Exhibit 10.1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Dated as of May 23, 2002
Among
MCI WORLDCOM RECEIVABLES CORPORATION,
as Seller,
and
WORLDCOM, INC.,
as Servicer,
and
CORPORATE ASSET FUNDING COMPANY, INC.
CHARTA CORPORATION,
DELAWARE FUNDING CORPORATION,
FALCON ASSET SECURITIZATION CORPORATION,
JUPITER SECURITIZATION CORPORATION,
PARADIGM FUNDING LLC,
GIRO BALANCED FUNDING CORPORATION, and
LIBERTY STREET FUNDING CORPORATION
as Purchasers
and
BANK ONE, NA (Main Office Chicago)
as Managing Agent for Falcon Asset Securitization Corporation
and Jupiter Securitization Corporation
and
WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH,
as Managing Agent for the Paradigm Funding LLC
and
BAYERISCHE LANDESBANK, NEW YORK BRANCH,
as Managing Agent for Giro Balanced Funding Corporation
and
THE BANK OF NOVA SCOTIA,
as Managing Agent for Liberty Street Funding Corporation
and
CITICORP NORTH AMERICA, INC.,
as Managing Agent for Corporate Asset
Funding Company, Inc. and Charta Corporation and as Co-Lead Manager
and
JPMORGAN CHASE BANK,
as Managing Agent for Delaware Funding Corporation, as Co-Lead Manager
and as Administrative Agent
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
SECTION 1.01 CERTAIN DEFINED TERMS.....................................3
SECTION 1.02 OTHER TERMS..............................................33
SECTION 1.03 COMPUTATION OF TIME PERIODS..............................33
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01 FACILITY.................................................33
SECTION 2.02 MAKING PURCHASES.........................................34
SECTION 2.03 TERMINATION OR REDUCTION OF THE PURCHASE LIMITS..........35
SECTION 2.04 RECEIVABLE INTEREST......................................36
SECTION 2.05 NON-LIQUIDATION SETTLEMENT PROCEDURES....................36
SECTION 2.06 LIQUIDATION SETTLEMENT PROCEDURES........................41
SECTION 2.07 GENERAL SETTLEMENT PROCEDURES............................42
SECTION 2.08 PAYMENTS AND COMPUTATIONS, ETC...........................43
SECTION 2.09 FEES.....................................................44
SECTION 2.10 INCREASED COSTS..........................................44
SECTION 2.11 INCREASED CAPITAL........................................45
SECTION 2.12 TAXES....................................................46
SECTION 2.13 SHARING OF PAYMENTS, ETC.................................48
SECTION 2.14 SUBSTITUTION OF PURCHASERS...............................48
ARTICLE III CONDITIONS PRECEDENT
SECTION 3.01 CONDITIONS PRECEDENT TO EFFECTIVENESS....................49
SECTION 3.02 CONDITIONS PRECEDENT TO ALL PURCHASES AND
REINVESTMENTS........................................52
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE SELLER.............53
SECTION 4.02 REPRESENTATIONS AND WARRANTIES OF THE SERVICER...........57
ARTICLE V GENERAL COVENANTS OF THE SELLER AND THE SERVICER
SECTION 5.01 AFFIRMATIVE COVENANTS OF THE SELLER......................58
SECTION 5.02 REPORTING REQUIREMENTS OF THE SELLER.....................62
SECTION 5.03 NEGATIVE COVENANTS OF THE SELLER.........................63
SECTION 5.04 AFFIRMATIVE COVENANTS OF THE SERVICER....................66
SECTION 5.05 NEGATIVE COVENANTS OF THE SERVICER.......................67
ARTICLE VI ADMINISTRATION AND COLLECTION
SECTION 6.01 DESIGNATION OF SERVICER..................................68
SECTION 6.02 DUTIES OF SERVICER.......................................69
SECTION 6.03 RIGHTS OF THE ADMINISTRATIVE AGENT.......................70
SECTION 6.04 RESPONSIBILITIES OF EACH ORIGINATOR AND THE SELLER.......71
SECTION 6.05 FURTHER ACTIONS EVIDENCING PURCHASES.....................72
SECTION 6.06 THE CONCENTRATION ACCOUNT AND THE DEPOSIT ACCOUNT........72
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ARTICLE VII EVENTS OF TERMINATION
SECTION 7.01 EVENTS OF TERMINATION....................................73
ARTICLE VIII THE MANAGING AGENTS AND THE ADMINISTRATIVE AGENT
SECTION 8.01 AUTHORIZATION AND ACTION.................................77
SECTION 8.02 ADMINISTRATIVE AGENT'S AND MANAGING AGENT'S
RELIANCE, ETC........................................77
SECTION 8.03 ADMINISTRATIVE AGENT AND MANAGING AGENTS.................78
SECTION 8.04 PURCHASERS' PURCHASE DECISIONS...........................78
SECTION 8.05 INDEMNIFICATION..........................................79
SECTION 8.06 SUCCESSOR ADMINISTRATIVE AGENT...........................79
SECTION 8.07 CO-LEAD MANAGERS.........................................80
ARTICLE IX ASSIGNMENT OF RECEIVABLE INTERESTS
SECTION 9.01 ASSIGNMENT...............................................80
SECTION 9.02 ASSIGNMENT OF RIGHTS AND OBLIGATIONS.....................82
SECTION 9.03 ANNOTATION OF CERTIFICATE................................83
ARTICLE X INDEMNIFICATION
SECTION 10.01 INDEMNITIES.............................................83
ARTICLE XI GRANT OF SECURITY INTEREST
SECTION 11.01 GRANT OF SECURITY INTEREST..............................86
SECTION 11.02 SECURITY FOR SECURED OBLIGATIONS........................86
SECTION 11.03 FURTHER ASSURANCES......................................86
SECTION 11.04 ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT.........87
SECTION 11.05 ADMINISTRATIVE AGENT MAY PERFORM........................87
SECTION 11.06 THE ADMINISTRATIVE AGENT'S DUTIES.......................87
SECTION 11.07 REMEDIES................................................87
ARTICLE XII MISCELLANEOUS
SECTION 12.01 AMENDMENTS, ETC.........................................88
SECTION 12.02 NOTICES, ETC............................................89
SECTION 12.03 BINDING EFFECT; ASSIGNABILITY...........................90
SECTION 12.04 COSTS AND EXPENSES......................................90
SECTION 12.05 NON-BUSINESS DAYS.......................................91
SECTION 12.06 NO PROCEEDINGS..........................................91
SECTION 12.07 OBLIGATIONS OF THE PURCHASERS; NO RECOURSE..............91
SECTION 12.08 CONFIDENTIALITY.........................................92
SECTION 12.09 GOVERNING LAW...........................................92
SECTION 12.10 CONSENT TO JURISDICTION, ETC............................92
SECTION 12.11 EXECUTION IN COUNTERPARTS...............................93
SECTION 12.12 INTENT OF THE PARTIES...................................93
SECTION 12.13 ENTIRE AGREEMENT........................................93
SECTION 12.14 SEVERABILITY OF PROVISIONS..............................93
SECTION 12.15 AMENDMENT, RESTATEMENT AND CONSENT......................94
SECTION 12.16 WAIVER OF JURY TRIAL....................................94
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EXHIBITS
EXHIBIT A Form of Assignment
EXHIBIT B Form of Assignment and Acceptance
EXHIBIT C Form of Certificate
EXHIBIT D Form of Monthly Report
EXHIBIT E Form of Collection Notice
EXHIBIT F Form of Receivables Contribution and Sale Agreement
EXHIBIT G Form of Consent and Agreement
EXHIBIT H-1A Form of Opinion of Hall, Estill, Hardwick, Gable, Golden &
▇▇▇▇▇▇, P.C., Counsel to the Seller and the Originators
("true sale" and non-substantive consolidation opinions)
EXHIBIT H-1B Form of Opinion of Hall, Estill, Hardwick, Gable, Golden &
▇▇▇▇▇▇, P.C., Counsel to the Seller and the Originators
EXHIBIT H-2 Form of Opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Assistant Corporate
General Counsel of WORLDCOM
EXHIBIT H-3 Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Wood, New York
counsel to the Seller, WORLDCOM and the Originators
EXHIBIT H-4 Form of Opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Counsel of
WORLDCOM
EXHIBIT H-5 Form of Opinion of Morris, Nichols, Arsht & ▇▇▇▇▇▇▇,
Delaware counsel to the Seller and the Originators
EXHIBIT I Form of Parent Undertaking
EXHIBIT J Form of Compliance Certificate
EXHIBIT K Form of Demand Note
EXHIBIT L Form of Daily Report
EXHIBIT M Form of Weekly Report
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SCHEDULES
SCHEDULE I Lock-Box Banks and Lock-Box Accounts
SCHEDULE II Credit and Collection Policy
SCHEDULE III Location of the Seller's Principal Place of Business, Chief
Executive Office and Office Where Records are Kept
SCHEDULE IV Forms of Contracts
SCHEDULE V WORLDCOM Press Releases and Other Information since
March 31, 2002
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THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
This THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (this
"AGREEMENT") dated as of May 23, 2002, amends and restates that certain Second
Amended and Restated Receivables Purchase Agreement dated as of October 24,
2001, as amended by Amendment No. 1 thereto dated as of March 26, 2002 (such
Amendment No. 1 being the "AMENDMENT") and the May 9, 2002 Letter Waiver and
Amendment (as defined in Section 1.01 hereof) (such Agreement as so amended
being the "SECOND A&R AGREEMENT"), which amended and restated that certain
Amended and Restated Receivables Purchase Agreement dated as of December 14,
1999 (the "A&R AGREEMENT"), which amended and restated that certain Receivables
Purchase Agreement, dated as of August 20, 1999 (the "ORIGINAL AGREEMENT"), and
is among:
(i) MCI WORLDCOM RECEIVABLES CORPORATION, a Delaware corporation
(the "SELLER"),
(ii) WORLDCOM, INC., a Georgia corporation ("WORLDCOM"), as Servicer
(as hereinafter defined),
(iii) CORPORATE ASSET FUNDING COMPANY, INC., a Delaware corporation
("CAFCO"),
(iv) CHARTA CORPORATION, a Delaware corporation ("CHARTA" and,
together with CAFCO, the "CNAI CONDUITS"),
(v) DELAWARE FUNDING CORPORATION, a Delaware corporation ("DELAWARE
Funding "),
(vi) FALCON ASSET SECURITIZATION CORPORATION, a Delaware corporation
("FASC"),
(vii) JUPITER SECURITIZATION CORPORATION, a Delaware corporation
("JSC" and, together with FASC, the "BANK ONE CONDUITS"),
(viii) PARADIGM FUNDING LLC, a Delaware limited liability company
("PARADIGM"),
(ix) GIRO BALANCED FUNDING CORPORATION, a Delaware corporation
("GBFC"),
(x) LIBERTY STREET FUNDING CORPORATION, a Delaware corporation
("LIBERTY"),
(xi) BANK ONE, NA (Main Office Chicago), a national banking
association ("BANK ONE"), as managing agent (the "BANK ONE CONDUITS
MANAGING Agent") for FASC and JSC and the Bank One Conduits' respective
successive Assignees (as defined below),
(xii) WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH, a
German bank organized under the laws of the State of North Rhine
Westphalia, acting by and through its New York Branch ("WEST LB"), as
managing agent (the "PARADIGM MANAGING AGENT") for Paradigm and Paradigm's
successive Assignees (as defined below),
(xiii) BAYERISCHE LANDESBANK, NEW YORK BRANCH, a German bank
organized under the laws of the State of Bavaria, acting by and through
its New York Branch ("BLBNY"), as managing agent (the "GBFC MANAGING
AGENT") for GBFC and GBFC's successive Assignees (as defined below),
(xiv) THE BANK OF NOVA SCOTIA, a Canadian chartered commercial bank,
acting by and through its New York Agency ("NOVA SCOTIA"), as managing
agent (the "LIBERTY MANAGING AGENT") for Liberty and Liberty's successive
Assignees (as defined below),
(xv) CITICORP NORTH AMERICA, INC., a Delaware corporation ("CNAI"),
as managing agent (the " CNAI CONDUITS MANAGING AGENT") for CAFCO and
CHARTA and the CNAI Conduits' respective successive Assignees (as defined
below), and as Co-Lead Manager hereunder, and
(xvi) JPMORGAN CHASE BANK, a New York banking corporation
("JPMORGAN"), as managing agent (the "DELAWARE FUNDING MANAGING AGENT")
for Delaware Funding and Delaware Funding's successive Assignees (as
defined below), as Co-Lead Manager, and as the administrative agent
(together with any successor administrative agent appointed pursuant to
SECTION 8.06, the "ADMINISTRATIVE AGENT") for itself and the other
Managing Agents (as defined below), the Purchasers (as defined below), and
the other Owners (as defined below).
PRELIMINARY STATEMENTS:
(1) Certain terms which are capitalized and used throughout this
Agreement (in addition to those defined above) are defined in ARTICLE I of
this Agreement.
(2) The Seller has purchased or otherwise acquired from CMC,
Partners and each of the Originators, and will continue to purchase from
time to time from each of the Originators, Pool Receivables in which the
Seller has sold, and intends to continue selling, interests referred to
herein as Receivable Interests.
(3) Each of CAFCO, CHARTA, FASC, JSC, GBFC, Delaware Funding,
Paradigm and Liberty (collectively, the "PURCHASERS", and each a
"PURCHASER") desires to continue to purchase Receivable Interests from the
Seller.
(4) In consideration of the reinvestment in Pool Receivables of
daily Collections (other than with regard to accrued Yield, the Servicer
Fee and other amounts accrued or payable by the Seller hereunder)
attributable to a Receivable Interest, the Seller has sold and intends to
continue to sell to each Owner of such Receivable Interests
2
additional interests in the Pool Receivables as part of such Receivable
Interests until such reinvestment is terminated.
(5) WORLDCOM has been requested and is willing to act as Servicer
pursuant to the terms hereof.
(6) JPMorgan has been requested and is willing to act as
Administrative Agent pursuant to the terms hereof.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ADJUSTED LIBO RATE" means, for any Settlement Period for any
Receivable Interest, an interest rate per annum equal to the rate per annum
obtained by dividing (i) the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Dow ▇▇▇▇▇ Market Service Page 3750 (or any
successor page) as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 a.m. (London time) two Business Days before the
first day of such Settlement Period for a term comparable to such Settlement
Period (PROVIDED that if for any reason such rate is not available, the term
"Adjusted LIBO Rate" shall mean, for any Settlement Period for any Receivable
Interest, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in U.S. dollars at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Settlement Period for a
term comparable to such Settlement Period; PROVIDED, HOWEVER, that if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%)) by (ii) a percentage equal to 100% minus the Eurodollar
Reserve Percentage (as defined below) for such Settlement Period. The
"EURODOLLAR RESERVE Percentage" for any Settlement Period means the reserve
percentage applicable during such Settlement Period under regulations issued
from time to time by the Board of Governors of the Federal Reserve System (or,
if more than one such percentage shall be so applicable, the daily average of
such percentages for those days in such Settlement Period during which any such
percentage shall be so applicable) for determining the maximum reserve
requirement (including, but not limited to, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve System in
respect of liabilities or assets consisting of or including eurocurrency
liabilities (as that term is defined in Regulation D of the Board of Governors
of the Federal Reserve System as in effect from time to time) having a term
equal to such Settlement Period.
3
"ADVERSE CLAIM" means a lien, security interest or other charge or
encumbrance, or other type of preferential arrangement.
"AFFILIATE" (i) as to any Person (including any party hereto), means
any other Person that (x) directly or indirectly, is in control of, is
controlled by or is under common control with such Person or (y) is a director
or officer of such Person or of any other Person that, directly or indirectly,
is in control of, is controlled by or is under common control with such Person,
and (ii) in the case of (A) any Purchaser, means its Managing Agent, any other
Purchaser for which such Managing Agent acts as managing agent hereunder and any
other Person who has a relationship to such Managing Agent comparable to that of
such Purchaser's relationship to such Managing Agent as of (i) the First Closing
Date in the case of JSC or Delaware Funding, (ii) the Second Closing Date in the
case of Paradigm, GBFC or Liberty or (iii) the New Closing Date in the case of
CHARTA, CAFCO or FASC, and (B) any Managing Agent, means each Purchaser for
which such Managing Agent acts as managing agent hereunder.
"AFFILIATED OBLIGOR" means any Obligor which is an Affiliate of
another Obligor.
"ALTERNATE BASE RATE" means a fluctuating interest rate per annum as
shall be in effect from time to time, which rate per annum shall at all times be
equal to the highest of:
(a) the rate of interest announced publicly by the Administrative
Agent in New York, New York, from time to time as the Administrative
Agent's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no
nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1% per
annum, plus (ii) the rate obtained by dividing (A) the latest three-week
moving average of secondary market morning offering rates in the United
States for three-month certificates of deposit of major United States
money market banks, such three-week moving average (adjusted to the basis
of a year of 360 days) being determined weekly on each Monday (or, if
such day is not a Business Day, on the next succeeding Business Day) for
the three-week period ending on the previous Friday by the Administrative
Agent on the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New York or, if
such publication shall be suspended or terminated, on the basis of
quotations for such rates received by the Administrative Agent from three
New York certificate of deposit dealers of recognized standing selected
by the Administrative Agent, by (B) a percentage equal to 100% minus the
average of the daily percentages specified during such three-week period
by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
but not limited to, any emergency, supplemental or other marginal reserve
requirement) for the Administrative Agent with respect to liabilities
consisting of or including (among other liabilities) three-month U.S.
dollar non-personal time deposits in the United States, plus (iii) the
average during such three-week period of the annual assessment rates
estimated by the Administrative Agent for determining the then current
annual assessment payable by the Administrative Agent to the Federal
Deposit Insurance Corporation (or any successor) for insuring U.S. dollar
deposits of the Administrative Agent in the United States, and
4
(c) 1/2 of 1% per annum above the Federal Funds Rate.
"AMENDMENT CLOSING DATE" means March 26, 2002.
"APPLICABLE MARGIN" means, for any day, a percentage per annum equal
to 2.50% per annum until the effectiveness of the New WORLDCOM Credit Agreement,
and on and after the effectiveness of the New WORLDCOM Credit Agreement, 0.25 of
1% per annum above that all-in, fully drawn, cost (including applicable margin,
utilization fees and facility fees) which WORLDCOM would pay for "Eurodollar
Rate Borrowings" (or the equivalent term) under and as defined in the New
WORLDCOM Credit Agreement on such day above, and in addition to, the "Adjusted
Eurodollar Rate" (or the equivalent term) under and as defined in the New
WORLDCOM Credit Agreement.
"APPROVED ORIGINATOR" means Communications, Network, Telecom, UUNET
and any other Originator approved in writing by all of the Managing Agents.
"ASSIGNEE" (i) in the case of CAFCO or CHARTA, means CNAI, or CAFCO
or CHARTA or any of their respective Affiliates, (ii) in the case of FASC or
JSC, means Bank One, FASC, JSC or any of their respective Affiliates, (iii) in
the case of GBFC, means BLBNY, GBFC or any of their respective Affiliates, (iv)
in the case of Delaware Funding, means JPMorgan or Delaware Funding or any of
their respective Affiliates, (v) in the case of Paradigm, means West LB or
Paradigm or any of their respective Affiliates, (vi) in the case of Liberty,
means Nova Scotia, Liberty or any of their respective Affiliates, (vii) in the
case of any Purchaser other than CAFCO, CHARTA, FASC, JSC, GBFC, Delaware
Funding, Paradigm or Liberty, means any of such Purchaser's Affiliates or (viii)
in the case of any Purchaser or Assignee, means any other Person as the assignee
of such Purchaser's or Assignee's Receivable Interest pursuant to SECTION 9.01
or the assignee of such Purchaser's or Assignee's rights and obligations under
this Agreement pursuant to SECTION 9.02.
"ASSIGNEE RATE" means, for any Settlement Period for any Receivable
Interest, an interest rate per annum equal, at the Seller's election upon notice
to the Administrative Agent at least three Business Days (in the case of the
rate referred to in clause (a) below) or one Business Day (in the case of the
rate referred to in clause (b) below) before the first day of such Settlement
Period, to either (a) the Applicable Margin in effect from time to time PLUS the
Adjusted LIBO Rate for such Settlement Period or (b) the Alternate Base Rate in
effect from time to time (or if no such notice is given selecting the rate
referred to in clause (a) above or the rate referred to in clause (b) above for
any Settlement Period, the Seller will be deemed to have selected the rate
referred to in clause (b) above for such Settlement Period); PROVIDED, HOWEVER,
that:
(i) in the case of any such Settlement Period of one to and
including 29 days, the "Assignee Rate" for such Settlement Period for such
Receivable Interest shall be an interest rate per annum equal to the
Alternate Base Rate in effect from time to time during such Settlement
Period; and
(ii) if either (A) the introduction of or any change in or in the
interpretation of any law or regulation shall make it unlawful, or any
central bank or other governmental authority asserts that it is unlawful,
for any Owner of such Receivable Interest to obtain
5
funds in the London interbank market during such Settlement Period, or (B)
the Adjusted LIBO Rate will not adequately reflect the cost to such Owner
(or if Participants own interests in such Receivable Interest, the
Participants owning 51% in aggregate amount of the interests in such
Receivable Interest) of making a Purchase of or maintaining such
Receivable Interest during such Settlement Period, then the "Assignee
Rate" for such Settlement Period for such Receivable Interest shall be an
interest rate per annum equal to the Alternate Base Rate in effect from
time to time.
"ASSIGNMENT" means an assignment, in substantially the form of
Exhibit A hereto, by which a Receivable Interest may be assigned pursuant to
SECTION 9.01.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance, in
substantially the form of Exhibit B hereto, entered into by a Purchaser and an
Assignee pursuant to SECTION 9.02.
"AUTHORIZATIONS" means all filings, recordings, and registrations
with, and all validations or exemptions, approvals, orders, authorizations,
consents, franchises, licenses, certificates and permits from any Governmental
Authority.
"BILLED RECEIVABLE" means any Receivable that is not an Unbilled
Receivable.
"BILLED POOL RECEIVABLE" means any Pool Receivable that is at the
time of determination a Billed Receivable.
"BUSINESS DAY" means any day (other than a Saturday or Sunday) on
which (i) banks are not authorized or required to close in New York, New York,
(ii) for purposes of SECTIONS 2.05, 2.06 and 2.07, WORLDCOM is open for any
business, and (iii) if the term "Business Day" is used in connection with the
Adjusted LIBO Rate, dealings in United States dollars are carried on in the
London interbank market.
"CAPITAL" means, in respect of any Receivable Interest, the original
amount paid to the Seller for such Receivable Interest at the time of its
acquisition by a Purchaser pursuant to SECTIONS 2.01 and 2.02, reduced from time
to time by Collections received and distributed on account of such Capital
pursuant to SECTION 2.05 or 2.06; PROVIDED, HOWEVER, that if such Capital of
such Receivable Interest shall have been reduced by any distribution of any
portion of Collections and thereafter such distribution is rescinded or must
otherwise be returned for any reason, such Capital of such Receivable Interest
shall be increased by the amount of such distribution, all as though such
distribution had not been made.
"CERTIFICATE" means a certificate of assignment by the Seller
delivered to the Administrative Agent on behalf of any Owner, in substantially
the form of Exhibit C hereto, evidencing each Receivable Interest of such Owner.
"CLAIM" means, in respect of any Obligor, any claim or other right
that shall have been evidenced in a written document between such Obligor and
the Seller or any Originator, or otherwise asserted in a written notice by such
Obligor against the Seller or any Originator, in each case for payment of any
amount or amounts for any reason whatsoever.
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"CMC" means MCI WORLDCOM Capital Management Corporation, a Delaware
corporation.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COLLECTION DELAY FACTOR" means 1.25 or such other number as the
Administrative Agent (with the consent or at the request of all the Managing
Agents) may select upon three Business Days' notice to the Seller.
"COLLECTION NOTICE" means a letter agreement, in substantially the
form of Exhibit E hereto and in respect of a Lock-Box Account, among the owner
of such Lock-Box Account, the applicable Lock-Box Bank and the Administrative
Agent.
"COLLECTIONS" means, with respect to any Pool Receivable, all cash
collections and other cash proceeds of such Pool Receivable, including, without
limitation, (i) all cash proceeds of the Related Security with respect to such
Pool Receivable and (ii) any Collections of such Pool Receivable deemed to have
been received, and actually paid, pursuant to SECTION 2.07.
"COMMERCIAL CONTRACT" means an agreement between any Originator and
an Obligor, in substantially the form of one of the forms of written contract
set forth in Schedule IV hereto or otherwise approved by the Administrative
Agent (with the consent or at the request of the Majority Managing Agents) or,
in the case of any open account agreement, as evidenced by one of the forms of
invoices set forth in Schedule IV hereto or otherwise approved by the
Administrative Agent (with the consent or at the request of the Majority
Managing Agents), pursuant to or under which such Obligor shall be obligated to
pay for telecommunication goods or services from time to time.
"COMMERCIAL RECEIVABLES" means Receivables originated by UUNET,
Communications or Network.
"COMMUNICATIONS" means MCI WORLDCOM Communications, Inc., a
Delaware corporation.
"CONCENTRATION ACCOUNT" means the deposit account of the Seller
(account number 1233103063, ABA Routing number ▇▇▇▇▇▇▇▇▇) maintained with the
Concentration Bank at its office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
"CONCENTRATION BANK" means Bank of America, N.A.
"CONCENTRATION LIMIT PERCENTAGE" means (a) for any Obligor that has
a short-term debt rating from S&P of "A-1+" (or its equivalent), 9% (b) for any
Obligor that has a short-term debt rating from S&P of at least "A-1" and from
▇▇▇▇▇'▇ of at least "P-1" (or its equivalent), 7%, (c) for any Obligor that has
a short-term debt rating from S&P of at least "A-2" and from ▇▇▇▇▇'▇ of at least
"P-2" (or its equivalent), 5%, and (d) for all other Obligors, 3.5%; PROVIDED,
HOWEVER, that in the case of an Obligor with any Affiliated Obligor, the
Concentration Limit Percentage shall be calculated as if such Obligor and such
Affiliated Obligor are one Obligor.
7
"CONSENT AND AGREEMENT" means an amended and restated consent and
agreement, in substantially the form of Exhibit G hereto, with respect to the
Receivables Contribution and Sale Agreement, duly executed by the Seller and
each Originator.
"CONSUMER RECEIVABLES" means Receivables originated by Telecom.
"CONTRACT" means either a Commercial Contract or a Tariff.
"CREDIT AND COLLECTION POLICY" means those credit and collection
policies and practices in effect on the New Closing Date relating to Contracts
and Receivables and described in Schedule II hereto, as modified from time to
time in compliance with SECTION 5.03(C).
"CURE AMOUNT" means, in respect of any Receivable Interest on any
Business Day, the lesser of (i) the amount of Owner Collections attributable to
such Receivable Interest and received or otherwise held in the Concentration
Account on such Business Day and (ii) that amount, if any, which would be
required to reduce Capital of such Receivable Interest on such Business Day so
that, together with similar reductions of Capital of all other Receivable
Interests and of Capital of "Receivable Interests" under the Parallel Purchase
Commitment, the aggregate undivided percentage interest of all Receivable
Interests and all "Receivable Interests" under the Parallel Purchase Commitment
would not, after giving effect to the Collections of Pool Receivables and the
addition of new Pool Receivables on the immediately preceding Business Day and
the resulting recomputation of such Receivable Interests pursuant to SECTION
2.04 and of all "Receivable Interests" under the Parallel Purchase Commitment
under, and pursuant to SECTION 2.04 of the Parallel Purchase Commitment as of
the end of the immediately preceding Business Day, exceed the Receivable
Interest Percent then in effect.
"CURE DEPOSITED AMOUNTS" means, as of any day, those amounts, if
any, that shall have been transferred to, and held on such day in, the Deposit
Account pursuant to SECTION 2.05(A)(II) or pursuant to the PROVISO to the first
sentence of SECTION 2.05(B).
"DAILY REPORT" means a report, in substantially the form of Exhibit
L hereto, furnished by the Servicer to each Managing Agent and the
Administrative Agent pursuant to SECTION 2.07(C).
"DAILY REPORTING PERIOD" means any period during which WORLDCOM's
long-term public senior unsecured and unguaranteed debt securities shall be
rated BB or lower by S&P or Ba2 or lower by Moody's or shall not be rated by S&P
or by Moody's.
"DEBT" means (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or services, (iv)
obligations as lessee under leases which shall have been or should be, in
accordance with GAAP, recorded as capital leases, and (v) obligations under
direct or indirect guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (i) through (iv) above.
"DEEMED LOSS RATIO" means the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the sum of
(a) the aggregate Outstanding
8
Balance of all Billed Pool Receivables which remain unpaid as of such day for at
least 121 days but not more than 150 days from their original respective due
dates for such payment, plus (b) the aggregate Outstanding Balance of all Billed
Pool Receivables which were less than 151 days past their original respective
due dates for such payment and were written off (or should have been written off
in accordance with the Credit and Collection Policy) the Seller's or any
Originator's books as uncollectible, by (ii) the aggregate Sales with respect to
the fifth calendar month immediately preceding such calendar month.
"DEFAULT RATE" means 2% per annum above the Alternate Base Rate in
effect from time to time.
"DEFAULT RATIO" means the ratio (expressed as a percentage) computed
as of the last day of each calendar month, by dividing (i) the aggregate
Outstanding Balance of all Billed Pool Receivables that were Defaulted
Receivables on such day or would have been Defaulted Receivables on such day had
they not been written off the books of the Seller or any Originator during such
month by (ii) the aggregate Outstanding Balance of all Billed Pool Receivables
on such day.
"DEFAULTED RECEIVABLE" means a Billed Receivable:
(i) as to which any payment, or part thereof (A) with respect to
Commercial Receivables, remains unpaid for 121 days or more from the
original due date for such payment or (B) with respect to Consumer
Receivables, remains unpaid for 31 days or more from the original due date
for such payment;
(ii) as to which the Obligor thereof or any other Person obligated
thereon or owning any Related Security in respect thereof has taken any
action, or suffered any event to occur, of the type described in SECTION
7.01(G);
(iii) which, consistent with the Credit and Collection Policy,
should be written off the Seller's or any Originator's books as
uncollectible; or
(iv) which has been restructured or otherwise renewed or refinanced
due to the financial inability of the Obligor thereof to pay such
Receivable, including, but not limited to, any Receivable the maturity of
which shall have been extended, or the Outstanding Balance of which shall
have been adjusted, pursuant to the final sentence of SECTION 6.02(B).
"DEMAND NOTE" means a demand promissory note, in substantially the
form of Exhibit K hereto, payable by WORLDCOM to the order of the Seller or any
other holder thereof.
"DEPOSIT ACCOUNT" means the deposit account of the Administrative
Agent, with reference to 160289.46 MCI WorldCom Rec. Corp. DEPOSIT A/C/ FBO
Admin Agent (ABA Routing number ▇▇▇▇▇▇▇▇▇, account number ###-##-####, and
account name DFC Funding Account), maintained with JPMorgan at its office at ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
9
"DESIGNATED OBLIGOR" means, at any time, each Obligor except any
Excluded Obligor; PROVIDED, HOWEVER, that any Obligor shall cease to be a
Designated Obligor upon three Business Days' notice by the Administrative Agent
(with the consent or at the request of the Majority Managing Agents) to the
Seller, it being understood and agreed that the Administrative Agent shall give
such notice as to any Obligor based upon events and circumstances either
relating to the credit-worthiness of such Obligor or relating to the legality of
the inclusion of the Receivables owing by such Obligor in the Receivables Pool;
and PROVIDED FURTHER, HOWEVER, that such Obligor shall continue to be a
Designated Obligor for purposes of all Pool Receivables existing, and in which
interests have been created hereunder, prior to the effectiveness of such
notice.
"DILUTION HORIZON" means, as of any date, a ratio (expressed as a
percentage) computed by dividing (i) the aggregate Sales with respect to the
last three calendar months ended on or immediately preceding such date by (ii)
the aggregate Outstanding Balance of all Billed Pool Receivables (excluding
Defaulted Receivables) as at the last day of the last calendar month ended on or
immediately preceding such date; PROVIDED that Unbilled Receivables shall be
excluded from the Dilution Horizon for purposes of calculating the Dilution
Reserve.
"DILUTION RATIO" means the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the aggregate
Dilutions during such calendar month by (ii) the aggregate Sales with respect to
the third calendar month immediately preceding such calendar month
"DILUTION RESERVE" means, for any Receivable Interest on any date,
an amount equal to:
DRP x (C + YFR)
---------
(1-DRP)
where:
DRP = the Dilution Reserve Percentage of such Receivable Interest
at the close of business of the Servicer on such date.
C = the Capital of such Receivable Interest at the close of
business of the Servicer on such date, reduced by the Cure
Deposited Amounts then on deposit in the Deposit Account and
attributable to such Receivable Interest.
YFR = the Yield/Fee Reserve of such Receivable Interest at the
close of business of the Servicer on such date.
"DILUTION RESERVE PERCENTAGE" means, in respect of any Receivable
Interest on any date, the greater of (a) 15% and (b) the product of (i) the sum
of (A) the average of the Dilution Ratios for each of the last twelve calendar
months ended on or immediately preceding such date, multiplied by (x) 2.0, if
WORLDCOM's long-term public senior unsecured and unguaranteed
10
debt securities shall be rated BB- or higher by S&P and Ba3 or higher by Moody's
on such date, or (y) 2.5, if WORLDCOM's long-term public senior unsecured and
unguaranteed debt securities shall be rated B+ or lower by S&P or B1 or lower by
Moody's on such date or shall not be rated by either S&P or Moody's on such
date, and (B) the Dilution Volatility Factor as of such date, and (ii) the
Dilution Horizon as of such date.
"DILUTIONS" means the aggregate amount of any reductions or
cancellations of the Outstanding Balance of the Pool Receivables as a result of
any defective, rejected or returned goods or services, any discount, or any
adjustment (including, without limitation, any SCA Adjustment) by the Seller or
any Originator or the Servicer or as a result of any dispute by the Obligor
thereof with respect to any such Pool Receivable or as a result of a setoff in
respect of any claim by the Obligor thereof against the Seller or any Originator
or the Servicer (whether such claim arises out of the same or a related
transaction or an unrelated transaction), PROVIDED, HOWEVER, that SCA
Adjustments shall be excluded from Dilutions for purposes of calculating the
Dilution Ratio, and PROVIDED FURTHER, that Unbilled Receivables shall be
excluded from Dilutions for purposes of calculating the Dilution Reserve.
"DILUTION VOLATILITY FACTOR" means, as of any date, the ratio
(expressed as a percentage) equal to the product of (a) the amount by which (i)
the highest of the average Dilution Ratios for any three month period during the
twelve calendar month period most recently ended on or before such date exceeds
(ii) the average of the Dilution Ratios for each of the twelve calendar months
constituting such period and (b) a fraction the numerator of which is the
highest of the average Dilution Ratios for any three month period during the
twelve calendar month period most recently ended on or before such date and the
denominator of which is the average of the Dilution Ratios for each of the
twelve calendar months constituting such period.
"DYNAMIC LOSS RESERVE PERCENTAGE" means, as of any date, the product
of (i) the highest of the average Deemed Loss Ratios for any three-month period
during the twelve calendar month period most recently ended on or before such
date, (ii) the Loss Horizon Factor as of such date, and (iii) (A) 2.0, if
WORLDCOM's long-term public senior unsecured and unguaranteed debt securities
shall be rated BB- or higher by S&P and Ba3 or higher by Moody's on such date or
(B) 2.5, if WORLDCOM's long-term public senior unsecured and unguaranteed debt
securities shall be rated B+ or lower by S&P or B1 or lower by Moody's on such
date or shall not be rated by either S&P or Moody's on such date.
"ELIGIBLE ASSIGNEE" means (i) any Managing Agent or any of their
respective Affiliates, (ii) any Purchaser or any of their respective Affiliates,
(iii) any commercial bank all of whose short-term public senior unsecured debt
securities are rated at least A-1 by S&P and at least P-1 by Moody's, or (iv)
any other Person, PROVIDED that such Person is not a competitor of WORLDCOM or
any of the Originators; PROVIDED, HOWEVER, that neither an Originator nor the
Seller nor any of their respective Affiliates may be an Eligible Assignee.
"ELIGIBLE INVESTMENTS" means any of the following, having a maturity
to satisfy the requirements of SECTION 6.06(B): (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) insured
certificates of deposit, or time deposits, or cash, or cash escrows, in each
case at any commercial bank that is a Liquidity Bank or a member of the Federal
Reserve System and that issues (or the parent of which issues) commercial paper
rated as described in clause (c) below, is organized
11
under the laws of the United States or any State thereof and has combined
capital and surplus of at least $1 billion, (c) commercial paper issued by any
corporation organized under the laws of any State of the United States and rated
at least "Prime-1" (or the then equivalent grade) by Moody's and "A-1+" (or the
then equivalent grade) by S&P, or (d) interests in any money market mutual fund
which at the date of investment in such fund has the highest fund rating by each
of Moody's and S&P which has issued a rating for such fund (which rating, in the
case of S&P, shall mean a rating of AAAm or AAAmg).
"ELIGIBLE RECEIVABLE" means, at any time and with respect to any
Receivable Interest, a Receivable:
(i) the Obligor of which is a United States resident and is not an
Affiliate of the Seller or WORLDCOM;
(ii) the Obligor of which is a Designated Obligor;
(iii) the Obligor of which at the time of the initial creation of an
interest therein hereunder is not the Obligor of any Defaulted Receivables
in the aggregate amount of 50% or more of the aggregate Outstanding
Balance of all Billed Pool Receivables of such Obligor;
(iv) which at the time of the initial creation of an interest
therein hereunder is not a Defaulted Receivable;
(v) which, according to the Contract related thereto, is required to
be paid in full within 30 days, in the case of each Consumer Receivable,
and 60 days, in the case of each other Receivable, of the original billing
date therefor;
(vi) which has been billed to the Obligor thereof or is an Eligible
Unbilled Receivable;
(vii) which is an account receivable representing all or part of the
sales price of merchandise, insurance or services within the meaning of
SECTION 3(C)(5) of the Investment Company Act of 1940, as amended;
(viii) a purchase of which with the proceeds of notes would
constitute a "current transaction" within the meaning of SECTION 3(a)(3)
of the Securities Act of 1933, as amended;
(ix) which is an "account" within the meaning of SECTION 9-102 of
the UCC of the jurisdiction the law of which governs the perfection of the
interest created by a Receivable Interest;
(x) which is denominated and payable only in United States dollars
in the United States;
(xi) which arises under a Contract which has been duly authorized
and which, together with such Receivable, is in full force and effect and
constitutes the legal, valid
12
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);
(xii) which arises under a Contract which does not contain any
provision that restricts the ability of the Co-Lead Managers, the
Administrative Agent or any Managing Agent from exercising its rights
under any of the Transaction Documents;
(xiii) which is assignable, under the terms of the applicable
Contract and otherwise, without any consent of or notice to the Obligor
thereof or any other Person (other than the Seller);
(xiv) which, arises under a Contract (A) which requires no further
action by any Originator or the Seller in order for payment thereof to be
enforced against the Obligor thereof and (B) under which the delivery of
goods and/or the performance of services giving rise to such Receivable
has been completed by the Originator in respect thereof without any
dispute, offset, counterclaim or defense whatsoever; it being understood
and agreed that any Receivable that is a Private Line Receivable shall not
be an "Eligible Receivable" pursuant to this clause (xiv) until the
delivery of goods and/or the performance of services for such Private Line
Receivable shall have been fully completed;
(xv) 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, consumer protection, 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;
(xvi) which (A) satisfies all applicable requirements of the Credit
and Collection Policy (other than, following the initial creation of an
interest therein hereunder, those relating to the credit-worthiness of the
Obligors) and (B) complies with such other reasonable criteria and
requirements (other than, following the initial creation of an interest
therein hereunder, those relating to the credit-worthiness of the
Obligors) as the Administrative Agent (with the consent or at the request
of the Majority Managing Agents) may from time to time specify to the
Seller upon 30 days' prior written notice;
(xvii) which was generated in the ordinary course of the applicable
Originator's business;
(xviii) as to which, at or prior to the time of the initial creation
of an interest therein through a Purchase, the Administrative Agent has
not notified the Seller (and the Administrative Agent shall so notify the
Seller at the request of the Majority Managing Agents) that the
Administrative Agent has determined, in its sole discretion, that such
Receivable (or class of Receivables) is not acceptable for purchase by the
Purchasers hereunder; and
13
(xix) Obligor of which is not the Obligor of any Receivable that is
evidenced by a promissory note or other "instrument" within the meaning of
the UCC;
PROVIDED, HOWEVER, that the PROVISO to the definition of "Receivables Pool"
contained herein shall also apply to this definition of "Eligible Receivable".
"ELIGIBLE UNBILLED RECEIVABLE" means, at any time, any Receivable
arising as a result of the provision of telecommunications goods and/or services
by an Approved Originator (excluding, however, any Private Line Receivable)
during (but not prior to) the immediately preceding calendar month (a) for which
the Obligor thereunder has not yet been billed and (b) arising pursuant to a
Contract (i) that requires no further action (other than customary billing or
invoicing) by any Approved Originator or the Seller in order for payment thereof
to become due and payable by the Obligor thereof and (ii) under which the
delivery of goods and/or the performance of services giving rise to such
Receivable has been completed by the Approved Originator thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title IV of
ERISA is a member of the Seller's controlled group, or under common control with
the Seller, within the meaning of SECTION 414 of the Code.
"EVENTS OF TERMINATION" has the meaning specified in SECTION 7.01.
"EXCESS AMOUNT" means, in respect of any Receivable Interest on any
Business Day, the lesser of (i) the aggregate amount of Cure Deposited Amounts
attributable to such Receivable Interest and received or otherwise held in the
Deposit Account on such Business Day and (ii) that amount, if any, which Capital
of such Receivable Interest could be permitted to increase on such Business Day
and not cause, together with similar increases of Capital of all other
Receivable Interests and of Capital of "Receivable Interests" under the Parallel
Purchase Commitment, the aggregate undivided percentage interest of all
Receivable Interests and all "Receivable Interests" under the Parallel Purchase
Commitment, after giving effect to the Collections of Pool Receivables and the
addition of new Pool Receivables on the immediately preceding Business Day and
the resulting recomputation of such Receivable Interests pursuant to SECTION
2.04 and of all "Receivable Interests" under the Parallel Purchase Commitment
under, and pursuant to SECTION 2.04 of the Parallel Purchase Commitment as of
the end of the immediately preceding Business Day, to exceed the Receivable
Interest Percent then in effect.
"EXCLUDED OBLIGOR" means any of the following:
Cherry Communications, Inc.
American Teletronics Long Distance dba ATLD
Communications Network Corporation a/k/a Conetco
Universal Network Services, Inc. a/k/a UNSI
UniDial Incorporated
Century Telecommunications, Inc.
Oncor Communications, Inc.
14
"FACILITY" means the willingness of each Purchaser to consider, in
its sole discretion pursuant to ARTICLE II, the purchase from the Seller of
Receivable Interests from time to time.
"FACILITY TERMINATION DATE" means the earliest of (i) May 22, 2003,
(ii) the date of termination of the Facility pursuant to SECTION 2.03, (iii) the
date designated as the Facility Termination Date by the Administrative Agent
pursuant to SECTION 7.01, and (iv) the "Commitment Termination Date" as defined
in and under the Parallel Purchase Commitment.
"FCC" means the Federal Communications Commission and any successor
regulatory body.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FEES" means those fees that are payable by the Seller pursuant to
the Fee Letters.
"FEE LETTERS" means (i) the amended and restated letter agreement
dated as of the New Closing Date among the Seller, WORLDCOM, each Managing Agent
and GBFC, as the same may from time to time be amended, supplemented or
otherwise modified and (ii) the Amended and Restated Co-Lead Manager Fee Letter
dated as of the New Closing Date among the Seller, WORLDCOM and CNAI as Co-Lead
Manager and JPMorgan as Co-Lead Manager, as the same may from time to time be
amended, supplemented or otherwise modified.
"FIRST CLOSING DATE" means August 20, 1999.
"GAAP" means generally accepted accounting principles in the United
States consistently applied, in effect from time to time.
"GOVERNMENTAL AUTHORITY" means any (a) local, state, municipal or
federal government or any local, state, municipal or federal judicial,
executive, regulatory or legislative agency or instrumentality, (b) private
arbitration board or panel or (c) central bank.
"GOVERNMENT RECEIVABLE" means any Receivable the Obligor of which is
any federal, state or local government or any subdivision, agency or
instrumentality of any federal, state or local government.
"INDEMNIFIED AMOUNTS" has the meaning specified in SECTION 10.01.
"INDEMNIFIED PARTY" means any or all of Purchasers, the Managing
Agents, the Assignees, the Liquidity Banks, the Participants, the Administrative
Agent and their respective Affiliates and successors and assigns.
15
"INVESTMENT" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock or other ownership or
profit interest, warrants, rights, options, obligations or other securities of
such Person, any capital contribution to such Person or any other investment in
such Person.
"LIQUIDATION DAY" means, for any Receivable Interest, either (i)
each day during any Settlement Period for such Receivable Interest on which the
conditions set forth in SECTION 3.03 are not satisfied (and such failure of
conditions is not waived by the Majority Managing Agents), PROVIDED that such
conditions are also not satisfied (and such failure of conditions is not waived
by the Majority Managing Agents) on all succeeding days during such Settlement
Period, or (ii) each day which occurs on or after the Termination Date.
"LIQUIDATION FEE" means, for each Receivable Interest for any
Settlement Period during which any Liquidation Day or the Termination Date
occurs, the amount, if any, by which (i) the additional Yield (calculated
without taking into account any Liquidation Fee or any shortened duration of
such Settlement Period) which would have accrued on the reductions of Capital of
such Receivable Interest during such Settlement Period if such reductions had
remained as Capital, exceeds (ii) the income, if any, received by the Owner of
such Receivable Interest from such Owner's investing the proceeds of such
reductions of Capital.
"LIQUIDATION YIELD/FEE" means, for any Receivable Interest at any
date, an amount equal to the product of (a) the Capital of such Receivable
Interest as at such date and (b) the Liquidation Yield/Fee Percentage for such
Receivable Interest at such date.
"LIQUIDATION YIELD/FEE PERCENTAGE" means, for any Receivable
Interest at any date, an amount equal to the fraction (a) the numerator of which
is the product of (i) the sum of (A) the Default Rate in effect on such date
plus (B) 1% per annum (representing the rate per annum of the Servicer Fee for a
successor Servicer) plus (C) the rate per annum of the Program Fee as defined in
and under the Fee Letters and (ii) the product of (A) the number of days in the
period equal to the average of Monthly Turnover Days for each of the three
calendar months most recently ended on or before such date and (B) the
Collection Delay Factor as in effect at such date and (b) the denominator of
which is 360.
"LIQUIDITY BANKS" means the banks and other financial institutions
(other than the Administrative Agent) parties to the Parallel Purchase
Commitment, together with their successors and assigns.
"LOCK-BOX ACCOUNT" means each of the deposit accounts specified on
Schedule I hereof and except for purposes of SECTIONS 2.05 and 2.06, the
Concentration Account, and maintained at a Lock-Box Bank for the purpose of
receiving Collections.
"LOCK-BOX BANK" means each of the banks specified on Schedule I
hereof and, except for purposes of SECTIONS 2.05 and 2.06, the Concentration
Bank, and any other bank specified as a "Lock-Box Bank" in accordance with this
Agreement, in each case holding one or more Lock-Box Accounts.
"LOCK-BOX NOTICE" means a notice, in substantially the form of Annex
A to a Collection Notice, from the Administrative Agent to any Lock-Box Bank.
16
"LOSS HORIZON FACTOR" means, as of any date, a fraction (a) the
numerator of which is the sum of (i) the aggregate Sales of Commercial
Receivables with respect to the five calendar months most recently ended on or
before such date, plus (ii) the aggregate Sales of Consumer Receivables with
respect to the two calendar months most recently ended on or before such date,
plus (iii) the aggregate Outstanding Balance of Unbilled Pool Receivables as of
the last day of the calendar month most recently ended on or before such date
and (b) the denominator of which is the aggregate Outstanding Balance of Pool
Receivables (excluding Defaulted Receivables) as of the last day of the calendar
month most recently ended on or before such date.
"LOSS RESERVE" means, for any Receivable Interest at any date, an
amount equal to
LRP x (C+YFR)
----------
(1-LRP)
where:
LRP = the Loss Reserve Percentage for such Receivable
Interest at the close of business of the Servicer on
such date.
C = the Capital of such Receivable Interest at the close
of business of the Servicer on such date, reduced by the
Cure Deposited Amounts then on deposit in the Deposit
Account and attributable to such Receivable Interest.
YFR = the Yield/Fee Reserve for such Receivable Interest at
the close of business of the Servicer on such date.
"LOSS RESERVE PERCENTAGE" means, for any Receivable Interest at any
date, the greatest of (i) the Dynamic Loss Reserve Percentage as of such date,
PROVIDED, HOWEVER, that until the delivery by the Servicer of the Monthly Report
pursuant to SECTION 2.07(B) in July 2002, the Dynamic Loss Reserve Percentage
solely for the purpose of the calculation of the "Loss Reserve Percentage"
pursuant to this definition, shall not exceed 35.2%, (ii) 16%, and (iii) three
times the Loss-to-Liquidation Ratio as of the last day of the calendar month
most recently ended on or before such date.
"LOSS-TO-LIQUIDATION RATIO" means the ratio (expressed as a
percentage) computed as of the last day of each calendar month by dividing (i)
an amount equal to the aggregate Outstanding Balance of all Billed Pool
Receivables written off by any Originator or the Seller, or which should have
been written off by any Originator or the Seller in accordance with the Credit
and Collection Policy, during such month by (ii) the aggregate amount of
Collections actually received during such month with respect to Billed Pool
Receivables.
"MAJORITY MANAGING AGENTS" means such of the Managing Agents as
represent Purchasers or successive Assignees thereof which own Receivable
Interests having at least 51% of the aggregate outstanding Capital at such time
or, if no Receivable Interests are then existing, having at least 51% of the
total of the Purchase Limits.
17
"MANAGING AGENT" means, at any time, each of the CNAI Conduits
Managing Agent, the Bank One Conduits Managing Agent, the GBFC Managing Agent,
the Delaware Funding Managing Agent, the Paradigm Managing Agent, the Liberty
Managing Agent and, in the case of any Purchaser becoming a party hereto solely
by Assignment and Acceptance, the Person designated as Managing Agent for such
Purchaser and its successive Assignees in such Assignment and Acceptance
PROVIDED that in the case of any such designation in such Assignment and
Acceptance, the Managing Agent of the assignor executing and delivering such
Assignment and Acceptance shall have assigned, and the Person so designated
shall have accepted and assumed, all of such Managing Agent's rights, interests,
duties and obligations (to the extent theretofore related to such assignor and
thereafter relating to such Purchaser) as Managing Agent hereunder in writing.
"MATERIAL ADVERSE EVENT" means any set of one or more circumstances
or events which, individually or collectively, could reasonably be expected to
result in any (a) material impairment of the ability of the Servicer to perform
any of its obligations under the Transaction Documents or the ability of the
Administrative Agent or any Indemnified Party to enforce any such obligations or
any of their respective rights or remedies under the Transaction Documents, or
(b) material and adverse effect on the business, properties, condition
(financial or otherwise) or results of operations of the Servicer. The phrase
"could be a Material Adverse Event" (and any similar phrase herein) means that
there is a material probability of such Material Adverse Event occurring, and
the phrase "could not be a Material Adverse Event" (and any similar phrase
herein) means that there is not a material probability of such Material Adverse
Event occurring.
"MAY 9, 2002 LETTER WAIVER AND AMENDMENT" means the Letter Waiver
and Amendment dated as of May 9, 2002, among the Seller, WORLDCOM, the Managing
Agents, the Banks and the Group Managing Agents.
"MIDTERM RECEIVABLE" means a Receivable which, according to the
Contract related thereto, has a due date for payment in full more than 30 days
but less than 61 days after the original billing date therefor.
"MONTHLY REPORT" means a report, in substantially the form of
Exhibit D hereto, furnished by the Servicer to each Managing Agent and the
Administrative Agent for each Owner pursuant to SECTION 2.07(B).
"MONTHLY REPORTING PERIOD" means any period during which WORLDCOM's
long-term public senior unsecured and unguaranteed debt securities shall be
rated BBB- or higher by S&P and Baa3 or higher by Moody's.
"MONTHLY TURNOVER DAYS" means, for any calendar month, that period
(expressed in days) equal to the product of (i) 30 and (ii) a fraction having as
its numerator the aggregate Outstanding Balance of all Pool Receivables on the
last day of such calendar month and as its denominator the aggregate amount of
Collections actually received during such month with respect to Pool
Receivables.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
thereof.
18
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
SECTION 4001(A)(3) of ERISA, to which the Seller or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in
SECTION 4001(A)(15) of ERISA, that (a) is maintained for employees of the Seller
or any ERISA Affiliate and at least one Person other than the Seller and the
ERISA Affiliates or (b) was so maintained and in respect of which the Seller or
any ERISA Affiliate could have liability under SECTION 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"NET RECEIVABLES POOL BALANCE" means at any time the Outstanding
Balance of the Eligible Receivables in the Receivables Pool at such time reduced
by the sum of, without duplication, (i) the aggregate Outstanding Balance of the
Defaulted Receivables in the Receivables Pool at such time, (ii) the aggregate
amount by which the then aggregate Outstanding Balance of all Eligible
Receivables (other than Defaulted Receivables) that are then Billed Receivables
of each Obligor then in the Receivables Pool exceeds (x) the product of (A) the
Concentration Limit Percentage for such Obligor at such time multiplied by (B)
the aggregate outstanding Capital of all Receivable Interests or (y) the Special
Concentration Limit for such Obligor, as the case may be, (iii) the aggregate
amount by which the then aggregate Outstanding Balance of all Eligible
Receivables (other than Defaulted Receivables) that are then Billed Receivables
and are Government Receivables then in the Receivables Pool exceeds 20% of the
sum of the aggregate Loss Reserve for all Receivable Interests and the aggregate
"Loss Reserve" for all "Receivable Interests" under and as defined in the
Parallel Purchase Commitment, (iv) the Unapplied Cash and Credits at such time,
(v) the aggregate amount of Offset Reserves in existence at such time in respect
of the Obligors of Billed Pool Receivables, (vi) without duplication in respect
of clause (ii) of the definition of "Eligible Receivable", the aggregate
Outstanding Balance of Pool Receivables owed by Obligors which are not
Designated Obligors at such time, (vii) without duplication in respect of clause
(iii) of the definition of "Eligible Receivable", the aggregate Outstanding
Balance of Pool Receivables owed by each Obligor of any Defaulted Receivables in
the aggregate amount of 50% or more of the aggregate Outstanding Balance of all
Pool Receivables of such Obligor, (viii) the aggregate amount of those portions
of the Outstanding Balances of Billed Pool Receivables which represent amounts
accrued and unpaid in connection with sales, excise or other taxes for the
account of any federal, state or local government, (ix) at any time during which
the Dilution Reserve is greater than zero, the aggregate amount of SCA
Adjustments that shall not have occurred at such time, as specified by the
Administrative Agent (at the request or with the consent of the Managing
Agents), and (x) the aggregate amount by which the then aggregate Outstanding
Balance of all Eligible Receivables (other than Defaulted Receivables) that are
Midterm Receivables then in the Receivables Pool exceeds 20% of the aggregate
Outstanding Balance of the Pool Receivables that are Eligible Receivables and
are not Defaulted Receivables.
"NETWORK" means MCI WORLDCOM Network Services, Inc., a Delaware
corporation.
"NEW CLOSING DATE" means May 23, 2002.
19
"NEW WORLDCOM CREDIT AGREEMENT" has the meaning specified in the
definition of "WORLDCOM Credit Agreement" contained in this SECTION 1.01.
"OBLIGOR" means a Person obligated to make payments pursuant to a
Contract.
"OFFSET RESERVE" means, in respect of the Billed Pool Receivables
owing by any Obligor at any time, the lesser of (i) the aggregate amount of
Claims of such Obligor in existence at such time and (ii) the aggregate
Outstanding Balance of such Billed Pool Receivables at such time.
"ORIGINAL PARALLEL PURCHASE COMMITMENT" means the Amended and
Restated Receivables Purchase Agreement dated as of October 24, 2001, as amended
by Amendment No. 1 thereto dated as of March 26, 2002 among the Seller, the
Servicer, the Liquidity Banks from time to time party thereto, the Group
Managing Agents from time to time party thereto and Bank One, as Administrative
Agent, as amended, restated or otherwise modified prior to the date hereof.
"ORIGINATOR" means each of Network, Communications, Telecom and
UUNET; PROVIDED, HOWEVER, that any Originator shall cease to be an Originator
upon (i) the occurrence of any event set forth in SECTION 7.01(E) as to such
Originator (as though such Originator were the Seller hereunder) and (ii) three
Business Days' notice to such effect by the Administrative Agent (with the
consent or at the request of the Majority Managing Agents) to the Seller; and
PROVIDED FURTHER, HOWEVER, that such Originator shall continue to be an
Originator for purposes of all Pool Receivables existing, and in which interests
have been created hereunder, prior to the effectiveness of such notice.
"OTHER TAXES" has the meaning specified in SECTION 2.12(B).
"OUTSTANDING BALANCE" of any Receivable at any time means the then
outstanding principal balance thereof after giving effect to all Collections
(including, without limitation, deemed Collections).
"OWNER" means, in respect of each Receivable Interest, upon its
purchase the Purchaser as the purchaser thereof; PROVIDED, HOWEVER, that, upon
any assignment thereof or a portion thereof pursuant to ARTICLE IX, the Assignee
thereof shall be the Owner thereof.
"OWNER COLLECTIONS" means, as of any date, that portion of the
Collections deposited to the Concentration Account on such date equal to the
product of (a) the aggregate amount of such Collections multiplied by (b) the
Total Receivable Interest Percentage on such date.
"PARALLEL PURCHASE COMMITMENT" means the Second Amended and Restated
Receivables Purchase Agreement dated as of the date hereof among the Seller, the
Servicer, the Liquidity Banks from time to time party thereto, the Group
Managing Agents from time to time party thereto and JPMorgan, as Administrative
Agent, which amends and restates the Original Parallel Purchase Commitment, and
as the same may from time to time be further amended, supplemented or otherwise
modified.
20
"PARENT UNDERTAKING" means an amended and restated undertaking, in
substantially the form of Exhibit I hereto, by WORLDCOM in favor of the
Administrative Agent and the other Indemnified Parties, as such undertaking may
from time to time be amended, supplemented or otherwise modified.
"PARTICIPANT" means, at any time for each Receivable Interest, each
Person which at such time (i) shall have purchased from any Purchaser or any
Assignee thereof an undivided interest in such Receivable Interest, or shall
have otherwise provided to such Purchaser or Assignee liquidity or credit
enhancement with respect thereto, or shall have made a commitment to any
Managing Agent for any Purchaser or any Assignee thereof or to any Purchaser or
any Assignee thereof to so purchase such an interest or to otherwise provide
liquidity or credit enhancement with respect to such Receivable Interest or (ii)
if the Parallel Purchase Commitment is in effect at such time, is a Liquidity
Bank thereunder.
"PARTNERS" means MCI WORLDCOM Capital Management Partners, a
Delaware general partnership.
"PASS-THROUGH PURCHASER" means any of Paradigm, Delaware Funding,
GBFC and Liberty.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"POOL RECEIVABLE" means a Receivable in the Receivables Pool.
"POTENTIAL EVENT OF TERMINATION" means any event that, with the
giving of notice or the passage of time or both, would constitute an Event of
Termination.
"PRIVATE LINE RECEIVABLE" means any Receivable arising from the sale
by any Originator of dedicated telecommunications services provided by such
Originator to its customers between designated customer premises.
"PRO RATA SHARE" means, at any time, in the case of any Purchaser,
the percentage obtained by dividing the amount of such Purchaser's Purchase
Limit at such time by the total of the Purchase Limits at such time; PROVIDED,
HOWEVER, that in the case of any Purchase where any Purchaser has refused to
make such Purchase or is unable or refuses to fund such Purchase by its issuance
of commercial paper notes, such Purchaser's Pro Rata Share for such Purchase
shall be zero and the Pro Rata Share for such Purchase for the Purchaser or
Purchasers, if any, which shall instead make such Purchase (as determined
pursuant to SECTION 2.02) in place of such replaced Purchaser shall be (i) if
such Purchaser is a new Purchaser replacing such replaced Purchaser pursuant to
SECTION 2.14 as a result of such refusal, the percentage obtained by dividing
the amount of such replaced Purchaser's Purchase Limit at such time by the total
of the Purchase Limits at such time, or (ii) if such Purchaser is a single
existing Purchaser at such time, the percentage obtained by dividing the sum of
such Purchaser's Purchase Limit at such time plus such replaced Purchaser's
Purchase Limit at such time by the total of the Purchase Limits at such
21
time, or (iii) if such Purchasers are multiple existing Purchasers at such time,
for each such Purchaser the percentage obtained by adding to the percentage
obtained for such Purchaser as set forth above in this definition prior to this
proviso such Purchaser's ratable share of such replaced Purchaser's percentage
(determined as set forth above in this definition prior to this proviso) or as
shall have otherwise been agreed by such multiple Purchasers (or, if no
Purchaser shall make such Purchase in place of such replaced Purchaser and as a
result such Purchase is reduced by the amount which such replaced Purchaser
would otherwise have paid in connection with such Purchase, each remaining
Purchaser's Pro Rata Share for such reduced Purchase shall be the percentage
obtained by dividing the amount of such Purchaser's Purchase Limit at such time
by the difference between the total of the Purchase Limits at such time minus
such replaced Purchaser's Purchase Limit at such time). Upon any Purchase where
any Purchaser shall have so refused or shall have been so unable to make or so
fund such Purchase, each Purchaser's Pro Rata Share for purposes of the Fee
Letters and SECTION 8.05 shall be the percentage obtained by dividing the
aggregate outstanding Capital of all Receivable Interests owned by such
Purchaser by the aggregate outstanding Capital of all Receivable Interests at
such time.
"PROVISIONAL LIQUIDATION DAY" means any day which could be a
Liquidation Day but for the proviso in clause (i) of the definition of
"Liquidation Day".
"PUC" means any state or local regulatory agency or governmental
authority that exercises jurisdiction over the rates or services or the
ownership, construction, or operation of network facilities or
telecommunications systems or over Persons who own, construct or operate network
facilities or telecommunications systems.
"PURCHASE" means a purchase by any Purchaser of a Receivable
Interest from the Seller pursuant to ARTICLE II.
"PURCHASE LIMIT" means:
(i) in the case of CAFCO or its successive Assignees pursuant to
SECTION 9.02, $150,000,000,
(ii) in the case of CHARTA or its successive Assignees pursuant to
SECTION 9.02, $150,000,000,
(iii) in the case of FASC or its successive Assignees pursuant to
SECTION 9.02, $150,000,000,
(iv) in the case of JSC or its successive Assignees pursuant to
SECTION 9.02, $150,000,000,
(v) in the case of GBFC or its successive Assignees pursuant to
SECTION 9.02, $225,000,000,
(vi) in the case of Delaware Funding or its successive Assignees
pursuant to SECTION 9.02, $300,000,000,
22
(vii) in the case of Paradigm or its successive Assignees pursuant
to SECTION 9.02, $300,000,000, and
(viii) in the case of Liberty or its successive Assignees pursuant
to SECTION 9.02, $75,000,000,
in each case of clauses (i) through (viii), as such amount may be reduced
pursuant to SECTION 2.03.
"PURCHASER" has the meaning assigned to that term in Preliminary
Statement (3) hereto; PROVIDED, HOWEVER, that upon any assignment hereunder
pursuant to SECTION 9.02 of all or a portion of the Receivable Interests owned
by any Purchaser together with all or a portion of the rights and obligations of
such Purchaser hereunder associated therewith, the Assignee thereof shall be a
Purchaser for all purposes hereunder.
"PURCHASER RATE" means:
(i) for any Settlement Period for any Receivable Interest owned by
any Owner (other than any Bank One Conduit and any Pass-Through Purchaser)
which funds the Purchase or maintenance of its Receivable Interest by the
issuance of commercial paper notes, the per annum rate equivalent to the
weighted average of the per annum rates paid or payable by such Owner from
time to time as interest on or otherwise (by means of interest rate ▇▇▇▇▇▇
or otherwise) in respect of those commercial paper notes issued by such
Owner that are allocated, in whole or in part, by the Managing Agent of
such Owner (on behalf of such Owner) to fund the Purchase or maintenance
of such Receivable Interest during such Settlement Period, as determined
by the Managing Agent of such Owner (on behalf of such Owner) and reported
to the Seller and the Servicer, which rates shall reflect and give effect
to the commissions of placement agents and dealers and other issuance
costs in respect of such commercial paper notes, to the extent such
commissions are allocated, in whole or in part, to such commercial paper
notes by the Managing Agent of such Owner (on behalf of such Owner);
PROVIDED, HOWEVER, that if any component of such rate is a discount rate,
in calculating the "Purchaser Rate" for such Settlement Period the
Managing Agent for such Owner shall for such component use the rate
resulting from converting such discount rate to an interest bearing
equivalent rate per annum;
(ii) for any Settlement Period for any Receivable Interest owned by
any Bank One Conduit if and to the extent such Bank One Conduit funds the
Purchase or maintenance of its Receivable Interest by the issuance of
commercial paper notes during such Settlement Period, the per annum rate
that reflects, for each day during such Settlement Period, the sum of (A)
discount accrued on commercial paper notes of such Bank One Conduit on
such day which commercial paper notes are subject to any pooling
arrangements by such Bank One Conduit (but excluding commercial paper
notes issued by such Bank One Conduit for a tenor and in an amount
specifically requested by any Person in connection with any agreement
effected by such Bank One Conduit) ("BANK ONE CONDUIT POOLED COMMERCIAL
PAPER"), plus (B) any and all accrued commissions in respect of placement
agents and commercial paper dealers, and issuing and paying agent fees
incurred, in respect of Bank One Conduit Pooled Commercial Paper for such
day,
23
plus (C) other costs associated with funding small or odd-lot amounts with
respect to all receivable purchase facilities which are funded by Bank One
Conduit Pooled Commercial Paper for such day, minus (D) any accrual of
income net of expenses received on such day from investment of collections
received under all receivable purchase facilities funded substantially
with Bank One Conduit Pooled Commercial Paper, minus (E) any payment
received on such day net of expenses in respect of broken funding costs
related to the prepayment of any Receivable Interest of such Bank One
Conduit pursuant to the terms of any receivable purchase facilities funded
substantially with Bank One Conduit Pooled Commercial Paper; PROVIDED,
HOWEVER, that in addition to the foregoing costs, if the Seller shall
request any additional Purchase by such Bank One Conduit during any period
of time determined by the Bank One Conduits Managing Agent in its sole
discretion to result in an incrementally higher Purchaser Rate applicable
to such additional Purchase, the Capital associated with any such
additional Purchase shall, during such period, be deemed to be funded by
such Bank One Conduit in a special pool (which may include capital
associated with other receivable purchase facilities) for purposes of
determining such higher Purchaser Rate applicable only to such special
pool and charged each day during such period against such Capital; and
(iii) for any Settlement Period for any Receivable Interest owned by
any Pass-Through Purchaser if and to the extent such Pass-Through
Purchaser funds the Purchase or maintenance of its Receivable Interest by
the issuance of commercial paper notes during such Settlement Period, the
per annum rate equivalent to the rate (or if more than one rate, the
weighted average of the rates) at which commercial paper notes of such
Pass-Through Purchaser to be issued from time to time to fund the Purchase
or maintenance of such Receivable Interest by such Pass-Through Purchaser
during such Settlement Period (including, for this purpose, commercial
paper notes which are issued by such Pass-Through Purchaser in order to
purchase or maintain such Receivable Interest and which may be in excess
of such Pass-Through Purchaser's Capital) may be sold by any placement
agent or commercial paper dealer selected by the Managing Agent of such
Pass-Through Purchaser as agreed between each such agent or dealer and the
Managing Agent of such Pass-Through Purchaser, which rate or rates shall
reflect and give effect to the commissions of placement agents and dealers
and other issuance costs in respect of such commercial paper notes, to the
extent such commissions are allocated, in whole or in part, to such
commercial paper notes by the Managing Agent of such Pass-Through
Purchaser (on behalf of such Pass-Through Purchaser); PROVIDED, HOWEVER,
if the rate (or rates) as agreed between any such agent or dealer and the
Managing Agent of such Pass-Through Purchaser during any Settlement Period
for any Receivable Interest is a discount rate (or rates), the "Purchaser
Rate" for such Settlement Period shall be the rate (or if more than one
rate, the weighted average of the rates) resulting from converting such
discount rate (or rates) to an interest-bearing equivalent rate per annum;
and provided, FURTHER, HOWEVER, that (i) if and to the extent that any
such commercial paper notes mature during any Settlement Period, the
Purchaser Rate for such Settlement Period shall be increased to reflect
the interest on the interest accrued to such maturity on such commercial
paper notes, such interest on interest to accrue during the period from
the date of such maturity to the last day of such Settlement Period and
(ii) the Purchaser Rate for any Settlement Period shall be increased to
reflect such Pass-Through Purchaser's cost
24
of funding, under any swingline or other short-term liquidity arrangement,
any amount of Yield for such Settlement Period to be paid on the next
succeeding Settlement Date.
"RATING AGENCY" means, collectively, Moody's and S&P, and each other
rating agency chosen by GBFC, Paradigm or Liberty to rate its commercial paper
notes at any time.
"RECEIVABLE" means the indebtedness of any Obligor under a Contract
(whether billed or unbilled), and includes the right to payment of any interest
or finance charges and other obligations of such Obligor with respect thereto.
"RECEIVABLE INTEREST" means, at any time, an undivided percentage
ownership interest at such time in (i) all then outstanding Pool Receivables
arising prior to the time of the most recent computation or recomputation of
such undivided percentage interest pursuant to SECTION 2.04, (ii) all Related
Security with respect to such Pool Receivables and (iii) all Collections with
respect to, and other proceeds of, such Pool Receivables. Such undivided
percentage interest for such Receivable Interest shall be computed as
C + YFR + LR + DR
-----------------
NRPB
where:
C = the Capital of such Receivable Interest at the time of
such computation, reduced by the Cure Deposited Amounts
then on deposit in the Deposit Account and attributable
to such Receivable Interest.
YFR = the Yield/Fee Reserve of such Receivable Interest at
the time of such computation.
LR = the Loss Reserve of such Receivable Interest at the
time of such computation.
DR = the Dilution Reserve of such Receivable Interest at
the time of such computation.
NRPB = the Net Receivables Pool Balance at the time of such
computation.
PROVIDED, HOWEVER, that upon the occurrence of any Termination Date that results
from either any Facility Termination Date in turn resulting from the occurrence
and continuance of an Event of Termination pursuant to SECTION 7.01 or any
Reinvestment Termination Date in turn resulting from the designation of such
Reinvestment Termination Date by the Administrative Agent pursuant to the
definition of "Reinvestment Termination Date" contained in this SECTION 1.01,
the Receivable Interests then outstanding under this Agreement, together with
the "Receivable Interests," if any, then outstanding under, and as defined in,
the Parallel Purchase Commitment, shall be increased, ratably according to their
respective amounts of Capital and "Capital" (as defined in the Parallel Purchase
Commitment) therefor, and shall be fixed at all times thereafter, so that the
aggregate undivided percentage interest of all such
25
Receivable Interests and such "Receivable Interests" shall be 100% in and to (i)
all then outstanding Pool Receivables, (ii) all Related Security with respect to
such Pool Receivables and (iii) all Collections with respect to, and other
proceeds of, such Pool Receivables.
Each Receivable Interest shall be determined from time to time
pursuant to the provisions of SECTION 2.04.
"RECEIVABLE INTEREST PERCENT" means (a) during each Daily Reporting
Period, 99% until the Servicer shall send, pursuant to Section 2.07(c), to each
Managing Agent and the Administrative Agent at least weekly the information
required as portfolio rollforward information set forth in the form of Daily
Report attached hereto as Exhibit L, and thereafter 100% so long as the Servicer
shall so send such information at least weekly and 99% if and so long as the
Servicer shall not so send such information at least weekly, (b) during each
Weekly Reporting Period, 99%, and (c) during each Monthly Reporting Period, 98%.
"RECEIVABLES CONTRIBUTION AND SALE AGREEMENT" means the Amended and
Restated Receivables Contribution and Sale Agreement, dated as of the date
hereof, in substantially the form of Exhibit F hereto, among each Originator,
WORLDCOM as the "Buyer's Servicer" thereunder, and the Seller, as the same may
from time to time be amended, supplemented or otherwise modified with the prior
written consent of the Administrative Agent (with the consent or at the request
of the Majority Managing Agents).
"RECEIVABLES POOL" means at any time the aggregation of each then
outstanding Receivable in respect of which the Obligor is a Designated Obligor
or, as to any Receivable in existence on such date, was a Designated Obligor on
the date of the initial creation of an interest in such Receivable under this
Agreement; PROVIDED, HOWEVER, solely (i) for the purposes of SECTION 7.01(Q),
(ii) so long as no other Event of Termination shall have occurred and be
continuing, and (iii) for a period of not more than two Business Days after the
earlier of the date on which the Seller or the Servicer knows that the event
described in SECTION 7.01(Q) has occurred and the next succeeding Settlement
Date for any Settlement Period, the amount set aside and held in trust (in
accordance with the provisions of SECTION 6.02(b)) by the Servicer pursuant to
SECTION 2.05(A)(II)(B) at any time shall be considered to be an Eligible
Receivable in the Receivables Pool.
"RECENT COLLECTIONS" means the aggregate of all those Collections
that were deposited in the Lock-Box Accounts during the period from January 1,
2002 to May 15, 2002.
"RECORDS" means, with respect to any Receivable, all Contracts and
other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable and the
related Obligor.
"REINVESTMENT TERMINATION DATE" means that Business Day which the
Seller designates or, if the conditions precedent in SECTION 3.03 are not
satisfied, that Business Day which the Administrative Agent (with the consent or
at the request of the Majority Managing Agents) designates, as the first date on
which Collections in respect of each Receivable Interest shall not be reinvested
in accordance with SECTION 2.05(a), by notice to the Administrative Agent
26
(if the Seller so designates) or to the Seller (if the Administrative Agent so
designates) at least one Business Day prior to such Business Day.
"RELATED SECURITY" means with respect to any Receivable:
(i) all of the Seller's interest in the goods (including returned
goods), if any, relating to the sale which gave rise to such Receivable;
(ii) 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,
together with all financing statements signed by an Obligor describing any
collateral securing such Receivable;
(iii) all letter of credit rights, guarantees, insurance 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;
(iv) all Records relating to such Receivable; and
(v) all of the Seller's right, title and interest in and to the
following:
(a) the Receivables Contribution and Sale Agreement,
including, without limitation, (i) all rights to receive moneys due
and to become due under or pursuant to the Receivables Contribution
and Sale Agreement, (ii) all rights to receive proceeds of any
indemnity, warranty or guaranty with respect to the Receivables
Contribution and Sale Agreement, (iii) claims for damages arising
out of or for breach of or default under the Receivables
Contribution and Sale Agreement, and (iv) the right to perform under
the Receivables Contribution and Sale Agreement and to compel
performance and otherwise exercise all remedies thereunder; and
(b) all proceeds of any and all of the foregoing (including,
without limitation, proceeds which constitute property of the types
described in clause (a) of this definition).
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of the Seller now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock or in any junior class of stock
to the Seller, (ii) any redemption, retirement, sinking fund or similar payment,
purchase, or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of the Seller now or hereafter outstanding, (iii) any
payment or prepayment of principal of, premium, if any, or interest, fees, or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for recession with
respect to the Subordinated Notes payable to each of the Originators under the
Receivables Contribution and Sale Agreement, (iv) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire
27
shares of any class of capital stock of the Seller now or hereafter outstanding,
and (v) any payment of management fees by the Seller.
"SALES" means, with respect to any period, the aggregate Outstanding
Balance of Billed Pool Receivables acquired by the Seller during such period
less the aggregate amount of adjustments that would be deducted from such Billed
Pool Receivables in order to calculate the "Net Invoices" amount thereof as
defined in and in accordance with the MCI WORLDCOM Business Markets 4090 Trend
Report as such Trend Report exists on the New Closing Date (whether or not such
Trend Report is used to calculate such "Net Invoices" amount or otherwise
applies to such Billed Pool Receivables), including, without limitation,
adjustments of the type referred to in such Trend Report as "Pre-Invoice
Adjustments" (SCA Adjustments), "Tax Adjustments", "Internals" and "WCOM
Adjustments" as such terms are used in such Trend Report, and as reported by the
Servicer in the Monthly Report.
"SCA ADJUSTMENTS" means one-time or recurring credits for domestic
or international usage due a customer pursuant to a contractual agreement.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereof.
"SECOND CLOSING DATE" means October 24, 2001.
"SECURED OBLIGATIONS" has the meaning specified in SECTION 11.02.
"SELLER COLLECTIONS" means, as of any date, that portion of the
Collections deposited to the Concentration Account on such date equal to the
product of (a) the aggregate amount of such Collections multiplied by (b) 100%
minus the sum of (i) the Total Receivable Interest Percentage on such date and
(ii) the "Total Receivable Interest Percentage" under and as defined in the
Parallel Purchase Commitment on such date.
"SELLER'S ACCOUNT" means the deposit account of the Seller (with
reference to 160289.47 MCI WorldCom Rec. Corp. Sellers A/C FBO Admin Agent ABA
Routing number ▇▇▇▇▇▇▇▇▇, account number ###-##-####, and account name DFC
Funding Account) maintained with JPMorgan at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"SENIOR FINANCIAL OFFICER" means, in the case of any Person, any of
the Chief Financial Officer, Treasurer, Assistant Treasurer or Controller of
such Person.
"SERVICER" has the meaning specified in SECTION 6.01.
"SERVICER FEE" has the meaning specified in SECTION 2.09(B).
"SETTLEMENT DATE" means, for each Settlement Period for each
Receivable Interest, (i) with respect to the payment of all amounts other than
Capital and Yield computed by reference to the Assignee Rate, the seventh
calendar day after the end of such Settlement Period during the term of this
Agreement; (ii) with respect to the payment of Yield computed by reference to
the Assignee Rate, the last day of such Settlement Period during the term of
this Agreement; and (iii) with respect to the recovery of Capital, the later of
the 26th day after the
28
end of such Settlement Period and the first Business Day after the Monthly
Report relating to such Settlement Period is required to be forwarded by the
Servicer to the Administrative Agent and each Managing Agent pursuant to SECTION
2.07(B) (whether or not so forwarded); PROVIDED that, in each case, if such day
is not a Business Day, such Settlement Date shall be the next succeeding
Business Day.
"SETTLEMENT PERIOD" means, for each Receivable Interest:
(a) in the case of any Settlement Period in respect of which Yield
is computed by reference to the Purchaser Rate, initially, the period
beginning on the date of Purchase of such Receivable Interest and ending
on and including the last day of the calendar month in which the date of
such Purchase occurs, and thereafter, each successive period commencing on
the first day of each calendar month during the term of this Agreement and
ending on the last day of such calendar month during the term of this
Agreement; PROVIDED, HOWEVER, that in the case of any Settlement Period
for any Receivable Interest which commences before the Termination Date
and would otherwise end on a date occurring after the Termination Date,
such Settlement Period shall end on the Termination Date and the duration
of each Settlement Period which commences on or after the Termination Date
may be any period (including, without limitation, a period of one day) as
shall be selected from time to time by the Administrative Agent (with the
consent or at the request of the Majority Managing Agents);
(b) in the case of any Settlement Period in respect of which Yield
is computed by reference to the Assignee Rate, initially, the period
beginning on the date of Purchase of such Receivable Interest and ending
on and including the last day of the calendar month in which the date of
such Purchase occurs, and thereafter, each successive period commencing on
the first day of each calendar month during the term of this Agreement and
ending on the last day of such calendar month during the term of this
Agreement, subject, however, to the proviso to clause (a) above; and
PROVIDED, HOWEVER, that whenever the last day of any such Settlement
Period would otherwise occur on a day other than a Business Day, the last
day of such Settlement Period shall be extended to occur on the next
succeeding Business Day, EXCEPT that, if such extension would cause the
last day of such Settlement Period to occur in the next following calendar
month, the last day of such Settlement Period shall occur on the next
preceding Business Day; and
(c) in the case of any Settlement Period in respect of which Yield
is computed by reference to the Alternate Base Rate, such Settlement
Period shall be of such duration as shall be selected by the
Administrative Agent (with the consent or at the request of the Majority
Managing Agents).
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in
SECTION 4001(A)(15) of ERISA, that (a) is maintained for employees of the Seller
or any ERISA Affiliate and no Person other than the Seller and the ERISA
Affiliates or (b) was so maintained and in respect of which the Seller or any
ERISA Affiliate could have liability under SECTION 4069 of ERISA in the event
such plan has been or were to be terminated.
29
"SPECIAL CONCENTRATION LIMIT" means, for any Obligor, at any time
such U.S. dollar amount specified for such Obligor by the Administrative Agent
(with the consent or at the request of all the Purchasers, which consent or
request, in the case of GBFC, Paradigm and Liberty, may be conditioned on
confirmation from the Rating Agencies rating GBFC's, Paradigm's or Liberty's, as
the case may be, commercial paper notes that such amount will not result in a
downgrade or withdrawal of the rating of GBFC's, Paradigm's or Liberty's, as the
case may be, commercial paper notes), in writing delivered to the Seller;
PROVIDED, HOWEVER, that the Administrative Agent (with the consent or at the
request of the Majority Managing Agents), may cancel any Special Concentration
Limit upon three Business Days' notice to the Seller.
"SPECIAL EVENT" means, for any Purchaser, 60 days following the date
of written notice by the Managing Agent of such Purchaser to the Seller,
WORLDCOM and each other Managing Agent to the effect that (i) the Securities and
Exchange Commission, any banking regulatory authority or any other Governmental
Authority having jurisdiction over any corporation controlling such Managing
Agent or any of its subsidiaries, requires the consolidation of the assets and
liabilities of such Purchaser on the balance sheet of such corporation or any of
its subsidiaries (including, without limitation, such Managing Agent) or
requires that capital be maintained with respect thereto under any capital
requirements as if such assets were owned by such corporation or any of its
subsidiaries or (ii) the independent auditors for such corporation have advised
such corporation or any of its subsidiaries in writing that in their opinion
such consolidation is required by GAAP or applicable law, rule or regulation.
"SUBSTITUTABLE PURCHASER" has the meaning specified in SECTION 2.14.
"TARIFF" means, at any time, any then effective agreement or other
document submitted from time to time by any Originator to any government or
governmental regulatory agency setting forth the terms and conditions of the
sales by such Originator of telecommunication goods or services to any Obligor
from time to time (including, without limitation, the terms and conditions
affecting the creation, billing, payment and collections of Receivables) within
the jurisdictional boundaries of any such government or agency.
"TAXES" has the meaning specified in SECTION 2.12(A).
"TELECOM" means Telecom*USA, Inc., a Delaware corporation.
"TERMINATION DATE" means the earlier of (i) the Reinvestment
Termination Date and (ii) the Facility Termination Date.
"TOTAL RECEIVABLE INTEREST PERCENTAGE" means, on any date, the sum
of the Receivable Interests (expressed in percentage terms) on such date.
"TRANSACTION DOCUMENTS" means this Agreement, the Parallel Purchase
Commitment, the Receivables Contribution and Sale Agreement, the Collection
Notices, the Consent and Agreement, the Parent Undertaking, the Certificates,
the Subordinated Notes, the Fee Letters and the Demand Note.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the specified jurisdiction.
30
"UNAPPLIED CASH AND CREDITS" means, at any time, the aggregate
amount of Collections or other cash or credits then held by or for the account
of the Servicer, any Originator or the Seller in respect of the payment of
Billed Pool Receivables, but not yet applied to the payment of such Pool
Receivables.
"UNBILLED POOL RECEIVABLE" means any Pool Receivable that is at the
time of determination an Unbilled Receivable.
"UNBILLED RECEIVABLES" means a Receivable for which the Obligor has
not been billed, net of any amounts reserved in connection with such Receivable
for SCA Adjustments.
"UNITED STATES" and "U.S." each mean United States of America.
"UUNET" means UUNET Technologies, Inc., a Delaware corporation.
"WEEKLY REPORT" means a report, in substantially the form of Exhibit
M hereto, furnished by the Servicer to each Managing Agent and the
Administrative Agent pursuant to SECTION 2.07(D).
"WEEKLY REPORTING PERIOD" means any period that is neither a Monthly
Reporting Period nor a Daily Reporting Period.
"WELFARE PLAN" means a welfare plan, as defined in SECTION 3(L) of
ERISA.
"WORLDCOM CREDIT AGREEMENT" means either (a) the 364-Day Revolving
Credit Agreement and Revolving Credit Agreement dated as of June 8, 2001 among
WORLDCOM, as borrower, certain banks and other financial institutions party
thereto as "Lenders" thereunder, and Bank of America, N.A., and The Chase
Manhattan Bank, as Co-Administrative Agents, or (b) the credit or loan agreement
which replaces, refinances or restates such Agreement (such credit or loan
agreement being the "NEW WORLDCOM CREDIT AGREEMENT"), without giving effect, in
the case of such clauses (a) and (b), to any waiver, amendment or other
modification, or consent, with respect thereto.
"YIELD" means:
(a) except as otherwise provided in clause (c) below, for each
Receivable Interest for any Settlement Period to the extent the Owner of
such Receivable Interest will be funding such Receivable Interest during
such Settlement Period through the issuance of commercial paper notes,
PR x C x ED + LF
--
360
(b) (i) except as otherwise provided in subclause (ii) below and
clause (c) below, for each Receivable Interest for any Settlement Period
to the extent the Owner of such Receivable Interest will not be funding
such Receivable Interest during such Settlement Period through the
issuance of commercial paper notes,
31
AR x C x ED + LF
--
360
(ii) except as otherwise provided in clause (c) below, for each
Receivable Interest for any Settlement Period during which the Owner of
such Receivable Interest shall cease to fund such Receivable Interest
through the issuance of commercial paper notes on any day other than the
first day thereof, the sum of (A) Yield for such Receivable Interest
calculated under clause (a) of this definition except that PND shall be
substituted for ED plus (B) Yield for such Receivable Interest calculated
under clause (b)(i) of this definition except that ARD shall be
substituted for ED plus (C) the product of
AR x AY x ARD
---
360
(c) for each Receivable Interest for any period within any
Settlement Period in which an Event of Termination shall have occurred
and/or is continuing, the sum of (i) the Yield for such Receivable
Interest calculated under clause (a) or (b), as applicable, of this
definition, plus (ii) the product of
DR x C x TD
--
360
where:
AR = the Assignee Rate for such Settlement Period for such
Receivable Interest;
PR = the Purchaser Rate for such Settlement Period for
such Receivable Interest;
DR = the Default Rate in effect from time to time;
C = the Capital of such Receivable Interest during such
Settlement Period;
ED = the actual number of days elapsed during such
Settlement Period, PROVIDED, HOWEVER, that if an Event
of Termination shall have occurred and/or is continuing
during such Settlement Period, "ED" shall not include
the number of days during such Settlement Period in
which there shall have occurred and/or be continuing an
Event of Termination;
TD = the actual number of days elapsed during such
Settlement Period in which there shall have occurred
and/or be continuing an Event of Termination;
32
LF = the Liquidation Fee, if any, for such Receivable
Interest for such Settlement Period;
PND = the actual number of days elapsed during the period
from the first day of such Settlement Period to the date
on which the Owner of such Receivable Interest shall
cease to fund such Receivable Interest through the
issuance of commercial paper notes;
ARD = the actual number of days elapsed during the period
from the date on which the Owner of such Receivable
Interest shall cease to fund such Receivable Interest
through the issuance of commercial paper notes to the
last day of such Settlement Period; and
AY = the sum of accrued Yield for such Receivable Interest
calculated under subclause (A) of clause (b)(ii) of this
definition plus all unpaid Yield for such Receivable
Interest which accrued prior to such Settlement Period,
as calculated under clause (a) of this definition;
PROVIDED that no provision of this Agreement shall require the payment or permit
the collection of Yield in excess of the maximum permitted by applicable law;
and PROVIDED FURTHER, that Yield for any Receivable Interest shall not be
considered paid by any distribution to the extent that at any time all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason.
"YIELD/FEE RESERVE" for any Receivable Interest at any date means
the sum of (i) the Liquidation Yield/Fee at such date for such Receivable
Interest, (ii) the accrued and unpaid Yield for such Receivable Interest and
(iii) the aggregate amount of accrued and unpaid fees payable by the Seller
pursuant to SECTION 2.09 (a) and (b) in respect of such Receivable Interest.
SECTION 1.02 OTHER TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. 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.
SECTION 1.03 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."
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01 FACILITY. On the terms and conditions hereinafter set
forth, any or all of the Purchasers may, in their discretion, make Purchases
from time to time during the period from the date hereof to the Facility
Termination Date. Purchases of Receivable Interests, if any, by Purchasers shall
be made by the Purchasers making such Purchases simultaneously and ratably
according to their respective Pro Rata Shares for such Purchases. Under no
33
circumstances shall any Purchaser make any Purchase if, after giving effect to
such Purchase, the aggregate outstanding Capital of Receivable Interests owned
by such Purchaser, together with the aggregate outstanding "Capital" of
"Receivable Interests" owned by the "Purchaser Group" of such Purchaser under
and as defined in the Parallel Purchase Commitment, would exceed such
Purchaser's Purchase Limit, or if, after giving effect to such Purchase to be
made by all the Purchasers, the aggregate outstanding Capital of Receivable
Interests, together with the aggregate outstanding "Capital" of "Receivable
Interests" under the Parallel Purchase Commitment, would exceed the total of the
Purchase Limits. The Owner of each Receivable Interest shall, with the proceeds
of such Receivable Interest, reinvest pursuant to SECTION 2.05 in additional
undivided percentage interests in the Pool Receivables by making an appropriate
readjustment of such Receivable Interest. Nothing in this Agreement shall be
deemed to be or construed as a commitment by any Purchaser to purchase any
Receivable Interest at any time.
SECTION 2.02 MAKING PURCHASES. (a) Each Purchase of Receivable
Interests by the Purchasers shall be made on notice from the Seller to each
Managing Agent and the Administrative Agent, given not later than (i) in the
case of Receivable Interests for which Yield is computed by reference to the
Purchaser Rate, 12:00 noon (New York City time) on the second Business Day
before the date of such Purchase (except in the case of any Purchase of
Receivable Interests to be made on the Business Day immediately following the
New Closing Date, not later than 12:00 noon (New York City time) on the New
Closing Date), and (ii) in the case of Receivable Interests for which Yield is
computed by reference to the Assignee Rate, 12:00 noon (New York City time) on
the fourth Business Day before the date of such Purchase. Each such notice of a
proposed Purchase of Receivable Interests shall be by telecopier to the
Administrative Agent and by electronic transmission to each Managing Agent and
the Administrative Agent, and shall specify the requested aggregate amount of
such Purchase (which shall not be less than $10,000,000) to be paid to the
Seller and the date of such Purchase (which shall be a Business Day). Each
Purchaser shall promptly notify each Managing Agent and the Administrative Agent
whether it has determined to make such Purchase. If any Purchaser so notifies
the Managing Agents and the Administrative Agent that it has determined not to
make such Purchase or will not so fund such Purchase and any or all of the other
Purchasers agree to make and so fund such Purchase in place of such Purchaser
(it being understood that each Purchaser willing to so make and fund such
Purchase shall be permitted by the other Purchasers and the Seller to do so),
the Purchasers so making such Purchase shall notify each Managing Agent and the
Administrative Agent of such agreement and their respective Pro Rata Shares for
such Purchase. The Administrative Agent shall promptly thereafter, on each day
it receives any such notice, notify the Seller of the identity of the
Purchasers, if any, which have determined to make and so fund such Purchase and
their respective Pro Rata Shares therefor. If any Purchaser shall have
determined not to make or so fund such Purchase and no other Purchasers shall
have agreed to make and so fund such Purchase in such Purchaser's place, the
Seller shall notify the Administrative Agent whether it has designated a new
Purchaser to replace such Purchaser pursuant to SECTION 2.14 and to make and so
fund such Purchase. On the date of each Purchase of Receivable Interests by the
Purchasers making such Purchase, each Purchaser making such Purchase shall, upon
satisfaction of the applicable conditions set forth in ARTICLE III, make
available to the Seller an amount equal to such Purchaser's Pro Rata Share of
such Purchase by deposit of such amount in same day funds to the Seller's
Account (or to such other account as the Seller may designate in writing from
time to time).
34
(b) The Managing Agent for each Purchaser holding any Receivable
Interest shall notify the Administrative Agent, (i) by 12:00 noon (New York City
time) on the third calendar day after the last day of each Settlement Period for
such Receivable Interest for which the Yield for such Settlement Period shall be
determined with reference to the Purchaser Rate, of (A) the Purchaser Rate for
such Settlement Period for such Receivable Interest and (B) the amount of Yield
accrued for such Receivable Interest during or with respect to such Settlement
Period, and (ii) by 12:00 noon (New York City time) on the third calendar day
after the last day of each Settlement Period for such Receivable Interest, of
the amount of fees accrued under the applicable Fee Letter during such
Settlement Period. The Administrative Agent shall notify the Seller and the
Servicer, by 12:00 noon (New York City time) on the fifth calendar day after the
last day of each Settlement Period for each Receivable Interest, of the
respective amounts of Yield and fees notified by each Managing Agent to the
Administrative Agent pursuant to the immediate preceding sentence. The
Administrative Agent shall, on the first day of each Settlement Period for such
Receivable Interest for which the Yield for such Settlement Period shall be
determined with reference to the Assignee Rate, notify the Seller, the Servicer
and each other Managing Agent of the Assignee Rate for such Settlement Period.
(c) Each notice of a Purchase delivered pursuant to SECTION 2.02(A)
shall be irrevocable and binding on the Seller. The Seller shall indemnify each
Managing Agent and each Purchaser against any actual loss or expense incurred by
such Managing Agent and/or such Purchaser as a result of any failure to fulfill
on or before the date of any Purchase by such Purchaser (as to which notice has
been given pursuant to SECTION 2.02(A)) the applicable conditions set forth in
ARTICLE III, including, without limitation, any actual loss or expense incurred
by reason of the liquidation or reemployment of deposits or other funds acquired
by such Managing Agent and/or such Purchaser to fund such Purchaser's ratable
portion of such Purchase when such Purchase, as a result of such failure, is not
made on such date.
(d) Either the Seller or the Managing Agent for any Owner, upon
notice to and consent by the other received at least three Business Days prior
to the end of any Settlement Period (the "TERMINATING SETTLEMENT PERIOD") for
any Receivable Interest of such Owner, may, effective on the last day of the
Terminating Settlement Period: (i) divide any such Receivable Interest into
multiple Receivable Interests, (ii) combine any such Receivable Interest with
one or more other Receivable Interests that have a Settlement Period ending on
the same day as such Terminating Settlement Period or (iii) combine any such
Receivable Interest with a new Receivable Interest to be purchased by such Owner
on the day such Terminating Settlement Period ends, PROVIDED, that in no event
may a Receivable Interest of any Owner be combined with a Receivable Interest of
any other Owner.
SECTION 2.03 TERMINATION OR REDUCTION OF THE PURCHASE LIMITS. (A)
OPTIONAL. The Seller may, upon at least five Business Days' notice to the
Administrative Agent and each Managing Agent, terminate in whole or reduce in
part, and ratably for each Purchaser, the unused portion of the aggregate
Purchase Limits; PROVIDED, HOWEVER, that for purposes of this SECTION 2.03(A),
the unused portion of the aggregate Purchase Limits shall be computed as the
excess of (i) the aggregate Purchase Limits immediately prior to giving effect
to such termination or reduction over (ii) the sum of (A) the aggregate Capital
of Receivable Interests outstanding at the time of such computation and (B) the
aggregate "Capital" of "Receivable Interests" outstanding under the Parallel
Purchase Commitment at such time; PROVIDED FURTHER, that each
35
partial reduction of the unused portion of the aggregate Purchase Limits shall
be in an amount equal to $10,000,000 or integral multiples of $1,000,000 in
excess thereof.
(b) MANDATORY. On each day on which the Seller shall, pursuant to
SECTION 2.03(A) of the Parallel Purchase Commitment, reduce in part the unused
portion of the aggregate Commitments (as defined in the Parallel Purchase
Commitment), the aggregate Purchase Limits shall automatically, and ratably for
each Purchaser, reduce by an equal amount. The aggregate Purchase Limits shall
automatically terminate in whole on any day on which the Seller shall terminate
in whole the aggregate Commitments pursuant to SECTION 2.03(A) of the Parallel
Purchase Commitment.
SECTION 2.04 RECEIVABLE INTEREST. Each Receivable Interest shall be
initially computed as of the opening of business of the Servicer on the date of
Purchase of such Receivable Interest. Thereafter until the Termination Date,
such Receivable Interest shall be automatically recomputed as of the close of
business of the Servicer on each day (other than a Liquidation Day). Such
Receivable Interest shall remain constant from the time as of which any such
computation or recomputation is made until the time as of which the next such
recomputation, if any, shall be made. Any Receivable Interest, as computed as of
the day immediately preceding the Termination Date, shall remain constant at all
times on and after the Termination Date. Such Receivable Interest shall become
zero at such time as the Owner of such Receivable Interest shall have received
the accrued Yield for such Receivable Interest, shall have recovered the Capital
of such Receivable Interest, and shall have received payment of the Fees and all
other amounts payable by the Seller to such Owner or its Managing Agent, and the
Servicer shall have received the accrued Servicer Fee for such Receivable
Interest. Upon any Receivable Interest becoming zero as aforesaid, the Owner
thereof and its Managing Agent and the Administrative Agent, respectively, shall
execute and deliver such documents and take such action as the Seller may
reasonably request to evidence the termination of such Owner's interest in the
remaining Pool Receivables and hereunder, including assignments to the Seller of
such Owner's interest in the remaining Pool Receivables and UCC termination
statements with respect thereto, all without recourse to, or representation or
warranty by, such Owner or its Managing Agent or the Administrative Agent, as
the case may be.
SECTION 2.05 NON-LIQUIDATION SETTLEMENT PROCEDURES. (a) Except as
set forth in subsection (d) of this SECTION 2.05, on each Business Day (other
than a Liquidation Day or a Provisional Liquidation Day) during any Daily
Reporting Period, the Servicer shall cause all those funds on deposit in the
Lock-Box Accounts that constitute Collections of Pool Receivables to be
transferred electronically in immediately available funds to the Concentration
Account, and shall, based on the Daily Report delivered by the Servicer to each
Managing Agent and the Administrative Agent on such Business Day pursuant to
SECTION 2.07(C), at that time and in the following order:
(i) allocate all Collections transferred to the Concentration
Account since receipt of the last such Daily Report either as Owner
Collections or as Seller Collections;
(ii) for each Receivable Interest, out of such Owner Collections
attributable to such Receivable Interest, cause the Concentration Bank to
transfer to the Deposit
36
Account, to be held and invested by the Administrative Agent pursuant to
SECTION 6.06, the Cure Amount, if any, for such Receivable Interest for
such Business Day;
(iii) for each Receivable Interest, out of the remainder of such
Owner Collections attributable to such Receivable Interest, set aside and
hold in trust (in accordance with the provisions of SECTION 6.02(B)) for
the Owner of such Receivable Interest and the Servicer an amount equal to
the sum of (A) the Yield and Servicer Fee accrued through such Business
Day for such Receivable Interest and not previously so set aside and (B)
the aggregate of the Fees and any other amounts then accrued or owed
hereunder by the Seller to such Owner or its Managing Agent and not
previously so set aside;
(iv) reinvest the remainder of such Owner Collections, for the
benefit of the Owner of such Receivable Interest, by recomputation of such
Receivable Interest pursuant to SECTION 2.04 as of the end of such
Business Day and cause the Concentration Bank to transfer such remainder
for account of the Seller either to the Seller's Account or to a deposit
account of the Servicer; PROVIDED that, to the extent that any Owner shall
be required for any reason to pay over any amount of Collections which
shall have been previously reinvested for the account of such Owner
pursuant to SECTION 2.04, such amount shall be deemed not to have been so
transferred but rather to have been retained by the Seller and paid over
for the account of such Owner and, notwithstanding any provision hereof to
the contrary, such Owner shall have a claim for such amount; and
(v) cause the Concentration Bank to transfer the Seller Collections
for account of the Seller either to the Seller's Account or to a deposit
account of the Servicer;
it being understood and agreed that if on any Business Day during any Daily
Reporting Period the Servicer shall fail to deliver the Daily Report for such
Business Day to each Managing Agent and the Administrative Agent pursuant to
SECTION 2.07(c), the Servicer shall, until such Daily Report shall be so
delivered, either hold all funds that constitute Collections of Pool Receivables
in the Concentration Account or, if and to the extent that the Servicer shall be
obligated to deposit such funds in the Deposit Account pursuant to this SECTION
2.05(A), deposit such funds in the Deposit Account.
If on any Business Day (other than a Settlement Date in respect of Capital)
during any Daily Reporting Period, the Servicer shall deliver to each Managing
Agent and the Administrative Agent, prior to 12:00 noon (New York City time) on
such Business Day, a Daily Report for such Business Day that shows any Excess
Amount in respect of the Receivable Interests on deposit in the Deposit Account
on such Business Day, the Administrative Agent shall, on such Business Day,
transfer by way of immediately available funds to the Concentration Account
funds equal to such Excess Amount.
On the Business Day that occurs two Business Days before the Settlement Date for
each Settlement Period for such Receivable Interest, the Servicer shall deposit
to the Deposit Account for the account of the Owner of such Receivable Interest
the amounts set aside in respect of such Settlement Period as described in
clause (iii) of this SECTION 2.05(a). Upon receipt of such funds by the
Administrative Agent and on such Settlement Date, the Administrative Agent shall
37
distribute such funds and the Cure Deposited Amounts, if any, then held in the
Deposit Account and attributable to such Receivable Interest (i) to the Owner of
such Receivable Interest (A) in payment of the accrued Yield for such Receivable
Interest, (B) in reduction of Capital of such Receivable Interest in the amount
of the Cure Amount, if any, then in respect of such Receivable Interest, and (C)
in payment of the Fees and any other amounts then owed by the Seller hereunder
to such Owner or its Managing Agent and (ii) to the Servicer in payment of the
accrued Servicer Fee payable with respect to such Receivable Interest. If there
shall be insufficient funds on deposit for the Administrative Agent to
distribute funds in payment in full of the aforementioned amounts, the
Administrative Agent shall distribute such funds, FIRST, to the payment of the
Servicer's out-of-pocket costs and expenses in connection with servicing,
administering and collecting the Pool Receivables, up to the amount of the
Servicer Fee, if WORLDCOM or one of its Affiliates is not then acting as the
Servicer, SECOND, in payment of the accrued Yield for such Receivable Interest,
THIRD, in reduction of Capital of such Receivable Interest in the amount of the
Cure Amount, if any, then in respect of such Receivable Interest, FOURTH, in
payment of the Fees and any other amounts owed by the Seller hereunder to such
Owner or its Managing Agent, FIFTH, in payment of the Servicer's out-of-pocket
costs and expenses in connection with servicing, administering and collecting
the Pool Receivables, in excess of the Servicer Fee, if WORLDCOM or one of its
Affiliates is not then acting as the Servicer, and SIXTH, in payment of the
accrued Servicer Fee payable with respect to such Receivable Interest if
WORLDCOM or one of its Affiliates is then acting as Servicer.
(b) Except as set forth in subsection (d) of this SECTION 2.05, on
each Business Day (other than a Liquidation Day or a Provisional Liquidation
Day) during each Weekly Reporting Period, the Servicer shall cause all those
funds on deposit in the Lock-Box Accounts that constitute Collections of Pool
Receivables to be transferred electronically in immediately available funds to
the Concentration Account, and shall, based on information available to it, at
that time and in the following order:
(i) allocate all such Collections transferred to the Concentration
Account either as Owner Collections or as Seller Collections;
(ii) for each Receivable Interest and subject to the PROVISO set
forth below, out of such Owner Collections attributable to such Receivable
Interest, set aside and hold in trust for the Owner of such Receivable
Interest and the Servicer an amount equal to the sum of (A) the Yield and
Servicer Fee accrued through such Business Day for such Receivable
Interest and not previously so set aside, (B) the Cure Amount, if any, for
such Receivable Interest for such Business Day, and (C) the aggregate of
the Fees and any other amounts then accrued or owed hereunder by the
Seller to such Owner or its Managing Agent and not previously so set
aside;
(iii) reinvest the remainder of such Owner Collections, for the
benefit of the Owner of such Receivable Interest, by recomputation of such
Receivable Interest pursuant to SECTION 2.04 as of the end of such
Business Day and cause the Concentration Bank to transfer such remainder
for account of the Seller either to the Seller's Account or to a deposit
account of the Servicer; PROVIDED that, to the extent that any Owner shall
be required for any reason to pay over any amount of Collections which
shall have been previously reinvested for the account of such Owner
pursuant to SECTION 2.04, such
38
amount shall be deemed not to have been so transferred but rather to have
been retained by the Seller and paid over for the account of such Owner
and, notwithstanding any provision hereof to the contrary, such Owner
shall have a claim for such amount; and
(iv) cause the Concentration Bank to transfer the Seller Collections
for account of the Seller either to the Seller's Account or to a deposit
account of the Servicer;
PROVIDED, HOWEVER, that on the first Business Day of each week, the Servicer
shall, based on the Weekly Report delivered by the Servicer to each Managing
Agent and the Administrative Agent on such Business Day pursuant to SECTION
2.07(D) for the immediately preceding week, for such Receivable Interest, out of
such Owner Collections referred to in clause (i) of this SUBSECTION (B)
attributable to such Receivable Interest, cause the Concentration Bank to
transfer to the Deposit Account, to be held and invested by the Administrative
Agent pursuant to SECTION 6.06, the Cure Amount, if any, for such Receivable
Interest for such Business Day, it being understood and agreed that if on the
first Business Day of any week during any Weekly Reporting Period, the Servicer
shall fail to have delivered the Weekly Report for such Business Day to each
Managing Agent and the Administrative Agent pursuant to SECTION 2.07(D), the
Servicer shall, until such Weekly Report shall be so delivered, either hold all
funds that constitute Collections of Pool Receivables in the Concentration
Account or, if and to the extent that the Servicer shall be obligated to deposit
such funds in the Deposit Account pursuant to this SECTION 2.05(B), deposit such
funds in the Deposit Account.
If, on the first Business Day (other than a Settlement Date in respect of
Capital) of any week during any Weekly Reporting Period, the Servicer shall
deliver to each Managing Agent and the Administrative Agent, prior to 12:00 noon
(New York City time) on such Business Day, a Weekly Report for such Business Day
that shows any Excess Amount in respect of the Receivable Interests on deposit
in the Deposit Account on such Business Day, the Administrative Agent shall, on
such Business Day, transfer by way of immediately available funds to the
Concentration Account funds equal to such Excess Amount.
On the Business Day that occurs two Business Days before the Settlement Date for
each Settlement Period for such Receivable Interest, the Servicer shall deposit
to the Deposit Account for the account of the Owner of such Receivable Interest
the amounts set aside in respect of such Settlement Period as described in
clause (ii) of this SECTION 2.05(B). Upon receipt of such funds by the
Administrative Agent and on such Settlement Date, the Administrative Agent shall
distribute such funds and the Cure Deposited Amounts, if any, then held in the
Deposit Account and attributable to such Receivable Interest (i) to the Owner of
such Receivable Interest (A) in payment of the accrued Yield for such Receivable
Interest, (B) in reduction of Capital of such Receivable Interest in the amount
of the Cure Amount, if any, then in respect of such Receivable Interest, and (C)
in payment of the Fees and any other amounts then owed by the Seller hereunder
to such Owner or its Managing Agent and (ii) to the Servicer in payment of the
accrued Servicer Fee payable with respect to such Receivable Interest. If there
shall be insufficient funds on deposit for the Administrative Agent to
distribute funds in payment in full of the aforementioned amounts, the
Administrative Agent shall distribute such funds, FIRST, to the payment of the
Servicer's out-of-pocket costs and expenses in connection with servicing,
administering and collecting the Pool Receivables, up to the amount of the
Servicer Fee, if WORLDCOM or one of its Affiliates is not then acting as the
Servicer, SECOND, in payment of
39
the accrued Yield for such Receivable Interest, THIRD, in reduction of Capital
of such Receivable Interest in the amount of the Cure Amount, if any, then in
respect of such Receivable Interest, FOURTH, in payment of the Fees and any
other amounts owed by the Seller hereunder to such Owner or its Managing Agent,
FIFTH, in payment of the Servicer's out-of-pocket costs and expenses in
connection with servicing, administering and collecting the Pool Receivables, in
excess of the Servicer Fee, if WORLDCOM or one of its Affiliates is not then
acting as the Servicer, and SIXTH, in payment of the accrued Servicer Fee
payable with respect to such Receivable Interest if WORLDCOM or one of its
Affiliates is then acting as Servicer.
(c) Except as set forth in subsection (d) of this SECTION 2.05, on
each Business Day (other than a Liquidation Day or a Provisional Liquidation
Day) during each Monthly Reporting Period, the Servicer shall cause all those
funds on deposit in the Lock-Box Accounts that constitute Collections of Pool
Receivables to be transferred electronically in immediately available funds to
the Concentration Account, and shall, based on information available to it, at
that time and in the following order:
(i) allocate all such Collections transferred to the Concentration
Account either as Owner Collections or as Seller Collections;
(ii) for each Receivable Interest, out of such Owner Collections
attributable to such Receivable Interest, set aside and hold in trust for
the Owner of such Receivable Interest and the Servicer an amount equal to
the sum of (A) the Yield and Servicer Fee accrued through such Business
Day for such Receivable Interest and not previously so set aside, (B) the
Cure Amount, if any, for such Receivable Interest for such Business Day,
and (C) the aggregate of the Fees and any other amounts then accrued or
owed hereunder by the Seller to such Owner or its Managing Agent and not
previously so set aside;
(iii) reinvest the remainder of such Owner Collections for the
benefit of the Owner of such Receivable Interest, by recomputation of such
Receivable Interest pursuant to SECTION 2.04 as of the end of such
Business Day and cause the Concentration Bank to transfer such remainder
for account of the Seller either to the Seller's Account or to a deposit
account of the Servicer; PROVIDED that, to the extent that any Owner shall
be required for any reason to pay over any amount of Collections which
shall have been previously reinvested for the account of such Owner
pursuant to SECTION 2.04, such amount shall be deemed not to have been so
transferred but rather to have been retained by the Seller and paid over
for the account of such Owner and, notwithstanding any provision hereof to
the contrary, such Owner shall have a claim for such amount; and
(iv) cause the Concentration Bank to transfer the Seller Collections
for account of the Seller either to the Seller's Account or to a deposit
account of the Servicer.
On the Settlement Date for each Settlement Period for such Receivable Interest,
the Servicer shall deposit to the Deposit Account for the account of the Owner
of such Receivable Interest the amounts set aside in respect of such Settlement
Period as described in clause (ii) of this SECTION 2.05(C). Upon receipt of such
funds by the Administrative Agent and on such Settlement Date, the
Administrative Agent shall distribute such funds (i) to the Owner of such
Receivable Interest (A) in payment of the accrued Yield for such Receivable
Interest, (B) in reduction of Capital of
40
such Receivable Interest in the amount of the Cure Amount, if any, then in
respect of such Receivable Interest, and (C) in payment of the Fees and any
other amounts then owed by the Seller hereunder to such Owner or its Managing
Agent and (ii) to the Servicer in payment of the accrued Servicer Fee payable
with respect to such Receivable Interest. If there shall be insufficient funds
on deposit for the Administrative Agent to distribute funds in payment in full
of the aforementioned amounts, the Administrative Agent shall distribute such
funds, FIRST, to the payment of the Servicer's out-of-pocket costs and expenses
in connection with servicing, administering and collecting the Pool Receivables,
up to the amount of the Servicer Fee, if WORLDCOM or one of its Affiliates is
not then acting as the Servicer, SECOND, in payment of the accrued Yield for
such Receivable Interest, THIRD, in reduction of Capital of such Receivable
Interest in the amount of the Cure Amount, if any, then in respect of such
Receivable Interest, FOURTH, in payment of the Fees and any other amounts owed
by the Seller hereunder to such Owner or its Managing Agent, FIFTH, in payment
of the Servicer's out-of-pocket costs and expenses in connection with servicing,
administering and collecting the Pool Receivables, in excess of the Servicer
Fee, if WORLDCOM or one of its Affiliates is not then acting as the Servicer,
and SIXTH, in payment of the accrued Servicer Fee payable with respect to such
Receivable Interest if WORLDCOM or one of its Affiliates is then acting as
Servicer.
(d) Anything herein to the contrary notwithstanding, on each
Business Day (other than a Liquidation Day or a Provisional Liquidation Day) on
which a Special Event for any Purchaser shall have occurred and be continuing
during any Settlement Period for any Receivable Interest owned by such
Purchaser, (i) the Servicer shall set aside and hold in trust, and deposit to
the Deposit Account for the account of such Purchaser, all Collections of Pool
Receivables attributable to such Receivable Interest, and (ii) the
Administrative Agent shall distribute such Collections to such Purchaser and the
Servicer, in each case of clauses (i) and (ii) above as and in the manner and
order set forth in SECTION 2.06 as though the term "Owner" in SECTION 2.06
referred only to such Purchaser.
SECTION 2.06 LIQUIDATION SETTLEMENT PROCEDURES. On each Liquidation
Day and on each Provisional Liquidation Day during each Settlement Period for
each Receivable Interest, the Servicer shall cause all those funds on deposit in
the Lock-Box Accounts that constitute Collections of Pool Receivables to be
transferred electronically in immediately available funds to the Concentration
Account, and, based on information available to it, at that time and in the
following order:
(i) allocate all such Collections either as Owner Collections or as
Seller Collections;
(ii) for each Receivable Interest, out of such Owner Collections,
cause the Concentration Bank to deposit to the Deposit Account for the
account of the Owner of such Receivable Interest funds constituting such
Owner Collections attributable to such Receivable Interest, but such
deposit shall not exceed the sum of (A) the accrued Yield for each
Receivable Interest as of such date, (B) the Capital of such Receivable
Interest, (C) the accrued Servicer Fee payable as of such date, and (D)
the aggregate of the Fees and any other amounts owed hereunder by the
Seller to the Owner of such Receivable Interest or its Managing Agent;
PROVIDED, HOWEVER, that if such funds are so deposited to the Deposit
Account on any Provisional Liquidation Day which is subsequently
41
determined not to be a Liquidation Day, such funds shall be applied
pursuant to SECTION 2.05 on the day of such subsequent determination; and
(iii) cause the Concentration Bank to transfer the Seller
Collections for account of the Seller either to the Seller's Account or to
a deposit account of the Servicer.
Upon receipt of such funds by, and held by, the Administrative Agent, the
Administrative Agent shall, on the Settlement Date for each Settlement Period
for such Receivable Interest, distribute them (A) to the Owner of such
Receivable Interest (x) in payment of the accrued Yield for such Receivable
Interest, (y) in reduction (to zero) of the Capital of such Receivable Interest
and (z) in payment of the Fees and any other amounts owed by the Seller
hereunder to such Owner or its Managing Agent and (B) to the Servicer in payment
of accrued Servicer Fees payable with respect to such Receivable Interest. If
there shall be insufficient funds on deposit for the Administrative Agent to
distribute funds in payment in full of the aforementioned amounts, the
Administrative Agent shall distribute such funds, FIRST, to the payment of the
Servicer's reasonable out-of-pocket costs and expenses in connection with
servicing, administering and collecting the Pool Receivables, including the
Servicer Fee, if WORLDCOM or one of its Affiliates is not then acting as the
Servicer, SECOND, to the reimbursement of the Administrative Agent's costs of
collection and enforcement of this Agreement, THIRD, in payment of the accrued
Yield for such Receivable Interest, FOURTH, in reduction of Capital of such
Receivable Interest, FIFTH, in payment of the Fees and any other amounts payable
to such Owner or its Managing Agent, and SIXTH, in payment of the accrued
Servicer Fee payable with respect to such Receivable Interest if WORLDCOM or one
of its Affiliates is then acting as the Servicer.
SECTION 2.07 GENERAL SETTLEMENT PROCEDURES. (a) If on any day the
Outstanding Balance of a Pool Receivable is reduced or cancelled and such
reduction or cancellation constitutes a Dilution, the Seller shall be deemed to
have received on such day a Collection of such Receivable in the amount of such
reduction or cancellation and shall make the payment required to be made by it
in connection with such Collection on the day required by, and otherwise
pursuant to, SECTION 5.01(G). If on any day any of the representations or
warranties in SECTION 4.01(H) is no longer true with respect to any Pool
Receivable, the Seller shall be deemed to have received on such day a Collection
in full of such Pool Receivable and shall make the payment required to be made
by it in connection with such Collection on the day required by, and otherwise
pursuant to, SECTION 5.01(G). Except as stated in the preceding sentences of
this SECTION 2.07 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, except if payment is
designated by such Obligor for application to specific Receivables.
(b) On or before the 25th day of each month and on the Termination
Date, the Servicer shall prepare and furnish by facsimile to the Administrative
Agent for each Owner of a Receivable Interest, and shall send by electronic
transmission to each Managing Agent, a Monthly Report, completed by the Servicer
in all respects and signed by a duly authorized officer of the Servicer,
relating to each Receivable Interest, as of the close of business of the
Servicer on the last day of the immediately preceding month. The Servicer shall,
from time to time at the reasonable request of the Administrative Agent or any
Managing Agent, furnish to the
42
Administrative Agent or such Managing Agent (promptly after any such request) a
list by Obligor of all Billed Pool Receivables, together with an analysis as to
the aging of such Billed Pool Receivables. On or prior to the day the Servicer
is required to make a deposit with respect to a Settlement Period pursuant to
SECTION 2.05 or 2.06, the Servicer will advise the Administrative Agent of each
Liquidation Day and each Provisional Liquidation Day occurring during such
Settlement Period and of the allocation of the amount of such deposit to each
outstanding Receivable Interest; PROVIDED, HOWEVER, that, if WORLDCOM is not the
Servicer, WORLDCOM shall advise the Servicer of the occurrence of each such
Liquidation Day and each Provisional Liquidation Day occurring during such
Settlement Period on or prior to such day.
(c) On each Business Day during each Daily Reporting Period, by not
later than 12:00 noon (New York City time), the Servicer shall (i) prepare and
furnish by facsimile to the Administrative Agent for each Owner of a Receivable
Interest, a Daily Report, stating the information required by the form of Daily
Report attached hereto as Exhibit L and such other information as may be
specified to the Servicer from time to time by the Administrative Agent and
signed by a duly authorized officer of the Servicer, and (ii) send by electronic
transmission a copy of such Daily Report to each Managing Agent.
(d) On or before the first Business Day of each week during each
Weekly Reporting Period, by not later than 12:00 noon (New York City time), the
Servicer shall (i) prepare and furnish by facsimile to the Administrative Agent
for each Owner of a Receivable Interest a Weekly Report, stating the information
required by the form of Weekly Report attached hereto as Exhibit M and such
other information as may be specified to the Servicer from time to time by the
Administrative Agent and signed by a duly authorized officer of the Servicer,
and (ii) send by electronic transmission a copy of such Weekly Report to each
Managing Agent.
SECTION 2.08 PAYMENTS AND COMPUTATIONS, ETC. (a) All amounts to be
paid or deposited by the Seller or the Servicer hereunder shall be paid or
deposited in accordance with the terms hereof no later than 12:00 noon (New York
City time) on the day when due in lawful money of the United States in same day
funds to the Deposit Account. Amounts paid or deposited by the Seller or the
Servicer to the Deposit Account on any day later than 12:00 noon (New York City
time) on such day shall be deemed to be paid or deposited on the next succeeding
Business Day. The Administrative Agent shall promptly thereafter cause to be
distributed (i) like funds relating to the payment out of Collections in respect
of Capital, Yield, Servicer Fee, Fees or other amounts payable out of
Collections, to the applicable Owners (or, in the case of Fees, the applicable
Managing Agents), ratably in accordance with their respective interests and to
the Servicer in accordance with the provisions of SECTION 2.05 or 2.06, as
applicable, and (ii) like funds relating to the payment by the Seller of other
amounts payable by the Seller hereunder, to the parties hereto for whose benefit
such funds were paid (and if such funds are insufficient, such distribution
shall be made ratably in accordance with the respective amounts thereof).
(b) The Seller shall, to the extent permitted by law, pay to the
Administrative Agent interest on all amounts not paid or deposited within 2
Business Days of the date due hereunder (except for those amounts with respect
to which Yield accrues) at the Default Rate in effect from time to time, 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 for
the
43
account of, and distributed by the Administrative Agent to, the applicable
Owners ratably in accordance with their respective interests in such overdue
amount.
(c) All computations of interest and all computations of Yield,
Liquidation Yield/Fee and fees hereunder shall be made on the basis of a year of
360 days for the actual number of days (including the first but excluding the
last day) elapsed.
(d) The Seller hereby authorizes each Owner, if and to the extent
any amount owed by the Seller to such Owner is not paid to the Administrative
Agent when due hereunder and if the Administrative Agent or such Owner shall
have notified the Seller that such amount is or will be due, to charge from time
to time against any or all of the Seller's accounts with such Owner any such
amount so due.
(e) Unless the Administrative Agent shall have received notice from
the Servicer or the Seller prior to the date on which any payment is due to the
Owners hereunder that the Servicer or the Seller, as the case may be, will not
make such payment in full, the Administrative Agent may assume that the Servicer
or the Seller, as the case may be, has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance
upon such assumption, cause to be distributed to each Owner on such due date an
amount equal to the amount then due such Owner. If and to the extent the
Servicer or the Seller, as the case may be, shall not have so made such payment
in full to the Administrative Agent, each Owner shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Owner
together with interest thereon, for each day from the date such amount is
distributed to such Owner until the date such Owner repays such amount to the
Administrative Agent, at the Federal Funds Rate.
SECTION 2.09 FEES. (a) The Seller shall pay to the Administrative
Agent such fees as are set forth in the Fee Letters.
(b) The Servicer shall be paid a fee (the "SERVICER FEE") of 1/2 of
1% per annum on the average daily amount of Capital of each Receivable Interest,
from the date of the initial Purchase hereunder until the later of the Facility
Termination Date or the date on which such Capital is reduced to zero, payable
on the Settlement Date for each Settlement Period for such Receivable Interest;
PROVIDED, HOWEVER, that, upon three Business Days' notice to the Administrative
Agent, the Servicer (if not WORLDCOM or any Affiliate thereof) may elect to be
paid, as such fee, another percentage per annum on the average daily amount of
Capital of each such Receivable Interest, but in no event in excess of the
lesser of (i) 1% per annum on the average daily amount of such Capital, and (ii)
110% of the costs and expenses referred to in SECTION 6.02(C); and PROVIDED
FURTHER, that such fee shall be payable only from Collections pursuant to, and
subject to the priority of payment set forth in, SECTIONS 2.05 and 2.06.
SECTION 2.10 INCREASED COSTS. If, due to either (a) a change in
Regulation D of the Board of Governors of the Federal Reserve System (to the
extent any cost incurred pursuant to such regulation is not included in the
calculation of Adjusted LIBO Rate), (b) the introduction of or any change in or
in the interpretation of any law or regulation (other than any law or regulation
relating to taxes, as to which SECTION 2.12 shall govern) or (c) the compliance
with any guideline or request issued or made after the New Closing Date from any
central bank
44
or other governmental authority (whether or not having the force of law), there
shall be any increase in the cost to (or, in the case of Regulation D of the
Board of Governors of the Federal Reserve System, there shall be imposed a cost
on) any Indemnified Party of agreeing to make or making any Purchase or
purchasing or maintaining any Receivable Interest or any interest therein
hereunder, or, in the case of any Indemnified Party which is a Participant,
under any agreement entered into by such Participant with respect to this
Agreement, then the Seller shall from time to time, upon demand and delivery to
the Seller of the certificate referred to in the last sentence of this SECTION
2.10 by such Indemnified Party (or by the Administrative Agent for the account
of such Indemnified Party) (with a copy of such demand and certificate to the
Administrative Agent), pay to the Administrative Agent for the account of such
Indemnified Party additional amounts sufficient to compensate such Indemnified
Party for such increased or imposed cost (except those costs incurred more than
360 days prior to the date of such demand, any cost or expense allocable to a
period prior to the publication or effective date of such change, introduction,
guideline or request being deemed to be incurred for purposes hereof on the
later of such publication or effective date). Each Indemnified Party hereto
agrees to use reasonable efforts promptly to notify the Seller of any event
referred to in clause (a), (b) or (c) above, PROVIDED that the failure to give
such notice shall not affect the rights of any Indemnified Party under this
SECTION 2.10. Each Indemnified Party agrees that it shall use reasonable efforts
to designate another applicable office of such Indemnified Party to hold its
interest in any Receivable Interest if the amounts payable to it under this
SECTION 2.10 would thereby be reduced and if the making, funding or maintenance
of its interest in such Receivable Interest through such other applicable office
would not otherwise adversely affect such interest or such Indemnified Party. A
certificate in reasonable detail as to the basis for and the amount of such
increased cost, submitted to the Seller and the Administrative Agent by such
Indemnified Party (or by the Administrative Agent for the account of such
Indemnified Party) shall be conclusive and binding for all purposes, absent
manifest error.
SECTION 2.11 INCREASED CAPITAL. If any Indemnified Party determines
that due to either the introduction of or any change in or in the interpretation
of any law or regulation after the New Closing Date or the compliance with any
guideline or request issued or made after the New Closing Date from any central
bank or other governmental authority (whether or not having the force of law)
affects or would affect the amount of capital required or expected to be
maintained by such Indemnified Party or any corporation controlling such
Indemnified Party and that the amount of such capital is increased by or based
upon the existence of such Indemnified Party's commitment, if any, to purchase
any Receivable Interest or any interest therein, or to maintain such Receivable
Interest or interest, hereunder, or, in the case of any Indemnified Party which
is a Participant, under any agreement entered into by such Participant with
respect to this Agreement, then, upon demand and delivery to the Seller of the
certificate referred to in the last sentence of this SECTION 2.11 by such
Indemnified Party (or by the Administrative Agent for the account of such
Indemnified Party) (with a copy of such demand and certificate to the
Administrative Agent) the Seller shall pay to the Administrative Agent for the
account of such Indemnified Party from time to time, as specified by such
Indemnified Party, additional amounts sufficient to compensate such Indemnified
Party or such corporation in the light of such circumstances, to the extent that
such Indemnified Party reasonably determines such increase in capital to be
allocable to the existence of any such commitment (except any such increase in
capital incurred more than, or compensation attributable to the period before,
360 days prior to the date of such demand, any increase in capital allocable to,
or compensation attributable to, a
45
period prior to the publication or effective date of such introduction, change,
guideline or request being deemed to be incurred for purposes hereof on the
later of such publication or effective date). Each Indemnified Party hereto
agrees to use reasonable efforts promptly to notify the Seller of any event
referred to in the first sentence of this SECTION 2.11, PROVIDED that the
failure to give such notice shall not affect the rights of any Indemnified Party
under this SECTION 2.11. A certificate in reasonable detail as to the basis for,
and the amount of, such compensation submitted to the Seller and the
Administrative Agent by such Indemnified Party (or by the Administrative Agent
for the account of such Indemnified Party) shall be conclusive and binding for
all purposes, absent manifest error.
SECTION 2.12 TAXES. (a) Any and all payments by the Seller hereunder
or deposits from Collections hereunder shall be made, in accordance with SECTION
2.08, free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, EXCLUDING, in the case of each Indemnified Party, (i)
taxes that are imposed on its overall net income by the United States, (ii)
taxes that are imposed on its overall net income, assets or net worth (and
franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction
under the laws of which such Indemnified Party is organized or qualified to do
business or in which such Indemnified Party holds any asset in connection with
this Agreement or, in each case, any political subdivision thereof, and (iii)
other liabilities, interest and penalties incurred as a result of actions by
such Indemnified Party constituting the gross negligence or willful misconduct
of such Indemnified Party, except to the extent that such actions shall have
been approved by or directed to be taken by the Seller or the Servicer (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or deposits from Collections
hereunder being hereinafter referred to as "TAXES"). If the Seller or the
Servicer or the Administrative Agent shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or deposit from
Collections hereunder to any Indemnified Party, (I) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this SECTION
2.12) such Indemnified Party receives an amount equal to the sum it would have
received had no such deductions been made, (II) the Seller or the Servicer or
the Administrative Agent shall make such deductions and (III) the Seller or the
Servicer or the Administrative Agent shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Seller shall pay any present or future sales,
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or deposit from Collections hereunder or
from the execution, delivery or registration of, performing under, or otherwise
with respect to, this Agreement, the Certificates, the Receivables Contribution
and Sale Agreement, the Consent and Agreement or the Fee Letters (hereinafter
referred to as "OTHER TAXES").
(c) The Seller shall indemnify each Indemnified Party for and hold
it harmless against the full amount of Taxes and Other Taxes (including, without
limitation, taxes of any kind imposed by any jurisdiction on amounts payable
under this SECTION 2.12) imposed on or paid by such Indemnified Party and any
liability (including penalties, additions to tax, interest and expenses other
than those incurred as a result of actions by such Indemnified Party
constituting the gross negligence or willful misconduct of such Indemnified
Party, except to the
46
extent that such actions shall have been approved by or directed to be taken by
the Seller or the Servicer) arising therefrom or with respect thereto whether or
not such Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date such Indemnified
Party makes written demand therefor (with a copy to the Administrative Agent).
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes, the Seller shall furnish to the Administrative Agent, at its address
referred to in SECTION 12.02, the original or a certified copy of a receipt
evidencing such payment.
(e) Each Owner organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution and delivery
of this Agreement in the case of each original Purchaser, and on the date of the
Assignment or the Assignment and Acceptance pursuant to which it became an Owner
in the case of each other Owner, and from time to time thereafter as requested
in writing by the Seller (but only so long thereafter as such Owner remains
lawfully able to do so), provide each of the Administrative Agent and the Seller
with two original Internal Revenue Service forms W-8BEN and W-8ECI, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Owner is exempt from or entitled to a reduced rate
of United States withholding tax on payments pursuant to this Agreement. If the
forms provided by an Owner at the time such Owner first becomes a party to this
Agreement indicate a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Owner provides the appropriate form certifying that a
lesser rate applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such form; PROVIDED,
HOWEVER that if, at the effective date of the Assignment or the Assignment and
Acceptance pursuant to which an Assignee becomes an Owner hereunder, the Owner
assignor was entitled to payments under subsection (a) of this SECTION 2.12 in
respect of United States withholding tax with respect to amounts paid hereunder
at such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to such Assignee on such date. If any form or document referred to in
this subsection (e) requires the disclosure of information, other than
information necessary to compute the tax payable and information required on the
date hereof by Internal Revenue Service form 1001 or 4224, that the Owner
reasonably considers to be confidential, the Owner shall give notice thereof to
the Seller and shall not be obligated to include in such form or document such
confidential information.
(f) For any period with respect to which an Owner has failed to
provide the Seller with the appropriate form described in subsection (e) of this
SECTION 2.12 (other than if such failure is due to a change in law occurring
after the date on which a form originally was required to be provided or if such
form otherwise is not required under subsection (e) of this SECTION 2.12), such
Owner shall not be entitled to indemnification under subsection (a) or (c) of
this SECTION 2.12 with respect to Taxes imposed by the United States by reason
of such failure; PROVIDED, HOWEVER that should an Owner become subject to Taxes
because of its failure to deliver a form required hereunder, the Seller shall
take such steps as such Owner shall reasonably request to assist such Owner (at
such Owner's expense) to recover such Taxes.
47
SECTION 2.13 SHARING OF PAYMENTS, ETC. If any Owner which is a
Purchaser or any successive Assignee thereof shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of any Receivable Interests owned by it (other than
pursuant to SECTION 2.10, 2.11, 2.12 or 2.14) in excess of its ratable share of
payments on account of Receivable Interests obtained by all such Owners, such
Owner shall forthwith purchase from the other such Owners such participations in
the Receivable Interests owned by them as shall be necessary to cause such
purchasing Owner to share the excess payment ratably with each of them,
PROVIDED, HOWEVER that if all or any portion of such excess payment is
thereafter recovered from such purchasing Owner, such purchase from each Owner
shall be rescinded and such Owner shall repay to the purchasing Owner the
purchase price to the extent of such recovery together with an amount equal to
such Owner's ratable share (according to the proportion of (i) the amount of
such Owner's required payment to (ii) the total amount so recovered from the
purchasing Owner) of any interest or other amount paid or payable by the
purchasing Owner in respect of the total amount so recovered. The Seller agrees
that any Owner so purchasing an interest in Receivable Interests from another
Owner pursuant to this SECTION 2.13 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such interest in Receivable Interests as fully as if such Owner were the
direct creditor of the Seller in the amount of such interest in Receivable
Interests.
SECTION 2.14 SUBSTITUTION OF PURCHASERS. If any Purchaser shall (i)
determine not to make the portion of any Purchase to be made by it under SECTION
2.02(A) or refuse or be unable to fund or maintain such Purchase with the
issuance of commercial paper notes, or (ii) request, or if any Participant or
Participants for the Receivable Interest or Interests of such Purchaser shall
request, a payment pursuant to SECTION 2.10, 2.11 or 2.12, or (iii) be unable to
make any Purchase of, or maintain, any Receivable Interest bearing Yield based
on the Adjusted LIBO Rate as a result of the occurrence of any circumstance
specified in clause (A) or (C) of section (ii) in the proviso to the definition
of the term "Assignee Rate" contained herein, or (iv) have had its Affiliate
that is a Bank (under and as defined in the Parallel Purchase Commitment) become
a "Substitutable Member" under and as defined in SECTION 2.14 of the Parallel
Purchase Commitment (in each of clauses (i) through (iv) such a Purchaser being
a "SUBSTITUTABLE PURCHASER"), the Seller may cause such Substitutable Purchaser,
as instructed by the Seller, to assign to the other Purchasers which shall have
agreed to accept and assume such assignment (it being understood that each
Purchaser willing to so accept and assume such assignment shall be permitted to
do so by each other Purchaser and the Seller) ratably in accordance with their
respective Pro Rata Shares or as otherwise agreed by such Purchasers and
notified to the Seller and the Administrative Agent, or, if no other Purchaser
shall have agreed to so accept and assume such assignment within five Business
Days after the Seller shall give written notice to the Administrative Agent of
the Seller's offer of such assignment to the other Purchasers, to such other
Person as shall have been designated by the Seller and approved by the
Administrative Agent (which approval shall not be unreasonably withheld,
conditioned or delayed, and PROVIDED that the Person designated by such Person
as its Managing Agent shall also have been so approved by the Seller and the
Administrative Agent), all of its rights and obligations under this Agreement
and with respect to its Receivable Interests (including, without limitation, all
of its Purchase Limit and the amount of Capital owing to it) pursuant to an
Assignment and Acceptance executed under SECTION 9.02, provided, HOWEVER that
(x) such assignment shall not conflict with any law, rule, regulation, order or
decree of any governmental authority, (y) the Substitutable Purchaser shall have
received from such assignee full payment in immediately
48
available funds of all amounts payable to it in respect of Capital, accrued
Yield and other amounts owing to it in connection herewith and (z) such
assignment by such Substitutable Purchaser shall occur simultaneously with an
assignment by that Bank (under and as defined in the Parallel Purchase
Commitment) which is an Affiliate of such Substitutable Purchaser of all of such
Bank's rights and obligations under the Parallel Purchase Commitment and with
respect to its Receivable Interests, if any, to an assignee pursuant to SECTION
2.14 of the Parallel Purchase Commitment; and PROVIDED FURTHER, that nothing
contained in this SECTION 2.14 shall obligate any Purchaser to assume any rights
or obligations of any Substitutable Purchaser.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01 CONDITIONS PRECEDENT TO EFFECTIVENESS. This Agreement
shall be effective at such time as (i) the Seller shall have caused the amount
of the aggregate outstanding Capital of the Receivable Interests, ratably in
accordance with their respective Capital, to be reduced to an amount resulting
in no Cure Amount, determined on the basis of the Daily Report furnished
pursuant to SUBSECTION (G) below, (ii) the Administrative Agent and each
Managing Agent shall have received all fees and expenses required to be paid on
or before the New Closing Date pursuant to the terms of this Agreement, (iii)
the Facility Termination Date shall not have occurred, and (iv) the
Administrative Agent shall have received each of the following, in form and
substance satisfactory to the Administrative Agent and in sufficient copies for
the Administrative Agent and each Managing Agent:
(a) This Agreement, duly executed by each of the parties hereto.
(b) The Parallel Purchase Commitment, duly executed by each of the
parties thereto.
(c) The Parent Undertaking, duly executed by WORLDCOM.
(d) The Receivables Contribution and Sale Agreement, executed by
each Originator, WORLDCOM as the Buyer's Servicer, and the Seller.
(e) The Consent and Agreement, duly executed by the Seller and each
Originator.
(f) Favorable opinions of (i) Hall, Estill, Hardwick, Gable, Golden
& ▇▇▇▇▇▇, P.C., counsel to the Originators, WORLDCOM and the Seller, in
substantially the form of Exhibits H-1A and B hereto, (ii) ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Assistant Corporate General Counsel of WORLDCOM, in
substantially the form of Exhibit H-2 hereto, (iii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
Wood, New York counsel to the Originators, WORLDCOM and the Seller, in
substantially the form of Exhibit H-3 hereto, (iv) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
General Counsel of WORLDCOM, in substantially the form of Exhibit H-4
hereto, and (v) Morris, Nichols, Arsht, & ▇▇▇▇▇▇▇, Delaware counsel to the
Seller and the Originators, in substantially the form of Exhibit H-5
hereto.
(g) A Daily Report as of May 22, 2002.
49
(h) An Officer's Certificate, duly executed by an authorized officer
of the Seller, stating that:
(A) The representations and warranties contained in SECTION
4.01 of this Agreement are correct on and as of the New Closing
Date, both before and after giving effect to this Agreement; and
(B) No event has occurred and is continuing, or would result
from the execution and delivery of this Agreement and the
performance by the Seller of its obligations hereunder, which
constitutes an Event of Termination or a Potential Event of
Termination.
(i) An Officer's Certificate, duly executed by an authorized officer
of the Servicer, stating that:
(A) The representations and warranties contained in SECTION
4.02 of this Agreement are correct on and as of the New Closing
Date, both before and after giving effect to this Agreement; and
(B) No event has occurred and is continuing, or would result
from the execution and delivery of this Agreement and the
performance by the Servicer of its obligations hereunder, which
constitutes an Event of Termination or a Potential Event of
Termination.
(j) An Officer's Certificate, duly executed by an authorized officer
of each of the Originators, stating that the representations and
warranties contained in SECTION 3.01 of the Receivables Contribution and
Sale Agreement are correct on and as of the New Closing Date, both before
and after giving effect to this Agreement.
(k) A certificate of the Secretary or Assistant Secretary of
WORLDCOM certifying (i) that there have been no changes to its Articles or
Certificate of Incorporation since the Amendment Closing Date, or if there
have been any changes, a copy of such Articles or Certificate duly
certified by the Secretary of State of Georgia as of a recent date
acceptable to the Administrative Agent, (ii) that there have been no
changes to its by-laws since the Amendment Closing Date, or if there have
been any changes, a copy of such by-laws, (iii) the names and true
signatures of the officers of WORLDCOM authorized on its behalf to sign
this Agreement and the other Transaction Documents to be delivered by it
hereunder and (iv) a copy of the resolutions of the Board of Directors of
WORLDCOM authorizing the transactions contemplated by this Agreement and
the other Transaction Documents.
(l) A certificate of the Secretary or Assistant Secretary of the
Seller certifying (i) that there have been no changes to its Certificate
of Incorporation since the Amendment Closing Date, (ii) that there have
been no changes to its by-laws since the Amendment Closing Date, (iii) the
names and true signatures of the officers of the Seller authorized on its
behalf to sign this Agreement and the other Transaction Documents to be
delivered by it hereunder and (iv) a copy of the resolutions of the Board
of Directors
50
of the Seller authorizing the transactions contemplated by this Agreement
and the other Transaction Documents.
(m) A certificate of the Secretary or Assistant Secretary of each
Originator certifying (i) that there have been no changes to its
Certificate of Incorporation since the First Closing Date or the Amendment
Closing Date (whichever date such Certificate was furnished to the
Administrative Agent or its predecessor), as the case may be, or if there
have been any changes, a copy of such Certificate duly certified by the
Secretary of State of Delaware as of a recent date acceptable to the
Administrative Agent, (ii) that there have been no changes to its by-laws
since the First Closing Date or the Amendment Closing Date (whichever date
such by-laws were furnished to the Administrative Agent or its
predecessor), or if there have been any changes, a copy of such by-laws,
(iii) the names and true signatures of the officers of such Originator
authorized on its behalf to sign the Consent and Agreement and the other
Transaction Documents to be delivered by it hereunder and (iv) a copy of
the resolutions of the Board of Directors of such Originator authorizing
the transactions contemplated by the Receivables Contribution and Sale
Agreement and the other Transaction Documents to which such Originator is
a party.
(n) Copies of good standing certificates for each of the Seller,
WORLDCOM and the Originators, issued as of a recent date acceptable to the
Administrative Agent by the Secretaries of State of their respective
states of incorporation.
(o) The Fee Letters dated as of the New Closing Date duly executed
by all parties thereto.
(p) Proper UCC-3 financing statements for each of the financing
statements delivered pursuant to Sections 3.01(l) of the Second A&R
Agreement (except for those filed against CMC and Partners) and pursuant
to Section 8(p) of the Amendment, to be filed under the UCC amending the
name of the secured party therein from Bank One as Administrative Agent to
JPMorgan as Administrative Agent.
(q) Collection Notices for the Lock-Box Accounts in which at least
40% of the Recent Collections were deposited, duly executed by the
respective Lock-Box Banks and the owner of the Lock-Box Accounts (that is,
the Seller), indicating daily settlement transfers of Collections to the
Concentration Account and giving "control" (within the meaning of Section
9-104 of the UCC in effect in the State of New York) to the Administrative
Agent.
(r) An assignment by Bank One to JPMorgan as Administrative Agent of
all of Bank One's right, title and interest as Administrative Agent in, to
and under the Collection Notices as defined in, and entered into pursuant
to, the Original Agreement, the A&R Agreement or the Second A&R Agreement.
(s) The cancellation and return by Bank One of the Letter of Credit
as defined in, and issued pursuant to, the Second A&R Agreement.
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(t) Each of GBFC, Paradigm and Liberty shall have received a
confirmation that the ratings of the commercial paper notes of GBFC,
Paradigm and Liberty will not be downgraded or withdrawn as a result of
the execution of this Agreement.
SECTION 3.02 CONDITIONS PRECEDENT TO ALL PURCHASES AND
REINVESTMENTS. Each Purchase (including the initial Purchase of each Purchaser)
hereunder and the right of the Servicer to reinvest in Pool Receivables those
Collections attributable to a Receivable Interest pursuant to SECTION 2.05 shall
be subject to the further conditions precedent that:
(a) with respect to any such Purchase, on or prior to the date of
such Purchase, the Servicer shall have delivered to each Managing Agent
and the Administrative Agent, in form and substance satisfactory to the
Administrative Agent, a copy of each of the most recent Monthly Report,
Weekly Report and Daily Report that are then required to be delivered to
each Managing Agent and the Administrative Agent pursuant to SECTION
2.07(B), (C) AND (D), and completed by the Servicer in all respects,
together with such additional information (including, without limitation,
a listing by Obligor of all Billed Pool Receivables, together with an
analysis as to the aging of any Billed Pool Receivables included in such
Pool Receivables) as may be reasonably requested by the Administrative
Agent;
(b) on the date of such Purchase or reinvestment the following
statements shall be true (and the acceptance by the Seller of the proceeds
of such Purchase or reinvestment shall constitute a representation and
warranty by the Seller that on the date of such Purchase or reinvestment
such statements are true):
(i) The representations and warranties contained in Sections
4.01 and 4.02 of this Agreement, in SECTION 3.01 of the Receivables
Contribution and Sale Agreement and in SECTION 5 of the Parent
Undertaking are correct on and as of the date of such Purchase or
reinvestment, before and after giving effect to such Purchase or
reinvestment and to the application of the proceeds therefrom, as
though made on and as of such date;
(ii) No event has occurred and is continuing, or would result
from such Purchase or reinvestment or from the application of the
proceeds therefrom, which constitutes an Event of Termination or a
Potential Event of Termination;
(c) in the case of any such Purchase, the Administrative Agent shall
have received a request for such Purchase pursuant to SECTION 2.02;
(d) the Administrative Agent and the Majority Managing Agents shall
have been satisfied with the results of the most recent audit conducted
pursuant to SECTION 5.01(E);
(e) the Administrative Agent (with the consent or at the request of
the Majority Managing Agents) shall not have delivered to the Seller a
notice that the Purchasers shall not make any further Purchases hereunder
and/or that the Servicer shall not reinvest in any Pool Receivables on
behalf of the Owner of a Receivable Interest;
52
(f) the Facility Termination Date shall not have occurred; and
(g) the Administrative Agent shall have received such other
approvals, opinions or documents as the Administrative Agent or any
Managing Agent may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE SELLER. The
Seller represents and warrants as follows:
(a) The Seller is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, and is duly
qualified to do business, and is in good standing, in every jurisdiction
where the nature of its business requires it to be so qualified. The
Seller has no subsidiaries. All the outstanding shares of stock of the
Seller are owned by Partners free and clear of any Adverse Claim. Such
stock is validly issued, fully paid and nonassessable, and there are no
options, warrants or other rights to acquire securities of the Seller. The
general partners of Partners are Network and Communications.
(b) The execution, delivery and performance by the Seller of the
Transaction Documents to which it is or will be a party and the other
documents to be delivered by it hereunder, and the transactions
contemplated hereby and thereby, including the Seller's use of the
proceeds of Purchases and reinvestments, are within the Seller's corporate
powers, have been duly authorized by all necessary corporate action, do
not (i) contravene the Seller's charter or by-laws, (ii) violate any law,
rule, regulation, order, writ, judgment, injunction, decree, determination
or award, or (iii) breach or result in a default under, or result in the
acceleration of (or entitle any party to accelerate) the maturity of any
obligation of the Seller under, or result in or require the creation of
any Adverse Claim upon any property of the Seller pursuant to the terms
of, any Contract or any other agreement or instrument (other than any
Transaction Document) binding on or affecting the Seller or any of its
properties.
(c) No authorization or approval or other action by, and no notice
to or filing with, any Governmental Authority is required for the due
execution, delivery and performance by the Seller of any Transaction
Document to which it is or will be a party or any other agreement or
document to be delivered hereunder or for the perfection of or the
exercise by any Indemnified Party of its rights and remedies under the
Transaction Documents and such other agreements or documents, except for
the filings of the financing statements referred to in ARTICLE III.
(d) This Agreement and the other Transaction Documents to which the
Seller is a party have been duly executed and delivered by the Seller.
This Agreement and the other Transaction Documents to which the Seller is
a party are the legal, valid and binding obligations of the Seller
enforceable against the Seller in accordance with their
53
respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
to general equitable principles.
(e) [Intentionally Omitted].
(f) There is no pending or, to the Seller's knowledge, threatened
action or proceeding affecting the Seller before any court, governmental
agency or arbitrator which may materially adversely affect (i) the
financial condition or operations of the Seller or (ii) the ability of the
Seller to perform its obligations under this Agreement or any other
Transaction Document to which the Seller is or will be a party, or which
purports to affect the legality, validity or enforceability of any
Transaction Document.
(g) No proceeds of any Purchase or reinvestment will be used to
acquire any security in any transaction which is subject to SECTIONS 13
AND 14 of the Securities Exchange Act of 1934, as amended, or for any
purpose that would violate Regulation T, U or X of the Board of Governors
of the Federal Reserve System.
(h) On the date of each Purchase and reinvestment, the Receivables
with respect to which such Purchase or reinvestment is being made
constitute Eligible Receivables. Immediately prior to the time of the
initial creation of an interest hereunder in any Pool Receivable and each
Purchase, the Seller is the legal and beneficial owner of the Pool
Receivables and Related Security with respect thereto, in each case free
and clear of any Adverse Claim. Upon each Purchase or reinvestment, the
Seller shall transfer to the Owner making such Purchase or reinvestment
(and such Owner shall acquire) a valid undivided percentage ownership
interest to the extent of the pertinent Receivable Interest in each Pool
Receivable then existing or thereafter arising and in the Related Security
and Collections with respect thereto, free and clear of any Adverse Claim,
which ownership interest shall be a perfected first priority ownership
interest upon the filing of the financing statements referred to in
SECTION 3.02(J). No effective financing statement or other instrument
similarly in effect covering any Contract or any Pool Receivable or
Related Security or Collections with respect thereto is on file in any
recording office, except those filed in favor of the Administrative Agent
relating to this Agreement and the Parallel Purchase Commitment or in
favor of the Seller and the Administrative Agent relating to the
Receivables Contribution and Sale Agreement.
(i) Each Daily Report, Weekly Report and Monthly Report (if prepared
by the Seller or one of its Affiliates, or to the extent that information
contained therein is supplied by the Seller or any Affiliate thereof),
information, exhibit, financial statement, or other report or document
furnished or to be furnished at any time by or on behalf of the Seller to
the Administrative Agent or any Owner in connection with this Agreement is
and will be accurate in all material respects as of its date or as of the
date so furnished, and no such report or document contains, or will
contain, as of its date of delivery or the date so furnished, any untrue
statement of a material fact or omits to state, or will omit to state, as
of its date of delivery or the date so furnished, a material fact
necessary in order to make the statements contained therein, in the light
of the circumstances under which they were made, not misleading.
54
(j) The principal place of business and chief executive office of
the Seller, and the office where the Seller keeps its Records concerning
the Pool Receivables, are located at the address specified in Schedule III
hereto (or, by notice to the Administrative Agent in accordance with
SECTION 5.01(C), at such other locations in jurisdictions, within the
United States, where all actions required by SECTION 6.05(A) have been
taken and completed).
(k) The names and addresses of all the Lock-Box Banks, together with
the lock-box numbers related to, and the account numbers and owners (any
Originator or the Seller, as the case may be) of, the Lock-Box Accounts at
such Lock-Box Banks, are specified in Schedule I hereto (or such other
Lock-Box Banks and/or such other Lock-Box Accounts as have been notified
to the Administrative Agent in accordance with SECTION 5.03(d)), SUBJECT,
HOWEVER, to the provisions of SECTION 5.01(N).
(l) Each Purchase of a Receivable Interest and each reinvestment of
Collections in Pool Receivables will constitute (i) a "current
transaction" within the meaning of SECTION 3(A)(3) of the Securities Act
of 1933, as amended, and (ii) a purchase or other acquisition of notes,
drafts, acceptances, open accounts receivable or other obligations
representing part or all of the sales price of merchandise, insurance or
services within the meaning of SECTION 3(C)(5) of the Investment Company
Act of 1940, as amended.
(m) First: Since the date of its formation, the Seller has not
engaged in any activity other than that contemplated by the Transaction
Documents or entered into any commitment or incurred any Debt other than
pursuant to, or as permitted under, the Transaction Documents.
Second: On the First Closing Date, the Seller had initial
capitalization of at least $1,000 in cash.
(n) The Seller has not maintained, contributed to or incurred or
assumed any obligation with respect to any Plan, Multiemployer Plan or
Welfare Plan.
(o) The Seller has not sold, assigned, transferred, pledged or
hypothecated any interest in any Pool Receivable or the Collections with
respect thereto to any Person other than as contemplated by this Agreement
and the Parallel Purchase Commitment.
(p) The Seller has complied with the Credit and Collection Policy in
all material respects and since the Amendment Closing Date there has been
no change in the Credit and Collection Policy except as permitted
hereunder.
(q) The Seller has not extended or modified the terms of any Pool
Receivable or the Contract under which any such Pool Receivable arose,
except in accordance with the Credit and Collection Policy.
(r) Except under the Collection Notices, the Seller has not granted
any Person dominion or control of any Lock-Box Account, or the right to
take dominion or control over any Lock-Box Account at a future time or
upon the occurrence of a future event,
55
PROVIDED, HOWEVER, that this subsection (r) shall not be effective until,
and it shall be effective at all times after, the end of the 45 days
referred to in SECTION 5.01(N).
(s) With respect to each transfer to it of any Pool Receivables, the
Seller has either (i) purchased such Pool Receivables from a Originator in
exchange for payment (made by the Seller to such Originator in accordance
with the provisions of the Receivables Contribution and Sale Agreement) in
an amount which constitutes fair consideration and approximates fair
market value for such Pool Receivables and in a sale the terms and
conditions of which (including, without limitation, the purchase price
thereof) reasonably approximate an arm's-length transaction between
unaffiliated parties or (ii) acquired such Pool Receivables from such
Originator as a capital contribution in accordance with the provisions of
the Receivables Contribution and Sale Agreement. No such sale, and no such
contribution, has been made for or on account of an antecedent debt owed
by such Originator to the Seller and no such sale or contribution is or
may be voidable or subject to avoidance under any section of the U.S.
Bankruptcy Code.
(t) Except for instances in which an extension has been granted by
the relevant taxing authority, the Seller has filed, or caused to be filed
or be included in, all tax reports and returns (federal, state, local and
foreign), if any, required to be filed by it and paid, or caused to be
paid, all amounts of taxes, including interest and penalties, required to
be paid by it, except for such taxes (i) as are being contested in good
faith by proper proceedings and (ii) against which adequate reserves shall
have been established in accordance with and to the extent required by
GAAP, but only so long as the proceedings referred to in clause (i) above
could not subject the Administrative Agent or any other Indemnified Party
to any civil or criminal penalty or liability or involve any material risk
of the loss, sale or forfeiture of any property, rights or interests
covered hereunder or under the Receivables Contribution and Sale
Agreement.
(u) Each Pool Receivable is effective to create, and has created, a
legal, valid and binding obligation of the related Obligor to pay the
Outstanding Balance of such Pool Receivable created thereunder and any
accrued interest thereon, enforceable against such Obligor in accordance
with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws relating to or limiting
creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or
at law).
(v) The Seller is neither a "holding company" nor a "subsidiary
holding company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or any successor statute.
The Seller is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or any successor statute.
(w) The Seller has not used any corporate names, trade names or
assumed names other than the name in which it has executed this Agreement.
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(x) Each SCA Adjustment has been applied to each Pool Receivable
applicable thereto within 30 days after the date of the invoice relating
to such Pool Receivable.
SECTION 4.02 REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The
Servicer represents and warrants as follows:
(a) The Servicer is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
organization. Except where failure could not be a Material Adverse Event,
the Servicer (a) is duly qualified to transact business and is in good
standing in each jurisdiction where the nature and extent of its business
and properties require the same, and (b) possesses all requisite
authority, power, licenses, approvals, permits, Authorizations, and
franchises to use its assets and conduct its business as is now being, or
is contemplated herein to be, conducted. The Servicer has obtained all
Authorizations of the FCC and any applicable PUC necessary to conduct its
businesses, and all such Authorizations are in full force and effect,
without conditions, except such conditions as are generally applicable to
holders of such Authorizations.
(b) The execution, delivery and performance by the Servicer of each
of this Agreement and the other Transaction Documents to which the
Servicer is a party, and the transactions contemplated hereby and thereby,
are within the Servicer's corporate powers, have been duly authorized by
all necessary corporate action, do not (i) contravene the Servicer's
charter or bylaws, (ii) violate any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award binding on or
affecting the Servicer or any of its properties, or (iii) breach or result
in a default under, or result in the acceleration of (or entitle any party
to accelerate) the maturity of any obligation of the Servicer under, or
result in or require the creation of any lien upon or security interest in
any property of the Servicer pursuant to the terms of, any credit or loan
agreement, indenture, or other agreement or instrument binding on or
affecting the Servicer or any of its properties. Each of this Agreement
and the other Transaction Documents to which the Servicer is a party have
been duly executed and delivered by the Servicer.
(c) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or other
Person is required for the due execution, delivery and performance by the
Servicer of this Agreement or any of the other Transaction Documents to
which the Servicer is a party.
(d) This Agreement and the other Transaction Documents to which the
Servicer is a party are the legal, valid and binding obligations of the
Servicer enforceable against the Servicer in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
to general equitable principles.
(e) There is no pending or, to the knowledge of the Servicer,
threatened action, suit or proceeding affecting the Servicer or any of its
subsidiaries, or its property or the property of any of its subsidiaries,
before any court, governmental agency or arbitrator that, if determined
adversely to the Servicer or any such subsidiary, could be a
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Material Adverse Event, or that purports to affect the legality, validity
or enforceability of this Agreement or any of the other Transaction
Documents to which the Servicer is a party.
(f) Each Daily Report, Weekly Report and Monthly Report (in each
case if prepared by the Servicer or any Affiliate thereof, or to the
extent that information contained therein is supplied by the Servicer or
any Affiliate thereof), notice or other written item of information,
exhibit, financial statement, document, book, record or report furnished
or to be furnished at any time by the Servicer to any Indemnified Party in
each case in connection with any Transaction Document is or will be
accurate in all material respects as of its date or as of the date so
furnished, and no such report or document contains or will contain any
untrue statement of a material fact or omits to state, or will omit to
state, as of its date of delivery or the date so furnished, a material
fact necessary in order to make the statements contained therein, in the
light of the circumstances under which they were made, not misleading.
(g) The Servicer is neither a "holding company" nor a "subsidiary
holding company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or any successor statute.
The Servicer is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or any successor statute.
(h) [Intentionally Omitted].
(i) The Servicer has complied with the Credit and Collection Policy
in all material respects and since the Amendment Closing Date there has
been no change in the Credit and Collection Policy except as permitted
hereunder.
ARTICLE V
GENERAL COVENANTS OF THE SELLER AND THE SERVICER
SECTION 5.01 AFFIRMATIVE COVENANTS OF THE SELLER. Until the later of
the Facility Termination Date and the date upon which no Capital for any
Receivable Interest shall be existing and all other amounts payable by the
Seller hereunder shall be paid in full, the Seller shall, unless the Majority
Managing Agents 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 it and
all Pool Receivables and related Contracts, Related Security and
Collections with respect thereto.
(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 qualification would materially adversely affect the
interests of the Owners, the Managing Agents or the Administrative Agent
hereunder or in the Pool Receivables and Related Security, or the ability
of the Seller or
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the Servicer to perform their respective obligations hereunder or the
ability of the Seller to perform its obligations under the Contracts.
(c) OFFICES, RECORDS AND BOOKS OF ACCOUNTS. (i) Keep its principal
place of business and chief executive office and the offices where it
keeps its Records concerning the Pool Receivables and the Related Security
at the address of the Seller referred to in SECTION 4.01(J) or, upon at
least 30 days' prior written notice to the Administrative Agent, at any
other location in a jurisdiction where all actions required by SECTION
6.05(A) shall have been taken, and (ii) 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
Pool Receivable, the Outstanding Balance of each Pool Receivable and the
dates which payments are due thereon and all Collections of and
adjustments to each existing Pool Receivable).
(d) PERFORMANCE AND COMPLIANCE WITH CONTRACTS AND CREDIT AND
COLLECTION POLICY. At its expense, timely and fully (i) perform, or cause
to be performed, and comply in all material respects with, or cause to be
complied with in all material respects, all material provisions, covenants
and other promises required to be observed by it under the Contracts
related to the Pool Receivables, and timely and fully comply in all
material respects with the Credit and Collection Policy in regard to each
Pool Receivable and the related Contract and (ii) as beneficiary of any
Related Security, enforce such Related Security as reasonably requested by
the Administrative Agent.
(e) EXAMINATION OF RECORDS, AUDITS. (i) From time to time during
regular business hours as requested by the Administrative Agent or any
Managing Agent upon two Business Days' notice (PROVIDED, HOWEVER, that no
such notice shall be required upon the occurrence or during the
continuance of an Event of Termination or Potential Event of Termination),
permit the Administrative Agent or such Managing Agent, or its agents or
representatives, (A) to examine and make copies of and abstracts from all
Records in the possession or under the control of the Servicer, any
Originator, the Seller, their respective Affiliates or the agents of the
Servicer, any Originator, the Seller or their respective Affiliates,
relating to Pool Receivables and the Related Security, including, without
limitation, the related Contracts, and (B) to visit the offices and
properties of the Servicer, any Originator, the Seller, their respective
Affiliates or the agents of the Servicer, any Originator, the Seller or
their respective Affiliates, for the purpose of examining such materials
described in clause (A) above, and to discuss matters relating to Pool
Receivables and the Related Security or the Servicer's or the Seller's
performance hereunder or under the Contracts with any of the officers or
employees of the Seller having knowledge of such matters, and (ii) within
110 days after the end of each fiscal year of the Seller commencing with
the fiscal year of the Seller ending on December 31, 2001, and at the
request of the Administrative Agent (with the consent or at the request of
the Majority Managing Agents) at any time and from time to time upon the
occurrence and during the continuance of any Event of Termination or
Potential Event of Termination or any other event or circumstance which
the Majority Managing Agents
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reasonably determine to be for a special audit to be conducted, at the
expense of the Seller, cause independent public accountants approved by
the Administrative Agent to perform, and deliver to the Administrative
Agent, a written report of an audit conducted by such accountants with
respect to the Pool Receivables, Credit and Collection Policy, Lock-Box
Account activity and the Servicer's and the Seller's performance of its
obligations under this Agreement, the Fee Letters and the Receivables
Contribution and Sale Agreement on a scope and in a form reasonably
requested by the Administrative Agent for such audit.
(f) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. (i) Keep, or cause to
be kept, proper books of record and account, which shall be maintained or
caused to be maintained by the Seller and shall be separate and apart from
those of any Affiliate of the Seller, in which full and correct entries
shall be made of all financial transactions and the assets and businesses
of the Seller in accordance with GAAP, and (ii) upon the occurrence and
during the continuance of an Event of Termination or Potential Event of
Termination, and at the request of the Administrative Agent or any
Managing Agent, provide Records with respect to the Pool Receivables to
such Administrative Agent or Managing Agent.
(g) DEPOSITS TO LOCK-BOX ACCOUNTS. Instruct all Obligors to make
payments in respect of Pool Receivables to a Lock-Box Account, which after
the end of the 45 days referred to in SECTION 5.01(N) shall be owned by,
and held in the name of the Seller, and, if the Seller shall otherwise
receive any Collections (including, without limitation, any Collections
deemed to have been received by the Seller pursuant to SECTION 2.07),
segregate and hold in trust (in accordance with the provisions of SECTION
6.02(B)) such Collections and deposit such Collections, or cause such
Collections to be deposited, to a Lock-Box Account within one Business Day
following such receipt.
(h) MAINTENANCE OF SEPARATE EXISTENCE. Do all things necessary to
maintain its corporate existence separate and apart from any Originator
and other Affiliates of the Seller, including, without limitation, (i)
maintaining proper corporate records and books of account separate from
those of such Affiliates; (ii) maintaining its assets, funds and
transactions separate from those of such Affiliates, reflecting such
assets, funds and transactions in financial statements separate and
distinct from those of such Affiliates, and evidencing such assets, funds
and transactions by appropriate entries in the records and books referred
to in clause (i) above, and providing for its own operating expenses and
liabilities from its own assets and funds other than certain expenses and
liabilities relating to basic corporate overhead which may be allocated
between the Seller and such Affiliates; (iii) holding such appropriate
meetings or obtaining such appropriate consents of its Board of Directors
as are necessary to authorize all the Seller's corporate actions required
by law to be authorized by the Board of Directors, keeping minutes of such
meetings and of meetings of its stockholders and observing all other
customary corporate formalities (and any successor Seller not a
corporation shall observe similar procedures in accordance with its
governing documents and applicable law); (iv) at all times entering into
its contracts and otherwise holding itself out to the public under the
Seller's own name as a legal entity separate and distinct from such
Affiliates; and (v) conducting all transactions and dealings between the
Seller and such Affiliates on an arm's-length basis.
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(i) COMPLIANCE WITH OPINION ASSUMPTIONS AND CHARTER AND BY-LAWS.
Without limiting the generality of subsection (h) above, maintain in place
all policies and procedures, and take and continue to take all actions,
described in the assumptions as to facts set forth in, and forming the
basis of, the opinions set forth in the opinion delivered to the
Administrative Agent pursuant to SECTION 3.01(F)(I), and comply with, and
cause compliance with, the provisions of the charter and by-laws of the
Seller delivered to the Administrative Agent pursuant to the Original
Agreement as the same may, from time to time, be amended, supplemented or
otherwise modified with the prior written consent of the Administrative
Agent.
(j) PURCHASE OF POOL RECEIVABLES FROM AN ORIGINATOR. With respect to
each Pool Receivable acquired from any Originator by the Seller other than
as a capital contribution, pay to such Originator (in accordance with the
Receivables Contribution and Sale Agreement) an amount which constitutes
fair consideration and approximates fair market value for such Pool
Receivable and in a sale the terms and conditions of which (including,
without limitation, the purchase price thereof) reasonably approximate an
arm's-length transaction between unaffiliated parties.
(k) NATURE OF BUSINESS AND PERMITTED TRANSACTIONS. Engage solely in
the following businesses and transactions, directly or indirectly,
purchasing Receivables and Related Security from each Originator and
selling interests in such Receivables and Related Security to the Owners
hereunder and the other transactions permitted or contemplated hereby.
(l) RECEIVABLES CONTRIBUTION AND SALE AGREEMENT. At its expense,
timely and fully perform and comply in all material respects with all
provisions, covenants and other promises required to be observed by it
under the Receivables Contribution and Sale Agreement, maintain the
Receivables Contribution and Sale Agreement in full force and effect,
enforce the Receivables Contribution and Sale Agreement in accordance with
its terms, take all such action to such end as may be from time to time
reasonably requested by the Administrative Agent, and make to any party to
the Receivables Contribution and Sale Agreement such demands and requests
for information and reports or for action as the Seller is entitled to
make thereunder and as may be from time to time reasonably requested by
the Administrative Agent.
(m) TAXES. File all tax returns and reports required by law to be
filed by it, promptly pay all taxes and governmental charges at any time
owing, except any such taxes which are not yet delinquent or are being
diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on its books, and pay when due any taxes payable in connection with the
Receivables, exclusive of taxes on or measured by income or gross receipts
of the Administrative Agent, any Managing Agent or any Purchaser.
(n) LOCK-BOX ACCOUNTS AND COLLECTION NOTICES. (i) As soon as
possible but not later than the day that shall occur 30 days after the New
Closing Date, (A) cause the ownership of the Lock-Box Accounts in which at
least 75% of the Recent Collections were deposited, to be transferred to,
and in the name of, the Seller and (B) deliver or
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cause to be delivered to the Administrative Agent a Collection Notice with
respect to each such Lock-Box Account executed by its respective Lock-Box
Bank and the owner of such Lock-Box Account (that is, the Seller) and (ii)
as soon as possible but not later than the day that shall occur 45 days
after the New Closing Date, (A) cause the ownership of all the Lock-Box
Accounts to be transferred to, and in the name of, the Seller and (B)
deliver or cause to be delivered to the Administrative Agent a Collection
Notice with respect to each such Lock-Box Account executed by its
respective Lock-Box Bank and the owner of such Lock-Box Account (that is,
the Seller).
(o) SCA ADJUSTMENTS. Apply each SCA Adjustment, or cause each SCA
Adjustment to be applied, to each Pool Receivable applicable thereto
within 30 days after the date of the invoice relating to such Pool
Receivable.
(p) NET WORTH. Maintain an excess of total assets over total
liabilities of not less than 10% of the aggregate Outstanding Balance of
the Pool Receivables from time to time.
(q) TRACKING SYSTEM. (1) Maintain an administrative and operating
procedure and computer system capable of identifying each Receivable
originated by any Originator other than Telecom or UUNET that, consistent
with the Credit and Collection Policy, is written off the Seller's or any
Originator's (other than Telecom's or UUNET's) books as uncollectible
prior to the expiration of 150 days from the original due date for payment
thereof; (2) within 180 days of the Amendment Closing Date and thereafter,
maintain an administrative and operating procedure and computer system
capable of identifying each Receivable originated by Telecom that,
consistent with the Credit and Collection Policy, is written off the
Seller's or Telecom's books as uncollectible prior to the expiration of
120 days from the original due date for payment thereof, provided,
however, that during the period of time that begins with the Amendment
Closing Date and ends with 180 days thereafter, Servicer shall establish
and maintain a methodology agreed to by both Servicer and Administrative
Agent which methodology shall determine the amount of such write-offs; and
(3) maintain an administrative and operating procedure and computer system
capable of identifying each Receivable originated by UUNET that,
consistent with the Credit and Collection Policy, is written off the
Seller's or UUNET's books as uncollectible prior to the expiration of 150
days from the original due date for payment thereof.
SECTION 5.02 REPORTING REQUIREMENTS OF THE SELLER. Until the later
of the Facility Termination Date and the date upon which no Capital for any
Receivable Interest shall be existing and all other amounts payable by the
Seller hereunder shall be paid in full, the Seller will, unless the
Administrative Agent shall otherwise consent in writing, furnish to each
Managing Agent and the Administrative Agent:
(a) as soon as available and in any event within 65 days after the
end of each of the first three quarters of each fiscal year of the Seller,
a balance sheet of the Seller as of the end of such quarter and statements
of income and retained earnings and of cash flows of the Seller for the
period commencing at the end of the previous fiscal year and
62
ending with the end of such quarter, certified by a Senior Financial
Officer of the Seller or WORLDCOM;
(b) as soon as available and in any event within 110 days after the
end of each fiscal year of the Seller, a copy of the financial statements
for such year for the Seller certified by a Senior Financial Officer of
the Seller or WORLDCOM;
(c) together with the financial statements required hereunder, a
compliance certificate in substantially the form of Exhibit J signed by a
Senior Financial Officer of the Seller or WORLDCOM and dated the date of
such annual financial statement or such quarterly financial statement, as
the case may be;
(d) as soon as possible and in any event within five days after the
occurrence of each Event of Termination or Potential Event of Termination,
a statement of a Senior Financial Officer of the Seller setting forth
details of such Event of Termination or Potential Event of Termination and
the action which the Seller has taken and proposes to take with respect
thereto;
(e) at least thirty days prior to the effectiveness of any material
change in or material amendment to the Credit and Collection Policy, a
copy of the Credit and Collection Policy then in effect and a notice (i)
indicating such change or amendment, and (ii) if such proposed change or
amendment would be reasonably likely to adversely affect the
collectibility of the Pool Receivables or decrease the credit quality of
any Obligors of any newly created Receivables, requesting the
Administrative Agent's and each Managing Agent's consent thereto (which
consent shall not be unreasonably withheld or delayed);
(f) as soon as possible and in any event within five days of the
Seller's knowledge thereof, notice of (i) any litigation, investigation or
proceeding against the Seller which may exist at any time and which, in
the reasonable judgment of the Seller, could have a material adverse
effect on the financial condition or results of operations of the Seller,
impair the ability of the Seller to perform its obligations under this
Agreement, or materially adversely affect the collectibility of the Pool
Receivables, and (ii) any material adverse development in any such
previously disclosed litigation, investigation or proceeding; and
(g) such other information, documents, records or reports respecting
the Receivables, the Related Security or the Contracts or the condition or
operations, financial or otherwise, of the Seller as the Administrative
Agent may from time to time reasonably request.
SECTION 5.03 NEGATIVE COVENANTS OF THE SELLER. Until the later of
the Facility Termination Date and the date upon which no Capital for any
Receivable Interest shall be existing and all other amounts payable by the
Seller hereunder shall be paid in full, the Seller will not, without the written
consent of the Majority Managing Agents (in the case of subsection (c) below,
the written consent of all the Managing Agents):
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(a) SALES, ADVERSE CLAIMS, ETC. Except as otherwise provided herein
or in the Parallel Purchase Commitment, sell, assign (by operation of law
or otherwise) or otherwise dispose of, or grant any option with respect
to, or create or suffer to exist any Adverse Claim upon or with respect
to, the Seller's undivided interest in any Pool Receivable or any Related
Security or Collections in respect thereof, or upon or with respect to any
related Contract or any deposit account to which any Collections of any
Pool Receivable are sent (including, without limitation, any Lock-Box
Account), or assign any right to receive income in respect thereof.
(b) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise
permitted in SECTION 6.02(B), 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.
(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 that would, in either case, materially adversely affect the
collectibility of the Pool Receivables or decrease the credit quality of
any Obligors of any newly created Receivables.
(d) CHANGE AS TO LOCK-BOX ACCOUNTS. Change or otherwise transfer the
ownership of any Lock-Box Account other than to the Seller pursuant to
SECTION 5.01(N), or add or terminate any bank as a Lock-Box Bank or any
deposit account as a Lock-Box Account from those listed in Schedule I, or
make any change in the instructions to Obligors regarding payments to be
made to any Lock-Box Account (except for any such change to make payments
to another Lock-Box Account that shall be subject to a then existing
Collection Notice), unless the Administrative Agent shall have received at
least 20 days' prior written notice of such addition, termination or
change and shall have received, with respect to each new Lock-Box Account,
a Collection Notice executed by the Lock-Box Bank that maintains such
Lock-Box Account and the owner of such Lock-Box Account (that is,
WORLDCOM, an Originator or the Seller, as the case may be).
(e) DEPOSITS TO LOCK-BOX ACCOUNTS. Deposit or otherwise credit, or
cause or permit to be so deposited or credited, to any Lock-Box Account
cash or cash proceeds other than Collections of Pool Receivables, except
for cash or cash proceeds (other than Collections of Pool Receivables)
that are inadvertently paid or transferred into any Lock-Box Account and
are removed by the Seller or the Servicer from such Lock-Box Account as
soon as possible, but in any event no later than two Business Days, after
the Seller or the Servicer shall have knowledge of such payment or
transfer.
(f) CHANGE OF NAME, ETC. Change its name, identity, form of legal
structure or jurisdiction of organization, unless, at least five Business
Days prior to the effective date of any such change, the Seller delivers
to the Administrative Agent (i) UCC financing statements, executed by the
Seller and, if applicable, the Originator, necessary to reflect such
change and to continue the perfection of the ownership interests in the
Receivable Interests contemplated by this Agreement, (ii) if the identity
or structure of the Seller has changed and such change adversely affects
the rights of the Administrative Agent under then existing Collection
Notices with the Seller, WORLDCOM or any Originator to take control of the
Lock-Box Accounts pursuant to SECTION 6.03(A), new
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Collection Notices executed by the Seller, WORLDCOM, or any Originator, as
applicable, and the Lock-Box Banks, to the extent necessary to reflect
such changes and to continue to enable the Administrative Agent to
exercise such rights and (iii) all other instruments and other documents
reasonably requested by the Administrative Agent in connection with such
change.
(g) DEBT. Except as otherwise provided herein or in the Receivables
Contribution and Sale Agreement or the Parallel Purchase Commitment,
create, incur, assume or suffer to exist any Debt.
(h) LEASE OBLIGATIONS. Except as contemplated by the Seller's
charter, create, incur, assume or suffer to exist any obligations as
lessee for the rental or lease of real or personal property.
(i) ERISA. Adopt, maintain, contribute to or incur or assume any
obligation with respect to any Plan, Multiemployer Plan or Welfare Plan.
(j) INVESTMENTS IN OTHER PERSONS. Except as otherwise provided
herein (including, without limitation, the Demand Note) or in the
Receivables Contribution and Sale Agreement or the Parallel Purchase
Commitment, make or hold any Investment in any Person.
(k) SALES, ETC., OF ASSETS. Except as contemplated by this Agreement
or the Parallel Purchase Commitment, sell, lease, transfer or otherwise
dispose of any assets.
(l) MERGER, ETC. Consolidate with or merge into any other Person.
(m) ORGANIZATIONAL DOCUMENTS. Amend, supplement or otherwise modify
its charter or by-laws furnished to the Administrative Agent pursuant to
SECTION 3.02.
(n) ACCOUNTING. Account for (including for accounting and tax
purposes) or otherwise treat the transactions contemplated by the
Receivables Contribution and Sale Agreement in any manner other than as
sales of Receivables by each Originator to the Seller, or account for
(other than for tax purposes) or otherwise treat the transactions
contemplated by this Agreement or the Parallel Purchase Commitment in any
manner other than as sales of Receivable Interests by the Seller to the
Administrative Agent for the account of each Purchaser.
(o) RECEIVABLES CONTRIBUTION AND SALE AGREEMENT, ETC. (i) Cancel or
terminate the Receivables Contribution and Sale Agreement or the
Subordinated Notes or the Demand Note or consent to or accept any
cancellation or termination thereof, (ii) amend, supplement or otherwise
modify any term or condition of the Receivables Contribution and Sale
Agreement or the Subordinated Notes or the Demand Note or give any
consent, waiver or approval thereunder, (iii) waive any default under or
breach of the Receivables Contribution and Sale Agreement or the
Subordinated Notes or the Demand Note or (iv) take any other action under
the Receivables Contribution and Sale Agreement or the Subordinated Notes
or the Demand Note not required by the terms
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thereof that would impair the value of the rights or interests of the
Seller thereunder or of the Administrative Agent or any Owner or
Indemnified Party hereunder or thereunder.
(p) METHOD OF CALCULATING SCA ADJUSTMENTS. Change the method
currently used for calculating SCA Adjustments in a manner which would
result in a delay in the application of such SCA Adjustments.
(q) COVERAGE. Permit the aggregate undivided percentage interest of
all Receivable Interests and all "Receivable Interests" under the Parallel
Purchase Commitment to exceed the Receivable Interest Percent then in
effect.
(r) RESTRICTED JUNIOR PAYMENTS. From and after the Termination Date,
make any Restricted Junior Payment if, after giving effect thereto, the
Seller would fail to perform or observe its obligations set forth in
SECTION 5.03(Q).
SECTION 5.04 AFFIRMATIVE COVENANTS OF THE SERVICER. Until the later
of the Facility Termination Date and the date upon which no Capital for any
Receivable Interest shall be existing and all other amounts payable by the
Seller hereunder shall be paid in full, the Servicer will, unless the Majority
Managing Agents shall otherwise consent in writing:
(a) OFFICES, RECORDS AND BOOKS OF ACCOUNTS. 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
Pool Receivable, the Outstanding Balance of each Pool Receivable and the
dates which payments are due thereon and all Collections of and
adjustments to each existing Pool Receivable).
(b) PERFORMANCE AND COMPLIANCE WITH CONTRACTS AND CREDIT AND
COLLECTION POLICY. At its expense, timely and fully (i) perform, or cause
to be performed, and comply in all material respects with, or cause to be
complied with in all material respects, all material provisions, covenants
and other promises required to be observed by it under the Contracts
related to the Pool Receivables, and timely and fully comply in all
material respects with the Credit and Collection Policy in regard to each
Pool Receivable and the related Contract and (ii) as beneficiary of any
Related Security, enforce such Related Security as reasonably requested by
the Administrative Agent.
(c) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. (i) Keep, or cause to
be kept, proper books of record and account in which full and correct
entries shall be made of all financial transactions and the assets and
businesses of the Servicer in accordance with GAAP, and (ii) upon the
occurrence and during the continuance of an Event of Termination or
Potential Event of Termination, and at the request of the Administrative
Agent or any Managing Agent, provide Records with respect to the Pool
Receivables to such Administrative Agent or Managing Agent.
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(d) DEPOSITS TO LOCK-BOX ACCOUNTS. Instruct all Obligors to make
payments in respect of Pool Receivables to a Lock-Box Account and, if the
Servicer shall otherwise receive any Collections, segregate and hold in
trust (in accordance with the provisions of SECTION 6.02(B)) such
Collections and deposit such Collections, or cause such Collections to be
deposited, to a Lock-Box Account within one Business Day following such
receipt.
(e) LOCK-BOX ACCOUNTS AND COLLECTION NOTICES. (i) As soon as
possible but not later the day that shall occur 30 days after the New
Closing Date, (A) cause the ownership of the Lock-Box Accounts in which at
least 75% of the Recent Collections were deposited, to be transferred to,
and in the name of, the Seller and (B) deliver or cause to be delivered to
the Administrative Agent a Collection Notice with respect to each such
Lock-Box Account executed by its respective Lock-Box Bank and the owner of
such Lock-Box Account (that is, the Seller) and (ii) as soon as possible
but not later than the day that shall occur 45 days after the New Closing
Date, (A) cause the ownership of all the Lock-Box Accounts to be
transferred to, and in the name of, the Seller and (B) deliver or cause to
be delivered to the Administrative Agent a Collection Notice with respect
to each such Lock-Box Account executed by its respective Lock-Box Bank and
the owner of such Lock-Box Account (that is, the Seller).
(f) SCA ADJUSTMENTS. Apply each SCA Adjustment, or cause each SCA
Adjustment to be applied, to each Pool Receivable applicable thereto
within 30 days after the date of the invoice relating to such Pool
Receivable.
(g) TRACKING SYSTEM. (1) Maintain an administrative and operating
procedure and computer system capable of identifying each Receivable
originated by any Originator other than Telecom or UUNET that, consistent
with the Credit and Collection Policy, is written off the Seller's or any
Originator's (other than Telecom's or UUNET's) books as uncollectible
prior to the expiration of 150 days from the original due date for payment
thereof; (2) within 180 days of the Amendment Closing Date and thereafter,
maintain an administrative and operating procedure and computer system
capable of identifying each Receivable originated by Telecom that,
consistent with the Credit and Collection Policy, is written off the
Seller's or Telecom's books as uncollectible prior to the expiration of
120 days from the original due date for payment thereof, provided,
however, that during the period of time that begins with the Amendment
Closing Date and ends with 180 days thereafter, Servicer shall establish
and maintain a methodology agreed to by both Servicer and Administrative
Agent which methodology shall determine the amount of such write-offs; and
(3) maintain an administrative and operating procedure and computer system
capable of identifying each Receivable originated by UUNET that,
consistent with the Credit and Collection Policy, is written off the
Seller's or UUNET's books as uncollectible prior to the expiration of 150
days from the original due date for payment thereof.
SECTION 5.05 NEGATIVE COVENANTS OF THE SERVICER. Until the later of
the Facility Termination Date and the date upon which no Capital for any
Receivable Interest shall be existing and all other amounts payable by the
Seller hereunder shall be paid in full, the Servicer will not, without the
written consent of the Majority Managing Agents (in the case of subsection (b)
below, the written consent of all the Managing Agents):
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(a) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise
permitted in SECTION 6.02(B), 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.
(b) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Make any
change in the character of its business or in the Credit and Collection
Policy that would, in either case, materially adversely affect the
collectibility of the Pool Receivables or decrease the credit quality of
any Obligors of any newly created Receivables.
(c) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Add or terminate any
bank as a Lock-Box Bank or any deposit account as a Lock-Box Account from
those listed in Schedule I, or make any change in the instructions to
Obligors regarding payments to be made to any Lock-Box Account (except for
any such change to make payments to another Lock-Box Account that shall be
subject to a then existing Collection Notice), unless the Administrative
Agent shall have received at least 20 days' prior written notice of such
addition, termination or change and shall have received, with respect to
each new Lock-Box Account, a Collection Notice executed by the Lock-Box
Bank that maintains such Lock-Box Account and the owner of such Lock-Box
Account (that is, WORLDCOM, an Originator or the Seller, as the case may
be).
(d) DEPOSITS TO LOCK-BOX ACCOUNTS. Deposit or otherwise credit, or
cause or permit to be so deposited or credited, to any Lock-Box Account
cash or cash proceeds other than Collections of Pool Receivables, except
for cash or cash proceeds (other than Collections of Pool Receivables)
that are inadvertently paid or transferred into any Lock-Box Account and
are removed by the Seller or the Servicer from such Lock-Box Account as
soon as possible, but in any event no later than two Business Days, after
the Seller or the Servicer shall have knowledge of such payment or
transfer.
(e) METHOD OF CALCULATING SCA ADJUSTMENTS. Change the method
currently used for calculating SCA Adjustments in a manner which would
result in a delay in the application of such SCA Adjustments.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01 DESIGNATION OF SERVICER. The Pool Receivables shall be
serviced, administered and collected by the Person (the "SERVICER") designated
to do so from time to time in accordance with this SECTION 6.01. Until the
Administrative Agent (with the consent or at the request of the Majority
Managing Agents) designates a new Servicer, WORLDCOM is hereby designated as,
and hereby agrees to perform the duties and obligations of, the Servicer
pursuant to the terms hereof. The Administrative Agent may (with the consent or
at the request of the Majority Managing Agents), at any time upon the occurrence
and during the continuance of any Event of Termination, designate as Servicer
any Person (including itself) to succeed WORLDCOM or any successor Servicer, if
such Person (other than itself) shall agree in writing to perform the duties and
obligations of the Servicer pursuant to the terms hereof. The Servicer may
subcontract with any Originator or, with the prior consent of the Administrative
Agent (with
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the consent or at the request of the Majority Managing Agents), any other
Person, in each case to service, administer or collect any or all of the Pool
Receivables, PROVIDED that the Person with whom the Servicer so subcontracts
shall not become the Servicer hereunder and the Servicer shall remain liable for
the performance of the duties and obligations of the Servicer pursuant to the
terms hereof.
SECTION 6.02 DUTIES OF SERVICER. (a) The Servicer shall take or
cause to be taken all such commercially reasonable actions as may be necessary
or advisable to collect each Pool Receivable from time to time, all in
accordance with applicable laws, rules and regulations, with reasonable care and
diligence, and in accordance with the Credit and Collection Policy. Each of the
Seller, the Purchasers, the Managing Agents and the Administrative Agent hereby
appoints as its agent the Servicer, from time to time designated pursuant to
SECTION 6.01, to enforce its respective rights and interests in and under the
Pool Receivables, the Related Security and the related Contracts.
(b) The Servicer shall set aside and hold in trust (in accordance
with the provisions of this SECTION 6.02) for the account of the Seller and each
Owner their respective allocable shares of the Collections of Pool Receivables
in accordance with SECTIONS 2.05 and 2.06, but shall not be required, unless
otherwise requested by the Administrative Agent (with the consent or at the
request of the Majority Managing Agents) to segregate the funds constituting
such portion of such Collections prior to the remittance thereof in accordance
with such Sections. While holding items in trust, except upon the occurrence and
during the continuance of an Event of Termination or Potential Event of
Termination, the Servicer undertakes to perform only those duties specifically
set forth in this Agreement and no others, and no implied covenants or
obligations shall be read into this Agreement against the Servicer in such
instances. If instructed by the Administrative Agent (with the consent or at the
request of the Majority Managing Agents), the Servicer shall segregate and
deposit with a bank (which may be any of the Managing Agents) designated by the
Administrative Agent such allocable share of Collections of Pool Receivables set
aside for each Owner on the first Business Day following receipt by the Servicer
of such Collections. If no Event of Termination or Potential Event of
Termination shall have occurred and be continuing, WORLDCOM, while it is the
Servicer, may, in accordance with the Credit and Collection Policy, extend the
maturity or adjust the Outstanding Balance of any Defaulted Receivable as
WORLDCOM may determine to be appropriate to maximize Collections thereof.
(c) The Servicer shall administer the Collections in accordance with
the procedures described herein and in SECTION 2.07. The Servicer shall set
aside and hold in trust (in accordance with the provisions of SECTION 6.02(b))
for the account of the Seller in accordance with subsection (b) of this SECTION
6.02, (i) the Seller's allocable share of the Collections of Pool Receivables
less all reasonable out-of-pocket costs and expenses of such Servicer of
servicing, administering and collecting the Pool Receivables to the extent not
covered by the Servicer Fee received by it and (ii) the Collections of any
Receivable which is not a Pool Receivable in accordance with SECTION 2.07. The
Servicer shall, if not WORLDCOM, as soon as practicable following receipt, turn
over to the Seller any cash collections or other cash proceeds received with
respect to Receivables not constituting Pool Receivables.
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(d) The Servicer shall hold as fiduciary for the Seller and each
Owner, in accordance with their respective interests, all Records that evidence
or relate to the Pool Receivables. The Servicer shall, upon the occurrence and
during the continuance of an Event of Termination or Potential Event of
Termination, and at the request of the Administrative Agent or any Managing
Agent, provide Records with respect to Pool Receivables to such Administrative
Agent or Managing Agent.
(e) The Servicer shall, from time to time at the request of the
Administrative Agent or any Managing Agent, furnish to the Administrative Agent
(promptly after any such request) a calculation of the amounts of Collections
attributable to each Receivable Interest pursuant to SECTION 2.05 or 2.06.
(f) The Servicer shall permit, and shall cause each of its agents
and subcontractors to permit, from time to time during regular business hours as
requested by the Administrative Agent or any Managing Agent upon two Business
Days' notice (PROVIDED, HOWEVER, that no such notice shall be required upon the
occurrence or during the continuance of an Event of Termination or Potential
Event of Termination), the Administrative Agent or any Managing Agent or any of
their agents or representatives, (i) to examine and make copies of and abstracts
from all Records in the possession or under the control of the Servicer, its
agents and subcontractors relating to Pool Receivables and the Related Security,
and (ii) to visit the offices and properties of the Servicer, its agents and
subcontractors for the purpose of examining such Records described in clause (i)
above, and to discuss matters relating to Pool Receivables and the Related
Security or the Servicer's performance hereunder or under the Contracts with any
of the officers or employees of the Servicer, its agents and subcontractors
having knowledge of such matters.
SECTION 6.03 RIGHTS OF THE ADMINISTRATIVE AGENT. (a) The
Administrative Agent may, with the consent of the Majority Managing Agents, and
shall, at the request of the Majority Managing Agents, at any time execute and
date, and deliver to the Lock-Box Banks, the Lock-Box Notices referred to in the
Collection Notices. The Seller and WORLDCOM, each hereby, when the
Administrative Agent shall deliver the Lock-Box Notices to the Lock-Box Banks,
transfers to the Administrative Agent the exclusive ownership, dominion and
control of the Lock-Box Accounts to which the Obligors of Pool Receivables shall
make payments, and shall take any further action that the Administrative Agent,
at the request of, or with the consent of, the Majority Managing Agents,
reasonably request to effect such transfer. In case any authorized signatory of
the Seller or WORLDCOM whose signature shall appear on any Lock-Box Notice shall
cease to have such authority before the delivery of such Lock-Box Notice, such
signature shall nevertheless be valid and sufficient for all purposes as if such
authority had remained in force at the time of such delivery. Further, the
Administrative Agent may at its election, and shall at the request of the
Majority Managing Agents, notify at any time and at the Seller's expense the
Obligors of Pool Receivables, or any of them, of the ownership of Receivable
Interests by the Owners.
(b) At any time following the designation of a Servicer other than
WORLDCOM pursuant to SECTION 6.01:
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First: The Administrative Agent may at its election, and shall
at the request of the Majority Managing Agents, direct the Obligors
of Pool Receivables, or any of them, to make payment of all amounts
due or to become due to the Seller under any Pool Receivable
directly to the Administrative Agent or its designee.
Second: The Seller and WORLDCOM each shall, at the
Administrative Agent's request (either at the Administrative Agent's
election or at the request of the Majority Managing Agents) and at
the Seller's and WORLDCOM's expense, give notice of the Owners'
ownership to such Obligors and direct them to make such payments
directly to the Administrative Agent or its designee.
Third: The Seller and WORLDCOM each shall, at the
Administrative Agent's request (either at the Administrative Agent's
election or at the request of the Majority Managing Agents), (A)
assemble all of the Records which evidence or relate to the Pool
Receivables, and the related Contracts and Related Security, or
which are otherwise necessary or desirable to collect the Pool
Receivables, and shall make the same available to the Administrative
Agent at a place selected by the Administrative Agent or its
designee, and (B) segregate all cash, checks and other instruments
received by it from time to time constituting Collections of Pool
Receivables in a manner acceptable to the Administrative Agent and
shall, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of
transfer, to the Administrative Agent or its designee.
Fourth: The Administrative Agent may at its election, and
shall at the request of the Majority Managing Agents, take any and
all commercially reasonable steps in the Seller's or WORLDCOM's name
and on behalf of the Seller and the Owners necessary or desirable,
in the determination of the Administrative Agent, to collect all
amounts due under any and all Pool Receivables, including, without
limitation, endorsing the Seller's or WORLDCOM's name on checks and
other instruments representing Collections, enforcing such Pool
Receivables and the related Contracts, and adjusting, settling or
compromising the amount or payment thereof, in the same manner and
to the same extent as the Seller or WORLDCOM might have done.
SECTION 6.04 RESPONSIBILITIES OF EACH ORIGINATOR AND THE SELLER.
Anything herein to the contrary notwithstanding:
(a) Each of the Seller and each Originator shall perform all of its
obligations under the Contracts related to the Pool Receivables to the
same extent as if Receivable Interests had not been sold hereunder and the
exercise by the Administrative Agent of its rights hereunder shall not
release any Originator or the Seller from such obligations or its
obligations with respect to Pool Receivables or under the related
Contracts; and
(b) Neither the Administrative Agent, nor any Managing Agent nor the
Owners shall have any obligation or liability with respect to any Pool
Receivables or
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related Contracts, nor shall any of them be obligated to perform any of
the obligations of the Seller thereunder.
SECTION 6.05 FURTHER ACTIONS EVIDENCING PURCHASES. (a) The Seller
and the Servicer each agree that from time to time, at the Seller's expense,
each will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that the
Administrative Agent may at its election, and shall at the request of the
Majority Managing Agents, reasonably request, in order to perfect, protect or
more fully evidence the sale, transfer and assignment of the Receivable
Interests purchased by the Owners hereunder free and clear of any Adverse Claim
other than Adverse Claims contemplated by the Transaction Documents, or to
enable any of them or the Administrative Agent or any Managing Agent to exercise
and enforce any of their respective rights and remedies hereunder or under the
Certificates. Without limiting the generality of the foregoing, the Seller and
(in the case of clause (ii) below) the Servicer will upon the reasonable request
of the Administrative Agent: (i) 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 desirable, or as the
Administrative Agent may at its election, and shall at the request of the
Majority Managing Agents, request, in order to perfect, protect or evidence such
Receivable Interests; and (ii) upon the occurrence and during the continuance of
an Event of Termination or Potential Event of Termination, provide Records with
respect to the Pool Receivables and the related Contracts to the Administrative
Agent.
(b) The Seller hereby authorizes the Administrative Agent to file
one or more financing or continuation statements, and amendments thereto and
assignments thereof, relating to all or any of the Contracts, or Pool
Receivables and the Related Security and Collections with respect thereto, now
existing or hereafter arising, without the signature of the Seller where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering all or any of the Contracts, or Pool Receivables
and the Related Security and Collections with respect thereto, shall be
sufficient as a financing statement where permitted by law.
(c) If the Servicer or the Seller fails to perform any agreement
contained herein, the Administrative Agent may itself perform, or cause
performance of, such agreement, and the reasonable costs and expenses of the
Administrative Agent incurred in connection therewith shall be payable by the
Seller under SECTION 10.01 or SECTION 12.04, as applicable.
SECTION 6.06 THE CONCENTRATION ACCOUNT AND THE DEPOSIT ACCOUNT. (a)
On or prior to the New Closing Date and during the term of this Agreement, the
Servicer, for the benefit of the Indemnified Parties, shall establish and
maintain or cause to be established and maintained in the name of the Seller
with the Concentration Bank, the Concentration Account, such account bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Administrative Agent. The Servicer shall cause Collections of
Pool Receivables to be deposited into the Concentration Account on each Business
Day as promptly as is reasonably practicable after receipt in a Lock-Box
Account, and in any event no later than the day on which such Collections become
available funds in such Lock-Box Account.
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(b) Funds on deposit in the Deposit Account, shall, at the written
direction of the Servicer or, upon the occurrence and during the continuance of
any Event of Termination or Potential Event of Termination, in the sole
discretion of the Administrative Agent, be invested by the Administrative Agent
in Eligible Investments as instructed by the Servicer in writing (which may be a
standing instruction) or, upon the occurrence and during the continuance of an
Event of Termination or Potential Event of Termination, as determined by the
Administrative Agent in its sole discretion. All such Eligible Investments shall
be held by the Administrative Agent for the benefit of the Indemnified Parties.
Such funds shall be invested in Eligible Investments that will mature so that
funds will be available in amounts sufficient for the Administrative Agent to
make each distribution required under this Agreement or the Parallel Purchase
Commitment. All interest and other investment earnings (net of losses and
investment expenses) received on funds on deposit in the Deposit Account, to the
extent such investment income is not needed to pay the Indemnified Parties or
any of them under the terms of this Agreement or the Parallel Purchase
Commitment, shall be added to the Deposit Account and allocated in the manner
of, and treated as, Collections of Pool Receivables for all purposes of this
Agreement. The Administrative Agent is hereby authorized, unless otherwise
directed in writing by the Servicer, to effect transactions in Eligible
Investments through a capital markets affiliate of the Administrative Agent.
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01 EVENTS OF TERMINATION. If any of the following events
("EVENTS OF TERMINATION") shall occur and be continuing:
(a) (i) The Seller or the Servicer (if WORLDCOM or any of its
Affiliates) shall fail to make any payment or deposit of Yield to be made
by it hereunder within one Business Day after such payment or deposit is
due, (ii) the Seller or the Servicer (if WORLDCOM or any of its
Affiliates) shall fail to make any other payment or deposit to be made by
it hereunder on the date such payment or deposit is due, or (iii) except
as otherwise provided in subsection (c) of this SECTION 7.01, the Servicer
(if WORLDCOM or any of its Affiliates) shall fail to perform or observe
any other term, covenant or agreement contained in this Agreement or any
other Transaction Document to which it is a party on its part to be
performed or observed and such failure shall continue for 10 days after
the earlier of (A) the date on which written notice thereof shall have
been given to the Servicer by the Administrative Agent and (B) the date on
which any Senior Financial Officer of the Servicer shall have knowledge of
such failure to perform or observe; or
(b) Any representation or warranty made or deemed made by the
Seller, the Servicer (if WORLDCOM or any of its Affiliates), WORLDCOM
(other than in its capacity as Servicer) or any Originator (or any of
their respective officers) under or in connection with this Agreement, the
Parent Undertaking or the Receivables Contribution and Sale Agreement or
in any Monthly Report, Weekly Report, Daily Report or any other written
report, certificate or information delivered by or on behalf of the
Seller, such Servicer, WORLDCOM or any Originator (or any of their
respective officers) pursuant
73
hereto or thereto, shall prove to have been incorrect in any material
respect when made or deemed made or delivered; or
(c) The Seller or the Servicer (if WORLDCOM or any of its
Affiliates) shall fail to perform or observe any term, covenant or
agreement contained in SECTION 5.01(E), 5.01(G), 5.01(N), 5.02(D), 5.03,
5.04(D), 5.04(E) or 5.05 of this Agreement, or any Originator shall fail
to perform or observe any term, covenant or agreement contained in SECTION
4.01(G), 4.01(I), 4.01(J)(III) or 4.02 of the Receivables Contribution and
Sale Agreement; or
(d) The Seller, WORLDCOM (other than in its capacity as Servicer),
or any Originator shall fail to perform or observe any other term,
covenant or agreement contained in any Transaction Document to which it is
a party on its part to be performed or observed and any such failure shall
remain unremedied for 10 days after written notice thereof shall have been
given to the Seller, WORLDCOM or such Originator, as the case may be, by
the Administrative Agent; or
(e) The Seller shall fail to pay any principal of, or premium or
interest on, any of its Debt that is outstanding, or WORLDCOM shall fail
to pay any principal of, or premium or interest on, any of its Debt that
is outstanding in a principal amount of at least $100,000,000, either
individually or in the aggregate, in each case, when the same becomes due
and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after
the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity
of such Debt; or any such Debt shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to be made, in
each case prior to the stated maturity thereof; PROVIDED, HOWEVER, that
the provisions of this subsection (e) shall not give effect to any waiver,
amendment or other modification, or consent, that would cure or otherwise
remedy any failure to pay or other event or condition referred to in this
subsection (e); or
(f) Any Purchase or any reinvestment pursuant to SECTION 2.05 shall
for any reason (other than pursuant to the terms hereof) cease to create,
or any Receivable Interest shall for any reason cease to be, a valid and
perfected first priority undivided percentage ownership interest to the
extent of the pertinent Receivable Interest in each applicable Pool
Receivable and the Related Security and Collections with respect thereto
or any Certificate shall for any reason cease to evidence in the Owner of
such Receivable Interest legal and equitable title to, and ownership of,
an undivided percentage ownership interest in Pool Receivables and Related
Security to the extent of such Receivable Interest; or
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(g) The Seller, the Servicer (if any Originator or any of its
Affiliates), WORLDCOM or any Originator shall generally not pay its debts
as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Seller,
the Servicer (if any Originator or any of its Affiliates), WORLDCOM or any
Originator seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it) that is being diligently
contested by it in good faith, such proceeding shall remain undismissed or
unstayed for a period of 60 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its
property) shall occur; or the Seller, the Servicer (if any Originator or
any of its Affiliates), WORLDCOM or any Originator shall take any
corporate action to authorize any of the actions set forth above in this
subsection (g); or
(h) (i) One or more final and non-appealable judgments for the
payment of money shall be entered against the Seller or (ii) one or more
final and non-appealable judgments for the payment of money in an amount
in excess of , until the effectiveness of the New WORLDCOM Credit
Agreement, $500,000,000, and on and after the effectiveness of the New
WORLDCOM Credit Agreement, the amount set forth in the equivalent defined
term "Default" or "Event of Default" under and as defined in the New
WORLDCOM Credit Agreement, individually or in the aggregate, shall be
entered against WORLDCOM on claims not covered by insurance or as to which
the insurance carrier has denied its responsibility, and such judgment
shall continue unsatisfied and in effect for sixty consecutive days
without a stay of execution; or
(i) (i) The average of the Deemed Loss Ratios for each of the three
most recently ended calendar months shall exceed 8%, or (ii) the average
of the Default Ratios for each of the three most recently ended calendar
months shall exceed 29%, or (iii) the average of the Loss-to-Liquidation
Ratios for each of the three most recently ended calendar months shall
exceed 6%, or (iv) the average of the Dilution Ratios for each of the
three most recently ended calendar months shall exceed 9%; or
(j) The aggregate undivided percentage interest of all Receivable
Interests and all "Receivable Interests" under the Parallel Purchase
Commitment shall exceed at any time the Receivable Interest Percent then
in effect and such excess shall continue until the earlier of (i) the date
two Business Days after the date on which the Seller or the Servicer knows
of such excess and (ii) the next succeeding Settlement Date for any
Settlement Period; or
(k) There shall have been any material adverse change in the
financial condition or operations of the Seller or the Servicer (if any
Originator or any of its Affiliates) or WORLDCOM or any Originator since
(i) in the case of the Seller, the First
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Closing Date, and (ii) in the case of such Servicer, WORLDCOM or any
Originator, December 31, 2001, except as set forth in (A) that certain
Form 10-Q filed by and in respect of WORLDCOM with the U.S. Securities and
Exchange Commission on or about May 15, 2002 (exclusive of, and without
giving effect to, the financial statements contained in such Form 10-Q,
but inclusive of, and giving effect to, the footnotes related to such
financial statements), and (B) Schedule V hereto; or there shall have
occurred any event which materially adversely affects the collectibility
of the Pool Receivables taken as a whole, or there shall have occurred any
other event which materially adversely affects the ability of the Servicer
(if any Originator or any of its Affiliates) to collect Pool Receivables
or the ability of the Servicer (if any Originator or any of its
Affiliates) to perform hereunder or there shall have occurred any other
event that materially adversely affects the credit quality of the Obligors
of the Pool Receivables taken as a whole; or
(l) Any provision of any Transaction Document shall for any reason
cease to be a legal, valid and binding obligation of the Seller or the
Servicer (if any Originator or any of its Affiliates) or WORLDCOM or any
Originator, as applicable, or the Seller or such Servicer or WORLDCOM or
any Originator, as applicable, shall so state in writing; or
(m) Any "Default" as defined in and under the WORLDCOM Credit
Agreement, without giving effect to any waiver, amendment or other
modification, or consent, with respect thereto, shall have occurred and be
continuing; or
(n) WORLDCOM shall cease to own directly or indirectly 100% of the
outstanding shares of stock of the Seller or of any Originator; or
(o) [Intentionally Omitted]; or
(p) The charter or by-laws of the Seller shall be amended,
supplemented or otherwise modified without consent of the Administrative
Agent; or
(q) The aggregate undivided percentage interest of all Receivable
Interests and all "Receivable Interests" under the Parallel Purchase
Commitment shall exceed at any time 100%;
then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Majority Managing Agents, by notice to the Seller
and the Servicer declare the Facility Termination Date to have occurred,
whereupon the Facility Termination Date shall forthwith occur; PROVIDED that,
automatically upon the occurrence of any event (without any requirement for the
passage of time or the giving of notice, or both) described in subsection (g) of
this SECTION 7.01, the Facility Termination Date shall occur, WORLDCOM shall
cease to be the Servicer and the Administrative Agent or its designee shall
become the Servicer. Upon any such occurrence of the Facility Termination Date,
the Administrative Agent and each Owner 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 the applicable jurisdiction and other
applicable laws, which rights shall be cumulative. Without limiting the
foregoing or the general applicability of ARTICLE IX hereof, any Owner may elect
to assign any Receivable Interest owned
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by such Owner to an Assignee pursuant to SECTION 9.01 following the occurrence
of any Event of Termination.
ARTICLE VIII
THE MANAGING AGENTS AND THE ADMINISTRATIVE AGENT
SECTION 8.01 AUTHORIZATION AND ACTION. Each Purchaser hereby
appoints and authorizes each of its Managing Agent and the Administrative Agent,
respectively, and each Managing Agent hereby appoints and authorizes the
Administrative Agent, to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Transaction Documents and each
other instrument or document furnished pursuant hereto as are delegated to such
Managing Agent or the Administrative Agent, respectively, by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by this Agreement (including, without
limitation, enforcement of such Transaction Documents and such other instruments
and documents), neither the Administrative Agent nor any Managing Agent shall 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 or requests of the Majority
Managing Agents, in the case of the Administrative Agent, or such Managing
Agent's Purchaser, in the case of such Managing Agent, and such instructions and
requests shall be binding upon all parties hereto and all Assignees; PROVIDED,
HOWEVER, that neither the Administrative Agent nor any Managing Agent shall be
required to take any action which exposes the Administrative Agent or such
Managing Agent to personal liability or which is contrary to this Agreement or
any other Transaction Document, or any other instrument or document furnished
pursuant hereto or applicable law. Each of the Administrative Agent and each
Managing Agent agrees to give to each other and to each Purchaser prompt notice
of each notice given to it pursuant to the terms of this Agreement or any other
Transaction Document or any other instrument or document furnished pursuant
hereto, and in the case of each notice by the Seller to the Administrative Agent
of each requested Purchase by the Purchasers pursuant to SECTION 2.02(a), the
Administrative Agent agrees to use its reasonable best efforts to give notice of
such Purchase to each Managing Agent on the same day as such notice by the
Seller. The Administrative Agent hereby agrees to deliver promptly to each
Managing Agent each report, document, notice or other written communication
required to be delivered by or on behalf of the Seller or the Servicer or any
Originator to the Administrative Agent on behalf of the Purchasers and the
Managing Agents by the terms and conditions of this Agreement and the other
Transaction Documents (it being understood that the Administrative Agent shall
have no obligation to deliver, or cause to be delivered, to any Managing Agent
any such report, document, notice or other written communication if the Seller
or the Servicer or any Originator required to deliver, or have delivered on its
behalf, such report, document, notice or other written communication fails to
make or cause such delivery to the Administrative Agent).
SECTION 8.02 ADMINISTRATIVE AGENT'S AND MANAGING AGENT'S RELIANCE,
ETC. Neither the Administrative Agent, nor any Managing Agent nor any of their
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them as Administrative Agent or
Managing Agent, respectively, under or in connection with this Agreement or any
other Transaction Document or any other instrument or document furnished
pursuant hereto (including, without limitation, the Administrative Agent's
servicing,
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administering or collecting the Pool Receivables as Servicer pursuant to SECTION
6.01), except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, except as otherwise agreed by
the Administrative Agent or any Managing Agent, as applicable, and any Owner,
each of the Administrative Agent and each Managing Agent, respectively: (i) may
consult with legal counsel (including counsel for the Seller, the Servicer or
any Originator), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (ii) makes no warranty or representation to any Owner or any other
Indemnified Party and shall not be responsible to any Owner or any other
Indemnified Party for any statements, warranties or representations (whether
written or oral) made in or in connection with this Agreement or any other
Transaction Document or any other instrument or document delivered pursuant
hereto; (iii) shall not have any duty to ascertain, to verify or to inquire as
to the performance or observance or accuracy of any of the terms, covenants or
conditions of, or information specified in, this Agreement or any other
Transaction Document or any Daily Report, Weekly Report, Monthly Report or other
instrument or document delivered pursuant hereto on the part of the Seller, the
Servicer or any Originator or to inspect the property (including the books and
records) of the Seller, the Servicer or any Originator; (iv) shall not be
responsible to any Owner or other Indemnified Party for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Transaction Document or any other instrument or document
furnished pursuant hereto, or the perfection, priority or value of any ownership
interest or security interest created or purported to be created hereunder or
under the Receivables Contribution and Sale Agreement; and (v) shall incur no
liability under or in respect of this Agreement or any other Transaction
Document or any other instrument or document delivered pursuant hereto by acting
upon any notice (including notice by electronic transmission or telephone),
consent, certificate or other instrument or writing (which may be by telecopier,
telegram, cable, telex or electronic transmission) believed by it to be genuine
and signed or sent by the proper party or parties.
SECTION 8.03 ADMINISTRATIVE AGENT AND MANAGING AGENTS. With respect
to any Receivable Interest owned by it, each of the Administrative Agent, the
CNAI Conduits Managing Agent, the Bank One Conduits Managing Agent, the GBFC
Managing Agent, the Delaware Funding Managing Agent, the Paradigm Managing Agent
and the Liberty Managing Agent shall have the same rights and powers under this
Agreement as any other Owner and may exercise the same as though it were not the
Administrative Agent or a Managing Agent, as applicable. Each of the
Administrative Agent, the CNAI Conduits Managing Agent, the Bank One Conduits
Managing Agent, the GBFC Managing Agent, the Delaware Funding Managing Agent,
the Paradigm Managing Agent and the Liberty Managing Agent and their respective
Affiliates may generally engage in any kind of business with the Seller or any
Originator or any Obligor, any of their respective Affiliates and any Person who
may do business with or own securities of the Seller or any Originator or any
Obligor or any of their respective Affiliates, all as if Bank One, CNAI, BLBNY,
JPMorgan, West LB and Nova Scotia were not the Administrative Agent or Managing
Agents, as applicable, and without any duty to account therefor to the Owners.
SECTION 8.04 PURCHASERS' PURCHASE DECISIONS. Each Purchaser
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any Managing Agent, any of their respective Affiliates
or any other Indemnified Party and based on such
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documents and information as it has deemed appropriate, made its own evaluation
and decision to enter into this Agreement and, if it so determines, to purchase
undivided ownership interests in Pool Receivables hereunder. Each Purchaser also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any Managing Agent, any of their respective Affiliates
or any other Indemnified Party and based on such documents and information as it
shall deem appropriate at the time, continue to make its own decisions in taking
or not taking action under this Agreement.
SECTION 8.05 INDEMNIFICATION. Each Purchaser agrees to cause to be
indemnified its Managing Agent and the Administrative Agent (to the extent not
reimbursed by the Seller or any Originator, and in the case of such
indemnification of the Administrative Agent, ratably in accordance with its
respective Pro Rata Share), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against such Managing Agent or the Administrative
Agent, respectively, in any way relating to or arising out of this Agreement or
any other Transaction Document or any other instrument or document furnished
pursuant hereto or in connection herewith or any action taken or omitted by such
Managing Agent or the Administrative Agent under this Agreement or any other
Transaction Document or any such instrument or document, PROVIDED that no
Purchaser shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Managing Agent's or Administrative Agent's,
respectively, gross negligence or willful misconduct. Without limitation of the
foregoing but subject to the PROVISO to the preceding sentence, each Purchaser
agrees to reimburse each of its Managing Agent, the Administrative Agent (in the
case of such reimbursement of the Administrative Agent, ratably in accordance
with its respective Pro Rata Share), promptly upon demand for any out-of-pocket
expenses (including counsel fees) incurred by such Managing Agent or the
Administrative Agent, respectively, in connection with the administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any other Transaction Document or any
other instrument or document furnished pursuant hereto or in connection
herewith, to the extent, in the case of the Administrative Agent, that such
expenses are incurred in the interests of or otherwise in respect of all
Purchasers (and not just Delaware Funding or its Affiliates) hereunder and to
the extent that such Managing Agent or the Administrative Agent, respectively,
is not reimbursed for such expenses by the Seller or any Originator.
SECTION 8.06 SUCCESSOR ADMINISTRATIVE AGENT. (a) The Administrative
Agent may resign at any time by giving written notice thereof to the Managing
Agents and the Seller and may be removed at any time with or without cause by
the Majority Managing Agents. Upon any such resignation or removal, the Managing
Agents shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Managing
Agents, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Majority
Managing Agents' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Purchasers and the Majority Managing
Agents, appoint a successor Administrative Agent, which shall be a commercial
bank organized under the laws of the United States or of any State thereof and
having a combined capital and surplus of at least
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$250,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent and upon the execution and filing
or recording of such financing statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Managing
Agents may request, in order to continue the perfection of the security
interests granted or purported to be granted by the Transaction Documents, such
successor Administrative Agent shall succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations under the Transaction Documents. Anything herein to the contrary
notwithstanding, the retiring Administrative Agent's resignation or removal
shall not become effective, and the retiring Administrative Agent shall not be
discharged from its duties and obligations under the Transaction Documents,
unless and until a successor Administrative Agent shall have been appointed
hereunder and shall have accepted such appointment. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent
shall have become effective, as specified above, the provisions of this ARTICLE
VIII shall inure to its benefit to any actions taken or omitted to be taken by
it while it was Administrative Agent under this Agreement.
(b) Upon the effectiveness of this Agreement and on and after the
date hereof:
(i) Bank One hereby resigns as Administrative Agent as defined in,
and for purposes of, the Original Agreement, the A&R Agreement and the
Second A&R Agreement and for purposes of this Agreement.
(ii) The Managing Agents and the Purchasers hereby appoint JPMorgan
as successor Administrative Agent under, and for purposes of, this
Agreement and JPMorgan hereby accepts such appointment.
(iii) The provisions of this Article VIII (including, without
limitation, the indemnity provisions of SECTION 8.05) shall inure to Bank
One's benefit to any actions taken or omitted to be taken by Bank One
while Bank One was Administrative Agent as defined in, and under, the
Original Agreement, the A&R Agreement and the Second A&R Agreement.
SECTION 8.07 CO-LEAD MANAGERS. It is understood and agreed that CNAI
and JPMorgan, each as Co-Lead Manager hereunder, shall have no duties or
responsibilities hereunder as such Co-Lead Managers.
ARTICLE IX
ASSIGNMENT OF RECEIVABLE INTERESTS
SECTION 9.01 ASSIGNMENT. (a) Each Purchaser may assign to any
Assignee, and any such Assignee may assign to any other Assignee, any Receivable
Interest. Upon any such assignment, (i) the Assignee thereof shall become the
Owner of such Receivable Interest for all purposes of this Agreement and (ii)
the Owner assignor thereof shall relinquish its rights with respect to such
Receivable Interest for all purposes of this Agreement. Such assignment shall be
upon such terms and conditions as the assignor and the Assignee of such
Receivable Interest may
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mutually agree; the parties thereto shall deliver to the Administrative Agent an
Assignment, duly executed by such parties; and such 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 perfect, protect or
more fully evidence the Assignee's right, title and interest in and to such
Receivable Interest, and to enable the Assignee to exercise or enforce any
rights hereunder or under the applicable Certificate and the other instruments
and documents furnished pursuant hereto. The Administrative Agent shall provide
notice to the Seller and each Managing Agent of each Assignment of a Receivable
Interest hereunder.
(b) By executing and delivering an Assignment (in the case of an
Owner assignor) and executing and accepting an Assignment (in the case of an
Assignee), the Owner assignor thereunder and the Assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment, such assigning Owner 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 or any other Transaction Document or any other instrument or document
furnished pursuant hereto or in connection herewith or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other Transaction Document or any other instrument or document furnished
pursuant hereto or in connection herewith, or the perfection, priority or value
of any ownership interest or security interest created or purported to be
created hereunder or thereunder; (ii) such assigning Owner makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Seller, WORLDCOM or any Originator or the performance
or observance by the Seller, WORLDCOM or any Originator of any of its
obligations under this Agreement or any other Transaction Document or any other
instrument or document furnished pursuant hereto or in connection herewith;
(iii) such Assignee confirms that it has received copies of this Agreement and
the other Transaction Documents, together with such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and to purchase such Receivable Interest;
(iv) such Assignee will, independently and without reliance upon the
Administrative Agent, any Managing Agent, or any of their respective Affiliates,
such assigning Owner or any other Owner or any other Indemnified Party 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
this Agreement and the other Transaction Documents and the other instruments and
documents furnished pursuant hereto; (v) such Assignee appoints and authorizes
each of the Managing Agent (if applicable) of such Owner assignor and the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Transaction
Documents and the other instruments and documents furnished pursuant hereto or
in connection herewith as are delegated to such Managing Agent or the
Administrative Agent, respectively, by the terms hereof and thereof, together
with such powers and discretion as are reasonably incidental thereto; (vi) such
Assignee appoints as its agent the Servicer from time to time designated
pursuant to SECTION 6.01 to enforce its respective rights and interests in and
under the Pool Receivables and the Related Security and Collections with respect
thereto and the related Contracts; (vii) such Assignee agrees that it will not
institute against any Purchaser or any former Purchaser any proceeding of the
type referred to in SECTION 7.01(G) so long as any commercial paper notes issued
by such Purchaser shall be outstanding or there shall not have elapsed one year
plus one day since the last day on which any such commercial paper notes shall
have been outstanding; and (viii) such Assignee agrees that it will
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perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as Owner.
SECTION 9.02 ASSIGNMENT OF RIGHTS AND OBLIGATIONS. (a) Each
Purchaser may assign to any Assignee, and if required by the Seller pursuant to
SECTION 2.14 will assign to the Assignee designated pursuant to such Section,
all or a portion of its rights and obligations under this Agreement (including,
without limitation, its right to make Purchases and reinvestments from time to
time hereunder and all Receivable Interests owned by it); PROVIDED, however,
that (i) each such assignment shall be to an Eligible Assignee and (ii) the
parties to each such assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance. Upon such execution, delivery and acceptance
of any Assignment and Acceptance, from and after the effective date specified in
such Assignment and Acceptance, which effective date shall be the later of (x)
the date the Administrative Agent receives such executed Assignment and
Acceptance and (y) the date of such Assignment and Acceptance, (I) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have all the rights and obligations of a Purchaser hereunder
and (II) the assigning Purchaser shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Purchaser's rights and obligations under
this Agreement, such Purchaser shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
assigning Purchaser and the 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 Acceptance, the assigning Purchaser 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 or
any other Transaction Document or any other instrument or document furnished
pursuant hereto or in connection herewith or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Transaction Document or any other instrument or document furnished pursuant
hereto or in connection herewith, or the perfection, priority or value of any
ownership interest or security interest created or purported to be created
hereunder or thereunder; (ii) the assigning Purchaser makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Seller, WORLDCOM or any Originator or the performance, or the observance,
by the Seller, WORLDCOM or any Originator of any of its obligations under this
Agreement or any other Transaction Document or any other instrument or document
furnished pursuant hereto or in connection herewith; (iii) such Assignee
confirms that it has received copies of this Agreement and the other Transaction
Documents, together with such other documents and information as it has deemed
appropriate to make its own analysis and decision to enter into such Assignment
and Acceptance; (iv) such Assignee
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will, independently and without reliance upon the Administrative Agent, any
Managing Agent, any of its Affiliates, the assigning Purchaser, any other
Purchaser or any former Owner or other Indemnified Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own decisions in taking or not taking action under this Agreement and
the other Transaction Documents and the other instruments and documents
furnished pursuant hereto; (v) such Assignee confirms that it is an Eligible
Assignee; (vi) such Assignee appoints and authorizes each of the Managing Agent
of such assigning Purchaser (or such other Managing Agent as shall be designated
by such Assignee in such Assignment and Acceptance) and the Administrative Agent
to take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement and the other Transaction Documents and the
other instruments and documents furnished pursuant hereto or in connection
herewith as are delegated to such Managing Agent or the Administrative Agent,
respectively, by the terms hereof and thereof, together with such powers and
discretion as are reasonably incidental thereto; (vii) such Assignee appoints as
its agent the Servicer from time to time designated pursuant to SECTION 6.01 to
enforce its respective rights and interests in and under the Pool Receivables
and the Related Security and Collections with respect thereto and the related
Contracts; (viii) such Assignee agrees that it will not institute against any
Purchaser or any former Purchaser any proceeding of the type referred to in
SECTION 7.01(G) so long as any commercial paper notes issued by any Purchaser or
any former 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; and (ix) such Assignee agrees that it will perform
in accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Purchaser.
(c) The Administrative Agent shall maintain at its office referred
to in SECTION 12.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the name and address of
each Purchaser, which shall be available for inspection by the Seller and the
Managing Agents at any reasonable time and from time to time upon reasonable
prior notice. The entries in such register shall be conclusive and binding for
all purposes, absent manifest error, and the Seller, the Servicer and the
Managing Agent may treat each Person whose name is recorded in such register as
a Purchaser hereunder for all purposes of this Agreement.
(d) Upon its receipt of an Assignment and Acceptance executed by any
assigning Purchaser and an assignee representing that it is an Eligible
Assignee, the Administrative Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit B hereto, (i) accept
such Assignment and Acceptance and (ii) give prompt notice thereof to the
Seller, the Servicer and each Managing Agent.
SECTION 9.03 ANNOTATION OF CERTIFICATE. The Administrative Agent
shall annotate the Certificate for each assigning Owner to reflect the
assignment made by such Owner pursuant to SECTION 9.01 or 9.02 or otherwise.
ARTICLE X
INDEMNIFICATION
SECTION 10.01 ..INDEMNITIES. Without limiting any other rights that
any Indemnified Party may have hereunder or under applicable law, and whether or
not any of the transactions contemplated hereby are consummated, the Seller
hereby agrees to indemnify each Indemnified Party from and against, and hold
each thereof harmless from, any and all claims, losses, liabilities, costs and
expenses of any kind whatsoever (including, without limitation, reasonable
attorneys' fees and expenses) (all of the foregoing being collectively referred
to as
83
"INDEMNIFIED AMOUNTS") arising out of, or resulting from, in whole or in part,
one or more of the following: (a) this Agreement or any other Transaction
Document or any other agreement or document delivered or to be delivered in
connection with this Agreement; (b) the use of proceeds of any Purchase or
reinvestment; (c) the interest of any Owner in any Receivable, any Contract or
any Related Security; or (d) any transaction contemplated by this Agreement or
any other Transaction Document or any other agreement or document delivered or
to be delivered in connection with this Agreement; excluding, however,
Indemnified Amounts to the extent resulting from either (x) the gross negligence
or willful misconduct on the part of such Indemnified Party, or (y) the failure
to collect amounts in respect of a Pool Receivable, which is an Eligible
Receivable, to the extent such failure results from a discharge of the Obligor
with respect thereto in a proceeding in respect of such Obligor under applicable
bankruptcy laws or otherwise results from the Obligor's financial inability to
pay such amounts. Without limiting or being limited by the foregoing (other
than, and subject to, the exclusions referred to in the "excluding, however"
clause above) and whether or not any of the transactions contemplated hereby are
consummated, the Seller shall pay on demand to each Indemnified Party any and
all amounts necessary to indemnify such Indemnified Party from and against any
and all Indemnified Amounts which relate to or result from, or which would not
have occurred but for, one or more of the following:
(i) any Receivable becoming a Pool Receivable which is not at the
date of the initial creation of an interest therein hereunder an Eligible
Receivable or which thereafter ceases to be an Eligible Receivable;
(ii) any representation or warranty or statement made or deemed made
by the Seller or any Originator (or any of their respective officers)
under or in connection with this Agreement or any other Transaction
Document or any Monthly Report, Weekly Report, Daily Report or other
document delivered or to be delivered in connection herewith or with any
other Transaction Document being incorrect in any material respect when
made or deemed made or delivered;
(iii) the failure by the Seller or any Originator to comply with any
applicable law, rule or regulation with respect to any Pool Receivable or
the related Contract or any Related Security with respect thereto; or the
failure of any Pool Receivable or the related Contract or any Related
Security with respect thereto to conform to any such applicable law, rule
or regulation;
(iv) the failure to vest in the Owner of a Receivable Interest a
first priority perfected undivided percentage ownership interest, to the
extent of such Receivable Interest, in each Receivable in, or purported to
be in, the Receivables Pool and the Related Security and Collections in
respect thereof, free and clear of any Adverse Claim; or the failure of
the Seller to have obtained a first priority perfected ownership interest
in the Pool Receivables and the Related Security and Collections with
respect thereto transferred or purported to be transferred to the Seller
under the Receivables Contribution and Sale Agreement, free and clear of
any Adverse Claim;
(v) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or
84
other applicable laws with respect to any Receivable in, or purported to
be in, the Receivables Pool and the Related Security and Collections in
respect thereof, whether at the time of any Purchase or reinvestment or at
any subsequent time unless such failure results directly and solely from
the Administrative Agent's failure to take appropriate action;
(vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of any Obligor to the payment of any Receivable
in, or purported to be in, the Receivables Pool (including, without
limitation, any defense based on the fact or allegation that such
Receivable or the related Contract is not 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 goods or
services related to such Receivable or the furnishing or failure to
furnish such goods or services;
(vii) any failure of the Seller, WORLDCOM, as Servicer or otherwise,
or any Originator to perform its duties or obligations in accordance with
the provisions of this Agreement or any other Transaction Document or to
perform its duties or obligations under any Contract;
(viii) any product liability, personal injury, copyright
infringement, theft of services, property damage, or other breach of
contract, antitrust, unfair trade practices or tortious claim arising out
of or in connection with the subject matter of any Contract or out of or
in connection with any transaction contemplated by this Agreement, any
Transaction Document or any other instrument or document furnished
pursuant hereto or such Contract;
(ix) the commingling of Collections of Pool Receivables by, or in
any Lock-Box Account or any other deposit account of, WORLDCOM or any of
its Affiliates at any time with other funds;
(x) any action or omission by the Seller, WORLDCOM, whether as
Servicer or otherwise, or any Originator reducing or impairing the rights
of any Owner of a Receivable Interest under this Agreement, any other
Transaction Document or any other instrument or document furnished
pursuant hereto or thereto or with respect to any Pool Receivable;
(xi) any cancellation or modification of a Pool Receivable, the
related Contract or any Related Security, whether by written agreement,
verbal agreement, acquiescence or otherwise other than as expressly
permitted by this Agreement or any other Transaction Document;
(xii) any investigation, litigation or proceeding related to or
arising from this Agreement, any other Transaction Document or any other
instrument or document furnished pursuant hereto or thereto, or any
transaction contemplated by this Agreement or any Contract or the use of
proceeds from any Purchase or reinvestment pursuant to this Agreement, or
the ownership of, or other interest in, any Receivable, the related
Contract or any Related Security;
85
(xiii) the existence of any Adverse Claim against or with respect to
any Pool Receivable, the related Contract or the Related Security or
Collections with respect thereto, except for any such Adverse Claim
created by any Purchaser;
(xiv) any failure by the Seller or any Originator to pay when due
any taxes, including without limitation sales, excise or personal property
taxes, payable by the Seller or such Originator in connection with any
Receivable or the related Contract or any Related Security with respect
thereto;
(xv) any claim brought by any Person other than an Indemnified Party
arising from any activity by any Originator or any Affiliate of any
Originator in servicing, administering or collecting any Pool Receivable;
(xvi) any setoff or counterclaim by any Lock-Box Bank or other
depositary bank against the deposits constituting Collections of Pool
Receivables held in any Lock-Box Account or other deposit account; or
(xvii) [Intentionally Omitted]; or
(b) to the extent not covered by the foregoing clauses, the
occurrence and continuance of any Event of Termination other than an Event of
Termination arising under SECTION 7.01(I).
ARTICLE XI
GRANT OF SECURITY INTEREST
SECTION 11.01 GRANT OF SECURITY INTEREST. The Seller hereby assigns
and pledges to the Administrative Agent for the benefit of itself, the Owners
and each other Indemnified Party from time to time, and hereby grants to the
Administrative Agent for the benefit of itself, the Owners and each other
Indemnified Party from time to time a security interest in and to, the Demand
Note and all proceeds thereof.
SECTION 11.02 SECURITY FOR SECURED OBLIGATIONS. The assignment,
pledge and security interest granted under this ARTICLE XI secures the payment
of all obligations of the Seller now or hereafter existing from time to time
under this Agreement, the Fee Letters and any other instruments and documents
furnished by the Seller pursuant hereto or otherwise in connection with this
Agreement, whether for Collections received or deemed to have been received or
otherwise payable by the Seller, interest, fees, costs, expenses, taxes,
indemnification or otherwise (all such obligations being the "SECURED
OBLIGATIONS").
SECTION 11.03 FURTHER ASSURANCES. (a) The Seller agrees that from
time to time, at the expense of the Seller, the Seller will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Administrative Agent may request, in
order to perfect and protect the assignment and security interest granted or
purported to be granted hereby or to enable the Administrative Agent to exercise
and enforce its rights and remedies hereunder with respect to the Demand Note.
Without limiting the generality of the foregoing, the Seller will, upon the
request of the
86
Administrative Agent, execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Administrative Agent may reasonably
request, in order to perfect and preserve the assignment and security interest
granted or purported to be granted hereby.
(b) The Seller hereby authorizes the Administrative Agent to file
one or more financing or continuation statements, and amendments thereto,
relating to the Demand Note and the proceeds thereof without the signature of
the Seller where permitted by law, and the Administrative Agent shall notify the
Seller of each such filing. A photocopy or other reproduction of this Agreement
or any financing statement covering the Demand Note and the proceeds thereof
shall be sufficient as a financing statement where permitted by law.
SECTION 11.04 ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT. The
Seller hereby irrevocably appoints the Administrative Agent the Seller's
attorney-in-fact, with full authority in the place and stead of the Seller and
in the name of the Seller or otherwise, from time to time in the Administrative
Agent's discretion following the occurrence and during the continuance of an
Event of Termination, to take any action and to execute any instrument which the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of the assignment, pledge and security interest granted hereunder, including,
without limitation:
(a) to ask, demand, collect, ▇▇▇ for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under
or in connection with the Demand Note, and
(b) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or desirable
for the collection of the Demand Note or otherwise to enforce compliance
with the terms and conditions of the Demand Note or the rights of the
Administrative Agent with respect to the Demand Note.
SECTION 11.05 ADMINISTRATIVE AGENT MAY PERFORM. If the Seller
fails to perform any agreement contained in this ARTICLE XI, the Administrative
Agent may itself perform, or cause performance of, such agreement, and the
expenses of the Administrative Agent incurred in connection therewith shall be
payable by the Seller under SECTION 12.04.
SECTION 11.06 THE ADMINISTRATIVE AGENT'S DUTIES. The powers
conferred on the Administrative Agent hereunder are solely to protect its
interest in the Demand Note and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of the Demand Note in its
possession and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to the Demand Note or as to the
taking of any necessary steps to preserve rights against any parties or any
other rights pertaining to the Demand Note. The Administrative Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
Demand Note in its possession if the Demand Note is accorded treatment
substantially equal to that which it accords its own property.
SECTION 11.07 REMEDIES. If any Event of Termination shall have
occurred and be continuing:
87
(a) The Administrative Agent may exercise any and all rights and
remedies of the Seller under or in connection with the Demand Note or
otherwise in respect of the Demand Note, including, without limitation,
any and all rights of the Seller to demand or otherwise require payment of
the Demand Note.
(b) The Administrative Agent may exercise in respect of the Demand
Note, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party
on default under the UCC in effect in the State of New York (whether or
not such UCC applies to the Demand Note).
(c) All payments received by the Seller in respect of the Demand
Note shall be received in trust for the benefit of the Administrative
Agent, shall be segregated from other funds of the Seller and shall be
forthwith paid over to the Administrative Agent in the same form as so
received (with any necessary endorsement).
(d) All payments made in respect of the Demand Note, and all cash
proceeds in respect of any sale of, collection from, or other realization
upon all or any part of the Demand Note, received by the Administrative
Agent may, in the discretion of the Administrative Agent, be held by the
Administrative Agent as collateral for, and/or then or at any time
thereafter applied (after payment of any amounts payable to the
Administrative Agent pursuant to SECTION 12.04) in whole or in part
by the Administrative Agent for the Owners or the applicable
Indemnified Parties against, all or any part of the Secured Obligations
and the "Secured Obligations" under and as defined in the Parallel
Purchase Commitment, to the Owners and Indemnified Parties hereunder and
the "Members" and "Indemnified Parties" under and as defined in the
Parallel Purchase Commitment ratably in accordance with the respective
amounts of such Secured Obligations and "Secured Obligations" owing to
them. Any surplus of such payments or cash proceeds held by the
Administrative Agent and remaining after payment in full of all the
Secured Obligations and the "Secured Obligations" under and as defined in
the Parallel Purchase Commitment shall be paid over to the Seller or to
whomsoever may be lawfully entitled to receive such surplus.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the Seller, or
the Servicer herefrom, shall be effective unless in a writing signed by the
Majority Managing Agents and, in the case of any such amendment, the Seller and
the Servicer, and then such amendment, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; PROVIDED,
HOWEVER, that no such amendment, waiver or consent shall do any of the
following, unless such amendment, waiver or consent is in writing and signed by
all the Managing Agents and the Rating Agencies then rating the commercial paper
notes of GBFC, Paradigm and Liberty shall have confirmed that the ratings of the
commercial paper notes of GBFC, Paradigm and Liberty will not be downgraded or
withdrawn as a result of such amendment, waiver or consent: (a) waive any of the
conditions specified in SECTIONS 3.01 and 3.02, (b) subject the Purchasers or
the
88
Managing Agents to any additional obligations, (c) reduce the amount of Capital
or Yield with respect to Receivable Interests or any fees payable hereunder, (d)
postpone any date scheduled for any reduction of Capital or for any payment of
Yield or any fees payable hereunder, (e) amend or waive any of the conditions
specified in SECTION 3.02 or any Event of Termination, (f) amend the definition
of "Contract", "Default Ratio", "Defaulted Receivable", "Dilution Reserve",
"Eligible Receivable", "Loss Reserve", "Loss-to-Liquidation Ratio", or "Net
Receivables Pool Balance" or amend or (if applicable) waive any defined term
used (or contained) in any of the foregoing definitions as applied thereto, (g)
assign any interest of Receivable Interests in any Pool Receivables or Related
Security or Collections, other than as provided in this Agreement, (h) change
the percentage of Purchase Limits, or the number of Owners or Managing Agents,
which shall be required for any amendment, waiver or consent or for any other
action hereunder, or (i) amend this SECTION 12.01; PROVIDED FURTHER, HOWEVER,
that no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Managing Agents as required above to
take such action, affect the rights or duties or increase the obligations of the
Administrative Agent under this Agreement; and PROVIDED FURTHER, HOWEVER, that
no amendment; waiver or consent shall increase the obligations of any Managing
Agent under this Agreement without the prior written approval of such Managing
Agent. Anything herein to the contrary notwithstanding, in the event of any
conflict between (i) any action taken by the Majority Managing Agents or all the
Managing Agents, as applicable, or the Administrative Agent under this
Agreement, including without limitation, in respect of any of the definitions
contained in SECTION 1.01 hereof or in respect of any amendment, waiver or
consent pursuant to this SECTION 12.01, and (ii) any action taken by the
Majority Purchaser Groups or all the Purchaser Groups (as each such term is
defined in the Parallel Purchase Commitment), as applicable, or the
Administrative Agent under the Parallel Purchase Commitment, such action
referred to in this clause (ii) shall control and apply to this Agreement as
well as the Parallel Purchase Commitment. No failure on the part of any Owner or
any Managing Agent or any other Indemnified Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. Without limiting the
foregoing, each Owner is hereby authorized by the Seller upon the occurrence and
during the continuance of an Event of Termination and from time to time, to the
fullest extent permitted by law, to setoff 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 such Owner to or for the credit or the
account of the Seller against any and all of the obligations of the Seller now
or hereafter existing under this Agreement to such Owner irrespective of whether
or not any formal demand shall have been made under this Agreement and although
such obligations may be unmatured. Each Owner agrees promptly to notify the
Seller and each other Owner after any such setoff and application; PROVIDED,
HOWEVER, that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of each Owner under this SECTION 12.01
are in addition to other rights and remedies (including, without limitation,
other rights of setoff) which such Owner may have. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
SECTION 12.02 NOTICES, ETC. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (including
telegraphic, telecopy or telex communication) and mailed, telegraphed,
telecopied, telexed or delivered, (i) to each of the Seller, the Servicer, each
Managing Agent and each initial Purchaser, at its address set forth
89
under its name on the signature pages hereof, (ii) to each Purchaser other than
an initial Purchaser, at its address specified on the Assignment and Acceptance
pursuant to which it became a Purchaser hereunder or (iii) to any party hereto
at such other address as shall be designated by such party in a written notice
to the other parties hereto. All such notices and communications shall, when
mailed, telegraphed, telecopied or telexed, be effective when deposited in the
mails, delivered to the telegraph company, transmitted by telecopier or
confirmed by telex answerback, respectively, except that notices and
communications to the Administrative Agent pursuant to ARTICLE II shall not be
effective until received by the Administrative Agent.
SECTION 12.03 BINDING EFFECT; ASSIGNABILITY. This Agreement shall
be binding upon and inure to the benefit of the Seller, WORLDCOM, each Managing
Agent, each Owner and each other Indemnified Party and their respective
successors and assigns, except that neither the Seller nor WORLDCOM shall have
the right to assign its rights or obligations hereunder or any interest herein
without the prior written consent of each Managing Agent. This Agreement shall
create and constitute the continuing obligation of the parties hereto in
accordance with its terms, and shall remain in full force and effect until such
time, after the Facility Termination Date, as no Capital of any Receivable
Interest shall be outstanding and no Yield, fee or other amounts payable
hereunder shall remain unpaid; PROVIDED, HOWEVER, that rights and remedies with
respect to the provisions of SECTIONS 2.10, 2.11, 2.12, 10.01, 12.04, 12.05,
12.06 and 12.07 shall be continuing and shall survive any termination of this
Agreement.
SECTION 12.04 COSTS AND EXPENSES. (a) In addition to the rights of
indemnification granted under this Agreement, the Seller agrees to pay on demand
all costs and expenses in connection with the preparation, execution, delivery
and administration (including periodic auditing of Receivables by an independent
accounting firm pursuant to SECTION 5.01(E)) of, and searches and filings in
respect of, this Agreement, the other Transaction Documents and the other
documents and agreements to be delivered hereunder and thereunder, including,
without limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent with respect thereto and advising the Administrative Agent
as to its rights and remedies hereunder. The Seller further agrees to pay on
demand all costs and expenses, if any (including, without limitation, reasonable
counsel fees and disbursements), of the Administrative Agent, each Owner, each
Managing Agent and any Affiliate thereof, in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the other Transaction Documents and the other documents and
agreements to be delivered in connection herewith or therewith.
(b) In addition, the Seller shall pay when due, to the extent not
otherwise required to be paid hereunder, any and all costs and expenses of any
issuing agent or other Person responsible for the administration of each
Purchaser's promissory note program in connection with the preparation,
completion, issuance, delivery or payment of commercial paper notes issued to
fund the Purchase or maintenance of any Receivable Interest.
(c) The Seller also shall pay on demand all other costs, expenses
and taxes (excluding taxes referred to in clauses (i), (ii) and (iii) of SECTION
2.12(a)) incurred by each Owner or any general or limited partner or shareholder
of each such Owner ("OTHER COSTS"), including, without limitation, (i) any and
all costs relating to all arrangements contemplated
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hereby with any of the Lock-Box Banks, (ii) the costs of auditing each Owner's
books by certified public accountants and of rating each Owner's commercial
paper notes by independent financial rating agencies, PROVIDED, that the Seller
shall only be obligated to pay such rating agency costs which are incurred in
connection with the preparation, negotiation, execution and delivery of this
Agreement, (iii) the taxes (excluding taxes referred to in clauses (i), (ii) and
(iii) of SECTION 2.12 (all resulting from each Owner's operations, and (iv) the
reasonable fees and disbursements of counsel for each Owner or any counsel for
any general or limited partner or shareholder of each Owner with respect to
advising such Owner or any general or limited partner or shareholder of such
Owner as to its rights and remedies under this Agreement, the other Transaction
Documents and the agreements and documents entered into in connection herewith
or therewith, the enforcement of this Agreement, the other Transaction Documents
and the agreements and documents entered into in connection herewith or
therewith, or advising as to matters relating to such Owner's operations, or
advising such Owner or any general or limited partner or shareholder of such
Owner as to the issuance of such Owner's commercial paper notes and acting in
connection with such issuance; PROVIDED, HOWEVER, that if any Owner enters into
agreements for the purchase of interests in receivables from one or more other
Persons ("Other Sellers"), the Seller and such Other Sellers shall each be
liable for such Other Costs ratably in accordance with the usage under the
respective facilities of such Owner to purchase receivables or interests therein
from the Seller and each Other Seller; and PROVIDED FURTHER, that if such Other
Costs are attributable to the Seller and not attributable to any Other Seller,
the Seller shall be solely liable for such Other Costs.
SECTION 12.05 NON-BUSINESS DAYS. In any case where any payment or
action is due under this Agreement on a day which is not a Business Day, such
payment or action may be made on the next succeeding Business Day, but such
extension of time shall in such case be included in the computation of payment
of interest, Yield, Liquidation Yield/Fee or fees, as the case may be, for
purposes of the applicable accrual period, PROVIDED, HOWEVER, that, if such
extension would cause payment in respect of Capital or Yield for Receivable
Interests for which Yield is computed by reference to the Assignee Rate to be
made in the next following calendar month, such payment shall be made on the
next preceding Business Day.
SECTION 12.06 NO PROCEEDINGS. (a) Each of the Seller, WORLDCOM,
the Administrative Agent, each Managing Agent and each Purchaser hereby agree
that they will not institute against or join or assist any Person in instituting
against, any other Purchaser any proceeding of the type referred to in SECTION
7.01(G) so long as any commercial paper notes issued by such other 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.
(b) Each of the parties hereto hereby agrees that they will not
institute against the Seller any proceeding of the type referred to in SECTION
7.01(G).
SECTION 12.07 OBLIGATIONS OF THE PURCHASERS; NO RECOURSE. Anything
herein to the contrary notwithstanding, the obligations of each Purchaser under
this Agreement and all other Transaction Documents are solely the business
entity obligations of such Purchaser and shall be payable solely from the assets
of such Purchaser in excess of funds necessary to pay matured and maturing
commercial paper notes issued by such Purchaser. No recourse shall be
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had for the payment of any amount owing by any Purchaser under this Agreement,
or for the payment by any Purchaser of any fee in respect hereof or any other
obligation or claim of or against any Purchaser arising out of or based on this
Agreement, against any stockholder, employee, officer, director or incorporator
of any such Purchaser.
SECTION 12.08 CONFIDENTIALITY. Except as otherwise required by
applicable law, each of the parties hereto agrees to maintain the
confidentiality of this Agreement, the Parallel Purchase Commitment, the
Receivables Contribution and Sale Agreement, Consent and Agreement, the Fee
Letters (and all drafts thereof) and all non-public information delivered in
connection herewith in communications with third parties and otherwise; PROVIDED
that this Agreement, the Parallel Purchase Commitment, the Receivables
Contribution and Sale Agreement, Consent and Agreement, the Fee Letters and such
information may be disclosed (i) to third parties to the extent such disclosure
is made pursuant to a written confidentiality agreement in form and substance
substantially identical to this SECTION 12.08, (ii) to the Seller's, the
Servicer's, the Administrative Agent's, each Managing Agent's and each Owner's
legal counsel, accountants and auditors if they agree to hold it confidential,
(iii) to any rating agency, (iv) to any regulatory authority having jurisdiction
over the Seller, the Servicer, the Administrative Agent, any Managing Agent or
an Owner, and (v) pursuant to court order or subpoena; PROVIDED, HOWEVER, that
each of the parties hereto agrees that the disclosure of this Agreement, the
Receivables Contribution and Sale Agreement, the Consent and Agreement, the Fee
Letters or other information required to be made by or pursuant to court order
or subpoena will not be made until the other parties hereto have been notified
at least five Business Days in advance of any such disclosure, unless such
notification is prohibited by applicable law or such court order or subpoena.
SECTION 12.09 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 12.10 CONSENT TO JURISDICTION, ETC. (a) Each of the
parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Transaction Documents to which it
is a party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such Federal court.
Each of the parties hereto hereby agrees that service of process in any such
action or proceeding may be effected by mailing a summons and complaint to it at
its address specified in SECTION 12.02 by registered mail, return receipt
requested, or in any other manner permitted by applicable law. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Transaction Documents
in the courts of any other jurisdiction.
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(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any action
or proceeding arising out of or relating to this Agreement or any of the other
Transaction Documents to which it is a party in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 12.11 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
one and the same agreement. Delivery by telecopier of an executed counterpart of
a signature page to this Agreement shall be effective as delivery of an original
executed counterpart of this Agreement.
SECTION 12.12 INTENT OF THE PARTIES. (a) It is the intention of
the parties hereto that each Purchase and reinvestment shall convey to each
Owner, to the extent of its Receivable Interests, an undivided ownership
interest in the Pool Receivables and the Related Security and Collections in
respect thereof and that such transaction shall constitute a purchase and sale
and not a secured loan. If, notwithstanding such intention, the conveyance of
the Receivable Interests from the Seller to the Administrative Agent for the
benefit of any Owner shall ever be recharacterized as a secured loan and not a
sale, it is the intention of the parties hereto that this Agreement shall
constitute a security agreement under applicable law, and that the Seller shall
be deemed to have granted to the Administrative Agent for the benefit of such
Owner, to the extent of said Owner's Receivable Interests, a duly perfected
first priority security interest in all of the Seller's right, title and
interest in, to and under the Pool Receivables, whether now owned or hereafter
acquired, and the Related Security and Collections with respect thereto from
time to time and all cash and non-cash proceeds in respect thereof, free and
clear of Adverse Claims. For such purpose, the Seller hereby grants to the
Administrative Agent for the benefit of each Owner, to the extent of such
Owner's Receivable Interests, a duly perfected first priority security interest
in all of the Seller's right, title and interest in, to and under the Pool
Receivables, whether now owned or hereafter acquired, and the Related Security
and Collections with respect thereto from time to time and all cash and non-cash
proceeds in respect thereof.
(b) Notwithstanding SECTION 12.12(A) or any other provision of this
Agreement, the parties hereto agree to treat the transfers of Receivable
Interests described herein as secured financing for all federal, state and local
tax purposes.
SECTION 12.13 ENTIRE AGREEMENT. This Agreement and the other
Transaction Documents contain a final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement and understanding among the parties hereto
with respect to the subject matter hereof and supersede all prior agreements and
understandings, written or oral, relating to the subject matter hereof.
SECTION 12.14 SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the
93
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
SECTION 12.15 AMENDMENT, RESTATEMENT AND CONSENT. (a) This
Agreement amends and restates in its entirety the Second A&R Agreement. Upon the
effectiveness of this Agreement, the terms and provisions of the Second A&R
Agreement shall, subject to this SECTION 12.15, be superseded hereby.
Notwithstanding the amendment and restatement of the Second A&R Agreement by
this Agreement, the Seller and the Servicer shall continue to be liable to the
Administrative Agent, the Managing Agents, the Purchasers and the other Owners
with respect to agreements on the part of the Seller and the Servicer under the
Second A&R Agreement to indemnify any of the Administrative Agent, the Managing
Agents, the Purchasers and the other Owners in connection with events or
conditions arising or existing prior to the date hereof. This Agreement is given
in substitution for the Second A&R Agreement. Upon the effectiveness of this
Agreement, each reference to the Original Agreement, the A&R Agreement or the
Second A&R Agreement in any other document, instrument or agreement (including,
without limitation, the Certificates) and/or delivered in connection therewith
shall mean and be a reference to this Agreement. This Agreement is not a
novation. Nothing contained herein or in any of the other Transaction Documents,
unless expressly herein or therein stated to the contrary, is intended to amend,
modify or otherwise affect any other instrument, document or agreement executed
and/or delivered in connection with the Original Agreement, the A&R Agreement or
the Second A&R Agreement. All amounts outstanding under the Original Agreement,
the A&R Agreement or the Second A&R Agreement immediately prior to giving effect
to this Agreement to each Purchaser and each Managing Agent that is a party
thereto shall be deemed to be outstanding under this Agreement. Each Certificate
issued under the Original Agreement, the A&R Agreement or the Second A&R
Agreement and outstanding immediately prior to giving effect to this Agreement
shall be deemed to be a Certificate hereunder.
(b) The Seller, the Administrative Agent, Bank One, and each
Purchaser that holds a Certificate as defined in, and issued under, the Original
Agreement, the A&R Agreement or the Second A&R Agreement hereby agree that each
such Certificate is, effective upon the effectiveness of this Agreement and on
and after the date hereof, hereby amended by deleting, in the first paragraph of
each such Certificate, the parenthetical phrase, "(the "ADMINISTRATIVE Agent")".
(c) Each of the parties hereto consents to the amendment and
restatement of the Receivables Contribution and Sale Agreement in the form of
Exhibit F hereto.
SECTION 12.16 WAIVER OF JURY TRIAL. Each of the parties hereto
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this Agreement or any of the other Transaction Documents, the
Purchases or the actions of the Administrative Agent, any Managing Agent or any
other Indemnified Party in the negotiation, administration, performance or
enforcement hereof or thereof.
(SIGNATURE PAGES FOLLOW)
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
MCI WORLDCOM RECEIVABLES CORPORATION,
as Seller
By:
--------------------------------
Name:
Title:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Senior Manager, Treasury Operations
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
WORLDCOM, INC.,
as Servicer
By:
--------------------------------
Name:
Title:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Senior Manager, Treasury Operations
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
CORPORATE ASSET FUNDING COMPANY, INC.
By: CITICORP NORTH AMERICA, INC., as
Attorney-in-Fact
By:
--------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Global Securitization
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
CHARTA CORPORATION
By: CITICORP NORTH AMERICA, INC., as
Attorney-in-Fact
By:
--------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Global Securitization
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
CITICORP NORTH AMERICA, INC.,
as CNAI Conduits Managing Agent and as Co-Lead
Manager
By:
--------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Global Securitization
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Citicorp North America, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Global Securitization
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
FALCON ASSET SECURITIZATION CORPORATION
By:
--------------------------------
Name:
Title:
c/o Bank One, NA (Main Office Chicago),
Asset Backed Finance
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇-▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Funding Manager
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
JUPITER SECURITIZATION CORPORATION
By:
--------------------------------
Name:
Title:
c/o Bank One, NA (Main Office Chicago),
Asset Backed Finance
1 Bank ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇-▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Funding Manager
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
BANK ONE, NA (Main Office Chicago),
as Bank One Conduits Managing Agent
By:
--------------------------------
Name:
Title:
Asset Backed Finance
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇-▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Funding Manager
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
GIRO BALANCED FUNDING CORPORATION
By:
--------------------------------
Name:
Title:
c/o Global Securitization Services, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
BAYERISCHE LANDESBANK, NEW YORK BRANCH, as GBFC
Managing Agent
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Finance Group
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
DELAWARE FUNDING CORPORATION
By: JPMORGAN CHASE BANK,
as Attorney-In-Fact
By:
--------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Conduit Administration
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
With a copy to:
JPMorgan Services
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Asset Finance Group/2CS
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
JPMORGAN CHASE BANK,
as Delaware Funding Managing Agent, as
Co-Lead Manager, and as Administrative Agent
By:
--------------------------------
Name:
Title:
JPMorgan Chase Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Conduit Administration
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
with a copy to:
JPMorgan Services
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Asset Finance Group/2CS
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
PARADIGM FUNDING LLC
By:
--------------------------------
Name:
Title:
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH, as Paradigm Managing
Agent
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
LIBERTY STREET FUNDING CORPORATION
By:
--------------------------------
Name:
Title:
c/o Global Securitization Services, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, President
Telephone No.:
Telecopier No.:
THE BANK OF NOVA SCOTIA, as Liberty
Managing Agent
By:
--------------------------------
Name:
Title:
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, Director