Exhibit 4.4
SECOND AMENDED AND RESTATED TRANSFER AND
ADMINISTRATION AGREEMENT
Dated as of January 25, 2002
Among
WACKENHUT FUNDING CORPORATION,
as Transferor,
and
THE WACKENHUT CORPORATION,
Individually and
as Servicer,
and
ENTERPRISE FUNDING CORPORATION,
as Purchaser,
and
the Bank Investors from time to time party hereto,
and
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Agent
TABLE OF CONTENTS
Page
----
ARTICLE I THE COMMITMENT.........................................................................................2
Section 1.1. Commitment........................................................................2
Section 1.2. Purchase and Reinvestment Limits..................................................2
Section 1.3. Making Purchases from the Transferor..............................................3
Section 1.4. [Reserved]........................................................................4
Section 1.5. Commitment Termination Date.......................................................4
Section 1.6. Purchase Termination Date.........................................................4
Section 1.7. Voluntary Termination of Commitment or Reduction of Maximum Purchase Limit........4
Section 1.8. Limitation of Ownership Interest..................................................5
Section 1.9. Special Undivided Interests.......................................................5
Section 1.10. Benefits of Agreement.............................................................5
ARTICLE II UNDIVIDED INTEREST AND PURCHASER'S SHARE..............................................................5
Section 2.1. Undivided Interest................................................................5
Section 2.2. Purchaser's Investment............................................................7
Section 2.3. Net Pool-Balance..................................................................8
Section 2.4. Shares............................................................................9
ARTICLE III SETTLEMENTS.........................................................................................10
Section 3.1. Non-Run Off Settlement Procedures for Collections................................10
Section 3.2. Run Off-Settlement Procedures for Collections....................................11
Section 3.3. Special Settlement Procedures: Reduction of Purchaser's Investment, Etc..........12
Section 3.4. Reporting........................................................................14
Section 3.5. Payments and Computations, Etc...................................................14
Section 3.6. Dividing or Combining Undivided Interests........................................15
Section 3.7. Treatment of Collections and Deemed Collections..................................16
ARTICLE IV FEES AND YIELD PROTECTION............................................................................16
Section 4.1. Fees.............................................................................16
Section 4.2. Yield Protection.................................................................16
ARTICLE V CONDITIONS OF PURCHASES...............................................................................18
Section 5.1. Conditions Precedent to Effectiveness of this Agreement..........................18
Section 5.2. Conditions Precedent to All Purchases and Reinvestments..........................18
Section 5.3. Additional Condition Precedent to Purchases......................................19
TABLE OF CONTENTS
(Continued)
Page
----
Section 5.4. Condition Subsequent.............................................................19
ARTICLE VI REPRESENTATIONS AND WARRANTIES.......................................................................20
Section 6.1. Representations and Warranties of the Transferor.................................20
Section 6.2. Representations and Warranties of the Servicer...................................24
ARTICLE VII GENERAL COVENANTS OF THE TRANSFEROR AND SERVICER....................................................27
Section 7.1. Affirmative Covenants of the Transferor..........................................27
Section 7.2. Reporting Requirements of the Transferor.........................................30
Section 7.3. Negative Covenants of the Transferor.............................................32
Section 7.4. Affirmative Covenants of Servicer................................................32
Section 7.5. Reporting Requirements of Servicer...............................................34
Section 7.6. Negative Covenants of the Servicer...............................................35
Section 7.7. Financial Covenants of the Servicer..............................................38
ARTICLE VIII ADMINISTRATION AND COLLECTION......................................................................39
Section 8.1. Designation of Servicer..........................................................39
Section 8.2. Successor Notice: Servicer Transfer Event........................................39
Section 8.3. Subcontracts.....................................................................40
Section 8.4. Duties of Servicer...............................................................40
Section 8.5. Allocation of Collections; Segregation...........................................40
Section 8.6. Modification of Receivables......................................................41
Section 8.7. Documents and Records............................................................41
Section 8.8. Certain Duties to the Transferor.................................................41
Section 8.9. Lock-Box Accounts................................................................41
Section 8.10. Rights of the Agent..............................................................41
Section 8.11. Rights on Servicer Transfer Event................................................42
Section 8.12. Responsibilities of the Transferor...............................................42
Section 8.13. Further Action Evidencing Purchases..............................................43
Section 8.14. Application of Collections.......................................................44
ARTICLE IX SECURITY INTEREST....................................................................................44
Section 9.1. Grant of Security Interest.......................................................44
Section 9.2. Further Assurances...............................................................44
Section 9.3. Remedies.........................................................................44
TABLE OF CONTENTS
(Continued)
Page
----
ARTICLE X [RESERVED]............................................................................................44
ARTICLE XI TERMINATION..........................................................................................44
Section 11.1. Termination Events...............................................................44
Section 11.2. Remedies.........................................................................46
ARTICLE XII THE AGENT...........................................................................................47
Section 12.1. Authorization and Action.........................................................47
Section 12.2. Agents' Reliance, Etc............................................................48
Section 12.3. Agents and Affiliates............................................................48
Section 12.4. Resignation of Agent.............................................................48
ARTICLE XIII BANK COMMITMENT; ASSIGNMENT OF PURCHASER'S INTEREST................................................49
Section 13.1. Rights as Bank Investor..........................................................49
Section 13.2. Indemnification of the Agent.....................................................49
Section 13.3. Non-Reliance.....................................................................50
Section 13.4. Payments by the Agent............................................................50
Section 13.5. Bank Commitment; Assignment to Bank Investors....................................50
Section 13.6. Restrictions on Assignments......................................................54
Section 13.7. Rights of Assignee...............................................................55
Section 13.8. Authorization of Agent...........................................................55
Section 13.9. Notice of Assignment.............................................................55
Section 13.10. Evidence of Assignment; Endorsement of Certificate...............................56
Section 13.11. Rights of Support Providers......................................................56
ARTICLE XIV INDEMNIFICATION.....................................................................................56
Section 14.1. Indemnities by the Transferor and Servicer.......................................56
Section 14.2. Contest of Tax Claim; After-Tax Basis............................................58
Section 14.3. Contribution.....................................................................59
ARTICLE XV MISCELLANEOUS........................................................................................59
Section 15.1. Amendments, Etc..................................................................59
Section 15.2. Notices, Etc.....................................................................59
Section 15.3. No Waiver; Remedies..............................................................60
Section 15.4. Binding Effect; Survival.........................................................60
Section 15.5. Costs, Expenses and Taxes........................................................60
TABLE OF CONTENTS
(Continued)
Page
----
Section 15.6. No Proceedings...................................................................61
Section 15.7. Bank of America Program Confidentiality..........................................61
Section 15.8. Confidentiality of the Transferor Information....................................63
Section 15.9. Captions and Cross References....................................................65
Section 15.10. Integration......................................................................65
Section 15.11. Governing Law....................................................................66
Section 15.12. Waiver Of Jury Trial.............................................................66
Section 15.13. Consent To Jurisdictions; Waiver Of Immunities...................................66
Section 15.14. Execution in Counterparts........................................................66
Section 15.15. Purchaser's Liabilities..........................................................67
Section 15.16. Agent's Liabilities..............................................................67
Section 15.17. Delegation of Servicer's Duties..................................................67
Section 15.18. Characterization of the Transactions Contemplated by this Agreement..............67
Section 15.19. Effect on Predecessor Agreement..................................................67
Section 15.20. Assignments by Exiting Bank Investor.............................................68
APPENDIX A Definitions
APPENDIX B Calculation of Discount and Reserve
Schedule 2.3(c) Form of Concentration Limit Certificate
Schedule 3.4(a) Form of Periodic Report
Schedule 6.1(j) Litigation (Transferor)
Schedule 6.1(n) Location of Transferor's Books, Records and Documents
Schedule 6.1(v) List of Transferor's Tradenames
Schedule 6.2(l) Litigation (Servicer)
Schedule 6.2(n) Location of Servicer's, Books, Records and Documents
Schedule 6.2(o) List of Lock Box Banks and Accounts
Schedule 13.5(b) Form of Assignment and Assumption Agreement
SECOND AMENDED AND RESTATED TRANSFER AND
ADMINISTRATION AGREEMENT
Dated as of January 25, 2002
THIS IS THE SECOND AMENDED AND RESTATED TRANSFER AND ADMINISTRATION
AGREEMENT, among WACKENHUT FUNDING CORPORATION, a Delaware corporation (the
"TRANSFEROR") and its successors and assigns, THE WACKENHUT CORPORATION, a
Florida corporation, individually and as Servicer ("WACKENHUT" or the
"SERVICER"), ENTERPRISE FUNDING CORPORATION, a Delaware corporation
("ENTERPRISE" or the "PURCHASER") and its successors and assigns, and BANK OF
AMERICA, NATIONAL ASSOCIATION (as successor to NationsBank, N.A.), a national
banking association ("BANK OF AMERICA"), as agent for Enterprise and the Bank
Investors (in such capacity, the "AGENT") and as a Bank Investor amending and
restating that certain Amended and Restated Transfer and Administration
Agreement dated as of January 26, 2001 among the Transferor, the Servicer,
Enterprise, Bank of America as agent for Enterprise and the Bank Investors and
as a Bank Investor (collectively, the "PARTIES"), as amended by the Amendment
Number 1 to Amended and Restated Transfer and Administration Agreement dated as
of October 12, 2001, among the Parties, (collectively, the "PREDECESSOR
AGREEMENT," and said agreement as amended and restated hereby, the "AGREEMENT").
Unless otherwise indicated, capitalized terms used in this Agreement are defined
in APPENDIX A.
BACKGROUND
1. The Originator has originated, and in the future will originate,
Receivables in the ordinary course of its business, and the Originator has sold,
and from time to time in the future will sell such Receivables to the Seller
pursuant to the Purchase and Sale Agreement.
2. The Seller will from time to time sell such Receivables (together
with Receivables originated by the Seller from time to time in the ordinary
course of its business) to the Transferor pursuant to the terms of the
Receivables Purchase Agreement.
3. Transferor has requested the Purchaser and the Bank Investors to
purchase, and the Purchaser may agree, and the Bank Investors have agreed, to
purchase, subject to the terms and conditions contained in this Agreement,
undivided interests in such Receivables, referred to herein as Undivided
Interests, from Transferor from time to time during the term of this Agreement.
4. Transferor, the Purchaser and the Bank Investors also desire that,
subject to the terms and conditions of this Agreement, certain of the daily
Collections in respect of the Undivided Interests in the Receivables be
reinvested in Receivables through the sale by the Transferor to the Purchaser or
the Bank Investors, as the case
may be, of additional Undivided Interests in the Receivables, such daily
reinvestment of Collections to be effected by an automatic daily adjustment to
the Purchaser's Undivided Interest or Bank Investor's as the case may be, and to
be intended to permit the Purchaser or the Bank Investors, as the case may be,
to maintain its Purchaser's Investment fully invested in uncollected Pool
Receivables.
5. The Bank of Nova Scotia, in its capacity as a Bank Investor under
the Predecessor Agreement, has determined not to renew its Commitment under the
Predecessor Agreement and its Commitment will be assumed by Bank of America in
its capacity as Bank Investor.
6. Bank of America has been requested, and is willing, to act as the
Agent for the Purchaser and the Bank Investors.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree to amend and restate the
Predecessor Agreement as follows:
ARTICLE I
THE COMMITMENT
Section 1.1. COMMITMENT. On the terms and subject to the conditions set
forth in this Agreement (including ARTICLE V):
(a) PURCHASES. Upon the terms and subject to the conditions
herein set forth the Transferor may, at its option, convey, transfer
and assign to the Agent, on behalf of the Purchaser or the Agent, on
behalf of the Bank Investors, as applicable, and the Agent, on behalf
of the Purchaser may, provided the Purchase Termination Date shall not
have occurred, at the Purchaser's option, or the Agent, on behalf of
the Bank Investors, provided that the Purchase Termination Date shall
not have occurred and that the Bank Investors shall have previously
accepted the assignment by the Purchaser of all of its interest in the
Undivided Interests, shall, if so requested by the Transferor, accept
such conveyance, transfer and assignment from the Transferor, without
recourse except as provided herein, undivided percentage ownership
interests in the Receivables, together with Related Security,
Collections and Proceeds with respect thereto (each such conveyance,
transfer and assignment, a "PURCHASE"). Each Purchase shall be in
accordance with SECTION 1.3. Under no circumstances shall Reinvestments
be deemed to be Purchases.
(b) REINVESTMENTS. Pursuant to SECTION 3.1, 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 3.1 is herein called a "REINVESTMENT". The
Bank Investors' obligation to make such Purchases and Reinvestments is
herein called the "COMMITMENT" and the amount thereof shall be equal to
the Maximum Purchase Limit.
Section 1.2. PURCHASE AND REINVESTMENT LIMITS. Under no circumstances
shall the Agent, on behalf of the Purchaser or the Bank Investors, as
applicable, make any
2
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 Purchaser Investments would
exceed an amount (the "PURCHASE LIMIT") equal to the lesser of (x)
$75,000,000 as such amount may be reduced pursuant to SECTION 1.7 (the
"MAXIMUM PURCHASE LIMIT"), and (y) the then Net Pool Balance; or
(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 2.3); or
(c) The sum of the Aggregate Purchaser Investments plus the
Interest Component of all outstanding Related Commercial Paper would
exceed the Facility Limit.
Section 1.3. MAKING PURCHASES FROM THE TRANSFEROR. (a) NOTICE OF
PURCHASE. Each Purchase from the Transferor shall be made by the Agent on behalf
of the Purchaser or the Agent on behalf of the Bank Investors, as applicable,
and shall be made on notice from the Transferor to the Agent received by the
Agent not later than 1:00 p.m. (New York time) on the Business Day next
preceding the date of such proposed Purchase; it being understood and agreed
that once any proposed Purchase hereunder is acquired on behalf of the Bank
Investors, the Agent, on behalf of such Bank Investors, shall be required to
purchase, and the Purchaser shall be required to sell, all Undivided Interests
held by the Agent on behalf of the Purchaser in accordance with SECTION 13.5 and
thereafter no additional Purchases shall be acquired on behalf of the Purchaser
hereunder. If such notice is received after 1:00 p.m. (New York time) by the
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. The Agent shall select the duration of such
initial, and each subsequent, Yield Period with regard to the Purchaser's
Investment Percentage of such Purchase in its discretion; PROVIDED that the
Agent shall use reasonable efforts, taking into account market conditions, to
accommodate the Transferor's preferences.
(b) AMOUNT OF PURCHASE. The amount of each Purchase shall be
equal to the lesser of (x) the amount proposed by the Transferor
pursuant to SECTION 1.3(A) and (y) the maximum amount permitted for the
Purchaser or the Bank Investors, as the case may be, under SECTION 1.2.
(c) FUNDING OF PURCHASE. On the date of each Purchase, upon
satisfaction of the applicable conditions set forth in ARTICLE V, the
Purchaser or each Bank Investor, as the case may be, shall make
available to the Agent at the address of its office set forth on the
signature pages hereto, the dollar amount of the Purchase Price, in the
case of the Purchaser, or in the case of the Bank Investors, the amount
of each Bank Investor's Percentage of such Purchase Price (determined
pursuant to SECTION 13.5(A)) in same day funds, and the Agent will make
such funds immediately available to the Transferor at such office.
3
Section 1.4. [Reserved].
Section 1.5. COMMITMENT TERMINATION DATE. (a) The "COMMITMENT
TERMINATION DATE" shall be January 24, 2003 (herein, as the same may be
extended, called the "SCHEDULED COMMITMENT TERMINATION DATE").
(b) The then Scheduled Commitment Termination Date may be
extended from time to time beginning with January 24, 2003, by written
notice of request given by the Transferor to the Agent at least 75 days
before the then Scheduled Commitment Termination Date, and written
notice of acceptance given by the Agent and the Bank Investors to the
Transferor not later than 15 days prior to such Scheduled Commitment
Termination Date. No such extension shall be effective unless the Agent
shall provide such notice of acceptance to the Transferor.
Section 1.6. PURCHASE TERMINATION DATE. (a) As to the Purchaser or any
Bank Investor, the "PURCHASE TERMINATION DATE" with respect to such entity shall
be the earlier to occur of (i) the Commitment Termination Date, (ii) the day the
Purchase Termination Date is declared or occurs pursuant to Section 11.2, (iii)
the date of termination of the Commitment with respect to Purchases by the
Purchaser pursuant to subsection (b) hereof, and (iv) the date the Purchase
Limit is reduced to zero.
(b) The Commitment shall terminate with respect to Purchases
by the Purchaser and the Purchaser 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. The
Purchaser agrees to give the Transferor (with a copy to the Agent) 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 the Purchaser pursuant to the foregoing
sentence, but failure to give or delay in giving such notice shall not
prevent or delay such termination.
(c) The provisions of SECTION 3.1 or SECTION 3.2, as
applicable, shall apply with respect to the Purchaser's Investment
until such time as the Purchaser has or the Bank Investors, as
applicable, have received the return of the Aggregate Purchaser's
Investment, Earned Discount thereon and all other amounts due to the
Purchaser or the Bank Investors, as the case may be, at which time the
Purchaser's or the Bank Investors', as the case may be, rights and
obligations under this Agreement shall terminate.
Section 1.7. VOLUNTARY TERMINATION OF COMMITMENT OR REDUCTION OF
MAXIMUM PURCHASE LIMIT. The Transferor may, upon at least five Business Days'
notice to the 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 PROVIDED HOWEVER, that
no reduction of the Maximum Purchase Limit shall occur without a corresponding
reduction of the Facility Limit, that in an amount equal to the product of (i)
the amount of the proposed
4
reduction in the Maximum Purchase Limit and (ii) 1.02, PROVIDED FURTHER HOWEVER,
that in no event shall the Facility Limit be reduced below an amount equal to
the greater of (A) the product of (i) the Maximum Purchase Limit and (ii) 1.02
and (B) the Aggregate Purchaser's Investments.
Section 1.8. LIMITATION OF OWNERSHIP INTEREST. Nothing in this
Agreement shall be interpreted as providing the Purchaser or any Bank Investor
with an ownership interest in Receivables that are not Pool Receivables.
Section 1.9. SPECIAL UNDIVIDED INTERESTS. The Transferor shall maintain
with the Purchaser or with the Bank Investors, as the case may be, at least one
Undivided Interest, the Purchaser's Investment in which shall be no less than
$4,000,000 (unless otherwise agreed by the 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 day immediately succeeding 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 the Purchaser or with the Bank Investors pursuant
to this SECTION 1.9 shall for any reason have a Purchaser's Investment of less
than $4,000,000, the Agent shall manage the Yield Periods related to the
Purchaser's Investment other Undivided Interests in a manner such that within 60
days of such day the Purchaser's Investment of such Undivided Interest required
to be maintained pursuant to this SECTION 1.9 shall again equal $4,000,000.
Section 1.10. BENEFITS OF AGREEMENT. In the event the Bank Investors
acquire Undivided Interests hereunder, each Bank Investor 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, 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 2.1. UNDIVIDED INTEREST. (a) DEFINITION AND COMPUTATION OF
UNDIVIDED INTEREST. For purposes of this Agreement, "UNDIVIDED INTEREST" for the
Purchaser and/or Bank Investors, as applicable, 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 + LR + DR + SFR
--- ----------------------------------------------------
NPB NPB
5
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 = the Purchaser's Investment of such Undivided Interest at such
time as determined pursuant to SECTION 2.1;
DF = the Discount Factor of such Undivided Interest at such time,
as determined pursuant to PART I of APPENDIX B;
LR = the Loss Reserve of such Undivided Interest at such time, as
determined pursuant to Part II of APPENDIX B;
DR = the Dilution 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 2.3.
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 the Transferor, and such Undivided Interest shall be recomputed
upon receipt of each Periodic Report. The Agent on behalf of the
Purchaser or the Bank Investors, as the case may be, 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 the
Purchaser or the Bank Investors, as the case may be, on such day. Such
Undivided Interest shall become zero at such time as the Purchaser, or
the Bank Investors, as the case may be, 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 the Purchaser or the Bank
Investors, as applicable, 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
recomputations if any, shall be made.
6
Section 2.2. PURCHASER'S INVESTMENT. (a) Subject to SUBSECTIONS (B) and
(C), the "Purchaser's Investment" of an Undivided Interest owned by the
Purchaser or any Bank Investor at any time means an amount equal to:
(i) the aggregate of the amounts theretofore paid by
the Purchaser or the Bank Investors, to the Transferor (and,
in the case of the Bank Investors, to the Purchaser) for the
acquisition of such Undivided Interest (A) by Purchase
pursuant to SECTIONS 1.1(A) and 1.3 and (B) by Reinvestments
pursuant to SECTIONS 1.1(B) and 3.1, and (C) in the case of
the Bank Investors, pursuant to SECTION 13.5, less
(ii) the aggregate amount of Collections theretofore
received and distributed on account of the Purchaser's
Investment pursuant to SECTIONS 3.1 and 3.2 (other than any
portion allocable to Earned Discount pursuant to SECTIONS 3.1
and 3.2 hereof).
(b) 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) "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 3.1 and 3.2 hereof);
(ii) "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
(iii) "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
7
Interest described in CLAUSES (I) and (II) above, calculated
in accordance with such CLAUSES (I) and (II), as applicable.
(c) The Purchaser's Investment 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.
(d) The "RELATED" Purchaser's Investment 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 2.3. 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 LIMITS": (i) the aggregate Concentration
Limit for any Obligor or Government Obligor 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;
(ii) the aggregate Concentration Limit for all
Obligors with respect to Receivables originated by Wackenhut
Airline Services, Inc. shall be 10% of the Aggregate Unpaid
Balance of the Eligible Receivables in the Receivables Pool at
any time;
(iii) the aggregate Concentration Limit for all
Obligors with respect to Receivables for which the related
service has not yet been rendered by the Seller or an
Originator shall be 2% of the Aggregate Unpaid Balance of the
Eligible Receivables in the Receivables Pool at any time;
(iv) the aggregate Concentration Limit for all
Government Obligors shall be 10% of the Aggregate Unpaid
Balance of the Eligible Receivables in the Receivables Pool at
any time;
(v) the aggregate Concentration Limit for all
Obligors with respect to Receivables which are required to be
paid in full not less than 31 days nor more than 60 days after
the billing thereof, shall be 10% of the Aggregate Unpaid
Balance of the Eligible Receivables in the Receivables Pool at
any time, PROVIDED, HOWEVER, that the Agent may, in its sole
discretion, determine to reduce this percentage to 0% at any
time upon three (3) days prior written notice to the
Transferor and Servicer; and
8
(vi) the aggregate Concentration Limit for all
Obligors with respect to Receivables for which the related
invoice has not yet been sent to the applicable Obligor shall
be 15% of the Aggregate Unpaid Balance of the Eligible
Receivables in the Receivables Pool at any time.
(c) "SPECIAL CONCENTRATION LIMIT" for any Obligor means the
amount designated from time to time as such by the Agent with regard to
any Obligor in a writing delivered to the Transferor (it being
understood that the most recent writing at any time delivered to the
Transferor shall supersede each previous writing); PROVIDED HOWEVER,
that the Special Concentration Limits in effect as of the date hereof
shall be as set forth on Schedule 2.3 (c) hereto.
(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.
Section 2.4. SHARES.
(a) AGGREGATE PURCHASER'S SHARE. The Purchaser's, or the Bank
Investors', as the case may be, "AGGREGATE PURCHASER'S SHARE" of
Collections of Pool Receivables received (or deemed received) by the
Transferor or Servicer on any day means an amount calculated by the
Servicer (subject to recalculation by any Agent) equal to the product
of:
(i) the amount of all Collections of Pool Receivables
received (or deemed received) by the Transferor or Servicer on
such day, TIMES
(ii) the Aggregate Required Allocations divided by
the Net Pool Balance.
(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 the Transferor or Servicer
on any day means an amount equal to the product of:
(i) the Aggregate Purchaser's Share of Collections
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 the Undivided Interests on
such day, expressed as a decimal,
(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 the 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
9
(C) each Bank Investor shall share PRO RATA in the
Aggregate Purchaser's Share.
ARTICLE III
SETTLEMENTS
Section 3.1. NON-RUN OFF SETTLEMENT PROCEDURES FOR COLLECTIONS. 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 Purchaser's Share
but not in excess of the Aggregate Purchaser's Share (as determined in SECTION
2.4) 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 the Purchaser's Share of such Collections,
hold in trust for the benefit of the Purchaser or the Bank
Investors, as the case may be, 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 the Purchaser or the Bank Investors,
as the case may be,
(ii) apply an amount equal to the remainder of the
Purchaser's Share of such Collections (the "REMAINING
Collections") to reduce the Purchaser's Investment of such
Undivided Interest (it being understood that such amount need
not be physically paid to the Purchaser or the Bank Investors
under this CLAUSE (II)),
(iii) subject to SECTION 3.3, after such reduction,
(A) apply such Remaining Collections to the Reinvestment, for
the benefit of the Purchaser or the Bank Investor, as the case
may be, of additional undivided interests in Pool Receivables
by recomputation of such Undivided Interest pursuant to
SECTION 2.1 as of the end of such day, thereby increasing the
Purchaser's Investment, and (B) pay to the Transferor such
Remaining Collections.
The recomputed Undivided Interest shall constitute the percentage ownership
interest in Pool Receivables on such day held by the Purchaser or the Bank
Investors, as the case may be, 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 Agent's account
for the Purchaser, or the Bank Investors, whichever then holds such
Undivided Interest, as described in SECTION 3.5, the amounts set aside
as described in SECTION 3.1(A)(I) and the amounts, if any, set aside
pursuant to SECTION 3.3(B) or (C) for payment to the Agent on such
Settlement Date; PROVIDED, HOWEVER, that if the Agent gives its consent
(which consent may be revoked at any time), Servicer may retain amounts
which
10
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.
(c) ORDER OF APPLICATION. Upon receipt by the Agent of funds
distributed pursuant to SUBSECTION (B) in respect of an Undivided
Interest owned by the Purchaser or the Bank Investors, as the case may
be, the Agent shall distribute such funds first, (i) to the Purchaser
or the Bank Investors, as applicable, 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 3.3(B) or (C), to the Purchaser or the Bank
Investors, as applicable, in reduction of the Purchaser's Investment
therein.
Section 3.2. 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 Purchaser or the
Bank Investors, as appropriate, the 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 the Aggregate Purchaser's Share and, if requested in writing by the
Agent (in its sole discretion), by depositing such Collections within one
Business Day of the Servicer's receipt thereof into a bank account at the Agent
on behalf of the Purchaser or the Bank Investors in which no other funds shall
be deposited.
(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 Agent for the benefit of
the Purchaser or the Bank Investors then owning such Undivided
Interest, as described in SECTION 3.5, the amounts set aside pursuant
to SECTION 3.2(A) out of the 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 the Transferor to the Purchaser, any Bank Investor or the 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 3.2 and not required to be deposited to the Agent's
account pursuant to the next preceding sentence shall be paid to the
Transferor by Servicer.
(c) ORDER OF APPLICATION. Upon receipt by the Agent of funds
deposited to its account pursuant to SECTION 3.2(B), the Agent shall
distribute such funds (i) to the Purchaser or the Bank Investors, as
the case may be, or to the 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 Purchaser's Investment of
such Undivided Interest and (C) in payment of any other amounts owed by
the Transferor hereunder to the Purchaser or the Agent, in each case
until reduced to zero, and (ii) to Servicer in payment of the accrued
and unpaid Servicer's Fee payable with respect to such Undivided
Interest, also until reduced to zero. If there shall be insufficient
funds on
11
deposit for the Agent to distribute funds in payment in full of the
aforementioned amounts, the 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
the Transferor or an Affiliate of the Transferor), THIRD, in reduction
of Purchaser's Investment of such Undivided Interest, FOURTH, in
payment of any other amounts payable to the Purchaser, any Bank
Investor, or to the Agent hereunder, and FIFTH, in payment of the
Servicer's Fee payable with respect to such Undivided Interest (if
Servicer is the Transferor or an Affiliate of the Transferor).
Section 3.3. 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 the Transferor,
any Originator or Seller or any Affiliate of the
Transferor or any Originator or Seller; or
(B) reduced or cancelled as a result of a
setoff in respect of any claim by the Obligor thereof
against the Transferor, any Originator or Seller or
any Affiliate of the Transferor or any Originator or
Seller (whether such claim arises out of the same or
a related or an unrelated transaction); or
(C) reduced on account of the obligation of
the Transferor to pay to the related Obligor any
rebate or refund; or
(ii) any of the representations or warranties of the
Transferor set forth in SECTION 6.1(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:
(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 1.2 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 in trust for the benefit of the Purchaser or the
Bank Investors, as the case may be, and, if requested by the Agent, in
a separate deposit account with the Agent containing only the
Purchaser's Share of
12
such Collections and no other funds, for payment to the Agent on the
next following Settlement Date for application to the next maturing
Undivided Interests.
(c) THE TRANSFEROR'S REDUCTION OF AGGREGATE PURCHASER'S
INVESTMENT. If at any time the Transferor shall wish to cause the
reduction of the Aggregate Purchaser's Investment (but not to commence
the liquidation, or reduction to zero, of all Undivided Interests), the
Transferor may do so as follows:
(i) the Transferor shall give the Agent 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) and, if applicable, shall
cause the reduction to be allocated ratably among the Bank
Investors such that each Bank Investor shall receive its pro
rata share of the aggregate amount of such proposed
reductions;
(ii) on the proposed date of commencement of such
reduction and on each day thereafter, Servicer shall refrain
from reinvesting Remaining Collections in Undivided Interests,
until the amount thereof not so reinvested shall equal the
desired amount of reduction for the Purchaser or the Bank
Investors, as the case may be; and
(iii) Servicer shall hold such Collections for the
benefit of the Purchaser or the Bank Investors, as the case
may be, for the payment to the Agent 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 the 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 such Undivided Interest shall be deemed reduced
in the amount to be paid to the Agent only when in fact
finally so paid;
provided that,
(A) 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 in such Undivided Interest shall not be less than
$1,000,000 (unless the Purchaser's Investment of such
Undivided Interest shall thereby be reduced to zero) and shall
be in an integral multiple of $100,000,
(B) if the Transferor 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) the Transferor 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
13
(D) if two or more Undivided Interests of the
Purchaser or any Bank Investor shall be outstanding at the
time of any proposed reduction, such proposed reduction shall
be applied, unless the 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 3.3(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 Agent may require the Transferor 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 Agent (the "COLLECTION ACCOUNT")
within one Business Day of receipt thereof. Such Collections shall be
applied by the Agent in accordance with the provisions of this
Agreement, including SECTIONS 3.1, 3.2 or 3.3 hereof. Servicer (or its
designee or successor) shall notify the Agent of the amount of funds
deposited in the Collection Account not received from Pool Receivables
and the Agent shall remit such funds as soon as practicable after such
notification to such account as Servicer (or its designee or successor)
shall designate.
Section 3.4. 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 Agent 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 Purchaser or the
Bank Investors, as applicable, as of the close of business of Servicer on the
next preceding Month End Date.
(b) On or prior to each Settlement Date, the Transferor will
advise the Agent and, if Wackenhut is not the Servicer, the 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,
the Transferor shall permanently ▇▇▇▇ in the computer records for each
Receivable subject to such Purchase or Reinvestment that such
Receivable is subject to the interest of the Agent, on behalf of the
Purchaser or the Bank Investors hereunder, as the case may be.
Section 3.5. PAYMENTS AND COMPUTATIONS, ETC. (a) Unless otherwise
required pursuant to this Agreement, all amounts to be paid or deposited by the
Transferor 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 indicated in writing
by the Agent. If the 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
14
Purchaser or the Bank Investors 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.
(b) The Transferor or Servicer, as applicable, shall, to the
extent permitted by law, pay to the 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
Agent except to the extent that such failure to make a timely payment
or deposit has continued beyond the date for distribution by the Agent
of such overdue amount to the Purchaser or the Bank Investors, 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 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 3.6. DIVIDING OR COMBINING UNDIVIDED INTERESTS.
(a) DIVISION OF UNDIVIDED INTERESTS. The Agent may at any
time, as of the last day of any Yield Period for any then existing
Undivided Interest owned by the Purchaser or any Bank Investor, as the
case may be, 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 the 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. The Agent may at any
time, as of the last day of any Yield Period for two or more existing
Undivided Interests owned by the Purchaser or the Bank Investors, as
the case may be, on or before the date of any proposed Purchase of an
Undivided Interest pursuant to SECTION 1.1 by the Purchaser or the Bank
Investors, as the case may be, 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 may be, in each case under and for all purposes of this Agreement.
15
Section 3.7. TREATMENT OF COLLECTIONS AND DEEMED COLLECTIONS. The
Transferor shall forthwith deliver to Servicer all Collections deemed received
by the Transferor pursuant to SECTION 3.3(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 Agent, or lock boxes or accounts
directly or indirectly owned or controlled by the Agent, Servicer shall
forthwith cause such deemed Collections to be ratably paid to the Agent or to
such lock boxes or accounts, as applicable. So long as the Transferor shall hold
any Collections or deemed Collections required to be paid to Servicer or to the
Agent, it shall hold such Collections in trust and separate and apart from its
own funds and shall clearly ▇▇▇▇ its records to reflect such trust.
ARTICLE IV
FEES AND YIELD PROTECTION
Section 4.1. FEES. (a) AGENT'S FEES. Fees payable to the Purchaser or
the Agent for services performed in its capacity as Agent or as Agent for the
benefit of the Purchaser or the Bank Investors, as the case may be, shall be due
and payable on such dates and in such amounts as set forth in the letter dated
January 25, 2002 from the Transferor and The Wackenhut Corporation to the Agent
and the Purchaser (the "FEE LETTER").
(b) NOTE FEE. From the date hereof until the date, on or after
the Commitment Termination Date, on which the Aggregate Total
Investments shall be reduced to zero, the Transferor shall pay to the
Agent for the account of the Purchaser, a note issuance fee ("NOTE
FEE") in an amount equal to the product of (x) the greater of $15, or
the note fee actually paid or payable by the 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 the Agent on behalf of the Purchaser to the Transferor and Servicer
from time to time, TIMES (y) the number of Commercial Paper Notes
issued by the Purchaser to fund its Undivided Interests hereunder
during the period for which such Note Fee is payable, as notified by
the Agent on behalf of the Purchaser to the Transferor 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
the Purchaser during the preceding calendar month for which no Note Fee
shall have theretofore been paid. The Agent, on behalf of the
Purchaser, shall notify the Transferor and Servicer at least one
Business Day prior to the end of each calendar month of the number of
Commercial Paper Notes issued by the Purchaser to fund its Undivided
Interests hereunder during such calendar month.
(c) DEALER FEE. The dealer fee is set forth in the Fee Letter.
Section 4.2. YIELD PROTECTION. (a) If (i) Regulation D or (ii) any
Regulatory Change occurring after the date hereof:
16
(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 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 this
Agreement, 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 the Transferor's, or any Originator's relationship
with the Purchaser or any Bank Investor, as the case may be; or
(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 or the
Enterprise Credit Support Agreement with respect thereto; or
17
(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, 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), the Transferor 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 the Transferor and (y)
notification of the Transferor pursuant to PARAGRAPH (B) below.
(b) Each Affected Party will promptly notify the Transferor
and the Agent of any event of which it has knowledge which will entitle
such Affected Party to compensation pursuant to this SECTION 4.2;
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 4.2, 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
4.2 shall submit to the Transferor 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 the Transferor.
ARTICLE V
CONDITIONS OF PURCHASES
Section 5.1. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT.
The effectiveness of this Agreement is subject to the condition precedent that
the Agent shall have received, the following, each (unless otherwise indicated)
dated the date of such proposed effectiveness and in form and substance
satisfactory to the Agent:
(a) Counterparts of this Agreement duly executed by the
parties hereto;
(b) Counterparts of the amended Fee Letter duly executed by
the parties thereto;
(c) Evidence of the payment of all fees required to be paid
prior to the date of this Agreement; and
(d) A current Good Standing Certificate for the Transferor and
Wackenhut issued by the Secretary of State or a similar official of the
Transferor's and Wackenhut's jurisdictions of incorporation;
Section 5.2. 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
18
Reinvestment the following statements shall be true (and the Transferor 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 6.1
and SECTION 6.2 and in the Purchase and Sale Agreement and in
the Receivables Purchase Agreement are correct in all material
respects 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
except for those representations and warranties made solely
with respect to an earlier date which shall be correct in all
material respects as of such date;
(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 Purchaser's Investments will not exceed the
Purchase Limit, and (ii) Aggregate Required Allocations will
not exceed the Required Allocations Limit and (iii) the sum of
the Aggregate Purchaser's Investment plus the Interest
Component of all outstanding Related Commercial Paper would
not exceed the Facility Limit; 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 Total Investments.
Section 5.3. 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.
Section 5.4. CONDITIONS SUBSEQUENT. Within sixty (60) days of the date
hereof, the Transferor and the Servicer shall deliver the following items to the
Agent (in each case, in form and substance reasonably satisfactory to the
Agent), and the failure to provide any such item shall result in the occurrence
of a Termination Event:
(a) A certificate of the Secretary or Assistant Secretary of
each of the Transferor and Wackenhut certifying the names and true
signatures of the officers authorized on its behalf to sign this
Agreement and the other documents to be delivered by them hereunder (on
which certificate the Agent, the Purchaser and each Bank Investor may
conclusively rely until such time as the Agent shall receive from the
Transferor or Wackenhut, as applicable, a revised certificate meeting
the requirements of this SUBSECTION (A));
(b) The Articles of Incorporation of each of the Transferor
and Wackenhut, duly certified by the Secretary of State or similar
official of the jurisdiction of its organization, as of a recent date
acceptable to each Agent, together with a copy of the By-laws of each
of the Transferor and Wackenhut, duly certified by the Secretary or an
Assistant Secretary of the Transferor and Wackenhut;
19
(c) Certified copies of: the resolutions of the Board of
Directors of each of the Transferor and Wackenhut authorizing the
execution, delivery and performance of this Agreement by the Transferor
or Wackenhut, as the case may be; and
(d) A favorable opinion of associate General Counsel for the
Transferor and Wackenhut, in form and substance satisfactory to the
Agent, based on the corporate and enforceability opinion delivered by
such counsel in connection with the Predecessor Agreement.
(e) A favorable opinion of Akerman, Senterfitt & ▇▇▇▇▇▇, P.A.,
covering enforceability and perfection matters in form and substance
satisfactory to Purchaser's counsel;
(f) UCC-1 financing statement in lieu of a continuation
statement naming the Transferor as debtor/seller and the Agent as
secured party/purchaser, filed with the Secretary of State of Delaware,
and such other financing statements (including amendments to existing
financing statements) as the Agent may reasonably request in order to
perfect, protect or more fully evidence the Purchases hereunder and the
resulting Undivided Interests; and
(g) A search report provided in writing to the Agent listing
all effective financing statements that name the Transferor, the Seller
or any Originator as debtor and that are filed in the jurisdictions in
which UCC filings were made pursuant to the Predecessor Agreement and
in such other jurisdictions that the 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);
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR. The
Transferor represents and warrants as follows:
(a) ORGANIZATION AND GOOD STANDING. The Transferor has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has not been
organized under the laws of any other jurisdiction. It has the 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. The Transferor 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.
20
(c) POWER AND AUTHORITY; DUE AUTHORIZATION. The Transferor (i)
has all necessary power, authority and legal right to (A) execute and
deliver this Agreement, the Certificate of Assignments and other
Agreement Documents to which it is a party, (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 to
which it is a party 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 Agent, on behalf of the Purchaser or the Bank
Investors, as the case may be, enforceable against creditors of, and
purchasers from, the Transferor; and this Agreement constitutes, and
each other Agreement Document to be signed by the Transferor when duly
executed and delivered will constitute, a legal, valid and binding
obligation of the Transferor 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 the Transferor, or any
indenture, loan agreement, receivables purchase agreement, mortgage,
deed of trust, or other agreement or instrument to which the Transferor
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
the Transferor'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 the Transferor of any court
or of any federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over the
Transferor or any of its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending, or to its knowledge 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 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 the
Transferor 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.
21
(g) NOT AN INVESTMENT COMPANY. The Transferor is not, and is
not controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
(h) BULK SALES ACT. No transaction contemplated hereby
requires compliance with any bulk sales act or similar law.
(i) 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 the Transferor 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.
(j) LITIGATION. No injunction, decree or other decision has
been issued or made by any court, governmental agency or
instrumentality thereof that prevents, and to its knowledge no threat
by any person has been made to attempt to obtain any such decision that
would prevent, the Transferor from conducting a significant part of its
business operations, except as described in SCHEDULE 6.1(J).
(k) MARGIN REGULATIONS. The use of all funds obtained by the
Transferor under this Agreement will not conflict with or contravene
any of Regulations T, U and X promulgated by the Board of Governors of
the Federal Reserve System from time to time.
(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 the Transferor free and clear of
any Adverse Claim (other than any Adverse Claim arising solely as the
result of any action taken by the Purchaser or any Bank Investor, as
the case may be (or any assignee thereof) or by the Agent) and
restriction on assignment, except as provided herein; when the
Purchaser or any Bank Investor, as the case may be, makes a Purchase,
it or they or the Agent 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 the Purchaser
or any Bank Investor (or any assignee thereof) or by the 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 the Transferor in accordance with the Contracts, or (ii) in favor of
the Purchaser or any Bank Investor or the Agent (or their respective
successors and assigns) in accordance with this Agreement or in
connection with any Adverse Claim arising solely as the result of any
action taken by the Purchaser or any Bank Investor (or any assignee
thereof) or by the Agent.
22
(m) ACCURATE REPORTS. No Periodic Report (if prepared by the
Transferor, or to the extent that information contained therein was
supplied by the Transferor), information, Exhibit, financial statement,
document, book, record or report furnished or to be furnished by the
Transferor to the Agent or the Purchaser or any Bank Investor 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 the Agent, the Purchaser or any Bank Investor,
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 principal place of business and chief
executive office of the Transferor are and at all times since its
incorporation have been located at the address of the Transferor
referred to on the signature page hereof, and the offices where the
Transferor 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 6.1(N) (or at such other locations,
notified to the Agents in accordance with SECTION 7.1(F), in
jurisdictions where all action required by SECTION 8.13 has been taken
and completed).
(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 the Transferor or Servicer at such Lock-Box Banks, are
specified in SCHEDULE 6.2(O) (or have been notified to the Agents in
accordance with SECTION 7.3(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) TRANSFERS. No purchase of an interest in Receivables by
the Purchaser or a Bank Investor from the Transferor or by the
Transferor from Wackenhut 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.
(r) PURCHASE AND SALE AGREEMENT. Each of the representations
and warranties made by each Originator in the Purchase and Sale
Agreement and by The Wackenhut Corporation in the Receivables Purchase
Agreement are true and correct in all material respects as of the date
or dates made.
(s) SOLVENCY. Immediately after giving effect to the
Transferor's, the Seller's and the Originator's obligations now or
hereafter arising pursuant to any Agreement Document and to each
transaction contemplated thereby, the Transferor, the Seller and each
Originator will each be Solvent.
(t) USE OF PROCEEDS. Neither the Transferor 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, as amended.
23
(u) TAX. The Transferor 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.
(v) TRADENAMES, ETC. As of the date hereof: (A) the
Transferor's chief executive office is located at the address set forth
under its signature to this Agreement; and (B) the Transferor has,
within the last five (5) years, used only the tradenames identified in
SCHEDULE 6.1(V) 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 ▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ Code (Bankruptcy) .
(w) NO TERMINATION EVENT. No event has occurred and is
continuing and no condition exists which constitutes a Termination
Event or an Unmatured Termination Event.
(x) ERISA. The Transferor 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.
Section 6.2. REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The
Servicer represents and warrants to the Purchaser and to the Bank Investors
that:
(a) ORGANIZATION AND GOOD STANDING. Servicer has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Florida and has not been organized under
the laws of any other jurisdiction. It has the 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, own and sell the Pool Receivables.
(b) DUE QUALIFICATION. Servicer 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. Servicer (i) has
all necessary power, authority and legal right to (A) execute and
deliver this Agreement, the Receivables Purchase Agreement and the
Purchase and Sale Agreement and other Agreement Documents, (B) carry
out the terms of the Agreement Documents to which it is a party, and
(C) sell and assign the Receivables to the Transferor pursuant to the
Receivables Purchase Agreement on the terms and conditions therein
provided and (ii) has duly authorized by all necessary corporate action
the execution, delivery and performance of this Agreement, the
Receivables Purchase Agreement, the Purchase and Sale Agreement and the
other Agreement Documents to which it is a party and the sale and
assignment of the Receivables to the Transferor pursuant to the
Receivables Purchase Agreement on the terms and conditions therein
provided.
24
(d) VALID SALE; BINDING OBLIGATIONS. The Receivables Purchase
Agreement constitutes a valid sale, transfer, and assignment of the
Receivables to the Transferor, enforceable against creditors of, and
purchasers from, Wackenhut; and this Agreement constitutes, and each
other Agreement Document to be signed by Wackenhut (in whatever
capacity) when duly executed and delivered will constitute, a legal,
valid and binding obligation of Wackenhut 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, its
articles of incorporation or by-laws, or any indenture, loan agreement,
receivables purchase agreement, mortgage, deed of trust, or other
agreement or instrument to which it 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 its 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
the Receivables Purchase Agreement and this Agreement, or (iii) violate
any law or order, rule, or regulation applicable to it of any court or
of any federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over Wackenhut
or any of its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending, or to its knowledge threatened, before any court, regulatory
body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement, the
Receivables Purchase Agreement, the Purchase and Sale Agreement or any
other Agreement Documents, (ii) seeking to prevent the sale and
assignment of the Receivables to the Transferor pursuant to the
Receivables Purchase Agreement or the consummation of any of the 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 it (in whatever
capacity) of its obligations under this Agreement, the Receivables
Purchase Agreement or any other Agreement Document to which it is a
party, or (B) the validity or enforceability of this Agreement, the
Receivables Purchase Agreement, 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) 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 Wackenhut of this Agreement, the
Receivables Purchase Agreement 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.
25
(h) FINANCIAL CONDITION.
(i) The Servicer has heretofore furnished to the
Agent an audited consolidated balance sheet of the Servicer
and its consolidated subsidiaries as at December 31, 2000 and
the notes thereto and the related consolidated statements of
income, retained earnings and cash flows for the fiscal year
then ended as examined and certified by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP,
and unaudited consolidated interim financial statements of the
Servicer and its consolidated subsidiaries consisting of a
consolidated balance sheet and related consolidated statements
of income, retained earnings and cash flows, in each case
without notes, for and as of the end of the nine month period
ending September 30, 2001. Except as set forth therein, such
financial statements (including the notes thereto) present
fairly the financial condition of the Servicer and its
consolidated subsidiaries as of the end of such fiscal year
and nine month period and results of their operations and the
changes in its stockholder's equity for the fiscal year and
interim period then ended, all in conformity with generally
accepted accounting principles consistently applied, subject
however, in the case of unaudited interim statements to year
end audit adjustments.
(ii) since the later of (A) the date of the audited
financial statements delivered pursuant to subsection (i)
above hereof or (B) the date of the audited financial
statements most recently delivered pursuant to Section 7.5(a)
and (b) hereof, there has not occurred any event, condition or
circumstance which has had or could reasonably be expected to
have a material adverse effect, nor have the businesses or
properties of the Servicer or any subsidiary been materially
adversely affected as a result of any fire, explosion,
earthquake, accident, strike, lockout, combination of workers,
flood, embargo or act of God; and
(iii) except as set forth in the financial statements
referred to in subsection (i) above, neither the Servicer nor
any subsidiary has incurred, other than in the ordinary course
of business, any material Indebtedness or other commitment or
liability which remains outstanding or unsatisfied.
(i) CREDIT AND COLLECTION POLICY. Since January 5, 1995, there
have been no material changes in the Credit and Collection Policy other
than as permitted hereunder. Since such date, no material adverse
change has occurred in the overall rate of collection of the
Receivables.
(j) COLLECTIONS AND SERVICING. Since January 5, 1995, there
has been no material adverse change in the ability of the Servicer to
service and collect the Receivables.
(k) NOT AN INVESTMENT COMPANY. The Servicer is not, and is not
controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
(l) LITIGATION. No injunction, decree or other decision has
been issued or made by any court, governmental agency or
instrumentality thereof that prevents, and to its
26
knowledge no threat by any person has been made to attempt to obtain
any such decision that would prevent, it from conducting a significant
part of its business operations, except as described in SCHEDULE
6.2(L).
(m) ACCURATE REPORTS. No Periodic Report (if prepared by it,
or to the extent that information contained therein was supplied by
it), information, Exhibit, financial statement, document, book, record
or report furnished or to be furnished by it to the Agent or the
Purchaser or any Bank Investor 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 the Agent, the
Purchaser or any Bank Investor, 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 the Servicer are, and for the last five years have been,
located at its address referred to on the signature page hereof, and
the offices where the Servicer 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 6.2(N) (or at such
other locations, notified to the Agent in accordance with SECTION
7.1(F), in jurisdictions where all action required by SECTION 8.13 has
been taken and completed).
(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 the Servicer at such Lock-Box Banks, are specified in
SCHEDULE 6.2(O) (or have been notified to the Agent in accordance with
SECTION 7.3(D)) .
(p) NO TERMINATION EVENT. No event has occurred and is
continuing and no condition exists which constitutes a Termination
Event or an Unmatured Termination Event.
ARTICLE VII
GENERAL COVENANTS OF THE TRANSFEROR AND SERVICER
Section 7.1. AFFIRMATIVE COVENANTS OF THE TRANSFEROR. From the date
hereof until the date, following the Commitment Termination Date, on which all
Undivided Interests shall be reduced to zero, the Transferor will, unless the
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
27
and qualification would materially adversely affect (i) the interests
of the Agent, the Purchaser or any Bank Investor hereunder or (ii) the
ability of the Transferor 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 the 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 the
Transferor 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 the Transferor for the purpose
of examining such materials described in CLAUSE (I)(A) next above, and
to discuss matters relating to Pool Receivables or the Transferor's
performance hereunder with any of the officers or employees of the
Transferor having knowledge of such matters; and (ii) without limiting
the provisions of CLAUSE (I)(A) next above, from time to time on
request of the Agent, permit certified public accountants or other
auditors reasonably acceptable to the Agent to conduct, at the
Transferor's expense, a review of the Transferor's books and records
with respect to the Pool Receivables.
(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 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; JURISDICTION. Keep its chief place of
business and principal 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
addresses of the Transferor referred to in SECTION 6.1(N) or, upon 30
days' prior written notice to each Agent, at such other locations in
jurisdictions where all action required by SECTION 8.13 shall have been
taken and completed. In addition, the Transferor shall provide not less
than thirty (30) days written notice to the Agent and the Bank
Investors prior to effecting any change in its form of organization or
jurisdiction of organization.
(g) CREDIT AND COLLECTION POLICIES. Comply in all material
respects with the Credit and Collection Policy in regard to each Pool
Receivable and the related Contract.
28
(h) MINIMUM NET WORTH. The Transferor shall at all times
maintain a minimum Net Worth of not less than an amount equal to the
sum of (i) the Aggregate Unpaid Balance of all Defaulted Receivables
and (ii) the sum of the Aggregate Unpaid Balance of the three largest
Receivables of the Obligors; PROVIDED, HOWEVER, that in any case, the
minimum Net Worth shall never be less than 15% of the Aggregate Unpaid
Balance of the Receivables.
(i) COLLECTIONS. Instruct all Obligors to cause all
Collections of Pool Receivables to be deposited directly with a
Lock-Box Bank.
(j) SALE TREATMENT. The Transferor will not account for
(including for accounting and tax purposes), or otherwise treat, the
transactions contemplated by the Receivables Purchase Agreement in any
manner other than as a sale of Receivables by the Seller to the
Transferor. In addition, the Transferor shall disclose (in a footnote
or otherwise) in all of its financial statements (including any such
financial statements consolidated with any other Persons' financial
statements) the existence and nature of the Transaction contemplated
hereby and by the Receivables Purchase Agreement and the interest of
the Agent, on behalf of the Company and the Bank Investors, in the
Receivables.
(k) SEPARATE BUSINESS. The Transferor shall at all times (a)
to the extent the Transferor's office is located in the offices of
Wackenhut or any Affiliate of Wackenhut, pay fair market rent for its
executive office space located in the offices of Wackenhut or any
Affiliate of Wackenhut, (b) have at all times at least two members of
its board of directors which are not and have never been employees,
officers or directors of Wackenhut or any Affiliate of Wackenhut or of
any major creditor of Wackenhut or any Affiliate of Wackenhut and are
persons who are familiar and have experience with asset securitization,
(c) maintain the Transferor's books, financial statements, accounting
records and other corporate documents and records separate from those
of Wackenhut or any other entity, (d) not commingle the Transferor's
assets with those of Wackenhut or any other entity, (e) not sell,
exchange or otherwise convey any of its assets in any inter-company
transactions except for fair market value in an arms length transaction
approved by a majority of its board of directors (including Independent
Directors, as defined in the Transferor's "Certificate of
Incorporation"), (f) act solely in its corporate name and through its
own authorized officers and agents, (g) make investments directly or by
brokers engaged and paid by the Transferor or its agents (provided that
if any such agent is an Affiliate of the Transferor it shall be
compensated at a fair market rate for its services), (h) separately
manage the Transferor's liabilities from those of Wackenhut or any
Affiliates of Wackenhut and pay its own liabilities, including all
administrative expenses, from its own separate assets, except that
Wackenhut may pay the organizational expenses of the Transferor, and
(i) pay from the Transferor's assets all obligations and indebtedness
of any kind incurred by the Transferor. The Transferor shall abide by
all corporate formalities, including the maintenance of current minute
books, and the Transferor shall cause its financial statements to be
prepared in accordance with generally accepted accounting principles in
a manner that indicates the separate existence of the Transferor and
its assets and liabilities. The Transferor shall (i) pay all its
liabilities, (ii) not assume the liabilities of Wackenhut or any
Affiliate of Wackenhut, (iii) not lend funds or extend credit to
Wackenhut or any affiliate of
29
Wackenhut except pursuant to the Receivables Purchase Agreement in
connection with the purchase of Receivables thereunder and (iv) not
guarantee the liabilities of Wackenhut or any Affiliates of Wackenhut.
The officers and directors of the Transferor (as appropriate) shall
make decisions with respect to the business and daily operations of the
Transferor independent of and not dictated by any controlling entity.
The Transferor shall not engage in any business not permitted by its
Certificate of Incorporation as in effect on the Closing Date.
(l) CORPORATE DOCUMENTS. The Transferor shall only amend,
alter, change or repeal Articles of its Certificate of Incorporation
with the prior written consent of the Agent.
(m) RIGHTS UNDER RECEIVABLES PURCHASE AGREEMENT. Exercise all
of its rights under or in connection with the Receivables Purchase
Agreement to the fullest extent thereof except to the extent otherwise
consented to in writing by the Agent.
Section 7.2. REPORTING REQUIREMENTS OF THE TRANSFEROR. 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, the Transferor will, unless the Agent shall
otherwise consent in writing, furnish to the Agent:
(a) FINANCIAL REPORTING. The Transferor will maintain, or
cause to be maintained, a system of accounting established and
administered in accordance with GAAP, and furnish to the Agent:
(i) QUARTERLY FINANCIAL STATEMENTS. As soon as
available and in any event within ninety (90) days after the
end of each of the first three quarters of each fiscal year of
the Transferor, copies of the Transferor's quarterly financial
reports, certified by a responsible officer of the Transferor;
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 7.1(H);
(ii) ANNUAL REPORTING. Within ninety (90) days after
the close of the Transferor's fiscal year, financial
statements, prepared in accordance with GAAP for the
Transferor, including balance sheets as of the end of such
period, related statements of operations, shareholder's equity
and cash flows, and reviewed by a nationally recognized
accounting firm reasonably acceptable to the Agent and
accompanied by a certificate of said accountants that, in the
course of the foregoing, they have obtained no knowledge of
any Termination Event or Unmatured Termination Event, or if,
in the opinion of such accountants, any Termination Event or
Unmatured Termination Event shall exist, stating the nature
and status thereof.
(iii) COMPLIANCE CERTIFICATE. Within forty-five (45)
days after the close of the first three quarterly periods of
the Transferor's fiscal year and together with the financial
statements required hereunder, a compliance certificate signed
by a
30
responsible officer of the Transferor stating that to the best
of such Person's knowledge, no Termination Event or Unmatured
Termination Event exists, or if any Termination Event or
Unmatured Termination Event exists, stating the nature and
status thereof.
(iv) SHAREHOLDERS STATEMENTS AND REPORTS. Promptly
upon the furnishing thereof to the shareholders of or the
Transferor, copies of all financial statements, reports and
proxy statements so furnished.
(b) REPORTS TO HOLDERS AND EXCHANGES. In addition to the
reports required by SUBSECTION (A) next above, promptly upon the
Agent's request, copies of any reports specified in such request which
the Transferor 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;
(c) 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 the Transferor, the 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 the Transferor, the Seller or any Originator receives from the
Pension Benefit Guaranty Corporation;
(d) 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 the Transferor setting forth details of such Event and the
action that the Transferor proposes to take with respect thereto;
(e) LITIGATION. As soon as possible and in any event within
three Business Days of the Transferor'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 the Transferor, the
Seller or any Originator or impair the ability of the Transferor or the
Servicer to perform its obligations under this Agreement and (ii) any
material adverse development in previously disclosed litigation;
(f) PURCHASE AND SALE AGREEMENT/RECEIVABLES PURCHASE
AGREEMENT. Promptly after receipt thereof, copies of all documents and
other information delivered by either of the Originator or the Seller
to the Transferor pursuant to either the Purchase and Sale Agreement or
the Receivables Purchase Agreement; and
(g) 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 the Transferor as the
31
Agent may from time to time reasonably request in order to protect the
interests of the Agent or any Purchaser under or as contemplated by
this Agreement.
Section 7.3. NEGATIVE COVENANTS OF THE TRANSFEROR. 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, the Transferor will not, without the prior
written consent of the 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 8.6, 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 (i) does not conflict with the Credit and Collection
Policy and (ii) does not affect the collectibility of the related
Receivable.
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Make
any change in the character of its business or in the 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
6.2(O) or make any change in its instructions to Obligors regarding
payments to be made to Servicer or payments to be made to any Lock-Box
Bank, unless the Agent 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 Agent.
(e) AMENDMENTS TO PURCHASE AND SALE AGREEMENT/RECEIVABLES
PURCHASE AGREEMENT. Amend, supplement, waive the application of any
provision of, amend and restate or otherwise modify the Purchase and
Sale Agreement or the Receivables Purchase Agreement except in each
case (i) in accordance with the terms thereof and (ii) with the prior
written consent of the Agent.
(f) CORPORATE IDENTITY. At any time change its name, identity,
corporate structure, location or jurisdiction of incorporation unless
at least 10 days prior thereto the Transferor shall have delivered to
the 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 favor of the Agent
on behalf of the Purchaser and the Bank Investors hereunder.
Section 7.4. AFFIRMATIVE COVENANTS OF SERVICER. From the date hereof
until the date, following the Commitment Termination Date, on which all
Undivided Interests shall be reduced to zero, Servicer will, unless the Agent
shall otherwise consent in writing:
32
(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 the Agent or the Purchaser or any Bank Investor hereunder
or (ii) the ability of Servicer or the Transferor to perform their
respective obligations hereunder or under the Receivable Purchase
Agreement.
(c) FIELD REVIEWS. (i) At any time and from time to time
during regular business hours, permit the 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
Servicer 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 Servicer for the purpose of
examining such materials described in CLAUSE (I)(A) next above, and to
discuss matters relating to Pool Receivables or Servicer's performance
hereunder with any of the officers or employees of Servicer having
knowledge of such matters; and (ii) without limiting the provisions of
CLAUSE (I)(A) next above, from time to time on request of the Agent,
permit certified public accountants or other auditors acceptable to the
Agent to conduct, at Servicer's expense, a review of Servicer's books
and records with respect to the Pool Receivables.
(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 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 principal 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 addresses of Servicer
33
referred to in SECTION 6.2(N) or, upon 30 days' prior written notice to
each Agent, at such other locations in jurisdictions where all action
required by SECTION 8.13 shall have been taken and completed. In
addition, the Servicer shall provide not less than thirty (30) days
written notice to the Agent and the Bank Investors prior to effecting
any change in its form of organization or jurisdiction of organization.
(g) CREDIT AND COLLECTION POLICIES. Comply in all material
respects with the 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.
Section 7.5. REPORTING REQUIREMENTS OF SERVICER. 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, the Servicer will, unless the Agent shall
otherwise consent in writing, furnish to the Agent:
(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 the Servicer, copies of the Servicer
quarterly financial reports, on Form 10-Q, as filed with the Securities
and Exchange Commission (or if the Servicer is no longer required to
file such Form 10-Q, the Servicer shall furnish such financial reports
containing the information typically found on Form 10-Q, certified by
an Authorized Representative of the Servicer; together with a
certificate from such Authorized Representative 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 7.7;
(b) ANNUAL FINANCIAL STATEMENTS. As soon as available and in
any event within 90 days after the end of each fiscal year of the
Servicer, a copy of the Servicer's Annual Report, on Form 10-K, as
filed with the Securities and Exchange Commission (or if the Servicer
is no longer required to file such Form 10-K, the Servicer 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 an Authorized
Representative of the Servicer 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 7.7;
(c) REPORTS TO HOLDERS AND EXCHANGES. In addition to the
reports required by SUBSECTION (A) next above, promptly upon the
Agent's request, copies of any reports specified in such request which
the Servicer sends to any of its security holders, and any reports or
registration statements that the Servicer files with the Securities and
Exchange Commission or any national securities exchange other than
registration statements
34
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 the Servicer 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
the Servicer or any Originator receives from the Pension Benefit
Guaranty Corporation;
(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 the Servicer setting forth details of such Event and the
action that the Servicer proposes to take with respect thereto;
(f) LITIGATION. As soon as possible and in any event within
three Business Days of the Servicer'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 the Servicer or any Originator or
impair the ability of the Servicer to perform its obligations under
this Agreement and (ii) any material adverse development in previously
disclosed litigation; and
(g) AGREED UPON PROCEDURES. On or before 120 days after the
end of each fiscal year of the Servicer, beginning with the fiscal year
ending December 31, 2000, the Servicer shall cause a firm of
independent public accountants (who may also render other services to
the Servicer or the Transferor) to furnish a report to the Agent to the
effect that they have (i) confirmed the Net Pool Balance as of the end
of each Yield Period during such fiscal year, (ii) confirmed that the
Receivables treated by the Servicer as Eligible Receivables in fact
satisfied the requirements of the definition thereof contained herein,
and (iii) such other matters as may be requested by the Agent in its
reasonable discretion; except, in each case for (a) such exceptions as
such firm shall believe to be immaterial (which exceptions need not be
enumerated) and (b) such other exceptions as shall be set forth in such
statement.
(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 the Servicer as the 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 7.6. NEGATIVE COVENANTS OF THE SERVICER. 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, the Servicer will not, without the prior written
consent of the 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
35
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 8.6, 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 (i) does not conflict with the Credit and Collection
Policy and (ii) does not affect the collectibility of the related
Receivable.
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Make
any change in the character of its business or in the 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
6.2(O) or make any change in its instructions to Obligors regarding
payments to be made to the Servicer or the Servicer or payments to be
made to any Lock-Box Bank, unless the Agent 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 Agent.
(e) MERGERS, CONSOLIDATIONS AND SALES OF ASSETS.
(i) Consolidate with or be a party to a merger with
any other corporation or sell, lease or otherwise dispose of
all or any substantial part (as defined in paragraph (iv) of
this Section 7.6(e)) of the assets of the Servicer and its
Subsidiaries, PROVIDED, HOWEVER, that:
(A) any Subsidiary may merge or consolidate
with or into the Servicer or any Wholly-owned
Subsidiary so long as in any merger or consolidation
involving the Servicer, the Servicer shall be the
surviving or continuing corporation; PROVIDED FURTHER
HOWEVER, that under no circumstances shall the
Transferor be permitted to merge with the Servicer;
(B) any Person may consolidate or merge with
the Servicer or a Subsidiary of the Servicer if 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 after giving effect to such
consolidation or merger the Servicer would be
permitted to incur at least $1.00 of additional
Consolidated Indebtedness;
(C) any Subsidiary may sell, lease or
otherwise dispose of all or any substantial part of
its assets to the Servicer or any Wholly-owned
Subsidiary;
(D) WCC may enter into TROL Leases; and
36
(E) the Servicer may sell for not less than
book value the (i) business, assets and operations
constituting the food service business of the
Servicer and its Subsidiaries or (ii) assets of, or
stock in, Chile.
(ii) Permit any Subsidiary to issue or sell any
shares of stock of any class (including as "stock" for the
purposes of this SECTION 7.6(E), any warrants, rights or
options to purchase or otherwise acquire stock or other
Securities exchangeable for or convertible into stock) of such
Subsidiary to any Person other than the Servicer or a
Wholly-owned Subsidiary, except for the purpose of qualifying
directors, or except in satisfaction of the validly
pre-existing preemptive rights of minority shareholders in
connection with the simultaneous issuance of stock to the
Servicer and/or a Subsidiary whereby the Servicer and/or such
Subsidiary maintain their same proportionate interest in such
Subsidiary.
(iii) Sell, transfer or otherwise dispose of any
shares of stock of any Subsidiary except (A) the minimal
amount necessary to qualify directors and (B) shares of stock
of WCC provided that, after giving effect to any such sale of
WCC stock, the Servicer shall own not less than 50% of the
stock of every class issued by WCC or any Indebtedness of any
Subsidiary, and will not permit any Subsidiary to sell,
transfer or otherwise dispose of (except to the Servicer or a
Wholly-owned Subsidiary) any shares of stock or any
Indebtedness of any other Subsidiary, unless:
(1) simultaneously with such sale, transfer,
or disposition, all shares of stock and all
Indebtedness of such Subsidiary at the time owned by
the Servicer and by every other Subsidiary shall be
sold, transferred or disposed of as an entirety;
(2) the Board of Directors of the Servicer
shall have determined, as evidenced by a resolution
thereof, that the proposed sale, transfer or
disposition of said shares of stock and Indebtedness
is in the best interests of the Servicer.
(3) said shares of stock and Indebtedness
are sold, transferred or otherwise disposed of to a
Person, for a cash consideration and on terms
reasonably deemed by the Board of Directors to be
adequate and satisfactory;
(4) the Subsidiary being disposed of shall
not have any continuing investment in the Servicer or
any other Subsidiary not being simultaneously
disposed of; and
(5) such sale or other disposition does not
involve a substantial part (as hereinafter defined)
of the assets of the Servicer and its Subsidiaries.
(iv) As used in this SECTION 7.6(E), a sale, lease or
other disposition of assets shall be deemed to be a
"substantial part" of the assets of the Servicer and its
Subsidiaries only if the book value of such assets, when added
to the book value of all other assets sold, leased or
otherwise disposed of by the Servicer and its Subsidiaries
(other than in the ordinary course of business) during the
period
37
from and after the Closing Date to and including the date of
the sale, lease or disposition in question, computed on a
cumulative basis for said entire period, exceeds 10% of
Consolidated Net Assets, determined as of the end of the
immediately preceding Fiscal Quarter.
(f) ACQUISITIONS. Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take
any action to solicit the tender of securities or proxies in respect
thereof in order to effect any Acquisition, unless (i) the Person to be
(or whose assets are to be) acquired does not oppose such Acquisition
and the line or lines of business of the Person to be acquired are
substantially the same as one or more line or lines of business
conducted by the Servicer and its Subsidiaries, (ii) no Unmatured
Termination Event or Termination Event shall have occurred and be
continuing either immediately prior to or immediately after giving
effect to such Acquisition and, if the Cost of Acquisition is in excess
of $5,000,000, the Servicer shall have furnished to the Agent and the
Bank Investors (A) pro forma historical financial statements as of the
end of the most recently completed Fiscal Year of the Servicer and most
recent interim Fiscal Quarter, if applicable, giving effect to such
Acquisition and (B) a certificate prepared on a historical pro forma
basis as of the most recent date for which financial statements have
been furnished pursuant to SECTION 7.5 giving effect to such
Acquisition, which certificate shall demonstrate that no Unmatured
Termination Event or Termination Event would exist immediately after
giving effect thereto, and (iii) the Person acquired shall be a
Wholly-owned Subsidiary, or be merged into the Servicer or a
Wholly-owned Subsidiary, immediately upon consummation of the
Acquisition (or if assets are being acquired, the acquiror shall be the
Servicer or a Wholly-owned Subsidiary).
(g) CORPORATE IDENTITY. At any time change its name, identity,
corporate structure, location or jurisdiction of organization unless at
least 10 days prior thereto the Servicer shall have delivered to the
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 favor of the
Transferor pursuant to the Receivables Purchase Agreement.
(h) CHANGE IN BUSINESS. Engage in, or permit any Subsidiary to
engage in, any business if, as a result, the general nature of the
business, taken on a consolidated basis, which would then be engaged in
by the Servicer and its Subsidiaries would be substantially changed
from the general nature of the business engaged in by the Servicer and
its Subsidiaries on the date hereof.
Section 7.7. FINANCIAL COVENANTS OF THE SERVICER.
(Additional terms used in this Section and not defined in APPENDIX A shall have
the meanings ascribed to such terms in the Revolving Credit Agreement).
(A) CONSOLIDATED NET WORTH. The Servicer will at all
times keep and maintain Consolidated Net Worth at an amount not less than (i)
90% of the Servicer and its Subsidiaries Consolidated Net Worth at October 1,
2000 and (ii) as at the last day of each
38
succeeding Fiscal Quarter of the Servicer and until (but excluding) the last day
of the next following Fiscal Quarter of the Servicer, the sum of (A) the amount
of Consolidated Net Worth required to be maintained pursuant to this SECTION 7.7
as at the end of the immediately preceding Fiscal Quarter, plus, (B) 50% of
Consolidated Net Income (with no reduction for net losses for any period but
including earnings and losses attributable to outstanding Minority Interest) for
the Fiscal Quarter of the Servicer ending on such day, plus (C) 75% of the Net
Proceeds to the Servicer from the sale of shares of the Servicer's capital stock
received during the Fiscal Quarter of the Servicer ending on such date, less (D)
losses incurred during the restructuring of Chile, not to exceed $50,000,000,
reduced by the amount of any realized tax credit. The calculation of this
covenant shall be based upon the consolidated financial statements of the
Servicer and its Subsidiaries, without giving effect to any Accounting
Adjustments.
(B) LIMITATIONS ON TOTAL DEBT.
(i) The Servicer will not at any time permit the ratio of
Consolidated Indebtedness to Consolidated Total Capitalization to be
greater than .50 to 1.00.
(ii) The Servicer and its Subsidiaries (other than WCC) will
not, at any time, issue, incur, assume, be or become liable in respect
of any Indebtedness other than (i) Indebtedness representing amounts
received by the Servicer or any Subsidiary in exchange for the transfer
of interests in trade receivables arising under this Agreement, (ii)
the purchase of products, merchandise and services in the ordinary
course of business, (iii) Indebtedness outstanding on the Closing Date,
(iv) Indebtedness of a Guarantor to the Servicer or to another
Guarantor, (v) Indebtedness arising under the Revolving Credit
Agreement, (vi) the endorsement of registrable instruments for deposit
or collection or similar transactions in the ordinary course of
business, and (vii) other Indebtedness in an aggregate amount for the
Servicer and all Subsidiaries (other than WCC) taken as a whole not
greater than $30,000,000.
(C) FIXED CHARGE COVERAGE RATIO. The Servicer will at
all times keep and maintain at the end of any Four-Quarter Period the
Consolidated Fixed Charge Coverage Ratio to be less than 1.50 to 1.00.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1. DESIGNATION OF SERVICER. WACKENHUT 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 8.1. Until the Agent gives a Successor
Notice (as defined in SECTION 8.2, Wackenhut is hereby designated as, and hereby
agrees to perform the duties and obligations of, Servicer pursuant to the terms
hereof.
Section 8.2. SUCCESSOR NOTICE: SERVICER TRANSFER EVENT. Upon
Wackenhut's receipt of a notice from the Agent of the Agent's designation of a
new Servicer (a "SUCCESSOR NOTICE"), Wackenhut agrees that it will terminate its
activities as Servicer hereunder in a manner
39
that the Agent reasonably believes will facilitate the transition of the
performance of such activities to the new Servicer, and the Agent (or its
designee) shall assume, until a new Servicer is appointed or designated, each
and all of Wackenhut's said obligations to service and administer such
Receivables, on the terms and subject to the conditions herein set forth, and
Wackenhut shall use its best efforts to assist the Agent (or its designee) in
assuming such obligations. The Agent will not give Wackenhut a Successor Notice
until after (A) the occurrence of any Termination Event listed in clauses (a),
(b), (c), (d), (e), (f), (k), (l) or (n) of Section 11.1, which, except in the
case of clause (e), relates directly to the Servicer or, in the case of clauses
(d), (f) or (l), any of its Subsidiaries, or (B) any other event which, in the
reasonable opinion of the Agent, could have a material adverse effect on
Wackenhut'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
Agent's discretion. If Wackenhut disputes the occurrence of a Servicer Transfer
Event, Wackenhut may take appropriate action to resolve such dispute; PROVIDED
that Wackenhut must terminate its activities hereunder as Servicer and allow the
newly designated Servicer to perform such activities on the date provided by the
Agent as described above, notwithstanding the commencement or continuation of
any proceeding to resolve the aforementioned dispute. The Agent may at any time
after the occurrence of a Servicer Transfer Event designate any other Person as
successor Servicer hereunder. If at any time the Agent shall be servicing
hereunder, upon the transfer of servicing by the Agent to any successor
Servicer, the Agent shall no longer perform the duties of Servicer and shall
have no further obligations or liabilities whatsoever in respect thereof.
Section 8.3. SUBCONTRACTS. Servicer may, with the prior consent of the
Agent, 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 8.4. DUTIES OF SERVICER. APPOINTMENT; DUTIES IN GENERAL. Each
of the Transferor, Purchaser, each Bank Investor and the Agent hereby appoints
as its agent the Servicer, as from time to time designated pursuant to SECTION
8.1, 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 Credit and
Collection Policy or otherwise at the direction or with the consent of the Agent
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 Credit and Collection Policy for the servicing of the
Pool Receivables.
Section 8.5. ALLOCATION OF COLLECTIONS; SEGREGATION. Servicer shall set
aside for the account of the Transferor, the Purchaser and each Bank Investor,
their respective allocable shares of the Collections of Pool Receivables in
accordance with SECTIONS 3.1 and 3.2 but shall not be required (unless otherwise
requested by the Agent, and subject to SECTION 3.7) to segregate the funds
constituting such portions of such Collections, or to segregate the respective
allocable shares of Enterprise and the Enterprise Liquidity Provider and the
Enterprise Credit Support Provider, as applicable, prior to the remittance
thereof in accordance with said Sections. If instructed by the Agent, Servicer
shall segregate and deposit with the Agent such allocable shares of Collections
of Pool Receivables, set aside for the Purchaser, the Bank Investors, the
40
Enterprise Liquidity Provider and Enterprise Credit Support Provider and any
other assignee from the Purchaser or any Bank Investor of any Undivided
Interest, on the first Business Day following receipt by Servicer of such
Collections in immediately available funds.
Section 8.6. MODIFICATION OF RECEIVABLES. So long as no Termination
Event or Unmatured Termination Event shall have occurred and be continuing, the
Servicer may, strictly in accordance with the 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 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 3.3(A).
Section 8.7. DOCUMENTS AND RECORDS. The Transferor shall, and shall
cause the Seller, to deliver to Servicer, and Servicer shall hold in trust for
the Transferor, each Originator, the Purchaser and the Bank Investors, 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.
Section 8.8. CERTAIN DUTIES TO THE TRANSFEROR. Servicer shall, as soon
as practicable following receipt, turn over to the Transferor (i) that portion
of Collections of Pool Receivables representing its undivided interest therein,
less, all reasonable and appropriate out-of-pocket costs and expenses of
Servicer of servicing, 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 shall, as
soon as practicable upon demand, deliver to the Transferor all documents,
instruments and records in its possession that evidence or relate to Receivables
of the Transferor other than Pool Receivables, and copies of documents,
instruments and records in its possession that evidence or relate to Pool
Receivables.
Section 8.9. LOCK-BOX ACCOUNTS. Upon the occurrence of any event which
gives the Agent the right to take control of one or more Lock-Box Accounts,
Servicer shall deliver to the Agent on a daily basis, a list setting forth those
Collections held by Servicer and by each Lock-Box Bank and received as of the
preceding Business Day, and designating such Collections as Collections in
respect of Pool Receivables or as Collections not subject to this Agreement.
Section 8.10. RIGHTS OF THE AGENT. (a) NOTICE TO OBLIGORS. At any time
the Agent, in its discretion, after notice to the Transferor or Servicer, may
notify the Obligors of Pool Receivables, or any of them, of the ownership of
Undivided Interests by the Purchaser or the Bank Investors, as the case may be.
(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 the Agent
shall have requested implementation of the Settlement procedures set
forth in SECTION 3.2, and (iii) the warranty in SECTION 6.1(1) shall no
longer be true, the Agent is hereby authorized to give notice to the
Lock-Box Banks, as provided in the
41
Lock-Box Agreements, of the transfer to the Agent of dominion and
control over the lock-box accounts to which the Obligors of Pool
Receivables make payments. The Transferor hereby transfers to the
Agent, effective when the 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 Agent may reasonably request to effect such transfer.
Section 8.11. RIGHTS ON SERVICER TRANSFER EVENT. At any time following
the designation of a Servicer other than Wackenhut pursuant to SECTION 8.1:
(a) The Agent may direct the Obligors of Pool Receivables, or
any of them, to pay all amounts payable under any Pool Receivable
directly to the Agent or its designee.
(b) Servicer shall, and shall direct the Seller and each
Originator to, at the Agent's request and at the Servicer's expense,
give notice of such ownership to each said Obligor and direct that
payments be made directly to the Agent or its designee.
(c) The Transferor shall, and shall direct the Seller and each
Originator to, at the Agent's request (with the written consent of the
Agent), (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
Agent at a place selected by the 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 Agent and shall, promptly upon receipt, remit all
such cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the Agent or its designee.
(d) Each of the Transferor, the Purchaser and the Bank
Investors, as the case may be, hereby authorizes the Agent to take any
and all steps in the Transferor's name and on behalf of the Transferor
and the Purchaser, the Bank Investors, as the case may be, which are
necessary or desirable, in the determination of the Agent, to collect
all amounts due under any and all Pool Receivables, including, without
limitation, endorsing the Transferor's name on checks and other
instruments representing Collections and enforcing such Pool
Receivables and the related Contracts.
Section 8.12. RESPONSIBILITIES OF THE TRANSFEROR. Anything herein to
the contrary notwithstanding:
(a) None of the Agent, the Purchaser nor any Bank Investor
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 the Transferor, Wackenhut or any
Originator thereunder.
(b) The Transferor hereby grants to the Servicer and the
Agent, for the benefit of the Purchaser and the Bank Investors, as the
case may be, an irrevocable power of
42
attorney, with full power of substitution, coupled with an interest, to
take in the name of the Transferor 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 the Transferor or
transmitted or received by the Purchaser or any Bank Investor, as the
case may be (whether or not from the Transferor) in connection with any
Receivable after the occurrence of any default by the Transferor
hereunder or the occurrence of any Termination Event.
Section 8.13. FURTHER ACTION EVIDENCING PURCHASES. (a) The Transferor
will, and will cause the Seller 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 Purchaser, the Bank Investors or the Agent to
exercise or enforce any of their respective rights hereunder or under the
Certificate of Assignments. Without limiting the generality of the foregoing,
the Transferor 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) The Transferor hereby authorizes the Agent to file one or
more financing or continuation statements on behalf of and for the
benefit of the Agent, the Purchaser or the Bank Investors, as the case
may be, 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 the Transferor. If the Transferor
fails to perform any of its agreements or obligations under this
Agreement, the Agent may (but shall not be required to) itself perform,
or cause performance of, such agreement or obligation, and the expenses
of the Agent incurred in connection therewith shall be payable by the
Transferor as provided in SECTION 14.1.
(c) Without limiting the generality of SUBSECTION (A), the
Transferor 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 statements filed in connection with the Predecessor
Agreement 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 Agent an
opinion of the counsel for the Transferor (or other counsel
for the Transferor reasonably satisfactory to the Agent), in
form and substance reasonably satisfactory to the Agent,
confirming and updating the opinion or opinions delivered
pursuant to the Predecessor Agreement (or any predecessor to
the Predecessor Agreement) with respect to UCC matters and
otherwise to the effect that all of the Undivided Interests
hereunder continue to be first and prior perfected security
interests.
43
Section 8.14. APPLICATION OF COLLECTIONS. Any payment by an Obligor in
respect of any indebtedness owed by it to the Transferor shall, except as
otherwise specified by an 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 an Obligor to the extent of any amounts then due
and payable thereunder before such payment is applied to any other indebtedness
of an Obligor.
ARTICLE IX
SECURITY INTEREST
Section 9.1. GRANT OF SECURITY INTEREST. To secure all obligations of
the Transferor arising in connection with this Agreement, the Certificate of
Assignments and each other Agreement Document to which it is a party, 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, the Transferor hereby assigns and
grants the Agent, on behalf of the Purchaser and each Bank Investor, a security
interest in all of the Transferor's (i) right, title and interest (including
specifically any undivided interest retained by the Transferor 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 Receivables Purchase
Agreement.
Section 9.2. FURTHER ASSURANCES. The provisions of SECTION 8.13 shall
apply to the security interest granted under SECTION 9.1 as well as to the
Purchases and all Undivided Interests hereunder.
Section 9.3. REMEDIES. Upon the occurrence of a Termination Event, the
Agent shall have, with respect to the collateral granted pursuant to SECTION
9.1, and in addition to all other rights and remedies available to the
Purchaser, the Bank Investors, or the Agent under this Agreement or other
applicable law, all the rights and remedies of a secured party upon default
under the UCC.
ARTICLE X
[RESERVED]
ARTICLE XI
TERMINATION
Section 11.1. TERMINATION EVENTS. If any of the following events
("TERMINATION EVENTS") shall occur:
(a) Servicer (if Wackenhut) shall fail to perform or observe
any term, covenant or agreement hereunder (other than as referred to in
CLAUSE (II) next following) and such
44
failure shall remain unremedied for five Business Days or (ii) Servicer
(if Wackenhut) or the Transferor (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 the Transferor, Servicer or any Originator (or any of their
respective officers) under or in connection with this Agreement, any
other Agreement 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
the Agent or (ii) the Transferor, Servicer or such Originator has
actual knowledge thereof; or
(c) The Transferor, Servicer, Wackenhut or any Originator
shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement or any other Agreement 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
Transferor, Servicer, Wackenhut or such Originator knew or should have
known of such failure; or
(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 $100,000 of,
or guaranteed by, the Transferor, Servicer, Wackenhut, any Originator
or any Subsidiary of any 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 the Transferor, Wackenhut, any Originator or
any Subsidiary of any 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
the Transferor 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 the Transferor, Servicer, Wackenhut, any
Originator or any Subsidiary of any thereof; or
(f) (i) Any litigation (including, without limitation,
derivative actions), arbitration proceedings or governmental
proceedings not disclosed in writing by the Transferor to the Agent,
prior to the date of execution and delivery of this Agreement is
pending against the Transferor, Servicer, Wackenhut, any Originator or
any Subsidiary of any thereof, or (ii) any material development not so
disclosed has occurred in any litigation (including, without
limitation, derivative actions), arbitration proceedings or
45
governmental proceedings so disclosed, which, in the case of CLAUSE (I)
or (II), in the opinion of the Agent, is likely to materially adversely
affect the financial position or business of the Transferor, Servicer,
any Originator or any Subsidiary of any thereof or impair the ability
of the Transferor or Servicer to perform its obligations under this
Agreement; or
(g) The Aggregate Required Allocations shall at any time
exceed the Required Allocations Limit; or
(h) The Losses to Liquidations Ratio exceeds 2%; or
(i) The average of the Deemed Default Ratios for any three
consecutive fiscal months exceeds 2.5% or
(j) The average of the Dilution Ratios for any three
consecutive fiscal months exceeds 2.5%; 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 the Transferor, any Originator or Servicer to collect
Pool Receivables or the ability of the Transferor or Servicer to
perform hereunder or the warranty in SECTION 6.1(L) 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 the Transferor, Servicer, the Seller, any
Originator or any Subsidiary of any thereof 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 the
Transferor, Servicer, the Seller, any Originator or any Subsidiary of
any thereof; 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 the
Transferor, the Seller, Servicer or any Originator; or
(o) The Agent on behalf of the Purchaser and the Bank
Investors, fail for any reason to have a perfected first priority
security interest as described in SECTION 9.1.
Section 11.2. 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 11.1), the Agent may, or at the request of the
Bank Investors, shall, by notice to the Transferor and the Purchaser declare the
Purchase 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 11.1, the Purchase Termination Date shall be deemed to have
occurred automatically upon the occurrence of such event;
46
PROVIDED, HOWEVER, that with respect to any proceeding instituted
against the Transferor pursuant to 11 U.S.C.ss.303 (an "INVOLUNTARY
FEDERAL PROCEEDING"), the settlement procedures described in SECTION
3.2 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 its commencement, and if no other
Termination Event has occurred, then following such dismissal, the
Commitment shall be reinstated as if the Purchase Termination Date had
not occurred upon the commencement of such Involuntary Federal
Proceeding.
(c) TERMINATION EVENTS. The Agent shall not be deemed to have
knowledge or notice of the occurrence of an Unmatured Termination Event
or a Termination Event unless the Agent has received written notice
from the Transferor specifying such Unmatured Termination Event or
Termination Event and stating that such notice is a `Notice of
Termination Event'. In the event that the Agent receives such a notice
of the occurrence of an Unmatured Termination Event or Termination
Event, the Agent shall give prompt notice thereof to the Purchaser and
the Bank Investors. The Agent shall (subject to SECTION 12.2 hereof)
take such action with respect to such Unmatured Termination Event or
Termination Event as shall reasonably be directed by the Purchaser and
the Bank Investors, PROVIDED that, unless and until the Agent shall
have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action,
with respect to such Unmatured Termination Event or Termination Event
as it shall deem advisable in the best interest of the Purchaser and
the Bank Investors.
(d) ADDITIONAL REMEDIES. Upon any termination of the Facility
pursuant to this SECTION 11.2, the Agent, the Purchaser and the Bank
Investors 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, the occurrence of a Termination Event shall not deny to the
Agent, the Purchaser or any Bank Investor any remedy in addition to
termination of the Commitment to which the Agent, the Purchaser or any
Bank Investor may be otherwise appropriately entitled, whether at law
or in equity.
ARTICLE XII
THE AGENT
Section 12.1. AUTHORIZATION AND ACTION. The Purchaser and each Bank
Investor hereby appoints and authorizes the 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 provisions of this ARTICLE XII are solely for the
benefit of the Agent, the Purchaser and the Bank Investors, and the Transferor
shall not have any rights as a third-party beneficiary or otherwise under any of
the provisions hereof. In performing its functions and duties hereunder, the
Agent shall act solely as the agent for the Purchaser and the Bank Investors, as
the case may be, and does not assume nor
47
shall be deemed to have assumed any obligation or relationship of trust or
agency with or for the Transferor, the Seller or any Originator or any of their
respective successors and assigns. The Agent (which term as used in this
sentence shall include its affiliates and its own and its affiliates' officers,
directors, employees and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Agreement and shall
not be a trustee or fiduciary for the Purchaser or any other Bank Investor; (b)
shall not be responsible to the Purchaser or any Bank Investor for any recital,
statement, representation, or warranty (whether written or oral) made in, or in
connection with, any Agreement Documents or any certificate or other document
referred to or provided for in, or received by any of them under any Agreement
Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Agreement Document, or any other document
referred to or provided for herein or for any failure by any of the Transferor,
or any other Person to perform any of its obligations thereunder; (c) shall not
be responsible for or have any duty to ascertain, inquire into, or verify the
performance or observance of any covenants or agreements by the Transferor or
the satisfaction of any condition or to inspect the property (including the
books and records) of the Transferor or any of its Subsidiaries or affiliates;
(d) shall not be required to initiate or conduct any litigation or collection
proceedings under any Agreement Document; and (e) shall not be responsible for
any action taken or omitted to be taken by it under or in connection with any
Agreement Document, except for its own gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.
Section 12.2. AGENTS' RELIANCE, ETC. The Agent shall be entitled to
rely upon any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telecopy) believed
by it to be genuine and correct and to have been signed, sent or made by or on
behalf of the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any of the Transferor or the Servicer),
independent accountants, and other experts selected by the Agent. As to any
matters not expressly provided for by this Agreement, the Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Bank Investors, and such
instructions shall be binding on all of the Bank Investors; PROVIDED, HOWEVER,
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to any Agreement Document or
applicable law or unless it shall first be indemnified to its satisfaction by
the Bank Investors against any and all liability and expense which may be
incurred by it by reason of taking any such action.
Section 12.3. AGENTS AND AFFILIATES. Bank of America and its Affiliates
may generally engage in any kind of business with the Transferor, Servicer, any
Originator or any Obligor, any of their respective Affiliates and any Person who
may do business with or own securities of the Transferor or any Obligor or any
of their respective Affiliates, all as if Bank of America was not the Agent and
without any duty to account therefor to the Purchaser, any Bank Investor or any
other holder of an interest in Pool Receivables.
Section 12.4. RESIGNATION OF AGENT. The Agent may resign at any time by
giving notice thereof to the Purchaser, the Bank Investors and the Transferor.
Upon any such resignation, the Agent and the Bank Investors which hold 50% or
more by aggregate principal
48
balance of the Facility Limit shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed by the Agent or the Bank
Investors which hold 50% or more by aggregate principal balance of the Facility
Limit and shall have accepted such appointment within thirty (30) days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Purchaser and the Bank Investors, appoint a successor Agent
which shall be a commercial bank organized under the laws of the United States
of America having combined capital and surplus of at least $100,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor, such
successor shall thereupon succeed to and become vested with all the rights,
powers, discretion, privileges, and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article XII shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
ARTICLE XIII
BANK COMMITMENT; ASSIGNMENT OF PURCHASER'S INTEREST
Section 13.1. RIGHTS AS BANK INVESTOR. With respect to its Bank
Commitment, Bank of America (and any successor acting as Agent) in its capacity
as a Bank Investor hereunder shall have the same rights and powers hereunder as
any other Bank Investor and may exercise the same as though it were not acting
as the Agent, and the term "BANK INVESTOR" or "BANK INVESTORS" shall, unless the
context otherwise indicates, include the Agent in its individual capacity. Bank
of America (and any successor acting as Agent) and its affiliates may (without
having to account therefor to the Purchaser or any Bank Investor) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any of
the Transferor and the Agent or any of their Subsidiaries or affiliates as if it
were not acting as Agent, and Bank of America (and any successor acting as
Agent) and its affiliates may accept fees and other consideration from any of
the Transferor and its affiliates and the Agent or any of their Subsidiaries or
affiliates for services in connection with this Agreement or otherwise without
having to account for the same to the Purchaser or any Bank Investor.
Section 13.2. INDEMNIFICATION OF THE AGENT. The Bank Investors agree to
indemnify the Agent (to the extent not reimbursed by the Transferor), ratably in
accordance with their PRO RATA portions of the Undivided Interests, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including attorneys' fees), or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Agent (including by the Purchaser or any Bank
Investor) in any way relating to or arising out of this Agreement or any other
Agreement Document or any of the transactions contemplated hereby or thereby or
any action taken or omitted by the Agent under this Agreement or any other
Agreement Document, PROVIDED that no Bank Investors shall be liable for any of
the foregoing to the extent they arise from the gross negligence or willful
misconduct of the Person indemnified. Without limitation of the foregoing, the
Bank Investors agree to reimburse the Agent, ratably in accordance with their
PRO RATA portions of the Undivided Interests promptly upon demand for any
out-of-pocket expenses (including attorneys' fees) incurred by the Agent in
connection with the administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in
49
respect of rights or responsibilities under, this Agreement and the other
Agreement Documents, to the extent that such expenses are incurred in the
interests of or otherwise in respect of the Bank Investors hereunder and/or
thereunder and to the extent that the Agent is not reimbursed for such expenses
by the Transferor. The agreements contained in this SECTION 13.2 shall survive
payment in full of the Undivided Interests and all other amounts payable under
this Agreement.
Section 13.3. NON-RELIANCE. The Purchaser and each Bank Investor agrees
that it has, independently and without reliance on the Agent or the Purchaser or
any Bank Investor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Transferor and the Agent and
their Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent, the Purchaser or any Bank
Investor, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under the Agreement Documents. Except for notices,
reports, and other documents and information expressly required to be furnished
to the Purchaser and the Bank Investors by the Agent hereunder, the Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the affairs, financial condition, or business of
the Transferor or the Agent or any of their Subsidiaries or affiliates that may
come into the possession of the Agent or any of its affiliates.
Section 13.4. PAYMENTS BY THE AGENT. Unless specifically allocated to a
Bank Investor pursuant to the terms of this Agreement, all amounts received by
the Agent on behalf of the Bank Investors shall be paid by the Agent to the Bank
Investors (at their respective accounts specified in their respective Assignment
and Assumption Agreements) in accordance with their respective related pro rata
interests in the Undivided Interest, on the Business Day received by the Agent,
unless such amounts are received after 12:00 noon on such Business Day, in which
case the Agent shall use its reasonable efforts to pay such amounts to the Bank
Investors on such Business Day, but, in any event, shall pay such amounts to the
Bank Investors in accordance with their respective related pro rata interests in
the Undivided Interest, not later than the following Business Day.
Section 13.5. BANK COMMITMENT; ASSIGNMENT TO BANK INVESTORS.
(a) BANK COMMITMENT. At any time on or prior to the Commitment
Termination Date, in the event that the Purchaser does not effect a
Purchase as requested under SECTION 1.1 then at any time, the
Transferor shall have the right to require the Purchaser to assign its
interest in the Aggregate Purchaser's Investment in whole to the Bank
Investors pursuant to this SECTION 13.5. In addition, if at any time on
or prior to the Commitment Termination Date the Purchaser elects to
give notice to the Transferor of a Reinvestment Termination Date, the
Transferor hereby requests and directs that the Purchaser assign its
interest in the Aggregate Purchaser's Investment in whole to the Bank
Investors pursuant to this SECTION 13.5 and the Transferor hereby
agrees to pay the amounts described in SECTION 13.5(D) below. Upon any
such election by the Purchaser or any such request by the Transferor,
the Purchaser shall make such assignment to the Bank Investors and the
Bank Investors shall thereupon be deemed to have accepted such
assignment and shall assume all of the Purchaser's obligations
hereunder. In connection with any assignment from the Purchaser to the
Bank Investors pursuant to this SECTION
50
13.5, each Bank Investor shall, by the close of business (New York
time) on the date of such notice of assignment, pay to the Purchaser
(in immediately available funds) an amount equal to its Assignment
Amount (it being understood that notwithstanding the foregoing
assignment of the Aggregate Purchasers Investment, the Bank Investors,
as assignees, continue to be obligated to fund Advances under Section
1.3 in accordance with the terms thereof and shall not have the right
to elect the commencement of the amortization of the Purchasers
Investment pursuant to the definition of "Reinvestment Termination
Date" notwithstanding that the Purchaser had such right). Upon any such
assignment, the amount set forth on the signature pages hereto next to
each Bank Investor's name shall be deemed to be the final Commitment
amount with respect to such Bank Investor. Upon any assignment by the
Purchaser to the Bank Investors contemplated hereunder, the Purchaser
shall cease to make any additional Purchases hereunder.
(b) ASSIGNMENT. No Bank Investor may assign all or a portion
of its interest in the Purchaser's Investment, the Receivables, and
Collections, Related Security and Proceeds with respect thereto and its
rights and obligations hereunder to any Person unless approved in
writing by the Transferor, the Purchaser and the Agent. In the case of
an assignment by a Bank Investor to another Person, the assignor shall
deliver to the assignee(s) an Assignment and Assumption Agreement in
substantially the form of Schedule 13.5(b) attached hereto, duly
executed, assigning to the assignee a pro rata interest in the
Purchaser's Investment, the Receivables, and Collections, Related
Security and Proceeds with respect thereto and the assignor's rights
and obligations hereunder and the assignor shall promptly execute and
deliver all further instruments and documents, and take all further
action, that the assignee may reasonably request, in order to protect,
or more fully evidence the assignee's right, title and interest in and
to such interest and to enable the Agent, on behalf of such assignee,
to exercise or enforce any rights hereunder and under the other
Agreement Documents to which such assignor is or, immediately prior to
such assignment, was a party. Upon any such assignment, (i) the
assignee shall have all of the rights and obligations of the assignor
hereunder and under the other Agreement Documents to which such
assignor is or, immediately prior to such assignment, was a party with
respect to such interest for all purposes of this Agreement and under
the other Agreement Documents to which such assignor is or, immediately
prior to such assignment, was a party (it being understood that the
Bank Investors, as assignees, shall (x) be obligated to fund Purchases
under Section 1.3(c) in accordance with the terms thereof,
notwithstanding that the Purchaser was not so obligated and (y) not
have the right to elect the commencement of the amortization of the
Purchaser's Investment pursuant to the definition of `Reinvestment
Termination Date', notwithstanding that the Purchaser had such right)
and (ii) the assignor shall relinquish its rights with respect to such
interest for all purposes of this Agreement and under the other
Agreement Documents to which such assignor is or, immediately prior to
such assignment, was a party. No such assignment shall be effective
unless a fully executed copy of the related Assignment and Assumption
Agreement shall be delivered to the Agent and the Transferor. All costs
and expenses of the Agent and the assignor and assignee incurred in
connection with any assignment hereunder shall be borne by the
Transferor and not by the assignor or any such assignee. No Bank
Investor shall assign
51
any portion of its Commitment hereunder without also simultaneously
assigning an equal portion of its interest in the Liquidity Provider
Agreement.
(c) EFFECTS OF ASSIGNMENT. By executing and delivering an
Assignment and Assumption Agreement, the assignor and assignee
thereunder confirm to and agree with each other and the other parties
hereto as follows: (i) other than as provided in such Assignment and
Assumption Agreement, the assignor makes no representation or warranty
and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement, the other Agreement Documents or any other instrument or
document furnished pursuant hereto or thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value
or this Agreement, the other Agreement Documents or any such other
instrument or document; (ii) the assignor makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Transferor or the Agent or the performance or
observance by the Transferor or the Agent of any of their respective
obligations under this Agreement, the other Agreement Documents or any
other instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement, and
such other instruments, documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into
such Assignment and Assumption Agreement and to purchase such interest;
(iv) such assignee will, independently and without reliance upon the
Agent, or any of its Affiliates, or the assignor and based on such
agreements, documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under this Agreement and the other Agreement Documents;
(v) such assignee appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under this
Agreement, the other Agreement Documents and any other instrument or
document furnished pursuant hereto or thereto as are delegated to the
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto and to enforce its respective rights and
interests in and under this Agreement, the other Agreement Documents,
the Receivables, and the Contracts; (vi) such assignee agrees that it
will perform in accordance with their terms all of the obligations
which by the terms of this Agreement and the other Agreement Documents
are required to be performed by it as the assignee of the assignor; and
(vii) such assignee agrees that it will not institute against the
Purchaser any proceeding of the type referred to in SECTION 15.6 prior
to the date which is one year and one day after the payment in full of
all Commercial Paper issued by the Purchaser.
(d) THE TRANSFEROR'S OBLIGATION TO PAY CERTAIN AMOUNTS;
ADDITIONAL ASSIGNMENT AMOUNT. The Transferor shall pay to the Agent,
for the account of the Purchaser, in connection with any assignment by
the Purchaser to the Bank Investors pursuant to this SECTION 13.5, an
aggregate amount equal to the Discount Factor to accrue through the end
of each outstanding Yield Period plus all other Aggregate Unpaids
(other than the Aggregate Purchaser's Investment). To the extent that
such Discount Factor relates to interest or discount on Related
Commercial Paper, if the Transferor fails to make payment of such
amounts at or prior to the time of assignment by the Purchaser to the
Bank Investors, such amount shall be paid by the Bank Investors (in
accordance with their respective PRO RATA portion) to the Purchaser as
additional consideration for the
52
interests assigned to the Bank Investors and the amount of the
"Aggregate Purchaser's Investment" hereunder held by the Bank Investors
shall be increased by an amount equal to the additional amount so paid
by the Bank Investors.
(e) DOWNGRADE OF BANK INVESTOR. If at any time prior to any
assignment by the Purchaser to the Bank Investors as contemplated
pursuant to this SECTION 13.5, the short term debt rating of any Bank
Investor shall be "A-2" or "P-2" from Standard & Poor' s or ▇▇▇▇▇'▇,
respectively, with negative credit implications, such Bank Investor,
upon request of the Agent, shall, within 30 days of such request,
assign its rights and obligations hereunder to another financial
institution (which institution's short term debt shall be rated at
least "A-2" and "P-2" from Standard & Poor's and ▇▇▇▇▇'▇, respectively,
and which shall not be so rated with negative credit implications). If
the short term debt rating of a Bank Investor shall be "A-3" or "P-3",
or lower, from Standard & Poor's or ▇▇▇▇▇'▇, respectively (or such
rating shall have been withdrawn by Standard & Poor's or ▇▇▇▇▇'▇), such
Bank Investor, upon request of the Agent, shall, within five (5)
Business Days of such request, assign its rights and obligations
hereunder to another financial institution (which institution's short
term debt shall be rated at least "A-2" and "P-2" from Standard &
Poor's and ▇▇▇▇▇'▇, respectively, and which shall not be so rated with
negative credit implications). In either such case, if any such Bank
Investor shall not have assigned its rights and obligations under this
Agreement within the applicable time period described above, the
Purchaser shall have the right to require such Bank Investor to accept
the assignment of such Bank Investor's Pro Rata portion of the Pool
Balance; such assignment shall occur in accordance with the applicable
provisions of SECTION 13.5(D). Such Bank Investor shall be obligated to
pay to the Purchaser, in connection with such assignment, in addition
to the Pro Rata portion of the Aggregate Purchaser's Investment, an
amount equal to the interest component of the outstanding Commercial
Paper Notes issued to fund the portion of the Aggregate Purchaser's
Investment being assigned to such Bank Investor, as reasonably
determined by the Agent. Notwithstanding anything contained herein to
the contrary, upon any such assignment to a downgraded Bank Investor as
contemplated pursuant to the immediately preceding sentence, the
aggregate available amount of the Facility Limit, solely as it relates
to new Purchases by the Purchaser, shall be reduced by the amount of
unused Commitment of such downgraded Bank Investor; it being understood
and agreed, that nothing in this sentence or the two preceding
sentences shall affect or diminish in any way any such downgraded Bank
Investor's Commitment to the Transferor or such downgraded Bank
Investor's other obligations and liabilities hereunder and under the
other Agreement Documents.
(f) ADMINISTRATION OF AGREEMENT AFTER ASSIGNMENT. After any
assignment by the Purchaser to the Bank Investors pursuant to this
SECTION 13.5 (and the payment of all amounts owing to the Purchaser in
connection therewith), all rights of the Agent set forth herein shall
be deemed to be afforded to the Agent on behalf of the Bank Investors
instead of the Purchaser. In the event that the aggregate of the
Assignment Amounts paid by the Bank Investors pursuant to SECTION
13.5(A) is less than the Aggregate Purchaser's Investments on the date
of such assignment, then to the extent payments made hereunder in
respect of the Aggregate Purchaser's Investments exceed the aggregate
of the Assignment Amounts, such excess shall be remitted by the Agent
to Bank of America, or
53
such other person acting as collateral agent in respect of the
Purchaser's Commercial Paper Note program.
Section 13.6. RESTRICTIONS ON ASSIGNMENTS. Except as otherwise
contemplated by SECTION 13.5, neither the Transferor nor the Purchaser may
assign its rights hereunder or any interest herein without the prior written
consent of the Agent, and the Purchaser may not assign any Undivided Interest
(or portion thereof) to any Person without the prior written consent of the
Transferor; PROVIDED, HOWEVER, that:
(a) Enterprise may assign or grant a security interest in, any
Undivided Interest (or portion thereof) owned by it to Bank of America,
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 Bank of America) 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
without limiting the foregoing, the Purchaser may, from time to time,
with prior or concurrent notice to Transferor and Collection Agent, in
one transaction or a series of transactions, assign all or a portion of
the Purchaser's Investment and its rights and obligations under this
Agreement and any other Agreement Documents to which it is party to a
Conduit Assignee. Upon and to the extent of such assignment by the
Purchaser to a Conduit Assignee, (i) such Conduit Assignee shall be the
owner of the assigned portion of the Purchaser's Investment, (ii) the
related administrative and/or managing agent for such Purchaser will
act as the Administrative Agent for such Conduit Assignee, with all
corresponding rights and powers, express or implied, granted to the
Administrative Agent hereunder or under the other Agreement Documents,
(iii) such Conduit Assignee and its liquidity support provider(s) and
credit support provider(s) and other related parties shall have the
benefit of all the rights and protections provided to the Purchaser and
its Enterprise Liquidity Support Provider(s) and Enterprise Credit
Support Provider(s), respectively, herein and in the other Agreement
Documents (including, without limitation, any limitation on recourse
against such Purchaser or related parties, any agreement not to file or
join in the filing of a petition to commence an insolvency proceeding
against such Purchaser, and the right to assign to another Conduit
Assignee as provided in this paragraph), (iv) such Conduit Assignee
shall assume all (or the assigned or assumed portion) of the
Purchaser's obligations, if any, hereunder and any other Agreement
Document, and the Purchaser shall be released from such obligations, in
each case to the extent of such assignment, and the obligations of the
Purchaser and such Conduit Assignee shall be several and not joint, (v)
all distributions in respect of the Purchaser's Investment shall be
made to the applicable agent or administrative agent, as applicable, on
behalf of the Purchaser and such Conduit Assignee on a pro rata basis
according to their respective interests, (vi) the definition of the
term "Commercial Paper Rate" with respect to the portion of the
Purchaser's Investment funded with commercial paper issued by the
Purchaser from time to time shall be determined in the manner set forth
in the definition of "Commercial Paper Rate" applicable to the
Purchaser on the basis of the interest rate or discount applicable to
commercial paper issued by such Conduit Assignee (rather than the
Purchaser), (vii) the defined terms and other terms and provisions of
this Agreement and the other Agreement Documents shall be interpreted
in
54
accordance with the foregoing, and (viii) if requested by the Agent or
administrative agent with respect to the Conduit Assignee, the parties
will execute and deliver such further agreements and documents and take
such other actions as the Agent or administrative agent may reasonably
request to evidence and give effect to the foregoing. No assignment by
the Purchaser to a Conduit Assignee of all or any portion of the
Purchaser's Investment shall in any way diminish the related Bank
Investors' obligation under SECTION 13.5 to fund any Reinvestment not
funded by the Purchaser or such Conduit Assignee or to acquire from the
Purchaser or such Conduit Assignee all or any portion of the
Purchaser's Investment.
(b) The 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 Bank of America, 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, the Enterprise Liquidity
Agreement, the Enterprise Credit Support Agreement and certain other
obligations of the 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 13.5(B), or, prior to the enforcement of such
security interest, for purposes of any other provision of this
Agreement.
(c) The Transferor agrees to advise the Agent within five
Business Days after notice to the Transferor of any proposed assignment
by the Purchaser of any Undivided Interest (or portion thereof), not
otherwise permitted under SUBSECTION (A), of the Transferor's consent
or non-consent to such assignment. If the Transferor does not consent
to such assignment, the Purchaser may immediately assign such Undivided
Interest (or portion thereof), to Bank of America, the Enterprise
Liquidity Provider or the Enterprise Credit Support Provider or any
Affiliate of Bank of America, the Enterprise Liquidity Provider or the
Enterprise Credit Support Provider. All of the aforementioned
assignments shall be upon such terms and conditions as the Purchaser
and the assignee may mutually agree.
Section 13.7. RIGHTS OF ASSIGNEE. Upon the assignment by the Purchaser
of any Undivided Interest (or portion thereof) owned by it in accordance with
this ARTICLE XIII, (a) the assignee receiving such assignment shall have all of
the rights of the Purchaser hereunder with respect to such Undivided Interest
(or such parties thereof) and (b) all references to the Purchaser in SECTION 4.2
shall be deemed to apply to such assignee to the extent of its interest the
Purchaser's Investment and the related Collections.
Section 13.8. AUTHORIZATION OF AGENT. The Purchaser authorizes the
Agent to, and the Agent agrees that it shall, endorse the Certificate(s) of the
Purchaser to reflect any assignments made pursuant to this ARTICLE XIII or
otherwise.
Section 13.9. NOTICE OF ASSIGNMENT. The Purchaser shall provide notice
to the Transferor and the Agent of any assignment of any Undivided Interest (or
portion thereof) by the Purchaser to any assignee.
55
Section 13.10. 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 SCHEDULE 13.5(B) or by
such other instruments) or documents) as may be satisfactory to the Purchaser,
the Agent and the assignee. The Purchaser authorizes the Agent to, and the Agent
agrees that it shall, endorse its Certificate of Assignments to reflect any
assignments made pursuant to this ARTICLE XIII or otherwise.
Section 13.11. RIGHTS OF SUPPORT PROVIDERS. The Transferor hereby
agrees that, upon notice to the Transferor, the Enterprise Liquidity Provider,
the Enterprise Credit Support Provider and the collateral agent or collateral
trustee referred to in SECTION 13.6(B) (collectively, the "ASSIGNEE PARTIES",
each an "ASSIGNEE PARTY"), or any of them, may exercise all the rights of Bank
of America (or Enterprise) 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 Enterprise (and not subject to an assignment or a
separate security interest in favor of the Enterprise Liquidity Provider or
Enterprise Credit Support Provider), and all other rights and interests of
Enterprise, 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 8.5, may give a Successor Notice pursuant to SECTION 8.2, may give or
require the Agent to give notice to the Lock-Box Banks as referred to in SECTION
8.10(B), and may direct the Obligors of Pool Receivables to make payments in
respect thereof directly to an account designated by them as referred to in
SECTION 8.11(A) (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 Bank of America (or Enterprise) might have
done.
ARTICLE XIV
INDEMNIFICATION
Section 14.1. INDEMNITIES BY THE TRANSFEROR AND SERVICER. (a) GENERAL
INDEMNITY. Without limiting any other rights which any such Person may have
hereunder or under applicable law, the Transferor hereby agrees to indemnify
each of the Agent, the Purchasers, each Enterprise Liquidity Provider, each
Enterprise Credit Support Provider, Bank of America, and each of Bank of
America'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 or
delinquent receivables. Without limiting the foregoing, the Transferor shall
indemnify each Indemnified Party for Indemnified Amounts arising out of or
relating to:
56
(i) the transfer by the Transferor of any interest in
any Receivable other than the transfer of an Undivided
Interest to the Agent on behalf of the Purchaser or the Bank
Investors, as the case may be, pursuant this Agreement and the
grant of a security interest to the Agent on behalf of
Purchaser and the Bank Investors pursuant to SECTION 9.1;
(ii) the breach of any representation or warranty
made by the Transferor or the Seller (or any of their
officers) under or in connection with this Agreement, any
other Agreement Document to which such entity is a party, any
Periodic Report or any other information or report delivered
by the Transferor 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;
(iii) the failure by the Transferor or the 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 the
Agent, on behalf of the Purchaser and the Bank Investors, an
undivided percentage ownership interest, to the extent of each
Undivided Interest owned by them 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 the Agent, on behalf
of the Purchaser or any Bank Investor, or any assignee
therefrom (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;
57
(vii) 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
(viii) 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 or profits or any portion thereof), 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 Interest, or any other interest in the Pool
Receivables or in any goods which secure any such Pool
Receivables.
(b) SERVICER INDEMNITY. Without limiting any other rights
which any such Person may have hereunder or under applicable law, the
Servicer hereby agrees to indemnify each Indemnified Party, forthwith
on demand from and against any and all Indemnified Amounts awarded
against or incurred by any of them arising out of or relating to this
Agreement or the ownership, servicing 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
and (b) recourse (except as otherwise specifically provided in this
Agreement) for Defaulted Receivables and delinquent receivables.
Without limiting the foregoing, the Servicer shall indemnify each
Indemnified Party for Indemnified Amounts arising out of or relating
to:
(i) the breach of any representation or warranty made
by the Servicer (or any of its officers) under or in
connection with this Agreement, any other Agreement Document
to which Servicer is a party, any Periodic Report or any other
information or report delivered by the Servicer 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;
(ii) the failure by the Servicer 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; and
(iii) any failure of the Servicer to perform its
duties or obligations in accordance with the provisions of
Article VIII.
Section 14.2. 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 the
Transferor under SECTION 14.1(A)(VIII), such Indemnified Party shall give prompt
and timely notice of such attempt to the Transferor and the
58
Transferor 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.
Section 14.3. CONTRIBUTION. If for any reason the indemnification
provided in SECTION 14.1 is unavailable to an Indemnified Party or is
insufficient to hold an Indemnified Party harmless, then the Transferor 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 the Transferor on the other hand but also the relative fault of
such Indemnified Party as well as any other relevant equitable considerations.
ARTICLE XV
MISCELLANEOUS
Section 15.1. AMENDMENTS, ETC. Any provision of this Agreement or any
other Agreement Document may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Transferor, the Servicer,
the Purchaser and the Agent, as applicable (and, if ARTICLE XII or the rights or
duties of the Agent are affected thereby, by the Agent); PROVIDED that no such
amendment or waiver shall, unless signed by each Bank Investor directly affected
thereby, (i) increase the Commitment of a Bank Investor, (ii) reduce the
Aggregate Purchaser's Investment or rate of interest to accrue thereon or any
fees or other amounts payable hereunder, (iii) postpone any date fixed for the
payment of any scheduled distribution in respect of Aggregate Purchaser's
Investment or interest with respect thereto or any fees or other amounts payable
hereunder or for termination of any Commitment, (iv) change the percentage of
the Commitments or the number of Bank Investors, which shall be required for the
Bank Investors or any of them to take any action under this Section or any other
provision of this Agreement, (v) release all or substantially all of the
property with respect to which a security or ownership interest therein has been
granted hereunder to the Agent or the Bank Investors, (vi) extend or permit the
extension of the Commitment Termination Date, (vii) amend the definition of
"Loss Reserve," "Dilution Reserve," or "Servicer's Fee Reserve," (viii) change
the Concentration Limits or (ix) waive any Termination Events. In the event the
Agent requests the Purchaser's or a Bank Investor's consent pursuant to the
foregoing provisions and the Agent does not receive a consent (either positive
or negative) from the Purchaser or such Bank Investor within 10 Business Days of
the Purchaser's or Bank Investor's receipt of such request, then the Purchaser
or such Bank Investor (and its percentage interest hereunder) shall be
disregarded in determining whether the Agent shall have obtained sufficient
consent hereunder.
Section 15.2. 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
59
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
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, answerback 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 15.3. NO WAIVER; REMEDIES. No failure on the part of the Agent,
Bank of America, any Affected Party, any Indemnified Party, the Purchaser, any
Bank Investor 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 Bank of America and any Enterprise
Liquidity Provider or Enterprise Credit Support Provider is hereby authorized by
the Transferor 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 Bank of America, Enterprise Liquidity Provider or Enterprise
Credit Support Provider to or for the credit or the account of the Transferor,
now or hereafter existing under this Agreement, to the payment of any amounts
owed by the Transferor hereunder to the Agent, any Affected Party, any
Indemnified Party or the Purchaser, any Bank Investor or their respective
successors and assigns; PROVIDED, HOWEVER, that none of Bank of America,
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 15.4. BINDING EFFECT; SURVIVAL. This Agreement shall be binding
upon and inure to the benefit of the Transferor, the Servicer, the Agent, the
Purchaser, the Bank Investors and their respective successors and assigns, and
the provisions of SECTION 4.2 and ARTICLE XIV 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 otherwise prohibited by this Agreement. 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 rights and remedies with respect
to any breach of any representation and warranty made by the Transferor or the
Servicer pursuant to ARTICLE VI and the indemnification and payment provisions
of ARTICLE XIV and SECTIONS 4.2, 15.5 and 15.7 shall be continuing and shall
survive any termination of this Agreement.
Section 15.5. COSTS, EXPENSES AND TAXES. In addition to its obligations
under ARTICLE XIV, the Transferor agrees to pay on demand:
60
(a) all costs and expenses incurred by the Agent, the
Purchaser, each Bank Investor, Bank of America, 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 the Transferor's books and records either prior to the
execution and delivery hereof or pursuant to SECTION 7.1(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 15.6. NO PROCEEDINGS. The Transferor, the Servicer, Wackenhut
(individually and not as Servicer) and Bank of America, individually and as
Agent and each Bank Investor, each hereby agrees that it will not institute
against the Purchaser or any Bank Investor or join any other Person in
instituting against the 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 the 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 the Transferor'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 the Transferor.
Section 15.7. BANK OF AMERICA PROGRAM CONFIDENTIALITY. Each party
hereto (other than Bank of America) acknowledges that Bank of America 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:
(a) unless Bank of America shall otherwise agree in writing,
and except as provided in SUBSECTION (B), such party will not disclose
to any other person or entity any of the following information (the
"INFORMATION"):
(i) any information regarding, or copies of, this
Agreement or any transaction contemplated hereby,
(ii) any information regarding the organization or
business of Enterprise generally, or
61
(iii) any information regarding Bank of America which
is designated by Bank of America to such party in writing or
otherwise as confidential or not otherwise available to the
general public;
(b) 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 15.7, and (C) are subject to
confidentiality restrictions consistent with this SECTION 15.7;
(c) 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
(d) such party will, upon demand, return (and cause its
representatives to return) to Bank of America, or to such other
information provider as shall have furnished it with any Information
(each an "INFORMATION PROVIDER"), all documents or other written
material received from Bank of America or such other Information
Provider which constitute or contain any Information described in
Section 15.7(A)(I) or (II) 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.
(e) notwithstanding the foregoing 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 15.7, and (C) are subject to confidentiality
restrictions consistent with this SECTION 15.7,
(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) subject to the other provisions of this SECTION
15.7, 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 the other provisions of this SECTION
15.7, 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.
(f) 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
62
demand or similar process) to disclose any of the Information, such
party will (or will cause its representatives to): provide Bank of
America with prompt written notice so that (A) Enterprise, Bank of
America, or any other Information Provider may seek a protective order
or other appropriate remedy, or (B) Bank of America may, if it so
chooses, agree that such party (or its representatives) may disclose
such Information pursuant to such request or legal compulsion.
(g) unless Bank of America 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
15.7;
(h) take any action as Bank of America 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 Bank of America 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
(i) in the event that such protective order or other remedy is
not obtained, or Bank of America 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 (H)
above, exercise best efforts to obtain reliable assurance that
confidential treatment will be accorded the Information.
This SECTION 15.7 shall survive termination of this Agreement.
Section 15.8. CONFIDENTIALITY OF THE TRANSFEROR INFORMATION.
(a) Each party hereto (other than the Transferor) acknowledges
that certain of the information provided to such party by or on behalf
of the Transferor in connection with this Agreement and the
transactions contemplated hereby is or may be confidential, and each
such party severally agrees that, unless the Transferor 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 the Transferor to
the Purchaser, any Bank Investor or the Agent pursuant to
SECTION 3.4, 7.1(C) or 7.2, or
(ii) any other information regarding the Transferor,
Servicer, Seller and any Originator which is designated by the
Transferor to such party in writing or otherwise as
confidential;
the information referred to in CLAUSES (I) AND (II), above, furnished by the
Transferor or any attorney for or other representative of the Transferor (each a
"TRANSFEROR INFORMATION PROVIDER"),
63
is collectively referred to as the "TRANSFEROR INFORMATION"; PROVIDED, HOWEVER,
the "TRANSFEROR INFORMATION" shall not include:
(i) 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 the Transferor
or any other Transferor Information Provider, or which was
known to such party on a nonconfidential basis prior to its
disclosure by the Transferor or any other Transferor
Information Provider, or
(ii) general information regarding the nature of this
Agreement, the basic terms hereof (including without
limitation the amount and nature of the Purchaser's or any
Bank Investor's Purchaser's Investment hereunder and of the
recourse or other credit enhancement provided by the
Transferor 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 the Transferor.
(b) Notwithstanding SUBSECTION (A), each party may disclose
any Transferor Information:
(i) to any of such party's attorneys, consultants and
auditors, and to any Enterprise Liquidity Provider, Enterprise
Credit Support Provider, any dealer or placement agent for the
Purchaser's commercial paper, and any actual or potential
assignees of, or participants in, any of the rights or
obligations of the Purchaser, Bank of America or any
Enterprise Liquidity Provider or Enterprise Credit Support
Provider under or in connection with this Agreement, who (A)
in the good faith belief of such party, have a need to know
such Transferor Information, (B) are informed by such party of
the confidential nature of the Transferor Information and the
terms of this SECTION 15.8, and (C) are subject to
confidentiality restrictions generally
consistent with this SECTION 15.8,
(ii) to any rating agency that maintains a rating for
the Purchaser's commercial paper or is considering the
issuance of such a rating, for the purposes of reviewing the
credit of the 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 Transferor Information.
64
(c) In the event that any party hereto (other than the
Transferor) 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 Transferor Information, such party will (or will
cause its representatives to):
(i) provide the Transferor with prompt written notice
so that (A) the Transferor or any other Transferor Information
Provider may seek a protective order or other appropriate
remedy, or (B) the Transferor may, if it so chooses, agree
that such party (or its representatives) may disclose such
Transferor Information pursuant to such request or legal
compulsion;
(ii) unless the Transferor agrees that such
Transferor Information may be disclosed, make a timely
objection to the request or compulsion to provide such
Transferor Information on the basis that such Transferor
Information is confidential and subject to the agreements
contained in this SECTION 15.8;
(iii) take any action as the Transferor or any other
Transferor 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 the
Transferor or such other Transferor 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 the Transferor agrees that such
Transferor Information may be disclosed, furnish only that
portion of the Transferor 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
Transferor Information.
This SECTION 15.8 shall survive termination of this Agreement.
Section 15.9. 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.
Section 15.10. INTEGRATION. This Agreement contains a final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof
65
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 15.11. 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.
Section 15.12. WAIVER OF JURY TRIAL. THE TRANSFEROR AND SERVICER 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 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 15.13. CONSENT TO JURISDICTIONS; WAIVER OF IMMUNITIES. EACH OF
THE TRANSFEROR AND SERVICER, THE PURCHASER, EACH BANK INVESTOR 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 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 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 15.14. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by the different parties hereto in
separate counterparts, each of
66
which when so executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same Agreement.
Section 15.15. PURCHASER'S LIABILITIES. The obligations of the
Purchaser hereunder are solely the corporate obligations of the Purchaser and no
personal liability shall attach to or be incurred by Global Securitization
Services LLC or any stockholder, employee, officer, director or incorporator of
the Purchaser, and the Transferor 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 Global Securitization
Services LLC or against any stockholder, employee, officer, director or
incorporator of the Purchaser. This SECTION 15.15 shall not relieve any such
Person of any liability it might otherwise have for its own gross negligence or
willful misconduct.
Section 15.16. AGENT'S LIABILITIES. The obligations of the Agent
hereunder are solely the corporate obligations of such Agent and no personal
liability shall attach to or be incurred by the Agent or any stockholder,
employee, officer, director or incorporator of the Agent, and the Transferor 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 Bank of America or against any stockholder, employee, officer,
director or incorporator of either of them; PROVIDED that, this SECTION 15.16
shall not relieve any such Person of any liability it might otherwise have for
its own gross negligence or willful misconduct.
Section 15.17. DELEGATION OF SERVICER'S DUTIES. Wackenhut, as Servicer,
may at any time, with the consent of the Agent, delegate to an Affiliate of
Wackenhut any of its servicing obligations hereunder, PROVIDED HOWEVER that no
such delegation shall operate to relieve the Servicer of any of its liabilities
hereunder.
Section 15.18. 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 Purchaser and the Bank
Investors, as the case may be and that the Undivided Interests not be part of
the Transferor's estate in an Event of Bankruptcy. If, notwithstanding the
foregoing, the transactions contemplated hereby are deemed a financing, the
parties intend that the Transferor shall be deemed to have granted to the Agent,
for the benefit of the Purchaser and the Bank Investors and the Transferor
hereby grants to the Agent, for the benefit of the Purchaser and the Bank
Investors, a first priority perfected security interest in all of the
Transferor's right, title and interest in, to and under the Receivables,
together with Related Security and Collections with respect thereto and under
the Receivables Purchase Agreement, and that this Agreement shall constitute a
security agreement under applicable law.
Section 15.19. EFFECT ON PREDECESSOR AGREEMENT. This Agreement amends
and restates the Predecessor Agreement effective as of the date of this
Agreement. This Agreement shall not effect a novation of the obligations of the
parties to the Predecessor Agreement but instead shall be merely a restatement
and, where applicable, an amendment of the terms governing such obligations;
provided that this sentence shall not limit the effect of SECTION 15.20. The
parties hereto hereby affirm, ratify and confirm all transactions pursuant to
the Predecessor Agreement and the other Agreement Documents. From and after the
date hereof,
67
any reference in any Agreement Document to the Transfer and Administration
Agreement shall be deemed to refer to this Second Amended and Restated Transfer
and Administration Agreement, as it may be further amended, supplemented or
otherwise modified from time to time.
Section 15.20. ASSIGNMENT BY EXITING BANK INVESTOR.
(a) The Bank of Nova Scotia (the "EXITING BANK INVESTOR")
hereby sells and assigns to Bank of America, National Association (the
"REMAINING BANK INVESTOR"), without recourse and without representation
and warranty, and the Remaining Bank Investor hereby purchases and
assumes from the Exiting Bank Investor, an interest in and to all of
the Exiting Bank Investor's rights and obligations hereunder and under
the other Agreement Documents:
(b) The Exiting Bank Investor (x) represents and warrants that
it is the legal and beneficial owner of the interest being assigned by
it hereunder and that such interest is free and clear of any adverse
claim; (y) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, any other
Agreement Document or any other instrument or document furnished
pursuant thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the Receivables,
any other Agreement Document or any other instrument or document
furnished pursuant thereto; and (z) makes no representation or warranty
and assumes no responsibility with respect to the financial condition
of any of the Transferor, the Servicer, the Seller or any Originator or
the performance or observance by any of the Transferor, the Servicer,
the Seller or any Originator of any of its obligations hereunder or
under any other Agreement Document, or any instrument or document
furnished pursuant thereto.
(c) As of the date hereof (the "ASSIGNMENT EFFECTIVE DATE"),
the Exiting Bank Investor shall relinquish its rights and be released
from its obligations hereunder.
(d) Each of the Transferor, the Purchaser and the Agent hereby
consents to the foregoing assignment.
- SIGNATURE PAGES FOLLOW -
68
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.
WACKENHUT FUNDING CORPORATION,
as the Transferor
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Title: Treasurer and Assistant Secretary
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, No. ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
THE WACKENHUT CORPORATION,
as Servicer
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Title: Assistant Treasurer
----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
ENTERPRISE FUNDING CORPORATION,
as Purchaser
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Vice President
----------------------------------
c/o Global Securitization Services
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Agent
By: /s/ ▇. ▇▇▇ ▇▇▇▇
-------------------------------------
Title: Vice President
IL1-231-16-07
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Global Asset Backed
Securitization
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: BANK OF AMERICA, NATIONAL ASSOCIATION,
$76,500,000 as Remaining Bank Investor
By: /s/ ▇. ▇▇▇ ▇▇▇▇
-------------------------------------
Title: Vice President
ILl-231-16-07
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Global Asset Backed
Securitization
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
Commitment: The Bank of Nova Scotia,
$0 as Exiting Bank Investor
By: /s/ ▇. ▇. ▇▇▇▇▇
-------------------------------------
Title: Vice President
----------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-4
APPENDIX A
DEFINITIONS
This is APPENDIX A to the Amended and Restated Transfer and
Administration Agreement dated as of January 25, 2002 among Wackenhut Funding
Corporation, The Wackenhut Corporation, and Enterprise Funding Corporation, Bank
of America, National Association, as Agent and the Bank Investors (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.
A. DEFINED TERMS. As used in this Agreement, unless the context
requires a different meaning, the following terms have the meanings indicated
herein below (terms used but not defined herein shall have the meanings set
forth in the Revolving Credit Agreement):
"ADJUSTED AVERAGE MATURITY" has the meaning set forth in APPENDIX B.
"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 the Purchaser, any Bank Investor, the
Enterprise Liquidity Provider, each Enterprise Credit Support Provider, any
other Person providing credit or liquidity support to the Purchaser, or any Bank
Investor any permitted assignee of any Purchaser, any Bank Investor, Enterprise
Liquidity Provider, Enterprise Credit Support Provider or such other Person, any
assignee of any of the Purchaser's obligations to any Enterprise Liquidity
Provider, any Enterprise Credit Support Provider, any holder of a participation
interest in the rights and obligations of any Enterprise Liquidity Provider or
Enterprise Credit Support Provider, the Agent, Bank of America, and any holding
company of Bank of America.
"AFFILIATE" when used with respect to a Person, means any other Person
controlling, controlled by, or under common control with, such Person.
"AGENT" has the meaning set forth in the preamble.
"AGGREGATE UNPAIDS" means, at any time, an amount equal to the sum of
(i) the aggregate Earned Discount at such time, (ii) the Aggregate Total
Investment at such time, and (iii) all other amounts owed (whether due or
accrued) hereunder by the Transferor to the Purchaser, the Bank Investors, or
the Agent at such time.
"AGGREGATE PURCHASER'S INVESTMENTS" means, at any time, with respect
to the Purchaser or the Bank Investors, as the case may be, the sum of the
Dollar amount of all of the Purchaser's Investments.
"AGGREGATE PURCHASER'S SHARE" shall have the meaning set forth in
SECTION 2.4(A).
A-1
"AGGREGATE REQUIRED ALLOCATIONS" at any time means the sum of all
Required Allocations of all Undivided Interests.
"AGGREGATE UNPAID BALANCE" has the meaning set forth in SECTION 2.1 of
the Purchase and Sale Agreement.
"AGREEMENT DOCUMENTS" means this Agreement, the Purchase and Sale
Agreement, the Receivables Purchase Agreement, the Certificate of Assignments,
the other documents executed and delivered in connection with the Predecessor
Agreement, and the documents executed and delivered in connection herewith from
time to time.
"ALTERNATE REFERENCE RATE" has the meaning set forth in APPENDIX B.
"ASSIGNMENT AMOUNT" with respect to a Bank Investor shall mean at
anytime an amount equal to the lesser of (i) such Bank Investor's PRO RATA
portion of the Aggregate Purchaser's Investment at such time and (ii) such Bank
Investor's PRO RATA portion of the aggregate Unpaid Balance of the Eligible
Receivables in the Receivables Pool and (iii) such Bank Investor's unused
Commitment.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means an Assignment and
Assumption Agreement substantially in the form of SCHEDULE 13.5(B) attached
hereto.
"ASSIGNMENT EFFECTIVE DATE" has the meaning set forth in SECTION
15.20(C).
"AVERAGE MATURITY" has the meaning set forth in APPENDIX B.
"BANK COMMITMENT" means (i) with respect to each Bank Investor party
hereto, the commitment of such Bank Investor to make acquisitions from the
Transferor or the Purchaser in accordance herewith in an amount not to exceed
the dollar amount set forth opposite such Bank Investor's signature on the
signature page hereto under the heading "COMMITMENT", MINUS the dollar amount of
any Commitment or portion thereof assigned pursuant to an Assignment and
Assumption Agreement PLUS the dollar amount of any increase to such Bank
Investor's Commitment consented to by such Bank Investor prior to the time of
determination, (ii) with respect to any assignee of a Bank Investor party hereto
taking pursuant to an Assignment and Assumption Agreement, the commitment of
such assignee to make acquisitions from the Transferor or the Purchaser not to
exceed the amount set forth in such Assignment and Assumption Agreement MINUS
the dollar amount of any Commitment or portion thereof assigned pursuant to an
Assignment and Assumption Agreement prior to such time of determination and
(iii) with respect to any assignee of an assignee referred to in clause (ii),
the commitment of such assignee to make acquisitions from the Transferor or the
Purchaser not to exceed the amount set forth in an Assignment and Assumption
Agreement between such assignee and its assign.
"BANK RATE" has the meaning set forth in APPENDIX B.
"BUSINESS DAY" means a day on which both (a) Bank of America at its
office in Charlotte, North Carolina is open for business and (b) commercial
banks in New York City are not authorized or required to be closed for business.
A-2
"CERTIFICATE OF ASSIGNMENTS" means the certificate of assignment, by
the Transferor to a Purchaser, delivered in connection with the Predecessor
Agreement (or the predecessor agreement), or any replacement certificate..
"COLLECTION ACCOUNT" shall have the meaning set forth in SECTION 3.3
(E).
"COLLECTIONS" means, with respect to any Receivable, all funds which
either (a) are received by the Transferor, 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 the Transferor,
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 the
Transferor, any Originator or any other Person as a Collection pursuant to
SECTION 3.3; PROVIDED THAT, prior to such time as Wackenhut 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 the 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 1.1.
"COMMITMENT TERMINATION DATE" has the meaning set forth in SECTION 1
..5(A).
"CONCENTRATION LIMIT" has the meaning set forth in SECTION 2.3(B).
"CONDITIONS PRECEDENT" has the meaning set forth in SECTION 5.2.
"CONDUIT ASSIGNEE" shall mean any commercial paper conduit administered
by Bank of America and designated by Bank of America from time to time to accept
an assignment from the Purchaser of all or a portion of the Purchaser's
Investment.
"CONTRACT" means any writing evidencing a Receivable.
"CREDIT AND COLLECTION POLICY" shall mean the Servicer's credit and
collection policy or policies and practices, relating to Contracts and
Receivables existing on the date hereof, and as modified from time to time in
compliance with SECTION 7.3(C).
"DEEMED DEFAULT RATIO" means the ratio (expressed as a percentage and
rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed
as of each Month End Date by dividing (i) the sum of (a) the aggregate Unpaid
Balance of all Pool Receivables that were aged 151-180 days from the date of
invoice as of such Month End Date and (b) without duplication, all Pool
Receivables that during such prior month were transferred to attorneys and
A-3
collections, by (ii) the aggregate sales made by the Seller and the Originators
during the fiscal month that ended four fiscal months prior to such Month End
Date.
"DEFAULTED RECEIVABLE" means, without duplication, a Receivable: (a) as
to which any payment, or part thereof, remains unpaid for 120 days or longer
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 Credit and Collection Policy, would be fully reserved
against or required to be sent to attorneys or collection agencies or would be
charged-off the Transferor's or Servicer's books as uncollectible.
"DESIGNATED OBLIGOR" means, at any time, any Obligor of the Transferor
as to which the Agent has, at least three Business Days prior to the date of
determination, given written notice to the Transferor that such Obligor shall be
considered a Designated Obligor.
"DILUTION" means a net reduction in the unpaid balance of a Receivable
attributable to any non-cash item, including, without limitation, credits,
rebates, billing errors, cash discounts, volume discounts, allowances, disputes,
set-offs, counterclaims, chargebacks, returned or repossessed goods, sales and
marketing discounts, warranties, credit memos and any other adjustments that are
made in respect of Obligors but excluding any such reduction attributable to
such Receivable becoming a Defaulted Receivable.
"DILUTION RATIO" means the ratio (expressed as a percentage and rounded
to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of
each Month End Date by dividing (i) the aggregate reduction in the Unpaid
Balance of all Pool Receivables resulting from Dilutions during the fiscal month
ending on such Month End Date, by (ii) the aggregate sales made by the Seller
and the Originators during the fiscal month that ended two fiscal months prior
to such Month End Date.
"DILUTION RESERVE" has the meaning set forth in APPENDIX B.
"DISCOUNT FACTOR" has the meaning set forth in APPENDIX B.
"DOLLARS" and the symbol "$" means dollars constituting legal tender
for the payment of public and private debts in the United States of America.
"EARNED DISCOUNT" has the meaning set forth in APPENDIX B.
"ELIGIBLE RECEIVABLE" means, at any time, a Receivable:
(a) which has been originated by an Originator and sold to
Wackenhut pursuant to (and in accordance with) the Purchase and Sale
Agreement and has been sold by Wackenhut to the Transferor pursuant to
(and in accordance with) the Receivables Purchase Agreement, and to
which the Transferor has good title thereto, free and clear of all
adverse claims;
(b) which (together with the Collections), has been the
subject of either a valid transfer and assignment from the Transferor
to the Agent, on behalf of the
A-4
Purchaser and the Bank Investors, all of the Transferor's right, title
and interest therein or the grant of a first priority security interest
therein (and in the Collections and Related Security) effective until
the termination of this Agreement;
(c) with regard to which the related service has been rendered
and all other obligations performed by the Seller or an Originator, as
applicable (except as permitted by SECTION 2.3(B)(III)), and which is
generated by the 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 60 days of
the billing thereof;
(d) which, (i) if the perfection of the Agent's, on behalf of
the Purchaser and the Bank Investors, 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 the
Agent's undivided ownership interest therein is governed by the law of
any jurisdiction where the Uniform Commercial Code -- Secured
Transactions is not in force, the Transferor has furnished to the Agent
such opinions of counsel and other evidence as has reasonably been
requested, establishing to the reasonable satisfaction of the Agent
that the Agent'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;
(e) which is a domestic Receivable, the Obligor of which is a
United States resident, and is not an Affiliate of any of the
Transferor or, the Servicer or any other party hereto (other than Bank
of America);
(f) the Obligor of which is not a Designated Obligor;
(g) the Obligor of which is not the private sector Obligor of
Defaulted Receivables aggregating more than 50% of such Obligor's total
obligations to the Seller and each Originator;
(h) which is not a Defaulted Receivable;
(i) with regard to which the warranty of the Transferor in
SECTION 6.1(1) is true and correct;
(j) the sale of which (or 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;
(k) 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;
(l) 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;
A-5
(m) which is denominated and payable only in Dollars in the
United States;
(n) 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);
(o) 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 violation of any such law, rule or
regulation in any material respect if such violation would impair the
collectibility of such Receivable;
(p) which (i) satisfies all applicable requirements of the
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 the
Transferor following thirty days, notice;
(q) as to which the Agent has not notified the Transferor that
the Agent has determined, in its sole discretion, that such Receivable
(or class of Receivables) is not acceptable for purchase hereunder;
(r) which, if originated by Wackenhut, was originated in The
Wackenhut Corporation or Wackenhut Airline Services, Inc.;
(s) which does not include any amount payable for sales taxes,
Payroll taxes or any other tax; and
(t) the related Obligor of which is not, directly or
indirectly, an Affiliate of the Transferor 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
A-6
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.
"EURODOLLAR RATE" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
------------------------------
Rate 1 - Reserve Requirement Margin
"EVENT OF BANKRUPTCY" shall be deemed to have occurred with respect to
a Person if either:
(u) 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
(v) 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.
"EXITING BANK INVESTOR" has the meaning set forth in SECTION 15.20(A).
"FACILITY" has the meaning set forth in SECTION 1.3(A) of the Purchase
and Sale Agreement.
A-7
"FACILITY FEE" has the meaning set forth in the Fee Letter.
"FACILITY LIMIT" means an amount equal to $76,500,000.
"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 4.1(A).
"GAAP" or "Generally Accepted Accounting Principles" means generally
accepted accounting principles, being those principles of accounting set forth
in pronouncements of the Financial Accounting Standards Board, the American
Institute of Certified Public Accountants or which have other substantial
authoritative support and are applicable in the circumstances as of the date of
a report.
"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 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 Wackenhut and its
Subsidiaries for such period, determined on a consolidated basis after
eliminating revenues attributable to outstanding Minority Interests.
"HEADQUARTERS" shall mean the Transferor's office located at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
"INDEMNIFIED AMOUNTS" has the meaning set forth in SECTION 14.1.
"INDEMNIFIED PARTY" has the meaning set forth in SECTION 14.1.
"INITIAL PURCHASER" means the Transferor as Initial Purchaser under the
Purchase and Sale Agreement.
"INFORMATION" has the meaning set forth in SECTION 15.7.
"INFORMATION PROVIDER" has the meaning set forth in SECTION 15.7.
"INTEREST COMPONENT" shall mean, (i) with respect to any Related
Commercial Paper issued on an interest-bearing basis, the interest payable on
such Related Commercial Paper at its maturity and (ii) with respect to any
Related Commercial Paper issued on a discount basis, the portion of the face
amount of such Related Commercial Paper representing the discount incurred in
respect thereof (including any dealer commissions to the extent included as part
of such discount).
A-8
"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.
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.
"INVOLUNTARY FEDERAL PROCEEDING" has the meaning set forth in SECTION
11.2(B).
"LETTER OF CREDIT" or "LETTERS OF CREDIT" shall have the meaning set
forth in the Revolving Credit Agreement.
"LOCK-BOX AGREEMENT" means a letter agreement between the Transferor
and any Lock-Box Bank in form and substance satisfactory to the Agent.
"LOCK-BOX BANK" means any of the banks holding one or more lockbox
accounts for receiving Collections from Pool Receivables.
"LOSS RESERVE" has the meaning set forth in APPENDIX B.
"LOSS RESERVE DISCOUNT" has the meaning set forth in SECTION 2.1 of the
Purchase and Sale Agreement.
"LOSSES" means, at any time, with respect to the Receivables Pool, the
sum of (x) all Receivables theretofore sent to attorneys or collection agencies
to be collected plus (y), without duplication, all Receivables theretofore
charged-off the Transferor'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 the Transferor was of (y) Collections of such Pool
Receivables during such period.
"MAXIMUM PURCHASE LIMIT" has the meaning set forth in clause (x) of
SECTION 1.2(A).
"MONTH END DATE" means the last day of each fiscal month.
"NEGATIVE SPREAD FEE" has the meaning set forth in APPENDIX B.
"NET POOL BALANCE" has the meaning set forth in SECTION 2.3(A).
A-9
"NOTE FEE" has the meaning set forth in SECTION 4.1(B).
"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 the Seller at such
time a signatory to the Purchase and Sale Agreement.
"ORIGINATOR RECEIVABLE" means the indebtedness owed to any Originator
by any Obligor (without giving effect to any purchase under the Purchase and
Sale Agreement by The Wackenhut Corporation and any purchase under the
Receivables Purchase Agreement by Wackenhut Funding Corporation, in each case,
at any time) under a Contract.
"PERIODIC REPORT" means a report in substantially the form of SCHEDULE
3.4(A).
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability 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.
"PREDECESSOR AGREEMENT" has the meaning set forth in the PREAMBLE.
"PROGRAM FEE" shall have the meaning set forth in the Fee Letter;
PROVIDED, HOWEVER, that if at any time the certificate furnished to the Agent
pursuant to SECTIONS 7.5(A) or (B) hereof shall disclose that Consolidated
Indebtedness exceeds 40% of Consolidated Total Capitalization and does not
exceed 50% of Consolidated Total Capitalization, then 0.25% shall be added to
the Program Fee set forth in the Fee Letter (such incremental amount, the
"Step-up Fee") effective for the full fiscal quarter immediately following the
calculation date of such covenant.
"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 1.1(A).
"PURCHASE AND SALE AGREEMENT" means that certain Amended and Restated
Purchase and Sale Agreement dated as of December 30, 1997 between the Seller as
Initial Purchaser and Wackenhut Airline Services, Inc. and each other Affiliate
of the 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
forth in SECTION 9.1 of the Receivable Purchase Agreement.
"PURCHASE LIMIT" has the meaning set forth in SECTION 1 .2(A).
A-10
"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 1.6.
"PURCHASER" 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 2.2.
"PURCHASER'S SHARE" has the meaning set forth in SECTION 2.4.
"RATE VARIANCE FACTOR" has the meaning set forth in APPENDIX B.
"RECEIVABLE" means (i) the indebtedness owed to any Originator by any
Obligor (without giving effect to any purchase under the Purchase and Sale
Agreement by the Seller at any time) under a Contract and sold by any such
Originator to the Seller pursuant to the Purchase and Sale Agreement and sold by
the Seller to the Transferor pursuant to the Receivables Purchase Agreement, and
(ii) the indebtedness owed to the Seller by any Obligor (without giving effect
to any purchase under the Receivables Purchase Agreement by the Transferor at
any time) under a Contract and sold by the Seller to the Transferor pursuant to
the Receivables Purchase Agreement, in each case whether constituting an
account, chattel paper, instrument, investment property or general intangible,
arising in connection with the sale or lease of merchandise or the rendering of
Services by any Originator or the Seller, and includes the right to payment of
any interest or Finance Charges and other obligations of such Obligor with
respect thereto.
"RECEIVABLE PURCHASE TERMINATION DATE" has the meaning set forth in
SECTION 1.4 of the Receivable Purchase Agreement.
"RECEIVABLE PURCHASE TERMINATION EVENTS" has the meaning set forth in
SECTION 8.1 of the Receivable Purchase Agreement.
"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.
"RECEIVABLES PURCHASE AGREEMENT" means that certain Purchase Agreement
dated as of December 30, 1997, between the Seller and the Transferor, with
respect to the purchase of the Pool Receivables by the Transferor, as the same
may be altered or supplemented from time to time.
"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.
A-11
"REGULATORY CHANGE" means, relative to any Affected Party:
(a) any change in (or the adoption, implementation, phasein or
commencement of effectiveness of) any:
(i) United States federal or state law or foreign law
applicable to such Affected Party;
(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 1.1(B).
"REINVESTMENT TERMINATION DATE" means the second Business Day after the
delivery by the Purchaser to the Transferor of written notice that the Purchaser
elects to commence the amortization of its Purchaser's Investment or otherwise
liquidate its interest in the Receivables Pool.
"RELATED COMMERCIAL PAPER" shall mean Commercial Paper issued by the
Purchaser the proceeds of which were used to acquire, or refinance the
acquisition of, an interest in Receivables with respect to the Transferor.
"RELATED SECURITY" means, with respect to any Receivable, Seller
Receivable, or Originator Receivable, as the case may be: (a) all of the
Transferor's right, title and interest in and to all Contracts or other
agreements that relate to such Receivable; (b) all of the Transferor'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 the 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 the Purchaser in any Related Security is only to the extent of the
Purchaser's Undivided Interest, as more fully described in the definition of an
Undivided Interest.
A-12
"REMAINING BANK INVESTOR" has the meaning set forth in SECTION
15.20(A).
"REMAINING COLLECTIONS" has the meaning set forth in SECTION
3.1(A)(II).
"REQUIRED ALLOCATIONS" has the meaning set forth in SECTION 2.1(A).
"REQUIRED ALLOCATIONS LIMIT" has the meaning set forth in SECTION
1.2(B).
"RESERVE REQUIREMENT" has the meaning set forth in APPENDIX B.
"REVOLVING CREDIT AGREEMENT" shall mean that certain Credit Agreement,
dated as of November 13, 2000, as amended through the date hereof (without
giving effect to any further amendments thereto), by and among the Servicer,
Bank of America, Scotiabanc Inc., First Union National Bank and certain other
lenders.
"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 the Transferor 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 5.2 are not satisfied, and on or before the date, if any, designated by
the Agent in its sole discretion on at least one Business Day's notice to the
Transferor 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 1.5(A).
"SECURITY" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Seller" means Wackenhut.
"SELLER RECEIVABLES" means (i) the indebtedness owed to any Originator
by any Obligor (without giving effect to any purchase under the Purchase and
Sale Agreement by The Wackenhut Corporation and any purchase under the
Receivables Purchase Agreement by Wackenhut Funding Corporation, in each case,
at any time) under a Contract and sold by any such Originator to The Wackenhut
Corporation pursuant to the Purchase and Sale Agreement, and (ii) the
indebtedness owed to The Wackenhut Corporation by any Obligor (without giving
effect to any purchase under the Receivables Purchase Agreement by Wackenhut
Funding Corporation, at any time) under a Contract, in each case, and sold by
The Wackenhut Corporation to Wackenhut Funding Corporation pursuant to the
Receivables Purchase Agreement, in each case whether constituting an account,
chattel paper, instrument, investment property or general intangible, arising in
connection with the sale or lease of merchandise or the rendering of Services by
any Originator or the Wackenhut Corporation, and includes the right to
A-13
payment of any interest or Finance Charges and other obligations of such Obligor
with respect thereto.
"SERVICER" initially means The Wackenhut Corporation, and thereafter
the Person determined pursuant to SECTION 8.1.
"SERVICER TRANSFER EVENT" has the meaning set forth in SECTION 8.2.
"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
(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
2.3(C).
A-14
"STEP-UP FEE" has the meaning set forth in the definition of "Program
Fee."
"SUCCESSOR NOTICE" has the meaning set forth in SECTION 8.2.
"TERMINATION DATE" for any Undivided Interest means the Commitment
Termination Date.
"TERMINATION EVENT" has the meaning set forth in SECTION 11.1.
"TRANSFEROR" has the meaning set forth in the PREAMBLE.
"TRANSFEROR INFORMATION" has the meaning set forth in SECTION 15.8.
"TRANSFEROR INFORMATION PROVIDER" has the meaning set forth in SECTION
15.8.
"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 2.1.
"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.
"WACKENHUT" has the meaning set forth in the preamble.
"WACKENHUT FAMILY" means (i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and other lineal descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, 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 Agent shall select,
after consultation with the Transferor, pursuant to SECTIONS 1.3(A);
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
Transferor;
A-15
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 the UCC in the State of New York, 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-16
Schedule 2.3(c)
FORM OF SPECIAL CONCENTRATION LIMIT CERTIFICATE
Reference is made to that certain Amended and Restated
Transfer and Administration Agreement dated as of January 25, 2002 (as at any
time amended or otherwise modified, the "Agreement") among Wackenhut Funding
Corporation, a Florida corporation, The Wackenhut Corporation, Enterprise
Funding Corporation, Bank of America, National Association, as Agent, and the
Bank Investors. Capitalized terms used herein have the meaning assigned thereto
in the Agreement. For purposes of Section 2.3(c) of the Agreement, the following
Special Concentration Limits shall be in effect for the period from January 25,
2002 until such time as the Administrative Agent delivers to the Transferor and
the Servicer written notice of a change in the Special Concentration Limits:
(a) Any Obligor rated BBB or Baa2 or better by Standard &
Poor's Corporation and ▇▇▇▇▇'▇ Investors Service, Inc., respectively,
may have a Special Concentration Limit of 5% of the Aggregate Unpaid
Balance of the Eligible Receivables in the Receivables Pool at any
time.
Transferor shall identify the specific Obligors to whom the
Special Concentration Limits described above should be applied by such form of
notice as the Agent may from time to time require.
Date: BANK OF AMERICA, NATIONAL ASSOCIATION,
---------------------------- as Agent
By:
-------------------------------------
Its:
-------------------------------------
Schedule 3.4(a)
FORM OF PERIODIC REPORT
A-2
Schedule 6.1(j)
LITIGATION (TRANSFEROR)
None.
Schedule 6.1(n)
LIST OF LOCATION OF TRANSFEROR'S BOOKS, RECORDS AND DOCUMENTS
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ #▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Schedule 6.1(v)
TRADENAMES OF TRANSFEROR
None.
Schedule 6.2(l)
LITIGATION (SERVICER)
None.
Schedule 6.2(n)
LIST OF LOCATION OF SERVICER'S BOOKS, RECORDS AND DOCUMENTS
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ #▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Schedule 6.2(o)
LIST OF LOCKBOX BANKS AND ACCOUNTS
Bank Name Aba Account Number
--------- --- --------------
Bank of America - Global ▇▇▇▇▇▇▇▇▇
3750156489
Bank of America - Global ▇▇▇▇▇▇▇▇▇
3751772727
Schedule 13.5(b)
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Reference is made to the Second Amended and Restated Transfer
and Administration Agreement dated as of January 25, 2002 as it may be amended
or otherwise modified from time to time (as so amended or modified, the
"Transfer Agreement") among Wackenhut Funding Corporation, as transferor (in
such capacity, the "Transferor"), The Wackenhut Corporation, individually and as
servicer (in such capacity, the "Servicer"), Enterprise Funding Corporation, as
purchaser (in such capacity, the "Purchaser") and Bank of America, National
Association, as agent for Enterprise and certain financial institutions from
time to time a party thereto as Bank Investors (in such capacity, the "Agent").
Terms defined in the Transfer Agreement are used herein with the same meaning.
_______________________ (the "Assignor") and _________________________
(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, without
recourse and without representation and warranty, and the Assignee hereby
purchases and assumes from the Assignor, an interest in and to all of the
Assignor's rights and obligations under the Transfer Agreement and the other
Agreement Documents. Such interest expressed as a percentage of all rights and
obligations of the Bank Investors being equal to the percentage equivalent of a
fraction the numerator of which is $_____________ and the denominator of which
is the Facility Limit. After giving effect to such sale and assignment, the
Assignee's Commitment will be as set forth on the signature page hereto.
2. [In consideration of the payment of $___________________, being
_____% of the existing Aggregate Purchaser's Investment, and of $
________________, being ____% of the aggregate unpaid accrued Earned Discount,
receipt of which payment is hereby acknowledged, the Assignor hereby assigns to
the Agent for the account of the Assignee, and the Assignee hereby purchases
from the Assignor, a _____% interest in and to all of the Assignor's right,
title and interest in and to the Aggregate Purchaser's Investment purchased by
the undersigned on ______ ___, 20__ under the Transfer Agreement.][include if an
existing Aggregate Purchaser's Investment is being assigned.]
3. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Transfer
Agreement, any other Agreement Document or any other instrument or document
furnished pursuant thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Transfer Agreement or the Receivables,
any other Agreement Document or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any of the Transferor,
the Servicer, the Seller or any Originator or the performance or observance by
any of the Transferor, the Servicer, the Seller or any Originator of any of its
A-2
obligations under the Transfer Agreement, any other Agreement Document, or any
instrument or document furnished pursuant thereto.
4. The Assignee (i) confirms that it has received a copy of the
Transfer Agreement, the Receivables Purchase Agreement and the Amended and
Restated Purchase and Sale Agreement, together with copies of the financial
statements referred to in Sections 7.2 and 7.5 of the Transfer Agreement, to the
extent delivered through the date of this Agreement, and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment; (ii) agrees that it will, independently
and without reliance upon the Agent, any of its Affiliates, the Assignor or any
other Purchaser and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Transfer Agreement and any other Agreement Document;
(iii) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Transfer Agreement
and the other Agreement Documents as are delegated to the Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental
thereto; (iv) agrees that it will perform in accordance with their terms all of
the obligations which by the terms of the Transfer Agreement are required to be
performed by it as a Bank Investor; and (v) specifies as its address for notices
and its account for payments the office and account set forth beneath its name
on the signature pages hereof[; and (vi) attaches the forms prescribed by the
Internal Revenue Service of the United States of America certifying as to the
Assignee's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Transfer Agreement or such other documents as are necessary to indicate that
all such payments are subject to such rates at a rate reduced by an applicable
tax treaty].1
5. The effective date for this Assignment shall be the later of (i) the
date on which the Agent receives this Assignment executed by the parties hereto
and receives the consent of the Transferor and the Agent, on behalf of the
Purchaser, and (ii) the date of this Assignment (the "Effective Date").
Following the execution of this Assignment and Assumption Agreement and the
consent of the Transferor and the Agent, on behalf of the Purchaser, this
Assignment and Assumption Agreement will be delivered to the Agent for
acceptance and, with respect to the Assignment and Assumption Agreement,
recording by the Agent.
6. Upon such acceptance and recording, as of the Effective Date, (i)
the Assignee shall be a party to the Transfer Agreement and, to the extent
provided in this Assignment, have the rights and obligations of a Bank Investor
thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment, relinquish its rights and be released from its obligations under the
Transfer Agreement.
7. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments under the Transfer Agreement in respect
of the interest assigned hereby (including, without limitation, all payments in
respect of such interest in Aggregate Purchaser's Investment, Earned Discount
and fees) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Transfer Agreement for periods prior to the
Effective Date directly between themselves.
--------
1 If the Assignee is organized under the laws of a jurisdiction outside the
United States.
A-3
8. This Assignment shall be governed by, and construed in accordance
with, the laws of the State of New York.
This Assignment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
the signature page to this Assignment by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption to be executed by their respective officers thereunto
duly authorized as of the __________ day of _______________, 20__.
Remaining [NAME OF ASSIGNOR]
COMMITMENT
By:
-------------------------------------
Name:
Title:
COMMITMENT [NAME OF ASSIGNEE]
----------
$------------------
By:
-------------------------------------
Name:
Title:
Address for notices and Account
for payments:
[Address]
[Account]
Consented to this ____ day
of _________, 20__
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Administrative Agent
By:
----------------------------------------
Name:
Title.
[TRANSFEROR]
By:
----------------------------------------
Name:
Title:
Accepted this _________ day
of ____________, 20__
BANK OF AMERICA, NATIONAL ASSOCIATION
as Agent
By:
----------------------------------------
Name:
Title:
A-4