EXHIBIT 4(b)
RECEIVABLES PURCHASE AGREEMENT
Dated as of January 5, 1995
Among
THE WACKENHUT CORPORATION
as Seller
---------
and
RECEIVABLES CAPITAL CORPORATION
and
ENTERPRISE FUNDING CORPORATION
each as a Purchaser
-------------------
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
and
NATIONSBANK OF NORTH CAROLINA, N.A.
each as a Managing Agent
------------------------
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as the Administrative Agent
----------------------------
TABLE OF CONTENTS
ARTICLE I
THE COMMITMENT. . . . . . . . . . . . .2
SECTION 1.01. Commitment . . . . . . . . . . . . . . . . .2
SECTION 1.02. Purchase and Reinvestment Limits . . . . . .2
SECTION 1.03. Making Purchases from Seller . . . . . . . .3
SECTION 1.04. Number of Undivided Interests. . . . . . . .3
SECTION 1.05. Commitment Termination Date. . . . . . . . .3
SECTION 1.06. Purchase Termination Date. . . . . . . . . .4
SECTION 1.07. Voluntary Termination of Commitment or
Reduction of Maximum Purchase Limit. . . . .5
SECTION 1.08. Limitation of Ownership Interest . . . . . .5
SECTION 1.09. Special Undivided Interests. . . . . . . . .5
SECTION 1.10. Benefits of Agreement. . . . . . . . . . . .5
ARTICLE II
UNDIVIDED INTEREST AND PURCHASER'S SHARE . . . . . .6
SECTION 2.01. Undivided Interest . . . . . . . . . . . . .6
SECTION 2.02. Purchaser's Investment . . . . . . . . . . .7
SECTION 2.03. Net Pool Balance . . . . . . . . . . . . . .9
SECTION 2.04. Shares . . . . . . . . . . . . . . . . . . 10
ARTICLE III
SETTLEMENTS . . . . . . . . . . . . 11
SECTION 3.01. Non-Run Off Settlement Procedures for
Collections. . . . . . . . . . . . . . . . 11
SECTION 3.02. Run Off Settlement Procedures for
Collections. . . . . . . . . . . . . . . . 12
SECTION 3.03. Special Settlement Procedures; Reduction
of Purchaser's Investment, Etc.. . . . . . 13
SECTION 3.04. Reporting. . . . . . . . . . . . . . . . . 16
SECTION 3.05. Payments and Computations, Etc.. . . . . . 16
SECTION 3.06. Dividing or Combining Undivided Interests. 17
SECTION 3.07. Treatment of Collections and Deemed
Collections. . . . . . . . . . . . . . . . 18
ARTICLE IV
FEES AND YIELD PROTECTION. . . . . . . . . 18
SECTION 4.01. Fees . . . . . . . . . . . . . . . . . . . 18
SECTION 4.02. Yield Protection . . . . . . . . . . . . . 19
ARTICLE V
CONDITIONS OF PURCHASES . . . . . . . . . 21
SECTION 5.01. Conditions Precedent to Initial Purchase . 21
SECTION 5.02. Conditions Precedent to All Purchase
and Reinvestments. . . . . . . . . . . . . 23
SECTION 5.03. Additional Condition Precedent to
Purchases. . . . . . . . . . . . . . . . . 24
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES. . . . . . . . 24
SECTION 6.01. Representations and Warranties of Seller . 24
ARTICLE VII
GENERAL COVENANTS OF SELLER . . . . . . . . 29
SECTION 7.01. Affirmative Covenants of Seller. . . . . . 29
SECTION 7.02. Reporting Requirements of Seller . . . . . 30
SECTION 7.03. Negative Covenants of Seller . . . . . . . 32
ARTICLE VIII
ADMINISTRATION AND COLLECTION. . . . . . . . 35
SECTION 8.01. Designation of Servicer. . . . . . . . . . 35
SECTION 8.02. Duties of Servicer . . . . . . . . . . . . 36
SECTION 8.03. Rights of the Agents . . . . . . . . . . . 37
SECTION 8.04. Responsibilities of Seller . . . . . . . . 39
SECTION 8.05. Further Action Evidencing Purchases. . . . 39
SECTION 8.06. Application of Collections . . . . . . . . 40
ARTICLE IX
SECURITY INTEREST. . . . . . . . . . . 40
SECTION 9.01. Grant of Security Interest . . . . . . . . 40
SECTION 9.02. Further Assurances . . . . . . . . . . . . 41
SECTION 9.03. Remedies . . . . . . . . . . . . . . . . . 41
ARTICLE X
TERMINATION EVENTS. . . . . . . . . . . 41
SECTION 10.01. Termination Events . . . . . . . . . . . . 41
SECTION 10.02. Remedies . . . . . . . . . . . . . . . . . 43
ARTICLE XI
THE AGENTS. . . . . . . . . . . . . 44
SECTION 11.01. Authorization and Action . . . . . . . . . 44
SECTION 11.02. Agents' Reliance, Etc. . . . . . . . . . . 44
SECTION 11.03. Agents and Affiliates. . . . . . . . . . . 45
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST. . . . . . . 45
SECTION 12.01. Restrictions on Assignments. . . . . . . . 45
SECTION 12.02. Rights of Assignee . . . . . . . . . . . . 46
SECTION 12.03. Authorization of Managing Agent. . . . . . 47
SECTION 12.04. Notice of Assignment . . . . . . . . . . . 47
SECTION 12.05. Evidence of Assignment; Endorsement of
Certificate. . . . . . . . . . . . . . . . 47
SECTION 12.06. Rights of Support Providers . . . . . . . 47
ARTICLE XIII
INDEMNIFICATION . . . . . . . . . . . 48
SECTION 13.01. Indemnities by Seller. . . . . . . . . . . 48
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ARTICLE XIV
MISCELLANEOUS. . . . . . . . . . . . 50
SECTION 14.01. Amendments, Etc. . . . . . . . . . . . . . 50
SECTION 14.02. Notices, Etc.. . . . . . . . . . . . . . . 50
SECTION 14.03. No Waiver; Remedies. . . . . . . . . . . . 51
SECTION 14.04. Binding Effect; Survival . . . . . . . . . 51
SECTION 14.05. Costs, Expenses and Taxes. . . . . . . . . 52
SECTION 14.06. No Proceedings . . . . . . . . . . . . . . 52
SECTION 14.07A BofA Program Confidentiality . . . . . . . 52
SECTION 14.07B NationsBank Program Confidentiality . . . 55
SECTION 14.08. Confidentiality of Seller Information. . . 57
SECTION 14.09. Captions and Cross References. . . . . . . 59
SECTION 14.10. Integration. . . . . . . . . . . . . . . . 60
SECTION 14.11. Governing Law. . . . . . . . . . . . . . . 60
SECTION 14.12. Waiver Of Jury Trial . . . . . . . . . . . 60
SECTION 14.13. Consent To Jurisdiction; Waiver
Immunities . . . . . . . . . . . . . . . . 60
SECTION 14.14. Execution in Counterparts. . . . . . . . . 60
SECTION 14.15. Purchasers' Liabilities. . . . . . . . . . 61
SECTION 14.16. Agents' Liabilities. . . . . . . . . . . . 61
SECTION 14.17. Characterization of the Transaction
Contemplated by the Agreement. . . . . . . 61
APPENDICES
APPENDIX A Definitions
APPENDIX B Calculation of Discount and Reserve
SCHEDULES
SCHEDULE 2.03(b) Special Concentration Limit Certificate
SCHEDULE 6.01(i) Description of Material Adverse Changes
SCHEDULE 6.01(j) Description of Litigation
SCHEDULE 6.01(n) List of Offices of Seller where Records Are
Kept
SCHEDULE 6.01(o) List of Lock-Box Banks
SCHEDULE 6.01(w) Tradenames
SCHEDULE A-1 Description of Agent's Credit and Collection
Policy
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EXHIBITS
EXHIBIT 3.04(a) Form of Periodic Report
EXHIBIT 5.01(a) Form of Certificate of Assignments
EXHIBIT 5.01(h) Form of Lock-Box Agreement
EXHIBIT 5.01(i) Form of Opinion of Counsel for Seller
EXHIBIT 5.01(j) Form of Opinion of Counsel for Agent
EXHIBIT 5.01(o) Form of Purchase and Sale Agreement
EXHIBIT 12.05 Form of Assignment (for assignment to third
party)
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RECEIVABLES PURCHASE AGREEMENT
Dated as of January 5, 1995
THIS IS A RECEIVABLES PURCHASE AGREEMENT, among THE WACKENHUT CORPORATION
("WACKENHUT"), a Florida corporation ("SELLER"), RECEIVABLES CAPITAL CORPORATION
("RCC") and each of their respective successors and assignees, a Delaware
corporation, ENTERPRISE FUNDING CORPORATION, a Delaware corporation
("ENTERPRISE"; and together with RCC, the "PURCHASERS" and each individually a
"PURCHASER") and each of their respective successors and assignees, BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association
("BOFA"), as agent for RCC, NATIONSBANK OF NORTH CAROLINA, N.A., a national
banking association ("NATIONSBANK") as agent for Enterprise (each in such
capacity as agent for the specified Purchaser, together with its successors and
assigns in each capacity, a "MANAGING AGENT" and together, the "MANAGING
AGENTS") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
administrative agent for the Purchasers and the Managing Agents (in such
capacity, together with its successors and assigns in such capacity, the
"ADMINISTRATIVE AGENT"). Unless otherwise indicated, capitalized terms used in
this Agreement are defined in APPENDIX A.
BACKGROUND
1. Seller has, and expects to have, Pool Receivables generated in the
ordinary course of its business and in the ordinary course of business of one or
more of its wholly-owned subsidiaries a party to that certain Purchase and Sale
Agreement pursuant to which each such subsidiary, each referred to herein as an
Originator, sells such Pool Receivables to Seller. Seller has requested the
Purchasers, and the Purchasers have agreed, subject to the terms and conditions
contained in this Agreement, to purchase undivided interests in such Pool
Receivables, referred to herein as Undivided Interests, from Seller from time to
time during the term of this Agreement.
2. Seller and the Purchasers also desire that, subject to the terms and
conditions of this Agreement, certain of the daily Collections in respect of
such Undivided Interests be reinvested in Pool Receivables through the sale by
Seller to the Purchasers of additional undivided interests in the Pool
Receivables, such daily reinvestment of Collections to be effected by an
automatic daily adjustment to each Purchaser's Undivided Interests, and to be
intended to permit the Purchasers to maintain their Purchaser's Investments
fully invested in uncollected Pool Receivables.
3. BofA has been requested, and is willing, to act as the Administrative
Agent.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
THE COMMITMENT
SECTION 1.01. COMMITMENT. On the terms and subject to the conditions
set forth in this Agreement (including ARTICLE V):
(a) PURCHASES. Each Purchaser shall severally and not jointly
purchase from Seller Undivided Interests (as defined in SECTION 2.01)
in an amount equal, for each Purchaser, to such Purchaser's Percentage
of each proposed Purchase from time to time during the period from the
date hereof to the Purchase Termination Date. Each such purchase is
herein called a "PURCHASE". Each Purchase shall be in accordance with
SECTION 1.03(b). Under no circumstances shall any Purchaser (x)
purchase Undivided Interests in excess of its Percentage of each
proposed Purchase, (y) Purchase the unfunded portion of any other
Purchaser's portion of any proposed Purchase and (z) be required to
make any Purchase if the other Purchaser shall not then be purchasing
its Percentage of such Purchase (other than to the extent of any
required adjustments pursuant to SECTIONS 1.06 AND 1.09). Under no
circumstances shall Reinvestments be deemed to be Purchases.
(b) REINVESTMENTS. Pursuant to SECTION 3.01, during the period
from the date hereof to the Purchase Termination Date, Servicer shall
cause certain of the Collections in respect of the Undivided Interests
to be applied to the purchase of additional undivided interests in
Pool Receivables, thereby resulting in an appropriate readjustment of
such Undivided Interests. Each such purchase of an additional
undivided interest pursuant to SECTION 3.01 is herein called a
"REINVESTMENT".
The Purchasers' obligation to make such Purchases and Reinvestments is
herein called the "COMMITMENT".
SECTION 1.02. PURCHASE AND REINVESTMENT LIMITS. Under no
circumstances shall a Purchaser make any Purchase or Reinvestment to the
extent that, after giving effect to such Purchase or Reinvestment, as the
case may be:
(a) PURCHASE LIMIT. The Aggregate Total Investments would exceed an
amount (the "PURCHASE LIMIT") equal to the lesser of (x) $40,000,000 as
such amount may be reduced pursuant to SECTION 1.07 (the "MAXIMUM PURCHASE
LIMIT"), and (y) the then Net Pool Balance;
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(b) REQUIRED ALLOCATIONS LIMIT. The Aggregate Required Allocations
would exceed an amount (the "REQUIRED ALLOCATIONS LIMIT") equal to 100% of
the Net Pool Balance (as defined in SECTION 2.03); or
(c) the Aggregate Purchaser's Investments of such Purchaser would
exceed its Percentage of the Aggregate Total Investments.
SECTION 1.03. MAKING PURCHASES FROM SELLER. (a) NOTICE OF PURCHASE.
Each Purchase from Seller shall be made by each Purchaser and shall be made on
notice from Seller to the Administrative Agent received by the Administrative
Agent not later than 11:00 a.m. (New York time) on the Business Day next
preceding the date of such proposed Purchase. If received by 11:00 a.m. (New
York time) the Administrative Agent will notify each Managing Agent by 2:00 p.m.
(New York time) of such proposed Purchase. If received after 11:00 a.m. (New
York time) by the Administrative Agent or after 2:00 p.m. (New York time) by any
Managing Agent such notice shall be deemed provided on the next following
Business Day. Each such notice of a proposed Purchase shall specify the desired
amount and date of such Purchase and the desired duration of the initial Yield
Periods for the resulting Undivided Interests. Each Managing Agent (or, if then
funding, an RCC Program Support Provider, an Enterprise Liquidity Provider or
Enterprise Credit Support Provider, as applicable) shall select the duration of
such initial, and each subsequent, Yield Period with regard to its Purchaser's
Percentage of such Purchase in its discretion; provided that each shall use
reasonable efforts, taking into account market conditions, to accommodate
Seller's preferences.
(b) AMOUNT OF PURCHASE. The amount of each Purchase shall be equal to the
lesser of (x) the amount proposed by Seller pursuant to SECTION 1.03(a) and (y)
the maximum amount permitted for each Purchaser under SECTION 1.02.
(c) FUNDING OF PURCHASE. On the date of each Purchase, each Purchaser
shall, upon satisfaction of the applicable conditions set forth in ARTICLE V,
make available to its Managing Agent at the address of its office set forth on
the signature pages hereto, the amount of its Percentage of such Purchase
(determined pursuant to SECTION 1.03(b)) in same day funds, and each such
Managing Agent will make such funds immediately available to Seller at such
office.
SECTION 1.04. NUMBER OF UNDIVIDED INTERESTS. The number of Undivided
Interests hereunder at any one time, after giving effect to any Purchase,
Reinvestment, division or combination, shall not exceed 8 for each Purchaser.
SECTION 1.05. COMMITMENT TERMINATION DATE. (a) The "COMMITMENT
TERMINATION DATE" shall be the earlier to occur of (i) January 6, 1998 (herein,
as the same may be extended, called the "SCHEDULED COMMITMENT TERMINATION
DATE"), and (ii) the date
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of termination of the Commitment pursuant to Section 1.07 or 10.02.
(b) The then Scheduled Commitment Termination Date may be extended from
time to time beginning with January 6, 1998, on each January 6 from a January 6
to a January 6, by written notice of request given by Seller to each Managing
Agent at least 75 days before such January 6, and written notice of acceptance
given by each Managing Agent to Seller not later than 15 days prior to such
January 6. No such extension shall be effective unless the related Managing
Agent shall provide such notice of acceptance to Seller.
SECTION 1.06. PURCHASE TERMINATION DATE. As to any Purchaser (a) the
"PURCHASE TERMINATION DATE" with respect to such Purchaser shall be the earlier
to occur of (i) the Commitment Termination Date and (ii) the date of termination
of the Commitment with respect to Purchases by such Purchaser pursuant to
SUBSECTIONS (b) OR (c). The occurrence of the Purchase Termination Date as to
one Purchaser shall permit the other Purchaser, in its sole discretion, to deem
the Purchase Termination Date to have occurred with regard to it.
(b) The Commitment shall terminate with respect to Purchases by RCC, and
RCC shall have no obligation to make any further Purchases or Reinvestments
hereunder, on the date of termination of any RCC Program Support Provider
commitment under any RCC Program Support Agreement. RCC agrees to give Seller at
least 30 days' prior written notice (with a copy to the Managing Agent for
Enterprise), unless circumstances shall not permit such 30 days' notice, of the
termination of the Commitment with respect to Purchases by RCC pursuant to the
foregoing sentence, but failure to give or delay in giving such notice shall not
prevent or delay such termination.
(c) The Commitment shall terminate with respect to Purchases by
Enterprise, and Enterprise shall have no obligation to make any further
Purchases or Reinvestments hereunder, on the date of termination of the
commitment of any (i) Enterprise Liquidity Provider under an Enterprise
Liquidity Agreement or (ii) Enterprise Credit Support Provider under an
Enterprise Credit Support Agreement. Enterprise agrees to give Seller (with a
copy to the Managing Agent for RCC) at least 30 days' prior written notice,
unless circumstances shall not permit such 30 days' notice, of the termination
of the Commitment with respect to Purchases by Enterprise pursuant to the
foregoing sentence, but failure to give or delay in giving such notice shall not
prevent or delay such termination.
(d) In the event that the Purchase Termination Date shall have occurred
pursuant to SECTION (a)(ii) above, the Purchase Termination Date shall be deemed
to have occurred solely as to the Purchaser providing notification, unless the
other Purchaser notifies Seller and the Administrative Agent that such Purchaser
also deems the Purchase Termination Date to have occurred with
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respect to it as of the date specified in its notification. The provisions of
Section 3.01 or Section 3.02, as applicable, shall apply with respect to the
terminating Purchaser's Investment until such time as the terminating Purchaser
has received the return of its Aggregate Purchaser's Investments, Earned
Discount thereon and all other amounts due to such Purchaser, at which time the
terminating Purchaser's rights and obligations under this Agreement shall
terminate. In such event the Maximum Purchase Limit shall be deemed to be
reduced by the amount of the terminating Purchaser's Percentage thereof (and in
no event shall exceed $20,000,000) and the remaining Purchaser's Percentage
shall be deemed to be 100%.
SECTION 1.07. VOLUNTARY TERMINATION OF COMMITMENT OR REDUCTION OF
MAXIMUM PURCHASE LIMIT. Seller may, upon at least five Business Days' notice to
each Agent, terminate the Commitment in whole or reduce in part the unused
portion of the Maximum Purchase Limit; PROVIDED, HOWEVER, that (a) each partial
reduction shall be in an amount equal to $5,000,000 or an integral multiple
thereof and (b) after giving effect to such reduction, the remaining Maximum
Purchase Limit will not be less than $20,000,000.
SECTION 1.08. LIMITATION OF OWNERSHIP INTEREST. Nothing in this
Agreement shall be interpreted as providing any Purchaser with an ownership
interest in Receivables that are not Pool Receivables.
SECTION 1.09. SPECIAL UNDIVIDED INTERESTS. Seller shall maintain with
each Purchaser at least one Undivided Interest the related Purchaser's
Investment of which shall be no less than $4,000,000 (unless otherwise agreed by
each Managing Agent) and which shall have a related Yield Period of no more than
35 days ending on the twenty-fourth day of each calendar month (or if such day
is not a Business Day, the next succeeding Business Day) and beginning on the
last day of the previous Yield Period (provided that the first Yield Period
shall begin on the date of the first Purchase hereunder). If on any day the
Undivided Interest required to be maintained with each Purchaser pursuant to
this SECTION 1.09 shall for any reason have a related Purchaser's Investment as
to either such Purchaser of less than $4,000,000, the related Managing Agent for
such Purchaser shall manage the Yield Periods related to such Purchaser's other
Undivided Interests in a manner such that within 60 days of such day the related
Purchaser's Investment of such Undivided Interest required to be maintained
pursuant to this SECTION 1.09 shall again equal $4,000,000.
SECTION 1.10. BENEFITS OF AGREEMENT. Each Purchaser shall be equally
and ratably entitled to the benefits of this Agreement, the other Agreement
Documents and the Receivables Pool, the Related Security and the Collections
without preference, priority or distinction on account of the actual timing of
the filing of any financing statements under the UCC,
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all in accordance with the terms and provisions of this Agreement and the other
Agreement Documents.
ARTICLE II
UNDIVIDED INTEREST AND PURCHASER'S SHARE
SECTION 2.01. UNDIVIDED INTEREST. (a) DEFINITION AND COMPUTATION OF
UNDIVIDED INTEREST. For purposes of this Agreement, "UNDIVIDED INTEREST" for
each Purchaser means, as the context may require (i) an undivided ownership
interest, in a percentage determined from time to time as provided in CLAUSE
(ii) below, in (A) all then outstanding Pool Receivables, (B) all Related
Security with respect to such Pool Receivables, and (C) all Collections with
respect to, and other proceeds of, such Pool Receivables and Related Security;
and (ii) at any time, the quotient, expressed as a percentage, obtained by
dividing the Required Allocation for such Undivided Interest by the Net Pool
Balance. Each Undivided Interest shall be computed as follows:
UI = RA = PI + DF + DR + LR + SFR
-- -----------------------------------
NPB NPB
WHERE:
UI = the Undivided Interest at any time;
RA = the Required Allocations of such Undivided
Interest at such time, which shall be an amount at
any time equal to the amount of the numerator of
the fraction set forth above;
PI = such Purchaser's Investment of such Undivided
Interest at such time as determined pursuant to
SECTION 2.02;
DF = the Discount Factor of such Undivided Interest at
such time, as determined pursuant to PART I of
APPENDIX B;
DR = the Dilution Reserve of such Undivided Interest at
such time, as determined pursuant to PART II of
APPENDIX B;
LR = the Loss Reserve of such Undivided Interest at
such time, as determined pursuant to PART II of
APPENDIX B;
SFR = the Servicer's Fee Reserve of such Undivided
Interest at such time, as determined pursuant to
PART III of APPENDIX B; and
NPB = the Net Pool Balance at such time, as determined
pursuant to SECTION 2.03.
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The "RELATED" Undivided Interest with respect to any of the foregoing items
shall mean the Undivided Interest as to which such item is calculated.
(b) FREQUENCY OF COMPUTATION OF PURCHASER'S INTEREST. Each Undivided
Interest shall initially be computed as of the opening of business of Servicer
on the date of Purchase of such Undivided Interest from Seller, and such
Undivided Interest shall be recomputed upon receipt of each Periodic Report.
Each Managing Agent on behalf of the related Purchaser may at any time request
Servicer to recompute its Undivided Interests. In addition, until such Undivided
Interest shall be reduced to zero, such Undivided Interest shall be deemed to be
automatically recomputed as of the close of business of Servicer on each day
(other than a day on which an actual recomputation is done), and, as so
recomputed, shall constitute the percentage ownership interest in Pool
Receivables held by Purchaser on such day. Such Undivided Interest shall become
zero at such time as the related Purchaser shall have received the accrued
Earned Discount for such Undivided Interest, shall have recovered the
Purchaser's Investment of such Undivided Interest and shall have received all
other amounts payable to such Purchaser pursuant to this Agreement in respect of
such Undivided Interest and Servicer shall have received the accrued Servicer's
Fee for such Undivided Interest. Such Undivided Interest shall remain constant
from the time as of which any such computation or recomputation is made until
the time as of which the next such recomputation, if any, shall be made.
SECTION 2.02. PURCHASER'S INVESTMENT. (a) Subject to SUBSECTIONS (b)
and (c), the "Purchaser's Investment" of an
Undivided Interest owned by any Purchaser at any time means an
amount equal to
(i) the aggregate of the amounts theretofore paid by the Purchaser
thereof to Seller for the acquisition of such Undivided Interest (A) by
Purchase pursuant to SECTIONS 1.01(a) and 1.03 and (B) by Reinvestments
pursuant to SECTIONS 1.01(b) and 3.01, less
(ii) the aggregate amount of Collections theretofore received and
distributed on account of such Purchaser's Investment pursuant to SECTIONS
3.01 and 3.02.
(b) Solely for purposes of calculating the Earned Discount (and each
component thereof) with respect to a portion of an Undivided Interest initially
owned by RCC or purchased by any RCC Program Support Provider pursuant to RCC's
commitment hereunder pursuant to the PROVISO to the definition of "Earned
Discount" in APPENDIX B:
(i) RCC's "PURCHASER'S INVESTMENT" of any portion of an Undivided
Interest owned by any RCC Program Support Provider (or any assignee
thereof) for RCC or otherwise funded by a Funding for RCC shall be deemed
to be the amount
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paid to RCC by such RCC Program Support Provider as the purchase price of,
or the original principal amount loaned or otherwise funded with respect
to, such portion (less any portion of such purchase price or principal
amount allocable to Earned Discount accrued and unpaid at the time of
assignment or Funding), as reduced from time to time by Collections
received and distributed to such RCC Program Support Provider (or any such
assignee) on account of such Funding (other than any portion allocable to
Earned Discounts pursuant to SECTIONS 3.01 and 3.02 or (without
duplication) by payments by RCC to any such RCC Program Support Provider in
reimbursement of any Funding; and
(ii) RCC's "PURCHASER'S INVESTMENT" of any other portion of an
Undivided Interest shall mean such Purchaser's Investment of such Undivided
Interest less the sum of such Purchaser's Investments of all portions of
such Undivided Interest described in CLAUSES (i) and (ii) above, calculated
in accordance with such CLAUSES (i) and (ii), as applicable.
(c) Solely for purposes of calculating the Earned Discount (and each
component thereof) with respect to a portion of an Undivided Interest purchased
or funded by an Enterprise Liquidity Provider or Enterprise Credit Support
Provider pursuant to the proviso to the definition of "Earned Discount" in
APPENDIX B:
(i) Enterprise's "PURCHASER'S INVESTMENT" of any portion of an
Undivided Interest owned by an Enterprise Liquidity Provider or otherwise
funded pursuant to an Enterprise Liquidity Agreement shall be deemed to be
the amount paid to Enterprise by such Enterprise Liquidity Provider as the
purchase price of, or the original principal amount loaned with respect to,
such portion (less any portion of such purchase price or principal amount
allocable to Earned Discount accrued and unpaid at the time of purchase or
funding by such Enterprise Liquidity Provider), as reduced from time to
time by Collections indefeasibly received and distributed to such
Enterprise Liquidity Provider on account of such purchase price or
principal amount (other than any portion allocable to Earned Discount
pursuant to Sections 3.01 and 3.02 hereof);
(ii) Enterprise's "PURCHASER'S INVESTMENT" of any portion of an
Undivided Interest funded under an Enterprise Credit Support Agreement
shall be deemed to be the principal amount of the advance or drawing under
such Enterprise Credit Support Agreement with respect to such portion (less
the amount, if any, of such advance or drawing used to fund Earned Discount
accrued and unpaid at the time of the making of such advance or drawing),
as reduced by any payments indefeasibly made by Enterprise or the
Enterprise Liquidity Provider to the Enterprise Credit Support Provider in
reimbursement of such drawing or repayment of such advance, as the case may
be (less any amount allocable to such accrued and unpaid Earned Discount);
and
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(iii) Enterprise's "PURCHASER'S INVESTMENT" of any other portion of
an Undivided Interest shall mean such Purchaser's Investment of such
Undivided Interest less the sum of such Purchaser's Investments of all
portions of such Undivided Interest described in CLAUSES (i) and (ii)
above, calculated in accordance with such CLAUSES (i) and (ii), as
applicable.
(d) The Purchaser's Investment of a Purchaser shall not be considered
reduced by any distribution of any portion of Collections if at any time such
distribution is rescinded or must otherwise be returned for any reason.
(e) The "RELATED" Purchaser's Investment of a Purchaser with regard to a
Yield Period or Undivided Interest (or portion thereof) means the Purchaser's
Investment calculated with regard to such Yield Period or Undivided Interest (or
such portion), as the case may be.
SECTION 2.03. NET POOL BALANCE. (a) The "NET POOL BALANCE" at any
time means an amount equal to
(i) the aggregate Unpaid Balance of the Eligible Receivables in the
Receivables Pool at such time, MINUS
(ii) the aggregate (for all Obligors) of the amounts by which (x) the
Unpaid Balance of all Pool Receivables of each Obligor exceeds (y) the
Concentration Limit for such Obligor at such time.
(b) "CONCENTRATION LIMIT" for any Obligor or Government Obligor
(Government Obligors in the aggregate may not exceed 15% of the Net Pool Balance
at any time as set forth on Schedule 2.03(b)) at any time means the greater of
(x) the Special Concentration Limit, if any, for such Obligor and (y) 2.0% of
the Aggregate Unpaid Balance of the Eligible Receivables in the Receivables Pool
at such time.
(c) "SPECIAL CONCENTRATION LIMIT" for any Obligor means the amount
designated from time to time as such by the Administrative Agent (with the
written consent of both Managing Agents) with regard to any Obligor in a writing
in the form of SCHEDULE 2.03(b) delivered to Seller (it being understood that
the most recent writing at any time delivered to Seller shall supersede each
previous writing).
(d) In the case of any Obligor which is an Affiliate of any other Obligor,
the Concentration Limit, the Special Concentration Limit, if any, and the
aggregate Unpaid Balance of Pool Receivables of such Obligors shall be
calculated as if such Obligors were one Obligor.
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SECTION 2.04. SHARES.
(a) AGGREGATE PURCHASER'S SHARE. Each Purchaser's "AGGREGATE PURCHASER'S
SHARE" of Collections of Pool Receivables received (or deemed received) by
Seller or Servicer on any day means an amount calculated by the Servicer
(subject to recalculation by any Agent) for each such Purchaser equal to the
product of
(i) the amount of all Collections of Pool Receivables received (or
deemed received) by Seller or Servicer on such day, TIMES,
(ii) the Purchasers' Aggregate Required Allocations divided by the
Net Pool Balance, TIMES
(iii) such Purchaser's Percentage;
PROVIDED THAT, if at any time a Purchaser's Aggregate Purchaser's Investments
shall have been reduced to zero and there shall be no other amounts owing to
such Purchaser or the related Managing Agent at such time, the other Purchaser's
Percentage set forth in clause (iii) shall equal 100%.
(b) PURCHASER'S SHARE. With respect to each Undivided Interest, the
related "PURCHASER'S SHARE" of Collections of Pool Receivables received (or
deemed received) by Seller or Servicer on any day means an amount equal to the
product of
(i) the Aggregate Purchaser's Share of Collections calculated for the
related Purchaser of such Undivided Interest for such day, TIMES
(ii) (A) if such day is not a Run Off Day, the quotient of (1) such
Undivided Interest on such day, expressed as a decimal divided by (2) all of
such Purchaser's Undivided Interests on such day, expressed as a decimal, and
(B) if such day is a Run Off Day, the quotient of (1) such Undivided
Interest on the first Run Off Day to have occurred during the then current Run
Off Period, expressed as a decimal, divided by (2) all of such Purchaser's
Undivided Interests on such day, expressed as a decimal;
PROVIDED that after such time as an Undivided Interest shall equal zero the
Purchaser's Share of Collections therefor shall also equal zero; and PROVIDED,
FURTHER, that no Purchaser shall be entitled to any Collections allocated to the
other Purchaser's Aggregate Purchaser's Share, whether or not the application of
this proviso would result in a shortfall with respect to any amounts then due
and payable with respect to any Undivided Interest owned by any Purchaser.
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ARTICLE III
SETTLEMENTS
SECTION 3.01. NON-RUN OFF SETTLEMENT PROCEDURES FOR COLLECTIONS. (a)
DAILY PROCEDURE. On each day (other than a Run Off Day) in any Yield Period for
any Undivided Interest, Servicer shall deem an amount equal to the related
Purchaser's Share but not in excess of such Purchaser's Aggregate Purchaser's
Share (as determined in SECTION 2.04) of Collections of Pool Receivables
received or deemed received on such day to be received in respect of such
Undivided Interest; and
(i) out of Purchaser's Share of such Collections, hold in trust for
the benefit of the Purchaser of such Undivided Interest an amount equal to
the related Earned Discount and related Servicer's Fee accrued through such
day and not previously so held for the benefit of such Purchaser,
(ii) apply an amount equal to the remainder of Purchaser's Share of
such Collections (the "REMAINING COLLECTIONS") to reduce the related
Purchaser's Investment of such Undivided Interest (it being understood that
such amount need not be physically paid to such Purchaser under this CLAUSE
(ii)),
(iii) Subject to SECTION 3.03, after such reduction, (A) apply such
Remaining Collections to the Reinvestment, for the benefit of such
Purchaser, of additional undivided interests in Pool Receivables by
recomputation of such Undivided Interest pursuant to SECTION 2.01 as of the
end of such day, thereby increasing the related Purchaser's Investment, and
(B) pay to Seller such Remaining Collections.
The recomputed Undivided Interest shall constitute the percentage ownership
interest in Pool Receivables on such day held by such Purchaser with regard to
such Undivided Interest.
(b) SETTLEMENT DATE PROCEDURE. On the Settlement Date for each Undivided
Interest, for each day in the related Yield Period of such Settlement
Period that is not a Run Off Day for such Undivided Interest, out of the
related Purchaser's Share of Collections for each such Undivided Interest,
Servicer shall deposit to the Managing Agent's account for the Purchaser
then owning such Undivided Interest, as described in SECTION 3.05, the
amounts set aside as described in SECTION 3.01(a)(i) and the amounts, if
any, set aside pursuant to SECTION 3.03(b) or (c) for payment to the
related Managing Agent on such Settlement Date; PROVIDED, HOWEVER, that if
the related Managing Agent and the Administrative Agent give their
respective consent (which consent may be revoked at any time), Servicer may
retain amounts which would otherwise be deposited in respect of Servicer's
Fee, in which case no distribution shall be made in respect of Servicer's
Fee under CLAUSE (c) below.
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(c) ORDER OF APPLICATION. Upon receipt by a Managing Agent of funds
distributed pursuant to SUBSECTION (b) in respect of an Undivided Interest owned
by the related Purchaser, such Managing Agent shall distribute them first, (i)
to the related Purchaser in payment of the accrued and unpaid Earned Discount
and Program Fee for such Undivided Interest until paid in full, then (ii) to
Servicer in payment of the accrued and unpaid Servicer's Fee payable with
respect to such Undivided Interest until paid in full, and (iii) in the case of
any amounts set aside pursuant to SECTION 3.03(b) or (c), to the related
Purchaser in reduction of the Purchaser's Investment therein.
SECTION 3.02. RUN OFF SETTLEMENT PROCEDURES FOR COLLECTIONS. (a)
DAILY PROCEDURE. On each Run Off Day occurring in any Yield Period for an
Undivided Interest, Servicer shall set aside and hold in trust for the related
Purchaser, such Purchaser's Share of the Collections of Pool Receivables in
respect of such Undivided Interest for such Run Off Day but not in excess of
such Purchaser's Aggregate Purchaser's Share and, if requested in writing (a
copy of such request to be forwarded to the other Managing Agent simultaneously)
by the related Managing Agent (in its sole discretion), by depositing such
Collections within one Business Day of Servicer's receipt thereof into a bank
account at the Administrative Agent on behalf of such Purchaser in which no
other funds shall be deposited (it being understood that, if one Managing Agent
so requests, the other Managing Agent shall also be entitled to so request,
whether or not a Run Off Day shall have occurred with respect to any Undivided
Interest owned by it).
(b) SETTLEMENT DATE PROCEDURE. On each Settlement Date for each Undivided
Interest, if one or more Run Off Days for such Undivided Interest occurred
during the related Yield Period for the Settlement Period ending on such
Settlement Date for such Undivided Interest, Servicer shall deposit to the
account of the Administrative Agent (such deposited funds shall be deemed
deposited on behalf of the Managing Agent for the Purchaser then owning such
Undivided Interest) for the Purchaser then owning such Undivided Interest, as
described in SECTION 3.05, the amounts set aside pursuant to SECTION 3.02(a) out
of Purchaser's Share of Collections during such Settlement Period, but not to
exceed the sum of (i) the accrued and unpaid Earned Discount, (ii) the
Purchaser's Investment of such Undivided Interest, (iii) the aggregate of other
amounts owed hereunder by Seller to such Purchaser or the related Managing Agent
in respect of such Undivided Interest, and (iv) the accrued Servicer's Fee
payable with respect to such Undivided Interest. If no Termination Event or
Unmatured Termination Event shall have occurred and be continuing, any amounts
set aside pursuant to the first sentence of this SECTION 3.02 and not required
to be deposited to the Administrative Agent's account pursuant to the next
preceding sentence shall be paid to Seller by Servicer.
(c) ORDER OF APPLICATION. Upon receipt by a Managing Agent of funds
deposited to its account pursuant to SECTION 3.02(b),
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the Managing Agent shall distribute them (i) to the related Purchaser or such
Managing Agent (as the case may be) (A) in payment of the accrued and unpaid
Earned Discount and Program Fee for such Undivided Interest, (B) in reduction of
the related Purchaser's Investment of such Undivided Interest and (C) in payment
of any other amounts owed by Seller hereunder to the related Purchaser or such
Managing Agent, in each case until reduced to zero, and (ii) to Servicer in
payment of the accrued Servicer's Fee payable with respect to such Undivided
Interest, also until reduced to zero. If there shall be insufficient funds on
deposit for such Managing Agent to distribute funds in payment in full of the
aforementioned amounts, such Managing Agent shall distribute funds on deposit,
FIRST, in payment of the Earned Discount and Program Fee for such Undivided
Interest, SECOND, in payment of the Servicer's Fee payable with respect to such
Undivided Interest, if any, (if Servicer is not Seller or an Affiliate of
Seller), THIRD, in reduction of Purchaser's Investment of such Undivided
Interest, FOURTH, in payment of any other amounts payable to such Purchaser or
such Managing Agent hereunder, and FIFTH, in payment of the Servicer's Fee
payable with respect to such Undivided Interest (if Servicer is Seller or an
Affiliate of Seller).
SECTION 3.03. SPECIAL SETTLEMENT PROCEDURES; REDUCTION OF PURCHASER'S
INVESTMENT, ETC. (a) DEEMED COLLECTIONS. If on any day
(i) the Unpaid Balance of any Pool Receivable is
(A) reduced as a result of any defective, rejected or returned
merchandise or services, any cash discount, or any adjustment by
Seller, any Originator or any Affiliate of Seller or any Originator
(other than any adjustment permitted by SECTION 8.02(c) unless any
Agent or Purchaser shall reasonably object thereto within 30 days of
being informed thereof),
(B) reduced or cancelled as a result of a setoff in respect of
any claim by the Obligor thereof against Seller, any Originator or any
Affiliate of Seller or any Originator (whether such claim arises out
of the same or a related or an unrelated transaction), or
(C) reduced on account of the obligation of Seller to pay to the
related Obligor any rebate or refund; or
(ii) any of the representations or warranties of Seller set forth in
SECTION 6.01(l) or (p) is no longer true with respect to a Pool Receivable,
then, on such day, Servicer shall be deemed to have received a Collection of
such Pool Receivable
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(I) in the case of CLAUSE (i) above, in the amount of such
reduction or cancellation; and
(II) in the case of CLAUSE (ii) above, in the amount of the
Unpaid Balance of such Pool Receivable.
(b) UNREINVESTED COLLECTIONS. Collections that may not be reinvested by
means of Reinvestments in an Undivided Interest on account of the application of
the Required Allocations Limit or the Purchase Limit pursuant to SECTION 2.01
shall be so reinvested as soon as it is possible to do so without violating such
Required Allocations Limit or Purchase Limit, as the case may be. To the extent
and so long as such Collections may not be so reinvested, Servicer shall hold
such Collections ratably intrust for the benefit of the Purchasers and, if
requested by the Managing Agent for any Purchaser in its sole discretion
(request by one Managing Agent shall be deemed to be request by each Managing
Agent unless otherwise notified to Seller by the second Managing Agent), in a
separate deposit account at the Administrative Agent containing only such
Purchaser's Share of such Collections and no other funds, for payment to each
Managing Agent on the next following Settlement Date for application to the
related Purchaser's next maturing Undivided Interests.
(c) SELLER'S REDUCTION OF AGGREGATE TOTAL INVESTMENT. If at any time
Seller shall wish to cause the reduction of the Aggregate Total Investment (but
not to commence the liquidation,or reduction to zero, of all Undivided
Interests), Seller may do so as follows:
(i) Seller shall give the Agents at least three Business Days' prior
written notice thereof (including the amount of such proposed reduction and
the proposed date on which such reduction will commence),
(ii) Seller shall cause the reduction to be allocated ratably among
the Purchasers such that each Purchaser shall receive its Percentage of the
aggregate amount of such proposed reduction,
(iii) on the proposed date of commencement of such reduction and on
each day thereafter, Servicer shall refrain from reinvesting Remaining
Collections in Undivided Interests of each Purchaser until the amount
thereof not so reinvested shall equal the desired amount of reduction for
each such Purchaser, and
(iv) Servicer shall hold such Collections for the benefit of the
Purchasers, for the ratable payment to the Managing Agents for each
Undivided Interest proposed to be reduced in connection herewith, in which
such Collections are accumulated, and such amounts shall be applied to
reduce each Purchaser's Investment in such Undivided Interests in
accordance with the PROVISOS hereto and with regard to any Undivided
Interest, the related Purchaser's Investment of
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such Undivided Interest shall be deemed reduced in the amount to be paid to
the Managing Agents only when in fact finally so paid;
PROVIDED that,
(A) with regard to each Purchaser, any such reduction may only be
effected on the last day of the related Yield Period for any Undivided
Interest the related Purchaser's Investment in which has been requested to
be reduced and only to the extent that after giving effect to any such
reduction the remaining Purchaser's Investment of each Purchaser in each
such Undivided Interest shall not be less than $1,000,000 (unless
Purchaser's Investment of any such Undivided Interest shall thereby be
reduced to zero) and shall be in an integral multiple of $100,000,
(B) if Seller shall commence any voluntary reduction in a Yield
Period containing all or a portion of any Run Off Period, Collections not
so reinvested shall be treated as if collected on the next following Run
Off Day,
(C) Seller shall use reasonable efforts to attempt to choose a
reduction amount, and the date of commencement thereof, so that such
reduction shall commence and conclude in the same Yield Period, and
(D) if two or more Undivided Interests of any Purchaser shall be
outstanding at the time of any proposed reduction, such proposed reduction
shall be applied, unless the related Managing Agent shall consent
otherwise, to the Undivided Interest with the shortest remaining Yield
Period.
(d) ALLOCATIONS OF OBLIGOR'S PAYMENTS. Except as provided in SECTION
3.03(a) or as otherwise required by law or the underlying Contract, all
Collections received from an Obligor of any Receivable shall be applied to
Receivables then outstanding of such Obligor in the order of the age of such
Receivables, starting with the oldest such Receivable; PROVIDED, HOWEVER, that,
if payment is designated by such Obligor for application to specific
Receivables, it shall be applied to such specified Receivables.
(e) DEPOSIT TO COLLECTION ACCOUNT. Notwithstanding anything herein to the
contrary, the Administrative Agent upon request of any Managing Agent or any
Purchaser may require Seller and Servicer (or their designees or successors) at
any time (such instruction shall be deemed given upon the occurrence and
continuance of a Termination Event), to deposit all Collections of Pool
Receivables received (including, without limitation, received by any Lock-Box
Bank) to an account established at the Administrative Agent (the "COLLECTION
ACCOUNT") within one Business Day of receipt thereof. Such Collections shall be
applied by the Administrative Agent in accordance with the provisions of this
Agreement, including SECTIONS 3.01, 3.02 or
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3.03 hereof. Servicer (or its designee or successor) shall notify the Agents of
the amount of funds deposited in the Collection Account not received from Pool
Receivables and shall remit such funds as soon as practicable after such
notification to such account as Servicer (or its designee or successor) shall
designate.
(f) CERTAIN REQUIRED DEPOSITS. Notwithstanding anything in this Agreement
to the contrary, if at any time any Purchaser's Share of Collections is at such
time being paid to such Purchaser in reduction of such Purchaser's Undivided
Interest, and at such time the other Purchaser's Share of Collections shall not
then be required to be paid over in reduction of such Purchaser's Investment in
an Undivided Interest, such other Purchaser's Share of Collections in an amount
equal to the amount of reduction in the first Aggregate Purchaser's Investments
shall be deposited into a bank account at the Administrative Agent on behalf of
such other Purchaser for application to such Purchaser's next maturing Undivided
Interests. Interest earnings on such bank account shall be for the account of
the Seller.
SECTION 3.04. REPORTING. (a) On or prior to the twentieth day of each
month (or if such day is not a Business Day, the next succeeding Business Day),
Servicer shall prepare and forward to the Managing Agents a Periodic Report
(including a certification that no Termination Event or Unmatured Termination
Event shall have occurred) relating to all Undivided Interests owned by the
Purchasers, as of the close of business of Servicer on the next preceding Month
End Date.
(b) On or prior to each Settlement Date, Seller will advise the Managing
Agents and, if Seller is not Servicer, Servicer of each Run Off Day occurring
during the Settlement Period ending on such Settlement Date.
(c) On or prior to each Purchase or Reinvestment hereunder, Seller shall
permanently mark in the computer records for each Receivable subject to such
Purchase or Reinvestment that such Receivable is subject to the interest of the
Purchasers hereunder.
SECTION 3.05. PAYMENTS AND COMPUTATIONS, ETC. (a) Unless otherwise
required pursuant to this Agreement, all amounts to be paid or deposited by
Seller hereunder shall be paid or deposited in accordance with the terms hereof
no later than noon (New York time) on the day when due in lawful money of the
United States of America in same day funds to accounts specified by the
Administrative Agent and located at 231 South LaSalle Street, Chicago, Illinois.
If the Administrative Agent shall have received such funds by noon (New York
time) it shall forward the portion of the funds deposited that are due to the
Purchasers by 3:00 p.m. (New York time) on such day and if received after noon
(New York time), on the next following Business Day.
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(b) Seller or Servicer, as applicable, shall, to the extent permitted by
law, pay to the applicable Agent interest on all amounts not paid or deposited
when due hereunder at 2% PER ANNUM above the Alternate Reference Rate, payable
on demand, PROVIDED, HOWEVER, that such interest rate shall not at any time
exceed the maximum rate permitted by applicable law. Such interest shall be
retained by the applicable Agent except to the extent that such failure to make
a timely payment or deposit has continued beyond the date for distribution by
the applicable Agent of such overdue amount to the related Purchaser, if any, or
any other Person having an interest in such overdue amount, in which case such
interest accruing after such date shall be for the account of, and distributed
by the applicable Agent, to such Persons ratably in accordance with their
respective interests in such overdue amount.
(c) All computations of interest, Earned Discount, Negative Spread Fee and
any other fees hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first day but excluding the last day)
elapsed.
SECTION 3.06. DIVIDING OR COMBINING UNDIVIDED INTERESTS.
(a) DIVISION OF UNDIVIDED INTERESTS. Each Managing Agent may at any time,
as of the last day of any Yield Period for any then existing Undivided Interest
owned by its related Purchaser, divide such existing Undivided Interest on such
last day into two or more new Undivided Interests, each such new Undivided
Interest having a Purchaser's Investment as designated by such Managing Agent
and all such new Undivided Interests collectively having aggregate Purchaser's
Investments equal to the Purchaser's Investment of such existing Undivided
Interest.
(b) COMBINATION OF UNDIVIDED INTERESTS. Each Managing Agent may at any
time, as of the last day of any Yield Period for two or more existing Undivided
Interests owned by its related Purchaser, on or before the date of any proposed
Purchase of an Undivided Interest pursuant to SECTIONS 1.01 and 1.04 by the
related Purchaser, on such last day or such date of Purchase, as the case may
be, combine into one new Undivided Interest such existing and/or proposed
Undivided Interests or any combination thereof, such new Undivided Interest
having a Purchaser's Investment equal to the aggregate Purchaser's Investments
of such Undivided Interests so combined.
(c) EFFECT OF DIVISION OR COMBINATION. On and after any division or
combination of Undivided Interests as described above, each of the new Undivided
Interests resulting from such division, or the new Undivided Interest resulting
from such combination, as the case may be, shall be a separate Undivided
Interest having a Purchaser's Investment as set forth above, and shall take the
place of such existing Undivided Interest or Undivided Interests or proposed
Undivided Interest, as the case
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may be, in each case under and for all purposes of this Agreement.
SECTION 3.07. TREATMENT OF COLLECTIONS AND DEEMED COLLECTIONS.
Seller shall forthwith deliver to Servicer all Collections deemed received by
Seller pursuant to SECTION 3.03(a), and Servicer shall hold or distribute such
Collections as Earned Discount, accrued Servicer's Fee, repayment of Purchaser's
Investment, etc. to the same extent as if such Collections had actually been
received on the date of such delivery to Servicer. If Collections are then
being paid to the Administrative Agent, or lock boxes or accounts directly or
indirectly owned or controlled by the Administrative Agent, Servicer shall
forthwith cause such deemed Collections to be ratably paid to the Administrative
Agent or to such lock boxes or accounts, as applicable. So long as Seller shall
hold any Collections or deemed Collections required to be paid to Servicer or
the Administrative Agent, it shall hold such Collections in trust and separate
and apart from its own funds and shall clearly mark its records to reflect such
trust.
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. FEES. (a) ADMINISTRATIVE AGENT'S FEES. Fees payable
to the Administrative Agent for its own account payable on such dates and in
such amounts set forth in the letter dated January 5, 1995 from the
Administrative Agent to Seller (the "FEE LETTER").
(b) FACILITY FEE. From the date hereof, until the date following the
Commitment Termination Date, on which Aggregate Total Investments shall be
reduced to zero, Seller shall pay to each Managing Agent a facility fee
("FACILITY FEE") for each day in such period equal, for each Purchaser, to the
product of (x) its related Purchaser's Percentage of the Maximum Purchase Limit
on each such day TIMES (y) .15% TIMES (z) 1/360. Such Facility Fee shall be
paid in arrears on the first Business Day of each month for the preceding
calendar month and on the date, following the Commitment Termination Date, when
such Purchaser's Aggregate Purchaser's Investments shall have been reduced to
zero, in the amount of such Facility Fee that shall have accrued during the
calendar month or other period then ending and which shall not have been
previously paid. The Managing Agents shall have the right to change the
percentage set forth in clause (y) in their reasonable discretion hereof on each
anniversary of the date hereof upon 30 days notice to the Seller.
(c) PROGRAM FEE. From the date hereof until the date, following the
Commitment Termination Date, on which Aggregate Total Investments shall be
reduced to zero, Seller shall pay to each Purchaser a program fee ("PROGRAM
FEE") for each day in such period equal, for each Purchaser, to the product of
(x) the
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Aggregate Purchaser's Investments of such Purchaser on such day, TIMES (y) .20%,
TIMES (z) 1/360. Such Program Fee shall be paid in arrears on the first
Business Day of each month for the preceding calendar month and on the date,
following the Commitment Termination Date, when such Purchaser's Aggregate
Purchaser's Investments shall have been reduced to zero, in the amount of such
Program Fee that shall have accrued during the calendar month or other period
then ending and which shall not have been previously paid.
(d) NOTE FEE. From the date hereof until the date, after the Commitment
Termination Date, on which the Aggregate Purchaser's Investments shall be
reduced to zero, Seller shall pay to each Managing Agent for the account of the
related Purchaser a note issuance fee ("NOTE FEE") in an amount equal to the
product of (x) the greater of the amount of the per-note fee (currently $15)
paid or payable by such Purchaser to the issuing agent and depositary for the
Commercial Paper Notes for the authentication and delivery of each Commercial
Paper Note, as notified by Purchaser to Seller and Servicer from time to time,
TIMES (y) the number of Commercial Paper Notes issued by such Purchaser to fund
its Undivided Interests hereunder during the period for which such Note Fee is
payable, as notified by such Purchaser to Seller and Servicer; PROVIDED THAT, if
such Commercial Paper Notes shall at any time become "book-entry" Notes, the
"Note Fee" therefor shall equal $30 per trade. Such Note Fee shall be paid in
arrears on the first Business Day of each month for the preceding calendar month
for the number of Commercial Paper Notes issued to fund the Undivided Interests
owned by each Purchaser during the preceding calendar month for which no Note
Fee shall have theretofore been paid. Each Purchaser shall notify Seller and
Servicer at least one Business Day prior to the end of each calendar month of
the number of Commercial Paper Notes issued by such Purchaser to fund its
Undivided Interests hereunder during such calendar month.
(e) DEALER FEE. The dealer fee is set forth in clause (ii) of the
definition of Commercial Paper Rate.
SECTION 4.02. YIELD PROTECTION. (a) If (i) Regulation D or (ii) any
Regulatory Change occurring after the date hereof
(A) shall subject an Affected Party to any tax, duty or other charge
with respect to any Undivided Interest owned by or funded by it or any
obligations or right to make Purchases or Reinvestments or to provide
funding therefor, or shall change the basis of taxation of payments to the
Affected Party of any Purchaser's Investments or Earned Discount owned by,
owed to or funded by it or any other amounts due under this Agreement in
respect of any Undivided Interest owned by or funded by it or its
obligations or rights, if any, to make Purchases or Reinvestments or to
provide funding therefor (except for changes in the rate of tax on the
overall net income of such Affected Party imposed by the United States of
America, by the jurisdiction in
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which such Affected Party's principal executive office is located and,
if such Affected Party's principal executive office is not in the United
States of America, by the jurisdiction where such Affected Party's
principal office in the United States is located); or
(B) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Federal Reserve Board, but
excluding any reserve included in the determination of Earned Discount),
special deposit or similar requirement against assets of any Affected
Party, deposits or obligations with or for the account of any Affected
Party or with or for the account of any affiliate (or entity deemed by the
Federal Reserve Board to be an affiliate) of any Affected Party, or credit
extended by any Affected Party; or
(C) shall change the amount of capital maintained or required or
requested or directed to be maintained by any Affected Party; or
(D) shall impose any other condition affecting any Undivided Interest
owned or funded by any Affected Party, or its obligations or rights, if
any, to make Purchases or Reinvestments or to provide funding therefor; or
(E) shall impose on any Affected Party any other expense (including
attorneys' fees and litigation costs)
and the result of any of the foregoing is or would be
(x) to increase the cost to (or in the case of Regulation D referred
to above, to impose a cost on) (I) an Affected Party funding or making or
maintaining any Purchases or Reinvestments, any purchases, reinvestments,
or loans or other extensions of credit under any RCC Program Support
Agreement, or any Funding, or under the Enterprise Liquidity Agreement or
Enterprise Credit Support Agreement, as applicable or any commitment of
such Affected Party with respect to any of the foregoing, or (II) any Agent
for continuing its, or Seller's, or any Originator's relationship with any
Purchaser,
(y) to reduce the amount of any sum received or receivable by an
Affected Party under this Agreement or the Certificate of Assignments, or
under the Enterprise Liquidity Agreement, the Enterprise Credit Support
Agreement, or any RCC Program Support Agreement with respect thereto, or
(z) in the sole determination of such Affected Party, to reduce the
rate of return on the capital of an Affected Party as a consequence of its
obligations hereunder or arising in connection herewith to a level below
that which such Affected Party could otherwise have achieved,
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then within thirty days after demand by such Affected Party (which demand
shall be accompanied by a statement setting forth the basis of such
demand), Seller shall pay directly to such Affected Party such additional
amount or amounts as will compensate such Affected Party for such
additional or increased cost or such reduction; PROVIDED THAT, such demand
shall be made only with regard to amounts accruing not more than six months
prior to the earlier of (x) such demand being made upon Seller and (y)
notification of Seller pursuant to PARAGRAPH (b) below.
(b) Each Affected Party will promptly notify Seller and the Agent of
any event of which it has knowledge which will entitle such Affected Party
to compensation pursuant to this SECTION 4.02; PROVIDED, HOWEVER, no
failure to give or delay in giving such notification shall adversely affect
the rights of any Affected Party to such compensation.
(c) In determining any amount provided for or referred to in this
SECTION 4.02, an Affected Party may use any reasonable averaging and
attribution methods that it (in its sole discretion) shall deem applicable.
Any Affected Party when making a claim under this SECTION 4.02 shall submit
to Seller a statement as to such increased cost or reduced return
(including calculation thereof in reasonable detail), which statement
shall, in the absence of manifest error, be conclusive and binding upon
Seller.
ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.01. CONDITIONS PRECEDENT TO INITIAL PURCHASE. The initial
Purchase hereunder is subject to the condition precedent that each Agent shall
have received, on or before the date of such Purchase, the following, each
(unless otherwise indicated) dated such date and in form and substance
satisfactory to each Agent (subject to approval by the RCC Program Support
Provider, the Enterprise Liquidity Provider and Enterprise Credit Support
Provider):
(a) A Certificate of Assignments for each Purchaser in
substantially the form attached hereto as EXHIBIT 5.01(a);
(b) A copy of the resolutions of the Board of Directors of Seller
approving this Agreement, the Purchase and Sale Agreement, the Certificate
of Assignments and the other Agreement Documents to be delivered by it
hereunder and the transactions contemplated hereby, certified by its
Secretary or Assistant Secretary;
(c) Good standing certificates for Seller and each Originator issued
by the Secretary of State of Florida;
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(d) A certificate of the Secretary or Assistant Secretary of each of
Seller and each Originator certifying the names and true signatures of the
officers authorized on its behalf to sign this Agreement, the Purchase and
Sale Agreement, the Certificate of Assignments and the other Agreement
Documents to be delivered by them hereunder (on which certificate each
Agent and each Purchaser may conclusively rely until such time as each
Agent shall receive from Seller or the applicable Originator, as
applicable, a revised certificate meeting the requirements of this
SUBSECTION (d));
(e) The Articles of Incorporation of each of Seller and each
Originator, duly certified by the Secretary of State of Florida, as of a
recent date acceptable to each Agent, together with a copy of the By-laws
of each of Seller and each Originator, duly certified by the Secretary or
an Assistant Secretary of Seller and such Originator, as applicable;
(f) Acknowledgment copies of proper Financing Statements (Form UCC-
1), filed on or prior to the date of the initial Purchase, naming (i) each
Originator as debtor/seller, Seller as secured party/purchaser and
Purchaser as assignee and filed in connection with transactions
contemplated by the Purchase and Sale Agreement and (ii) Seller as the
debtor/seller of Receivables or an undivided interest therein and
Purchasers as the secured party/purchaser, or other, similar instruments or
documents, as may be necessary or, in the opinion of the Managing Agents,
desirable under the UCC or any comparable law of all appropriate
jurisdictions to perfect Purchaser's interests in all Undivided Interests
assigned to it or otherwise created or arising hereunder;
(g) A search report provided in writing to each Agent by LEXIS
Document Services, listing all effective financing statements that name
Seller or any Originator as debtor and that are filed in the jurisdictions
in which filings were made pursuant to SUBSECTION (f) above and in such
other jurisdictions that any Agent shall reasonably request, together with
copies of such financing statements (none of which shall cover any
Receivables or Contracts or interests therein or Collections or proceeds of
any thereof);
(h) Duly executed copies of Lock-Box Agreements with each of the
Lock-Box Banks, in substantially the form attached hereto as EXHIBITS
5.01(h);
(i) A favorable opinion of associate General Counsel for Seller, each
Originator and Servicer, in substantially the form of EXHIBIT 5.01(i);
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(j) A favorable opinion of Faegre & Benson, counsel for BofA as
Administrative Agent and as Managing Agent, substantially in the form of
EXHIBIT 5.01(j);
(k) Such sublicenses as the Administrative Agent shall require with
regard to all programs leased by Seller, any Originator or Servicer and
used in the servicing of the Receivables Pool;
(l) Such powers of attorney as the Administrative Agent shall
reasonably request to enable the Administrative Agent to collect all
amounts due under any and all Pool Receivables;
(m) A Periodic Report as of the most recent Month End Date;
(n) A report from Coopers & Lybrand or other independent certified
public accountants or other auditors acceptable to each Agent, with respect
to the application of certain procedures to Seller's books and records
relating to the Pool Receivables;
(o) Evidence (i) of the execution and delivery by Seller and each
Originator of the Purchase and Sale Agreement (substantially in the form
attached hereto as EXHIBIT 5.01(o)) and each other Agreement Document to be
executed and delivered in connection therewith and (ii) that each of the
conditions precedent to the execution, delivery and effectiveness of the
Purchase and Sale Agreement and each other Agreement Document has been
satisfied;
(p) Executed Letter Agreement (Segregation of Funds) of even date
herewith among Wackenhut, BofA and NationsBank;
(q) A computer tape or disc containing such information relating to
each of the Pool Receivables the subject of the first Purchase hereunder as
is satisfactory to the Managing Agents; and
(r) Evidence of the payment of all fees required to be paid prior to
closing.
SECTION 5.02. CONDITIONS PRECEDENT TO ALL PURCHASES AND
REINVESTMENTS. Each Purchase (including the initial Purchase) and each
Reinvestment hereunder shall be subject to the further conditions precedent
("CONDITIONS PRECEDENT") that on the date of such Purchase or Reinvestment the
following statements shall be true (and Seller by accepting the amount of such
Purchase or by receiving the proceeds of such Reinvestment shall be deemed to
have certified that):
(a) The representations and warranties contained in SECTION 6.01 and
in the Purchase and Sale Agreement are
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correct on and as of such day as though made on and as of such day and
shall be deemed to have been made on such day,
(b) No event has occurred and is continuing, or would result from
such Purchase or Reinvestment, that constitutes a Termination Event or
Unmatured Termination Event,
(c) After giving effect to each proposed Purchase or Reinvestment,
(i) Aggregate Total Investments will not exceed the Purchase Limit, (ii)
Aggregate Required Allocations will not exceed the Required Allocations
Limit and (iii) the Aggregate Purchaser's Investments of the Purchaser
making such Purchase would not exceed its Percentage of the Aggregate Total
Investments, and
(d) The Commitment Termination Date shall not have occurred;
PROVIDED, HOWEVER, the absence of the occurrence and continuance of an Unmatured
Termination Event shall not be a Condition Precedent to any reinvestment being
made with the proceeds of Collections that were, on the same day, applied in
reduction of the Aggregate Purchaser's Investments.
SECTION 5.03. ADDITIONAL CONDITION PRECEDENT TO PURCHASES. Each
Purchase (including the initial Purchase) shall be subject to the further
condition precedent that the Purchase Termination Date shall not have occurred.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller
represents and warrants as follows:
(a) ORGANIZATION AND GOOD STANDING. Seller has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Florida, with power and authority to own its properties and to
conduct its business as such properties are presently owned and such
business is presently conducted, and had at all relevant times, and now
has, all necessary power, authority, and legal right to acquire and own the
Pool Receivables.
(b) DUE QUALIFICATION. Seller is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business requires such
qualification, licenses or approvals.
(c) POWER AND AUTHORITY; DUE AUTHORIZATION. Seller (i) has all
necessary power, authority and legal right to
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(A) execute and deliver this Agreement, the Certificate of Assignments and other
Agreement Documents, (B) carry out the terms of the Agreement Documents, and (C)
sell and assign Undivided Interest on the terms and conditions herein provided
and (ii) has duly authorized by all necessary corporate action the execution,
delivery and performance of this Agreement and the other Agreement Documents and
the sale and assignment of the Undivided Interests on the terms and conditions
herein provided.
(d) VALID SALE; BINDING OBLIGATIONS. This Agreement constitutes a valid
sale, transfer, and assignment of Undivided Interests to the Purchasers,
enforceable against creditors of, and purchasers from, Seller; and this
Agreement constitutes, and each other Agreement Document to be signed by Seller
when duly executed and delivered will constitute, a legal, valid and binding
obligation of Seller enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights generally and
by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the other Agreement Documents and the fulfillment of the
terms hereof will not (i) conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a default under, the articles of incorporation or by-laws of Seller, or
any indenture, loan agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument to which Seller is a party or by which
it or any of its properties is bound, (ii) result in the creation or imposition
of any Adverse Claim upon any of Seller's properties pursuant to the terms of
any such indenture, loan agreement, receivables purchase agreement, mortgage,
deed of trust, or other agreement or instrument, other than this Agreement and
the Certificate of Assignments, or (iii) violate any law or order, rule, or
regulation applicable to Seller of any court or of any federal or state
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over Seller or any of its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending, or
threatened, before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (i) asserting the invalidity of this
Agreement, the Certificate of Assignments or any other Agreement Documents, (ii)
seeking to prevent the sale and assignment of any Undivided Interest, the
issuance of the Certificate of Assignments or the consummation of any of the
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other transactions contemplated by this Agreement or any other Agreement
Document, (iii) seeking any determination or ruling that might materially
and adversely affect (A) the performance by Seller or Servicer of its
obligations under this Agreement, or (B) the validity or enforceability of
this Agreement, the Certificate of Assignments, any other Agreement
Document, the Receivables or the Contracts or (iv) seeking to adversely
affect the federal income tax attributes of the Purchases hereunder or the
Certificate of Assignments.
(g) BULK SALES ACT. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(h) GOVERNMENT APPROVALS. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance
by Seller of this Agreement, the Certificate of Assignments or any other
Agreement Document, except for the filing of the UCC Financing Statements
referred to in Article V, all of which, at the time required in Article V,
shall have been duly made and shall be in full force and effect.
(i) FINANCIAL CONDITION. (x) The consolidated balance sheets of
Seller and its consolidated subsidiaries as at September 30, 1994, and
the related statements of income and shareholders' equity of Seller and its
consolidated subsidiaries for the fiscal year then ended, copies of which
have been furnished to the Agent, fairly present the consolidated financial
condition, business, business prospects and operations of Seller and its
consolidated subsidiaries as at such date and the consolidated results of
the operations of Seller and its consolidated subsidiaries for the period
ended on such date all in accordance with generally accepted accounting
principles consistently applied, and (y) since September 30, 1994 there has
been no material adverse change in any such condition, business, business
prospects or operations except as described in Schedule 6.01(i).
(j) LITIGATION. No injunction, decree or other decision has been
issued or made by any court, governmental agency or instrumentality thereof
that prevents, and no threat by any person has been made to attempt to
obtain any such decision that would prevent, Seller from conducting a
significant part of its business operations, except as described in
Schedule 6.01(j).
(k) MARGIN REGULATIONS. The use of all funds obtained by Seller
under this Agreement will not conflict with or contravene any of
Regulations G, T, U and X promulgated by the Board of Governors of the
Federal Reserve System from time to time.
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(l) QUALITY OF TITLE. Each Pool Receivable, together with the related
Contract and all purchase orders and other agreements related to such Pool
Receivable, is owned by Seller free and clear of any Adverse Claim (other than
any Adverse Claim arising solely as the result of any action taken by a
Purchaser (or any assignee thereof) or by any Agent) and restriction on
assignment, except as provided herein; when a Purchaser makes a Purchase, it
shall have acquired and shall continue to have maintained a valid and perfected
first priority undivided percentage ownership interest to the extent of its
Undivided Interest in each Pool Receivable and in the Related Security and
Collections with respect thereto, free and clear of any Adverse Claim (other
than any Adverse Claim arising solely as the result of any action taken by a
Purchaser (or any assignee thereof) or by any Agent) except as provided
hereunder; and no effective financing statement or other instrument similar in
effect covering any Pool Receivable, any interest therein, the Related Security
or Collections with respect thereto is on file in any recording office except
such as may be filed (i) in favor of Seller in accordance with the Contracts,
(ii) in favor of a Purchaser or any Agent in accordance with this Agreement or
in connection with any Adverse Claim arising solely as the result of any action
taken by a Purchaser (or any assignee thereof) or by the Agent, or (iii) in
favor of BofA or NationsBank, or any successor, as described in SECTION 11.01.
(m) ACCURATE REPORTS. No Periodic Report (if prepared by Seller, or to
the extent that information contained therein was supplied by Seller),
information, exhibit, financial statement, document, book, record or report
furnished or to be furnished by Seller to any Agent or Purchaser in connection
with this Agreement was or will be inaccurate in any material respect as of the
date it was or will be dated or (except as otherwise disclosed to any such Agent
or Purchaser, as the case may be, at such time) as of the date so furnished, or
contained or will contain any material misstatement of fact or omitted or will
omit to state a material fact or any fact necessary to make the statements
contained therein not materially misleading.
(n) OFFICES. The chief place of business and chief executive office of
Seller are located at the address of Seller referred to in SECTION 13.02, and
the offices where Seller keeps all of its books, records, and documents
evidencing Pool Receivables, the related Contracts and all purchase orders and
other agreements related to such Pool Receivables are located at the addresses
specified in SCHEDULE 6.01(n) (or at such other locations, notified to the
Agents in accordance with SECTION 7.01(f), in jurisdictions where all action
required by SECTION 8.05 has been taken and completed).
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(o) LOCK-BOX ACCOUNTS. The names and addresses of all the Lock-Box Banks,
together with the account numbers of the lock-box accounts of Seller or Servicer
at such Lock-Box Banks, are specified in SCHEDULE 6.01(o) (or have been notified
to the Agents in accordance with SECTION 7.03(d)).
(p) ELIGIBLE RECEIVABLES. Each Receivable included in the Net Pool
Balance as an Eligible Receivable on the date of any Purchase or Reinvestment
shall be an Eligible Receivable on such date.
(q) SERVICING PROGRAMS. Any and all programs used by Seller in the
servicing of the Receivables Pool are owned by it and not leased or licensed.
(r) TRANSFERS. No purchase of an interest in Receivables by a Purchaser
from Seller or by Seller from any Originator constitutes a fraudulent transfer
or fraudulent conveyance or is otherwise void or voidable under similar laws or
principles, the doctrine of equitable subordination or for any other reason.
(s) PURCHASE AND SALE AGREEMENT. Each of the representations and
warranties made by Seller and each Originator in the Purchase and Sale Agreement
is true and correct as of the date or dates made.
(t) SOLVENCY. Immediately after giving effect to Seller's and the
Originators' obligations now or hereafter arising pursuant to any Agreement
Document and to each transaction contemplated thereby, Seller and each
Originator will each be Solvent.
(u) USE OF PROCEEDS. Neither Seller nor any Originator will use the
proceeds of the Purchases hereunder to acquire a security in a transaction
subject to Section 13 or 14 of the Securities Exchange Act of 1934.
(v) TAX. Seller has filed each and every tax return required to be filed
by it in each jurisdiction in which it is required to do so and has paid in each
such jurisdiction all taxes required to be paid by it on a consolidated basis.
(w) TRADENAMES, ETC. As of the date hereof: (A) the Seller's chief
executive office is located at the address set forth under its signature to this
Agreement; and (B) the Seller has, within the last five (5) years, used only the
tradenames identified in Exhibit 6.01(w) hereto, and, within the last five (5)
years, has not changed its name, merged with or into or consolidated with any
other corporation or been the subject of any proceeding under Title 11, United
States Code (Bankruptcy).
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(x) NO TERMINATION EVENT. No event has occurred and is continuing and no
condition exists which constitutes a Termination Event or an Unmatured
Termination Event.
(y) ERISA. The Seller is in compliance in all material respects with ERISA
and there exists no lien in favor of the Pension Benefit Guaranty Corporation on
any of the Receivables.
ARTICLE VII
GENERAL COVENANTS OF SELLER
SECTION 7.01. AFFIRMATIVE COVENANTS OF SELLER. From the date hereof until
the date, following the Commitment Termination Date, on which all Undivided
Interests shall be reduced to zero, Seller will, unless each Agent shall
otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply in all material respects with
all applicable laws, rules, regulations and orders with respect to the Pool
Receivables and related Contracts.
(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as
a foreign corporation in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges and
qualification would materially adversely affect (i) the interests of any
Agent or Purchaser hereunder or (ii) the ability of Seller or Servicer to
perform their respective obligations hereunder.
(c) FIELD REVIEWS. (i) At any time and from time to time during
regular business hours, permit any Agent, or its agents or representatives,
(A) to examine and make copies of and abstracts from all books, records and
documents (including, without limitation, computer tapes and disks) in the
possession or under the control of Seller relating to Pool Receivables,
including, without limitation, the related Contracts and purchase orders
and other agreements, and (B) to visit the offices and properties of Seller
for the purpose of examining such materials described in CLAUSE (i) (A)
next above, and to discuss matters relating to Pool Receivables or Seller's
performance hereunder with any of the officers or employees of Seller
having knowledge of such matters; and (ii) without limiting the provisions
of CLAUSE (i) next above, from time to time on request of any Agent, permit
Coopers & Lybrand or other certified public accountants or other auditors
acceptable to the Agents to conduct, at Seller's expense, a review of
Seller's books and records with respect to the Pool Receivables.
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(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Pool Receivables in the event of the
destruction of the originals thereof), and keep and maintain, all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Pool Receivables (including, without
limitation, records adequate to permit the daily identification of each new
Pool Receivable and all Collections of and adjustments to each existing
Pool Receivable); such records to be retained by Servicer for such periods
as are usual and customary and in accordance with the Agent's Credit and
Collection Policy.
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS. At its
expense timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the
Contracts related to the Pool Receivables and all purchase orders and other
agreements related to such Pool Receivables.
(f) LOCATION OF RECORDS. Keep its chief place of business and chief
executive office, and the offices where it keeps its records concerning the
Pool Receivables, all related Contracts and all purchase orders and other
agreements related to such Pool Receivables (and all original documents
relating thereto), at the address(es) of Seller referred to in Section
6.01(n) or, upon 30 days' prior written notice to each Agent, at such other
locations in jurisdictions where all action required by Section 8.05 shall
have been taken and completed.
(g) AGENT'S CREDIT AND COLLECTION POLICIES. Comply in all material
respects with the Agent's Credit and Collection Policy in regard to each
Pool Receivable and the related Contract.
(h) COLLECTIONS. Instruct all Obligors to cause all Collections of
Pool Receivables to be deposited directly with a Lock-Box Bank.
(i) RIGHTS UNDER PURCHASE AND SALE AGREEMENT. Exercise all of its
rights under or in connection with the Purchase and Sale Agreement to the
fullest extent thereof except to the extent otherwise consented to in
writing by each Agent.
SECTION 7.02. REPORTING REQUIREMENTS OF SELLER. From the date hereof
until the date, following the Commitment Termination Date, on which all
Undivided Interests shall be reduced to zero and all other amounts owing
hereunder shall have been paid, Seller will, unless each Agent shall otherwise
consent in writing, furnish to each Agent:
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(a) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in any
event within 45 days after the end of each of the first three quarters of
each fiscal year of Seller, copies of Seller's quarterly financial reports,
on Form 10-Q, as filed with the Securities and Exchange Commission (or if
Seller is no longer required to file such Form 10-Q, Seller shall furnish
such financial reports containing the information typically found on Form
10-Q, certified by the vice president and treasurer, chief financial
officer or chief accounting officer of Seller; together with a certificate
from such officer certifying that no Termination Event or Unmatured
Termination Event has occurred and containing a computation of, and showing
compliance with, the financial restrictions contained in SECTION 7.03;
(b) ANNUAL FINANCIAL STATEMENTS. As soon as available and in any
event within 90 days after the end of each fiscal year of Seller, a copy of
Seller's Annual Report, on Form 10-K, as filed with the Securities and
Exchange Commission (or if Seller is no longer required to file such Form
10-K, Seller shall furnish such financial reports containing information
typically found on Form 10-K) and as reported on by nationally recognized
independent certified public accountants on a consolidated (for the
Originator only) basis; together with a copy of the year-end financial
statements of each Originator (which need not be reported by independent
certified accountants); and together with a certificate from vice president
and treasurer, chief financial officer or chief accounting officer of
Seller certifying that no Termination Event or Unmatured Termination Event
has occurred and containing a computation of, and showing compliance with,
the financial restrictions contained in SECTION 7.03;
(c) REPORTS TO HOLDERS AND EXCHANGES. In addition to the reports
required by SUBSECTIONS (a) and (b) next above, promptly upon any Agent's
request, copies of any reports specified in such request which Seller sends
to any of its security holders, and any reports or registration statements
that Servicer files with the Securities and Exchange Commission or any
national securities exchange other than registration statements relating to
employee benefit plans and to registrations of securities for selling
security holders;
(d) ERISA. Promptly after the filing or receiving thereof, copies of
all reports and notices with respect to any Reportable Event defined in
Article IV of ERISA which Seller or any Originator files under ERISA with
the Internal Revenue Service, the Pension Benefit Guaranty Corporation or
the U.S. Department of Labor or which Seller or any Originator receives
from the Pension Benefit Guaranty Corporation;
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(e) TERMINATION EVENTS. As soon as possible and in any event within
five days after the occurrence of each Termination Event and each Unmatured
Termination Event, written statement of the vice president and treasurer,
chief financial officer or chief accounting officer of Seller setting forth
details of such Event and the action that Seller proposes to take with
respect thereto;
(f) LITIGATION. As soon as possible and in any event within three
Business Days of Seller's or any Originator's knowledge thereof, notice of
(i) any litigation, investigation or proceeding which may exist at any time
which could have a material adverse effect on the business, operations,
property or financial condition of Seller or any Originator or impair the
ability of Seller or any Originator to perform its obligations under this
Agreement and (ii) any material adverse development in previously disclosed
litigation; and
(g) PURCHASE AND SALE AGREEMENT. Promptly after receipt thereof,
copies of all documents and other information delivered by any Originator
to Seller pursuant to the Purchase and Sale Agreement.
(h) OTHER. Promptly, from time to time, such other information
(including a listing by Obligor of all Pool Receivables), documents,
records or reports respecting the Receivables or the condition or
operations, financial or otherwise, of Seller as any Agent may from time to
time reasonably request in order to protect the interests of such Agent or
any Purchaser under or as contemplated by this Agreement.
SECTION 7.03. NEGATIVE COVENANTS OF SELLER. From the date hereof
until the date, following the Commitment Termination Date, on which all
Undivided Interests shall be reduced to zero and all other amounts owing
hereunder shall have been paid, Seller will not, without the prior written
consent of each Agent:
(a) SALES, LIENS, ETC. Except as otherwise provided herein, sell,
assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Adverse Claim upon or with respect to, any
Pool Receivable or related Contract or Related Security, or any interest
therein, or any lock-box account to which any Collections of any Pool
Receivable are sent, or any right to receive income from or in respect of
any of the foregoing.
(b) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise
permitted in SECTION 8.02, extend, amend or otherwise modify the terms of
any Pool Receivable, or amend, modify or waive any term or condition of any
Contract related thereto unless such extension, amendment or modification
does not affect the collectibility of the related Receivable.
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(c) CHANGE IN BUSINESS OR AGENT'S CREDIT AND COLLECTION POLICY. Make
any change in the character of its business or in the Agent's Credit and
Collection Policy.
(d) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Add or terminate any
bank as a Lock-Box Bank from those listed in SCHEDULE 6.01(o) or make any
change in its instructions to Obligors regarding payments to be made to
Servicer or Servicer or payments to be made to any Lock-Box Bank, unless
the Agents shall have received notice of such addition, termination or
change and duly executed copies of Lock-Box Agreements with each new Lock-
Box Bank in a form satisfactory to the Managing Agents.
(e) AMENDMENTS TO PURCHASE AND SALE AGREEMENT. Amend, supplement,
waive the application of any provision of, amend and restate or otherwise
modify the Purchase and Sale Agreement except in each case (i) in
accordance with the terms thereof and (ii) with the prior written consent
of each Agent.
(f) FIXED CHARGE COVERAGE RATIO. At any time fail to keep and
maintain the ratio ("FIXED CHARGE COVERAGE RATIO") of Net Income Available
for Fixed Charges, determined as of the last day of each fiscal quarter for
the immediately preceding Four-Quarter Period, to Fixed Charges for such
Four-Quarter Period, at not less than 1.60:1.00.
(g) CONSOLIDATED NET WORTH. At any time fail to keep and maintain
Consolidated Net Worth at an amount greater than or equal to sum of (i)
$60,000,000 (or, if the Seller shall establish a reserve in respect of the
anticipated sale of Seller's Headquarters, $60,000,000 minus the amount of
such reserve, but in no event shall the resulting Consolidated Net Worth be
less than $55,000,000) plus, (ii) 50% of Consolidated Net Income (or if
such Consolidated Net Income is a deficit then no change) for the period
from October 2, 1994 to and including the date of determination, plus (iii)
75% of the net proceeds to the Seller from the sale of shares of the
Seller's capital stock.
(h) CONSOLIDATED FUNDED DEBT TO TOTAL CAPITALIZATION. At any time
permit the Seller's Consolidated Funded Debt to exceed 60% of its Total
Capitalization.
(i) SOURCE OF BUSINESS. At any time permit more than 50% of Seller's
aggregate consolidated revenues to be derived from businesses other than
from the protective and/or correctional services business.
(j) MERGERS, ACQUISITIONS, LINE OF BUSINESS. Be a party to any merger
or consolidation, or purchase or otherwise acquire all or substantially all
of the assets, or any stock of any class of, or any partnership or joint
venture interest in any other Person, or, except in the
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ordinary course of its business, sell transfer, convey or lease all or any
substantial part of its assets, or sell or assign with or without recourse,
any receivables (other than pursuant hereto), or permit any Subsidiary to
do any of the foregoing, PROVIDED, HOWEVER, that:
(A) any Subsidiary may merge or consolidate with or into Seller
or any wholly-owned Subsidiary so long as in any merger or
consolidation involving Seller, Seller shall be the surviving or
continuing corporation;
(B) Seller may consolidate or merge with any other corporation
if (1) either (x) Seller shall be the surviving or continuing
corporation or (y) the surviving corporation is organized and existing
under the laws of the United States of America or any state thereof or
the District of Columbia and such continuing or surviving corporation
expressly assumes in writing, in form and substance satisfactory to
the Agent, all obligations of Seller under this Agreement, (2) at the
time of such consolidation or merger and after giving effect thereto
no Unmatured Termination Event or Termination Event shall have
occurred and be continuing and (3) after giving effect to such
consolidation or merger Seller or such surviving corporation, as the
case may be, could incur at least $1.00 of additional Consolidated
Funded Debt without causing Consolidated Funded Debt to exceed 60% of
Total Capitalization;
(C) any Subsidiary may sell, lease or otherwise dispose of all
or any substantial part of its assets to Seller or any wholly-owned
Subsidiary; and
(D) Seller and each Subsidiary may enter into, any agreement,
contract or arrangement, providing for the acquisition of any Person
or all or substantially all of the assets of any Person (however
structured); but if the amount to be paid exceeds $5,000,000, Seller
may do so only if it shall, at least 30 days prior to consummation of
such transaction, have furnished to each Agent a certificate of an
authorized financial officer of Seller (x) certifying that after
giving effect to such acquisition no Unmatured Termination Event or
Termination Event will have occurred hereunder, and (y) containing
calculations conclusively demonstrating that after giving effect to
the proposed transaction, and for the prior twelve months, if the
transaction had been consummated at the beginning of such twelve month
period, Seller will not be, and would not have been, in violation of
any covenant contained in SECTIONS 7.03(f) and 7.03(g) hereof.
(k) CORPORATE IDENTITY. At any time change its name, identity,
corporate structure or location unless at least 10
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days prior thereto Seller shall have delivered to the Administrative Agent
UCC financing statements or other statements amending or otherwise
modifying UCC financing statements filed hereunder in order to maintain a
first perfected ownership interest in the Purchasers hereunder.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. DESIGNATION OF SERVICER. (a) SELLER AS INITIAL
SERVICER. The servicing, administering and collection of the Pool Receivables
shall be conducted by the Person designated as Servicer hereunder ("SERVICER")
from time to time in accordance with this SECTION 8.01. Until the Administrative
Agent gives to Seller a Successor Notice (as defined in SECTION 8.01(b)), Seller
is hereby designated as, and hereby agrees to perform the duties and obligations
of, Servicer pursuant to the terms hereof.
(b) SUCCESSOR NOTICE; SERVICER TRANSFER EVENTS. Upon Seller's receipt of
a notice from the Administrative Agent (provided with the written consent of the
Managing Agents) of the Administrative Agent's designation of a new Servicer (a
"SUCCESSOR NOTICE"), Seller agrees that it will terminate its activities as
Servicer hereunder in a manner that the Agents believe will facilitate the
transition of the performance of such activities to the new Servicer, and the
Administrative Agent (or its designee) shall assume, until a new Servicer is
appointed or designated, each and all of Seller's said obligations to service
and administer such Receivables, on the terms and subject to the conditions
herein set forth, and Seller shall use its best efforts to assist the
Administrative Agent (or its designee) in assuming such obligations. The
Administrative Agent will not give Seller a Successor Notice until after the
occurrence of any Termination Event listed in any of CLAUSES (a), (e), (f),
(g),(h), (i), (j) or (k) of SECTION 10.01 or any event which, in the reasonable
opinion of the Administrative Agent (with the consent of both Managing Agents),
could have a material adverse effect on Seller's ability to perform its
obligations as Servicer hereunder(any such Termination Event or other event
being herein called a "SERVICER TRANSFER EVENT"), in which case such Successor
Notice may be given at any time in the Administrative Agent's discretion or upon
direction by any Managing Agent. If Seller disputes the occurrence of a
Servicer Transfer Event, Seller may take appropriate action to resolve such
dispute; PROVIDED that Seller must terminate its activities hereunder as
Servicer and allow the newly designated Servicer to perform such activities on
the date provided by the Administrative Agent as described above,
notwithstanding the commencement or continuation of any proceeding to resolve
the aforementioned dispute. The Administrative Agent may at any time after the
occurrence of a Servicer Transfer Event designate, with the consent of the
Managing Agents, any other Person as successor Servicer
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hereunder. If at any time the Administrative Agent shall be servicing
hereunder, upon the transfer of servicing by the Administrative Agent to any
successor Servicer, the Administrative Agent shall no longer perform the duties
of Servicer and shall have no further obligations or liabilities whatsoever in
respect thereof.
(c) Subcontracts. Servicer may, with the prior consent of the Agents,
subcontract with any other person for servicing,administering or collecting the
Pool Receivables, provided that Servicer shall remain liable for the performance
of the duties and obligations of Servicer pursuant to the terms hereof.
SECTION 8.02. DUTIES OF SERVICER. (a) APPOINTMENT; DUTIES IN
GENERAL. Each of Seller, each Purchaser and each Agent hereby appoints as its
agent Servicer, as from time to time designated pursuant to SECTION 8.01, to
enforce its rights and interests in and under the Pool Receivables, the Related
Security and the Contracts. Servicer shall take or cause to be taken all such
actions as may be necessary or advisable in accordance with the Agent's Credit
and Collection Policy or otherwise at the direction or with the consent of the
Agents to collect each Pool Receivable from time to time, all in accordance with
applicable laws, rules and regulations, with reasonable care and diligence.
Servicer shall adopt the Agent's Credit and Collection Policy for the servicing
of the Pool Receivables.
(b) ALLOCATION OF COLLECTIONS; SEGREGATION. Servicer shall set aside for
the account of Seller and each Purchaser their respective allocable shares of
the Collections of Pool Receivables in accordance with SECTIONS 3.01 and 3.02
but shall not be required (unless otherwise requested by any Agent, and subject
to SECTION 3.07) to segregate the funds constituting such portions of such
Collections, or to segregate the respective allocable shares of RCC, RCC Program
Support Providers on the onehand, and Enterprise and the Enterprise Liquidity
Provider and the Enterprise Credit Support Provider on the other hand, as
applicable, prior to the remittance thereof in accordance with said Sections. If
instructed by any Agent, Servicer shall segregate and deposit with the
Administrative Agent such allocable shares of Collections of Pool Receivables,
set aside for the Purchasers, RCC Program Support Providers, the Enterprise
Liquidity Provider and Enterprise Credit Support Provider and any other assignee
from any Purchaser of any Undivided Interest, on the first Business Day
following receipt by Servicer of such Collections in immediately available
funds.
(c) Modification of Receivables. So long as no Termination Event or
Unmatured Termination Event shall have occurred and be continuing, Seller, while
it is Servicer, may, strictly in accordance with the Agent's Credit and
Collection Policy, (i) extend the maturity or adjust the Unpaid Balance of any
Defaulted Receivable as it may determine to be appropriate to maximize
Collections thereof; PROVIDED THAT, after giving effect to such extension of
maturity, the Aggregate Required Allocations will
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not exceed the Required Allocations Limit, and (ii) adjust the Unpaid Balance of
any Receivable to reflect the reductions or cancellations described in the first
sentence of SECTION 3.03(a).
(d) DOCUMENTS AND RECORDS. Seller shall, and shall cause each Originator,
to deliver to Servicer, and Servicer shall hold in trust for Seller, each
Originator and the Purchasers in accordance with their respective interests, all
documents,instruments and records (including, without limitation, computer tapes
or disks) that evidence or relate to Pool Receivables.
(e) CERTAIN DUTIES TO SELLER. Servicer shall, as soon as practicable
following receipt, turn over to Seller (i) that portion of Collections of Pool
Receivables representing its undivided interest therein, less, in the event
Seller is no longer Servicer, all reasonable and appropriate out-of-pocket costs
and expenses of Servicer of servicing, General. Each of Seller, each Purchaser
and each Agent hereby appoints as its agent Servicer, as from time to time
designated pursuant to Section 8.01, to enforce its rights and interests in and
under the Pool Receivables, the Related collecting and administering the Pool
Receivables to the extent not covered by the Servicer's Fee received by it, and
(ii) the Collections of any Receivable which is not a Pool Receivable.
Servicer, if other than Seller, shall, as soon as practicable upon
demand,deliver to Seller all documents, instruments and records in its
possession that evidence or relate to Receivables of Seller other than Pool
Receivables, and copies of documents, instruments and records in its possession
that evidence or relate to Pool Receivables.
(f) Upon the occurrence of any Lock-Box Control Event (as such term is
defined in the Letter Agreement (Segregation of Funds) of even date herewith
among Wackenhut, BofA and NationsBank), Servicer shall deliver to the
Administrative Agent,in its capacity as Lock-Box Segregation Agent thereunder, a
list,referred to in such Letter Agreement as the Identification List,setting
forth those Collections held by Servicer and by each Lock-Box Bank and received
prior to said Business Day, and designating such Collections as Collections in
respect of Pool Receivables or as Collections not subject to this Agreement.
The Segregation Agent's duties shall be governed solely by the terms of such
Letter Agreement and no other duties or terms shall be implied therein.
SECTION 8.03. RIGHTS OF THE AGENTS. (a) NOTICE TO OBLIGORS. At any
time the Administrative Agent upon request by a Managing Agent or otherwise
(after notice to Seller or Servicer)may notify the Obligors of Pool Receivables,
or any of them, of the ownership of Undivided Interests by the Purchasers.
(b) NOTICE TO LOCK-BOX BANKS. At any time following the earliest to occur
of (i) the occurrence of a Termination Event,(ii) any of the Conditions
Precedent shall not be satisfied and any Agent shall have requested
implementation of the Settlement procedures set forth in SECTION 3.02, and (iii)
the warranty in SECTION 6.01(i) shall no longer be true, the Administrative
Agent is hereby authorized to give notice to the Lock-Box Banks, as provided in
the Lock-Box Agreements, of the transfer to the
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Administrative Agent of dominion and control over the lock-box accounts to which
the Obligors of Pool Receivables make payments. Seller hereby transfers to the
Administrative Agent, effective when the Administrative Agent shall give notice
to the Lock-Box Banks as provided in the Lock-Box Agreements, the exclusive
dominion and control over such lock-box accounts, and shall take any further
action that the Administrative Agent (whether upon request of any Managing Agent
or otherwise) may reasonably request to effect such transfer.
(c) RIGHTS ON SERVICER TRANSFER EVENT. At any time following the
designation of a Servicer other than Seller pursuant to SECTION 8.01:
(i) The Administrative Agent (with the written consent of the
Managing Agents) may direct the Obligors of Pool Receivables, or any of
them, to pay all amounts payable under any Pool Receivable directly to the
Administrative Agent or its designee.
(ii) Seller shall, and shall direct each Originator to, at the
Administrative Agent's request (with the written consent of the Managing
Agents) and at Seller's expense, give notice of such ownership to each said
Obligor and direct that payments be made directly to the Administrative
Agent or its designee.
(iii) Seller shall, and shall direct each Originator to, at the
Administrative Agent's request (with the written consent of the Managing
Agents), (A) assemble all of the documents, instruments and other records
(including, without limitation, computer programs, tapes and disks) which
evidence the Pool Receivables, and the related Contracts and Related
Security, or which are otherwise necessary or desirable to collect such
Pool Receivables, and shall make the same available to the Administrative
Agent at a place selected by the Administrative Agent or its designee, and
(B) segregate all cash, checks and other instruments received by it from
time to time constituting Collections of Pool Receivables in a manner
acceptable to the Administrative Agent and shall, promptly upon receipt,
remit all such cash, checks and instruments, duly endorsed or with duly
executed instruments of transfer, to the Administrative Agent or its
designee.
(iv) Each of Seller and the Purchasers hereby authorizes the
Administrative Agent to take any and all steps in Seller's name and on
behalf of Seller and the Purchasers which are necessary or desirable, in
the determination of the Administrative Agent, to collect all amounts due
under any and all Pool Receivables, including, without limitation,
endorsing Seller's name on checks and other instruments representing
Collections and enforcing such Pool Receivables and the related Contracts.
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SECTION 8.04. RESPONSIBILITIES OF SELLER. Anything herein to the
contrary notwithstanding:
(a) Seller shall, and shall cause each Originator to, (i) perform all
of its obligations under the Contracts related to the Pool Receivables and
under the related purchase orders and other agreements to the same extent
as if Undivided Interests had not been sold hereunder and the exercise by
any Agent of its rights hereunder shall not relieve Seller from such
obligations and (ii) pay all taxes as and when due.
(b) Neither any Agent nor any Purchaser shall have any obligation or
liability with respect to any Pool Receivables, Contracts related thereto
or any other related purchase orders or other agreements, nor shall any of
them be obligated to perform any of the obligations of Seller or any
Originator thereunder.
(c) Seller hereby grants to the Administrative Agent, for the benefit
of the Managing Agents and the Purchasers, and the Administrative Agent
grants to Servicer an irrevocable power of attorney, with full power of
substitution, coupled with an interest, to take in the name of Seller all
steps which are necessary or advisable to endorse, negotiate or otherwise
realize on any writing or other right of any kind held or transmitted by
Seller or transmitted or received by any Purchaser (whether or not from
Seller) in connection with any Receivable.
SECTION 8.05. FURTHER ACTION EVIDENCING PURCHASES. (a) Seller will,
and will cause each Originator to, from time to time, at its expense, promptly
execute and deliver all further instruments and documents, and take all further
action that any Agent may reasonably request in order to perfect, protect or
more fully evidence the Purchases hereunder and the resulting Undivided
Interests, or to enable the Purchasers or the Agents to exercise or enforce any
of their respective rights hereunder or under the Certificate of Assignments.
Without limiting the generality of the foregoing, Seller will upon the request
of any Agent: execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate and will maintain such procedures as
are necessary to permit daily identification of Pool Receivables and Eligible
Receivables;
(b) Seller hereby authorizes the Administrative Agent to file one or more
financing or continuation statements on behalf of and for the benefit of the
Purchasers, and amendments thereto and assignments thereof, relative to all or
any of the Pool Receivables and the Related Security now existing or hereafter
arising in the name of Seller. If Seller fails to perform any of its agreements
or obligations under this Agreement, the Administrative Agent may (but shall not
be required to) itself
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perform, or cause performance of, such agreement or obligation,and the expenses
of the Administrative Agent incurred in connection therewith shall be payable by
Seller as provided in SECTION 13.01.
(c) Without limiting the generality of SUBSECTION (a), Seller will, not
earlier than six (6) months and not later than three (3) months from the fifth
anniversary of the date of filing of the financing statement referred to in
SECTION 5.01 (f) or any other financing statement filed pursuant to this
Agreement or in connection with any Purchase hereunder, unless the Commitment
Termination Date shall have occurred and all Undivided Interests shall have been
reduced to zero
(i) execute and deliver and file or cause to be filed an appropriate
continuation statement with respect to such financing statement; and
(ii) deliver or cause to be delivered to the Agents an opinion of the
counsel for Seller referred to in SECTION 5.01(i) (or other counsel for
Seller reasonably satisfactory to the Agents), in form and substance
reasonably satisfactory to the Agents, confirming and updating the opinion
delivered pursuant to SECTION 5.01(i) with respect to the matters set forth
in paragraph no. 7 of EXHIBIT 5.01(i) and otherwise to the effect that all
of the Undivided Interests hereunder continue to be first and prior
perfected security interests.
SECTION 8.06. APPLICATION OF COLLECTIONS. Any payment by an
Obligor in respect of any indebtedness owed by it to Seller shall, except as
otherwise specified by such Obligor or otherwise required by contract or law
and unless the Agent instructs otherwise, be applied as a Collection of any
Pool Receivable or Receivables of such Obligor to the extent of any amounts
then due and payable thereunder before such payment is applied to any other
indebtedness of such Obligor.
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. GRANT OF SECURITY INTEREST. To secure all obligations
of Seller arising in connection with this Agreement, the Certificate of
Assignments and each other Agreement Document, whether now or hereafter
existing, due or to become due, direct or indirect, or absolute or contingent,
Indemnified Amounts, payments on account of Collections received or deemed to be
received, fees and Earned Discount, in each case PRO RATA according to the
respective amounts thereof, Seller hereby ratably (in proportion to their
respective Aggregate Purchaser's Investments) assigns and grants to each
Purchaser a security interest in all of Seller's (i) right, title and interest
(including specifically any undivided interest retained
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by Seller hereunder) now or hereafter existing in, to and under all the Pool
Receivables, the Related Security and all Collections with regard thereto and
(ii) rights, remedies, powers and privileges under and in respect of the
Purchase and Sale Agreement.
SECTION 9.02. FURTHER ASSURANCES. The provisions of SECTION 8.05
shall apply to the security interest granted under SECTION 9.01 as well as to
the Purchases and all Undivided Interests hereunder.
SECTION 9.03. REMEDIES. Upon the occurrence of a Termination Event,
Purchaser shall have, with respect to the collateral granted pursuant to SECTION
9.01, and in addition to all other rights and remedies available to the
Purchasers or the Agents under this Agreement or other applicable law, all the
rights and remedies of a secured party upon default under the UCC.
ARTICLE X
TERMINATION EVENTS
SECTION 10.01. TERMINATION EVENTS. If any of the following events
("TERMINATION EVENTS") shall occur:
(a) (i) Servicer (if Seller) shall fail to perform or observe any
term, covenant or agreement hereunder (other than as referred to in CLAUSE
(ii) next following) and such failure shall remain unremedied for five
Business Days or (ii) Servicer (if Seller) or Seller (if not Servicer)
shall fail to make any payment or deposit to be made by it hereunder when
due; or
(b) Any representation or warranty made or deemed to be made by
Seller, Servicer or any Originator (or any of their respective officers)
under or in connection with this Agreement, any other Transaction Document
or any Periodic Report or other information or report delivered pursuant
hereto shall prove to have been false or incorrect in any material respect
when made and, if such condition shall be amenable to remedy, such
condition shall continue unremedied for a period of ten Business Days after
(i) written notice thereof by any Agent or (ii) Seller, Servicer or such
Originator has actual knowledge thereof.
(c) Seller, Servicer or any Originator shall fail to perform or
observe any other term, covenant or agreement contained in this Agreement
or any other Transaction Document on their respective parts to be performed
or observed and any such failure shall remain unremedied for five Business
Days after the date on which the Seller, Servicer or such Originator knew
or should have known of such failure; or
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(d) A default shall have occurred and be continuing under any
instrument or agreement evidencing, securing or providing for the issuance
of indebtedness for borrowed money in excess of $5,000,000 of, or
guaranteed by, Seller, Servicer, any Originator or of any Affiliate of
either thereof, which default if unremedied, uncured, or unwaived (with or
without the passage of time or the giving of notice or both) would permit
acceleration of the maturity of such indebtedness and such default shall
have continued unremedied, uncured or unwaived for a period long enough to
permit such acceleration and any notice of default required to permit
acceleration shall have been given; or any default under any agreement or
instrument relating to the purchase of receivables of Seller, any
Originator or of any Affiliate of either thereof, or any other event, shall
occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such default is
to terminate, or permit the termination of, the commitment of any party to
such agreement or instrument to purchase receivables or the right of Seller
to reinvest in receivables the principal amount paid by any party to such
agreement or instrument for interest in receivables; or
(e) An Event of Bankruptcy shall have occurred and remained
continuing with respect to Seller, Servicer, any Originator or any
Affiliate of any thereof; or
(f) (i) Any litigation (including, without limitation, derivative
actions), arbitration proceedings or governmental proceedings not disclosed
in writing by Seller to each Agent and Purchaser prior to the date of
execution and delivery of this Agreement is pending against Seller,
Servicer, any Originator or any Affiliate of any thereof, or (ii) any
material development not so disclosed has occurred in any litigation
(including, without limitation, derivative actions), arbitration
proceedings or governmental proceedings so disclosed, which, in the case of
CLAUSE (i) or (ii), in the opinion of any Agent, is likely to materially
adversely affect the financial position or business of Seller, Servicer,
any Originator or any Affiliate of any thereof or impair the ability of
Seller or Servicer to perform its obligations under this Agreement; or
(g) After any Settlement Date, the Aggregate Required Allocations
shall exceed the Required Allocations Limit; or
(h) The Losses to Liquidations Ratio exceeds 2%; or
(i) Three-Month Default Ratio at any time exceeds 6%; or
(j) Three-Month Dilution Ratio at any time exceeds 4% (it being
understood and agreed that the Managing Agents may modify such percentage
after the expiration of six months
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from the date hereof based upon the actual dilution experience during such
six months period); or
(k) There shall have occurred any event which materially adversely
affects the collectibility of the Pool Receivables or there shall have
occurred any other event which materially adversely affects the ability of
Seller, any Originator or Servicer to collect Pool Receivables or the
ability of Seller or Servicer to perform hereunder or the warranty in
Section 6.01(i) (y) shall not be true at any time; or
(l) The Internal Revenue Service shall file notice of a lien pursuant
to Section 6323 of the Internal Revenue Code with regard to any of the
assets of Seller, Servicer, any Originator or any Affiliate and such lien
shall not have been released within 30 days, or the Pension Benefit
Guaranty Corporation shall, or shall indicate its intention to, file notice
of a lien pursuant to Section 4068 of the Employee Retirement Income
Security Act of 1974 with regard to any of the assets of Seller, Servicer
or any Originator; or
(m) A Purchase and Sale Termination Event shall have occurred; or
(n) The Wackenhut Family shall at any time, directly or indirectly,
control less than 33 1/3% of the voting securities of Seller, Servicer or
any Originator.
(o) Purchasers fail for any reason to have a perfected first priority
security interest as described in Section 9.01; or
(p) The Required Allocations shall at any time exceed the Required
Allocations Limit.
SECTION 10.02. REMEDIES. (a) OPTIONAL TERMINATION. Upon the
occurrence of a Termination Event (other than a Termination Event described in
SUBSECTION (a), (e), (f), or (p) of SECTION 10.01), either Managing Agent shall,
at the request, or may with the consent, of its related Purchaser, by notice to
Seller declare the Commitment Termination Date to have occurred.
(b) AUTOMATIC TERMINATION. Upon the occurrence of a Termination Event
described in SUBSECTION (a), (e), (f) or (p) of SECTION 10.01, the Commitment
Termination Date shall be deemed to have occurred automatically upon the
occurrence of such event; PROVIDED HOWEVER, that with respect to any proceeding
instituted against Seller pursuant to 11 U.S.C. Section 303 (an "INVOLUNTARY
FEDERAL PROCEEDING"), the settlement procedures described in SECTION 3.02 shall
become applicable upon the commencement of such Proceeding and no further
Purchases or Reinvestments of Collections shall be made; and provided, further,
that if such Involuntary Federal Proceeding is dismissed within 60 days after
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its commencement, and if no other Termination Event has occurred, then following
such dismissal, the Commitment shall be reinstated as if the Commitment
Termination Date had not occurred upon the commencement of such Involuntary
Federal Proceeding.
(c) ADDITIONAL REMEDIES. Upon any termination of the Facility pursuant to
this SECTION 10.02, the Agents and the Purchasers shall have, in addition to all
other rights and remedies under this Agreement or otherwise, all other rights
and remedies provided under the UCC of each applicable jurisdiction and other
applicable laws, which rights shall be cumulative. Without limiting the
foregoing or the general applicability of ARTICLE XII hereof, (i) the occurrence
of a Termination Event shall not deny to any Purchaser any remedy in addition to
termination of the Commitment to which such Purchaser may be otherwise
appropriately entitled, whether at law or in equity, and (ii) following the
occurrence of any Termination Event a Purchaser may (without the Seller's
consent) elect to assign to any Person any Undivided Interest owned by such
Purchaser.
ARTICLE XI
THE AGENTS
SECTION 11.01. AUTHORIZATION AND ACTION. Each Purchaser hereby
appoints and authorizes its related Managing Agent and the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to such Agent by the terms hereof, together with
such powers as are reasonably incidental thereto. The Managing Agents hereby
appoint and authorize the Administrative Agent to take such action as agent on
their respective behalfs and to exercise such powers under this Agreement as are
delegated to the Administrative Agent hereunder, together with such powers as
are reasonably incidental thereto. The provisions of this ARTICLE XI are solely
for the benefit of appropriate Agents and the Purchasers and Seller shall not
have any rights as a third-party beneficiary or otherwise under any of the
provisions hereof. In performing their functions and duties hereunder, the
Managing Agents and the Administrative Agent, respectively, shall act solely as
the agent, in the case of the Managing Agents, for its respective Purchaser and,
in the case of the Administrative Agent, for the Managing Agents, and do not
assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for the Seller or any Originator or any of their
respective successors and assigns. The Administrative Agent shall distribute all
Collections and other amounts received or acquired by it hereunder on behalf of
the Purchasers or their respective Managing Agents to such Purchasers or
Managing Agents in accordance with SECTIONS 3.01 and 3.02. Enterprise has
separately appointed NationsBank as its Managing Agent.
SECTION 11.02. AGENTS' RELIANCE, ETC. Neither any Agent nor any of
its directors, officers, agents or employees
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shall be liable for any action taken or omitted to be taken by it or such Agent
under or in connection with this Agreement (including, without limitation, the
servicing, administering or collecting Pool Receivables as Servicer pursuant to
SECTION 8.01), except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, each Agent: (a)
may consult with legal counsel (including counsel for Seller), independent
certified public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (b) makes no
warranty or representation to any Purchaser or any other holder of any interest
in Pool Receivables and shall not be responsible to any Purchaser or any such
other holder for any statements, warranties or representations made in or in
connection with this Agreement; (c) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of Seller or to inspect the property
(including the books and records) of Seller; (d) shall not be responsible to any
Purchaser or any other holder of any interest in Pool Receivables for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement, the Certificate of Assignments or any Agreement Document; and
(e) shall incur no liability under or in respect of this Agreement by acting
upon any notice (including notice by telephone), consent, certificate or other
instrument or writing (which may be by facsimile or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 11.03. AGENTS AND AFFILIATES. BofA and NationsBank and their
respective Affiliates may generally engage in any kind of business with Seller,
Servicer, any Originator or any Obligor, any of their respective Affiliates and
any Person who may do business with or own securities of Seller or any Obligor
or any of their respective Affiliates, all as if BofA and NationsBank were not
Agents and without any duty to account therefor to any Purchaser or any other
holder of an interest in Pool Receivables.
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01. RESTRICTIONS ON ASSIGNMENTS. (a) Neither Seller nor
any Purchaser may assign its rights hereunder or any interest herein without the
prior written consent of the Agents, and no Purchaser may assign any Undivided
Interest (or portion thereof) to any Person without the prior written consent
of Seller; PROVIDED, HOWEVER, that
(i) RCC may assign, or grant a security interest in, any Undivided
Interest (or portion thereof) owned by it to BofA, any RCC Program Support
Provider (or any successor of
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any thereof by merger, consolidation or otherwise), any Affiliate of BofA,
any RCC Program Support Provider (which may then assign any such Undivided
Interest (or portion thereof) so assigned or any interest therein to such
party or parties as it may choose);
(ii) Enterprise may assign or grant a security interest in, any
Undivided Interest (or portion thereof) owned by it to NationsBank, the
Enterprise Liquidity Provider or the Enterprise Credit Support Provider (or
any successor thereof by merger, consolidation or otherwise), any Affiliate
of Enterprise (including any securitization vehicle managed by NationsBank)
or such Enterprise Liquidity Provider or Enterprise Credit Support Provider
(which may then assign any such Undivided Interest (or portion thereof) so
assigned or any interest therein to such party or parties as it may
choose); and
(iii) Each Purchaser may assign and grant a security interest in any
interest in, to and under any Undivided Interest owned by it, this
Agreement and the other Agreement Documents to BofA or NationsBank, as
applicable, as collateral agent or collateral trustee, and any successor in
such capacity, to secure each such Purchaser's obligations under or in
connection with its Commercial Paper Notes, in the case of RCC, any RCC
Program Support Agreement, and in the case of Enterprise, the Enterprise
Liquidity Agreement, the Enterprise Credit Support Agreement and certain
other obligations of any Purchaser incurred in connection with the funding
of the Purchases and Reinvestments hereunder, which assignment and grant of
a security interest shall not be considered an "assignment" for purposes of
SECTION 12.01(b), SECTION 12.03 or 12.04 or, prior to the enforcement of
such security interest, for purposes of any other provision of this
Agreement.
(b) Seller agrees to advise the Agents within five Business Days after
notice to Seller of any proposed assignment by a Purchaser of any Undivided
Interest (or portion thereof), not otherwise permitted under SUBSECTION (a), of
Seller's consent or non-consent to such assignment. If Seller does not consent
to such assignment, such Purchaser may immediately assign such Undivided
Interest (or portion thereof), in the case of RCC, to BofA, the RCC Program
Support Providers or any Affiliate of BofA or the RCC Program Support Providers
and in the case of Enterprise, to NationsBank, the Enterprise Liquidity Provider
or the Enterprise Credit Support Provider or any Affiliate of NationsBank, the
Enterprise Liquidity Provider or the Enterprise Credit Support Provider. All of
the aforementioned assignments shall be upon such terms and conditions as such
Purchaser and the assignee may mutually agree.
SECTION 12.02. RIGHTS OF ASSIGNEE. Upon the assignment by the
Purchaser of any Undivided Interest (or portion thereof) owned by it in
accordance with this ARTICLE XII, (a) the
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assignee receiving such assignment shall have all of the rights of such
Purchaser hereunder with respect to such Undivided Interest (or such parties
thereof) and (b) all references to such Purchaser in SECTION 4.02 shall be
deemed to apply to such assignee to the extent of its interest the related
Purchaser's Investment and the related Collections.
SECTION 12.03 AUTHORIZATION OF MANAGING AGENT. Each Purchaser
authorizes its Managing Agent to, and the Managing Agent agrees that it shall,
endorse the Certificate(s) of such Purchaser to reflect any assignments made
pursuant to this Article XII or otherwise.
SECTION 12.04. NOTICE OF ASSIGNMENT. Each Purchaser shall provide
notice to Seller and the Agents of any assignment of any Undivided Interest (or
portion thereof) by such Purchaser to any assignee.
SECTION 12.05. EVIDENCE OF ASSIGNMENT; ENDORSEMENT OF CERTIFICATE.
Any assignment of any Undivided Interest (or portion thereof) to any Person may
be evidenced by an instrument of assignment in the form of EXHIBIT 12.05 or by
such other instrument(s) or document(s) as may be satisfactory to the selling
Purchaser, the Agents and the assignee. Each Purchaser authorizes its related
Managing Agent to, and such Managing Agent agrees that it shall, endorse its
Certificate of Assignments to reflect any assignments made pursuant to this
ARTICLE XII or otherwise.
SECTION 12.06. RIGHTS OF SUPPORT PROVIDERS. Seller hereby agrees
that, upon notice to Seller, any RCC Program Support Provider, the Enterprise
Liquidity Provider, the Enterprise Credit Support Provider and the collateral
agent or collateral trustee referred to in SECTION 12.01 (collectively, the
"ASSIGNEE PARTIES", each an "ASSIGNEE PARTY"), or any of them, may exercise all
the respective rights of BofA and NationsBank (or RCC or Enterprise, as
applicable) respectively hereunder, with respect to Undivided Interests, and
Collections with respect thereto, which have been assigned (or in which a
security interest has been granted) to such Assignee Party, with respect to all
Undivided Interests (or portions thereof), and Collections with respect thereto,
which are owned by RCC or Enterprise, as applicable (and not subject to an
assignment or a separate security interest in favor of such RCC Program Support
Provider under an RCC Program Support Agreement with such RCC Program Support
Provider or the Enterprise Liquidity Provider or Enterprise Credit Support
Provider), and all other rights and interests of RCC or Enterprise, as
applicable in, to or under this Agreement or any other Agreement Document.
Without limiting the foregoing, upon such notice such Assignee Party may request
Servicer to segregate its allocable shares of Collections, in accordance with
SECTION 8.02(a), may give a Successor Notice pursuant to SECTION 8.01(a), may
give or require the Administrative Agent to give notice to the Lock-Box Banks as
referred to in SECTION 8.03(a), and may direct the Obligors of
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Pool Receivables to make payments in respect thereof directly to an account
designated by them (provided that such Assignee Party shall designate a single
account for the making of such payments with respect to any Pool Receivable), in
each case, to the same extent as BofA or NationsBank (or RCC or Enterprise, as
the case may be) might have done.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. INDEMNITIES BY SELLER. (a) GENERAL INDEMNITY. Without
limiting any other rights which any such Person may have hereunder or under
applicable law, Seller hereby agrees to indemnify each of the Agents, the
Purchasers, each RCC Program Support Provider, the Enterprise Liquidity Support
Provider, the Enterprise Credit Support Provider, BofA, NationsBank, each of
BofA's and NationsBank's Affiliates, their respective successors, transferees,
participants and assigns and all officers, directors, shareholders, controlling
persons, employees and agents of any of the foregoing (each an "Indemnified
Party"), forthwith on demand from and against any and all damages, losses,
claims, liabilities and related costs and expenses, including reasonable
attorneys fees and disbursements (all of the foregoing being collectively
referred to as "INDEMNIFIED AMOUNTS") awarded against or incurred by any of them
arising out of or relating to this Agreement or the ownership or funding of any
Undivided Interest or in respect of any Receivable or any Contract, EXCLUDING,
HOWEVER, (a) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of such Indemnified Party or (b) recourse
(except as otherwise specifically provided in this Agreement) for Defaulted
Receivables. Without limiting the foregoing, Seller shall indemnify each
Indemnified Party for Indemnified Amounts arising out of or relating to:
(i) the transfer by Seller of any interest in any Receivable other
than the transfer of an Undivided Interest to a Purchaser pursuant to this
Agreement and the grant of a security interest to the Purchasers pursuant
to SECTION 9.01;
(ii) the breach of any representation or warranty made by Seller (or
any of its officers) under or in connection with this Agreement, any other
Transaction Document, any Periodic Report or any other information or
report delivered by Seller pursuant hereto, which shall have been false or
incorrect in any material respect when made or deemed made and any losses,
if any, relating to Receivables included in the Receivables Pool as
Eligible Receivables that were 60 days or more past due on the date of
their inclusion and any amounts relating to dilutions on Eligible
Receivables included in the Receivables Pool;
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(iii) the failure by Seller to comply with any applicable law, rule
or regulation with respect to any Pool Receivable or the related Contract,
or the nonconformity of any Pool Receivable or the related Contract with
any such applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in any Purchaser an
undivided percentage ownership interest, to the extent of each Undivided
Interest owned by it hereunder, in the Receivables in, or purporting to be
in, the Receivables Pool, free and clear of any Adverse Claim, other than
an Adverse Claim arising solely as a result of an act of any such
Purchaser, any assignee from any such Purchaser or any Agent (when used in
this CLAUSE (iv), an Adverse Claim shall include any lien for taxes whether
accrued and payable or not), whether existing at the time of any Purchase
or Reinvestment of Undivided Interest or at any time thereafter;
(v) the failure to file, or any delay in filing, financing statements
or other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Receivables in,
or purporting to be in, the Receivables Pool, whether at the time of any
Purchase or Reinvestment or at any time thereafter;
(vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables Pool (including, without limitation, a
defense based on such Receivable's or the related Contract's not being a
legal, valid and binding obligation of such Obligor enforceable against it
in accordance with its terms), or any other claim resulting from the sale
of the merchandise or services related to such Receivable or the furnishing
or failure to furnish such merchandise or services;
(vii) any failure of Seller, as Servicer or otherwise, to perform its
duties or obligations in accordance with the provisions of ARTICLE VIII;
(viii) any products liability claim or personal injury or property
damage suit or other similar or related action arising out of or in
connection with merchandise or services that are the subject of any Pool
Receivable; or
(ix) any tax or governmental fee or charge (including, without
limitation, all intangibles and similar taxes and all other taxes, but not
including taxes upon or measured by net income), all interest and penalties
thereon or with respect thereto, and all out-of-pocket costs and expenses,
including the reasonable fees and expenses of counsel in defending against
the same, which may arise by reason of the purchase or ownership of any
Undivided
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Interest, or any other interest in the Pool Receivables or in any goods
which secure any such Pool Receivables.
(b) CONTEST OF TAX CLAIM; AFTER-TAX BASIS. If any Indemnified Party shall
have notice of any attempt to impose or collect any tax or governmental fee or
charge for which indemnification will be sought from Seller under SECTION
13.01(a) (ix), such Indemnified Party shall give prompt and timely notice of
such attempt to Seller and Seller shall have the right, at its expense, to
conduct or participate in any proceedings resisting or objecting to the
imposition or collection of any such tax, governmental fee or charge.
Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to the
Indemnified Party of the payment of any of the aforesaid taxes and the receipt
of the indemnity provided hereunder or of any refund of any such tax previously
indemnified hereunder, including the effect of such tax or refund on the amount
of tax measured by net income or profits which is or was payable by the
Indemnified Party.
(c) CONTRIBUTION. If for any reason the indemnification provided above in
this SECTION 13.01 is unavailable to an Indemnified Party or is insufficient to
hold an Indemnified Party harmless, then Seller shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Indemnified Party on the one hand and Seller
on the other hand but also the relative fault of such Indemnified Party as well
as any other relevant equitable considerations.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement nor consent to any departure by Seller therefrom
shall in any event be effective unless the same shall be in writing and signed
by (a) Seller, each Agent and each Purchaser (with respect to an amendment) or
(b) each Agent and each Purchaser (with respect to a waiver or consent by them)
or Seller (with respect to a waiver or consent by it), as the case may be, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
SECTION 14.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including Telex and facsimile communication) and shall be personally delivered
or sent by certified mail, postage prepaid, or by Telex, or by facsimile, to the
intended party at the address or Telex or facsimile number of such party set
forth under its name on the signature pages hereof or at such other address or
Telex or facsimile number as shall be
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designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, (a) if personally delivered,
when received, (b) if sent by certified mail, three Business Days after having
been deposited in the mail, postage prepaid, (c) if sent by overnight courier,
one Business Day after having been given to such courier, (d) if transmitted by
Telex, when sent, answer back confirmed, and (e) if transmitted by facsimile,
when sent, receipt confirmed by telephone or electronic means, except that
notices and communications pursuant to ARTICLE I shall not be effective until
received.
SECTION 14.03. NO WAIVER; REMEDIES. No failure on the part of any
Agent, BofA, NationsBank, any Affected Party, any Indemnified Party, any
Purchaser or any other holder of any Undivided Interest to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law. Without limiting the foregoing, each of BofA, NationsBank, each RCC Program
Support Provider and any Enterprise Liquidity Provider or Enterprise Credit
Support Provider is hereby authorized by Seller at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by BofA, NationsBank, any RCC
Program Support Provider, Enterprise Liquidity Provider or Enterprise Credit
Support Provider to or for the credit or the account of Seller, now or hereafter
existing under this Agreement, to the payment of any amounts owed by the Seller
hereunder to any Agent, any Affected Party, any Indemnified Party or any
Purchaser, or their respective successors and assigns; PROVIDED, HOWEVER, that
none of BofA, NationsBank, each RCC Program Support Provider, Enterprise
Liquidity Provider or Enterprise Credit Support Provider shall, through the
exercise of such setoff or otherwise, obtain payment with respect to any amounts
due to it (or their respective successors and assigns) which results in its or
their receiving more than their PRO RATA share of the aggregate of such amounts
due hereunder.
SECTION 14.04. BINDING EFFECT; SURVIVAL. This Agreement shall be
binding upon and inure to the benefit of Seller, the Agents, the Purchasers and
their respective successors and assigns, and the provisions of SECTION 4.02 and
ARTICLE XIII shall inure to the benefit of the Affected Parties and the
Indemnified Parties, respectively, and their respective successors and assigns;
PROVIDED, HOWEVER, nothing in the foregoing shall be deemed to authorize any
assignment not permitted by SECTION 12.01. This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until such time, after the
Commitment Termination Date, as all Undivided Interests shall have been reduced
to zero. The
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rights and remedies with respect to any breach of any representation and
warranty made by Seller pursuant to ARTICLE VI and the indemnification and
payment provisions of ARTICLE XIII and SECTIONS 4.02, 14.05 and 14.07 shall be
continuing and shall survive any termination of this Agreement.
SECTION 14.05. COSTS, EXPENSES AND TAXES. In addition to its
obligations under ARTICLE XIII, Seller agrees to pay on demand:
(a) all costs and expenses incurred by each Agent, each Purchaser,
BofA, NationsBank, each RCC Program Support Provider, the Enterprise
Liquidity Provider, the Enterprise Credit Support Provider and their
respective Affiliates in connection with the negotiation, preparation,
execution and delivery, the administration (including periodic auditing) or
the enforcement of, or any actual or claimed breach of, or any amendment to
or waiver of any provision contained in this Agreement, the Certificate of
Assignments and the other Agreement Documents, including, without
limitation (i) the reasonable fees and expenses of counsel to any of such
Persons incurred in connection with any of the foregoing or in advising
such Persons as to their respective rights and remedies under any of the
Agreement Documents, and (ii) all reasonable out-of-pocket expenses
(including reasonable fees and expenses of independent accountants)
incurred in connection with any review of Seller's books and records either
prior to the execution and delivery hereof or pursuant to SECTION 7.01(c);
and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of
this Agreement, the Certificate of Assignments or the other Agreement
Documents, and agrees to indemnify each Indemnified Party against any
liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.
SECTION 14.06. NO PROCEEDINGS. Seller, BofA and NationsBank,
individually and as Agents, each hereby agrees that it will not institute
against any Purchaser, or join any other Person in instituting against any
Purchaser, any insolvency proceeding (namely, any proceeding of the type
referred to in the definition of Event of Bankruptcy) so long as any Commercial
Paper Notes issued by such Purchaser shall be outstanding or there shall not
have elapsed one year plus one day since the last day on which any such
Commercial Paper Notes shall have been outstanding. The foregoing shall not
limit Seller's right to file any claim in or otherwise take any action with
respect to any insolvency proceeding that was instituted by any Person other
than Seller.
SECTION 14.07A. BOFA PROGRAM CONFIDENTIALITY. (a) Each party hereto
(other than BofA) acknowledges that BofA regards the structure of the
transactions contemplated by this
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Agreement, and by each RCC Program Support Agreement, and the other Program
Documents referred to therein, to be proprietary, and each such party severally
agrees that:
(i) unless BofA shall otherwise agree in writing, and except as
provided in SUBSECTION (b), such party will not disclose to any other
person or entity:
(A) any information regarding, or copies of, this Agreement or
any transaction contemplated hereby,
(B) any information regarding the organization or business of
RCC generally, or
(C) any information regarding BofA which is designated by BofA
to such party in writing or otherwise as confidential or not otherwise
available to the general public
(the information referred to in CLAUSES (A), (B) and (C) above, whether
furnished by RCC, BofA, NationsBank, any RCC Program Support Provider, the
Enterprise Liquidity Agreement and Enterprise Credit Support Agreement, any
assignee of or participant in any rights or obligations of RCC, any RCC Program
Support Provider, the Enterprise Liquidity Provider and Enterprise Credit
Support Provider, or any attorney for or other representative of any of the
foregoing (each an "INFORMATION PROVIDER"), is collectively referred to as the
"INFORMATION"; PROVIDED, HOWEVER, "INFORMATION" shall not include any
information which is or becomes generally available to the general public or to
such party on a nonconfidential basis from a source other than BofA or any other
Information Provider, or which was known to such party on a nonconfidential
basis prior to its disclosure by BofA or any other Information Provider);
(ii) such party will make the Information available to only such of
its officers, directors, employees and agents who (A) in the good faith
belief of such party, have a need to know such Information, (B) are
informed by such party of the confidential nature of the Information and
the terms of this SECTION 14.07A, and (C) are subject to confidentiality
restrictions consistent with this SECTION 14.07A;
(iii) such party will use the Information solely for the purposes of
evaluating, administering and enforcing the transactions contemplated by
this Agreement and making any necessary business judgments with respect
thereto; and
(iv) such party will, upon demand, return (and cause each of its
officers, directors, employees, agents, attorneys, consultants or auditors
(collectively, "REPRESENTATIVES") to return) to BofA, or to such other
Information Provider as shall have furnished it with any Information, all
documents or other written material
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received from BofA or such other Information Provider which constitute or
contain any Information described in SUBCLAUSE (B) or (C) of CLAUSE (i)
above and all copies of such documents or other material in its possession
or in the possession of any of its representatives, and will not retain any
copy, summary or extract thereof on any storage medium whatsoever.
(b) Notwithstanding CLAUSE (i) of SUBSECTION (a), each party may disclose
any Information:
(i) to its attorneys, consultants and auditors who (A) in the good
faith belief of such party, have a need to know such Information, (B) are
informed by such party of the confidential nature of the Information and
the terms of this SECTION 14.07A, and (C) are subject to confidentiality
restrictions consistent with this SECTION 14.07A,
(ii) to any other party to this Agreement, for the purposes
contemplated hereby or to any rating agency rating the Commercial Paper
Notes,
(iii) as may be required by any municipal, state, federal or other
regulatory body having or claiming to have jurisdiction over such party, in
order to comply with any law, order, regulation, regulatory request or
ruling applicable to such party, or
(iv) subject to SUBSECTION (c), in the event such party is legally
compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose such
Information.
(c) In the event that any party hereto (other than BofA) or any one to
whom such party or its representatives transmits the Information is requested or
becomes legally compelled (by interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to disclose
any of the Information, such party will (or will cause its representatives to)
(i) provide BofA with prompt written notice so that (A) RCC, BofA, or
any other Information Provider may seek a protective order or other
appropriate remedy, or (B) BofA may, if it so chooses, agree that such
party (or its representatives) may disclose such Information pursuant to
such request or legal compulsion;
(ii) unless BofA agrees that such Information may be disclosed, make
a timely objection to the request or compulsion to provide such Information
on the basis that such Information is confidential and subject to the
agreements contained in this SECTION 14.07A;
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(iii) take any action as BofA or any other Information Provider may
reasonably request to seek a protective order or other appropriate remedy,
PROVIDED that, in connection therewith, such party shall have first
received such assurances as it may reasonably request that BofA or such
other Information Provider shall reimburse such party's or its
representatives' reasonable costs and expenses or provide such other
assistance as such party or its representatives may reasonably require; and
(iv) in the event that such protective order or other remedy is not
obtained, or BofA agrees that such Information may be disclosed, furnish
only that portion of the Information which is legally required to be
furnished, and, provided such party (or its representative) is reimbursed
or assisted as referred to in CLAUSE (iii) above, exercise best efforts to
obtain reliable assurance that confidential treatment will be accorded the
Information.
(d) This SECTION 14.07A shall survive termination of this Agreement.
SECTION 14.07B. NATIONSBANK PROGRAM CONFIDENTIALITY. (a) Each party
hereto (other than NationsBank) acknowledges that NationsBank regards the
structure of the transactions contemplated by this Agreement, and by the
Enterprise Liquidity Agreement and Enterprise Credit Support Agreement and its
other program documents referred to therein, to be proprietary, and each such
party severally agrees that:
(i) unless NationsBank shall otherwise agree in writing, and except
as provided in SUBSECTION (b), such party will not disclose to any other
person or entity:
(A) any information regarding, or copies of, this Agreement or
any transaction contemplated hereby,
(B) any information regarding the organization or business of
Enterprise generally, or
(C) any information regarding NationsBank which is designated by
NationsBank to such party in writing or otherwise as confidential or
not otherwise available to the general public;
(ii) such party will make the Information available to only such of
its officers, directors, employees and agents who (A) in the good faith
belief of such party, have a need to know such Information, (B) are
informed by such party of the confidential nature of the Information and
the terms of this SECTION 14.07B, and (C) are subject to confidentiality
restrictions consistent with this SECTION 14.07B;
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(iii) such party will use the Information solely for the purposes of
evaluating, administering and enforcing the transactions contemplated by
this Agreement and making any necessary business judgments with respect
thereto; and
(iv) such party will, upon demand, return (and cause its
representatives to return) to NationsBank, or to such other Information
Provider as shall have furnished it with any Information, all documents or
other written material received from NationsBank or such other Information
Provider which constitute or contain any Information described in SUBCLAUSE
(B) or (C) of CLAUSE (i) above and all copies of such documents or other
material in its possession or in the possession of any of its
representatives, and will not retain any copy, summary or extract thereof
on any storage medium whatsoever.
(b) Notwithstanding CLAUSE (i) of SUBSECTION (a), each party may disclose
any Information:
(i) to its attorneys, consultants and auditors who (A) in the good
faith belief of such party, have a need to know such Information, (B) are
informed by such party of the confidential nature of the Information and
the terms of this SECTION 14.07B, and (C) are subject to confidentiality
restrictions consistent with this Section 14.07B,
(ii) to any other party to this Agreement, for the purposes
contemplated hereby or to any rating agency then rating the Commercial
Paper Notes,
(iii) as may be required by any municipal, state, federal or other
regulatory body having or claiming to have jurisdiction over such party, in
order to comply with any law, order, regulation, regulatory request or
ruling applicable to such party, or
(iv) subject to SUBSECTION (c), in the event such party is legally
compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose such
Information.
(c) In the event that any party hereto or any one to whom such party
or its representatives transmits the Information is requested or becomes
legally compelled (by interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to
disclose any of the Information, such party will (or will cause its
representatives to)
(i) provide NationsBank with prompt written notice so that (A)
Enterprise, NationsBank, or any other Information Provider may seek a
protective order or other appropriate remedy, or (B) NationsBank may, if it
so chooses, agree that
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such party (or its representatives) may disclose such Information pursuant
to such request or legal compulsion;
(ii) unless NationsBank agrees that such Information may be
disclosed, make a timely objection to the request or compulsion to provide
such Information on the basis that such Information is confidential and
subject to the agreements contained in this SECTION 14.07B;
(iii) take any action as NationsBank or any other Information
Provider may reasonably request to seek a protective order or other
appropriate remedy, PROVIDED that, in connection therewith, such party
shall have first received such assurances as it may reasonably request that
NationsBank or such other Information Provider shall reimburse such party's
or its representatives' reasonable costs and expenses or provide such other
assistance as such party or its representatives may reasonably require; and
(iv) in the event that such protective order or other remedy is not
obtained, or NationsBank agrees that such Information may be disclosed,
furnish only that portion of the Information which is legally required to
be furnished, and, provided such party (or its representative) is
reimbursed or assisted as referred to in CLAUSE (iii) above, exercise best
efforts to obtain reliable assurance that confidential treatment will be
accorded the Information.
(d) This SECTION 14.07B shall survive termination of this
Agreement.
SECTION 14.08. CONFIDENTIALITY OF SELLER INFORMATION. (a) Each party
hereto (other than Seller) acknowledges that certain of the information
provided to such party by or on behalf of Seller in connection with this
Agreement and the transactions contemplated hereby is or may be
confidential, and each such party severally agrees that, unless Seller
shall otherwise agree in writing, and except as provided in SUBSECTION (b),
such party will not disclose to any other person or entity:
(i) any information regarding, or copies of, any Periodic Reports,
and any non-public financial statements, reports and other information,
furnished by Seller to any Purchaser or any Agent pursuant to Section 3.04,
5.01(m), 5.01(n), 6.01(i), 6.01(j), 7.01(c) or 7.02, or
(ii) any other information regarding Seller which is designated by
Seller to such party in writing or otherwise as confidential;
the information referred to in CLAUSES (i) and (ii), above, furnished
by Seller or any attorney for or other representative of Seller (each a
"SELLER INFORMATION PROVIDER"), is collectively referred to as the "SELLER
INFORMATION"; PROVIDED, HOWEVER, "SELLER INFORMATION" shall not include
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(A) any information which is or becomes generally available to the
general public or to such party on a nonconfidential basis from a source
other than Seller or any other Seller Information Provider, or which was
known to such party on a nonconfidential basis prior to its disclosure by
Seller or any other Seller Information Provider), or
(B) general information regarding the nature of this Agreement, the
basic terms hereof (including without limitation the amount and nature of
each Purchaser's commitment and Purchaser's Investments hereunder and of
the recourse or other credit enhancement provided by Seller hereunder), the
nature, amount and status of the Pool Receivables, and the current and/or
historical ratios of losses to liquidations and/or outstandings with
respect to the Receivables Pool, and the identity of Seller.
(b) Notwithstanding SUBSECTION (a), each party may disclose any Seller
Information:
(i) to any of such party's attorneys, consultants and auditors, and
to such of RCC Program Support Provider, the Enterprise Liquidity Provider,
Enterprise Credit Support Provider, assignee, any dealer or placement agent
for any Purchaser's commercial paper, and any actual or potential assignees
of, or participants in, any of the rights or obligations of any Purchaser,
RCC Program Support Provider, Enterprise Liquidity Provider or Enterprise
Credit Support Provider, NationsBank or BofA under or in connection with
this Agreement, who (A) in the good faith belief of such party, have a need
to know such Seller Information, (B) are informed by such party of the
confidential nature of the Seller Information and the terms of this Section
14.08, and (C) are subject to confidentiality restrictions generally
consistent with this Section 14.08,
(ii) to any rating agency that maintains a rating for any Purchaser's
commercial paper or is considering the issuance of such a rating, for the
purposes of reviewing the credit of any Purchaser in connection with such
rating,
(iii) to any other party to this Agreement, for the purposes
contemplated hereby,
(iv) as may be required by any municipal, state, federal or other
regulatory body having or claiming to have jurisdiction over such party, in
order to comply with any law, order, regulation, regulatory request or
ruling applicable to such party, or
(v) subject to SUBSECTION (c), in the event such party is legally
compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose such
Seller Information.
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(c) In the event that any party hereto (other than Seller) or any of its
representatives is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Seller Information, such party will (or
will cause its representatives to)
(i) provide Seller with prompt written notice so that (A) Seller or
any other Seller Information Provider may seek a protective order or other
appropriate remedy, or (B) Seller may, if it so chooses, agree that such
party (or its representatives) may disclose such Seller Information
pursuant to such request or legal compulsion;
(ii) unless Seller agrees that such Seller Information may be
disclosed, make a timely objection to the request or compulsion to provide
such Seller Information on the basis that such Seller Information is
confidential and subject to the agreements contained in this SECTION 14.08;
(iii) take any action as Seller or any other Seller Information
Provider may reasonably request to seek a protective order or other
appropriate remedy, PROVIDED that, in connection therewith, such party
shall have first received such assurances as it may reasonably request that
Seller or such other Seller Information Provider shall reimburse such
party's or its representatives' reasonable costs and expenses or provide
such other assistance as such party or its representatives may reasonably
require; and
(iv) in the event that such protective order or other remedy is not
obtained, or Seller agrees that such Seller Information may be disclosed,
furnish only that portion of the Seller Information which is legally
required to be furnished, and, provided such party (or its representative)
is reimbursed or assisted as referred to in CLAUSE (iii) above, exercise
best efforts to obtain reliable assurance that confidential treatment will
be accorded the Seller Information.
(d) This SECTION 14.08 shall survive termination of this Agreement.
SECTION 14.09. CAPTIONS AND CROSS REFERENCES. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Appendix, Schedule or Exhibit are
to such Section of or Appendix, Schedule or Exhibit to this Agreement, as the
case may be, and references in any Section, subsection, or clause to any
subsection, clause or subclause are to such subsection, clause or subclause of
such Section, subsection or clause.
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SECTION 14.10. INTEGRATION. This Agreement contains a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire Agreement among the
parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings.
SECTION 14.11. GOVERNING LAW. THIS AGREEMENT, INCLUDING THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE
PERFECTION OF THE INTERESTS OF THE PURCHASERS IN THE RECEIVABLES IS GOVERNED BY
THE LAWS OF THE JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 14.12. WAIVER OF JURY TRIAL. SELLER HEREBY EXPRESSLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT, THE CERTIFICATE OF ASSIGNMENTS, ANY OTHER AGREEMENT
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY
BE IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING
OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, THE
CERTIFICATE OF ASSIGNMENTS OR ANY OTHER AGREEMENT DOCUMENT AND AGREES THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY TRIAL.
SECTION 14.13. CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES. EACH OF
SELLER AND EACH PURCHASER AND AGENT HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY
UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT
AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW YORK
CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR
FEDERAL COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID
TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.
SECTION 14.14. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by the different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all
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of which when taken together shall constitute one and the same Agreement.
SECTION 14.15 PURCHASERS' LIABILITIES. The obligations of each
Purchaser hereunder are solely the corporate obligations of each such Purchaser
and no personal liability shall attach to or be incurred by MLMMI or any
stockholder, employee, officer, director or incorporator of either Purchaser,
and the Seller and Servicer expressly waive any claim based on such personal
liability. No recourse shall be had for an obligation or claim arising out of or
based upon this Agreement against MLMMI or against any stockholder, employee,
officer, director or incorporator of either Purchaser. For purposes of this
paragraph "MLMMI" shall mean and include Merrill Lynch Money Markets Inc. and
all Affiliates thereof and any employee, officer, director, incorporator,
shareholder or beneficial owner of any of them; provided, however, that no
Purchaser shall be considered to be an Affiliate of MLMMI; and, provided,
further, that this SECTION 14.15 shall not relieve any such Person of any
liability it might otherwise have for its own gross negligence or willful
misconduct.
SECTION 14.16 AGENTS' LIABILITIES. The obligations of each Agent
hereunder are solely the corporate obligations of each such Agent and no
personal liability shall attach to or be incurred by any such Agent or any
stockholder, employee, officer, director or incorporator of any Agent, and the
Seller and Servicer expressly waive any claim based on such personal liability.
No recourse shall be had for an obligation or claim arising out of or based upon
this Agreement against BofA or NationsBank or against any stockholder, employee,
officer, director or incorporator of either of them; provided that, this SECTION
14.16 shall not relieve any such Person of any liability it might otherwise have
for its own gross negligence or willful misconduct.
SECTION 14.17. CHARACTERIZATION OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. It is the intention of the parties hereto that the transactions
contemplated hereby constitute the sale of the Undivided Interests, conveying
good title thereto free and clear of any Liens to the Purchasers and that the
Undivided Interests not be part of the Seller's estate in an Event of
Bankruptcy. If, notwithstanding the foregoing, the transactions contemplated
hereby are deemed a financing, the parties intend that the Seller shall be
deemed to have granted to the Purchasers, and the Seller hereby grants to the
Purchasers, a first priority perfected security interest in all of the Seller's
right, title and interest in, to and under the Receivables, together with
Related Security and Collections with respect thereto, and that this Agreement
shall constitute a security agreement under applicable law.
- SIGNATURE PAGES FOLLOW -
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
THE WACKENHUT CORPORATION
as Seller and initial Servicer
By _________________________________
Title _________________________
1500 San Remo Avenue
Coral Gables, Florida 33146
Facsimile: (305) 662-7366
Attention: Treasury Operations
Terry P. Mayotte
Telephone: (305) 662-7373
RECEIVABLES CAPITAL CORPORATION,
as a Purchaser
By _________________________________
Title ______________________________
c/o Merrill Lynch Money Markets Inc.
World Financial Center - South Tower
225 Liberty Street - 8th Floor
New York, New York 10080
Attention: Mr. Gary Carlin
Telephone: (212) 236-7200
Facsimile: (212) 236-7584
ENTERPRISE FUNDING CORPORATION,
as a Purchaser
By _________________________________
Title _________________________
c/o Merrill Lynch Money Markets Inc.
World Financial Center - South Tower
225 Liberty Street - 8th Floor
New York, New York 10080
Attention: Mr. Gary Carlin
Telephone: (212) 236-7200
Facsimile: (212) 236-7584
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as a Managing Agent and as the
Administrative Agent
By _________________________________
Vice President
231 South LaSalle Street
Chicago, Illinois 60697
Facsimile No.: (312) 828-7855
Attention: Securitized Products Group
Eurodollar Office:
231 South LaSalle Street
Chicago, Illinois 60697
NATIONSBANK OF NORTH CAROLINA, N.A.,
as a Managing Agent
By _________________________________
Vice President
100 North Tryon Street, 7th Floor
Charlotte, North Carolina 28255
Facsimile: (704) 388-9169
Attention: Structured Finance Group
Michelle M. Heath
Telephone: (704) 386-7922
Eurodollar Office:
100 North Tryon Street, 10th Floor
Charlotte, North Carolina 28255
Facsimile: (704) 388-9211
Attention: Camille Zerbinos
Telephone: (704) 386-8361
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APPENDIX A
DEFINITIONS
This is APPENDIX A to the Receivables Purchase Agreement dated as of
January 5, 1995 among The Wackenhut Corporation, Receivables Capital Corporation
and Enterprise Funding Corporation, NationsBank of North Carolina, N.A., as a
Managing Agent, Bank of America National Trust and Savings Association, as a
Managing Agent and as the Administrative Agent (as amended, supplemented or
otherwise modified from time to time, this "Agreement"). Each reference in this
APPENDIX A to any Section, Appendix or Exhibit refers to such Section of or
Appendix or Exhibit to this Agreement.
INDEX
Page No.
A. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
B. Other Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
C. Computations of Time Periods . . . . . . . . . . . . . . . . . . A-25
A. DEFINED TERMS. As used in this Agreement, unless the context requires
a different meaning, the following terms have the meanings indicated
hereinbelow:
"ADJUSTED AVERAGE MATURITY" has the meaning set forth in APPENDIX B.
"ADMINISTRATIVE AGENT" and "ADMINISTRATIVE AGENTS" has the meaning set
forth in the preamble.
"ADVERSE CLAIM" means a lien, security interest, charge, or encumbrance, or
other right or claim of any Person other than (a) a potential claim or right
(that has not yet been asserted) of a trustee appointed for an Obligor in
connection with any Event of Bankruptcy or (b) an unfiled lien for taxes accrued
but not yet payable.
"AFFECTED PARTY" means each of each Purchaser, each RCC Program Support
Provider, the Enterprise Liquidity Provider, the Enterprise Credit Support
Provider, any other Person providing credit or liquidity support to any
Purchaser, any permitted assignee of any Purchaser, RCC Program Support
Provider, Enterprise Liquidity Provider, Enterprise Credit Support Provider or
such other Person, any assignee of any of either Purchaser's obligations to any
Enterprise Liquidity Provider, any Enterprise Credit Support Provider, any RCC
Program Support Provider, any other Person providing credit or liquidity support
in respect of
A-1
any Funding, any holder of a participation interest in the rights and
obligations of any Enterprise Liquidity Provider or Enterprise Credit Support
Provider, any RCC Program Support Provider or any other Person providing credit
or liquidity enhancement under any RCC Program Support Agreement and in respect
of any Funding or in the commitment or facility of such other Person, the
Administrative Agent, each Managing Agent, BofA, NationsBank, and any holding
company of BofA or NationsBank.
"AFFILIATE" when used with respect to a Person, means any other Person
controlling, controlled by, or under common control with, such Person.
"AGENT" means the Administrative Agent and the Managing Agents.
"AGENT'S CREDIT AND COLLECTION POLICY" means those credit and collection
policies and practices relating to Contracts and Receivables required by the
Administrative Agent to be used in the servicing of the Receivables Pool in
accordance with Section 8.02(a) and described in Schedule A-1, as modified
without violating Section 7.03(c).
"AGREEMENT DOCUMENTS" means this Agreement, the Certificate of Assignments
and the other documents to be executed and delivered in connection herewith.
"AGGREGATE PURCHASER'S INVESTMENTS" means, at any time, with respect to a
Purchaser, the sum of the Dollar amount of all of such Purchaser's Investments.
"AGGREGATE PURCHASER'S SHARE" shall have the meaning set forth in SECTION
2.05.
"AGGREGATE REQUIRED ALLOCATIONS" at any time means the sum of all Required
Allocations of all Undivided Interests.
"AGGREGATE TOTAL INVESTMENTS" means, at any time, the then sum of the
dollar amount of the Aggregate Purchaser's Investments for both Purchasers.
"AGGREGATE UNPAID BALANCE" has the meaning set forth in SECTION 2.1 of the
Purchase and Sale Agreement.
"ALTERNATE REFERENCE RATE" has the meaning set forth in APPENDIX B.
"AVERAGE MATURITY" has the meaning set forth in APPENDIX B.
"BAI" means Bank of America Illinois, an Illinois state bank.
"BANK RATE" has the meaning set forth in APPENDIX B.
A-2
"BOFA" has the meaning set forth in the preamble.
"BUSINESS DAY" means a day on which both (a) BofA at its office in Chicago,
Illinois and NationsBank at its office in Charlotte, North Carolina is open for
business and (b) commercial banks in Dallas, Texas and New York City are not
authorized or required to be closed for business.
"CAPITALIZED LEASE" means any lease for which Rentals must be capitalized
on a consolidated balance sheet of the lessee and its subsidiaries in accordance
with generally accepted accounting principles.
"CAPITALIZED RENTALS" of any Person and as of the date of any determination
thereof means the amount at which the aggregate Rentals due and to become due
under all Capitalized Leases under which such Person is lessee would be
reflected as a liability on a consolidated balance sheet of such Person.
"CCFM" has the meaning set forth in the preamble.
"CERTIFICATE OF ASSIGNMENTS" means each certificate of assignment, by
Seller to a Purchaser, in the form of EXHIBIT 5.01(a), evidencing an Undivided
Interest.
"COLLECTION ACCOUNT" shall have the meaning set forth in Section 3.03(e).
"COLLECTIONS" means, with respect to any Receivable, all funds which either
(a) are received by Seller, any Originator or Servicer from or on behalf of the
related Obligors in payment of any amounts owed (including, without limitation,
purchase prices, finance charges, interest and all other charges) in respect of
such Receivable, or applied to such amounts owed by such Obligors (including,
without limitation, insurance payments that Seller, each Originator or Servicer
applies in the ordinary course of its business to amounts owed in respect of
such Receivable and net proceeds of sale or other disposition repossessed goods
or other collateral or property of the Obligor or any other party directly or
indirectly liable for payment of such Receivable and available to be applied
thereon), or (b) are deemed to have been received by Seller, any Originator or
any other Person as a Collection pursuant to SECTION 3.03; PROVIDED THAT, prior
to such time as Seller shall cease to be Servicer, late payment charges,
collection fees and extension fees shall not be deemed to be Collections.
"COMMERCIAL PAPER NOTES" means short-term promissory notes issued or to be
issued by a Purchaser to fund its investments in accounts receivable or other
financial assets.
"COMMERCIAL PAPER RATE" has the meaning set forth in APPENDIX B.
"COMMITMENT" has the meaning set forth in SECTION 1.01.
A-3
"COMMITMENT TERMINATION DATE" has the meaning set forth in SECTION 1.05(a).
"CONCENTRATION LIMIT" has the meaning set forth in Section 2.03(b).
"CONDITIONS PRECEDENT" has the meaning set forth in Section 5.02.
"CONSOLIDATED FUNDED DEBT" means all Funded Debt of the Seller and its
Subsidiaries, determined on a consolidated basis eliminating intercompany items.
For the purposes of determining Consolidated Funded Debt, any corporation which
becomes a Subsidiary after the date hereof shall be deemed to have created,
assumed or incurred at the time it becomes a Subsidiary, all Indebtedness of
such corporation existing immediately after it becomes a Subsidiary.
"CONSOLIDATED NET INCOME" for any period means the gross revenues of Seller
and its Subsidiaries for such period less all expenses and other proper charges
(including taxes on income and Interest Charges), determined on a consolidated
basis after eliminating earnings attributable to outstanding Minority Interests,
but excluding in any event:
(a) any gains on the sale or other disposition of Investments or
fixed or capital assets, and any taxes on such excluded gains and any tax
deductions or credits on account of any such excluded losses;
(b) the proceeds of any life insurance policy except for proceeds
received during such period with respect to deferred compensation plans to
the extent that Seller or any Subsidiary recognized any expenses during
such period with respect to such plans;
(c) net earnings and losses of any Subsidiary accrued prior to the
date it became a Subsidiary;
(d) net earnings and losses of any corporation (other than a
Subsidiary), substantially all the assets of which have been acquired in
any manner by Seller or any Subsidiary, realized by such corporation prior
to the date of such acquisition;
(e) net earnings and losses of any corporation (other than a
Subsidiary) with which Seller or a Subsidiary shall have consolidated or
which shall have merged into or with Seller or a Subsidiary prior to the
date of such consolidation or merger;
(f) net earnings of any business entity (other than a Subsidiary) in
which Seller or any Subsidiary has an ownership interest unless such net
earnings shall have
A-4
actually been received by Seller or such Subsidiary in the form of cash
distributions;
(g) any portion of the net earnings of any Subsidiary which for any
reason is unavailable for payment of dividends to Seller or any other
Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or write-up
of assets;
(i) any deferred or other credit representing any excess of the
equity in any Subsidiary at the date of acquisition thereof over the amount
invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities of Seller
or any Subsidiary; and
(k) any reversal of any contingency reserve, except to the extent
that provision for such contingency reserve shall have been made from income
arising during such period.
"CONSOLIDATED NET WORTH" means at any time as of which the amount
thereof is to be determined, the sum of the following in respect of the Seller
and its Subsidiaries (on a consolidated basis and excluding intercompany items):
(i) the amount of issued and outstanding share capital, PLUS (ii) the amount of
additional paid-in capital and retained income (or, in the case of a deficit,
minus the amount of such deficit), MINUS (iii) the sum of the following (without
duplication of deductions in respect of items already deducted in arriving at
surplus and retained earnings): (A) all reserves, except legal reserves and
other contingency reserves (i.e., reserves not allocated to specific purposes
and not deducted from assets), which are properly treated as appropriations of
surplus or retained earnings; (B) any treasury stock, capital stock subscribed
and unissued and other contra-equity accounts; and (C) the cumulative amount of
any net write-up of asset values after the date of the audit immediately
preceding the date of revolver, plus or minus, as the case may be (iv) the
cumulative effect of foreign exchange valuations.
"CONSOLIDATED TOTAL ASSETS" means as of the date of any determination
thereof the total amount of all assets of Seller and its Subsidiaries determined
on a consolidated basis in accordance with generally accepted accounting
principles.
"CONTRACT" means any writing evidencing a Receivable.
"CURRENT DEBT" of any Person as of the date of any determination thereof
means (i) all Indebtedness of such Person for borrowed money other than Funded
Debt of such Person and (ii) Guaranties by such Person of Current Debt of
others.
A-5
"DEFAULTED RECEIVABLE" means, without duplication, a Receivable: (a) as to
which any payment, or part thereof, remains unpaid for 120 days from the
original invoice date for such Receivable, (b) with regard to which an Event of
Bankruptcy has occurred and remains continuing, (c) as to which payments have
been extended, or the terms of payment thereof rewritten, or (d) which
consistent with the Agent's Credit and Collection Policy, would be fully
reserved against or required to be sent to attorneys or collection agencies or
would be charged-off Seller's or Servicer's books as uncollectible.
"DELINQUENT RECEIVABLE" means a Receivable that is not a Defaulted
Receivable and: (a) as to which any payment, or part thereof, remains unpaid for
60 days or more from the original invoice date for such Receivable; or (b)
which, consistent with the Agent's Credit and Collection Policy, would be
classified as delinquent by Seller.
"DESIGNATED OBLIGOR" means, at any time, all Obligors of Seller except any
such Obligor as to which any Agent has, at least three Business Days prior to
the date of determination, given notice to Seller that such Obligor shall not be
considered a Designated Obligor.
"DISCOUNT FACTOR" has the meaning set forth in Appendix B.
"DOLLARS" means dollars in lawful money of the United States of America.
"DOMESTIC CD RATE (ADJUSTED)" has the meaning set forth in Appendix B.
"EARNED DISCOUNT" has the meaning set forth in Appendix B.
"ELIGIBLE RECEIVABLE" means, at any time, a Receivable:
(a) with regard to which the related service has been rendered and all
other obligations performed by the Seller or an Originator (except as permitted
by Schedule 2.03(b)), as applicable, and which is generated by Seller and the
applicable Originator in the ordinary course of their respective business of
providing Services and is required to be paid in full by the related Obligor
within 30 days of the billing thereof;
(b) which, (i) if the perfection of Purchaser's undivided ownership
interest therein is governed by the laws of a jurisdiction where the Uniform
Commercial Code - - Secured Transactions is in force, constitutes an account or
general intangible as defined in the Uniform Commercial Code as in effect in
such jurisdiction, and (ii) if the perfection of Purchaser's undivided ownership
interest therein is governed by the law of any jurisdiction where the Uniform
Commercial Code - - Secured Transactions is not in force. Seller has furnished
to the Agents such opinions of counsel and other evidence as has reasonably been
requested, establishing to the reasonable satisfaction of
A-6
the related Agent that the related Purchaser's undivided ownership interest and
other rights with respect thereto are not significantly less protected and
favorable than such rights under the Uniform Commercial code;
(c) which is a domestic Receivable, the Obligor of which is a United
States resident, and is not an Affiliate of any of the parties hereto;
(d) the Obligor of which is a Designated Obligor;
(e) the Obligor of which is not the private sector Obligor of Defaulted
Receivables aggregating more than 15% of such Obligor's total obligations to
Seller and each Originator;
(f) which is not a Defaulted Receivable;
(g) with regard to which the warranty of Seller in SECTION 6.01(l) is true
and correct;
(h) (x) the sale of an undivided interest in which does not require the
consent of or notice to the related Obligor under the related Contract and does
not contravene or conflict with any law, and (y) in the case of Receivables
generated by an Originator, the sale of which to Seller does not contravene or
conflict with any law;
(i) which is an account receivable representing all or part of the sales
price of merchandise, insurance and services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended;
(j) which arises out of a current transaction, or the proceeds of which
have been or are to be used for current transactions, within the meaning of
Section 3(a)(3) of the Securities Act of 1933, as amended;
(k) which is denominated and payable only in Dollars in the United States;
(l) which arises under a Contract that has been duly authorized and that,
together with such Receivable, is in full force and effect and constitutes the
legal, valid and binding obligation of the Obligor of such Receivable
enforceable against such Obligor in accordance with its terms and is not subject
to any dispute, offset, counterclaim or defense whatsoever (except the discharge
in bankruptcy of such Obligor);
(m) which, together with the Contract related thereto, does not contravene
in any material respect any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating to usury,
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect to
which no party to the Contract related thereto is in
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violation of any such law, rule or regulation in any material respect if such
violation would impair the collectibility of such Receivable;
(n) which (i) satisfies all applicable requirements of the Agent's Credit
and Collection Policy and (ii) complies with such other criteria and
requirements (other than those relating to the collectibility of such
Receivable) as the Agents may from time to time specify to Seller following
thirty days' notice;
(o) as to which no Agent has notified Seller that such Agent has
determined, in its sole discretion, that such Receivable (or class of
Receivables) is not acceptable for purchase hereunder;
(p) which, if originated by Seller, was originated in its divisions
referred to as Company 1 and Company 21;
(q) which does not include any amount payable for sales taxes, payroll
taxes or any other tax; and
(r) the related Obligor of which is not, directly or indirectly, an
Affiliate of Seller or any Originator.
"ENTERPRISE CREDIT SUPPORT AGREEMENT" means any agreement between
Enterprise and the Enterprise Credit Support Provider evidencing the obligation
of the Enterprise Credit Support Provider to provide credit support to
Enterprise in connection with the issuance by Enterprise of Commercial Paper.
"ENTERPRISE CREDIT SUPPORT PROVIDER" means any Person or Persons who are
providing or will provide credit support to Enterprise in connection with the
issuance by Enterprise of Commercial Paper Notes, together with the successors
and assigns of any such Person or Persons.
"ENTERPRISE LIQUIDITY AGREEMENT" means any agreement between Enterprise and
the Enterprise Liquidity Provider evidencing the obligation of the Liquidity
Provider to provide liquidity support to Enterprise in connection with the
issuance by Enterprise of Commercial Paper Notes, as such agreement may be
modified, amended, supplemented or restated from time to time.
"ENTERPRISE LIQUIDITY PROVIDER" means any Person or Persons who are
providing or will provide liquidity support to Enterprise in connection with the
issuance by Enterprise of Commercial Paper Notes, together with the successors
and assigns of any such Person or Persons.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EURODOLLAR RATE (RESERVE ADJUSTED)" has the meaning set forth in APPENDIX
B.
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"EVENT OF BANKRUPTCY" shall be deemed to have occurred with respect to a
Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the
like for such Person or all or substantially all of its assets, or any
similar action with respect to such Person under any law relating to
bankruptcy, insolvency, reorganization, winding up or composition or
adjustment of debts, and such case or proceeding shall continue
undismissed, or unstayed and in effect, for a period of 60 consecutive
days; or an order for relief in respect of such Person shall be entered in
an involuntary case under the federal bankruptcy laws or other similar laws
now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect,
or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for, such Person or for any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall
fail to, or admit in writing its inability to, pay its Debts generally as
they become due, or, if a corporation or similar entity, its board of
directors shall vote to implement any of the foregoing.
"EXISTING CREDIT AGREEMENT" means and includes the Credit Agreement dated
as of December 1, 1989 among RCC, BofA (as assignee from BAI) and Credit
Lyonnais New York Branch and Credit Lyonnais Cayman Island Branch, as amended,
supplemented or otherwise modified from time to time.
"EXISTING LIQUIDITY AGREEMENT" means and includes the Secondary Purchase
Agreement dated as of December 1, 1989 among RCC, BofA (as assignee of BAI), as
Servicing Agent for RCC, and BofA (as assignee from BAI), Credit Lyonnais New
York Branch and Credit Lyonnais Cayman Island Branch, as purchasers (and
lenders), as amended, supplemented or otherwise modified from time to time.
"FACILITY" has the meaning set forth in Section 1.1 of the Purchase and
Sale Agreement.
"FACILITY FEE" has the meaning set forth in SECTION 4.01(b).
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"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal Reserve
System, or any successor thereto or to the functions thereof.
"FEE LETTER" has the meaning set forth in SECTION 4.01(a).
"FIXED CHARGES" for any period means on a consolidated basis the sum of (i)
100% of Rentals (other than Rentals on Capitalized Leases) payable during such
period by Seller and its Subsidiaries (other than WCC) and (ii) all Interest
Charges on all Indebtedness (including, without duplication, the interest
component of Rentals on Capitalized Leases and the Earned Discount and fees and
expenses payable under this Agreement) of Seller and its Subsidiaries (other
than WCC) payable during said period by Seller and its Subsidiaries (other than
WCC).
"FIXED CHARGE COVERAGE RATIO" has the meaning set forth in Section 7.03(f).
"FOUR-QUARTER PERIOD" means a period of four full consecutive quarter-
annual periods, taken together as one accounting period.
"FUNDED DEBT" of any Person shall mean (i) all Indebtedness of such Person
for borrowed money or which has been incurred in connection with the acquisition
of assets, including all payments in respect thereof that are required to be
made within one year from the date of any determination of Funded Debt, whether
or not the obligation to make such payments shall constitute a current liability
of the obligor under GAAP, (ii) all Capitalized Rentals of such Person (iii) all
Guaranties by such Person of Funded Debt of others, (iv) with respect to Funded
Debt of the Seller, the product of (x) the aggregate amounts available for
drawing under all outstanding Letters of Credit, and (y).50; and (v) to the
extent not otherwise included in clauses (i) through (iv) above, the Aggregate
Total Investments.
"FUNDING" means a drawing under a letter of credit, surety bond or other
instrument issued pursuant to an RCC Program Support Agreement, a drawing on a
cash collateral account funded pursuant to an RCC Program Support Agreement, a
purchase, loan or other extension of credit made by an RCC Program Support
Provider to RCC under an RCC Program Support Agreement, or any other advance or
disbursement of funds from or to RCC or for RCC's account or for which RCC is
obligated to reimburse an RCC Program Support Provider pursuant to an RCC
Program Support Agreement.
"GAAP" means generally accepted accounting principles at the time.
"GOVERNMENT OBLIGOR" means a department, agency, bureau, division or
instrumentality of the United States of America or any state thereof or the
District of Columbia or any county or municipal government chartered or
otherwise existing by authority
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of any of the foregoing, or any department, agency, bureau, division or
instrumentality thereof obligated to make payments with respect to a Receivable.
"GROSS REVENUES" for any period means the gross revenues, determined in
accordance with generally accepted accounting principles, of Seller and its
Subsidiaries for such period, determined on a consolidated basis after
eliminating revenues attributable to outstanding Minority Interests.
"GUARANTIES" by any Person means all obligations (other than endorsements
in the ordinary course of business of negotiable instruments for deposit or
collection) of such Person guaranteeing or, in effect, guaranteeing any
Indebtedness, dividend or other obligation, of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or obligation, (y) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, or (iii) to lease property or to purchase Securities or other
Property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make payment
of the Indebtedness or obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
"HEADQUARTERS" shall mean Seller's building located at 1500 San Remo
Avenue, Coral Gables, Florida.
"INDEBTEDNESS" of any Person means and includes all obligations of such
Person which in accordance with generally accepted accounting principles shall
be classified upon a balance sheet of such Person as liabilities of such Person,
and in any event shall include all (i) obligations of such Person for borrowed
money or which has been incurred in connection with the acquisition of property
or assets, (ii) obligations secured by any Lien upon property or assets owned by
such Person, even though such Person has not assumed or become liable for the
payment of such obligations, (iii) obligations created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person, notwithstanding the fact that the rights and remedies
of the seller, lender or
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lessor under such agreement in the event of default are limited to repossession
or sale of property, (iv) Capitalized Rentals under any Capitalized Lease, (v)
Guaranties of Indebtedness of others and (vi) reimbursement obligations arising
under any Letter of Credit.
"INDEMNIFIED AMOUNTS" has the meaning set forth in SECTION 13.01.
"INDEMNIFIED PARTY" has the meaning set forth in Section 13.01.
"INITIAL CLOSING DATE" means, with regard to any Originator, the date on
which the first purchase of Conveyed Property, including the related
Receivables, from such Originator under the Purchase and Sale Agreement shall
occur.
"INITIAL PURCHASER" means the Seller as Initial Purchaser under the
Purchase and Sale Agreement.
"INFORMATION" has the meaning set forth in SECTION 14.07A.
"INFORMATION PROVIDER" has the meaning set forth in SECTION 14.07A.
"INTEREST CHARGES" for any period means all interest, and all amortization
of debt discount and expense on any particular Indebtedness and all Earned
Discount and fees and expenses payable under this Agreement for which such
calculations are being made. Computations of Interest Charges on a pro forma
basis for Indebtedness having a variable interest rate shall be calculated at
the rate in effect on the date of any determination.
"INVESTMENTS" means all investments, in cash or by delivery of Property
made, directly or indirectly in any Person, whether by acquisition of shares of
capital stock, indebtedness or other obligations or Security or by loan,
advance, capital contribution or otherwise; PROVIDED, HOWEVER, that
"Investments" shall not mean or include routine investments in Property to be
used or consumed in the ordinary course of business or investments in accounts
receivable or notes receivable arising in the ordinary course of business.
"INVOLUNTARY FEDERAL PROCEEDING" has the meaning set forth in SECTION
10.02(b).
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means a letter of credit issued
by a Letter of Credit Issuer for the account of the Seller or the Seller and
Titania in favor of a Person advancing credit, providing insurance or securing
obligations on behalf of the Seller or the Seller and Titania, and shall
include, without limitation, all such letters of credit issued prior to January
5, 1995 and remaining outstanding as of such date.
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"LETTER OF CREDIT ISSUER" means NationsBank or BofA, as the case may be, as
issuer of a Letter of Credit.
"LIEN" means any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, and including but not limited
to the security interest or lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting Property. For the purposes of this
Agreement, the Seller or a Subsidiary shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement,
Capitalized Lease or other arrangement pursuant to which title to the Property
has been retained by or vested in some other Person for security purposes and
such retention or vesting shall constitute a Lien.
"LOCK-BOX AGREEMENT" means a letter agreement, in substantially the form of
EXHIBIT 5.01(h), between Seller and any Lock-Box Bank.
"LOCK-BOX BANK" means any of the banks holding one or more lock-box
accounts for receiving Collections from Pool Receivables.
"LOSSES" means, at any time, with respect to the Receivables Pool, the sum
of (x) all Receivables theretofore fully reserved against by Seller or Servicer
plus (y), without duplication, all Receivables theretofore sent to attorneys or
collection agencies to be collected plus (z), without duplication, all
Receivables theretofore charged-off Seller's or Servicer's books as
uncollectible.
"LOSSES TO LIQUIDATIONS RATIO" means the percentage that (x) Losses during
the three fiscal month period ending on the most recent Month End Date on all
Pool Receivables owned by Seller was of (y) Collections of such Pool Receivables
during such period.
"LOSS RESERVE DISCOUNT" has the meaning set forth in SECTION 2.1 of the
Purchase and Sale Agreement.
"MANAGING AGENT" and "MANAGING AGENTS" has the meaning set forth in the
preamble.
"MAXIMUM PURCHASE LIMIT" has the meaning set forth in clause (x) of SECTION
1.02(a).
"MINORITY INTERESTS" means any shares of stock of any class of a Subsidiary
(other than directors' qualifying shares as
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required by law) that are not owned by Seller and/or one or more of its
Subsidiaries. Minority Interests shall be valued by valuing Minority Interests
constituting preferred stock at the voluntary or involuntary liquidating value
of such preferred stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and surplus applicable
thereto adjusted, if necessary, to reflect any changes from the book value of
such common stock required by the foregoing method of valuing Minority Interests
in preferred stock.
"MONTH END DATE" means the last day of each fiscal month.
"NEGATIVE SPREAD FEE" has the meaning set forth in APPENDIX B.
"NET INCOME AVAILABLE FOR FIXED CHARGES" for any period means the sum of
(i) Consolidated Net Income during such period (excluding, for the purpose of
determining Net Income Available for Fixed Charges, revenues, expenses and other
appropriate charges or adjustments attributable to WCC) PLUS (to the extent
deducted in determining Consolidated Net Income), (ii) all provisions for any
Federal, state or other income taxes made by the Seller and its Subsidiaries
(other than WCC) during such period, (iii) Fixed Charges of the Seller and its
Subsidiaries (other than WCC) during such period and (iv) for each of the last
fiscal quarter of the fiscal year of the Seller ending January 1, 1995 and the
first three fiscal quarters in the succeeding fiscal year, the amount of the
reserve, which is not to exceed $5,000,000, if any, established by the Seller in
connection with the anticipated sale of its Headquarters.
"NET POOL BALANCE" has the meaning set forth in SECTION 2.03(a).
"NOTE FEE" has the meaning set forth in SECTION 4.01(e).
"OBLIGOR" means a Person (including any Affiliate of such Person) obligated
to make payments with respect to a Receivable.
"ORIGINATOR" means, at any time, each Subsidiary of Seller at such time a
signatory to the Purchase and Sale Agreement.
"PERCENTAGE" means with respect to RCC, 50% and with respect to Enterprise,
50%; PROVIDED THAT, at such time as the Aggregate Purchaser's Investments of a
Purchaser shall have been reduced to zero, Percentage shall mean, as to the
remaining Purchaser, 100%.
"PERIODIC REPORT" means a report in substantially the form
of EXHIBIT 3.04(a).
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability
A-14
company or limited liability partnership, government or any agency or political
subdivision thereof or any other entity.
"POOL RECEIVABLE" means a Receivable in the Receivables Pool.
"PROGRAM FEE" has the meaning set forth in SECTION 4.01(c).
"PROPERTY" means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
"PURCHASE" has the meaning set forth in SECTION 1.01(a).
"PURCHASE AND SALE AGREEMENT" means that certain Purchase and Sale
Agreement dated as of January 5, 1995 between the Seller as Initial Purchaser
and Wackenhut Airline Services, Inc. and each other Affiliate of Seller from
time to time a party thereto, as the same may be amended and otherwise modified
from time to time.
"PURCHASE AND SALE INDEMNIFIED AMOUNTS" has the meaning set forth in
SECTION 9.1 of the Purchase and Sale Agreement.
"PURCHASE AND SALE INDEMNIFIED PARTIES" has the meaning set forth in
SECTION 9.1 of the Purchase and Sale Agreement.
"PURCHASE AND SALE TERMINATION DATE" has the meaning set forth in SECTION
1.4 of the Purchase and Sale Agreement.
"PURCHASE AND SALE TERMINATION EVENT" has the meaning set forth in SECTION
8.1 of the Purchase and Sale Agreement.
"PURCHASE LIMIT" has the meaning set forth in SECTION 1.02(a).
"PURCHASE PRICE" has the meaning set forth in SECTION 2.1 of the Purchase
and Sale Agreement.
"PURCHASE TERMINATION DATE" has the meaning set forth in SECTION 1.06.
"PURCHASER" AND "PURCHASERS" has the meaning set forth in the preamble.
"PURCHASER RATE" has the meaning set forth in APPENDIX B.
"PURCHASER'S INVESTMENT" has the meaning set forth in SECTION 2.02.
"PURCHASER'S SHARE" has the meaning set forth in SECTION 2.04.
"RATE VARIANCE FACTOR" has the meaning set forth in APPENDIX B.
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"RCC" has the meaning set forth in the Preamble.
"RCC PROGRAM SUPPORT AGREEMENT" means and includes (a) the Existing Credit
Agreement and any letter of credit issued thereunder, (b) the Existing Liquidity
Agreement and (c) any other agreement hereafter entered into by any RCC Program
Support Provider providing for the issuance of one or more letters of credit for
the account of RCC, the issuance of one or more surety bonds for which RCC is
obligated to reimburse the applicable RCC Program Support Provider for any
drawings thereunder, the sale by RCC to any RCC Program Support Provider of
Undivided Interests (or portions thereof) and/or the making of loans and/or
other extensions of credit to RCC in connection with RCC's securitization
program, together with any letter of credit, surety bond or other instrument
issued thereunder (but excluding any discretionary advance facility provided by
the Administrative Agent).
"RCC PROGRAM SUPPORT PROVIDER" means and includes BofA and any other or
additional Person (other than any customer of RCC) now or hereafter extending
credit or having a purchase commitment or a commitment to extend credit to or
for the account of RCC or issuing a letter of credit, surety bond or other
instrument to support any obligations arising under or in connection with RCC's
securitization program.
"RECEIVABLE" means any right to payment from a Person, whether constituting
an account, chattel paper, instrument or general intangible, to Seller or any
Originator arising in the divisions of Seller referred to as Company 1 and
Company 21 or in any Originator and includes the right to payment of any
interest or finance charges and other obligations of such Person with respect
thereto.
"RECEIVABLES POOL" means at any time all then outstanding Receivables which
(a) arose from or relate to a Contract, and (b) as to which the Obligors
thereunder are Designated Obligors. If a Receivable is a Pool Receivable on the
day immediately preceding the Commitment Termination Date, such Receivable shall
continue to be considered a Pool Receivable at all times thereafter.
"REGULATION D" means Regulation D of the Federal Reserve Board, or any
other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as presently defined in Regulation D, as in effect from time to
time.
"REGULATORY CHANGE" means, relative to any Affected Party
(a) any change in (or the adoption, implementation, phase-in or
commencement of effectiveness of) any
(i) United States federal or state law or foreign law applicable
to such Affected Party;
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(ii) regulation, interpretation, directive, requirement or
request (whether or not having the force of law) applicable to such
Affected Party of (A) any court, government authority charged with the
interpretation' or administration of any law referred in CLAUSE (a)(i)
or of (B) any fiscal, monetary or other authority having jurisdiction
over such Affected Party; or
(iii) generally accepted accounting principles or regulatory
accounting principles applicable to such Affected Party and affecting
the application to such Affected Party of any law, regulation,
interpretation, CLAUSE (a)(i) or (a)(ii) above; or
(b) any change in the application to such Affected Party of any
existing law, regulation, interpretation, directive, requirement, request
or accounting principles referred to in CLAUSE (a)(i), (a)(ii) or (a)(iii)
above.
"REINVESTMENT" has the meaning set forth in SECTION 1.01(b).
"RELATED SECURITY" means, with respect to any Receivable: (a) all of
Seller's right, title and interest in and to all Contracts or other agreements
that relate to such Receivable; (b) all of Seller's interest in the merchandise
(including returned merchandise), if any, relating to the sale which gave rise
to such Receivable; (c) all other security interests or liens and property
subject thereto from time to time purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise; (d) the assignment to any Agent, for the benefit of Purchaser and any
assignee, of all UCC financing statements covering any collateral securing
payment of such Receivable (but such assignment is made only to the extent of
the interest of its related Purchaser in the respective Receivable); and (e) all
guarantees and other agreements or arrangements of whatever character from time
to time supporting or securing payment of such Receivable whether pursuant to
the Contract related to such Receivable or otherwise. The interest of a
Purchaser in any Related Security is only to the extent of such Purchaser's
Undivided interest, as more fully described in the definition of an Undivided
Interest.
"REMAINING COLLECTIONS" has the meaning set forth in SECTION 3.01(a)(ii).
"RENTALS", with respect to any lease, means and includes as of the date of
any determination thereof, all fixed payments (including as such all payments
which the lessee is obligated to make to the lessor on termination of the lease
or surrender of the Property) payable by Seller or a Subsidiary, as lessee or
sublessee under a lease of real or personal property, but shall be exclusive of
any amounts required to be paid by Seller or a Subsidiary (whether or not
designated as rents or additional rents) on account of maintenance, repairs,
insurance, taxes and
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similar charges. Fixed rents under any so-called "percentage leases" shall be
computed solely on the basis of the minimum rents, if any, required to be paid
by the lessee regardless of sales volume or gross revenues.
"REQUIRED ALLOCATIONS" has the meaning set forth in SECTION 2.01.
"REQUIRED ALLOCATIONS LIMIT" has the meaning set forth in SECTION 1.02(b).
"RESERVE PERCENTAGE" has the meaning set forth in APPENDIX B.
"RESTRICTED INVESTMENTS" means all Investments in any Person, other than:
(a) Investments by Seller and its Subsidiaries in and to
Subsidiaries, including any investment in a corporation which, after giving
effect to such Investments, will become a Subsidiary;
(b) Investments in (i) commercial paper maturing in 270 days or less
from the date of issuance and which, at the time of acquisition by Seller
or any Subsidiary, is accorded one of the two highest ratings by Standard &
Poor's Corporation or Moody's Investors Service, Inc.; (ii) Variable Rate
Demand Notes of issuers whose commercial paper, at the time of acquisition,
is accorded one of the two highest ratings by Standard & Poor's Corporation
or Moody's Investors Service, Inc.; or (iii) Direct obligations of any
State of the United States of America or of any political subdivision
thereof located in the United States of America and which, at the time of
acquisition, is accorded one of the two highest ratings by Standard &
Poor's Corporation or Moody's Investors Service, Inc., maturing in twelve
months or less from the date of acquisition;
(c) Investments in direct obligations of the United States of
America, or investments in any Person, which Investments are guaranteed by
the full faith and credit of the United States of America, in either case
maturing in twelve months or less from the date of acquisition thereof by
Seller or any Subsidiary;
(d) Investments in certificates of deposit maturing within one year
from the date of issuance thereof, issued by a bank or trust company
organized under the laws of the United States or any state thereof, having
capital, surplus and undivided profits aggregating at least $100,000,000
and whose long-term certificates of deposit are, at the time of acquisition
thereof by Seller or any Subsidiary, rated A by Standard & Poor's
Corporation or A by Moody's Investors Service, Inc.;
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(e) Loans or advances in the usual and ordinary course of business to
officers, directors and employees for expenses (including moving expenses
related to a transfer) incidental to carrying on the business of Seller or
any Subsidiary; PROVIDED, HOWEVER that Seller may make up with aggregate at
any one time outstanding, up to $300,000 of such loans or advances which
are not incidental to carrying on the business of Seller or any Subsidiary;
(f) receivables arising from the sale of goods and services in the
ordinary course of business of Seller and its Subsidiaries; and
(g) provided, however, that with respect to investments made by or on
behalf of Titania Insurance Company of America, a Vermont Corporation, the
following shall not be Restricted Investments;
(1) Certificates of deposit, time deposits and banker's
acceptance maturing within one year from the date of
acquisition, issued by a bank or trust company organized
under the laws of the United States or any state thereof, or
any foreign bank whose branch is organized under the laws of
the United States or any state thereof, having capital,
surplus and undivided profits aggregating at least
$100,000,000 and whose long-term certificates of deposit
are, at the time of acquisition, rated at least A by
Standard & Poor's Corporation or Moody's Investors Service,
Inc.;
(2) Repurchase Agreements with any domestic bank with debt rated
'AA' or better by Standard & Poor's Corporation, or any
foreign bank rated at least 'AA' by Standard & Poor's
Corporation and 'Aa' by Moody's Investors Service, Inc.; or
repurchase agreements with such other Persons on such terms
as Seller and Agent shall agree in writing; provided the
term of all such repurchase agreements is for one year or
less;
(3) Direct obligations of the United States of America, or
Investments in any Person, which Investments are guaranteed
by the full faith and credit of the United States of
America;
(4) Mortgage-backed securities issued by the United States
Government or any agency or instrumentality thereof, having
at the time of acquisition, a credit rating of at least AA
by a nationally recognized rating service;
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(5) Bonds, notes and other direct obligations (other than those
referred to in clause (b), above) of any corporation
domiciled in the United States of America, or a State of the
United State of America, or of any sovereign or
supranational institution whose obligations are denominated
in United States dollars, at the time of acquisition rated
at least A by a nationally recognized rating service.
Obligations of sovereign or supranational institutions at
the time of acquisition, shall be rated at least AA by a
nationally recognized rating service;
(6) Preferred stock obligations of any corporation domiciled in
the United States of America, whose obligations at the time
of acquisition are rated at least A by a nationally
recognized rating service;
(7) Shares in mutual funds that invest solely in investments of
the types described in clause (b)(i), clause (b)(iii),
clause (3), clause (4), clause (5) and/or clause (6) above
and have assets in excess of $100,000,000;
(8) Any Investments (other than the Investments set forth in
clause (b) and clause (1) through clause (7) inclusive,
above), provided that the aggregate fair value for all such
investments shall not, at any time, exceed five percent (5%)
of the aggregate fair value of all Investments set forth in
clause (1) through (8) inclusive, above. For the purposes of
this subsection (8) only, fair value shall mean the greater
of book value or fair market value.
In valuing any investments for the purpose of applying the limitations set
forth in this Agreement, such investments, loans and advances shall be taken at
the original cost thereof, without allowance for any subsequent write-offs or
appreciation or depreciation therein, but less any amount repaid or recovered on
account of capital or principal.
For purposes of this Agreement, at any time when a corporation becomes a
Subsidiary, all Investments of such corporation at such time shall be deemed to
have been made by such corporation, as a Subsidiary, at such time.
"RUN OFF DAY" for any Undivided Interest means any of (a) each day which
occurs on or after the date designated by any Agent to Seller to be the "Run Off
Commencement Date", provided such date is designated on at least one Business
Day's notice during a time when any of the conditions set forth in SECTION
A-20
5.02 are not satisfied, and on or before the date, if any, designated by such
Agent in its sole discretion on at least one Business Day's notice to Seller as
the "Run Off Termination Date", and (b) each day which occurs on or after the
Termination Date for such Undivided Interest.
"RUN OFF DISCOUNT" has the meaning set forth in APPENDIX B.
"RUN OFF PERIOD" means one or more successive Run Off Days.
"RUN OFF SERVICER'S FEE" has the meaning set forth in APPENDIX B.
"SCHEDULED COMMITMENT TERMINATION DATE" has the meaning set forth in
SECTION 1.02(a).
"SECURITY" shall have the same meaning as in SECTION 2(l) of the Securities
Act of 1933, as amended.
"SELLER" has the meaning set forth in the PREAMBLE.
"SELLER INFORMATION" has the meaning set forth in SECTION 14.08.
"SELLER INFORMATION PROVIDER" has the meaning set forth in SECTION 14.08.
"SERVICER" initially means The Wackenhut Corporation, and thereafter the
Person determined pursuant to SECTION 8.01(a).
"SERVICER TRANSFER EVENT" has the meaning set forth in SECTION 8.01(b).
"SERVICER'S FEE" has the meaning set forth in APPENDIX B.
"SERVICER'S FEE RESERVE" has the meaning set forth in APPENDIX B.
"SERVICES" means (i) security related services (including, without
limitation, physical security, investigations, transit security, nuclear site
security, emergency protection and similar services) and (ii) corrections
related services (including, without limitation, correctional facility guard,
food and similar services).
"SETTLEMENT DATE" means the last day of each Settlement Period.
"Settlement Period" for any Undivided Interest means
(a) each period commencing on the first day of each Yield Period for
such Undivided Interest and ending on the last day of such Yield Period;
and
A-21
(b) on and after the Termination Date for such Undivided Interest,
such period (including, without limitation, a daily period) as shall be
selected from time to time by the Agent or, in absence of any such
selection, each period of thirty days from the next preceding Settlement
Date;
PROVIDED, HOWEVER, that
(i) with respect to any Yield Period of one day (as described in
CLAUSE (ii) of the PROVISO of the definition of "Yield Period"), the
related Settlement Period shall be the first day following such Yield
Period;
(ii) any Settlement Period which would otherwise end on a day which
is not a Business Day shall be extended to the next succeeding Business
Day; and
(iii) the last Settlement Period shall end on the date on which all
Undivided Interests have been reduced to zero.
"SOLVENT" shall mean, when used with respect to any Person, that at the
time of determination: (i) the fair value of its assets (both at fair valuation
and present fair saleable value) is in excess of the total amount of its
liabilities, including, without limitation, contingent liabilities; (ii) it is
then able and expects to be able to pay its debts as they mature; and (iii) it
has capital sufficient to carry on its business as conducted and as proposed to
be conducted.
"SPECIAL CONCENTRATION LIMIT" has the meaning set forth in SECTION 2.03(c).
"SUBSIDIARY" means, as to any particular parent corporation, any
corporation of which more than 50% (by number of votes) of the Voting Stock
shall be owned by such parent corporation and/or one or more corporations which
are themselves subsidiaries of such parent corporation. The term "Subsidiary"
shall mean a subsidiary of Seller and The Atrium At Coral Gables, Ltd., a
Florida limited partnership.
"SUCCESSOR NOTICE" has the meaning set forth in SECTION 8.01(b).
"TERMINATION DATE" for any Undivided Interest means the Commitment
Termination Date.
"TERMINATION EVENT" has the meaning set forth in SECTION 10.01.
"THREE-MONTH DEFAULT RATIO" means the ratio (expressed as a percentage)
computed as of any Month End Date by dividing (x) the aggregate Unpaid Balance
of all Defaulted Receivables calculated as at each of the three most recent
Month End Dates less Losses
A-22
(without giving effect to CLAUSE (z) of the definition thereof) during the three
preceding fiscal months by (y) the aggregate Unpaid Balance of all Pool
Receivables calculated as at each of the three most recent Month End Dates less
Losses (without giving effect to CLAUSE (z) of the definition thereof) during
the three most recent fiscal months.
"THREE-MONTH DILUTION RATIO" means the ratio (expressed as a percentage)
computed as of each Month End Date by dividing (x) the aggregate reduction in
the Unpaid Balance of all Pool Receivables arising from dilutive credits during
the three immediately preceding fiscal months by (y) Collections of Pool
Receivables received during such period; PROVIDED THAT, for each calendar month
preceding December, 1994 (or for December, 1994, if actual dilutive credits are
not known as of the date of calculation of the ratio for such month), dilutive
credits shall be estimated at .0065 times Collections of Pool Receivables during
each such month.
"TITANIA" means Titania Insurance Company of America, a corporation
organized under the laws of Vermont and a wholly-owned Subsidiary of the Seller.
"TOTAL CAPITALIZATION" means the sum of (i) Consolidated Funded Debt PLUS
(ii) Consolidated Net Worth.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction or jurisdictions.
"UNDIVIDED INTEREST" has the meaning set forth in SECTION 2.01.
"UNMATURED PURCHASE AND SALE TERMINATION EVENT" means any event which, with
the giving of notice or lapse of time, or both, would become a Purchase and Sale
Termination Event.
"UNMATURED TERMINATION EVENT" means any event which, with the giving of
notice or lapse of time, or both, would become a Termination Event.
"UNPAID BALANCE" of any Receivable means at any time the SUM of (x) the
unpaid principal amount thereof, PLUS (y) the unpaid amount of all finance
charges, interest payments and other amounts actually accrued thereon at such
time, but EXCLUDING, in the case of CLAUSE (y) next above, all late payment
charges, delinquency charges, and extension or collection fees.
"VOTING STOCK" means Securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"WACKENHUT" has the meaning set forth in the preamble.
A-23
"WACKENHUT FAMILY" means (i) George R. Wackenhut, Ruth J. Wackenhut,
Richard R. Wackenhut and other lineal descendants of George R. Wackenhut, the
founder of Wackenhut; (ii) the spouses and lineal descendants of the persons
named in clause (i); and (iii) the estates or legal representatives of the
persons named in clause (i).
"WCC" means Wackenhut Corrections Corporation, a Florida corporation.
"YIELD PERIOD" means with respect to any Undivided Interest (or portion
thereof):
(a) the period commencing on the date of the initial Purchase of such
Undivided Interest (or such portion) and ending such number of days
thereafter (not to exceed 100 days) as the applicable Managing Agent shall
select, after consultation with the Seller, pursuant to SECTIONS 1.03 or
2.01(b); and
(b) thereafter, each period commencing on the last day of the
immediately preceding Yield Period for such Undivided Interest (or such
portion) and ending such number of days thereafter (not to exceed 100 days)
as the Agent shall select, after consultation with the Seller;
PROVIDED, HOWEVER, that
(i) any such Yield Period (other than a Yield Period consisting of
one day) which would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day (unless the related
Undivided Interest shall be accruing Earned Discount at a rate determined
by reference to the Eurodollar Rate (Reserve Adjusted), in which case if
such succeeding Business Day is in a different fiscal month, such Yield
Period shall instead be shortened to the next preceding Business Day);
(ii) in the case of Yield periods of one day for any Undivided
Interest, (A) the Initial Yield Period shall be the day of the related
Purchase; and (B) any subsequently occurring Yield Period which is one day
shall, if the immediately preceding Yield Period is more than one day, be
the last day of such immediately preceding Yield Period, and if the
immediately preceding Yield Period is one day, shall be the next day
following such immediately preceding Yield Period.
The "RELATED" Yield Period for any Undivided Interest at any time means the
Yield Period pursuant to which Earned Discount is then accruing for such
Undivided Interest.
B. OTHER TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles.
All terms used in Article 9 of
A-24
the UCC in the State of Illinois, and not specifically defined herein, are used
herein as defined in such Article 9.
C. COMPUTATION OF TIME PERIODS. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding".
A-25
APPENDIX B
CALCULATION OF DISCOUNT AND RESERVE
This is APPENDIX B to the Receivables Purchase Agreement dated as of
January 5, 1995 among The Wackenhut Corporation, Receivables Capital
Corporation, Enterprise Funding Corporation, BofA, NationsBank of North
Carolina, N.A., and BofA as Administrative Agent (as amended, supplemented or
otherwise modified from time to time, the "Agreement"). Capitalized terms used
in this APPENDIX B without definition have the meanings assigned to such terms
in APPENDIX A to the Agreement. Each reference in this APPENDIX B to any Section
refers to such Section of the Agreement. Each reference in this APPENDIX B to
any Part refers to the part of this APPENDIX B so designated.
INDEX
PART I
DISCOUNT FACTOR
Sub-
Part Term Page No.
- ---- ---- --------
A. Discount Factor. . . . . . . . . . . . . . . . . . . . . . . B-2
B. Earned Discount. . . . . . . . . . . . . . . . . . . . . . . B-2
C. Negative Spread Fee. . . . . . . . . . . . . . . . . . . . . B-3
D. Run Off Discount . . . . . . . . . . . . . . . . . . . . . . B-3
E. Rate Definitions . . . . . . . . . . . . . . . . . . . . . . B-4
Alternate Reference Rate . . . . . . . . . . . . . . . . . B-4
Bank Rate . . . . . . . . . . . . . . . . . . . . . . . B-5
Commercial Paper Rate. . . . . . . . . . . . . . . . . . . B-5
Domestic CD Rate (Adjusted). . . . . . . . . . . . . . . . B-5
Domestic CD Rate . . . . . . . . . . . . . . . . . . . . . B-6
Assessment Rate. . . . . . . . . . . . . . . . . . . . . . B-6
Reserve Requirement. . . . . . . . . . . . . . . . . . . . B-6
Eurodollar Rate (Reserve Adjusted) . . . . . . . . . . . . B-8
Purchaser Rate . . . . . . . . . . . . . . . . . . . . . . B-9
F. Rate Variance Factor . . . . . . . . . . . . . . . . . . . . B-10
PART II
LOSS RESERVE; DILUTION RESERVE
Sub-
Part Term Page No.
- ---- ---- --------
A. Loss Reserve . . . . . . . . . . . . . . . . . . . . . . . . B-10
B. Reserve Percentage . . . . . . . . . . . . . . . . . . . . . B-10
C. Dilution Reserve . . . . . . . . . . . . . . . . . . . . . . B-10
B-1
PART III
SERVICER'S FEE RESERVE
A. Servicer's Fee Reserve . . . . . . . . . . . . . . . . . . . B-11
B. Servicer's Fee . . . . . . . . . . . . . . . . . . . . . . . B-11
C. Run Off Servicer's Fee . . . . . . . . . . . . . . . . . . . B-10
PART IV
ADJUSTED AVERAGE MATURITY
A. Adjusted Average Maturity. . . . . . . . . . . . . . . . . . B-12
B. Average Maturity . . . . . . . . . . . . . . . . . . . . . . B-12
-----------------------
PART I
DISCOUNT FACTOR
A. DISCOUNT FACTOR. The "DISCOUNT FACTOR" for a related Undivided
Interest at any time in a Yield Period means an amount determined as follows:
DF = ED + ROD
WHERE:
DF = the Discount Factor of such Undivided Interest at such time;
ED = Earned Discount of such Undivided Interest accrued and unpaid at
such time, as determined pursuant to PART I.B;
ROD = Run Off Discount of such Undivided Interest at such time, as
determined pursuant to PART I.D.
B. EARNED DISCOUNT. The "EARNED DISCOUNT" for any Undivided Interest for
each day in a related Yield Period means an amount determined as follows:
ED = [PI x (PR + FR) x 1/360] + NSF (if any);
PROVIDED, HOWEVER, that if, such Undivided Interest is owned by RCC and
Enterprise and pursuant to the definition of "Purchaser Rate" in PART I.E.,
different Purchaser Rates would apply to different portions of an Undivided
Interest, then Earned Discount shall be calculated separately with respect to
each such portion, and the Earned Discount shall be the sum of the Earned
Discount so calculated for such portions;
B-2
WHERE:
ED = Earned Discount of such Undivided Interest (or such portion)
accrued on such day;
PI = the Purchaser's Investment of such Undivided Interest (or such
portion) on such day, as determined pursuant to SECTION 2.02;
PR = the Purchaser Rate for such Undivided Interest (or such portion)
on such day, as defined in PART IE.;
FR = the Program Fee Rate consisting of the rate set forth in CLAUSE
(y) of SECTION 4.01(c); and
NSF = the Negative Spread Fee for such Undivided Interest or such
portion thereof) on such day, as defined in PART C.
No provision of the Agreement shall require the payment or permit the collection
of Earned Discount in excess of the maximum permitted by applicable law. Earned
Discount for any Undivided Interest shall not be considered paid by any
distribution if at any time such distribution is rescinded or must otherwise be
returned for any reason.
C. NEGATIVE SPREAD FEE. The "NEGATIVE SPREAD FEE" means, for each
Undivided Interest (or portion thereof) for each day in any Yield Period during
which any Run Off Day or Termination Date for such Undivided Interest occurs,
the amount, if any, by which;
(i) the additional Earned Discount (calculated without taking into
account any Negative Spread Fee) which would have accrued on the reductions
of the related Purchaser's Investment of such Undivided Interest (or such
portion) during such Yield Period (as so computed) if such reductions had
remained as Purchaser's Investment exceeds,
(ii) the income, if any, received by the owner of such Undivided
Interest (or such portion) from such owner's investing the proceeds of such
reductions of Purchaser's Investment.
D. RUN OFF DISCOUNT. The "RUN OFF DISCOUNT" for the related Undivided
Interest at any time means an amount determined as follows:
ROD = PI x (PR + RVF) x AAM
---------------------
360
WHERE:
B-3
ROD = The Run Off Discount for such Undivided Interest at such
time;
PI = the Purchaser's Investment of such Undivided Interest at
such time;
PR = the Purchaser Rate for such Undivided Interest for a Yield
Period deemed to commence at such time pursuant to PART I.E;
AAM = the Adjusted Average Maturity of the Receivables Pool
related to such Undivided Interest, as determined pursuant
to PART V; and
RVF = the Rate Variance Factor deemed to be in effect at such
time, as determined pursuant to PART I.F.
E. RATE DEFINITIONS. The "ALTERNATE REFERENCE RATE" means, on any date,
a fluctuating rate of interest PER ANNUM equal to the higher of
(a) the higher of the rates of interest most recently announced by
BofA at its office in Chicago, Illinois and NationsBank at its office in
Charlotte, North Carolina as their respective reference rates from time to
time, changing when and as said reference rates change (such reference
rates are not necessarily the lowest or best rate charged by BofA or
NationsBank) and
(b) the Federal Funds Rate (as defined below) most recently
determined by BofA plus 1.0% PER ANNUM.
For purposes of this definition, "FEDERAL FUNDS RATE" means, for any period, a
fluctuating interest rate PER ANNUM equal (for each day during such period) to
(i) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York; or
(ii) if such rate is not so published for any day which is a Business
Day, the average of the quotations for such day on such transactions
received by BofA from three federal funds brokers of recognized standing
selected by it.
The Alternate Reference Rate is not necessarily intended to be the lowest rate
of interest determined by BofA or NationsBank in connection with extensions of
credit.
B-4
"BANK RATE" for any Yield Period for the related Undivided Interest of any
Purchaser means an interest rate PER ANNUM equal to the sum of (a) 0.50% PER
ANNUM, PLUS (b) if the Fixed Charge Coverage Ratio is at such time less than
2.25:1, .375% PER ANNUM, plus (c) the Eurodollar Rate (Reserve Adjusted) of such
Purchaser for such Yield Period; PROVIDED, HOWEVER, that if (i) it shall become
unlawful for any Managing Agent, any RCC Program Support Provider, Enterprise
Liquidity Provider or Enterprise Credit Support Provider to obtain funds in the
London interbank eurodollar market in order to fund any Purchase or to maintain
any Undivided Interest, or if such funds shall not be reasonably available to
any Managing Agent, any RCC Program Support Provider, Enterprise Liquidity
Provider or Enterprise Credit Support Provider or (ii) there shall not be time
prior to the commencement of an applicable Yield Period to determine a
Eurodollar Rate for any Purchaser in accordance with its terms, then the "BANK
RATE" for any Yield Period for such Undivided Interest shall be equal to a rate
of (x) 0.50% PER ANNUM, PLUS (y) the Domestic CD Rate (Adjusted) of such
Purchaser for such Yield Period PLUS (z) if the Fixed Charge Coverage Ratio is
at such time less than 2.25:1, .375% PER ANNUM ("DEALER FEE").
"COMMERCIAL PAPER RATE" for any Yield Period for the related Undivided
Interest for any Purchaser means a rate PER ANNUM equal to the sum of (i) the
rate or, if more than one rate, the weighted average of the rates, determined by
converting to an interest-bearing equivalent rate PER ANNUM the discount rate
(or rates) at which Commercial Paper Notes having a term equal to such Yield
Period and to be issued to fund the Purchase of or to maintain such Undivided
Interest by the Purchaser purchasing such Undivided Interest (including, without
limitation, Purchaser's Investment and accrued and unpaid Earned Discount) may
be sold by any placement agent or commercial paper dealer selected by the
related Managing Agent, as agreed between each such agent or dealer and the
related Managing Agent, PLUS (ii) the greater of (A) the commissions and charges
charged by such placement agent or commercial paper dealer with respect to such
Commercial Paper Notes and (B) .05% times the face amount of such Commercial
Paper Notes, expressed as a percentage of such face amount and converted to an
interest-bearing equivalent rate PER ANNUM.
"DOMESTIC CD RATE (ADJUSTED)" means, with respect to Undivided Interests
owned or otherwise funded by BofA, RCC or any RCC Program Support Provider and
with respect to any Yield Period, a rate PER ANNUM (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined pursuant to the following
formula:
Domestic CD Rate = DOMESTIC CD RATE + Assessment
----------------
(Adjusted) 1-Reserve Rate
Requirement
WHERE, for purposes of this definition:
B-5
"DOMESTIC CD RATE" means, with respect to any Yield Period for any
related Undivided Interest (or portion thereof), owned or otherwise
funded by BofA, RCC, or any other RCC Program Support Provider, a rate
of interest equal to the average of the secondary market morning
offering rates in the United States for time certificates of deposit
of major United States money market banks for a period approximately
equal to such Yield Period in an amount substantially equal to the
Purchaser's Investment of the related Undivided Interest (or such
portion), as such offering rate is quoted to BofA by the Federal
Reserve Bank of New York during the morning of the first day of such
Yield Period; PROVIDED, HOWEVER, that if BofA shall not receive any
such quote by the Federal Reserve Bank of New York by 11:00 a.m., New
York time, on the morning of the first day of any Yield Period, then
"DOMESTIC CD RATE" for the purposes of this definition shall mean,
with respect to such Yield Period, the rate of interest determined by
BofA to be the average (rounded upwards, if necessary, to the nearest
1/100 of 1%) of the bid rates quoted to BofA in the secondary market
at approximately 11:00 a.m., New York time (or as soon thereafter as
practicable), on the first day of such Yield Period by two certificate
of deposit dealers in New York or Chicago of recognized standing
selected by BofA in its sole discretion for the purchase from BofA at
face value of certificates of deposit issued by BofA in an amount
approximately equal or comparable to the amount of the Purchaser's
Investment and having a maturity equal to such Yield Period.
"ASSESSMENT RATE" for purposes of this definition and for any Yield
Period means the annual assessment rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) applicable to BofA on its
insured deposits, on the Business Day immediately preceding the first
day of such Yield Period, under the Federal Deposit Insurance Act,
determined by annualizing the most recent assessment levied on BofA by
the Federal Deposit Insurance Corporation (together with any
successor, the "FDIC" with respect to such deposits after giving
effect to the most recent rebate granted to such Managing Agent by the
FDIC with respect to deposit insurance as well as the loss to BofA
(determined in the good faith judgment of BofA) of the use of such
rebate prior to the date a credit is taken by BofA with respect to
such rebate.
"RESERVE REQUIREMENT" means, for purposes of this definition and with
respect to any Yield Period, a percentage (expressed as a decimal)
equal to the daily average during such Yield Period of the aggregate
reserve requirement (including all basic, supplemental, marginal and
other reserves and taking into account any
B-6
transitional adjustments or other scheduled changes in reserve
requirements during such period) specified under Regulation D, as
applicable to the class of banks of which BofA is a member, at
deposits of the types used as a reference in determining the Domestic
CD Rate and having a maturity approximately equal to such Yield
Period.
"DOMESTIC CD RATE (ADJUSTED)" means, with respect to Undivided Interests
owned or otherwise funded by NationsBank, Enterprise, any Enterprise Liquidity
Provider or any Enterprise Credit Support Provider and with respect to any Yield
Period, a rate PER ANNUM equal to the sum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) of (A) the rate obtained by dividing (x) the Enterprise CD
Rate for such Yield Period by (y) a percentage equal to 100% minus the stated
maximum rate for all reserve requirements as specified in Regulation D
(including without limitation any marginal, emergency, supplemental, special or
other reserves) that would be applicable during such Yield Period to a
negotiable certificate of deposit in excess of $100,000, with a maturity
approximately equal to such Yield Period, of any member bank of the Federal
Reserve System plus (B) the then daily net annual assessment rate (rounded
upward, if necessary, to the nearest 1/100 of 1%) as estimated by NationsBank,
the Enterprise Liquidity Provider or the Enterprise Credit Support Provider, as
applicable, for determining the current annual assessment payable by it to the
FDIC for insuring such certificates of deposit;
WHERE, for purposes of this definition:
"ENTERPRISE CD RATE" means, with respect to any Yield Period for any
related Undivided Interest owned or otherwise funded by NationsBank,
Enterprise, any Enterprise Liquidity Provider or any Enterprise Credit
Support Provider, the average of the bid rates determined by
NationsBank, the Enterprise Liquidity Provider or the Enterprise
Credit Support Provider, as applicable, per annum, at approximately
10:00 a.m. (New York City time) on the Business Day before the first
day of such Yield Period for which such Domestic CD Rate (Adjusted) is
to be applicable, of two or more New York certificate of deposit
dealers of recognized standing selected by NationsBank, the Enterprise
Liquidity Provider or the Enterprise Credit Support Provider, as
applicable, for the purchase in New York from the Enterprise Liquidity
Provider or the Enterprise Credit Support Provider, as applicable, at
face value of certificates of deposit of the Enterprise Liquidity
Provider or the Enterprise Credit Support Provider, as applicable, in
an aggregate amount approximately comparable to the amount of
Enterprise's Purchaser's Investment for the related Undivided Interest
(or portion thereof) to which such Domestic CD
B-7
Rate (Adjusted) is to be applicable and with a maturity approximately
equal to the applicable Yield Period.
"EURODOLLAR RATE (RESERVE ADJUSTED)" means, with respect to Undivided
Interests owned or otherwise funded by BofA, RCC or any RCC Program Support
Provider, and with respect to any Yield Period for any related Undivided
Interest (or portion thereof), a rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
---------------
(Reserve Adjusted) 1-Eurodollar
Reserve Percentage
WHERE for purposes of this definition:
"EURODOLLAR RATE" means, with respect to any Yield Period for any
related Undivided Interest (or portion thereof), the rate per annum at
which Dollar deposits in immediately available funds are offered to
the Eurodollar Offices of BofA two Eurodollar Business Days prior to
the beginning of such period by prime banks in the interbank
eurodollar market at or about 11:00 a.m., New York time for delivery
on the first day of such Yield Period, for the number of days
comprised therein and in an amount equal or comparable to the amount
of the related Purchaser's Investment of such Undivided Interest (or
such portion) for such Yield Period.
"EURODOLLAR BUSINESS DAY" means a day of the year on which dealings
are carried on in the London eurodollar interbank market and banks are
open for business in London and are not required or authorized to
close in New York City and Chicago, Illinois.
"EURODOLLAR OFFICE" shall mean the office of BofA through which BofA
determines the Eurodollar Rate. A Eurodollar Office of BofA may be,
at the option of BofA, either a domestic or foreign office.
"EURODOLLAR RESERVE PERCENTAGE" means, with respect to any Yield
Period, the then applicable percentage (expressed as a decimal)
prescribed by the Federal Reserve Board for determining reserve
requirements applicable to "Eurocurrency Liabilities" pursuant to
Regulation D.
"EURODOLLAR RATE (RESERVE ADJUSTED)" means, with respect to Undivided
Interests owned or otherwise funded by NationsBank, Enterprise, any Enterprise
Liquidity Provider or any Enterprise Credit Support Provider and with respect to
any Yield Period for any related Undivided Interest (or portion thereof), a rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) of (A) the
rate obtained by dividing (i) the applicable LIBO Rate by (ii) a percentage
equal to 100% minus the reserve percentage
B-8
used for determining the maximum reserve requirement as specified in Regulation
D (including without limitation any marginal, emergency, supplemental, special
or other reserves) that is applicable to the Enterprise Liquidity Provider
during such Yield Period in respect of eurocurrency or eurodollar funding,
lending or liabilities (or, if more than one percentage shall be so applicable,
the daily average of such percentage for those days in such Yield Period during
which any such percentage shall be applicable) plus (B) the then daily net
annual assessment rate (rounded upwards, if necessary, to the nearest 1/100 of
1%) as estimated by the Enterprise Liquidity Provider for determining the
current annual assessment payable by the Liquidity Provider to the FDIC in
respect of eurocurrency or eurodollar funding, lending or liabilities;
WHERE:
"LIBO RATE" means, with respect to any Yield Period, the rate at which
deposits in dollars are offered to NationsBank, the Enterprise
Liquidity Provider or the Enterprise Credit Support Provider in the
London interbank market at approximately 11:00 a.m. (London time) two
Enterprise Eurodollar Business Days before the first day of such Yield
Period in an amount approximately equal to the Purchaser's Investment
for a related Undivided Interest to which the Eurodollar Rate (Reserve
Adjusted) is to apply and for a period of time approximately equal to
the applicable Yield Period.
"ENTERPRISE EURODOLLAR BUSINESS DAY" means any Business Day which is
also a day for trading by and between banks in United States dollar
deposits in the London interbank market.
"PURCHASER RATE" for any Yield Period for any related Undivided Interest
(or portion thereof) of any Purchaser means:
(a) in the case of an Undivided Interest (or portion thereof) of
any Purchaser other than one referred to in CLAUSE (b) of this
definition, the Commercial Paper Rate of such Purchaser for such
Undivided Interest (or such portion) for such Yield Period; and
(b) in the case of an Undivided Interest (or portion thereof)
(i) (A) owned by an RCC Program Support Provider or any other assignee
(other than RCC), or otherwise funded pursuant to an RCC Program
Support Agreement, or (B) funded by a Funding or (ii) owned or funded
by an Enterprise Liquidity Provider or an Enterprise Credit Support
Provider, the Bank Rate of such Purchaser for such Undivided Interest
(or such portion) for such Yield Period;
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PROVIDED, HOWEVER, that on any day when any Termination Event or Unmatured
Termination Event shall have occurred and be continuing, the Purchaser Rate
shall mean a rate PER ANNUM equal to the Alternate Reference Rate in effect on
such day plus 2% PER ANNUM.
F. RATE VARIANCE FACTOR. The "RATE VARIANCE FACTOR" means, during any
Yield Period, such percentage PER ANNUM not exceeding 2% as the Managing Agents
may designate from time to time in their sole discretion.
PART II
LOSS RESERVE
A. LOSS RESERVE. The "LOSS RESERVE" of any Undivided Interest on any day
means the greater of (x) $2,000,000 and (y) an amount determined as follows:
LR = RP x (PI + DF)
WHERE:
LR = the Loss Reserve of such Undivided Interest on such day;
RP = the Reserve Percentage at the close of business of Purchaser
on such day, as determined pursuant to PART II.B;
PI = the related Purchaser's Investment of such Undivided
Interest at the opening of business of Purchaser on such
day, as determined pursuant to SECTION 1.03; and
DF = the Discount Factor of such Undivided Interest at the close
of business of Purchaser on such day, as determined pursuant
to PART I.A.
B. RESERVE PERCENTAGE. The "RESERVE PERCENTAGE" means, for the related
Undivided Interest on any day, the greatest of (i) three times the most recent
Three-Month Default Ratio, (ii) 1.5 times the percentage that the largest
Special Concentration Limit set forth on SCHEDULE 2.03 (c) bears to the then
Aggregate Unpaid Balance of Eligible Receivables and (iii) 10%.
C. DILUTION RESERVE. The "DILUTION RESERVE" for the related Undivided
Interest on any day means an amount equal to the product of (x) the sum of the
related Purchaser's Investment of such Undivided Interest at the close of
business of Purchaser on such day, as determined pursuant to SECTION 1.03 and
(y) the greater of (i) 2% and (ii) 2 times the highest Three-Month Dilutions
Ratio calculated on the Month End Date for each of the
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six fiscal months preceding or ending on such day. It shall be understood and
agreed that the Managing Agents may modify the percentages and calculations set
forth in CLAUSES (y)(i) and (y)(ii) above, after the expiration of six months
from the date hereof based upon the actual dilution experience during the first
six-month period after the closing.
PART III
SERVICER'S FEE RESERVE
A. SERVICER'S FEE RESERVE. The "SERVICER'S FEE RESERVE" for the related
Undivided Interest at any time means an amount determined as follows:
SFR = SF + ROSF
WHERE:
SFR = the Servicer's Fee Reserve for such Undivided Interest at
any time;
SF = the unpaid Servicer's Fee relating to such Undivided
Interest accrued to such time and unpaid as determined
pursuant to PART III.B; and
ROSF = the Run Off Servicer's Fee for such Undivided Interest at
such time, as determined pursuant to PART III.C.
B. SERVICER'S FEE. The "SERVICER'S FEE" relating to any Undivided
Interest accrued for any day means
(i) an amount equal to (x) .50% PER ANNUM, TIMES (y) the amount
of the related Purchaser's Investment at the close of business on such
day, TIMES (z) 1/360; or
(ii) on and after Servicer's reasonable request made at any time
when Seller shall no longer be Servicer, an alternative amount
specified by Servicer not exceeding (x) 110% of Servicer's cost and
expenses of performing its obligations under the Agreement during the
Yield Period when such day occurs, divided by (y) the number of days
in such Yield Period.
C. RUN OFF SERVICER'S FEE. The "RUN OFF SERVICER'S FEE" for any
Undivided Interest at any time means an amount equal to
(x) the related Purchaser's Investment at such time, TIMES
(y) (A) the percentage PER ANNUM set forth in clause (i) (x) of
the definition of "Servicer's Fee", or (B) if Servicer's Fee is
calculated pursuant to
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CLAUSE (ii) of such definition, the percentage PER ANNUM determined
for each day by dividing the amount of the Servicer's Fee accrued for
such day by the related Purchaser's Investment at the close of
business on such day, multiplying the quotient by 360 and expressing
the product as a percentage, TIMES
(z) a fraction, the numerator of which is the number of days
equal to the then Adjusted Average Maturity, and the denominator of
which is 360 days.
PART IV
ADJUSTED AVERAGE MATURITY
"ADJUSTED AVERAGE MATURITY" means, on any day, the product of (i) 2 times
(ii) the Average Maturity for such day.
"AVERAGE MATURITY" means, on any day, that time period (expressed in days)
equal to the weighted average maturity of the Pool Receivables as shall be
calculated by Servicer, as set forth in the most recent Periodic Report in
accordance with the provisions thereof. If a Managing Agent shall disagree with
any such calculation, such Agent may recalculate the Average Maturity for such
day, which calculation shall, absent manifest error, be binding upon Servicer,
Seller and Purchaser.
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