ESSEX GROUP, INC.,
DIAMOND WIRE & CABLE CO., and
INTERSTATE INDUSTRIES, INC., as Sellers,
AND
ESSEX GROUP, INC., as Servicer
AND
ESSEX FUNDING INC., Purchaser
SALES AND SERVICING AGREEMENT
Dated as of April 29, 1998
ALL RIGHT, TITLE AND INTEREST IN AND TO THIS AGREEMENT ON THE
PART OF ESSEX FUNDING INC. HAVE BEEN ASSIGNED TO AND ARE SUBJECT
TO A SECURITY INTEREST IN FAVOR OF THREE RIVERS FUNDING
CORPORATION, AS LENDER, UNDER A LOAN AND SECURITY AGREEMENT DATED
AS OF APRIL 29, 1998.
TABLE OF CONTENTS
Page
EXHIBIT A Form of Purchaser Note
EXHIBIT B Form of Credit and Collection Policy
EXHIBIT C Form of Monthly Servicer's Report
SCHEDULE 1 Location of Chief Executive Office
of the Servicer and each Seller
SALES AND SERVICING AGREEMENT
SALES AND SERVICING AGREEMENT dated as of April 29,
1998 among ESSEX GROUP, INC., a Michigan corporation ("Essex"),
DIAMOND WIRE & CABLE CO., an Illinois corporation ("Diamond"),
INTERSTATE INDUSTRIES, INC., a Mississippi corporation
("Interstate"; and, together with Essex and Diamond, the
"Sellers"); ESSEX FUNDING INC., a Delaware corporation (the
"Purchaser"); and ESSEX GROUP, INC., in its capacity as servicer
(the "Servicer").
RECITALS
WHEREAS, the Sellers wish to sell and assign to the
Purchaser and the Purchaser wishes to purchase from the Sellers,
all right, title and interest of each Seller in, to and under its
respective Receivables (such term and all other capitalized terms
used herein and not defined herein having the meanings assigned
thereto in the Loan and Security Agreement dated as of April __,
1998 (as the same may be amended from time to time, the "Loan
Agreement") between Three Rivers Funding Corporation, as lender
(the "Lender"), and the Purchaser, as borrower (the "Purchaser");
WHEREAS, pursuant to the Loan Agreement, the Lender
will make Loans to the Purchaser from time to time the proceeds
of which will be used by the Purchaser to make payment to the
Sellers for the Receivables;
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
SECTION 1. PURCHASE AND SALE OF RECEIVABLES
1.01 Purchases. (a) Initial Purchase. As of the Closing
Date, each Seller hereby sells and assigns to the Purchaser, and
the Purchaser hereby purchases from each Seller, without
recourse, all of each such Seller's right, title and interest in
and to all of its respective Receivables in existence on the
Cut-Off Date.
(b) Subsequent Purchases. Subject to the terms and
conditions hereof, each Seller hereby sells, transfers, assigns,
sets over and conveys to the Purchaser, and the Purchaser hereby
agrees to purchase from each Seller, at the times set forth in
Section 1.02, all of such Seller's right, title and interest in,
to and under (i) all Receivables created by such Seller that
arise during the period from and including the closing of such
Seller's business on the Cut-Off Date to but excluding the
Commitment Expiration Date, and (ii) all proceeds of such
Receivables (including all Collections with respect thereto).
1.02 Timing of Purchases. After the closing of the
Sellers' businesses on the Cut-Off Date until the closing of the
Sellers' businesses on the Business Day immediately preceding the
Commitment Expiration Date, all Receivables of each Seller shall
be sold automatically to the Purchaser pursuant hereto
immediately (and without further action by any Person) upon the
creation of such Receivables.
1.03 Calculation of Purchase Price.
(a) On each Settlement Date, the Servicer shall (i)
deliver to the Purchaser and each Seller a Monthly Servicer
Report with respect to the Purchaser's purchases of Receivables
from each Seller that were made during the immediately preceding
Settlement Period and (ii) record the net increase or decrease in
each Purchaser Note and compute the amount of interest thereon
which is then accrued and unpaid.
(b) On each day when Receivables are purchased by the
Purchaser from the Sellers pursuant to Section 1.01 (including,
without limitation, the Closing Date), the "Purchase Price" to be
paid to each Seller on such day for the Receivables that are to
be sold by such Seller on such day shall be an amount equal to
the product of (i) the aggregate outstanding balance of the
Receivables of such Seller that are to be purchased from such
Seller on such day times (ii) the Purchase Price Percentage.
"Purchase Price Percentage" shall mean the percentage determined
in accordance with the following formula:
PPP = 100% - CLR
where:
PPP = the Purchase Price Percentage in effect
during such Settlement Period, and
CLR = the Credit Loss Reserve (expressed as a
percentage) determined on the Settlement Date
with respect to the immediately preceding
Accounting Period.
The Purchase Price Percentage shall be recomputed by the
Servicer on each Settlement Date, in each case as of the
then most recent Determination Date.
1.04 Purchase Price Payments. On the Business Day
following each day on which any Receivables are purchased by the
Purchaser pursuant to Section 1.01, on the terms and subject to
the conditions of this Agreement, the Purchaser shall pay to each
Seller the Purchase Price for the Receivables purchased on such
day by the Purchaser from such Seller (i) by making a cash
payment pro rata to each such Seller to the extent that the
Purchaser has cash available to make the payment pursuant to
Section 1.06 and (ii) if the Purchase Price to be paid for the
Receivables of such Seller exceeds the amount of any cash
actually paid for the account of such Seller on such day pursuant
to clause (i), by automatically increasing the principal amount
outstanding under the Purchaser Note payable to such Seller by
the amount of the excess.
Each Seller agrees that, prior to the Maturity Date,
the Purchaser shall be required to make payments in respect of
the payment obligations evidenced by the Purchaser Notes only to
the extent that it has cash available under Section 1.06.
1.05 The Purchaser Notes.
(a) On the Closing Date, the Purchaser will deliver to
each Seller a promissory note, substantially in the form of
Exhibit A, payable to the order of such Seller (such promissory
note, as the same may be amended, supplemented, endorsed or
otherwise modified from time to time, together with any
promissory note issued from time to time in substitution therefor
or renewal thereof in accordance with the Sale Documents, being
herein called a "Purchaser Note"). Each Purchaser Note is payable
in full on the date (the "Maturity Date") that is one year and
one day after the date on which all the obligations owed by the
the Purchaser to the Lender under the Loan Agreement have been
repaid in full. Each Purchaser Note shall bear interest at a rate
per annum equal to the rate publicly announced by the Referral
Agent from time to time as its reference rate,
determined as of each Determination Date. The Purchaser may repay
all or part of the outstanding balance of the Purchaser Notes
from time to time without any premium or penalty in accordance
with Section 1.06.
(b) The Servicer (or its designee) shall hold all the
Purchaser Notes for the benefit of the Sellers and shall make all
appropriate recordkeeping entries with respect to the Purchaser
Notes or otherwise to reflect the payments on and adjustment of
the Purchaser Notes. The Servicer's Records shall constitute
rebuttable presumptive evidence of the principal amount of any
accrued interest on each Purchaser Note at any time. Each Seller
hereby irrevocably authorizes the Servicer to xxxx its Purchaser
Note "CANCELED" and return it to the Purchaser upon the final
payment thereof.
1.06 Application of Collections and other Funds. The
Purchaser shall have the right to receive all proceeds with
respect to Collections; provided, however, that the Purchaser
shall have no right to any amounts held in trust by the Servicer
in accordance with Section 4.01 hereof and Section 2.6 of the
Loan Agreement. If, on any day, the Purchaser receives any
amounts as set forth in the preceding sentence, the Purchaser
shall apply the funds as follows:
(a) first, to pay the Purchaser's existing expenses and
to set aside funds for the payment of expenses that are then
accrued (in each case to the extent such expenses are permitted
to exist under Section 6 of the Loan Agreement),
(b) second, to pay the Purchase Price for Receivables
purchased by the Purchaser from each Seller on the next preceding
Business Day,
(c) third, to repay amounts owed by the Purchaser to
each Seller under the Purchaser Notes,
(d) fourth, to loan amounts to the Sellers, and
(e) fifth, to declare and pay dividends to Essex to the
extent permitted by applicable law and the Operative Agreements.
1.07 Monthly Calculations. For ease of computation, the
Purchaser and each Seller agree that the daily payments and
adjustments to the balance of the Purchaser Notes shall occur
automatically and without a requirement for immediate
computation, and Servicer shall only be required to reconcile the
amounts of the foregoing payments on a monthly basis on each
Determination Date.
1.08 Deemed Collections. (a) If on any day the Account
Balance of a Receivable is reduced as a result of a Dilution with
respect to such Receivable, the Seller from whom the Purchaser
purchased such Receivable shall be deemed to have received on
such day a Collection with respect to such Receivable in the
amount of such reduction. If on any day any of the
representations and warranties of any Seller set forth in Section
2.03(a) of this Sales and Servicing Agreement is no longer true
or was not true when made with respect to such Receivable, of any
of the representations and warranties of the Seller set forth in
Section 2.03(b) of this Sales and Servicing Agreement was not
true when made, the Seller from whom the Purchaser purchased such
Receivable shall be deemed to have received on such day a
Collection of such Receivable in full.
(b) In order to effect any deemed Collection required
by paragraph (a) above, the Purchaser and each Seller agree that
either (i) the Purchase Price for any Receivable with respect to
which a deemed Collection shall have occurred shall be reduced by
the amount of such payment or (ii) the principal amount
outstanding under such Seller's Purchaser Note on such date shall
be increased by such amount.
1.09 Payments and Computations, Etc.
(a) All amounts to be paid by any Seller to the
Purchaser hereunder shall be received in accordance with the
terms hereof no later than 1:00 p.m., New York City time, on the
day when due in Dollars in immediately available funds in an
account that the Purchaser shall from time to time specify in
writing. Payments received by the Purchaser after such time shall
be deemed to have been received on the next Business Day. In the
event that any payment otherwise is scheduled to become due on a
day that is not a Business Day, then payment shall become due on
the next Business Day. Each Seller shall, to the extent permitted
by applicable law, pay to the Purchaser, on demand, interest on
all amounts not paid when due hereunder at 2% per annum above the
interest rate on the Purchaser Note in effect on the date the
payment was due; provided, however, that the
interest rate shall not at any time exceed the maximum rate
permitted by applicable law. All computations of interest payable
hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first but excluding the
last day) elapsed.
(b) All amounts to be paid by the Purchaser to any
Seller hereunder shall be paid to such Seller no later than 2:00
p.m., New York City time, on the day when due in Dollars in
immediately available funds to an account that each Seller shall
from time to time specify in writing. Payments received by a
Seller after such time shall be deemed to have been received on
the next Business Day. In the event that any payment otherwise is
scheduled to become due on a day that is not a Business Day, then
such payment shall become due on the next Business Day.
1.10 No Recourse. Except as specifically provided in
this Sales and Servicing Agreement, the sale and purchase of
Receivables under this Agreement shall be without recourse to any
Seller; it being understood that each Seller shall be liable to
the Purchaser for all of its respective representations,
warranties, covenants and indemnities made by such Seller
pursuant to the terms of this Sales and Servicing Agreement, all
of which obligations have been designed so as not to constitute
recourse to any such Seller for the credit risk of the Obligors.
1.11 No Assumption of Obligations. Neither the
Purchaser nor the Lender shall have any obligation or liability
to any Obligor or other customer or client of any Seller
(including any obligation to perform any of the obligations of
any such the Seller under any Receivable, related Contracts or
any other related purchase orders or other agreements). No such
obligation or liability is intended to be assumed by the Purchase
or the Lender hereunder, and any assumption thereof is
expressly disclaimed.
1.12 True Sales. (a) Each Seller and the Purchaser
intend the transfers of such Seller's respective Receivables
hereunder to be true sales by such Seller to the Purchaser that
are absolute and irrevocable and that provide the Purchaser with
the full benefits of ownership of the Receivables, and neither
any Seller nor the Purchaser intends the transactions
contemplated hereunder to be, or for any purpose to be
characterized as, loans from the Purchaser to such Seller.
(b) It is, further, not the intention of the Purchaser
or any Seller that the conveyance of its respective Receivables
be deemed a grant of a security interest in such Receivables by
such Seller to the Purchaser to secure a debt or other obligation
of such Seller. However, in the event that, notwithstanding the
intent of the parties, any Receivables are property of any
Seller's estate, (i) this Sales and Servicing Agreement also
shall be deemed to be and hereby is a security agreement within
the meaning of the Uniform Commercial Code of any applicable
jurisdiction, and (ii) the conveyance by each Seller provided for
in this Sales and Servicing Agreement shall be deemed to be a
grant by such Seller to the Purchaser of, and such Seller hereby
grants to the Purchaser, a security interest in and to all of
such Seller's right, title and interest in, to and under the
Receivables to secure the rights of the Purchaser hereunder. Each
Seller and the Purchaser shall, to the extent consistent with
this Sales and Servicing Agreement, take such actions as may be
necessary to ensure that, if this Sales and Servicing Agreement
were deemed to create a security interest in the Receivables,
such security interest would be deemed to be a perfected security
interest of first priority (subject to Liens created or permitted
under the Loan Agreement) in favor of the Purchaser under
applicable law and will be maintained as such throughout the term
of this Sales and Servicing Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES
Each Seller hereby represents and warrants as of the
date of this Sales and Servicing Agreement and as of each
transfer of its Receivables hereunder as follows:
2.01 Corporate Organization and Authority.
Such Seller:
(a) is a corporation duly organized, validly
existing and in good standing under the laws
of its jurisdiction of incorporation,
(b) has all requisite power and authority and all
necessary licenses and permits to own and
operate its properties and to carry on its
business as now conducted (except where the
failure to have such licenses and permits
would not have a material adverse effect on
the Collateral or the business or condition
(financial or otherwise) of such Seller or
impair the enforceability of any of its
Receivables or the ability of such Seller to
perform any of its obligations under any of
the Operative Agreements) and to enter into
and perform its obligations under this Sales
and Servicing Agreement and the transactions
contemplated hereby and thereby, including
(with respect to Essex only) performance of
the duties of the Servicer hereunder,
(c) has duly qualified and is authorized to do
business and is in good standing as a foreign
corporation in each jurisdiction where the
character of its properties or the nature of
its activities makes such qualification
necessary (except where the failure to be so
qualified or in good standing would not have
a material adverse effect on the Collateral
or the business or condition (financial or
otherwise) of such Seller or impair the
enforceability of any of its Receivables or
the ability of such Seller to perform any of
its obligations under any of the Operative
Agreements),
(d) has no place of business other than as set
forth for such Seller on Schedule 1 attached
hereto, and
(e) for the past six years, has not had any legal
name or operated under any name other than
the name set forth for such Seller on page
one of this Sales and Servicing Agreement.
2.02 Financial Statements. (a) The consolidated balance
sheets of Essex and its subsidiaries (including, without
limitation, the other Seller which are parties hereto) for the
years ended December 31, 1997, December 31, 1996 and December 31,
1995 and the related consolidated statements of income, retained
earnings and cash flow for the respective periods and fiscal
years ended on such dates, all accompanied by reports thereon
containing opinions without qualification, except as therein
noted, by [Insert name of accountants], independent certified
public accountants (with respect to the financial statements for
the years ended December 31, 1997, December 31, 1996 and December
31, 1995, the unaudited consolidated balance sheet of Essex as of
______ __, 1998 and the related statements of income for three
months ended on such date have been prepared in accordance with
generally accepted accounting principles consistently applied,
and present fairly the financial position of Essex and its
subsidiaries as of such dates and the results of their operations
for such periods.
(b) Since December 31, 1997, there has been no change
in the business or condition (financial or otherwise) of such
Seller in the financial statements referred to in Section
2.02(a), except changes in the ordinary course of business, none
of which individually or in the aggregate has been materially
adverse. Neither such Seller nor any of its subsidiaries has any
material liabilities or obligations not incurred in the ordinary
course of business in the financial statements referred to in
Section 2.02(a) or for which adequate reserves are reflected in
such financial statements.
2.03 Receivables. With respect to the Receivables of
such Seller:
(a) Upon payment by the Purchaser of the Purchase Price
to such Seller to be paid for the purchase of each Receivable
from such Seller as provided in Section 1.03 hereof, the
Purchaser will be the legal owner of such Receivable (including
the Collections and the right to receive all other payments due
or to become due thereunder) and such ownership interest will be
duly perfected. At such time, such Receivables (including the
Collections and the right to receive all other payments due or to
become due thereunder) will be free and clear of all Liens other
than the Lien created by the Loan Agreement.
(b) At the time of each acquisition of a Receivable by
the Purchaser hereunder, each such Receivable will be a legal,
valid and binding full recourse obligation of the Obligor
thereunder, enforceable by the Purchaser (and by the Lender as
assignee of the Purchaser) against such Obligor in accordance
with the terms thereof, except as such enforcement may be limited
by bankruptcy, insolvency, reorganization or similar laws
relating to or affecting the enforcement of creditors' rights,
and will be in full force and effect, and any and all
requirements of any federal, state or local law including,
without limitation, usury, truth-in-lending and equal credit
opportunity laws applicable to such Receivable will have been
complied with, and such Seller will have no knowledge (after due
inquiry) of any challenge or dispute by the Obligor under such
Receivable or of the bankruptcy or insolvency of any such
Obligor.
(c) Each Receivable will have been entered into or
acquired in accordance with the Credit and Collection Policy, a
copy of which is attached hereto as Exhibit B.
(d) All amounts to be paid under each Receivable are
stated in United States Dollars and are to be paid in legal
tender in the United States of America.
(e) There will be no facts or circumstances existing as
of the time of each transfer of Receivables hereunder which give
rise, or would give rise at any time in the future, to any right
of rescission, offset, counterclaim or defense, including the
defense of usury, to the obligations of any Obligor, including
the obligation of such Obligor to pay all amounts due with
respect to any Receivable to which such Obligor is a party, and
neither the operation of any of the terms of any Receivable nor
the exercise of any right thereunder will render such Receivable
unenforceable in whole or in part or subject to any right of
rescission, offset, counterclaim or defense, including the
defense of usury, and no such right of rescission, offset,
counterclaim or defense will have been asserted with respect
thereto.
(f) No Receivable will have been originated in or be
subject to the laws of any jurisdiction whose laws would make the
transfer and sale thereof under this Sales and Servicing
Agreement unlawful.
(g) The sale of the Receivables will at all times be
reflected on such Seller's consolidating balance sheet and other
financial statements as a sale and contribution of assets by such
Seller under GAAP.
(h) No Obligor is the United States of America or any
agency, department or instrumentality of the United States of
America. Each Obligor is a United States resident.
(i) Each Receivable is an "eligible asset" as defined
in Rule 3a-7 under the Investment Company Act of 1940, as
amended.
2.04 Full Disclosure. As of the Closing Date and each
date upon which the Purchaser acquires Receivables from such
Seller hereunder, there will be no fact peculiar to such Seller
or any Affiliate of such Seller or, to the knowledge of such
Seller, any Receivable or Obligor which such Seller will not have
disclosed in writing to the Purchaser and the Lender that
materially affects adversely nor, so far as such Seller then can
reasonably foresee, will materially affect adversely the ability
of such Seller to perform the transactions contemplated by this
Sales and Servicing Agreement.
2.05 Pending Litigation. There are no proceedings or
investigations pending, or to the knowledge (after due inquiry)
of such Seller threatened, against or affecting such Seller or
any subsidiary in or before any court, governmental authority or
agency or arbitration board or tribunal which, individually or in
the aggregate, involve the possibility of materially and
adversely affecting the properties, business, prospects, profits
or condition (financial or otherwise) of such Seller and its
subsidiaries, or the ability of such Seller to perform its
obligations under this Sales and Servicing Agreement or any other
Operative Agreement. Such Seller is not in default with respect
to any order of any court, governmental authority or agency or
arbitration board or tribunal.
2.06 Transactions Legal and Authorized. This Sales and
Servicing Agreement and the transfer by such Seller to the
Purchaser of all of such Seller's right, title and interest in
and to each Receivable of such Seller (including the Collections
and the right to receive all other payments due or to become due
thereunder) at any time transferred hereunder and compliance by
such Seller with all of the provisions of this Sales and
Servicing Agreement:
(a) have been duly authorized by all necessary
corporate action on the part of such Seller, and do not and will
not require any stockholder approval, or approval or consent of
any trustee or holders of any indebtedness or obligations of such
Seller except such as have been duly obtained;
(b) are within the corporate powers of such Seller; and
(c) are legal, valid and binding obligations of such
Seller enforceable in accordance with their terms and will not
conflict with, result in any breach in any of the provisions of,
constitute a default under, or result in the creation of any Lien
upon any property of such Seller under the provisions of, any
agreement, charter instrument, by-law or other instrument to
which such Seller is or will be a party or by which it or its
property may be bound or result in the violation of any law,
regulation, rule, order or judgment applicable to such Seller or
its properties of or by any government or governmental agency or
authority.
2.07 Governmental Consent. No consent, approval or
authorization of, or filing, registration or qualification with,
any governmental authority is or will be necessary or required on
the part of such Seller in connection with the execution,
delivery and performance of this Sales and Servicing Agreement or
the transfer of the Receivables of such Seller hereunder.
2.08 Taxes. (a) All tax returns required to be filed by
such Seller or any subsidiary in any jurisdiction have in fact
been filed, and all taxes, assessments, fees and other
governmental charges upon such Seller or any subsidiary thereof,
or upon any of their respective properties, income or franchises,
shown to be due and payable on such returns have been paid. All
such tax returns were true and correct, and neither such Seller
nor any subsidiary thereof knows of any proposed additional tax
assessment against it in any material amount nor of any basis
therefor.
(b) The provisions for taxes on the books of such
Seller and each subsidiary thereof are in accordance with
generally accepted accounting principles.
(c) Such Seller is not consolidated with any entity
other than Essex International, Inc. and other direct or indirect
subsidiaries of Essex International, Inc. for federal income tax
purposes.
2.09 Compliance with Law. Such Seller:
(a) is not in violation of any laws, ordinances,
governmental rules or regulations to which it is
subject,
(b) has not failed to obtain any licenses, permits,
franchises or other governmental authorizations
necessary to the ownership of its property or to
the conduct of its business, and
(c) is not in violation of any term of any agreement,
charter instrument, by-law or other instrument to
which it is a party or by which it may be bound,
which violation or failure to obtain might materially adversely
affect the business or condition (financial or otherwise) of such
Seller and its subsidiaries or such Seller's ability to perform
its obligations under the Operative Agreements.
2.10 ERISA. (a) The present value of all benefits
vested under all "employee pension benefit plans," as such term
is defined in Section 3 of ERISA, maintained by the such Seller
and its Related Persons, or in which employees of such Seller or
any Related Person are entitled to participate, as from time to
time in effect (herein called the "Pension Plans"), does not
exceed the value of the assets of the Pension Plans allocable to
such vested benefits (based on the value of such assets as of the
last annual valuation date for the Pension Plans);
(b) No Prohibited Transactions, Accumulated Funding
Deficiencies, withdrawals or Reportable Events have occurred with
respect to any Pension Plans that, in the aggregate, could
subject such Seller to any material tax, penalty or other
liability; and
(c) No notice of intent to terminate a Pension Plan has
been filed, nor has any Pension Plan been terminated under
Section 4041(f) of ERISA, nor has the PBGC instituted proceedings
to terminate, or appoint a trustee to administer, a Pension Plan
and no event has occurred or condition exists which might
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer,
any Pension Plan.
2.11 Ordinary Course; No Insolvency. The transactions
contemplated by this Sales and Servicing Agreement are being
consummated by such Seller in furtherance of such Seller's
ordinary business purposes and constitute a practical and
reasonable course of action by such Seller designed to improve
the financial position of such Seller, with no contemplation of
insolvency and with no intent to hinder, delay or defraud any of
its present or future creditors. Neither as a result of the
transactions contemplated by this Sales and Servicing Agreement,
nor immediately before or after any such transactions, will such
Seller be insolvent or have an unreasonably small capital for the
conduct of its business and the payment of its anticipated
obligations. No Event of Bankruptcy has occurred with respect to
such Seller.
2.12 Assets and Liabilities. (a) Both immediately
before and after the sale of its Receivables (including the right
to receive all Collections due or to become due thereunder)
contemplated by this Sales and Servicing Agreement, the present
fair salable value of such Seller's assets will be in excess of
the amount that will be required to pay such Seller's probable
liabilities as they then exist and as they become absolute and
matured; and
(b) Both immediately before and after the sale of its
Receivables (including the right to receive all Collections due
or to become due thereunder) contemplated by this Sales and
Servicing Agreement, the sum of such Seller's assets will be
greater than the sum of such Seller's debts, valuing such
Seller's assets at a fair salable value.
2.13 Fair Consideration. The consideration received by
such Seller in exchange for the transfer of its Receivables
(including the right to receive all Collections due or to become
due thereunder) is fair consideration having value equivalent to
or in excess of the value of the assets being transferred by such
Seller.
2.14 Ability to Pay Debts. Neither as a result of the
transactions contemplated by this Sales and Servicing Agreement
nor otherwise does such Seller believe that it will incur debts
beyond its ability to pay or which would be prohibited by its
charter documents or bylaws. Such Seller's assets and cash flow
enable it to meet its present obligations in the ordinary course
of business as they become due.
2.15 Bulk Transfer Provisions. The sale, transfer,
assignment and conveyance of its Receivables by such Seller to
the Purchaser contemplated by this Sales and Servicing Agreement
will not be subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
2.16 Transfer Taxes. No sale, transfer, assignment or
conveyance of its Receivables contemplated by this Sales and
Servicing Agreement is subject to or will result in any tax, fee
or governmental charge payable by such Seller or the Purchaser to
any federal, state or local government ("Transfer Taxes"). In the
event that such Seller or the Purchaser receives actual notice of
any Transfer Taxes arising out of the transfer, assignment and
conveyance of any of such Seller's Receivables, on written demand
by the Purchaser, or upon such Seller otherwise being given
notice thereof, such Seller shall pay, and otherwise indemnify
and hold the Purchaser and the Lender harmless, on an after-tax
basis, from and against any and all such Transfer Taxes (it being
understood that the Lender shall not have any obligation to pay
such Transfer Taxes).
2.17 Chief Executive Office. The chief executive office
of such Seller is as set forth on Schedule 1 attached hereto, and
such Seller has not had any other location as its chief executive
office for the four months immediately preceding the Closing
Date.
SECTION 3 REPRESENTATIONS AND WARRANTIES
OF THE SERVICER
The Servicer represents and warrants (in the case of
the initial Servicer, as of the date hereof, and in the case of
any Servicer appointed thereafter pursuant to Section 8, as of
the date of its acceptance of its appointment, and in each case
as of the date of each Monthly Servicer Report) as follows:
3.01 Organization and Qualification. The Servicer is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation. The Servicer
is duly qualified to do business as a foreign corporation in good
standing in each jurisdiction in which the ownership of its
properties or the nature of its activities or both, requires it
to be so qualified or, if not so qualified, the failure to so
qualify would not have a material adverse effect on its business,
operations, properties or financial condition.
3.02 Authorization. The Servicer has the corporate
power and authority to execute and deliver this Sales and
Servicing Agreement and to perform its obligations hereunder.
3.03 Execution and Binding Effect. This Sales and
Servicing Agreement has been duly and validly executed and
delivered by the Servicer and constitutes a legal, valid and
binding obligation of the Servicer enforceable in accordance with
its terms.
3.04 Authorizations and Filings. No authorization,
consent, approval, license, exemption or other action by, and no
registration, qualification, designation, declaration or filing
with, any Official Body is or will be necessary or, in the
opinion of the Servicer, advisable in connection with the
execution and delivery of this Sales and Servicing Agreement, the
consummation of the transactions herein contemplated or the
performance of or the compliance with the terms and conditions
hereof by the Servicer, to ensure the legality, validity or
enforceability hereof.
3.05 Absence of Conflicts. Neither the execution and
delivery of this Sales and Servicing Agreement, nor the
consummation of the transactions herein contemplated, nor the
performance of or the compliance with the terms and conditions
hereof by the Servicer, will (i) violate any Law or (ii) conflict
with or result in a breach of or a default under (A) the articles
or certificate of incorporation or by-laws of the Servicer or (B)
any agreement or instrument, including, without limitation, any
and all indentures, debentures, loans or other agreements to
which the Servicer is a party or by which it or any of its
properties (now owned or hereafter acquired) may be subject or
bound.
3.06 No Termination Event. No event has occurred and is
continuing and no condition exists which constitutes a
Termination Event or an Unmatured Event.
3.07 Accurate and Complete Disclosure. No information,
whether written or oral, furnished by the Servicer to the
Purchaser pursuant to or in connection with this Sales and
Servicing Agreement or any transaction contemplated hereby,
including without limitation information regarding the Lock-Box
Accounts and Lock-Box Banks, is false or misleading in any
material respect (and with respect to any Monthly Servicer
Report, when furnished, in any respect, whether or not material)
as of the date as of which such information was furnished
(including by omission of material information necessary to make
such information not misleading).
3.08 No Proceedings. There are no proceedings or
investigations pending or threatened before any court, official
body, regulatory body, administrative agency, or other tribunal
or governmental instrumentality (A) asserting the invalidity of
any of this Sales and Servicing Agreement, (B) seeking to prevent
the consummation of any of the transactions contemplated by any
of this Sales and Servicing Agreement, or (C) seeking any
determination or ruling that could materially and adversely
affect (i) the performance by the Servicer of its obligations
under this Sales and Servicing Agreement or (ii) the validity or
enforceability of the Contracts or any material amount of the
Receivables.
SECTION 4. SERVICING OF RECEIVABLES
4.01 Servicer to Act. (a) Following the transfer and
assignment by each Seller of its respective Receivables
(including the right to receive all Collections due or to become
due thereunder) and until such time as a Complete Servicing
Transfer shall have occurred, Essex, as the Servicer, for the
benefit of the Purchaser, will service, administer and collect
each Receivable in accordance with the terms thereof and of this
Sales and Servicing Agreement; provided, however, that upon
written approval by the Lender such duties may be delegated by
Essex to any of its Affiliates or a third party (without
impairment of Essex's Obligations as Servicer). The Servicer
shall receive all Collections on or in respect of each Receivable
and shall keep accurate records thereof and of the Receivables to
which each such payment relates. Any amount received by the
Servicer from time to time from any Seller, the Purchaser or any
Obligor which is or is intended to be subject to the Lien of the
Loan Agreement shall be held in trust by the Servicer for
application in accordance with the provisions of the Loan
Agreement.
(b) The Servicer shall do, and shall have full power
and authority to do, subject only to the specific requirements
and prohibitions of this Sales and Servicing Agreement, any and
all things in connection with the servicing and administration of
the Receivables which are consistent with the manner in which it
services receivables constituting part of its own portfolio and
consistent with customary practices of prudent servicers, but in
performing its duties hereunder, the Servicer will act on behalf
and for the benefit of the Purchaser and the Lender, subject at
all times to the provisions of the Loan Agreement, without regard
to any relationship which the Servicer or any Affiliate of the
Servicer may otherwise have with an Obligor. The Servicer shall
at all times act in accordance with the provisions of each
Receivable, and shall observe and comply with all requirements of
law applicable to it. The Servicer shall, to the maximum extent
permitted by law, have the power and authority, on behalf of the
Purchaser as part of the Servicer's administrative and servicing
obligations hereunder, to take such action in respect of any
Receivable as the Servicer may deem advisable, including the
resale of any repossessed, returned or rejected goods; provided,
however, that the Servicer may not under any circumstances
compromise, rescind, cancel, adjust or modify (including by
extension of time for payment or granting any discounts,
allowances or credits) the Account Balance of the related
Contract for any Receivable, except in accordance with the Credit
and Collection Policy. The Servicer undertakes to comply with
each of the covenants of the Seller included herein in respect of
which each Seller undertakes to cause the Servicer to take or
avoid taking actions specified therein.
(c) Without limiting the generality of the foregoing,
the Servicer agrees to (i) invoice each Obligor for all payments
required to be paid by such Obligor in such manner and to the
same extent as the Servicer does with respect to similar
receivables held for its own account, (ii) maintain with respect
to each Receivable, and with respect to each payment by each
Obligor and compliance by each Obligor with the provisions of
each Receivable, complete and accurate records in the same form
and to the same extent as the Servicer does with respect to
receivables held for its own account (which records shall be at
least as complete and accurate as those maintained by the
Servicer as of the date of this Sales and Servicing Agreement),
and (iii) execute, deliver and file (or cause the same to be
done), and the Servicer is hereby authorized and empowered to
execute, deliver, and file on behalf of the Purchaser and the
Lender, any and all tax returns with respect to sales, use,
personal property and other taxes (other than corporate income
tax returns) and any and all reports or licensing applications
required to be filed in any jurisdiction with respect to any
Receivable and any and all filings required by Section 4.01(d)
below.
(d) On or prior to the Closing Date, the Servicer will
file the Financing Statements and assignments of Financing
Statements required by the Operative Agreements, and the Servicer
thereafter will file such additional Financing Statements and
continuation statements and assignments with respect thereto as
may be necessary so that the ownership interest contemplated by
this Sales and Servicing Agreement in favor of the Purchaser and
the Lien contemplated by the Loan Agreement in favor of the
Lender in each of the Receivables will be perfected by such
filings with the appropriate Uniform Commercial Code Filing
offices. The Purchaser agrees to execute such Financing
Statements and continuation statements as shall be necessary and
shall furnish the Servicer with any powers of attorney or other
documents necessary and appropriate to enable the Servicer to
carry out its servicing and administration duties hereunder.
(e) In the event of a default under any Receivable
before a Servicer Event of Default, the Servicer shall, at the
expense of the Seller from whom such Receivable was purchased
hereunder, to the maximum extent permitted by law, have the power
and authority, on behalf of the Purchaser as part of the
Servicer's administrative and servicing obligations hereunder, to
take any action in respect of any such Receivable as the Servicer
may deem advisable; provided, however, that the Servicer or such
Seller, as the case may be, shall take no enforcement action
(judicial or otherwise) with respect to such Receivable, except
in accordance with the Credit and Collection Policy. The Servicer
or such Seller, as the case may be, will apply or will cause to
be applied at all times before a Servicer Event of Default the
same standards and follow the same procedures with respect to
deciding to commence, and in prosecuting, litigation on such
Receivables as is applied and followed with respect to like
accounts not owned by the Purchaser. In no event shall the
Servicer or such Seller, as the case may be, be entitled to make
or authorize any Person to make the Purchaser a party to any
litigation without the Purchaser's express prior written consent.
(f) The Purchaser may, but shall have no obligation to,
take any action or commence any proceeding to realize upon any
Receivable. At such time as the Servicer or a Seller, as the case
may be, has any obligation to pursue the collection of
Receivables and the Purchaser possesses any documents necessary
therefor, the Purchaser agrees to furnish such documents to the
Servicer or such Seller, as the case may be, to the extent and
for the period necessary for the Servicer or such Seller, as the
case may be, to comply with its obligations hereunder.
(e) The Servicing Fee shall constitute the Servicer's
compensation for performing its responsibilities as the servicer
hereunder. If Essex is the Servicer, the Servicing Fee shall not
be paid on or after any day on which a Termination Event shall
have occurred and be continuing.
4.02 Monthly Servicer Reports. The Servicer shall
submit to the Purchaser and the Lender on each Determination
Date, a Monthly Servicer Report in the form of Exhibit C attached
hereto, signed by an Authorized Officer of the Servicer and
including information in respect of the Receivables as of the
last day of the Accounting Period most recently completed. The
execution and delivery of any Monthly Servicer Report shall
constitute a representation and warranty by each Seller and the
Servicer that the information contained therein is true and
correct as of the date thereof. Such Monthly Servicer Report
shall be accompanied by such other information as the Purchaser
and the Lender may reasonably request.
4.03 Receivables Status. Upon ten (10) Business Days'
notice from the Purchaser or the Lender, the Servicer will
furnish or cause to be furnished to the Purchaser and the Lender
a written report, signed by an Authorized Officer of the
Servicer, containing such information as the Purchaser or the
Lender may reasonably request (in such form as the Purchaser or
Lender may reasonably request), which shall include, without
limitation, with respect to the Receivables (a) the Account
Balances of the Contracts for all Receivables, together with all
Collections, Dilutions, and other adjustments to such Receivables
since the date of the last written report furnished to the
Purchaser and the Lender, and an aging of all Contracts as of a
date no later than the date of such notice; and (b) an analysis
and explanation of significant variances, if any, between actual
Collections of Receivables during such Accounting Period and
historical collections experience.
4.04 Daily Settlements. (a) On each day with regard to
each Settlement Period, the Collections shall be allocated first,
in accordance with the provisions of Section 2.6 of the Loan
Agreement, and then in accordance with the provisions of
Section 1.06 of this Sales and Servicing Agreement. The Servicer
shall hold the Collections in trust for the benefit of the
Persons to whom such Collections are allocated in accordance with
the foregoing sentence. Notwithstanding the foregoing, in the
event that at the end of any Settlement Period the amounts held
in trust for the benefit of the Lender pursuant to Section 2.6 of
the Loan Agreement and not previously paid to the Lender are less
than the accrued and unpaid amounts so allocated to the Lender
for such Settlement Period, then any amount which had been deemed
to be a remainder during such Settlement Period (up to the amount
of such deficit in the amount available to pay the Lender) shall
be deemed to have been held in trust for the benefit of the
Lender.
(b) On each Settlement Date, the Servicer shall pay to
the Lender and the Servicer the amounts held in trust for the
benefit of the Lender and the Servicer, respectively, pursuant to
subsection (a) above and not previously paid to the Lender and
the Servicer, respectively.
4.05 Allocation of Collections. Except as required by
applicable law or the underlying Contract, if any Obligor is
obligated under one or more Receivables and also under one or
more Contracts not constituting Receivables, then any payment
received from or on behalf of such Obligor shall be applied (i)
to a specific Contract if the Obligor designates such payment to
be so applied, or (ii) to the Receivables in the order in which
payments are due thereunder if the application of such payment is
not so designated.
4.06 Maintenance of Information and Computer Records.
Each Seller will, or will cause the Servicer to, hold in trust
and keep safely for the Purchaser all evidence of the Purchaser's
right, title and interest in the Receivables. Each Seller will,
or will cause the Servicer to, on or prior to the Closing Date,
and with respect to all Receivables that are purchased after the
Closing Date, on each respective date such Receivables are added,
place an appropriate code or notation in its Records to indicate
those Receivables which are or which will be sold hereunder.
4.07 Maintenance of the Location of Writings and
Records. Each Seller will at all times until completion of a
Complete Servicing Transfer keep or cause to be kept at its chief
executive office or at an office of the Servicer designated in
advance to the Purchaser, separate and apart from all other
Records, each writing or Record which evidences, and which is
necessary or desirable to establish or protect, including such
books of account and other Records as will enable the Purchaser
or its designee to determine at any time the status of each
Receivable.
4.08 Indemnification. The Servicer shall indemnify the
Purchaser in respect of any losses, claims, damages, liabilities,
costs or expenses incurred or arising out of any action taken or
caused to be taken by the Servicer under this Section 4.
4.09 Complete Servicing Transfer. (a) If at any time a
Servicer Event of Default shall have occurred and be continuing,
the Lender may, by notice in writing to each Seller and Essex,
terminate Essex's capacity as Servicer in respect of the
Receivables (such termination referred to herein as a "Complete
Servicing Transfer"), notify Obligors of its interest in the
Receivables, take control of the Lock-Box Accounts and exercise
all other incidences of ownership in the Receivables. After a
Complete Servicing Transfer, the Lender may administer, service
and collect the Receivables itself, and in such event may retain
the Servicing Fee for its own account, in any manner it sees fit,
including, without limitation, by compromise, extension or
settlement of such Receivables. Alternatively, the Lender may
engage Mellon Bank to perform all or any part of the
administration, servicing and collection of the Receivables and
pay to Mellon Bank all or a portion of the Servicing Fee in
consideration thereof.
(b) Essex, within ten (10) Business Days after
receiving a notice pursuant to Section 4.09(a) hereof, shall, at
its own cost and expense, deliver or cause to be delivered to the
Lender or its designated agent (i) a schedule of the Receivables
indicating as to each such Receivable information as to the
related Obligor, the Account Balance as of such date of the
related Contract and the location of the evidences of such
Receivable and related Contract, together with such other
information as the Purchaser may reasonably request and (ii) all
evidence of such Receivables and related Contracts and such other
Records related thereto (including, without limitation, true
copies of any computer tapes and data in computer memories) as
the Lender may reasonably deem necessary to enable it to protect
and enforce its rights to, or its position as owner of such
Receivables. After any such delivery, neither any Seller nor
Essex will hold or retain any executed counterpart or any
document evidencing such Receivables or related Contracts without
clearly marking the same to indicate conspicuously that the same
is not the original and that transfer thereof does not transfer
any rights against the related Obligor or any other Person.
(c) From and after the occurrence of a Complete
Servicing Transfer, each Seller and the Servicer will cause to be
transmitted and delivered directly to the Lender or its
designated agent, for the Lender's own account, forthwith upon
receipt and in the exact form received, all Collections (properly
endorsed, where required, so that such items may be collected by
the Purchaser) on account of its interest in the Receivables. All
such Collections consisting of cash shall not be commingled with
other items or monies of any Seller or Essex for a period longer
than the lesser of (i) two (2) Business Days or (ii) the number
of days specified in Section 9-306(4)(d) of the Uniform
Commercial Code as in effect in the jurisdiction whose laws
govern the rights of the Lender in and to any such Collections.
If the Lender or its designated agent receives items or monies
that are not payments on account of the Receivables, such items
or monies shall be delivered promptly to the related Seller after
being so identified by the Lender or its designated agent. Each
Seller hereby irrevocably grants the Lender or its designated
agent, if any, an irrevocable power of attorney, with full power
of substitution, coupled with an interest, to take in the name of
such Seller all steps with respect to such Receivable which the
Lender, in its sole discretion, may deem necessary or advisable
to negotiate or otherwise realize on any right of any kind held
or owned by such Seller or transmitted to or received by the
Lender or its designated agent (whether or not from such Seller
or any Obligor) in connection with such Receivable; provided,
however, that the Lender hereby agrees not to exercise, and not
to permit its designated agents to exercise, such power of
attorney unless a Servicer Event of Default shall have occurred
and be continuing. The Lender will provide such periodic
accountings and other information related to disposition of funds
so collected as any Seller may reasonably request.
(d) Essex agrees that, in the event of a Complete
Servicing Transfer, it will reimburse the Lender for all
out-of-pocket expenses (including, without limitation, attorneys'
and accountants' and other third parties' fees and expenses,
expenses incurred by the Referral Agent's credit recovery group
(or any successor), expenses of litigation or preparation
therefor, and expenses of audits and visits to the offices of
Essex) incurred by the Lender or the Referral Agent in connection
with and following the transfer of functions following a Complete
Servicing Transfer (excluding, however, the fees of any successor
Servicer).
(e) At any time, and from time to time following a
Complete Servicing Transfer, or if a Servicer Event of Default or
potential Servicer Event of Default shall have occurred and be
continuing, each Seller, Essex and the Servicer shall permit such
Persons as the Lender may designate to open and inspect all mail
received by any Seller or the Servicer at any of its offices, and
to remove therefrom any and all Collections or other
correspondence from Obligors or Essex in respect of Receivables.
All Collections received by the Purchaser shall be applied in
accordance with Section 4.04 hereof. The Lender shall be entitled
to notify the Obligors of Receivables to make payments directly
to the Lender of amounts due thereunder at any time and from time
to time following the occurrence of (i) a Servicer Event of
Default, (ii) a Complete Servicing Transfer, or (iii) a violation
by the Seller of the provisions of Section 4.10 hereof.
4.10 Lockboxes. Each Seller and Essex hereby agree (i)
to cause all Collections which may be sent by mail as payment on
account of Receivables to be mailed by Obligors to the Lock-Box
Accounts; (ii) to make or cause the Servicer to make the
necessary bookkeeping entries to reflect such Collections on the
Records pertaining to such Receivables; (iii) to apply or cause
the Servicer to apply all such Collections as provided in this
Sales and Servicing Agreement; and (iv) not to amend or modify
any term, with respect to the disposition of such Collections or
any other amounts received by the Seller, Essex or the Servicer
or any Lock-Box Bank, of this Sales and Servicing Agreement or
any other agreement (including instructions with respect thereto)
without the prior written consent of the Purchaser to such
amendment or modification.
4.11 Receivable Amendments and Modifications. In
performing its obligations hereunder, the Servicer may, acting in
the name of the Purchaser and without the necessity of obtaining
the prior consent of the Purchaser or the Lender, enter into and
grant modifications, waivers and amendments to the terms of any
Receivable so long as such modifications, waivers or amendments
(i) are consistent with the servicing standards set forth in
Section 4.01 above and the Credit and Collection Policy, (ii) do
not reduce the amount or extend the time for payment of any
Receivable or the Obligor's absolute and unconditional obligation
to make payment of the same, and (iii) otherwise could not
adversely affect the interests of the Purchaser or the Lender.
4.12 Servicing Provisions Customary. The servicing
arrangements hereunder, including without limitation the terms
and conditions pursuant to which Essex will act as Servicer and
the Servicing Fee to be paid to Essex, are consistent with the
arrangements and customary practices of Essex when providing
comparable services to entities which are not Affiliates and of
other servicers in the trade receivables servicing industry.
SECTION 5. SELLER'S SUPPORT
5.01 Indemnification. Each Seller agrees to indemnify
and hold harmless the Purchaser, the Servicer and the Lender
(each an "Indemnified Party") against any and all liabilities,
losses, damages, penalties, costs and expenses (including costs
of defense and legal fees and expenses) which may be incurred or
suffered by such Indemnified Party (except to the extent caused
by gross negligence or willful misconduct on the part of the
Indemnified Party) as a result of claims, actions, suits or
judgments asserted or imposed against it and arising out of the
transactions contemplated hereby or by the other Operative
Agreements, and any tort claims and any fines or penalties
arising from any violation of the laws or regulations of the
United States or any state or local government or governmental
authority, provided that the foregoing indemnity shall in no way
be deemed to impose on such Seller any obligation, other than to
the extent specifically set forth in this Section 5, to make any
payment with respect to principal or interest on a Loan or to
reimburse the Purchaser for any payments on account of the Note.
5.02 Payments Held in Trust. Any amount received by any
Seller from time to time from the Servicer, the Purchaser or any
Obligor which is or is intended to be subject to the Lien of the
Loan Agreement shall be held in trust by such Seller, as agent
for the Lender, and turned over within two Business Days of
receipt thereof to the Lender for application in accordance with
the provisions of the Loan Agreement.
5.03 Payment Advices. Each payment by any Seller or the
Servicer to the Lender pursuant to any of the provisions of this
Sales and Servicing Agreement shall be accompanied by written
advice containing sufficient information to identify the
Receivable to which such payment relates, the Section of this
Sales and Servicing Agreement pursuant to which such payment is
made, and the proper application pursuant to the provisions of
the Loan Agreement of the amounts being paid.
SECTION 6. COVENANTS OF THE SERVICER
6.01 Merger or Consolidation of the Servicer. The
Servicer will keep in full force and effect its existence, rights
and franchise as a corporation under the laws of its jurisdiction
of incorporation and will preserve its qualification to do
business as a foreign corporation in each jurisdiction in which
such qualification is necessary to protect the validity and
enforceability of any of the Receivables or to permit performance
of the Servicer's duties under this Sales and Servicing
Agreement.
The Servicer shall not merge or consolidate with any
other Person unless (i) the entity surviving such merger or
consolidation is a corporation organized under the laws of the
United States or any jurisdiction thereof, (ii) the surviving
entity, if not the Servicer, shall execute and deliver to the
Purchaser, each Seller and the Lender, in form and substance
satisfactory to each of them, (x) an instrument expressly
assuming all of the obligations of the Servicer hereunder and (y)
an opinion of counsel to the effect that such Person is a
corporation of the type described in the preceding clause (i) and
has effectively assumed the obligations of the Servicer
hereunder, and (iii) the Lender has notified the Servicer in
writing of its approval thereof.
6.02 Limitation on Liability of the Servicer and
Others. Neither the Servicer nor any of the directors, officers,
employees or agents of the Servicer shall incur any liability to
the Purchaser or the Lender for any action taken or not taken in
good faith pursuant to the terms of this Sales and Servicing
Agreement with respect to any Receivable (including any Defaulted
Receivable), provided, that this provision shall not protect the
Servicer or any such Person against any breach of warranties or
representations made by it herein or in any certificate delivered
in conjunction with the Operative Agreements or for any liability
which would otherwise be imposed for any action or inaction
resulting from willful misconduct or bad faith or for negligence
in the performance of its duties hereunder.
6.03 Removal/Resignation of Servicer. The Servicer
shall not resign from the servicing obligations and duties hereby
imposed on it except in connection with an assignment permitted
by Section 9.02 hereof or upon determination that such duties
hereunder are no longer permissible under applicable law. Any
such determination permitting the resignation of the Servicer
shall be evidenced by an opinion of independent counsel,
addressed to, and in form and substance satisfactory to, the
Lender.
No resignation or removal of the Servicer shall in any
event become effective until the Lender or a successor servicer
shall have assumed the Servicer's servicing responsibilities and
obligations in accordance with Section 8.02 hereof.
6.04 Financial and Business Information. The Servicer
will deliver to the Purchaser and the Lender:
(a) Quarterly Statements -- within 45 days after
the end of each of the first three quarterly fiscal
periods in each fiscal year of the Servicer, a copy of:
(i) a consolidated balance sheet of the Servicer
and its consolidated subsidiaries as at the end of such
quarter, and (ii) consolidated statements of income,
retained earnings and cash flow of the Servicer and its
consolidated subsidiaries for that quarter and for the
portion of the fiscal year ending with such quarter,
accompanied by a certificate signed by an Authorized
Officer of the Servicer stating that such financial
statements present fairly the financial condition of
the Servicer and its consolidated subsidiaries and have
been prepared in accordance with generally accepted
accounting principles consistently applied;
(b) Annual Statements -- within 135 days after the
end of each fiscal year of the Servicer, a copy of:
(i) a consolidated balance sheet of the Servicer
and its consolidated subsidiaries, at the end of that
year, and
(ii) consolidated statements of income, retained
earnings and cash flow of the Servicer and its
consolidated subsidiaries for that year, setting forth
in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and
accompanied by an opinion of a firm of independent
certified public accountants of recognized national
standing stating that such financial statements present
fairly the financial condition of the Servicer and its
consolidated subsidiaries and have been prepared in
accordance with generally accepted accounting
principles consistently applied (except for changes in
application in which such accountants concur and
footnote), and that the examination of such accountants
in connection with such financial statements has been
made in accordance with generally accepted auditing
standards, and accordingly included such tests of the
accounting records and such other auditing procedures
as were considered necessary in the circumstances;
(c) Notice of Servicer Event of Default of Default;
Event of Termination -- immediately upon becoming aware of the
existence of any condition or event which constitutes a Servicer
Event of Default of Default (as defined in Section 8.01), Event
of Termination or Unmatured Event, a written notice describing
its nature and period of existence and what action the Servicer
is taking or proposes to take with respect thereto.
(d) SEC and Other Reports -- promptly upon their
becoming available, one copy of each report (including the
Servicer's annual report to shareholders and reports on Form 8-K,
10-K, and 10-Q), proxy statement, registration statement,
prospectus and notice filed with or delivered to any securities
exchange, the Securities and Exchange Commission or any successor
agencies;
(e) Report on Proceedings -- promptly upon the Servicer
becoming aware of
(i) any proposed or pending investigation of it by
any governmental authority or agency, or
(ii) any court or administrative proceeding which
involves or may involve the possibility of materially
and adversely affecting the properties, business,
prospects, profits or conditions (financial or
otherwise) of the Servicer, a written notice specifying
the nature of such investigation or proceeding and what
action the Servicer is taking or proposes to take with
respect thereto and evaluating its merits; and
(f) Requested Information -- with reasonable
promptness, any other data and information which may be
reasonably requested from time to time.
6.05 Officers' Certificates. With each set of financial
statements delivered pursuant to Section 6.04, the Servicer will
deliver an Officers' Certificate stating (i) that the officers
signing such Certificate have reviewed the relevant terms of this
Sales and Servicing Agreement and have made, or caused to be made
under such officers' supervision, a review of the activities of
the Servicer during the period covered by the statements then
being furnished, (ii) that the review has not disclosed the
existence of any Servicer Event of Default of Default or, if a
Servicer Event of Default of Default exists, describing its
nature and what action the Servicer has taken and is taking with
respect thereto, and (iii) that on the basis of such review the
officers signing such certificate are of the opinion that during
such period the Servicer has serviced the Receivables in
compliance with the procedures hereof except as described in such
certificate.
6.06 Inspection. The Servicer will permit, on
reasonable prior notice, the representatives of the Purchaser or
the Lender to examine all of the books of account, records,
reports and other papers of the Servicer, to make copies and
extracts therefrom, and to discuss its affairs, finances and
accounts with its officers, employees and independent public
accountants (and by this provision the Servicer authorizes said
accountants to discuss the finances and affairs of the Servicer)
all at such reasonable times and as often as may be reasonably
requested for the purpose of reviewing or evaluating the
financial condition or affairs of the Servicer or the Servicer's
performance of its duties and obligations hereunder. Any expense
incident to the exercise by the Purchaser or the Lender during
the continuance of any Servicer Event of Default of Default or
Event of Termination, or any event or condition which with the
giving of notice or the lapse of time or both would become a
Servicer Event of Default of Default or Event of Termination, of
any right under this Section 6.06 shall be borne by the Servicer.
6.07 Servicer Records. The Servicer will indicate in
its records that it is servicing and administering each
Receivable in its
capacity as Servicer hereunder, at the request and for the
benefit of the Purchaser (and subject to the provisions of the
Loan Agreement).
6.08 Credit and Collection Policy. The Servicer will at
all times service the Receivables in accordance with the Credit
and Collection Policy attached hereto as Exhibit B, as the same
may be amended from time to time in the ordinary course of
business of each Seller and, with respect to material changes
thereto, with the prior written consent of the Lender.
SECTION 7. COVENANTS OF EACH SELLER
7.01 Merger or Consolidation. Each Seller will keep in
full force and effect its existence, rights and franchise as a
corporation under the laws of its jurisdiction of incorporation
and will preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is
necessary to protect the validity and enforceability of any of
its Receivables or to permit performance of such Seller's duties
under this Sales and Servicing Agreement.
No Seller shall merge or consolidate with any other
Person unless (i) the entity surviving such merger or
consolidation is a corporation organized under the laws of the
United States or any jurisdiction thereof, (ii) the surviving
entity, if not such Seller, shall execute and deliver to the
Purchaser, the Servicer and the Lender, in form and substance
satisfactory to each of them, (x) an instrument expressly
assuming all of the obligations of such Seller hereunder and (y)
an opinion of counsel to the effect that such Person is a
corporation of the type described in the preceding clause (i) and
has effectively assumed the obligations of such Seller hereunder,
and (iii) the Lender has notified such Seller in writing of its
approval thereof.
7.02 Limitation of Fundamental Changes; Control of
Purchaser. So long as any of the Obligations remain outstanding,
no Seller will, without the prior written consent of the Lender,
(a) 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, or make any material change in its present
method of conducting business, (b) sell, pledge or otherwise
transfer any of the Capital Stock in the Purchaser held by such
Seller, if any, or (c)
vote such Capital Stock in favor of any amendment to or
alteration of the Certificate of Incorporation of the Purchaser.
7.03 Financial and Business Information. Each Seller
will deliver to the Purchaser and the Lender:
(a) Notice of Certain Events -- immediately upon
becoming aware of the existence of any condition or
event which constitutes a Servicer Event of Default of
Default, Event of Termination or Unmatured Event, a
written notice describing its nature and period of
existence and what action such Seller is taking or
proposes to take with respect thereto;
(b) SEC and Other Reports -- promptly upon their
becoming available, one copy of each report (including
such Seller's annual report to shareholders and reports
on Form 8-K, 10-K, and 10-Q), proxy statement,
registration statement, prospectus and notice filed
with or delivered to any securities exchange, the
Securities and Exchange Commission or any successor
agencies by such Seller;
(c) Report on Proceedings -- promptly upon such
Seller's becoming aware of
(i) any proposed or pending investigation of it by
any governmental authority or agency, or
(ii) any court or administrative proceeding which
involves or may involve the possibility of materially
and adversely affecting the properties, business,
prospects, profits or conditions (financial or
otherwise) of such Seller, a written notice specifying
the nature of such investigation or proceeding and what
action such Seller is taking or proposes to take with
respect thereto and evaluating its merits;
(d) ERISA -- (i) promptly and in any event within
10 days after such Seller knows or has reason to know
of the occurrence of a Reportable Event with respect to
a Pension Plan with regard to which notice must be
provided to the PBGC, a copy of such materials required
to be filed with the PBGC with respect to such
Reportable Event and in each such case a statement of
the chief financial officer of such Seller setting
forth details as to such Reportable Event and the
action which such Seller proposes to take with respect thereto;
(ii) at least 10 days prior to the filing by any plan
administrator of a Pension Plan of a notice of intent to
terminate such Pension Plan, a copy of such notice; (iii)
promptly and in no event more than 10 days after the filing
thereof with the Internal Revenue Service, copies of each annual
report which is filed on Form 5500, together with certified
financial statements for the Pension Plan (if any) as of the end
of such year and actuarial statements on Schedule B to such Form
5500; (iv) promptly and in any event within 10 days after it
knows or has reason to know of any event or condition which might
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer,
any Pension Plan, a statement of the chief financial officer of
such Seller describing such event or condition; (v) promptly and
in no event more than 10 days after receipt thereof by such
Seller or any Related Person, each notice received by such Seller
or any Related Person concerning the imposition of any withdrawal
liability under Section 4202 of ERISA; and (vi) promptly after
receipt thereof a copy of any notice such Seller or any Related
Person may receive from the PBGC or the Internal Revenue Service
with respect to any Pension Plan; provided, however, that this
clause (vi) shall not apply to notices of general application
promulgated by the PBGC or the Internal Revenue Service; and
(e) Requested Information -- with reasonable
promptness, any other data and information which may be
reasonably requested from time to time.
7.04 Inspection. Each Seller will permit, on reasonable
prior notice, the representatives of the Purchaser or the Lender
to examine all of the books of account, records, reports and
other papers of such Seller, to make copies and extracts
therefrom, and to discuss its affairs, finances and accounts with
its officers, employees and independent public accountants (and
by this provision such Seller authorizes said accountants to
discuss the finances and affairs of such Seller) all at such
reasonable times and as often as may be reasonably requested for
the purpose of reviewing or evaluating the financial condition or
affairs of such Seller or such Seller's performance of its duties
and obligations hereunder. Any expense incident to the exercise
by the Purchaser or the Lender during the continuance of any
Event of Termination or default by such Seller in any of its
obligations hereunder of any right under this Section 7.04 shall
be borne by such Seller.
7.05 No Bankruptcy Petition Against the Purchaser. No
Seller will, prior to the date that is one year and one day after
the payment in full of all amounts owing pursuant to the
Operative Agreements, institute against the Purchaser, or join
any other Person in instituting against the Purchaser, any
bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceedings under the
laws of the United States or any state of the United States. This
Section 7.05 shall survive the termination of this Sales and
Servicing Agreement.
7.06 Books and Records. Each Seller will clearly xxxx
its books and records to reflect each sale of a Receivable by
such Seller to the Purchaser.
7.07 Communications. Each Seller will reply to all
inquiries by third parties with respect to the transactions
contemplated by this Sales and Servicing Agreement by indicating
that it has sold to the Purchaser its Receivables.
7.08 Credit and Collection Policy. No Seller will
modify or alter the Credit and Collection Policy in any manner
without the consent of the Lender.
7.09 Notice of Termination Event. Promptly upon
becoming aware of any Termination Event or Unmatured Event, each
Seller will give the Purchaser and the Lender notice thereof,
together with a written statement of an Authorized Officer
setting forth the details thereof and any action with respect
thereto taken or contemplated to be taken by such Seller.
7.10 Notice of Material Adverse Change. Promptly upon
becoming aware thereof, each Seller shall give the Purchaser and
the Lender notice of any material adverse change in the business,
operations or financial condition of such Seller which affect
adversely the collectibility of the Receivables of such Seller
purchased by the Purchaser hereunder or the ability to service
such Receivables.
7.11 Compliance with Laws. Each Seller shall comply in
all material respects with all laws applicable to such Seller,
its business and properties and its Receivables.
7.12 Enforceability of Contracts. Each Seller shall
ensure that, with respect to each Receivable purchased by
Purchaser hereunder from such Seller, the obligation of any
related Obligor to pay the
unpaid balance of such Receivable in accordance with the terms of
the related Contract remains legal, valid, binding and
enforceable against such Obligor, except as such enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws which may be
applied in the event of the bankruptcy or insolvency of such
Obligor and as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in
equity).
7.13 Fulfillment of Obligations. Each Seller will duly
observe and perform, or cause to be observed or performed, all
obligations and undertakings on its part to be observed and
performed under or in connection with its Receivables, and will
do nothing to impair the rights, title and interest of the
Purchaser in and to such Receivables.
7.14 Customer List. Each Seller shall at all times
maintain (or cause the Servicer to maintain) a current list
(which may be stored on magnetic tapes or disks) of all Obligors
under Contracts related to its Receivables, including the name,
address, telephone number and account number of each such
Obligor. Each Seller shall deliver or cause to be delivered a
copy of such list to the Purchaser and the Lender as soon as
practicable following either such Person's request therefore.
7.15 Total Systems Failure. Each Seller shall cause the
Servicer to promptly notify the Purchaser and the Lender of any
total systems failure and to advise such Persons Purchaser of the
estimated time required to remedy such total systems failure and
of the estimated date on which a Monthly Servicer Report can be
delivered. Until a total systems failure is remedied, each Seller
shall cause the Servicer (i) to furnish to the Purchaser and the
Lender such periodic status reports and other information
relating to such total systems failure as such Persons may
reasonably request and (ii) to promptly notify the Purchaser and
the Lender if the Servicer believes that such total systems
failure cannot be remedied by the estimated date, which notice
shall include a description of the circumstances which gave rise
to such delay, the action proposed to be taken in response
thereto, and a revised estimate of the date on which a Monthly
Servicer Report can be delivered. Each Seller shall cause the
Servicer to promptly notify the Purchaser and the Lender when a
total systems failure has been remedied.
7.16 Notice of Relocation. Each Seller shall give the
Purchaser and the Lender sixty (60) days' prior written notice of
any
relocation of its chief executive office if, as a result of such
relocation, the applicable provisions of the Uniform Commercial
Code of any applicable jurisdiction or other applicable laws
would require the filing of any amendment of any previously filed
financing statement or continuation statement or of any new
financing statement. Each Seller will at all times maintain its
chief executive office within a jurisdiction in the United States
in which Article Nine of the Uniform Commercial Code (1972 or
later revision) is in effect.
7.17 Statementing for and Treatment of the Sales. No
Seller shall prepare any financial statements for financial
accounting or reporting purposes which shall account for the
transactions contemplated hereby in any manner other than as a
sale of its Receivables to the Purchaser.
7.18 No Rescissions or Modifications. No Seller shall
rescind or cancel any Receivable or related Contract or modify
any terms or provisions thereof, except in accordance with the
Credit and Collection Policy.
7.19 No Liens. No Seller shall cause any of its
Receivables to be sold, pledged, assigned or transferred or to be
subject to a Lien, other than the sale and assignment herein to
the Purchaser.
7.20 No Changes. No Seller shall change its name,
identity or corporate structure in any manner which would, could
or might make any financing statement or continuation statement
filed in connection with this Sales and Servicing Agreement or
the transactions contemplated hereby seriously misleading within
the meaning of Section 9-402(7) of the Uniform Commercial Code of
any applicable jurisdiction or other applicable laws unless it
shall have given the Purchaser and the Lender at least sixty (60)
days' prior written notice thereof.
SECTION 8. DEFAULT
8.01 Servicer Event of Defaults of Default. The
following events and conditions shall constitute Servicer Event
of Defaults of Default hereunder:
(i) failure on the part of the Servicer to remit
any payment to the Lender within the time period
required by Section 4.01(a) hereof;
(ii) failure on the part of the Servicer to
observe or perform in any material respect any other of
its covenants or agreements in this Sales and Servicing
Agreement which failure continues unremedied for a
period of 30 days after the earlier of (A) the date it
first becomes known to any officer of the Servicer, and
(B) the date on which written notice thereof requiring
the same to be remedied shall have been given to the
Servicer, as the case may be, by the Lender;
(iii) if any representation or warranty of the
Servicer made in this Sales and Servicing Agreement or
in any certificate or other writing delivered pursuant
hereto or made by any successor Servicer in connection
with such successor Servicer's assumption of the duties
of the Servicer shall prove to be incorrect in any
material respect as of the time when the same shall
have been made;
(iv) the occurrence of an Event of Bankruptcy with
respect to the Servicer;
(v) the failure of the Servicer to make one or
more payments due with respect to recourse debt or
other recourse obligations, which debt or obligations
in the aggregate exceed $1,000,000 or the occurrence of
any event or the existence of any condition, the effect
of which event or condition is to cause (or permit one
or more Persons to cause) more than $1,000,000 of
aggregate recourse debt or other recourse obligations
of the Servicer to become due before its (or their)
stated maturity or before its (or their) regularly
scheduled dates of payment so long as such failure,
event or condition shall be continuing and shall not
have been waived by the Person or Persons entitled to
performance; or
(vi) the rendering against the Servicer of a
judgment, decree or order for the payment of money in
excess of $1,000,000 and the continuance of such
judgment, decree or order unsatisfied and in effect for
any period of 30 consecutive days without a stay of
execution.
8.02 Termination. If a Servicer Event of Default of
Default shall have occurred and be continuing, (i) the Lender
shall take all action with respect to the Collateral as it may
elect, and (ii) if the
Lender so elects, the Lender may give written notice to the
Servicer of the termination of all of the rights and obligations
of the Servicer (but none of Essex's obligations as a Seller
hereunder, which shall survive any such termination) under this
Sales and Servicing Agreement. Upon the receipt by the Servicer
of such written notice, all rights and obligations of the
Servicer under this Sales and Servicing Agreement, including
without limitation the Servicer's right to receive the Servicing
Fee, but none of Essex's obligations as a Seller hereunder, shall
cease and the same shall pass to and be vested in, and assumed
by, any successor appointed pursuant to Section 8.03.
8.03 Appointment of Successor. Following the occurrence
of a Servicer Event of Default of Default and the removal of the
Servicer pursuant to Section 8.02 above, the Lender shall (i)
appoint a successor to the Servicer hereunder to assume all of
the rights and obligations of the Servicer hereunder, including,
without limitation, the Servicer's right hereunder to receive the
Servicing Fee or, (ii) if no such institution is so appointed,
petition a court of competent jurisdiction to appoint an
institution meeting such criteria as the Servicer hereunder. In
connection with such appointment and assumption, the Lender shall
cause such successor to the Servicer to enter into a servicing
agreement substantially in the form of this Sales and Servicing
Agreement except that such agreement shall not include any of the
Sellers' representations, warranties or obligations and the
Lender may make arrangements for the compensation of such
successor out of payments on Receivables as it and such successor
shall agree.
8.04 Servicer to Cooperate. The Servicer hereby agrees
to cooperate with any successor to the Servicer appointed in
accordance with Section 8.03 hereof, in effecting the termination
and transfer of the responsibilities and rights of the Servicer
hereunder to any successor to the Servicer, including, without
limitation, the execution and delivery of assignments of
Financing Statements, and the transfer to such successor to the
Servicer for administration by it of all cash amounts which shall
at the time be held by the Servicer or thereafter received with
respect to the Receivables. The Servicer hereby agrees to
transfer to any successor to the Servicer its electronic records
and all other records, correspondence and documents relating to
the Receivables in the manner and at such times as the successor
to the Servicer shall reasonably request. The Servicer hereby
designates any successor to the Servicer its agent and attorney-
in-fact to execute transfers of Financing Statements (including
any and all Financing Statements naming an individual Obligor as
debtor and the Seller as secured party) and any other
filings or instruments which may be necessary or advisable to
effect such transfer of the Servicer's responsibilities and
rights hereunder.
8.05 Remedies Not Exclusive. Nothing in the preceding
provisions of this Section 8 shall be interpreted as limiting or
restricting any rights or remedies which the Purchaser, the
Lender or any other Person would otherwise have at law or in
equity on account of the breach or violation of any provision of
this Sales and Servicing Agreement by the Servicer, including
without limitation the right to recover full and complete damages
on account thereof to the extent not inconsistent with Section
6.02 hereof.
SECTION 9. ASSIGNMENT
9.01 Assignment to Lender. It is understood that this
Sales and Servicing Agreement and all rights of the Purchaser
hereunder will be assigned by the Purchaser to the Lender
pursuant to the Loan Agreement, and may be subsequently assigned
by the Lender to any successor Lender or as otherwise provided in
the Loan Agreement. The Servicer and each Seller hereby expressly
agrees to each such assignment and agrees that all of its duties,
obligations, representations and warranties hereunder shall be
for the benefit of, and may be enforced by, the Lender from time
to time and any successor to or assignee thereof.
9.02 Assignment by any Seller or Servicer. None of the
respective rights or obligations of any Seller or the Servicer
hereunder may be assigned without the prior written consent of
the Purchaser and the Lender; provided that nothing herein shall
preclude the Servicer from performing its duties hereunder
through the use of agents to the extent that such use is
consistent with the Servicer's business practices; provided,
further, that such use of agents shall not relieve the Servicer
from any of its obligations or liabilities hereunder.
SECTION 10. NATURE OF EACH SELLER'S OBLIGATIONS
AND SECURITY THEREFOR
10.01 Each Seller's Obligations Absolute. The
obligations of each Seller hereunder, and the rights of the
Lender, as assignee of the Purchaser, in and to all amounts
payable by such Seller hereunder, shall be absolute and
unconditional and shall not be subject to any abatement,
reduction, setoff, defense, counterclaim or recoupment whatsoever
including, without limitation, abatements, reductions, setoffs,
defenses, counterclaims or recoupments due or alleged to be
due to, or by reason of, any past, present or future claims which
such Seller may have against the Servicer, the Purchaser, the
Lender or any other Person for any reason whatsoever; nor, except
as otherwise expressly provided herein, shall this Sales and
Servicing Agreement terminate, or the respective obligations of
the Purchaser, such Seller or the Servicer be otherwise affected,
by reason of any defect in any Receivable or in the respective
rights and interests of the Purchaser, the such Seller and the
Lender in any thereof, or by reason of any Liens with respect to
any Receivable, or any failure by the Purchaser or the Servicer
to perform any of its obligations herein contained, or by reason
of any other indebtedness or liability, howsoever and whenever
arising, of the Purchaser, the Servicer or the Lender to such
Seller or any other Person or by reason of any insolvency,
bankruptcy, or similar proceedings by or against such Seller, the
Servicer, the Purchaser, the Lender or any other Person or for
any other cause whether similar or dissimilar to the foregoing,
any present or future law to the contrary notwithstanding, it
being the intention of the parties hereto that all obligations of
such Seller hereunder and all amounts payable by such Seller
hereunder shall continue to be due and payable in all events and
in the manner and at the times herein provided unless and until
the obligation to perform or pay the same shall be terminated or
limited pursuant to the express provisions of this Sales and
Servicing Agreement.
10.02 Security for Obligations. As security for the
full and timely performance by each Seller and the Servicer of
each of their respective obligations hereunder, and by the
Purchaser of each of its obligations hereunder and under the Loan
Agreement, each Seller hereby pledges and Grants to the Lender
(as a precaution in the event that, contrary to the intent of the
parties to the transactions contemplated hereby, it is contended
that such Seller has any continuing interest in any Receivable or
any other of the property, rights and interests subject or
intended to be subject to the Loan Agreement) a first priority
Lien on and security interest in all right, title and interest of
such Seller now or hereafter acquired in and to each Receivable
(including the right to receive all payments due or to become due
thereunder) and all other property, rights and interests at any
time subject or intended to be subject to the Loan Agreement and
all proceeds of any of the foregoing. The foregoing security
interest is granted upon and is subject to the same terms and
provisions as are set forth in the Loan Agreement and shall
continue in full force and effect until the same is discharged in
accordance with the terms therein, notwithstanding any waiver or
modification of any of the terms hereof or thereof or of any of
the Operative Agreements, whether with or without the consent of
such Seller.
SECTION 11. MISCELLANEOUS
11.01 Continuing Obligations. This Sales and Servicing
Agreement shall continue in full force and effect until all
amounts due to the Lender have been paid in full and all other
Obligations, if any, secured by the Lien of the Loan Agreement
have been fully satisfied.
11.02 Governing Law. This Sales and Servicing Agreement
shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State
of New York. If any provision of this Sales and Servicing
Agreement is deemed invalid, it shall not affect the balance of
this Sales and Servicing Agreement.
11.03 Successors and Assigns. This Sales and Servicing
Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Purchaser, each Seller, the
Servicer and shall inure to the benefit of the successors and
assigns of the Lender which is expressly a third party
beneficiary hereunder.
11.04 Modification. The terms of this Sales and
Servicing Agreement shall not be waived, modified or amended
without the written consent of the Lender.
11.05 Notices. All notices and other communications
given in connection with this Sales and Servicing Agreement shall
be sufficient for every person hereunder if in writing and sent
by telex, facsimile, or certified, registered or express mail, or
hand delivered to, in case of the parties hereto, their
respective addresses set forth below or to such other address as
either party may specify to the other from time to time in
accordance with this Section 11.05 or, in the case of the Lender,
to such addresses as are provided pursuant to Section 9.2 of the
Loan Agreement.
11.06 Counterparts. This Sales and Servicing Agreement
may be executed in any number of counterparts, each counterpart
constituting an original, but all together constituting only one
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Sales and Servicing Agreement to be duly executed as of the day
and year first above written.
ESSEX GROUP, INC., as Servicer and
a Seller
By: /s/ Xxxxx X. Xxxx
---------------------------
Name: Xxxxx X. Xxxx
Title: Executive Vice President,
Chief Financial Officer
DIAMOND WIRE & CABLE CO., as a Seller
By: /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
Title: Vice President, Treasurer
INTERSTATE INDUSTRIES, INC., as a Seller
By: /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
Title: Vice President, Treasurer
ESSEX FUNDING INC., as Purchaser
By: /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
Title: Vice President, Treasurer
Exhibit A
to the Sales and
Servicing Agreement
Form of Purchaser Note
Exhibit B
to the Sales and
Servicing Agreement
[Form of Seller's Credit and Collection Policy]
Exhibit C
to the Sales and
Servicing Agreement
[Form of Monthy Servicer Report]
Schedule 1
to the Sales and
Servicing Agreement
Location of the Chief Executive Office of
the Servicer and Each Seller
