account in which
full, true and correct entries in conformity with GAAP and all
Requirements of Law applicable to the Borrower shall be made of
all material dealings and transactions in relation to its
business and activities; and permit representatives of the
Lender to visit and inspect any of its properties and examine
and make abstracts from any of its books and records at any
time and as often as may be desired on three (3) Business Days'
prior notice during normal business hours and to discuss the
business, operations, properties and financial and other
condition of the Borrower with officers and employees of the
Borrower and with its independent certified public accountants.
Any expense incident to the exercise by the Lender during the
continuance of any Event of Termination or Unmatured Event
under this subsection 5.6 shall be borne by the Borrower.
5.6 Notices. Promptly after obtaining knowledge
thereof give notice to the Lender of:
(a) the occurrence of any Unmatured Event or Event of
Termination;
(b) any (i) default or event of default by the
Borrower under any Contractual Obligation of the Borrower or
(ii) litigation which may exist at any time affecting the
Borrower or any investigation or proceeding pending before any
Official Body affecting the Borrower;
(c) a material adverse change in the business,
properties, assets, operations or condition (financial or
otherwise) of the Borrower which could adversely affect the
servicing or collection of the Receivables; and
(d) any change (i) in the Borrower's corporate name
or in any Trade Name used to identify it in the conduct of its
business or the ownership of its properties or (ii) in the
location of its Chief Executive Office, its principal place of
business, any office in which it maintains records relating to
the Collateral or the offices or facilities at which Collateral
is located (including the establishment of any such new office
or facility).
Each notice pursuant to this subsection shall be accompanied by
a statement of an Authorized Officer setting forth details of
the occurrence referred to therein and stating what action the
Borrower proposes to take with respect thereto.
5.7 Delivery of Other Reports. Furnish, or instruct
the Servicer to deliver any reports required to be delivered by
the Borrower, an Originator or the Servicer pursuant to any
Operative Agreement to which the Borrower, such Originator or
the Servicer is a party or which the Borrower, each Originator
or the Servicer has signed.
5.8 Servicing Matters. The Borrower shall instruct
and require the Servicer (i) to maintain and implement
administrative and operating procedures necessary to permit the
identification and segregation of the Receivables and all
collections and adjustments to such Receivable from all other
assets that are owned, controlled, or otherwise in the custody
of the Servicer in accordance with the Sales and Servicing
Agreement, including, without limitation, implementing such
procedures as shall be necessary for the proper deemed
allocation of Collections to the Lender on each day during each
Settlement Period in accordance with the allocation provisions
set forth herein and in the Sales and Servicing Agreement, (ii)
take all action necessary to mitigate by December 30, 1999 the
risk that computer applications used by the Servicer may be
unable to recognize and properly perform date-sensitive
functions involving certain dates prior to, during and after
the year 2000 (the "Year 2000 Problem"), and (iii) except as
otherwise may be expressly permitted in this Loan Agreement, to
forbear from (A) altering the Credit and Collection Policy in a
manner that could have a material adverse effect on the
collectibility of the Receivables and (B) rescinding or
modifying the terms of any Receivable except in accordance with
the Sales and Servicing Agreement and the Credit and Collection
Policy, in each case without the prior written consent of the
Lender. The Borrower shall cause a firm of nationally
recognized independent certified public accountants (who may
render other services to the Borrower, the Servicer or the
Originators) to furnish a report, at least annually, to the
Lender to the effect that they have applied certain procedures
agreed upon with the Servicer and Lender and examined certain
documents and records relating to the servicing of the
Receivables under the Sales and Servicing Agreement and that,
based upon such agreed-upon procedures, nothing has come to the
attention of such accountants that caused them to believe that
the servicing (including, without limitation, the allocation of
the Collections) has not been conducted in compliance with the
terms and conditions of this Loan Agreement and the Sales and
Servicing Agreement, except for such exceptions as they believe
to be immaterial and such other exceptions as shall be set
forth in such statement; and in addition, each report shall set
forth the agreed-upon procedures performed.
5.9 Further Assurances. Do such further acts and
things and execute and deliver to the Lender such assignments,
agreements, powers and instruments as are reasonably required
by the Lender to carry into effect the purposes of this Loan
Agreement and the other Operative Agreements or to better
assure and confirm unto the Lender its rights, powers and
remedies hereunder and under the other Operative Agreements,
including, without limitation, to obtain such consents and give
such notices, and to file and record all such documents and
instruments, and renew each such consent, notice, filing and
recordation, at such time or times, in such manner and at such
places, as may be necessary or desirable to preserve and
protect the position of the Lender hereunder and under the
other Operative Agreements.
5.10 Separate Corporate Existence. The Borrower
hereby acknowledges that the Lender is entering into the
transactions contemplated by this Loan Agreement in reliance
upon the Borrower's identity as a separate legal entity from
the Originators or any Originator Entity (as defined below).
Therefore, from and after the date of execution and delivery of
this Loan Agreement, the Borrower shall take all reasonable
steps including, without limitation, all steps that the Lender
may from time to time reasonably request, to maintain the
Borrower's identity as a separate legal entity and to make it
manifest to third parties that the Borrower is an entity with
assets and liabilities distinct from those of the Originators
and any Affiliates (other than the Borrower) thereof (each of
the Originators and its respective Affiliates (other than the
Borrower) shall be referred to herein as an "Originator
Entity"), and not just a division of any Originator Entity.
Without limiting the generality of the foregoing, the Borrower
shall:
(i)require that all full-time employees of the
Borrower, if any, identify themselves as such and not
as employees of any Originator Entity (including,
without limitation, by means of providing appropriate
employees with business or identification cards
identifying such employees as the Borrower's
employees);
(ii)allocate all overhead expenses (other than
expenses allocable to the Borrower's use of office
space made available by an Originator Entity),
including, without limitation, telephone and other
utility charges, for items shared between the
Borrower and any Originator Entity on the basis of
actual use to the extent practicable and, to the
extent such allocation is not practicable, on a basis
reasonably related to actual use;
(iii)at all times have at least one member of
its Board of Directors (an "Independent Director")
who is not at such time, and shall not have been at
any time during the preceding three years (A) a
director, officer, employee or Affiliate of any
Originator Entity or any major creditor thereof, (B)
a person related to any officer or director of any
Originator Entity, (C) a holder (directly or
indirectly) of more than 10% of any class of Capital
Stock of any Originator Entity, or (D) a person
related to a holder (directly or indirectly) of more
than 10% of any class of Capital Stock of any
Originator Entity (The term "major creditor" shall
mean a financial institution to which the Originator
has outstanding indebtedness for borrowed money in a
sum sufficiently large as would reasonably be
expected to influence the judgment of the proposed
Independent Director adversely to the interests of
the Borrower when its interests are adverse to those
of the Originator);
(iv)ensure that all corporate actions are duly
authorized by its Board of Directors;
(v)maintain the Borrower's books and records
separate from those of any Originator Entity;
(vi)prepare its financial statements separately
from those of other Originator Entities;
(vii)except as specifically permitted by the
Operative Agreements, not commingle funds or other
assets of Borrower with those of any other Originator
Entity and not maintain bank accounts or other
depository accounts to which any Originator Entity is
an account party, into which any Originator Entity
makes deposits or from which any Originator Entity
has the power to make withdrawals;
(viii)except as specifically permitted by the
Operative Agreements, not permit any Originator
Entity to pay any of the Borrower's operating
expenses;
(ix)at all times act solely in its corporate
name and through its duly authorized officers or
agents to maintain an arm's-length relationship with
the Originator and each other Originator Entity; and
(x)conduct its business solely in its own name
so as to not mislead others as to the identity of the
corporation with which those others are concerned,
and particularly use all reasonable efforts to avoid
the appearance of conducting business on behalf of
any Originator or any other Originator Entity or that
the assets of the Borrower are available to pay the
creditors of the Originator or any other Originator
Entity.
5.11 Net Worth. The Borrower shall, at all times,
have a positive net worth as determined in accordance with
generally accepted accounting principles.
5.12 Collections. Instruct all Obligors to cause all
Collections to be deposited directly to the Lock-Box Account
and if the Borrower shall receive any Collections, the Borrower
shall remit such Collections to the Servicer within two
Business Days following the Borrower's receipt thereof.
5.13 Enforcement of Sales and Servicing Agreement.
The Borrower shall enforce its rights under the Sales and
Servicing Agreement against the Servicer and the Originators in
accordance with the terms thereof, except where the failure to
enforce such rights would not have a Material Adverse Effect on
the Lender or the Receivables.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as this Loan
Agreement remains in effect, the Borrower shall not, without
the consent of the Lender:
6.1 Limitation on Debt. Create, incur, assume or
suffer to exist any Debt, except indebtedness in respect of the
Loans and the Note and any other obligations of the Borrower
under the Operative Agreements and additional Debt of the
Borrower not to exceed $10,000 at any time outstanding.
6.2 Limitation on Liens. Create, incur, assume or
suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, except
Permitted Liens.
6.3 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, assign, transfer or otherwise dispose of
all or substantially all of its property, business or assets.
6.4 Limitation on Sale of Assets. Convey, sell,
lease, assign, transfer or otherwise dispose of any of its
property, business or assets (including, without limitation,
Receivables and interests therein) which is valued in excess of
$10,000, whether now owned or hereafter acquired, except as
expressly permitted by the Operative Agreements.
6.5 Receivables.
(a) sell, assign or otherwise encumber any Receivable
owned by it, except as expressly permitted by the Operative
Agreements; or
(b) cancel, terminate, amend, modify or waive any
term or condition of any Receivable (including the granting of
rebates or adjustments with respect thereto), except in
accordance with the Sales and Servicing Agreement and the
Credit and Collection Policy.
6.6 Limitation on Dividends. Declare or pay any
dividend on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any
shares of any class of Capital Stock of the Borrower or any
warrants or options to purchase any such Capital Stock, whether
now or hereafter outstanding, or make any other distribution in
respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Borrower except (i)
dividends payable solely in common stock of the Borrower, and
(ii) payments pursuant to any agreement or other arrangement
approved in writing by the Lender, such approval not to be
unreasonably withheld, with respect to the payment by the
Borrower of its allocable share of the taxes of any affiliated,
consolidated, unitary, combined or similar group including the
Borrower and (iii) cash dividends to the extent permitted by
applicable law; provided that, in the case of clause (i) or
(iii), after giving effect thereto, no Event of Termination or
Unmatured Event shall have occurred and be continuing.
6.7 Limitation on Capital Expenditures. Make or
commit to make (by way of the acquisition of securities of a
Person or otherwise) any expenditure in respect of the purchase
or other acquisition of fixed or capital assets in excess of
$10,000.
6.8 Limitation on Investments, Loans and Advances.
Make any advance, loan, extension of credit or capital
contribution to, or purchase any stock, bonds, notes,
debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person,
except:
(a) the purchase of the Receivables pursuant to the
Sales and Servicing Agreement; and
(b) as otherwise contemplated by the Operative
Agreements.
6.9 Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale,
lease or exchange of property or the rendering of any service,
with any Affiliate, except for (i) purchases of Receivables
pursuant to the Sales and Servicing Agreement, (ii)
transactions which do not violate any provision of the
Operative Agreements and which are necessary to carry out the
business of the Borrower and the purposes of this Loan
Agreement, and (iii) an agreement or other arrangement
reasonably satisfactory to the Lender to share taxes of any
affiliated, consolidated, unitary, combined or similar group
including any of the Originators and the Borrower.
6.10 Corporate Documents. Amend its Certificate of
Incorporation or By-laws.
6.11 Capital Stock. Issue any shares of Capital Stock
in addition to the shares issued and paid for as of the Closing
Date or permit during the term of this Loan Agreement any
transfers of any shares of its Capital Stock to any Person
other than Essex; provided that the Borrower may issue shares
of its capital stock to another direct or indirect wholly-owned
subsidiary of Essex International as long as the Lender shall
have received an opinion of counsel reasonably satisfactory to
the Lender that the Borrower would not be substantively
consolidated with such subsidiary.
6.12 Fiscal Year. Permit the fiscal year of the
Borrower to end on a day other than December 31.
6.13 Limitation on Negative Pledge Clauses. Enter
into any agreement with any Person other than the Lender
pursuant to the Operative Agreements which prohibits or limits
the ability of the Borrower to create, incur, assume or suffer
to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired except with the prior
written consent of the Lender.
6.14 Agreements.
(a) Cancel, terminate, amend, supplement, modify or
waive any of the provisions of any Operative Agreement.
(b) Cancel, terminate, amend, supplement, modify or
waive any of the provisions of the Credit and Collection Policy
in any material respect.
(c) Permit any Originator or the Servicer to assign
any of their respective rights or obligations under the Sales
and Servicing Agreement, except as expressly permitted by the
Sales and Servicing Agreement.
6.15 Successor Servicer. Permit any change of
Servicer, except in accordance with the Sales and Servicing
Agreement.
6.16 Change in Payment Instructions to Obligors.
Terminate any bank as a Lock-Box Bank from those listed in
Schedule 1 or make any material change in its instructions to
Obligors regarding payments to be made to the Borrower or
payments to be made to any Lock-Box Bank, unless the Lender
shall have received thirty (30) days' prior written notice of
such termination or change, or add any bank as a Lock-Box Bank
unless the Lender shall have received (i) thirty (30) days'
prior written notice of such addition and (ii) prior to the
effective date of such addition, (x) executed copies of
Lock-Box Agreements executed by each new Lock-Box Bank, the
Servicer and the Borrower and (y) copies of all agreements and
documents signed by either the Servicer, the Borrower or the
respective Lock-Box Bank with respect to any new Lock-Box
Account.
6.17 Maintenance of Office or Agency; Chief Executive
Office. The Borrower will not change the location of its Chief
Executive Office as set forth in Section 3.1(s) without giving
the Lender at least 60 days' prior written notice thereof.
SECTION 7. REMEDIES
At any time after the occurrence of an Event of
Termination and so long as such Event of Termination is
continuing, the Lender may, in accordance with the Uniform
Commercial Code or other applicable law, take one or more of
the
following actions: (i) give notice (which may be telephone
notice confirmed in writing) to the Borrower of the occurrence
of such Event of Termination, and the Lender's election to
terminate the Commitment under this Loan Agreement, whereupon
the Lender's obligation to make Loans shall be terminated
(except that in the case of the occurrence of any Event of
Termination described in clause (d) of the definition of such
term, no such notice shall be required and such termination
shall be automatic), (ii) by notice to the Borrower declare the
unpaid principal amount and interest under the Note, the Loans
and all other amounts payable to the Lender by the Borrower
hereunder to be forthwith due and payable, whereupon such
amounts shall become forthwith due and payable, both as to
principal and interest, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the Note to the
contrary notwithstanding (except that in the case of the
occurrence of any Event of Termination described in clause (d)
of the definition of such term, no such notice shall be
required and such termination and acceleration shall be
automatic), (iii) to demand, collect, receive payment of, give
receipt for and give discharges and releases of all or any of
the Collateral, (iv) to notify, or to require the Borrower or
the Servicer to notify, each Obligor to make payment in respect
of the Receivables directly to the Lender, and (v) to use,
sell, assign, transfer, pledge, make any agreement with respect
to or otherwise deal with all or any of the Collateral, and to
do any and all other and further acts and actions which the
Lender may take pursuant to this Loan Agreement or under the
Uniform Commercial Code or other applicable law, including,
without limitation (A) establishing an account or accounts (the
"Collection Account") with the Referral Agent or such other
financial institution as the Lender may designate into which
the Collections or any amounts realized on the Collateral shall
be paid, and (B) taking control of the Lock-Box Accounts (by
delivery to the Lock-Box Bank of notices in substantially the
forms attached to the Lock-Box Agreement).
In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition, or other judicial
proceeding relative to the Borrower, any Originator or the
Servicer, the other obligations secured hereby or relating to
the property of the Borrower, any Originator, the Servicer or
of such other obligor or their creditors, the Lender
(irrespective of whether the Obligations shall then be due and
payable as therein expressed or by declaration or otherwise and
irrespective of whether the
Lender shall have made any demand on the Borrower, any
Originator or the Servicer for the payment of overdue principal
or interest or any such other obligation) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole
amount of principal, interest, if any, owing and
unpaid in respect of the Obligations and any other
obligation secured hereby and to file such other
papers or documents as may be necessary or advisable
in order to have the claims of the Lender (including
any claim for the reasonable compensation, expenses,
disbursements and advances of the Lender, its agents
and counsel) and of the Lender allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other
property payable or deliverable on any such claims
and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator, or other similar official in any such judicial
proceeding is hereby authorized by the Lender to make such
payments to the Lender and, in the event that the Lender shall
consent to the making of such payments directly to the Lender,
to pay to the Lender any amount due it for the reasonable
compensation, expenses, disbursements and advances of the
Lender, its agents and counsel.
SECTION 8. GRANT OF SECURITY INTEREST
8.1 Grant of Security Interest. The Borrower hereby
Grants to the Lender a security interest in all of the
Borrower's right, title and interest in and to (a) each
Receivable, whether now owned or hereafter acquired, and all
Collections and other amounts now due or hereafter becoming due
with respect thereto, (b) all rights of the Borrower to or
under any guarantees of or collateral for the Obligor's
obligations under any Contract, (c) all of the Borrower's
right, title and interest in and to the goods subject to each
Receivable, (d) all moneys held by a Lock-Box Bank in a
Lock-Box Account in respect of the Receivables, (e) all rights
of the Borrower under the Sales and Servicing Agreement, and
(f) all proceeds of the conversion, whether voluntary or
involuntary, of any of the foregoing into cash or other
property (collectively, the "Collateral"). Such Grant is
made in trust to secure (1) the payment of all amounts due to
the Lender from the Borrower in accordance with the terms of
the Operative Agreements, and (2) the performance of each and
all of the Borrower's other obligations under this Loan
Agreement and the other Operative Agreements (collectively, the
"Obligations").
8.2 Remedies. Following any acceleration of the
Obligations, the Lender shall have all of the rights, powers
and remedies with respect to the Collateral set forth in
Section 7 hereof or as are otherwise available to secured
parties under the Uniform Commercial Code or other applicable
law.
8.3 Application of Money Collected. Any money
realized from a sale by the Lender of any Collateral subject to
the Lien of this Loan Agreement pursuant to this Section 8
shall be applied in the following order, at the date or dates
fixed by the Lender:
first, to the payment of all costs and expenses
of collection incurred by the Lender (including the
fees and expenses of any counsel to the Lender) in
connection with any Operative Agreement and all other
amounts due the Lender under Section 9.4 and, after
such costs and expenses incurred by the Lender have
been paid, then to the payment of any other such
costs and expenses incurred by the Lender in
connection with any Operative Agreement;
second, if the Servicer is not an Originator,
the Borrower or an Affiliate of either thereof, to
the payment of all Servicing Fees then due;
third, to the payment to the Lender of all
accrued and unpaid Cost of Funds Amount (including
interest on overdue payments of interest or principal
as set forth in this Loan Agreement), Program Fees
and Facility Fees;
fourth, to the payment to the Lender of the
Outstanding Principal Amount;
fifth, to the Lender, all other amounts owed to
it pursuant to the Operative Agreements;
sixth, if the Servicer is an Originator, the
Borrower or an Affiliate of either thereof, to the
payment of all Servicing Fees then due;
seventh, the balance, if any, to the Borrower.
8.4 Restoration of Rights and Remedies. If the Lender
has instituted any proceeding to enforce any right or remedy
under this Loan Agreement and such proceeding has been
discontinued or abandoned for any reason, or has been
determined adversely to the Lender, then and in every such
case, subject to any determination in such proceeding, the
Borrower and the Lender shall be restored severally and
respectively to their former positions hereunder and thereafter
all rights and remedies of the Lender shall continue as though
no such proceeding had been instituted.
8.5 Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Lender is
intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate
right or remedy.
8.6 Delay or Omission Not Waiver. No delay or
omission of the Lender to exercise any right or remedy accruing
upon any Event of Termination shall impair any such right or
remedy or constitute a waiver of any such Event of Termination
or an acquiescence therein. Every right and remedy given by
this Section or by law to the Lender may be exercised from time
to time, and as often as may be deemed expedient, by the
Lender.
8.7 Waiver of Stay or Extension Laws. The Borrower
covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay
or extension law wherever enacted, now or at any time hereafter
in force, which may affect the covenants or the performance of
this Loan Agreement; and the Borrower (to the extent that it
may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein
granted to the Lender,
but will suffer and permit the execution of every such power as
though no such law had been enacted.
8.8 Sale of Collateral.
(a) The power to effect any sale of any portion of
the Collateral pursuant to Section 7 shall not be exhausted by
any one or more sales as to any portion of the Collateral
remaining unsold, but shall continue unimpaired until the
entire Collateral shall have been sold or all Obligations shall
have been paid. The Lender may from time to time postpone any
public sale by public announcement made at the time and place
of such sale.
(b) In connection with a sale of all or any portion
of the Collateral:
(i) the Lender may bid for and purchase the
property offered for sale, and upon compliance with
the terms of sale may hold, retain, and possess and
dispose of such property, without further
accountability, and the Lender may, in paying the
purchase money therefor, deliver in lieu of cash the
Note or claims for interest thereon for credit in the
amount that shall, upon distribution of the net
proceeds of such sale, be payable thereon, and the
Note, in case the amounts so payable thereon shall be
less than the amount due thereon, shall be returned
to the Lender after being appropriately stamped to
show such partial payment;
(ii) the Lender may bid for and acquire the
property offered for sale in connection with any
public sale thereof;
(iii) the Lender shall execute and deliver an
appropriate instrument of conveyance transferring its
interest in any portion of the Collateral in
connection with a sale thereof;
(iv) the Lender is hereby irrevocably appointed
the agent and attorney-in-fact of the Borrower to
transfer and convey its interest in any portion of
the Collateral in connection with a sale thereof, and
to take all action necessary to effect such sale; and
(v) no purchaser or transferor at such a sale
shall be bound to ascertain the Lender's authority,
inquire into the satisfaction of any conditions
precedent or see to the application of any moneys.
(c) The method, manner, time, place and terms of any
sale of all or any portion of the Collateral shall be
commercially reasonable.
(d) The provisions of this Section 8.8 shall not be
construed to restrict the ability of the Lender to exercise any
rights and powers against the Borrower or the Collateral that
are vested in the Lender by this Loan Agreement, including,
without limitation, the power of the Lender to proceed against
the Collateral subject to the lien of this Loan Agreement and
to institute judicial proceedings for the collection of any
deficiency remaining thereafter.
8.9 Protection of Collateral; Further Assurances.
The Borrower will from time to time execute and
deliver all such supplements and amendments hereto and all such
Financing Statements, continuation statements, instruments of
further assurance, and other instruments, and will take such
other action as may be reasonably necessary or advisable to
(i) grant more effectively a security interest
in all or any portion of the Collateral;
(ii) maintain or preserve the Lien of this Loan
Agreement or carry out more effectively the purposes
hereof;
(iii) publish notice of, or protect the validity
of, any Grant made or to be made by this Loan
Agreement and perfect the security interest
contemplated hereby in favor of the Lender in each of
the Receivables and the other property constituting
part of the Collateral;
(iv) enforce or cause the Servicer to enforce
any of the Receivables; or
(v) preserve and defend title to any Receivable
(including the right to receive all payments due or
to become due thereunder) or other Collateral as
required
by the Sales and Servicing Agreement and preserve and
defend the rights of the Lender in such Receivable
(including the right to receive all payments due or
to become due thereunder) and other property against
the claims of all persons and parties.
The Borrower hereby designates the Lender its agent and
attorney-in-fact to execute, upon the Borrower's failure to do
so, any Financing Statement or continuation statement required
pursuant to this Section 8.9. In furtherance of the assignment
of all of the Borrower's rights under the Sales and Servicing
Agreement, the Borrower hereby irrevocably authorizes and
empowers the Lender in its own name, or in the name of its
nominee, or in the name of the Borrower, from and after the
date on which any Unmatured Event or Event of Termination shall
occur and be continuing, to ask, demand, xxx for, collect and
receive any and all payments to which the Borrower is or may
become entitled under the Sales and Servicing Agreement, and to
enforce compliance by each and every party, or any one or more
of them, with all or any of the terms and provisions of the
Sales and Servicing Agreement.
8.10 Opinions as to Collateral. On or before March 15
in each calendar year, beginning March 15, 1999, the Borrower
shall furnish to the Lender an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has
been taken with respect to the execution and filing of any
Financing Statements and continuation statements as is required
pursuant to the Sales and Servicing Agreement and Section 8.9
hereof to maintain the ownership interest of the Borrower in
each Receivable (including the right to receive all payments
due or to become due thereunder) and the valid and perfected
Lien created by this Loan Agreement in each Receivable and
reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain
such Lien and security interest. Such Opinion of Counsel shall
also describe the execution and filing of any Financing
Statements and continuation statements that will, in the
opinion of such counsel, be required to maintain the valid and
perfected Lien of this Loan Agreement with respect to the
Receivables until March 15 in the following calendar year.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. None of this Loan
Agreement, the Note or any other Operative Agreement to which
the Lender or the Borrower is a party, nor any terms hereof or
thereof, may be amended, supplemented or modified except in
accordance with the provisions of this subsection. Subject to
obtaining the consent of any other party required hereunder or
thereunder, the Lender and the Borrower may, from time to time,
enter into written amendments, supplements or modifications
hereto and to the Note and the other Operative Agreements to
which they are parties for the purpose of adding any provisions
to this Loan Agreement or the Note or such other Operative
Agreements or changing in any manner the rights of Lender or
the Borrower hereunder or thereunder and, in addition, waiving,
on such terms and conditions as Lender may specify in such
instrument, any of the requirements of this Loan Agreement or
the Note or such other Operative Agreements or any Unmatured
Event or Event of Termination and its consequences. Any such
waiver and any such amendment, supplement or modification shall
be binding upon the Lender and all future holders of the Note.
In the case of any waiver, the Lender and the Borrower shall be
restored to their former position and rights hereunder and
under the Note and any other Operative Agreements to which they
are parties, and any Unmatured Event or Event of Termination
waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Unmatured
Event or Event of Termination, or impair any right consequent
thereon.
9.2 Notices. Except where telephonic instructions or
notices are authorized herein to be given, all notices,
demands, instructions and other communications required or
permitted to be given to or made upon any party hereto shall be
in writing and shall be personally delivered or sent by
overnight courier service, or by registered, certified or
express mail, postage prepaid, return receipt requested, or by
facsimile copy, or telegram (with messenger delivery specified
in the case of a telegram) and shall be deemed to be delivered
for purposes of this Loan Agreement on: (a) the third Business
Day following the day on which such notice was placed in the
custody of the U.S. Postal Service, (b) the next Business Day
following the day on which such notice was placed in the
custody of any overnight courier service, including express
mail service or (c) the same Business Day on which such notice
is sent by telegram, messenger or facsimile. Unless otherwise
specified in a notice sent or
delivered in accordance with the foregoing provisions of this
subsection, notices, demands, instructions and other
communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or to
their respective facsimile numbers) indicated below, and, in
the case of telephonic instructions or notices, by calling the
telephone number or numbers indicated for such party below:
If to the Borrower: Essex Funding Inc.
0000 Xxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xx. Xxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Essex: Essex Group, Inc.
0000 Xxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xx. Xxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Diamond: Diamond Wire & Cable Co.
0000 Xxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xx. Xxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Interstate: Interstate Industries, Inc.
0000 Xxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xx. Xxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Lender: Three Rivers Funding Corporation
c/o Merrill Xxxxx Money Markets Inc.
World Financial Center - North Tower
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:Xx. Xxxxxxx X. Xxxxxx
Telephone:(000) 000-0000
Facsimile:(000) 000-0000
With a copy to:
Mellon Bank, N.A.
One Mellon Bank Center - Room 0410
Pittsburgh, Pennsylvania 15258-0001
Attention: Xx. Xxxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
9.3 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any
document, certificate or statement delivered pursuant hereto or
in connection herewith shall survive the execution and delivery
of this Loan Agreement and the Note.
9.4 Payment of Expenses and Taxes. The Borrower
agrees, on demand, to (a) pay or reimburse the Lender for all
its reasonable out-of-pocket costs and expenses incurred in
connection with the preparation and execution of any amendment,
supplement or modification to, this Loan Agreement, the Note
and the other Operative Agreements and any other agreements
prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and
thereby, including, without limitation, any and all reasonable
collateral audit fees, and the fees and disbursements of
counsel to the Lender, (b) pay or reimburse the Lender for all
its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Loan
Agreement, the Note and the other Operative Agreements,
including, without limitation, fees and disbursements of
counsel to the Lender and (c) pay, indemnify, and hold the
Lender harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any
delay in paying, any registration tax, stamp, duty and other
similar taxes or duties, if any, which may be payable or
determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Loan
Agreement, the Note and the other Operative Agreements, and (d)
pay, indemnify, and hold the Lender harmless from and against
any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent arising from the execution,
delivery and administration of, and the enforcement against the
Borrower of, this Loan Agreement, the Note and the other
Operative Agreements (all the foregoing, collectively, the
"indemnified liabilities"); provided that the Borrower shall
not have any obligation hereunder to the Lender with respect to
indemnified liabilities arising from the gross negligence or
willful misconduct of the Lender. Without limitation of the
generality of this Section 9.4(d), the Borrower shall pay on
demand to the Lender any and all amounts necessary to indemnify
the Lender from and against any and all indemnified liabilities
relating to or resulting from any of the following:
(i) reliance on any representation or warranty
made or deemed made by the Borrower (or any of its
officers) under or in connection with this Loan
Agreement, any Operative Document, any Loan Request
or any other information or report delivered by the
Borrower pursuant hereto, which, in any such case,
shall have been false or incorrect in any material
respect when made or deemed made or delivered, except
to the extent it specifically relates to an earlier
date:
(ii) the failure by the Borrower to comply with
any term, provision or covenant contained in this
Loan Agreement or any Operative Document or with any
applicable law, rule or regulation with respect to
any Receivable, or the nonconformity of any
Receivable with any such applicable law, rule or
regulation;
(iii) the failure as a result of any action by
the Borrower to vest and maintain vested in the
Lender, a perfected security interest in the
Receivables transferred or purported to be
transferred to the Borrower, together with all
Collections and related security agreements,
instruments and documents, and all
other Collateral, free and clear of any Lien (other
than Permitted Liens);
(iv) the failure by the Borrower to file, or any
delay in filing (other than solely as a result of the
action or inaction of the Lender), Financing
Statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other
applicable laws against the Borrower with respect to
any Receivables;
(v) any dispute, claim, offset or defense (other
than discharge in bankruptcy of the Obligor or other
financial inability of the Obligor to pay such
Receivable) of the Obligor to the payment of any
Receivable which is, or is purported to be, a
Receivable, including, without limitation, a defense
based on such Receivable not being a legal, valid and
binding obligation of such Obligor enforceable
against it in accordance with its terms), or any
other claim resulting from the sale or lease of the
goods or services related to such Receivable or the
furnishing or failure to furnish goods or services;
(vi) any 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 the goods or services
subject to any Receivable;
(vii) the failure to pay when due any taxes,
including, without limitation, sales, excise or
personal property taxes payable by the Borrower in
connection with the Receivables;
(viii) the commingling of any Collections of
Receivables with any other funds; and
(ix) the failure of the computer applications of
the Servicer to resolve the Year 2000 Problem on or
prior to December 30, 1999.
The agreements in this subsection shall survive repayment of
the Loans, the Note and all other amounts payable hereunder.
Notwithstanding anything in this Section 9.4 to the contrary,
the Borrower shall not have any obligation hereunder to the
Lender
with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of the Lender.
9.5 Successors and Assigns; Participations.
(a) This Loan Agreement shall be binding upon and
inure to the benefit of the Borrower, the Lender and all future
holders of the Note and their respective successors and
assigns, except that the Borrower may not assign or transfer
any of its rights or obligations under this Loan Agreement
without the prior consent of the Lender, and the Lender may not
assign or transfer any of its rights or obligations under this
Loan Agreement without the prior consent of the Borrower (which
consent shall not be unreasonably withheld). The parties to
this Agreement acknowledge that the Lender has assigned and
shall be permitted to continue to assign (without consent) to
Bankers Trust Company, as collateral agent for the benefit of
the holders of any debt instruments issued by the Lender, its
security interest in all of the Collateral.
(b) The Borrower and the Lender agree that the Lender
may, from time to time, with the prior consent of the Borrower
(which consent shall not be unreasonably withheld), sell a
portion of the Lender's obligation to make Loans hereunder and
of the Lender's rights hereunder and under the Loans and the
Note, or grant participations herein and in the Loans and the
Note. Any such assignee or participant may have the same rights
as the Lender in respect of the rights granted to the Lender
hereunder. In such connection, it is agreed that the Lender
shall not be responsible for a failure by any such assignee or
participant, and that each such assignee or participant shall
not be responsible for a failure by the Lender (or another such
assignee or participant), to make or fund, as the case may be,
its pro rata portion of any Loan.
(c) Every participant or assignee of the Lender shall
provide the Borrower (A) prior to becoming a participant or
assignee (i) if the participant or assignee is incorporated or
established under the laws of a jurisdiction outside of the
United States, two duly completed copies of the United States
Internal Revenue Form 4224 or 1001 (or, if the assignee or
participant is not a bank, Form W-8) or successor applicable or
required forms, in each case entitling the participant or
assignee to receive payments under this Agreement without
deduction or withholding of any United States Federal income
taxes and demonstrating the participant's or assignee's
exemption from backup withholding tax, (ii) a duly completed
copy of the Internal Revenue Service Form W-8 or W-9 or
successor applicable or required forms, and (iii) such other
forms and information as may be reasonably required to confirm
the availability of any applicable exemption from United States
Federal, state or local withholding taxes, and (B) to the
extent possible, each potential participant or assignee must
also agree to provide the Borrower on or before the date that
any such form expires or becomes obsolete, or upon the
occurrence of any event requiring an amendment, resubmission or
change in the most recent form previously delivered by it, and
such extensions or renewals as may be reasonably requested by
the Borrower. Notwithstanding any provision of this Agreement
to the contrary, the Borrower shall be entitled to withhold or
cause withholding, and no amount shall be payable under Section
2.8, to the extent such amount would otherwise be payable as
the result of such participant's or assignee's failure to
deliver the forms required by this paragraph (c) on a timely
basis.
(d) Notwithstanding anything contained herein to the
contrary, the Lender hereby agrees (i) to maintain the
confidentiality of the information relating to the business and
operations of the Originators and the Borrower as the Borrower,
the Originators or the Servicer may from time to time disclose
to the Lender and (ii) not to duplicate, disclose or distribute
such information to any Person other than its directors,
officers, representatives (including its accountants, attorneys
and agents) and employees who are directly participating in the
administration of the transactions contemplated by the
Operative Agreements; provided, however, that the Lender may
disclose any such information (i) if in the reasonable judgment
of the Lender, such disclosure is required under any
requirement of applicable law, rule or regulation or compliance
by the Lender with any binding requirements of any regulatory
body having jurisdiction over the Lender, (ii) if such
information has become available to the public other than as a
result of a disclosure by or through the Lender, (iii) if such
information was available to the Lender on a non-confidential
basis prior to its disclosure to the Lender hereunder, (iv) if
the Lender should be required in connection with any legal or
regulatory proceeding to disclose such information (including
pursuant to court order or subpoena) or (v) to its liquidity or
credit providers under any Liquidity Agreement, which agrees in
writing to maintain the confidentiality of such information in
accordance with this
paragraph (d), or a rating agency rating the securities of the
Lender; provided, however, that in the case of any instance set
forth in clause (i) or (iv) above, the Lender will, to the
extent practicable, inform the Borrower of its intention to
make any such disclosure prior to (and, to the extent
reasonably practicable, three (3) days prior to) making any
such disclosure. The Borrower authorizes the Lender to
disclose, to any assignee or participant or proposed assignee
or participant referred to in Section 9.5(b) any and all
financial information in its possession concerning the
Originator, the Borrower and their affiliates which has been
delivered to it by or on behalf of such Person pursuant to this
Loan Agreement or any Operative Agreement or which has been
delivered to it by or on behalf of such Person in connection
with its credit evaluation of the Originators, the Borrower and
their Affiliates prior to becoming a party to this Loan
Agreement, provided, that such assignee or participant shall
first have agreed in writing to be bound by the provisions of
this Section 9.5(d).
(e) Notwithstanding anything contained herein to the
contrary, without the prior written consent of the Lender, the
Borrower hereby agrees (i) to maintain the confidentiality of
this Loan Agreement and the other Operative Agreements and the
information relating to the business and operations of the
Lender as the Lender may from time to time disclose to the
Borrower and (ii) not to duplicate, disclose or distribute this
Loan Agreement or any other Operative Agreement or any such
information to any Person other than its directors, officers,
representatives (including its accountants, attorneys and
agents), employees, and Affiliates who are directly
participating in the administration of the transactions
contemplated by the Operative Agreements; provided, however,
that the Borrower may disclose any such information (i) if in
the reasonable judgment of the Borrower such disclosure is
required under any requirement of applicable law, rule or
regulation or compliance by the Borrower with any binding
requirements of any regulatory body, including any securities
exchange, having jurisdiction over the Borrower, (ii) if such
information has become available to the public other than as a
result of a disclosure by or through the Borrower, (iii) if
such information was available to the Borrower on a
non-confidential basis prior to its disclosure to the Borrower
hereunder, (iv) if the Borrower should be required in
connection with any legal or regulatory proceeding to disclose
such information (including pursuant to court order or
subpoena), or (v) if upon advice of counsel, the disclosure of
such information
shall be reasonably necessary or desirable in connection with
any litigation; provided, however, that in the case of any
instance set forth in clause (i) or (iv) above, the Borrower
will, to the extent practicable, inform the Lender of its
intention to make any such disclosure prior to (and, to the
extent reasonably practicable, three (3) days prior to) making
any such disclosure.
(f) The Lender shall not grant to any assignee or
participant the right to consent to any amendment or waiver
entered into in accordance with subsection 9.1 except for any
such amendment or waiver which would reduce the amount or
extend the due date of any principal of or interest on the
Note.
9.6 Termination. This Loan Agreement shall terminate
upon payment in full of all outstanding principal, interest and
other amounts due hereunder; provided, however, that to the
extent that the Borrower or any Obligor makes a payment to the
Lender or the Lender exercises its rights of set-off and such
payment or set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set
aside, recovered from, disgorged by, or is required to be
refunded, rescinded, returned, repaid or otherwise restored to
the Borrower, such Obligor, a trustee, a receiver or any other
Person under any law, including, without limitation, any
bankruptcy law, any state or federal law, common law or
equitable cause, the obligation or part thereof originally
intended to be satisfied shall, to the extent of any such
restoration, be reinstated, revived and continued in full force
and effect as if such payment had not been made or such set-off
had not occurred. The provisions of the proviso to this Section
9.6 shall survive the termination of this Loan Agreement.
Notwithstanding anything herein to the contrary, in the event
that any Originator shall cease to be directly or indirectly
wholly-owned by Essex International, such Originator shall,
from and after the date on which it so ceases to be directly or
indirectly wholly-owned by Essex International, cease to be an
"Originator" for purposes of this Loan Agreement and the Sales
and Servicing Agreement; provided, however, that such
Originator's liability for any obligations under any Operative
Agreement which are accrued through such date on which it
ceases to be directly or indirectly wholly-owned by Essex
International shall continue.
9.7 Counterparts. This Loan Agreement may be executed
by one or more of the parties to this Loan Agreement on any
number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same
instrument.
9.8 Severability. Any provision of this Loan
Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
9.9 Integration. This Loan Agreement represents the
agreement of the Borrower and the Lender with respect to the
subject matter hereof, and there are no promises, undertakings,
representations or warranties by Lender relative to the subject
matter hereof not expressly set forth or referred to herein or
in the other Operative Agreements.
9.10 GOVERNING LAW. THIS LOAN AGREEMENT AND THE NOTE
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS LOAN
AGREEMENT AND THE NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
9.11 SUBMISSION TO JURISDICTION WAIVERS. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS LOAN AGREEMENT AND THE
OTHER OPERATIVE AGREEMENTS TO WHICH IT IS A PARTY, OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF,
TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS
FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY
BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING
WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR
CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION
OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY
REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM
OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN
SUBSECTION 9.2 OR AT SUCH OTHER ADDRESS OF WHICH ALL OF THE
OTHER PARTIES HERETO SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
AND
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT
TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR SHALL LIMIT THE RIGHT TO XXX IN ANY OTHER JURISDICTION.
9.12 Acknowledgments. The Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the
negotiation, execution and delivery of this Loan Agreement, the
Note and the other Operative Agreements;
(b) the Lender has no fiduciary relationship to the
Borrower, and the relationship between the Lender and the
Borrower is solely that of debtor and creditor; and
(c) no joint venture exists between the Borrower and
the Lender.
9.13 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS LOAN AGREEMENT
OR THE NOTE OR ANY OTHER OPERATIVE AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.
9.14 No Bankruptcy Petition Against Lender. The
Borrower covenants and agrees that it will not institute
against, or join any other Person in instituting against, the
Lender any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings, or other proceedings under any
federal or state bankruptcy or similar law.
9.15 No Recourse. The obligations of the Lender under
this Loan Agreement are solely the corporate obligations of the
Lender. No recourse shall be had for the payment of any amount
owing in respect to this Loan Agreement or for the payment of
any fee hereunder or for any other obligation or claim arising
out of or based upon this Loan Agreement against any
stockholder, employee, officer, director or incorporator of the
Lender or against Mellon Bank, N.A. or any stockholder,
employee, officer, director, incorporator or affiliate thereof.
9.16 No Recourse Against the Borrower's Stockholders.
The obligations of the Borrower under this Loan Agreement are
solely the corporate obligations of the Borrower. No recourse
shall be had for the payment of any amount owing in respect to
this Loan Agreement or for the payment of any fee hereunder or
for any other obligation or claim arising out of or based upon
this Loan Agreement against any stockholder, employee, officer,
director or incorporator of the Borrower or an Affiliate
thereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Loan Agreement to be duly executed and delivered in New
York, New York by their proper and duly authorized officers as
of the day and year first above written.
ESSEX FUNDING INC.
By: /S/ Xxxxx X. Xxxx
--------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President, Treasurer
THREE RIVERS FUNDING CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Authorized Signatory
SCHEDULE 1
to the Loan Agreement
LOCK-BOXES/LOCK BOX-BANKS
1. Xxxxxx Trust and Savings Bank
Attention: Remittance Processing Division, 311/7
X.X. Xxx 000
Xxxxxxx, Xxxxxxxx 00000
Account No. _________________
ABA No. ________________
Xxxx-Xxx Xx. Xxxxxxxx Xxxx
00000 Magnet Wire
71144 Wire and Cable
71248 Automotive
00000 Xxxxx Xxxxxxxx
00000 XX Samica
71785 Cable Communications
71934 Triangle
95356 Appliance Wire
95481 Diamond
95876 HandiWire
95691 Interstate Industries Inc.
EXHIBIT A
to the Loan Agreement
[Form of Note]
$150,000,000 April , 1998
FOR VALUE RECEIVED, the undersigned, upon the terms
and the conditions set forth in the Loan Agreement (as such
term is hereinafter defined), hereby promises to pay to the
order of THREE RIVERS FUNDING CORPORATION (the "Lender"), the
principal sum which is the lesser of One Hundred Fifty Million
Dollars ($150,000,000) and the aggregate unpaid principal
amount from time to time outstanding of all Loans made by the
Lender to the undersigned pursuant to Section 2.1 of the Loan
Agreement, in immediately available funds and in lawful money
of the United States of America on the Commitment Expiration
Date, and to pay interest on the unpaid balance of said
principal sum from time to time outstanding, from the date
hereof until the principal sum shall be paid in full, in like
funds and money, at the office of the Lender as shall be
designated by the Lender, at the rates of interest and at such
times as provided in said Loan Agreement.
This promissory note is the Note referred to in the
Loan Agreement dated as of April 29, 1998 (as the same may from
time to time be amended, the "Loan Agreement"), between the
undersigned and the Lender, to which Loan Agreement reference
is made for a description of the rights of prepayment, the
Events of Termination and the rights of acceleration of
maturity upon the occurrence of an Event of Termination. All
advances made by the Lender to the undersigned pursuant to the
Loan Agreement and all payments made on account of principal
hereof shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on the grid attached hereto which is
part of this promissory note (provided that any failure by the
Lender to make any such endorsement shall not affect the
obligations of the undersigned under this Note in respect of
any such advance).
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
ESSEX FUNDING INC.
By:
--------------------------
Name:
Title:
[REVERSE OF NOTE OR SCHEDULE THERETO]
This Note evidences Loans made by the Lender under
Section 2.1 of the Loan Agreement dated as of April 29, 1998,
as from time to time amended, between ESSEX FUNDING INC. and
the Lender, in the principal amounts and on the dates set forth
below, subject to the payments and prepayments of principal set
forth below:
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT AMOUNT PAID BALANCE
DATE LOANED OR PREPAID OUTSTANDING
EXHIBIT B
to the Loan Agreement
[Form of Initial Loan Request]
Three Rivers Funding Corporation
c/o Merrill Xxxxx Money Markets Inc.
World Financial Center - North Tower
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Ladies and Gentlemen:
This Initial Loan Request is delivered to you pursuant
to Section 2.3 of the Loan Agreement dated as of April 29, 1998
(as such Loan Agreement may be amended, supplemented, restated or
otherwise modified from time to time, the "Agreement") between
Essex Funding Inc. (the "Borrower") and Three Rivers Funding
Corporation (the "Lender"). Unless otherwise defined herein or
the context otherwise requires, all capitalized terms used herein
will have the respective meanings assigned to them in the
Agreement.
The Borrower hereby requests that a Loan be made on
________________, 199_, in the principal amount of $___________.
The Borrower hereby certifies and affirms that (i) the
representations and warranties of the Borrower set forth in each
Operative Document are on the date hereof true and correct in all
material respects as if made on and as of each such date, except
to the extent such representation or warranty specifically
relates to an earlier date, (ii) no Unmatured Event, Event of
Termination or, to the knowledge of the Borrower, Servicer Event
of Default has occurred and is continuing on the date hereof or
shall have occurred and be continuing on the date of the proposed
Loan, and (iii) after giving effect to the making of the Loan
requested hereby, the aggregate principal amount of all Loans
outstanding will not exceed the lesser of (A) the Borrowing Base
and (B) the Commitment.
The Borrower agrees that if, prior to the time that the
Loan requested hereby is made, any matter affirmed herein shall
no longer be true and correct, it will promptly so notify the
Lender. Except to the extent, if any, that prior to the time that
the Loan requested hereby is made the Lender shall receive
written notice to the contrary from the Borrower, each matter
affirmed herein shall be deemed once again to be affirmed as true
and correct in all material respects as of the date of such Loan
as if then made, except to the extent such representation or
warranty specifically relates to an earlier date.
Please wire transfer the proceeds of the requested Loan
to the account(s) of the following Persons at the financial
institution(s) indicated below:
Amount to be Person to be Paid Name, Address, etc.
Transferred Name Account No. of Payee Bank
$----------- ---------- ----------- ------------------
------------------
ABA #_____________
Attention: _______
$---------- ---------- ----------- ------------------
------------------
ABA #_____________
Attention: _______
The Borrower has caused this Initial Loan Request to be
executed and delivered, and the affirmations and warranties
contained herein to be made, by its duly authorized officer this
____ day of __________, 199_.
ESSEX FUNDING INC.
By:
-------------------------
Name:
Title:
cc: Mellon Financial Markets, Inc.
One Mellon Bank Center - Room 0400
Pittsburgh, Pennsylvania 15258-0001
Attention: Xx. Xxxxxxxx X. Xxxxxx
EXHIBIT C
to the Loan Agreement
[Form of Borrowing Base Certificate]
[GRAPHIC OMITTED]
H. All of the Eligible Receivables included above are subject
to security interest granted pursuant to the Loan and
Security Agreement.
I. The undersigned has examined the amounts and calculations
set forth herein and such amounts are true, complete and
correct in all respects as of the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Borrowing Base Certificate on this ____ day of ____________,
199_.
----------------------------
Title:____________________
EXHIBIT D-1
to the Loan Agreement
[Form of Enforceability and Perfection Opinion]
EXHIBIT D-2
to the Loan Agreement
[Form of True Sale and Nonconsolidation Opinion]
EXHIBIT E
to the Loan Agreement
[Form of Lock-Box Agreement]
