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EXHIBIT 10.7
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AMENDED AND RESTATED
TRANSFER AND ADMINISTRATION AGREEMENT
between
ENTERPRISE FUNDING CORPORATION,
as Company
WORLDCOM FUNDING CORPORATION,
as Transferor
WORLDCOM, INC.,
individually and
as Collection Agent
SHEFFIELD RECEIVABLES CORPORATION
and
NATIONSBANK, N.A.
as Agent and Bank Investor
Dated as of December 31, 1996
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms . . . . . . . . . . . . . . . . 1
SECTION 1.2. Other Terms . . . . . . . . . . . . . . . . . . . . 37
SECTION 1.3. Computation of Time Periods . . . . . . . . . . . . 37
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. Facility . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 2.2. Transfers; Certificate;
Eligible Receivables . . . . . . . . . . . . . . . . 39
SECTION 2.3. Selection of Enterprise Tranche
Periods Sheffield Tranche
Periods, Enterprise Tranche
Rates and Sheffield Tranche
Rates . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 2.4. Discount, Fees and Other Costs
and Expenses . . . . . . . . . . . . . . . . . . . . 50
SECTION 2.5. Non-Liquidation Settlement and
Reinvestment Procedures . . . . . . . . . . . . . . 51
SECTION 2.6. Liquidation Settlement Procedures . . . . . . . . . . 52
SECTION 2.7. Fees . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 2.8. Protection of Ownership Interest
of the Company, Sheffield and
Bank Investors . . . . . . . . . . . . . . . . . . . 54
SECTION 2.9. Deemed Collections; Application
of Payments . . . . . . . . . . . . . . . . . . . . 56
SECTION 2.10. Payments and Computations, Etc. . . . . . . . . . . 57
SECTION 2.11. Reports . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 2.12. Collection Account . . . . . . . . . . . . . . . . . 58
SECTION 2.13 Sharing of Payments . . . . . . . . . . . . . . . . 59
SECTION 2.14 Right of Setoff . . . . . . . . . . . . . . . . . . 60
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties
of the Transferor . . . . . . . . . . . . . . . . . 61
SECTION 3.2. Reaffirmation of Representations
and Warranties of the
Transferor . . . . . . . . . . . . . . . . . . . . 66
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SECTION 3.3. Representations and Warranties
of WorldCom . . . . . . . . . . . . . . . . . . . . 66
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. . . . . . . . . . . . . . . . 71
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of Transferor . . . . . . . . . 73
SECTION 5.2. Negative Covenants of Transferor . . . . . . . . . . 79
SECTION 5.3. Financial Covenants of WorldCom . . . . . . . . . . 82
SECTION 5.4. Affirmative Covenants of WorldCom . . . . . . . . . 83
SECTION 5.5. Negative Covenants of WorldCom . . . . . . . . . . . 85
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Appointment of Collection Agent . . . . . . . . . . . 87
SECTION 6.2. Duties of Collection Agent . . . . . . . . . . . . . 87
SECTION 6.3. Rights After Designation of New
Collection Agent . . . . . . . . . . . . . . . . . . 90
SECTION 6.4. Collection Agent Default . . . . . . . . . . . . . . 91
SECTION 6.5. Responsibilities of the Transferor . . . . . . . . . 92
ARTICLE VII
TERMINATION EVENTS
SECTION 7.1. Termination Events . . . . . . . . . . . . . . . . . 93
SECTION 7.2. Termination . . . . . . . . . . . . . . . . . . . . . 96
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ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. Indemnities by the Transferor . . . . . . . . . . . . 98
SECTION 8.2. Indemnity for Taxes,
Reserves and Expenses . . . . . . . . . . . . . . . 102
SECTION 8.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 8.4. Other Costs, Expenses and Related
Matters . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 8.5. Reconveyance Under Certain
Circumstances . . . . . . . . . . . . . . . . . . . 107
ARTICLE IX
THE AGENT; THE ENTERPRISE AGENT; BANK COMMITMENT
SECTION 9.1. Authorization and Action . . . . . . . . . . . . . . 108
SECTION 9.2. Agent's Reliance, Etc. . . . . . . . . . . . . . . . 111
SECTION 9.3. Credit Decision . . . . . . . . . . . . . . . . . . . 112
SECTION 9.4. Indemnification of the Enterprise Agent . . . . . . . 112
SECTION 9.5. Successor Agent and Enterprise Agent . . . . . . . . 113
SECTION 9.6. Payments by the Agent and Enterprise
Agent . . . . . . . . . . . . . . . . . . . . . . . 114
SECTION 9.7. Bank Commitment; Assignment to Bank Investors . . . . 115
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Term of Agreement . . . . . . . . . . . . . . . . . 121
SECTION 10.2. Waivers; Amendments . . . . . . . . . . . . . . . . 121
SECTION 10.3. Notices . . . . . . . . . . . . . . . . . . . . . . 122
SECTION 10.4. Governing Law; Submission to
Jurisdiction; Integration . . . . . . . . . . . . . 124
SECTION 10.5. Severability; Counterparts . . . . . . . . . . . . . 125
SECTION 10.6. Successors and Assigns . . . . . . . . . . . . . . . 125
SECTION 10.7. Waiver of Confidentiality . . . . . . . . . . . . . 126
SECTION 10.8. Confidentiality Agreement . . . . . . . . . . . . . 126
SECTION 10.9. No Bankruptcy Petition Against the
Company or Sheffield . . . . . . . . . . . . . . . 126
SECTION 10.10. No Recourse Against Stockholders,
Officers and Directors . . . . . . . . . . . . . . 127
SECTION 10.11. Characterization of the Transactions
Contemplated by the Agreement . . . . . . . . . . . 127
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EXHIBITS
EXHIBIT A Forms of Contracts
EXHIBIT B Credit and Collection Policies and
Practices
EXHIBIT C List of Lock-Box Banks and Accounts
EXHIBIT D Form of Lock-Box Agreement
EXHIBIT E Form of Investor Report
EXHIBIT F Form of Transfer Certificate
EXHIBIT G Form of Assignment and Assumption
Agreement
EXHIBIT H List of Actions and Suits
EXHIBIT I Location of Records
EXHIBIT J List of Subsidiaries, Divisions
and Tradenames
EXHIBIT K Forms of Opinions of Counsel for
the Transferor and WorldCom
EXHIBIT L Forms of Secretary's Certificate
for the Transferor, WorldCom
and Permitted Originators
EXHIBIT M Form of Company Certificate
EXHIBIT N Form of Weekly Report
EXHIBIT O Section 5.3 Definitions
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AMENDED AND RESTATED
TRANSFER AND ADMINISTRATION AGREEMENT
THIS AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT (as
amended, supplemented or otherwise modified and in effect from time to time,
this "Agreement"), dated as of December 31, 1996, by and among WORLDCOM FUNDING
CORPORATION, a Delaware corporation, as transferor (in such capacity, the
"Transferor"), WORLDCOM, INC., a Georgia corporation, individually and as
collection agent (in such capacity, the "Collection Agent"), ENTERPRISE FUNDING
CORPORATION, a Delaware corporation (the "Company"), SHEFFIELD RECEIVABLES
CORPORATION, a Delaware corporation ("Sheffield") and NATIONSBANK, N.A., a
national banking association ("NationsBank"), as agent for the Company,
Sheffield and the Bank Investors (in such capacity, the "Agent") and as a Bank
Investor.
PRELIMINARY STATEMENTS
WHEREAS, the Transferor, the Collection Agent, the Company and the
Agent entered into a Transfer and Administration Agreement dated as of October
25, 1996 (the "Existing Agreement");
WHEREAS, the Transferor has requested that the Existing Agreement be
amended and restated, among other things, to provide for the addition of
Sheffield as a purchaser and to provide for an increase to the aggregate
facility limit;
WHEREAS, the Transferor may desire to convey, transfer and assign, from
time to time, undivided percentage interests in certain accounts receivable,
and the Company may desire to, and the Bank Investors and Sheffield, if
requested, shall, accept such conveyance, transfer and assignment of such
undivided percentage interests, subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Administrative Agent" means NationsBank, N.A., as administrative agent
for the Company.
"Adverse Claim" means a lien, security interest, charge or encumbrance,
or other right or claim in, of or on any Person's assets or properties in favor
of any other Person (including any UCC financing statement or any similar
instrument filed against such Person's assets or properties).
"Affected Assets" means, collectively, the Receivables and the Related
Security, Collections and Proceeds relating thereto.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the power
to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of voting stock, by contract or
otherwise.
"Agent" means NationsBank, N.A., in its capacity as agent for the
Company, Sheffield and the Bank Investors, and any successor thereto appointed
pursuant to Article IX.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of
(i) the aggregate accrued and unpaid Enterprise Discount and Sheffield Discount
with respect to all Enterprise Tranche Periods and Sheffield Tranche Periods,
as applicable, at such time, (ii) the Enterprise Net Investment and Sheffield
Net Investment, as applicable, at such time, and (iii) all other amounts owed
(whether due or accrued) hereunder by the Transferor
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to the Company, Sheffield, the Bank Investors, the Enterprise Agent and the
Agent at such time.
"Assignment Amount" with respect to a Bank Investor means, at any time,
an amount equal to the lesser of (i) such Bank Investor's Pro Rata Share of the
Enterprise Net Investment at such time and (ii) such Bank Investor's unused
Commitment.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement substantially in the form of Exhibit G attached hereto.
"Bank Investor Commitment Fee" means the commitment fee payable to the
Bank Investors in an amount agreed upon from time to time by the Transferor,
WorldCom and NationsBank, N.A.
"Bank Investors" means NationsBank, N.A. and its successors and
assigns.
"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C. et
seq), as amended.
"Base Rate" or "BR" means, a rate per annum equal to the greater of (i)
the prime rate of interest announced by the Agent from time to time, changing
when and as said prime rate changes (such rate not necessarily being the lowest
or best rate charged by the Agent) and (ii) the sum of (a) 1.50% and (b) the
rate equal 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 Agent from three Federal funds brokers of recognized standing selected by
it.
"Benefit Plan" means any employee benefit plan as defined in Section
3(3) of ERISA in respect of which the Transferor, WorldCom or any ERISA
Affiliate of the Transferor or WorldCom is, or at any time during the
immediately preceding six years was, an "employer" as defined in Section 3(5)
of ERISA.
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"Billing Adjustments" means, for any period, an amount equal to the
aggregate actual billing adjustments or credits made by the Transferor or the
Collection Agent with respect to Receivables during such period.
"Billing Adjustments Ratio" means, the ratio (expressed as a
percentage) computed as of the last day of each calendar month by dividing (i)
the amount of Billing Adjustments for such calendar month by (ii) credit sales
on all Receivables for the calendar month immediately preceding the then
current calendar month.
"Business Day" means any day excluding Saturday, Sunday and any day on
which banks in New York, New York, Charlotte, North Carolina or Jackson,
Mississippi are authorized or required by law to close, and, when used with
respect to the determination of any Eurodollar Rate or any notice with respect
thereto, any such day which is also a day for trading by and between banks in
United States dollar deposits in the London interbank market.
"Capitalized Lease" of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.
"Certificate" means the certificate issued to the Agent for the benefit
of the Company, Sheffield and the Bank Investors pursuant to Section 2.2(d)
hereof.
"Closing Date" means December 31, 1996.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agent" means NationsBank, N.A., as collateral agent for any
Liquidity Provider, any Credit Support Provider, the holders of Commercial
Paper issued by the Company and certain other parties.
"Collection Account" means the account, established by the Agent, for
the benefit of the Company, Sheffield and the Bank Investors, pursuant to
Section 2.12.
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"Collection Agent" means at any time the Person then authorized
pursuant to Section 6.1 to service, administer and collect Receivables.
"Collection Agent Default" has the meaning specified in Section 6.4
hereof.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all Finance Charges, if any, and cash proceeds of Related Security
with respect to such Receivable.
"Commercial Paper" means the short- term promissory notes of the
Company or Sheffield issued by the Company or Sheffield, as applicable, in the
commercial paper market.
"Commitment" means for each Bank Investor, the commitment of such Bank
Investor to make acquisitions from the Transferor or the Company in accordance
herewith in an amount not to exceed the dollar amount set forth opposite such
Bank Investor's signature on the signature page hereto under the heading
"Commitment."
"Commitment Termination Date" means October 24, 1997, or such later
date to which the Commitment Termination Date may be extended by Transferor,
the Enterprise Agent and the Bank Investors not later than sixty (60) days
prior to the then current Commitment Termination Date.
"Company" means Enterprise Funding Corporation, and its successors and
assigns.
"Concentration Factor" means for any Designated Obligor on any date of
determination (a) 3% of the Eligible Receivables on such date; provided
however, that with respect to any Designated Obligor and its affiliates whose
long term unsecured debt obligations are rated at ▇▇▇▇▇ "▇▇" by Moody's and at
least "A+" by Standard & Poor's and with respect to which rating neither
Moody's nor Standard & Poor's shall have made a public announcement
anticipating a downgrading of such Designated Obligor's long term unsecured
debt obligations to a rating less than the aforementioned ratings ("A1/A+ Rated
Obligors") 5% of the Eligible Receivables on such date,
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or (b) such other amount determined by the Agent in the reasonable exercise of
its good faith judgment and disclosed in a written notice delivered to the
Transferor.
"Contract" means an agreement or invoice in substantially the form of
one of the forms attached hereto as Exhibit A or otherwise approved by the
Company and Sheffield, pursuant to or under which an Obligor shall be obligated
to pay for merchandise purchased or services rendered.
"Credit Agreement" means the Amended and Restated Credit Agreement
dated as of June 28, 1996 among WorldCom, Inc., as borrower, NationsBank of
Texas, N.A., as managing agent and administrative agent, the agents named
therein and the lenders named therein, as the same may be amended from time to
time.
"Credit and Collection Policy" means the Transferor's credit and
collection policy or policies and practices, relating to Contracts and
Receivables existing on the date hereof and referred to in Exhibit B attached
hereto, as modified from time to time in compliance with Section 5.2(c).
"Credit Support Agreement" means any agreement between the Company or
Sheffield and any Credit Support Provider evidencing the obligation of such
Credit Support Provider to provide credit support to the Company or Sheffield
in connection with the issuance by the Company or Sheffield, as applicable, of
Commercial Paper.
"Credit Support Provider" means the Person or Persons who provides
credit support to the Company or Sheffield in connection with the issuance by
the Company or Sheffield, as applicable, of Commercial Paper.
"Deemed Collections" means any Collections on any Receivable deemed to
have been received pursuant to Section 2.9(a) or (b) hereof.
"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 Defaulted Receivables as of such date by (ii) the
aggregate Outstanding Balance of all Receivables as of such date.
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"Defaulted Receivable" means a Receivable: (i) as to which any
payment, or part thereof, remains unpaid for ninety-one (91) days or more from
the original due date for such Receivable; (ii) as to which an Event of
Bankruptcy has occurred and is continuing with respect to the Obligor thereof;
(iii) which has been identified by the Transferor, WorldCom or the Collection
Agent as uncollectible; or (iv) which, consistent with the Credit and
Collection Policy, should be written off as uncollectible.
"Delinquency 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 Delinquent Receivables as of such date by
(ii) the aggregate Outstanding Balance of all Receivables (other than Defaulted
Receivables) as of such date.
"Delinquent Receivable" means a Receivable: (i) as to which any
payment, or part thereof, remains unpaid for more than thirty (30) days from
the original due date for such Receivable but less than ninety-one (91) days
from the original due date for such Receivable and (ii) which is not a
Defaulted Receivable.
"Designated Obligor" means, at any time, each Obligor, provided,
however, that any Obligor shall cease to be a Designated Obligor upon notice to
the Transferor from the Enterprise Agent or Sheffield, delivered at any time.
"Eligible Investments" means any of the following (a) negotiable
instruments or securities represented by instruments in bearer or registered or
in book-entry form which evidence (i) obligations fully guaranteed by the
United States of America; (ii) time deposits in, or bankers acceptances issued
by, any depositary institution or trust company incorporated under the laws of
the United States of America or any state thereof and subject to supervision
and examination by Federal or state banking or depositary institution
authorities; provided, however, that at the time of investment or contractual
commitment to invest therein, the certificates of deposit or short-term
deposits, if any, or long-term unsecured debt obligations (other than such
obligation whose rating is based on collateral or on the credit of a Person
other than such institution or trust company)
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of such depositary institution or trust company shall have a credit rating from
Moody's and S&P of at least "P-1" and "A-1", respectively, in the case of the
certificates of deposit or short-term deposits, or a rating not lower than one
of the two highest investment categories granted by Moody's and by S&P; (iii)
certificates of deposit having, at the time of investment or contractual
commitment to invest therein, a rating from Moody's and S&P of at least "P-1"
and "A-1", respectively; or (iv) investments in money market funds rated in the
highest investment category or otherwise approved in writing by the applicable
rating agencies; (b) demand deposits in any depositary institution or trust
company referred to in (a)(ii) above; (c) commercial paper (having original or
remaining maturities of no more than 30 days) having, at the time of investment
or contractual commitment to invest therein, a credit rating from Moody's and
S&P of at least "P-1" and "A-1", respectively; (d) Eurodollar time deposits
having a credit rating from Moody's and S&P of at least "P-1" and "A-1",
respectively; and (e) repurchase agreements involving any of the Eligible
Investments described in clauses (a)(i), (a)(iii) and (d) hereof so long as the
other party to the repurchase agreement has at the time of investment therein,
a rating from Moody's and S&P of at least "P-1" and "A-1", respectively.
"Eligible Receivable" means, at any time, any Receivable:
(i)(A) which has been originated by WorldCom or a Permitted
Originator, (B) if originated by a Permitted Originator, which has been
sold to WorldCom pursuant to (and in accordance with) a valid purchase and
sale agreement, (C) which has been sold by WorldCom to the Transferor
pursuant to (and in accordance with) the Receivables Purchase Agreement and
(D) as to which the Transferor has good title thereto, free and clear of
all Adverse Claims;
(ii) which (together with the Collections and Related Security
related thereto) has been the subject of either a valid transfer and
assignment from the Transferor to
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the Agent, on behalf of the Company, Sheffield and the Bank Investors, of
all of the Transferor's right, title and interest therein or the grant of a
first priority perfected security interest therein (and in the Collections
and Related Security related thereto), effective until the termination of
this Agreement;
(iii) the Obligor of which is a United States resident, is a
Designated Obligor at the time of the initial creation of an interest
therein hereunder and is not an Affiliate of any of the parties hereto;
(iv) which is not a Defaulted Receivable at the time of the
initial creation of an interest therein hereunder;
(v) which, (A) except with respect to any Private Line Receivable,
arises pursuant to a Contract with respect to which each of WorldCom or the
applicable Permitted Originator and the Transferor has performed all
obligations required to be performed by it thereunder, including without
limitation shipment of the merchandise and/or the performance of the
services purchased thereunder; (B) has been billed; and (C) according to
the Contract related thereto, is required to be paid in full (1) in the
case of a Switched Service Receivable, within thirty (30) days, (2) in the
case of a Private Line Receivable, within forty (40) days of the original
billing date therefor and (3) in the case of a Rebiller, within forty-five
(45) days of the original billing date therefor;
(vi) which is an "eligible asset" as defined in Rule 3a-7 under
the Investment Company Act of 1940, as amended;
(vii) a purchase of which with the proceeds of Commercial Paper
would constitute a "current transaction" within the meaning of Section
3(a)(3) of the Securities Act of 1933, as amended;
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(viii) which is an "account" within the meaning of Article 9 of
the UCC of all applicable jurisdictions;
(ix) which is denominated and payable only in United States
dollars in the United States;
(x) which, arises under a Contract that together with the
Receivable related thereto, is in full force and effect and constitutes the
legal, valid and binding obligation of the related Obligor enforceable
against such Obligor in accordance with its terms and is not subject to any
litigation, dispute, offset, counterclaim or other defense;
(xi) 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 truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no part of the Contract related thereto
is in violation of any such law, rule or regulation in any material
respect;
(xii) which (A) satisfies all applicable requirements of the
Credit and Collection Policy, (B) is assignable without the consent of, or
notice to, the Obligor thereunder, and (C) complies with such other
criteria and requirements as the Agent may from time to time specify to the
Transferor following five (5) days' notice;
(xiii) which was generated in the ordinary course of business of
WorldCom or a Permitted Originator;
(xiv) the Obligor of which has been directed to make all payments
to a specified account of the Collection Agent with
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respect to which there shall be a Lock-Box Agreement in effect;
(xv) as to which neither the Enterprise Agent nor Sheffield has
notified the Transferor that the Enterprise Agent or Sheffield, as
applicable, has determined, in its sole discretion, based on non- arbitrary
credit considerations with respect to the Obligor, that such Receivable (or
class of Receivables) is not acceptable for purchase hereunder, which
notice shall set forth the reasons for such determination;
(xvi) the assignment of which by a Permitted Originator to
WorldCom (if applicable) and by WorldCom to the Transferor under the
Receivables Purchase Agreement and hereunder by the Transferor to the Agent
on behalf of Enterprise, Sheffield and the Bank Investors does not violate,
conflict or contravene any applicable laws, rules, regulations, orders or
writs or any contractual or other restriction, limitation or encumbrance;
(xvii) which has not been compromised, adjusted or modified
(including by the extension of time for payment or the granting of any
discounts, allowances or credits); provided, however, that only such
portion of such Receivable that is the subject of such compromise,
adjustment or modification shall be deemed to be ineligible pursuant to the
terms of this clause (xviii);
(xviii) if the Obligor of such Receivable is a government agency
or subdivision, the Outstanding Balance of which, when added to the
aggregate Outstanding Balance of all Receivables the Obligor of which is a
government agency or subdivision, does not exceed 5% of the aggregate
Outstanding Balance of all Receivables;
(xix) if such Receivable is a Private Line Receivable, (A) the
Contract related thereto requires the Obligor to give
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WorldCom or the Permitted Originator at least thirty (30) days' notice of
cancellation and (B) the related Obligor has not provided notice to cancel
the related Contract; and
(xx) if such Receivable is a Private Line Receivable, the
Outstanding Balance thereof, when combined with the aggregate Outstanding
Balance of all other Private Line Receivables, does not exceed 20% of the
aggregate Outstanding Balance of all Receivables.
"Enterprise Agent" means NationsBank, N.A., in its capacity as agent
for the Company and the Bank Investors, and any successor thereto appointed
pursuant to Article IX.
"Enterprise Billing Adjustments Reserve" means, at any time, an amount
equal to the product of (i) the greater of (A) 5% and (B) 1.5 multiplied by the
highest Billing Adjustment Ratio over the last twelve (12) months and (ii) the
sum of the Enterprise Net Investment, the Enterprise Discount Reserve and the
Enterprise Servicing Fee Reserve at such time.
Notwithstanding the foregoing, the Enterprise Billing Adjustments Reserve shall
at all times be at least equal to $10,000,000.
"Enterprise BR Tranche" means an Enterprise Tranche as to which
Enterprise Discount is calculated at the Base Rate.
"Enterprise BR Tranche Period" means, with respect to an Enterprise BR
Tranche, either (i) prior to the Enterprise Termination Date, a period of up
to 30 days requested by the Transferor and agreed to by the Company,
NationsBank on behalf of any Liquidity Provider, or the Enterprise Agent, as
the case may be, commencing on a Business Day requested by the Transferor and
agreed to by the Company, NationsBank or the Enterprise Agent, as the case may
be, or (ii) after the Enterprise Termination Date, a period of one day. If
such Enterprise BR Tranche Period would end on a day which is not a Business
Day, such Enterprise BR Tranche Period shall end on the next succeeding
Business Day.
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"Enterprise CP Rate" means, with respect to any Enterprise CP Tranche
Period, the rate equivalent to the rate (or if more than one rate, the weighted
average of the rates) at which Commercial Paper issued by the Company having a
term equal to such Enterprise CP Tranche Period may be sold by any placement
agent or commercial paper dealer selected by the Company, provided, however,
that if the rate (or rates) as agreed between any such agent or dealer and the
Company is a discount rate, then the rate (or if more than one rate, the
weighted average of the rates) resulting from the Company's converting such
discount rate (or rates) to an interest-bearing equivalent rate per annum.
"Enterprise CP Tranche" means an Enterprise Tranche as to which
Enterprise Discount is calculated at an Enterprise CP Rate.
"Enterprise CP Tranche Period" means, with respect to an Enterprise CP
Tranche, a period of days not to exceed ninety (90) days commencing on a
Business Day requested by the Transferor and agreed to by the Company pursuant
to Section 2.3. If an Enterprise CP Tranche Period would end on a day which is
not a Business Day, such Enterprise CP Tranche Period shall end on the next
succeeding Business Day.
"Enterprise Dealer Fee" means the fee payable by the Transferor to the
Agent, pursuant to Section 2.4 hereof, the terms of which are set forth in the
Enterprise Fee Letter.
"Enterprise Discount" means, with respect to any Enterprise Tranche
Period:
(TR x TNI x AD)
360
Where:
TR = the Enterprise Tranche Rate applicable
to such Enterprise Tranche Period.
TNI = the portion of the Enterprise Net
Investment allocated to such
Enterprise Tranche Period.
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AD = the actual number of days during such
Enterprise Tranche Period.
provided, however, that no provision of this Agreement shall require the
payment or permit the collection of Enterprise Discount in excess of the
maximum amount permitted by applicable law; and provided, further, that
Enterprise Discount shall not be considered paid by any distribution if at any
time such distribution is rescinded or must be returned for any reason.
"Enterprise Discount Reserve" means, at any time, an amount equal to:
TD + LY
Where:
TD = the sum of the unpaid Enterprise
Discount for all Enterprise Tranche Periods.
LY = the Enterprise Liquidation Yield.
"Enterprise Early Collection Fee" means, for any Enterprise Tranche
Period (such Enterprise Tranche Period to be determined without regard to the
last sentence in Section 2.3(a) hereof) during which the portion of the
Enterprise Net Investment that was allocated to such Enterprise Tranche Period
is reduced for any reason whatsoever, the excess, if any, of (i) the additional
Enterprise Discount that would have accrued during such Enterprise Tranche
Period if such reductions had not occurred, minus (ii) the income, if any,
received by the recipient of such reductions from investing the proceeds of
such reductions.
"Enterprise Eurodollar Tranche" means an Enterprise Tranche as to which
Enterprise Discount is calculated at the Eurodollar Rate.
"Enterprise Eurodollar Tranche Period" means, with respect to an
Enterprise Eurodollar Tranche, prior to the Enterprise Termination Date, a
period of up to one month requested by the Transferor and agreed to by the
Company, NationsBank, on behalf of Enterprise's Liquidity Provider, or the
Enterprise Agent, as the case may be, commencing on a Business Day requested by
the Transferor
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and agreed to by the Company, NationsBank or the Enterprise Agent, as
applicable; provided, however, that if such Enterprise Eurodollar Tranche
Period would expire on a day which is not a Business Day, such Enterprise
Eurodollar Tranche Period shall expire on the next succeeding Business Day;
provided, further, that if such Enterprise Eurodollar Tranche Period would
expire on (a) a day which is not a Business Day but is a day of the month after
which no further Business Day occurs in such month, such Enterprise Eurodollar
Tranche Period shall expire on the next preceding Business Day or (b) a
Business Day for which there is no numerically corresponding day in the
applicable subsequent calendar month, such Enterprise Eurodollar Tranche Period
shall expire on the last Business Day of such month.
"Enterprise Facility Fee" means the fee payable by the Transferor to
the Company pursuant to Section 2.7(a) hereof, the terms of which are set forth
in the Enterprise Fee Letter.
"Enterprise Fee Letter" means the letter agreement dated October 25,
1996 between the Transferor and the Company with respect to the fees to be paid
by the Transferor hereunder, as amended, modified or supplemented from time to
time.
"Enterprise Liquidation Yield" means, at any time, an amount equal to:
(RVF x LBR x NI) x (EMP x 1.5)
-----------
360
Where:
RVF = the Enterprise Rate Variance Factor at such time;
LBR = the Base Rate at such time which is applicable to the liquidation
period after a Termination Event;
NI = the Enterprise Net Investment at such time; and
EMP = the Estimated Maturity Period of the Receivables.
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"Enterprise Loss Reserve" means, on any day, an amount equal to:
LP x (NI + DR + SFR)
Where:
LP = the Loss Percentage at the close of business of the Collection Agent on
such day;
NI = the Enterprise Net Investment at the close of business of the
Collection Agent on such day;
DR = the Enterprise Discount Reserve at the close of business of the
Collection Agent on such day; and
SFR = the Enterprise Servicing Fee Reserve at the close of business of the
Collection Agent on such day.
Notwithstanding the foregoing, the Enterprise Loss Reserve shall at all times
be at least equal to $30,000,000.
"Enterprise Maximum Net Investment" means $306,000,000; provided that
such amount may not at any time exceed the aggregate Commitments at any time in
effect; provided, further, that from and after the Enterprise Termination Date,
the Enterprise Maximum Net Investment shall at all times equal the Enterprise
Net Investment.
"Enterprise Net Investment" means the sum of the cash amounts paid to
the Transferor by Enterprise or the Bank Investors for each Incremental
Transfer less the aggregate amount of Collections received and applied by the
Agent to reduce such Enterprise Net Investment pursuant to Section 2.6 or 2.9
hereof; provided that the Enterprise Net Investment shall be restored and
reinstated in the amount of any Collections so received and applied if at any
time the distribution of such Collections is rescinded or must otherwise be
returned for any reason; and provided further that the Enterprise Net
Investment may be increased by the amount described in Section 9.7(d) as
described therein.
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"Enterprise Percentage Factor" means the fraction (expressed as a
percentage) computed at any time of determination as follows:
NI + LR + BAR + DR + SFR
-------------------------
NRB
Where:
NI = the Enterprise Net Investment at the time of such computation;
LR = the Enterprise Loss Reserve at the time of such computation;
BAR = the Enterprise Billing Adjustment Reserve at the time of such
computation;
DR = the Enterprise Discount Reserve at the time of such computation;
SFR = the Enterprise Servicing Fee Reserve at the time of such computation;
and
NRB = the Net Receivables Balance at the time of such computation.
The Enterprise Percentage Factor shall be calculated by the Collection Agent
from time to time as described in Section 2.2(e).
"Enterprise Program Fee" means the fee payable by the Transferor to the
Company pursuant to Section 2.7 hereof, the terms of which are set forth in the
Enterprise Fee Letter.
"Enterprise Rate Variance Factor" means 1.15 or such other number
computed from time to time in good faith by the Enterprise Agent and set forth
in a written notice by the Enterprise Agent to the Transferor and the
Collection Agent.
"Enterprise Servicing Fee Reserve" means at any time an amount equal to
the product of (i) the aggregate Outstanding Balance of all Receivables at such
time, (ii) 0.5%, (iii) a fraction having, as the numerator, the sum of (a) 1.5
times the Estimated Maturity Period plus (b)
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30 and, as the denominator, 360 and (iv) a fraction the numerator of which is
the Enterprise Net Investment and the denominator of which is the Net
Investment.
"Enterprise Termination Date" means the earliest of (i) the Business
Day designated by the Transferor to the Company as the "Enterprise Termination
Date" at any time following 60 days' written notice to the Company, (ii) the
date of termination of the commitment of any Liquidity Provider under any
Liquidity Provider Agreement, but only with respect to the Company, (iii) the
date of termination of the commitment of any Credit Support Provider under any
Credit Support Agreement, but only with respect to the Company (iv) the day
upon which the Termination Date is declared or automatically occurs pursuant to
Section 7.2(a) hereof, (v) two (2) Business Days prior to the Commitment
Termination Date, (vi) the day on which a Reinvestment Termination Date shall
occur, (vii) the Purchase Termination Date, (viii) October 24, 1997, (ix) on or
after the occurrence of a Sheffield Termination Date, the Business Day
designated by the Enterprise Agent, at its option, as the Enterprise
Termination Date or (x) the Business Day designated as the Enterprise
Termination Date by the Enterprise Agent on or after the day on which the
Commercial Paper issued by the Company shall not be rated at least "A-2" by
Standard & Poor's and at least "P-2" by Moody's.
"Enterprise Tranche" means a portion of the Enterprise Net Investment
allocated to an Enterprise Tranche Period pursuant to Section 2.3 hereof.
"Enterprise Tranche Period" means an Enterprise CP Tranche Period, an
Enterprise BR Tranche Period or an Enterprise Eurodollar Tranche Period.
"Enterprise Tranche Rate" means the Enterprise CP Rate, the Base Rate
or the Eurodollar Rate.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means, with respect to any Person, (i) any
corporation which is a member of the same controlled group of corporations
(within the meaning of
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Section 414(b) of the Code (as in effect from time to time, the "Code")) as
such Person; (ii) a trade or business (whether or not incorporated) under
common control (within the meaning of Section 414(c) of the Code) with such
Person; or (iii) a member of the same affiliated service group (within the
meaning of Section 414(n) of the Code) as such Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above.
"Estimated Maturity Period" means, at any time, the period, rounded
upward to the nearest whole number of days, equal to the weighted average
number of days until due of the Receivables as calculated by the Collection
Agent in good faith and set forth in the most recent Investor Report, such
calculation to be based on the assumptions that (a) each Receivable within a
particular aging category, (as set forth in the Investor Report) will be paid
on the last day of such aging category and (b) the last day of the last such
aging category coincides with the last date on which any Outstanding Balance of
any Receivables would be written off as uncollectible or charged against any
applicable reserve or similar account in accordance with the objective
requirements of the Credit and Collection Policy and WorldCom's normal
accounting practices applied on a basis consistent with those reflected in
WorldCom's financial statements; provided, however, that if the Agent, the
Enterprise Agent, the Company, Sheffield or any of the Bank Investors shall
reasonably disagree with any such calculation, the Agent may recalculate the
Estimated Maturity Period, and such recalculation, in the absence of manifest
error, shall be conclusive.
"Eurodollar Rate" means, with respect to any Enterprise Eurodollar
Tranche Period or Sheffield Eurodollar Tranche Period, a rate which is 0.625%
in excess of a rate per annum equal to the sum (rounded upwards, if necessary,
to the next higher 1/100 of 1%) of (A) the rate obtained by dividing (i) the
applicable LIBOR Rate by (ii) a percentage equal to 100% minus the reserve
percentage used for determining the maximum reserve requirement as specified in
Regulation D (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) that is applicable to the Agent during
such Enterprise Eurodollar Tranche Period or Sheffield Eurodollar Tranche
Period in respect of
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eurocurrency or eurodollar funding, lending or liabilities (or, if more than
one percentage shall be so applicable, the daily average of such percentage for
those days in such Enterprise Eurodollar Tranche Period or Sheffield Eurodollar
Tranche Period during which any such percentage shall be applicable) plus (B)
the then daily net annual assessment rate (rounded upwards, if necessary, to
the nearest 1/100 of 1%) as estimated by the Agent for determining the current
annual assessment payable by the Agent to the Federal Deposit Insurance
Corporation in respect of eurocurrency or eurodollar funding, lending or
liabilities.
"Event of Bankruptcy" means, with respect to any Person, (i) that such
Person (a) shall generally not pay its debts as such debts become due or (b)
shall admit in writing its inability to pay its debts generally or (c) shall
make a general assignment for the benefit of creditors; (ii) any proceeding
shall be instituted by or against such Person seeking to adjudicate it as
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 or other similar official for it or any substantial part of
its property or (iii) if such Person is a corporation, such Person or any
Subsidiary shall take any corporate action to authorize any of the actions set
forth in the preceding clauses (i) or (ii).
"Excluded Taxes" shall have the meaning specified in Section 8.3
hereof.
"Finance Charges" means, with respect to a Contract, any finance,
interest, late or similar charges owing by an Obligor pursuant to such
Contract.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
accounting profession, which are in effect as of the date of this Agreement.
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"Guaranty" means, with respect to any Person any agreement by which
such Person assumes, guarantees, endorses, contingently agrees to purchase or
provide funds for the payment of, or otherwise becomes liable upon, the
obligation of any other Person, or agrees to maintain the net worth or working
capital or other financial condition of any other Person or otherwise assures
any other creditor of such other Person against loss, including, without
limitation, any comfort letter, operating agreement or take-or-pay contract and
shall include, without limitation, the contingent liability of such Person in
connection with any application for a letter of credit.
"Incremental Transfer" means a Transfer which is made pursuant to
Section 2.2(a) hereof.
"Indebtedness" means, with respect to any Person such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of such Person's business on terms customary in the trade, (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease obligations and (vi) obligations for which
such Person is obligated pursuant to a Guaranty.
"Indemnified Amounts" has the meaning specified in Section 8.1 hereof.
"Indemnified Parties" has the meaning specified in Section 8.1 hereof.
"Interest Component" means (i) with respect to any Commercial Paper
issued on an interest-bearing basis, the interest payable on such Commercial
Paper at its maturity (including any dealer commissions) and (ii) with respect
to any Commercial Paper issued on a discount basis, the portion of the face
amount of such Commercial Paper representing the discount incurred in respect
thereof (including any dealer commissions).
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"Investor Report" means a report, in substantially the form attached
hereto as Exhibit E or in such other form as is mutually agreed to by the
Transferor, the Enterprise Agent and Sheffield, furnished by the Collection
Agent pursuant to Section 2.11 hereof.
"Law" means any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award
of any Official Body.
"LIBOR Rate" means, with respect to any Enterprise Eurodollar Tranche
Period or Sheffield Eurodollar Tranche Period, the rate at which deposits in
dollars are offered to the Agent, in the London interbank market at
approximately 11:00 A.M. (London time) two Business Days before the first day
of such Enterprise Eurodollar Tranche Period or Sheffield Eurodollar Tranche
Period in an amount approximately equal to the Enterprise Eurodollar Tranche
Period or Sheffield Eurodollar Tranche to which the Eurodollar Rate is to apply
and for a period of time approximately equal to the applicable Enterprise
Eurodollar Tranche Period or Sheffield Eurodollar Tranche Period.
"Liquidity Provider" means the Person or Persons who will provide
liquidity support to the Company or Sheffield in connection with the issuance
by the Company or Sheffield, as applicable, of its Commercial Paper.
"Liquidity Provider Agreement" means the agreement between the Company
or Sheffield, as applicable, and the Liquidity Provider evidencing the
obligation of such Liquidity Provider to provide liquidity support to the
Company or Sheffield in connection with the issuance by the Company or
Sheffield, as applicable, of its Commercial Paper.
"Lock-Box Account" means an account maintained by the Collection Agent
at a Lock- Box Bank for the purpose of receiving Collections from Receivables.
"Lock-Box Agreement" means an agreement between the Collection Agent
and a Lock-Box Bank in substantially the form of Exhibit D hereto or such other
form of agreement as shall have been approved by the Agent.
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"Lock-Box Bank" means each of the banks set forth in Exhibit C hereto
and such banks as may be added thereto or deleted therefrom pursuant to Section
2.8 hereof.
"Loss Percentage" means, on any day, the greatest of (i) 2.5 times the
highest two- month rolling average Loss-to-Liquidation Ratio as of the last day
of each of the twelve (12) calendar months preceding the then current month and
(ii) 15%.
"Loss-to-Liquidation 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 Receivables which have been written off as
uncollectible by the Collection Agent during such calendar month, together with
the aggregate Outstanding Balance of all Receivables which are 91-120 days past
due, by (ii) the aggregate amount of Collections received by the Collection
Agent during such calendar month.
"Majority Investors" shall have the meaning specified in Section 9.1(a)
hereof.
"Material Adverse Effect" means any event or condition which would (i)
have a material and adverse effect on the collectibility of the Receivables,
(ii) have a material and adverse effect on the businesses, properties,
condition (financial or otherwise) or results of operations of the Transferor
or WorldCom, in each case considered as a whole (iii) cause a material
impairment of the ability of the Transferor or WorldCom to perform any of its
payment or material obligations under the Transaction Documents to which it is
a party or the ability of the Company, Sheffield, the Bank Investors, the
Enterprise Agent or the Agent to enforce such obligations or any of their
rights under the Transaction Documents and (iv) have a material and adverse
effect on the interests of the Agent, the Enterprise Agent, the Company,
Sheffield or the Bank Investors under the Transaction Documents.
"Maximum Net Investment" means the sum of the Enterprise Maximum Net
Investment and the Sheffield Maximum Net Investment.
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"Maximum Percentage Factor" means 98%.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is or was at any time during the current year or the
immediately preceding five years contributed to by the Transferor, WorldCom or
any ERISA Affiliate of the Transferor or WorldCom on behalf of its employees.
"Net Asset Test" means, in connection with any assignment by the
Company to the Bank Investors of an interest in the Enterprise Net Investment
pursuant to Section 9.7 hereof, that on the day immediately prior to the day on
which such assignment is to take effect, the Net Receivables Balance shall be
greater than the sum of the Enterprise Net Investment plus the Sheffield Net
Investment plus the Enterprise Liquidation Yield plus the Sheffield Liquidation
Yield.
"Net Investment" means the sum of Enterprise Net Investment and the
Sheffield Net Investment.
"Net Receivables Balance" means at any time the Outstanding Balance of
the Eligible Receivables at such time reduced by the sum of (i) the aggregate
amount by which the Outstanding Balance of all Eligible Receivables of each
Designated Obligor exceeds the Concentration Factor for such Designated
Obligor, plus (ii) the aggregate Outstanding Balance of all Eligible
Receivables which are Defaulted Receivables, plus (iii) the product of (A) 30%
and (B) the aggregate Outstanding Balance of all Receivables which are Private
Line Receivables plus, (iv) at the request of the Enterprise Agent or
Sheffield, the aggregate Outstanding Balance of all Eligible Receivables of
each Obligor with respect to which either 25% or more of such Obligor's
Receivables are Defaulted Receivables or 50% or more of such Obligor's
Receivables are Delinquent Receivables.
"Obligor" means a Person obligated to make payments for the provision
of goods and services pursuant to a Contract.
"Official Body" means any government or political subdivision or any
agency, authority, bureau, central
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bank, commission, department or instrumentality of any such government or
political subdivision, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"Other Transferor" means any Person other than the Transferor that has
entered into a receivables purchase agreement or transfer and administration
agreement with the Company.
"Outstanding Balance" means, with respect to any Receivable at any
time, the then outstanding principal amount thereof excluding any accrued and
outstanding Finance Charges related thereto.
"Percentage Factor" means the sum of the Enterprise Percentage Factor
and the Sheffield Percentage Factor.
"Permitted Originator" means Com Systems Inc., a California
corporation, WorldCom Network Services, Inc., a Delaware corporation, and any
other Affiliate of WorldCom designated as a "Permitted Originator" in writing
by the Agent.
"Permitted Originator Receivables Purchase Agreement" shall have the
meaning specified in the Receivables Purchase Agreement.
"Person" means any corporation, limited liability company, natural
person, firm, joint venture, partnership, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"Potential Termination Event" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Termination Event.
"Private Line Receivable" means any right to payment from an Obligor,
whether constituting an account, chattel paper, instrument or general
intangible, arising from the sale by WorldCom or a Permitted Originator of
Private Line Services related to telecommunications, and includes the right to
payment of any interest or finance charges and other obligations of such
Obligor with respect thereto.
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"Private Line Services" means dedicated telecommunications services
provided by WorldCom or a Permitted Originator to its customers between
designated customer premises.
"Pro Rata Share" means, for a Bank Investor, the Commitment of such
Bank Investor divided by the sum of the Commitments of all Bank Investors.
"Proceeds" means "proceeds" as defined in Section 9-306(1) of the UCC.
"Purchased Interest" means the interest in the Receivables acquired by
a Liquidity Provider through purchase pursuant to the terms of a Liquidity
Provider Agreement.
"Purchase Termination Date" means the date upon which the Transferor
shall cease, for any reason whatsoever, to make purchases of Receivables from
WorldCom under the Receivables Purchase Agreement or the Receivables Purchase
Agreement shall terminate for any reason whatsoever.
"Rebiller" means any customer of WorldCom and the Permitted Originators
which purchases long distance service in bulk and resells such service to
smaller end-users.
"Receivable" means the indebtedness owed to WorldCom or any Permitted
Originator by any Obligor, with the exception of Cherry Communications,
American Teletronics Long Distance, Universal Network Services, Conetco,
Unidial, Oncor, Century and any other operator billed service (without giving
effect to any purchase under the Receivables Purchase Agreement by the
Transferor at any time) under a Contract (and, if originated by a Permitted
Originator, sold by such Permitted Originator to WorldCom) and, in either case,
sold by WorldCom to the Transferor pursuant to the Receivables Purchase
Agreement, whether constituting an account, chattel paper, instrument,
investment property or general intangible, arising in connection with the sale
or lease of merchandise or the rendering of services by WorldCom or a Permitted
Originator, and includes the right to payment of any Finance Charges and other
obligations of such Obligor with respect thereto. Notwithstanding the
foregoing,
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once a Receivable has been deemed collected pursuant to Section 2.9 hereof, it
shall no longer constitute a Receivable hereunder.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement dated as of October 25, 1996 by and between WorldCom, as seller, and
the Transferor, as purchaser, as such agreement may be amended, supplemented or
otherwise modified and in effect from time to time.
"Records" means all Contracts and other documents, books, records and
other information (including, without limitation, computer programs, tapes,
discs, punch cards, data processing software and related property and rights)
maintained with respect to Receivables and the related Obligors.
"Reinvestment Termination Date" means the second Business Day after the
delivery by the Company to the Transferor of written notice that the Company
elects to commence the amortization of its interest in the Enterprise Net
Investment.
"Related Commercial Paper" means, with respect to Commercial Paper
issued by the Company or Sheffield, Commercial Paper issued by the Company or
Sheffield, respectively, the proceeds of which were used to acquire, or
refinance the acquisition of, an interest in Receivables with respect to the
Transferor.
"Related Security" means, with respect to any Receivable, all of the
Transferor's rights, title and interest in, to and under:
(i) all of the Transferor's interest, if any, in the merchandise
(including returned or repossessed merchandise), if any, the sale of which
by the Transferor gave rise to such Receivable;
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing
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statements signed by an Obligor describing any collateral securing such
Receivable;
(iii) all guarantees, indemnities, warranties, insurance (and
proceeds and premium refunds thereof) or other agreements or arrangements
of any kind 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 related to such Receivable;
(v) all rights and remedies of (A) the Transferor under the
Receivables Purchase Agreement, together with all financing statements
filed by the Transferor against WorldCom in connection therewith and (B)
WorldCom under a sale and assignment agreement with a Permitted Originator,
together with all financing statements filed by WorldCom against such
Permitted Originator in connection therewith; and
(vi) all Proceeds of any of the foregoing.
"Section 8.2 Costs" has the meaning specified in Section 8.2(d) hereof.
"Servicing Fee" means the fees payable by the Company, Sheffield or
the Bank Investors to the Collection Agent, with respect to an Enterprise
Tranche or a Sheffield Tranche, as applicable, in an amount equal to 0.50% per
annum on the amount of the Enterprise Net Investment or Sheffield Net
Investment allocated to such Enterprise Tranche or Sheffield Tranche pursuant
to Section 2.3 hereof. Such fee shall accrue from the date of the initial
purchase of an interest in the Receivables to the later of the Termination Date
or the date on which the Enterprise Percentage Factor or
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Sheffield Percentage Factor, as applicable, is reduced to zero. On or prior to
the Enterprise Termination Date or the Sheffield Termination Date, as
applicable, such fee shall be payable only from Collections pursuant to, and
subject to the priority of payments set forth in, Section 2.5 hereof. After
the Enterprise Termination Date or the Sheffield Termination Date, as
applicable,such fee shall be payable only from Collections pursuant to, and
subject to the priority of payments set forth in, Section 2.6 hereof.
"Sheffield" means Sheffield Receivables Corporation, a Delaware
corporation, and its successors and permitted assigns.
"Sheffield Billing Adjustments Reserve" means, at any time, an amount
equal to the product of (i) the greater of (A) 5% and (B) 1.5 multiplied by the
highest Billing Adjustment Ratio over the last twelve (12) months and (ii) the
sum of the Sheffield Net Investment, the Sheffield Discount Reserve and the
Sheffield Servicing Fee Reserve at such time.
Notwithstanding the foregoing, the Sheffield Billing Adjustments Reserve shall
at all times be at least equal to $2,500,000.
"Sheffield BR Tranche" means a Sheffield Tranche as to which Sheffield
Discount is calculated at the Base Rate.
"Sheffield BR Tranche Period" means, with respect to a Sheffield BR
Tranche, either (i) prior to the Sheffield Termination Date, a period of up to
30 days requested by the Transferor and agreed to by Sheffield, commencing on a
Business Day requested by the Transferor and agreed to by Sheffield, or (ii)
after the Sheffield Termination Date, a period of one day. If such Sheffield
BR Tranche Period would end on a day which is not a Business Day, such
Sheffield BR Tranche Period shall end on the next succeeding Business Day.
"Sheffield CP Rate" means, with respect to any Sheffield CP Tranche
Period, the rate equivalent to the rate (or if more than one rate, the weighted
average of the rates) at which Commercial Paper issued by Sheffield having a
term equal to such Sheffield CP Tranche Period may be sold by any placement
agent or commercial paper dealer selected by Sheffield, provided, however, that
if the rate (or rates) as agreed between any such agent or dealer and Sheffield
is a discount rate, then the rate (or if more than one rate, the weighted
average of the rates) resulting from Sheffield's converting such
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35
discount rate (or rates) to an interest-bearing equivalent rate per annum.
"Sheffield CP Tranche" means a Sheffield Tranche as to which Sheffield
Discount is calculated at a Sheffield CP Rate.
"Sheffield CP Tranche Period" means, with respect to a Sheffield CP
Tranche, a period of days not to exceed ninety (90) days commencing on a
Business Day requested by the Transferor and agreed to by Sheffield pursuant to
Section 2.3. If a Sheffield CP Tranche Period would end on a day which is not
a Business Day, such Sheffield CP Tranche Period shall end on the next
succeeding Business Day.
"Sheffield Dealer Fee" means the fee payable by the Transferor to
Sheffield, pursuant to Section 2.4 hereof, the terms of which are set forth in
the Sheffield Fee Letter.
"Sheffield Discount" means, with respect to any Sheffield Tranche
Period:
(TR x TNI x AD)
--
360
Where:
TR = the Sheffield Tranche Rate applicable to such Sheffield Tranche Period.
TNI = the portion of the Sheffield Net Investment allocated to such Sheffield
Tranche Period.
AD = the actual number of days during such Sheffield Tranche Period.
provided, however, that no provision of this Agreement shall require the
payment or permit the collection of Sheffield Discount in excess of the maximum
amount permitted by applicable law; and provided, further, that Sheffield
Discount shall not be considered paid by any distribution if at any time such
distribution is rescinded or must be returned for any reason.
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"Sheffield Discount Reserve" means, at any time, an amount equal to:
TD + LY
Where:
TD = the sum of the unpaid Sheffield Discount for all Sheffield Tranche
Periods.
LY = the Sheffield Liquidation Yield.
"Sheffield Early Collection Fee" means, for any Sheffield Tranche
Period (such Sheffield Tranche Period to be determined without regard to the
last sentence in Section 2.3(a) hereof) during which the portion of the
Sheffield Net Investment that was allocated to such Sheffield Tranche Period is
reduced for any reason whatsoever, the excess, if any, of (i) the additional
Sheffield Discount that would have accrued during such Sheffield Tranche Period
if such reductions had not occurred, minus (ii) the income, if any, received by
the recipient of such reductions from investing the proceeds of such
reductions.
"Sheffield Eurodollar Tranche" means a Sheffield Tranche as to which
Sheffield Discount is calculated at the Eurodollar Rate.
"Sheffield Eurodollar Tranche Period" means, with respect to a
Sheffield Eurodollar Tranche, prior to the Sheffield Termination Date, a period
of up to one month requested by the Transferor and agreed to by Sheffield,
commencing on a Business Day requested by the Transferor and agreed to by
Sheffield; provided, however, that if such Sheffield Eurodollar Tranche Period
would expire on a day which is not a Business Day, such Sheffield Eurodollar
Tranche Period shall expire on the next succeeding Business Day; provided,
further, that if such Sheffield Eurodollar Tranche Period would expire on (a) a
day which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Sheffield Eurodollar Tranche
Period shall expire on the next preceding Business Day or (b) a Business Day
for which there is no numerically corresponding day in the applicable
subsequent calendar month, such
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Sheffield Eurodollar Tranche Period shall expire on the last Business Day of
such month.
"Sheffield Facility Fee" means the fee payable by the Transferor to
Sheffield pursuant to Section 2.7(b) hereof, the terms of which are set forth
in the Sheffield Fee Letter.
"Sheffield Fee Letter" means the letter agreement dated the date hereof
between the Transferor and Sheffield with respect to the fees to be paid by the
Transferor hereunder, as amended, modified or supplemented from time to time.
"Sheffield Liquidation Yield" means, at any time, an amount equal to:
(RVF x LBR x NI) x (EMP x 1.5)
-----------
360
Where:
RVF = the Sheffield Rate Variance Factor at such time;
LBR = the Base Rate at such time which is applicable to the liquidation
period after a Termination Event;
NI = the Sheffield Net Investment at such time; and
EMP = the Estimated Maturity Period of the Receivables.
"Sheffield Loss Reserve" means, on any day, an amount equal to:
LP x (NI + DR + SFR)
Where:
LP = the Loss Percentage at the close of business of the Collection Agent on
such day;
NI = the Sheffield Net Investment at the close of business of the Collection
Agent on such day;
▇▇
▇▇
▇▇ = the Sheffield Discount Reserve at the close of business of the
Collection Agent on such day; and
SFR = the Sheffield Servicing Fee Reserve at the close of business of the
Collection Agent on such day.
Notwithstanding the foregoing, the Sheffield Loss Reserve shall at all times be
at least equal to $7,500,000.
"Sheffield Maximum Net Investment" means $75,000,000; provided,
further, that from and after the Sheffield Termination Date, the Sheffield
Maximum Net Investment shall at all times equal the Sheffield Net Investment.
"Sheffield Net Investment" means the sum of the cash amounts paid to
the Transferor by Sheffield for each Incremental Transfer less the aggregate
amount of Collections received and applied by Sheffield to reduce such
Sheffield Net Investment pursuant to Section 2.6 or 2.9 hereof; provided that
the Sheffield Net Investment shall be restored and reinstated in the amount of
any Collections so received and applied if at any time the distribution of such
Collections is rescinded or must otherwise be returned for any reason.
"Sheffield Percentage Factor" means the fraction (expressed as a
percentage) computed at any time of determination as follows:
NI + LR + BAR + DR + SFR
-------------------------
NRB
Where:
NI = the Sheffield Net Investment at the time of such computation;
LR = the Sheffield Loss Reserve at the time of such computation;
BAR = the Sheffield Billing Adjustment Reserve at the time of such
computation;
DR = the Sheffield Discount Reserve at the time of such computation;
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SFR = the Sheffield Servicing Fee Reserve at the time of such computation;
and
NRB = the Net Receivables Balance at the time of such computation.
The Sheffield Percentage Factor shall be calculated by the Collection Agent
from time to time as described in Section 2.2(e).
"Sheffield Program Fee" means the fee payable by the Transferor to
Sheffield pursuant to Section 2.7(b) hereof, the terms of which are set forth
in the Sheffield Fee Letter.
"Sheffield Rate Variance Factor" means 1.15 or such other number
computed from time to time in good faith by Sheffield and set forth in a
written notice by Sheffield to the Transferor and the Collection Agent.
"Sheffield Servicing Fee Reserve" means at any time an amount equal to
the product of (i) the aggregate Outstanding Balance of all Receivables at such
time, (ii) 0.5%, (iii) a fraction having, as the numerator, the sum of (a) 1.5
times the Estimated Maturity Period plus (b) 30 and, as the denominator, 360
and (iv) a fraction the numerator of which is the Sheffield Net Investment and
the denominator of which is the Net Investment.
"Sheffield Termination Date" means the earliest of (i) the Business Day
designated by the Transferor to Sheffield as the "Sheffield Termination Date"
at any time following 60 days' written notice to Sheffield, (ii) the date of
termination of the commitment of any Liquidity Provider under any Liquidity
Provider Agreement, but only with respect to Sheffield, (iii) the date of
termination of the commitment of any Credit Support Provider under any Credit
Support Agreement, but only with respect to Sheffield, (iv) the day upon which
the Termination Date is declared or automatically occurs pursuant to Section
7.2(a) hereof, (v) the Purchase Termination Date, (vi) October 24, 1997, or
(vii) on or after the occurrence of an Enterprise Termination Date, the
Business Day designated by Sheffield, at its option, as the Sheffield
Termination Date.
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▇▇
"▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇" means a portion of the Sheffield Net Investment
allocated to a Sheffield Tranche Period pursuant to Section 2.3 hereof.
"Sheffield Tranche Period" means a Sheffield CP Tranche Period, a
Sheffield BR Tranche Period or a Sheffield Eurodollar Tranche Period.
"Sheffield Tranche Rate" means the Sheffield CP Rate, the Base Rate or
the Eurodollar Rate.
"Standard & Poor's" or "S&P" means Standard & Poor's Ratings Services,
a Division of The ▇▇▇▇▇▇-▇▇▇▇ Companies.
"Subordinated Note" shall have the meaning specified in the Receivables
Purchase Agreement.
"Subsidiary" of a Person means any Person more than 50% of the
outstanding voting interests of which shall at any time be owned or controlled,
directly or indirectly, by such Person or by one or more Subsidiaries of such
Person or any similar business organization which is so owned or controlled.
"Switched Service Receivable" means any right to payment from an
Obligor, whether constituting an account, chattel paper, instrument or general
intangible, arising from the sale by WorldCom or a Permitted Originator of
Switched Services related to telecommunications, and includes the right to
payment of any interest or finance charges and other obligations of such
Obligor with respect thereto.
"Switched Services" means the measured services provided by WorldCom or
a Permitted Originator to its customers for originating and/or terminating
telecommunications transmissions.
"Taxes" shall have the meaning specified in Section 8.3 hereof.
"Termination Date" shall have the meaning specified in Section 7.2 (a)
hereof.
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"Termination Event" means an event described in Section 7.1 hereof.
"Transaction Costs" has the meaning specified in Section 8.4(a) hereof.
"Transaction Documents" means, collectively, this Agreement, the
Receivables Purchase Agreement, the Enterprise Fee Letter, the Sheffield Fee
Letter, the Lock-Box Agreements, the Certificates, the Transfer Certificates
and all of the other instruments, documents and other agreements executed and
delivered by WorldCom or the Transferor in connection with any of the
foregoing, in each case, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Transfer" means a conveyance, transfer and assignment by the
Transferor to the Company, Sheffield or the Bank Investors of an undivided
percentage ownership interest in Receivables hereunder (including, without
limitation, as a result of any reinvestment of Collections in Transferred
Interests pursuant to Section 2.2(b) and 2.5).
"Transfer Certificate" has the meaning specified in Section 2.2(a)
hereof.
"Transfer Date" means, with respect to each Transfer, the Business Day
on which such Transfer is made.
"Transfer Price" means with respect to any Incremental Transfer, the
amount paid to the Transferor by the Company, Sheffield or the Bank Investors
as described in the applicable Transfer Certificate. The Transfer Price for
any Transfer shall be comprised of (a) a cash component equal to the Enterprise
Net Investment or the Sheffield Net Investment, as applicable, less the
Enterprise Net Investment or Sheffield Net Investment, as applicable, paid for
all prior Transfers, and (b) a deferred payment component payable in accordance
with Section 2.6 hereof.
"Transferor" means WorldCom Funding Corporation, a Delaware
corporation, and its successors and permitted assigns.
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"Transferred Interest" means, at any time of determination, an
undivided percentage ownership interest in (i) each and every then outstanding
Receivable, (ii) all Related Security with respect to each such Receivable,
(iii) all Collections with respect thereto, and (iv) other Proceeds of the
foregoing, which undivided ownership interest shall be equal to the Percentage
Factor at such time, and only at such time (without regard to prior
calculations). The Transferred Interest in each Receivable, together with
Related Security, Collections and Proceeds with respect thereto, shall at all
times be equal to the Transferred Interest in each other Receivable, together
with Related Security, Collections and Proceeds with respect thereto. To the
extent that the Transferred Interest shall decrease as a result of a
recalculation of the Percentage Factor, the Company, Sheffield or the Bank
Investors, as applicable, shall be considered to have reconveyed to the
Transferor an undivided percentage ownership interest in each Receivable,
together with Related Security, Collections and Proceeds with respect thereto,
in an amount equal to such decrease such that in each case the Transferred
Interest in each Receivable shall be equal to the Transferred Interest in each
other Receivable.
"UCC" means, with respect to any state, the Uniform Commercial Code as
from time to time in effect in such state.
"U.S." or "United States" means the United States of America.
"WorldCom" means WorldCom, Inc., a Georgia corporation, and its
successors and assigns.
SECTION 1.2. 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 1.3. 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", the
words "to" and "until" each means "to but
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43
excluding", and the word "within" means "from and excluding a specified date
and to and including a later specified date".
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ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. Facility. Upon the terms and subject to the
conditions herein set forth, at any time prior to the Enterprise Termination
Date (with respect to the Company and the Bank Investors) and the Sheffield
Termination Date (with respect to Sheffield)(x) the Transferor may, at its
option, convey, transfer and assign to the Company or the Bank Investors, as
applicable, and Sheffield and (y) the Company may, at its option, or Sheffield
and the Bank Investors shall, if so requested, accept such conveyance, transfer
and assignment from the Transferor of, without recourse except as provided
herein, undivided percentage ownership interests in the Receivables, together
with Related Security, Collections and Proceeds with respect thereto, from time
to time. By accepting any conveyance, transfer and assignment hereunder,
neither the Company, Sheffield, any Bank Investor nor the Agent assumes or
shall have any obligations or liability under any of the Contracts, all of
which shall remain the obligations and liabilities of the Transferor and
WorldCom.
SECTION 2.2. Transfers; Certificates; Eligible Receivables
(a) Incremental Transfers. Upon the terms and subject to the conditions herein
set forth the Transferor may, at its option, convey, transfer and assign to the
Company, Sheffield or the Bank Investors, as applicable, and (y) the Company
may, at its option, or Sheffield and the Bank Investors shall, if so requested,
accept such conveyance, transfer and assignment from the Transferor, without
recourse except as provided herein, undivided percentage ownership interests in
the Receivables, together with Related Security, Collections and Proceeds with
respect thereto (each, an "Incremental Transfer") from time to time prior to
the occurrence of the Enterprise Termination Date (with respect to the Company
and the Bank Investors) or the Sheffield Termination Date (with respect to
Sheffield); provided that after giving effect to the issuance of Related
Commercial Paper, or any drawings under any Liquidity Provider Agreement or any
Credit Support Agreement, to fund the cash portion of the Transfer Price of any
Incremental Transfer and the payment to the Transferor of the cash portion of
such Transfer Price
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(i) the Enterprise Net Investment will not exceed $300,000,000, (ii) the
Sheffield Net Investment will not exceed $75,000,000, (iii) the Percentage
Factor will not exceed 98% and (iv) the sum of the Enterprise Net Investment
plus the Interest Component of all outstanding Related Commercial Paper issued
by the Company would not exceed the Enterprise Maximum Net Investment; and,
provided further, that the representations and warranties set forth in Section
3.1 shall be true and correct both immediately before and immediately after
giving effect to any such Incremental Transfer and the payment to the
Transferor of the cash portion of the Transfer Price related thereto and an
Investor Report shall have been delivered with respect to such Incremental
Transfer as required by Section 3.2 hereof.
The Transferor shall, by notice to the Agent given by telecopy, offer
to convey, transfer and assign to the Company, Sheffield or the Bank Investors,
as applicable, undivided percentage ownership interests in the Receivables and
the other Affected Assets relating thereto at least three (3) Business Days
prior to the proposed date of any Incremental Transfer. Each such notice shall
specify (w) whether, as between the Company and the Bank Investors, such
request is made to the Company or the Bank Investors (it being understood and
agreed that once the Bank Investors acquire any Transferred Interest hereunder,
the Bank Investors shall be required to purchase all Transferred Interests held
by the Company, pro rata and in accordance with Section 9.7 and thereafter the
Company shall no longer accept any additional Incremental Transfers hereunder),
(x) to the amount of the desired Transfer Price to be funded by the Company or
the Bank Investors on the one hand and Sheffield on the other (such amounts to
be a ratio to each other equal to 300/the amount of the Sheffield Maximum Net
Investment), the desired aggregate Transfer Price (which shall be at least
$1,000,000 or integral multiples of $500,000 in excess thereof) or to the
extent that the then available unused portion of the Maximum Net Investment is
less than such amount, such lesser amount equal to such available portion of
the Maximum Net Investment), (y) the desired date of such Incremental Transfer
and (z) the desired Enterprise Tranche Period and Sheffield Tranche Period and
allocations of the Enterprise Net Investment and Sheffield Net Investment of
such Incremental Transfer thereto as required by Section 2.3. The
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46
Agent will promptly notify the Company or each of the Bank Investors, as the
case may be, and Sheffield of the Agent's receipt of any request for an
Incremental Transfer to be made to such Person. To the extent that any such
Incremental Transfer is requested of the Company, the Company shall accept or
reject such offer by notice given to the Transferor and the Agent by telephone
or telecopy by no later than the close of its business on the Business Day
following its receipt of any such request. Notwithstanding the foregoing, the
Incremental Transfer to occur on December 31, 1996 shall be wholly funded by
Sheffield in the amount of $75,000,000.
Each notice of proposed Transfer shall be irrevocable and binding on
the Transferor and the Transferor shall indemnify the Company, Sheffield and
each Bank Investor against any loss or expense incurred by the Company,
Sheffield or any Bank Investor, either directly or indirectly (including, in
the case of the Company, or Sheffield through any Liquidity Provider Agreement)
as a result of any failure by the Transferor to complete such Incremental
Transfer including, without limitation, any loss (including loss of anticipated
profits) or expense incurred by the Company, Sheffield or any Bank Investor,
either directly or indirectly (including, in the case of the Company or
Sheffield, pursuant to any Liquidity Provider Agreement) by reason of the
liquidation or reemployment of funds acquired by the Company, Sheffield (or the
Liquidity Provider) or any Bank Investor (including, without limitation, funds
obtained by issuing commercial paper or promissory notes or obtaining deposits
as loans from third parties) for the Company, Sheffield or any Bank Investor to
fund such Incremental Transfer.
On the date of the initial Incremental Transfer to Sheffield, Sheffield
shall deliver written confirmation to the Transferor of the cash portion of the
Transfer Price, the Sheffield Tranche Period and the Sheffield Tranche Rate
relating to such Transfer and the Transferor shall deliver to the Agent the
Transfer Certificate in the form of Exhibit F hereto (the "Transfer
Certificate"). The Agent shall indicate the amount of the initial Incremental
Transfer together with the date thereof on the grid attached to the Transfer
Certificate and shall also indicate the amount of any Incremental Transfer
funded by the Company prior to such date. On the date of each subsequent
Incremental Transfer, the
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Agent shall send written confirmation to the Transferor of the cash portion of
the Transfer Price, the Enterprise Tranche Period and Sheffield Tranche Period,
the Transfer Date and the Enterprise Tranche Rate and Sheffield Tranche Rate
applicable to such Incremental Transfer. The Agent shall indicate the amount
of the Incremental Transfer together with the date thereof as well as any
decrease in the Enterprise Net Investment and Sheffield Net Investment on the
grid attached to the Transfer Certificate. The Transfer Certificate shall
evidence the Incremental Transfers. Following each Incremental Transfer, the
Agent shall deposit to the Transferor's account at the location indicated in
Section 10.3 hereof, in immediately available funds, an amount equal to the
cash portion of the Transfer Price for such Incremental Transfer made to the
Company or the Bank Investors and Sheffield.
By no later than 11:00 A.M. (New York time) on any Transfer Date, the
Company, Sheffield or each Bank Investor, as the case may be, shall remit its
share (which, in the case of an Incremental Transfer to the Bank Investors,
shall be equal to such Bank Investor's Pro Rata Share) of the aggregate
Transfer Price for such Transfer to the account of the Agent specified therefor
from time to time by the Agent by notice to such Persons. The obligation of
each Bank Investor to remit its Pro Rata Share of any such Transfer Price shall
be several from that of each other Bank Investor, and the failure of any Bank
Investor to so make such amount available to the Agent shall not relieve any
other Bank Investor of its obligation hereunder. Following each Incremental
Transfer and the Agent's receipt of funds from the Company, Sheffield or the
Bank Investors as aforesaid, the Agent shall remit the Transfer Price to the
Transferor's account at the location indicated in Section 10.3 hereof, in
immediately available funds, an amount equal to the cash portion of the
Transfer Price for such Incremental Transfer. Unless the Agent shall have
received notice from the Company, Sheffield or any Bank Investor, as
applicable, that such Person will not make its share of any Transfer Price
relating to any Incremental Transfer available on the applicable Transfer Date
therefor, the Agent may (but shall have no obligation to) make the Company's,
Sheffield's or any such Bank Investor's share of any such Transfer Price
available to the Transferor in anticipation of the receipt by the Agent of such
amount
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from the Company, Sheffield or such Bank Investor. To the extent the Company,
Sheffield or any such Bank Investor fails to remit any such amount to the Agent
after any such advance by the Agent on such Transfer Date, the Company,
Sheffield or such Bank Investor, on the one hand, and the Transferor, on the
other hand, shall be required to pay such amount, together with interest
thereon at a per annum rate equal to the Federal funds rate (as determined in
accordance with clause (ii) of the definition of "Base Rate"), in the case of
the Company, Sheffield or any such Bank Investor, or the Base Rate, in the case
of the Transferor, to the Agent upon its demand therefor (provided that neither
the Company nor Sheffield shall have any obligation to pay such interest
amounts except to the extent that it shall have sufficient funds to pay the
face amount of its Commercial Paper in full). Until such amount shall be
repaid, such amount shall be deemed to be Net Investment paid by the Agent and
the Agent shall be deemed to be the owner of a Transferred Interest hereunder.
Upon the payment of such amount to the Agent (x) by the Transferor, the amount
of the Agent's Net Investment shall be reduced by such amount or (y) by the
Company, Sheffield or such Bank Investor, such payment shall constitute such
Person's payment of its share of the applicable Transfer Price for such
Transfer. If agreed by the Agent and Sheffield (with notice to the Transferor
and the Collection Agent), Sheffield may remit its share of any Transfer Price
directly to the Transferor.
(b) Reinvestment Transfers. On each Business Day occurring after
the Incremental Transfer hereunder on the date hereof and prior to the
Enterprise Termination Date or Sheffield Termination Date, as applicable, the
Transferor hereby agrees to convey, transfer and assign to the Company,
Sheffield or the Bank Investors then owning any Transferred Interests, and in
consideration of Transferor's agreement to maintain at all times prior to the
Enterprise Termination Date or Sheffield Termination Date, as applicable, a Net
Receivables Balance in an amount at least sufficient to maintain the Percentage
Factor at an amount not greater than the Maximum Percentage Factor, the Company
may, and Sheffield and the Bank Investors shall (in either case, to the extent
such Persons then own any Transferred Interest), agree to purchase from the
Transferor undivided percentage ownership interests in each and every
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Receivable, together with Related Security, Collections and Proceeds with
respect thereto, to the extent that Collections are available for such Transfer
in accordance with Section 2.5 hereof, such that after giving effect to such
Transfer, (i) the amount of the Enterprise Net Investment and the Sheffield Net
Investment at the close of business on such Business Day shall be equal to the
amount of the Enterprise Net Investment and the Sheffield Net Investment,
respectively, at the close of the business on the Business Day immediately
preceding such Business Day plus the cash portion of the Transfer Price of any
Incremental Transfer made by Enterprise or the Bank Investors and Sheffield
made on such day, if any, and (ii) the Transferred Interest in each Receivable,
together with Related Security, Collections and Proceeds with respect thereto,
shall be equal to the Transferred Interest in each other Receivable, together
with Related Security, Collections and Proceeds with respect thereto.
(c) All Transfers. Each Transfer shall constitute a purchase of
undivided percentage ownership interests in each and every Receivable, together
with Related Security, Collections and Proceeds with respect thereto, then
existing, as well as in each and every Receivable, together with Related
Security, Collections and Proceeds with respect thereto, which arises at any
time after the date of such Transfer. The Company's, Sheffield's or the Bank
Investors', as applicable, aggregate undivided percentage ownership interest in
the Receivables, together with the Related Security, Collections and Proceeds
with respect thereto, shall equal the Enterprise Percentage Factor or Sheffield
Percentage Factor, as applicable, in effect from time to time. So long as the
Company, on the one hand, or the Bank Investors, on the other hand, own all of
the Transferred Interests related to the Enterprise Net Investment at such
time, each of the Company's and each Bank Investor's undivided percentage
ownership interest in the Affected Assets shall equal such Person's ratable
share (determined on the basis of the relationship that such Person's Net
Investment bears to the Enterprise Net Investment at such time) of the
Enterprise Percentage Factor at such time.
(d) Certificate. The Transferor shall issue to the Agent the
Certificate, in the form of Exhibit M, on or prior to the date hereof.
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(e) Percentage Factor. The Percentage Factor shall be initially
computed as of the opening of business on November 30, 1996. Thereafter until
the Enterprise Termination Date or the Sheffield Termination Date, the
Enterprise Percentage Factor and the Sheffield Percentage Factor, respectively,
shall be deemed to be recomputed as of the close of business by the Collection
Agent on each Business Day. Each Percentage Factor 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 shall be made, notwithstanding any
additional Receivables arising, any Incremental Transfer made pursuant to
Section 2.2(a) or any reinvestment Transfer made pursuant to Section 2.2(b) and
2.5 during any period between computations of the Enterprise Percentage Factor
or the Sheffield Percentage Factor, as applicable. Each of the Enterprise
Percentage Factor and the Sheffield Percentage Factor, as calculated at the
close of business on the Business Day immediately preceding the Enterprise
Termination Date or Sheffield Termination Date, as applicable, shall remain
constant at all times thereafter until such time as the Agent, on behalf of the
Company, Sheffield and the Bank Investors, as applicable, shall have received
its Aggregate Unpaids, in cash, at which time the Enterprise Percentage Factor
or Sheffield Percentage Factor, as applicable, shall be recomputed in
accordance with Section 2.6.
SECTION 2.3. Selection of Enterprise Tranche Periods, Sheffield
Tranche Periods, Enterprise Tranche Rates and Sheffield Tranche Rates.
(a) Prior to the Enterprise Termination Date or Sheffield
Termination Date.
(i) Transferred Interest held by Company. At all times hereafter, but
prior to the Enterprise Termination Date and not with respect to any portion of
the Transferred Interest held by the Bank Investors (or any of them), the
Transferor may, subject to the Company's approval and the limitations described
below, request Enterprise
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Tranche Periods and allocate a portion of the Enterprise Net Investment to each
selected Enterprise Tranche Period, so that the aggregate amounts allocated to
outstanding Enterprise Tranche Periods at all times shall equal the Enterprise
Net Investment held by the Company. The Transferor shall give the Company
irrevocable notice by telephone of the new requested Enterprise Tranche Period
at least three (3) Business Days prior to the expiration of any then existing
Enterprise Tranche Period; provided, however, that the Company may select, in
its sole discretion, any such new Enterprise Tranche Period if (i) the
Transferor fails to provide such notice on a timely basis or (ii) the Company
determines, in its sole discretion, that the Enterprise Tranche Period
requested by the Transferor is commercially undesirable to the Company or the
Transferor. The Company confirms that it is its intention to allocate all or
substantially all of the Enterprise Net Investment held by it to one or more
Enterprise CP Tranche Periods; provided that the Company may determine, from
time to time, in its sole discretion, that funding such Enterprise Net
Investment by means of one or more Enterprise CP Tranche Periods is not
possible or is not desirable for any reason. If the Liquidity Provider
acquires from the Company a Purchased Interest with respect to the Receivables
pursuant to the terms of a Liquidity Provider Agreement, NationsBank, N.A.
"NationsBank" on behalf of such Liquidity Provider, may exercise the right of
selection granted to the Company hereby. The initial Enterprise Tranche Period
applicable to any such Purchased Interest shall be a period of not greater than
14 days and such Enterprise Tranche shall be an Enterprise BR Tranche.
Thereafter, provided that the Enterprise Termination Date shall not have
occurred, the Enterprise Tranche Period applicable thereto shall be the BR Rate
or the Eurodollar Rate, as determined by NationsBank. In the case of any
Enterprise Tranche Period outstanding upon the Enterprise Termination Date,
such Enterprise Tranche Period shall end on such date.
(ii) Transferred Interest held by Sheffield. At all times hereafter,
but prior to the Sheffield Termination Date, the Transferor may, subject to
Sheffield's approval and the limitations described below, request Sheffield
Tranche Periods and allocate a portion of the Sheffield Net Investment to each
selected Sheffield Tranche Period, so that the aggregate amounts allocated to
outstanding Sheffield Tranche Periods at all times shall equal the Sheffield
Net Investment held by Sheffield. The Transferor shall give Sheffield
irrevocable notice by telephone of the new requested Sheffield Tranche
Period(s) at least three (3) Business Days prior to the expiration of any then
existing Sheffield Tranche Period; provided, however, that Sheffield may
select, in
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its sole discretion, any such new Sheffield Tranche Period if (i) the
Transferor fails to provide such notice on a timely basis or (ii) Sheffield
determines, in its sole discretion, that the Sheffield Tranche Period requested
by the Transferor is unavailable or commercially undesirable to Sheffield or
the Transferor. Sheffield confirms that it is its intention to allocate all or
substantially all of the Sheffield Net Investment held by it to one or more
Sheffield CP Tranche Periods; provided that Sheffield may determine, from time
to time, in its sole discretion, that funding such Sheffield Net Investment by
means of one or more Sheffield CP Tranche Periods is not possible or is not
desirable for any reason. In the case of any Sheffield Tranche Period
outstanding upon the Sheffield Termination Date, such Sheffield Tranche Period
shall end on such date.
(b) After the Termination Date; Transferred Interest Held by
Company. At all times on and after the Enterprise Termination Date, with
respect to any portion of the Transferred Interest which shall not have been
transferred to the Bank Investors (or any of them), the Company or NationsBank,
as applicable, shall select all Enterprise Tranche Periods and Enterprise
Tranche Rates applicable thereto.
(c) Prior to the Enterprise Termination Date; Transferred
Interest Held by Bank Investor. At all times with respect to any portion of
the Transferred Interest transferred to the Bank Investors (or any of them)
pursuant to Section 9.7, but prior to the Enterprise Termination Date, the
initial Enterprise Tranche Period applicable to such portion of the Enterprise
Net Investment allocable thereto shall be a period of not greater than 14 days
and such Enterprise Tranche shall be an Enterprise BR Tranche. Thereafter,
with respect to such portion, and with respect to any other portion of the
Transferred Interest held by the Bank Investors (or any of them), provided that
the Enterprise Termination Date shall not have occurred, the Enterprise Tranche
Period applicable thereto shall be, at the Transferor's option, either an
Enterprise BR Tranche or an Enterprise Eurodollar Tranche. The Transferor
shall give the Enterprise Agent irrevocable notice by telephone of the new
requested Enterprise Tranche Period at least three (3) Business Days prior to
the expiration of any then existing Enterprise Tranche Period. In the case of
any
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Enterprise Tranche Period outstanding upon the occurrence of a Termination
Date, such Enterprise Tranche Period shall end on the date of such occurrence.
(d) After the Sheffield Termination Date or Enterprise
Termination Date; Transferred Interest Held by Sheffield or Bank Investor. At
all times on and after the Enterprise Termination Date, with respect to any
portion of the Transferred Interest which shall have been owned or transferred
to the Bank Investors (or any of them), respectively, the Enterprise Agent
shall select all Enterprise Tranche Periods and Enterprise Tranche Rates
applicable thereto. At all times on and after the Sheffield Termination Date,
with respect to any portion of the Transferred Interest which shall have been
owned or transferred to Sheffield, Sheffield shall select all Sheffield Tranche
Periods and Sheffield Tranche Rates applicable thereto.
(e) Eurodollar Rate Protection; Illegality. (i) If the Agent is
unable to obtain on a timely basis the information necessary to determine the
LIBOR Rate for any proposed Enterprise Eurodollar Tranche or Sheffield
Eurodollar Tranche, then
(A) the Agent shall forthwith notify the Company, Sheffield or Bank
Investors, as applicable and the Transferor that the Eurodollar Rate cannot
be determined for such Enterprise Eurodollar Tranche or Sheffield
Eurodollar Tranche, and
(B) while such circumstances exist, none of the Company, Sheffield,
the Bank Investor or the Agent shall allocate the Enterprise Net Investment
or the Sheffield Net Investment of any additional Transferred Interests
purchased during such period or reallocate the Enterprise Net Investment or
the Sheffield Net Investment allocated to any then existing Enterprise
Tranche or Sheffield Tranche ending during such period, to an Enterprise
Eurodollar Tranche or Sheffield Eurodollar Tranche.
(ii) If, with respect to any outstanding Enterprise Eurodollar Tranche
or Sheffield Eurodollar Tranche, the Company, Sheffield or any of the Bank
Investors owning any Transferred Interest therein notifies the Agent that it is
unable to obtain matching deposits in
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the London interbank market to fund its purchase or maintenance of such
Transferred Interest or that the Eurodollar Rate applicable to such Transferred
Interest will not adequately reflect the cost to the Person of funding or
maintaining its respective Transferred Interest for such Enterprise Tranche
Period or Sheffield Tranche Period then the Agent shall forthwith so notify the
Transferor, whereupon neither the Agent nor the Company, Sheffield or the Bank
Investors, as applicable, shall, while such circumstances exist, allocate any
Enterprise Net Investment or Sheffield Net Investment of any additional
Transferred Interest purchased during such period or reallocate the Enterprise
Net Investment or the Sheffield Net Investment allocated to any Enterprise
Tranche Period or Sheffield Tranche Period ending during such period, to an
Enterprise Eurodollar Tranche or a Sheffield Eurodollar Tranche.
(iii) Notwithstanding any other provision of this Agreement, if the
Company, Sheffield or any of the Bank Investors, as applicable, shall notify
the Agent that such Person has determined (or has been notified by any
Liquidity Provider) that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful (either for the
Company, such Bank Investor, or such Liquidity Provider, as applicable), or any
central bank or other governmental authority asserts that it is unlawful, for
the Company, Sheffield, such Bank Investor or such Liquidity Provider, as
applicable, to fund the purchases or maintenance of Transferred Interests at
the Eurodollar Rate, then (x) as of the effective date of such notice from such
Person to the Agent, the obligation or ability of the Company, Sheffield or
such Bank Investor, as applicable, to fund its purchase or maintenance of
Transferred Interests at the Eurodollar Rate shall be suspended until such
Person notifies the Agent that the circumstances causing such suspension no
longer exist and (y) the Enterprise Net Investment or Sheffield Net Investment
of each Enterprise Eurodollar Tranche or Sheffield Eurodollar Tranche in which
such Person owns an interest shall either (1) if such Person may lawfully
continue to maintain such Transferred Interest at the Eurodollar Rate until the
last day of the applicable Enterprise Tranche Period or Sheffield Tranche
Period, be reallocated on the last day of such Enterprise Tranche Period or
Sheffield Tranche Period to another Enterprise Tranche Period or Sheffield
Tranche
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Period in respect of which the Enterprise Net Investment or Sheffield Net
Investment allocated thereto accrues discount at an Enterprise Tranche Rate or
Sheffield Tranche Rate other than the Eurodollar Rate or (2) if such Person
shall determine that it may not lawfully continue to maintain such Transferred
Interest at the Eurodollar Rate until the end of the applicable Enterprise
Tranche Period or Sheffield Tranche Period, such Person's share of the
Enterprise Net Investment or Sheffield Net Investment allocated to such
Eurodollar Tranche shall be deemed to accrue discount at the Base Rate from the
effective date of such notice until the end of such Enterprise Tranche Period
or Sheffield Tranche Period.
SECTION 2.4. Discount, Fees and Other Costs and Expenses.
Notwithstanding the limitation on recourse under Section 2.1 hereof, the
Transferor shall pay, as and when due in accordance with this Agreement, all
fees hereunder, Enterprise Discount and Sheffield Discount , all amounts
payable pursuant to Article VIII hereof, if any, and the Servicing Fees. On
the last day of each Enterprise Tranche Period and Sheffield Tranche Period,
the Transferor shall pay to the Agent, on behalf of the Company, Sheffield or
the Bank Investors, as applicable, an amount equal to the accrued and unpaid
Enterprise Discount and/or Sheffield Discount for such Enterprise Tranche
Period or Sheffield Tranche Period together with, in the event any portion of
the Transferred Interest is held by the Company, an amount equal to the
discount accrued on the Company's Commercial Paper to the extent such
Commercial Paper was issued in order to fund the Transferred Interest in an
amount in excess of the cash portion of the Transfer Price of an Incremental
Transfer, and together with, in the event any portion of the Transferred
Interest is held by Sheffield, an amount equal to any interest accrued on
advances made to Sheffield to the extent the proceeds of such advances were
used by Sheffield in order to fund the Transferred Interest in an amount equal
to the excess of the portion thereof funded by Sheffield's Commercial Paper.
Notwithstanding the foregoing, if agreed by the Transferor, the Agent and
Sheffield (with notice to the Collection Agent), the Transferor may remit
amounts in respect of Sheffield Discount directly to Sheffield. The Transferor
shall pay to the Agent, on behalf of the Company, on each day on which
Commercial Paper is issued by the Company, the Enterprise
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Dealer Fee. The Transferor shall pay to Sheffield, on each day on which
Commercial Paper is issued by Sheffield, the Sheffield Dealer Fee. All the
foregoing amounts may be paid out of Collections pursuant to Section 2.5 or
2.6, as applicable. Enterprise Discount shall accrue with respect to each
Enterprise Tranche on each day occurring during the Enterprise Tranche Period
related thereto. Sheffield Discount shall accrue with respect to each
Sheffield Tranche on each day occurring during the Sheffield Tranche Period
related thereto. Nothing in this Agreement shall limit in any way the
obligations of the Transferor to pay the amounts set forth in this Section 2.4.
SECTION 2.5. Non-Liquidation Settlement and Reinvestment Procedures.
On each day after the date of any Incremental Transfer but prior to the
Sheffield Termination Date with respect to Sheffield and the Enterprise
Termination Date with respect to the Company and the Bank Investors and
provided in either case that no Potential Termination Event shall have occurred
and be continuing, the Collection Agent shall out of the applicable Enterprise
Percentage Factor and Sheffield Percentage Factor of Collections received on or
prior to such day and not previously applied or accounted for: (i) set aside
and hold in trust for the Company or the Bank Investors, as applicable and
Sheffield (or deposit into the Collection Account if so required pursuant to
Section 2.12 hereof) an amount equal to all Enterprise Discount and Sheffield
Discount and the Servicing Fee accrued through such day and not so previously
set aside or paid and (ii) apply the balance of the Enterprise Percentage
Factor or Sheffield Percentage Factor of Collections remaining after
application of Collections as provided in clause (i) of this Section 2.5 hereof
to the Transferor, for the benefit of the Company or the Bank Investors, as
applicable, and Sheffield to the purchase of additional undivided percentage
interests in each Receivable pursuant to Section 2.2(b) hereof. On the last
day of each Enterprise Tranche Period and Sheffield Tranche Period, from the
applicable amounts set aside as described in clause (i) of the first sentence
of this Section 2.5 hereof, the Collection Agent shall deposit to the Agent's
account, for the benefit of the Company or the Bank Investors, as applicable,
and Sheffield an amount equal to the accrued and unpaid Enterprise Discount and
Sheffield Discount for such Enterprise Tranche Period or
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Period and shall deposit to its own account an amount equal
to the accrued and unpaid Servicing Fee for such Enterprise Tranche Period or
Sheffield Tranche Period. The Agent, upon its receipt of such amounts in the
Agent's account, shall distribute such amounts to the Company and/or Sheffield
and the Bank Investors entitled thereto as set forth above; provided that if
the Agent shall have insufficient funds to pay all of the above amounts in full
on any such date, the Agent shall pay such amounts ratably (based on the
amounts owing to each such Person) to all such Persons entitled to payment
thereof. In addition, the Collection Agent shall remit to the Transferor at
the end of each Enterprise Tranche Period and Sheffield Tranche Period, such
portion of Collections not allocated to the Company, Sheffield and the Bank
Investors.
SECTION 2.6. Liquidation Settlement Procedures. If at any time on or
prior to the Enterprise Termination Date or the Sheffield Termination Date, the
Percentage Factor is greater than the Maximum Percentage Factor, then the
Transferor shall immediately pay to the Agent, for the benefit of the Company
or the Bank Investors, as applicable, and Sheffield from previously received
Collections, an amount equal to the amount such that, when applied in reduction
of the Net Investment, will result in a Percentage Factor less than or equal to
the Maximum Percentage Factor. Such amounts shall be applied pro rata to the
reduction of the Enterprise Net Investment of Enterprise Tranche Periods
selected by the Enterprise Agent and the Sheffield Net Investment of Sheffield
Tranche Periods selected by Sheffield. On the Sheffield Termination Date, with
respect to Sheffield, and the Enterprise Termination Date with respect to the
Company and the Bank Investors and on each day thereafter, and on each day on
which a Potential Termination Event has occurred and is continuing, the
Collection Agent shall set aside and hold in trust for the Company, Sheffield
and the Bank Investors, as applicable (or deposit into the Collection Account
if so required pursuant to Section 2.12 hereof) the Enterprise Percentage
Factor and the Sheffield Percentage Factor of all Collections received on such
day and shall set aside and hold in trust for the Transferor such portion of
Collections not allocated to the Company, Sheffield or the Bank Investors, as
applicable. On the Sheffield Termination Date, the Enterprise Termination Date
or the day on which
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a Potential Termination Event occurs, the Collection Agent shall deposit to the
Agent's account, for the benefit of the Company, Sheffield or the Bank
Investors, as applicable, any amounts set aside pursuant to Section 2.5(i)
above. On the last day of each Enterprise Tranche Period to occur on or after
the Enterprise Termination Date and the last day of each Sheffield Tranche
Period to occur on or after the Sheffield Termination Date, or in either case
during the continuance of a Potential Termination Event, the Collection Agent
shall deposit to the Agent's account, for the benefit of the Company, Sheffield
or the Bank Investors, as applicable, the amounts so set aside for the Company,
Sheffield or the Bank Investors pursuant to the second preceding sentence, but
not to exceed the sum of (i) the accrued Enterprise Discount or Sheffield
Discount for such Enterprise Tranche Period or Sheffield Tranche Period, as
applicable, (ii) the portion of the Enterprise Net Investment or Sheffield Net
Investment allocated to such Enterprise Tranche Period or Sheffield Tranche
Period, as applicable, and (iii) all other Aggregate Unpaids. On such day, the
Collection Agent shall deposit to its account, from the amounts set aside for
the Company, Sheffield and the Bank Investors pursuant to the preceding
sentence which remain after payment in full of the aforementioned amounts, the
accrued Servicing Fee for such Enterprise Tranche Period or Sheffield Tranche
Period. If there shall be insufficient funds on deposit for the Collection
Agent to distribute funds in payment in full of the aforementioned amounts, the
Collection Agent shall distribute funds first, in payment of the accrued
Enterprise Discount and Sheffield Discount, second, if the Transferor, WorldCom
or any Affiliate of the Transferor or WorldCom is not then the Collection
Agent, to the Collection Agent's account, in payment of the Servicing Fee
payable to the Collection Agent, third, in reduction of the Enterprise Net
Investment and Sheffield Net Investment allocated to any Enterprise Tranche
Period or Sheffield Tranche Period ending on such date, fourth, in payment of
all fees payable by the Transferor hereunder, fifth, in payment of all other
Aggregate Unpaids and sixth, if the Transferor, WorldCom or any Affiliate of
the Transferor or WorldCom is the Collection Agent, to its account as
Collection Agent, in payment of the Servicing Fee payable to such Person as
Collection Agent. The Agent, upon its receipt of such amounts in the Agent's
account, shall distribute such amounts to the
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Company and/or the Bank Investors and Sheffield entitled thereto as set forth
above; provided that if the Agent shall have insufficient funds to pay all of
the above amounts in full on any such date, the Agent shall pay such amounts in
the order of priority set forth above and, with respect to any such category
above for which the Agent shall have insufficient funds to pay all amounts
owing on such date, ratably (based on the amounts in such categories owing to
such Persons) among all such Persons entitled to payment thereof.
Following the date on which the Net Investment has been reduced to
zero, all accrued Enterprise Discount and Sheffield Discount and Servicing Fees
have been paid in full and all other Aggregate Unpaids have been paid in full,
(i) the Collection Agent shall recompute the Enterprise Percentage Factor and
the Sheffield Percentage Factor, (ii) the Agent, on behalf of the Company,
Sheffield and the Bank Investors, shall be considered to have reconveyed to the
Transferor all of the Company's, Sheffield's and the Bank Investors' right,
title and interest in and to the Affected Assets (including the Transferred
Interest), (iii) the Collection Agent shall pay to the Transferor any remaining
Collections set aside and held by the Collection Agent pursuant to the third
sentence of this Section 2.6 and (iv) the Agent, on behalf of the Company,
Sheffield and the Bank Investors, shall execute and deliver to the Transferor,
at the Transferor's expense, such documents or instruments as are necessary to
terminate the Company's, Sheffield's and the Bank Investors' respective
interests in the Affected Assets. Any such documents shall be prepared by or
on behalf of the Transferor. On the last day of each Enterprise Tranche Period
and Sheffield Tranche Period, the Collection Agent shall remit to the
Transferor such portion of Collections set aside for the Transferor pursuant to
this Section 2.6.
SECTION 2.7. Fees. Notwithstanding any limitation on recourse
contained in this Agreement, the Transferor shall pay the following
non-refundable fees:
(a) On the last day of each month, to the Company solely for its
own account, the Enterprise Program Fee and the Enterprise Facility Fee, and to
the Enterprise Agent for distribution to the Bank Investors
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as agreed upon by the Bank Investors, the Bank
Investor Commitment Fee; and
(b) On the last day of each month, to Sheffield solely for its
own account, the Sheffield Program Fee and the Sheffield Facility Fee.
SECTION 2.8. Protection of Ownership Interest of the Company,
Sheffield and the Bank Investors. (a) The Transferor agrees that it will, and
will cause WorldCom to, from time to time, at its expense, promptly execute and
deliver all instruments and documents and take all actions as may be necessary
or as the Agent may reasonably request in order to perfect or protect the
Transferred Interest or to enable the Agent, the Company, Sheffield or the Bank
Investors to exercise or enforce any of their respective rights hereunder.
Without limiting the foregoing, the Transferor will, and will cause WorldCom
to, upon the request of the Agent, the Company, Sheffield or any of the Bank
Investors, in order to accurately reflect this purchase and sale transaction,
(x) execute and file such financing or continuation statements or amendments
thereto or assignments thereof (as permitted pursuant to Section 9.7 hereof) as
may be requested by the Agent, Sheffield, the Company or any of the Bank
Investors and (y) ▇▇▇▇ its respective master data processing records and other
documents with a legend describing the conveyance to the Transferor (in the
case of WorldCom), the Agent, for the benefit of the Company, Sheffield and the
Bank Investors, of the Transferred Interest. The Transferor shall, and will
cause WorldCom to, upon request of the Agent, the Company, Sheffield or any of
the Bank Investors, obtain such additional search reports as the Agent, the
Company, Sheffield or any of the Bank Investors shall request. To the fullest
extent permitted by applicable law, the Agent shall be permitted to sign and
file continuation statements and amendments thereto and assignments thereof
without the Transferor's or WorldCom's signature. Carbon, photographic or
other reproduction of this Agreement or any financing statement shall be
sufficient as a financing statement. The Transferor shall not, and shall not
permit WorldCom to, change its respective name, identity or corporate structure
(within the meaning of Section 9-402(7) of the UCC) nor relocate its respective
chief executive office or any office where Records are kept unless it shall
have: (i) given the Agent at least thirty (30) days prior notice
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thereof and (ii) prepared at Transferor's expense and delivered to the Agent
all financing statements, instruments and other documents necessary to preserve
and protect the Transferred Interest or requested by the Agent in connection
with such change or relocation. Any filings under the UCC or otherwise that
are occasioned by such change in name or location shall be made at the expense
of Transferor.
(b) The Collection Agent shall instruct all Obligors to cause all
Collections to be deposited directly with a Lock-Box Bank. Any Lock-Box
Account maintained by a Lock-Box Bank pursuant to the related Lock-Box
Agreement shall be under the exclusive ownership and control of the Agent which
is hereby granted to the Agent by WorldCom and the Transferor. The Collection
Agent shall be permitted to give instructions to the Lock-Box Banks for so long
as neither a Collection Agent Default nor any other Termination Event has
occurred hereunder. The Collection Agent shall not add any bank as a Lock-Box
Bank to those listed on Exhibit C attached hereto unless such bank has entered
into a Lock-Box Agreement. The Collection Agent shall not terminate any bank
as a Lock- Box Bank unless the Administrative Agent shall have received fifteen
(15) days' prior notice of such termination. If the Transferor, WorldCom or
the Collection Agent receives any Collections, the Transferor, WorldCom or the
Collection Agent, as applicable, shall immediately, but in any event within
forty- eight (48) hours of receipt, remit (and shall cause WorldCom to remit)
such Collections to a Lock-Box Account.
SECTION 2.9. Deemed Collections; Application of Payments. (a) If on
any day the Outstanding Balance of a Receivable is either (x) reduced as a
result of any defective, rejected or returned merchandise or services, any
discount, credit, rebate, dispute, warranty claim, repossessed or returned
goods, chargeback, allowance, any billing adjustment, dilutive factor or other
adjustment, or (y) reduced or canceled as a result of a setoff or offset in
respect of any claim by any Person (whether such claim arises out of the same
or a related transaction or an unrelated transaction), and if such reduction or
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cancellation shall result in the Percentage Factor exceeding the Maximum
Percentage Factor, the Transferor shall be deemed to have received on such day
a Collection of such Receivable in the amount of such reduction or cancellation
and the Transferor shall pay to the Collection Agent an amount equal to such
reduction or cancellation and such amount shall be applied by the Collection
Agent as a Collection in accordance with Section 2.5 or 2.6 hereof, as
applicable. The Enterprise Net Investment and Sheffield Net Investment shall
be reduced by the amount of such payment applied pursuant to Section 2.5 or
Section 2.6 to the reduction of the Enterprise Net Investment or Sheffield Net
Investment, as applicable.
(b) If on any day any of the representations or warranties in
Article III was or becomes untrue with respect to a Receivable (whether on or
after the date of any transfer of an interest therein to the Agent, the
Company, Sheffield or the Bank Investors as contemplated hereunder), the
Transferor shall be deemed to have received on such day a Collection of such
Receivable in full and the Transferor shall on such day pay to the Collection
Agent an amount equal to the Outstanding Balance of such Receivable and such
amount shall be allocated and applied by the Collection Agent as a Collection
allocable to the Transferred Interest in accordance with Section 2.5 or 2.6
hereof, as applicable. The Enterprise Net Investment and Sheffield Net
Investment shall be reduced by the amount of such payment applied pursuant to
Section 2.5 or Section 2.6 to the reduction of the Enterprise Net Investment or
Sheffield Net Investment, as applicable.
(c) Any payment by an Obligor in respect of any indebtedness owed
by it to the Transferor or WorldCom shall, except as otherwise specified by
such Obligor or otherwise required by contract or law and unless otherwise
instructed by the Agent, be applied as a Collection of any Receivable of such
Obligor included in the Transferred Interest (starting with the oldest such
Receivable) to the extent of any amounts then due and payable thereunder before
being applied to any other receivable or other indebtedness of such Obligor.
SECTION 2.10. Payments and Computations, Etc. All amounts to be paid
or deposited by the Transferor or the Collection Agent hereunder shall be paid
or deposited in accordance with the terms hereof no later than 11:00 A.M.
(Central time) on the day when due in immediately available funds; if such
amounts are payable to the Company, Sheffield or any Bank Investor they shall
be
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paid or deposited in the account indicated in Section 10.3 hereof, until
otherwise notified by the Agent. The Transferor shall, to the extent permitted
by law, pay to the Agent, for the benefit of the Company, Sheffield and the
Bank Investors upon demand, interest on all amounts not paid or deposited when
due hereunder at a rate equal to 2% per annum plus the Base Rate. All
computations of Enterprise Discount and Sheffield Discount, interest and all
per annum 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. Any computations by the Agent of amounts payable by the Transferor
hereunder shall be binding upon the Transferor absent manifest error.
SECTION 2.11. Reports. (a) On the 25th day of each month, (or the
next succeeding Business Day if such 25th day is not a Business Day), the
Collection Agent shall prepare and forward to the Agent and the Administrative
Agent (i) an Investor Report as of the end of the last day of the immediately
preceding month, (ii) as soon as is reasonably practicable after receipt of a
request by the Agent or the Administrative Agent, the Collection Agent shall
prepare and forward to the Agent or the Administrative Agent, a listing by
Obligor of all Receivables together with an aging of such Receivables and (iii)
within a reasonable time after request therefor, such other information as the
Agent or the Administrative Agent may reasonably request. The Agent shall
promptly upon receipt forward a copy of any such report or listing to
Sheffield.
(b) Promptly upon receipt by the Collection Agent of each weekly
report described in this Section 2.11(b), the Collection Agent shall forward to
the Administrative Agent and the Agent, a copy of each such report setting
forth the information contained therein in substantially the form of Exhibit N
attached hereto. The Agent shall promptly upon receipt forward a copy of any
such report to Sheffield.
SECTION 2.12. Collection Account. There shall be established on the
day of the initial Incremental Transfer hereunder and maintained, for the
benefit of the Company, Sheffield and the Bank Investors, with the Agent, a
segregated account (the "Collection Account"), bearing a designation clearly
indicating that the funds
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deposited therein are held for the benefit of the Company, Sheffield and the
Bank Investors. On and after the occurrence of a Collection Agent Default or a
Termination Event or a Potential Termination Event, the Collection Agent shall
remit daily within forty-eight hours of receipt to the Collection Account all
Collections received with respect to any Receivables. Funds on deposit in the
Collection Account (other than investment earnings) shall be invested by the
Agent in Eligible Investments that will mature so that such funds will be
available prior to the last day of each successive Enterprise Tranche Period
and Sheffield Tranche Period following such investment. On the last day of
each Enterprise Tranche Period and Sheffield Tranche Period, all interest and
earnings (net of losses and investment expenses) on funds on deposit in the
Collection Account shall be retained in the Collection Account and be available
to make any payments required to be made hereunder (including Enterprise
Discount or Sheffield Discount) by the Transferor. On the date on which the
Net Investment is zero, all accrued Enterprise Discount and Sheffield Discount
and Servicing Fees have been paid in full and all other Aggregate Unpaids have
been paid in full, any funds remaining on deposit in the Collection Account
shall be paid to the Transferor.
SECTION 2.13. Sharing of Payments, Etc. If the Company, Sheffield or
any Bank Investor (for purposes of this Section 2.13 only, being a "Recipient")
shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of setoff, or otherwise) on account of Transferred Interest owned
by it (other than pursuant to Section 2.7, or Article VIII and other than as a
result of the differences in the timing of the applications of Collections
pursuant to Section 2.5 or 2.6) in excess of its ratable share of payments on
account of Transferred Interest obtained by the Company and/or the Bank
Investors and Sheffield entitled thereto, such Recipient shall forthwith
purchase from the Company and/or the Bank Investors or Sheffield entitled to a
share of such amount participations in the Percentage Interests owned by such
Persons as shall be necessary to cause such Recipient to share the excess
payment ratably with each such other Person entitled thereto; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such Recipient, such purchase from each such other Person shall
be rescinded
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and each such other Person shall repay to the Recipient the purchase price paid
by such Recipient for such participation to the extent of such recovery,
together with an amount equal to such other Person's ratable share (according
to the proportion of (a) the amount of such other Person's required payment to
(b) the total amount so recovered from the Recipient) of any interest or other
amount paid or payable by the Recipient in respect of the total amount so
recovered.
SECTION 2.14. Right of Setoff. Without in any way limiting the
provisions of Section 2.13, each of the Company, Sheffield and the Bank
Investors is hereby authorized (in addition to any other rights it may have) at
any time after the occurrence of the Sheffield Termination Date, in the case of
Sheffield and the Enterprise Termination Date, in the case of the Bank
Investors and Enterprise, or during the continuance of a Potential Termination
Event, in either case, to set-off, appropriate and apply (without presentment,
demand, protest or other notice which are hereby expressly waived) any deposits
and any other indebtedness held or owing by the Company, Sheffield or such Bank
Investor to, or for the account of, the Transferor against the amount of the
Aggregate Unpaids owing by the Transferor to such Person (even if contingent or
unmatured).
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Transferor. The
Transferor represents and warrants to the Agent, the Company, Sheffield and the
Bank Investors that:
(a) Corporate Existence and Power. The Transferor is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all corporate power and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business in each jurisdiction in which its business is now
conducted. The Transferor is duly qualified to do business in, and is in good
standing in, every other jurisdiction in which the nature of its business
requires it to be so qualified, except where the failure to be so qualified or
in good standing would not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Transferor of this Agreement, the
Receivables Purchase Agreement, the Enterprise Fee Letter, the Sheffield Fee
Letter, the Certificates, the Transfer Certificates and the other Transaction
Documents to which the Transferor is a party are within the Transferor's
corporate powers, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any Official Body or
official thereof (except as contemplated by Section 3.1(d) hereof), and do not
contravene, or constitute a default under, any provision of applicable law,
rule or regulation or of the Certificate of Incorporation or Bylaws of the
Transferor or of any agreement, judgment, injunction, order, writ, decree or
other instrument binding upon the Transferor or result in the creation or
imposition of any Adverse Claim on the assets of the Transferor or any of its
Subsidiaries (except as contemplated by Section 3.1(d) hereof).
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(c) Binding Effect. Each of this Agreement, the Receivables
Purchase Agreement, the Fee Letter, the Certificates and the other Transaction
Documents to which the Transferor is a party constitutes and the Transfer
Certificate upon payment of the Transfer Price set forth therein will
constitute the legal, valid and binding obligation of the Transferor,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the rights
of creditors generally.
(d) Perfection. Immediately preceding each Transfer hereunder,
the Transferor shall be the owner of all of the Receivables, free and clear of
all Adverse Claims. On or prior to each Transfer and each recomputation of the
Transferred Interest, all financing statements and other documents required to
be recorded or filed in order to perfect and protect the Transferred Interest
against all creditors of and purchasers from the Transferor and WorldCom will
have been duly filed in each filing office necessary for such purpose and all
filing fees and taxes, if any, payable in connection with such filings shall
have been paid in full.
(e) Accuracy of Information. All information heretofore
furnished by the Transferor (including without limitation, the Investor
Reports, any reports delivered pursuant to Section 2.11 hereof and the
Transferor's financial statements) to the Company, Sheffield, any Bank
Investors, the Agent or the Administrative Agent for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Transferor to the Company,
Sheffield, any Bank Investors, the Agent or the Administrative Agent will be,
true and accurate in every material respect, on the date such information is
stated or certified.
(f) Tax Status. The Transferor has filed all material tax
returns (federal, state and local) required to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges.
(g) Action, Suits. Except as set forth in Exhibit H hereof,
there are no actions, suits or proceedings pending, or to the knowledge of the
Transferor
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threatened, against or affecting the Transferor or any Affiliate of the
Transferor or their respective properties, in or before any court, arbitrator
or other body, which may, individually or in the aggregate, have a Material
Adverse Effect.
(h) Use of Proceeds. No proceeds of any Transfer will be used by
the Transferor to acquire any security in any transaction which is subject to
Section 13 or 14 of the Securities Exchange Act of 1934, as amended.
(i) Place of Business. The principal place of business and chief
executive office of the Transferor are located at the address of the Transferor
indicated in Section 9.3 hereof and the offices where the Transferor keeps all
its Records, are located at the address(es) described on Exhibit I or such
other locations notified to the Company in accordance with Section 2.8 hereof
in jurisdictions where all action required by Section 2.8 hereof has been taken
and completed.
(j) Good Title. Upon each Transfer and each recomputation of
the Transferred Interest, the Company shall acquire a valid and perfected first
priority undivided percentage ownership interest to the extent of the
Transferred Interest or a first priority perfected security interest in each
Receivable that exists on the date of such Transfer and recomputation and in
the Related Security and Collections with respect thereto free and clear of any
Adverse Claim.
(k) Tradenames, Etc. As of the date hereof: (i) the
Transferor's chief executive office is located at the address for notices set
forth in Section 9.3 hereof; (ii) the Transferor has only the subsidiaries and
divisions listed on Exhibit J hereto; and (iii) the Transferor has, within the
last five (5) years, operated only under the tradenames identified in Exhibit J
hereto, and, within the last five (5) years, has not changed its name, merged
with or into or consolidated with any other corporation or been the subject of
any proceeding under ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code (Bankruptcy), except as
disclosed in Exhibit J hereto.
(l) Nature of Receivables. Each Receivable (x) represented by
the Transferor or the Collection
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Agent to be an Eligible Receivable (including in any Investor Report or other
report delivered pursuant to Section 2.11 hereof) or (y) included in the
calculation of the Net Receivables Balance in fact satisfies at such time the
definition of "Eligible Receivable" set forth herein and, in the case of clause
(y) above, is not a Receivable of the type described in clauses (i) through
(iii) of the definition of "Net Receivables Balance."
(m) Coverage Requirement; Amount of Receivables. The Percentage
Factor does not exceed the Maximum Percentage Factor. As of November 30, 1996,
the aggregate Outstanding Balance of the Receivables in existence was at least
$809,000,000 and the Net Receivable Balance was at least $597,000,000.
(n) Credit and Collection Policy. Since September 27, 1996,
there have been no material changes in the Credit and Collection Policy other
than as permitted hereunder. Since such date, no material adverse change has
occurred in the overall rate of collection of the Receivables.
(o) Collections and Servicing. Since September 27, 1996, there
has been no material adverse change in the ability of the Collection Agent (to
the extent it is WorldCom, the Transferor or any Subsidiary or Affiliate of any
of the foregoing) to service and collect the Receivables.
(p) No Termination Event. No event has occurred and is
continuing and no condition exists which constitutes a Termination Event or a
Potential Termination Event.
(q) Not an Investment Company. The Transferor is not, and is not
controlled by, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or is exempt from all provisions of such Act.
(r) ERISA. Each of the Transferor and its ERISA Affiliates is in
compliance in all material respects with ERISA and no lien exists in favor of
the Pension Benefit Guaranty Corporation on any of the Receivables.
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(s) Lock-Box Accounts. The names and addresses of all the
Lock-Box Banks, together with the account numbers of the Lock- Box Accounts at
such Lock-Box Banks, are specified in Exhibit C hereto (or at such other
Lock-Box Banks and/or with such other Lock-Box Accounts as have been notified
to the Agent and for which Lock-Box Agreements have been executed in accordance
with Section 2.8(b) hereof and delivered to the Collection Agent). All
Obligors have been instructed to make payment to a Lock-Box Account and only
Collections are deposited into the Lock-Box Accounts.
(t) Bulk Sales. No transaction contemplated hereby or by the
Receivables Purchase Agreement requires compliance with any bulk sales act or
similar law.
(u) Transfers Under Receivables Purchase Agreement. Each
Receivable which has been transferred to the Transferor by WorldCom has been
purchased by the Transferor from WorldCom pursuant to, and in accordance with,
the terms of the Receivables Purchase Agreement.
(v) Preference; Voidability. The Transferor shall have given
reasonably equivalent value to WorldCom in consideration for the transfer to
the Transferor of the Receivables and Related Security from WorldCom, and each
such transfer shall not have been made for or on account of an antecedent debt
owed by WorldCom to the Transferor and no such transfer is or may be voidable
under any Section of the Bankruptcy Reform Act of 1978 (11 U.S.C. Section
Section 101 et seq.), as amended.
(w) Representations and Warranties of WorldCom. Each of the
representations and warranties of WorldCom set forth in the Receivables
Purchase Agreement are true and correct in all material respects and the
Transferor hereby remakes all such representations and warranties for the
benefit of the Agent, the Company, Sheffield, the Bank Investors and the
Administrative Agent.
Any document, instrument, certificate or notice delivered to the
Company hereunder shall be deemed a representation and warranty by the
Transferor.
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SECTION 3.2. Reaffirmation of Representations and Warranties by the
Transferor. On each day that a Transfer is made hereunder, the Transferor, by
accepting the proceeds of such Transfer, whether delivered to the Transferor
pursuant to Section 2.2(a) or Section 2.5 hereof, shall be deemed to have
certified that all representations and warranties described in Section 3.1
hereof are correct on and as of such day as though made on and as of such day.
Each Incremental Transfer shall be subject to the further condition precedent
that prior to the date of such Incremental Transfer, the Collection Agent shall
have delivered to the Agent and the Administrative Agent, in form and substance
satisfactory to the Agent and the Administrative Agent, a completed Investor
Report dated within ten (10) days prior to the date of such Incremental
Transfer, together with a listing by Obligor, if requested, and such additional
information as may be reasonably requested by the Administrative Agent or the
Agent; and the Transferor shall be deemed to have represented and warranted
that such conditions precedent have been satisfied. The Agent shall promptly
upon receipt forward a copy of any such report to Sheffield.
SECTION 3.3. Representations and Warranties of WorldCom. WorldCom
represents and warrants to the Company, Sheffield and the Bank Investors that:
(a) Corporate Existence and Power. WorldCom is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate power and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is now conducted.
WorldCom is duly qualified to do business in, and is in good standing in, every
other jurisdiction in which the nature of its business requires it to be so
qualified, except where the failure to be so qualified or in good standing
would not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contravention.
The execution, delivery and performance by WorldCom of this Agreement and the
Receivables Purchase Agreement are within WorldCom's corporate powers, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any Official Body or official thereof
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(except for the filing of UCC financing statements as required by the
Receivables Purchase Agreement), and do not contravene, or constitute a default
under, any provision of applicable law, rule or regulation or of the
Certificate of Incorporation or Bylaws of WorldCom or of any agreement,
judgment, injunction, order, writ, decree or other instrument binding upon
WorldCom or result in the creation or imposition of any Adverse Claim on the
assets of WorldCom or any of its Subsidiaries (except those created by the
Receivables Purchase Agreement).
(c) Binding Effect. Each of this Agreement and the Receivables
Purchase Agreement will constitute the legal, valid and binding obligation of
WorldCom, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the rights
of creditors.
(d) Perfection. Immediately preceding the sale of the
Receivables and related property pursuant to the Receivables Purchase
Agreement, WorldCom was the owner of all of the Receivables, free and clear of
all liens, encumbrances, security interests, preferences or other security
arrangement of any kind or nature whatsoever. On or prior to the date hereof,
all financing statements and other documents required to be recorded or filed
in order to perfect and protect the ownership interest of the Transferor in and
to the Receivables against all creditors of and purchasers from WorldCom will
have been duly filed in each filing office necessary for such purpose and all
filing fees and taxes, if any, payable in connection with such filings shall
have been paid in full.
(e) Accuracy of Information. All information heretofore
furnished by WorldCom to the Transferor, the Agent, the Company, Sheffield and
the Bank Investor or the Administrative Agent for purposes of or in connection
with the Receivables Purchase Agreement or any transaction contemplated thereby
is, and all such information hereafter furnished by WorldCom to the Transferor,
the Agent, the Enterprise Agent, the Company, Sheffield and Bank Investor or
the Administrative Agent will be, true and accurate in every material respect,
on the date such information is stated or certified.
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(f) Tax Status. WorldCom has filed all material tax returns
(federal, state and local) required to be filed and has paid or made adequate
provision for the payment of all taxes, assessments and other governmental
charges.
(g) Action, Suits. Except as set forth in the Receivables
Purchase Agreement, there are no actions, suits or proceedings pending, or to
the knowledge of WorldCom threatened, against or affecting WorldCom or any
Affiliate of WorldCom or their respective properties, in or before any court,
arbitrator or other body, which may, individually or in the aggregate, have a
Material Adverse Effect.
(h) Place of Business. The principal place of business and chief
executive office of WorldCom are located at Jackson, Mississippi and the
offices where WorldCom keeps all its Records, are located at the address(es)
described on Exhibit I or such other locations notified to the Transferor in
accordance with the Receivables Purchase Agreement in jurisdictions where all
action required by the terms of the Receivables Purchase Agreement has been
taken and completed.
(i) Good Title. Upon the sale of the Receivables and related
property to the Transferor pursuant to the receivable Purchase Agreement, the
Transferor shall acquire a valid and perfected first priority ownership
interest in each Receivable (and in the Related Security, Collections and
Proceeds with respect thereto) that exists on the date of the Receivables
Purchase Agreement and each Receivable created or acquired by WorldCom and in
the Related Security, Collections and Proceeds with respect thereto until the
Termination Date (as defined in the Receivables Purchase Agreement) in each
case free and clear of any Adverse Claim.
(j) Tradenames, Etc. As of the date hereof: (i) WorldCom's
chief executive office is located at the address for notices set forth in
Section 10.3; (ii) WorldCom has only the subsidiaries and divisions listed on
Exhibit J hereto; and (iii) WorldCom has, within the last five (5) years,
operated only under the tradenames identified in Exhibit J hereto, and, within
the last five (5) years, has not changed its name, merged with or into or
consolidated with any other corporation
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or been the subject of any proceeding under ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code
(Bankruptcy), except as disclosed in Exhibit J hereto.
(k) Nature of Receivables. Each Receivable (x) represented by
WorldCom to be an Eligible Receivable, or (y) included in the calculation of
the Net Receivables Balance in fact satisfies at such time the definition of
"Eligible Receivable" and is an "eligible asset" as defined in Rule 3a-7 under
the Investment Company Act, of 1940, as amended, and in the case of clause (y)
above, is not a Receivable of the type described in clauses (i) through (iii)
of the definition of "Net Receivables Balance".
(l) Amount of Receivables. As of November 30, 1996, the
aggregate Outstanding Balance of the Receivables in existence was at least
$809,000,000 and the Net Receivable Balance was at least $597,000,000.
(m) Credit and Collection Policy. Since September 27, 1996,
there have been no material changes in the Credit and Collection Policy other
than as permitted hereunder. Since such date, no material adverse change has
occurred in the overall rate of collection of the Receivables.
(n) Collections and Servicing. Since September 27, 1996, there
has been no material adverse change in the ability of WorldCom to service and
collect the Receivables.
(o) Not an Investment Company. WorldCom is not, and is not
controlled by, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or is exempt from all provisions of such Act.
(p) ERISA. Each of WorldCom and its ERISA Affiliates is in
compliance in all material respects with ERISA and no lien exists in favor of
the Pension Benefit Guaranty Corporation on any of the Receivables.
(q) Lock-Box Accounts. The names and addresses of all the
Lock-Box Banks, together with the account numbers of the Lock- Box Accounts at
such Lock-Box Banks, are specified in Exhibit C hereto (or at such
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other Lock-Box Banks and/or with such other Lock-Box Accounts as have been
notified to the Transferor and the Agent and for which Lock-Box Agreements have
been executed in accordance with Section 2.8(b) hereof and delivered to the
Collection Agent). All Obligors have been instructed to make payment to a
Lock-Box Account and only Collections are deposited into the Lock-Box Accounts.
(r) Bulk Sales. No transaction contemplated by the Receivables
Purchase Agreement requires compliance with any bulk sales act or similar law.
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ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. On or prior to the date of
execution hereof, the Transferor shall deliver to the Agent the following
documents, instruments and fees all of which shall be in a form and substance
acceptable to the Agent:
(a) A copy of the resolutions of the Board of Directors of the
Transferor certified by its Secretary approving the execution, delivery and
performance by the Transferor of this Agreement, the Receivables Purchase
Agreement and the other Transaction Documents to be delivered by the Transferor
hereunder or thereunder.
(b) The Articles of Incorporation of the Transferor certified by
the Secretary of State or other similar official of the Transferor's
jurisdiction of incorporation dated a date reasonably prior to the Closing
Date, or a certification from the Treasurer of the Transferor to the effect
that such Articles have not been amended or modified since a date on or prior
to October 25, 1996.
(c) A Good Standing Certificate for the Transferor issued by the
Secretary of State or a similar official of the Transferor's jurisdiction of
incorporation and certificates of qualification as a foreign corporation issued
by the Secretaries of State or other similar officials of each jurisdiction
where such qualification is material to the transactions contemplated by this
Agreement and the other Transaction Documents, in each case, dated a date
reasonably prior to the Closing Date.
(d) A Certificate of the Secretary of the Transferor
substantially in the form of Exhibit L-1 attached hereto.
(e) Copies of proper financing statements (Form UCC-1) or
amendments, dated a date reasonably near to the date of the initial Incremental
Transfer naming the Transferor as the debtor in favor of the Agent, for the
benefit of the Company, Sheffield and the Bank Investors,
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secured party or other similar instruments or documents as may be necessary or
in the reasonable opinion of the Agent desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect the Agent's
undivided percentage interest in all Receivables and the Related Security and
Collections relating thereto.
(f) Certified copies of request for information or copies (Form
UCC-11) (or a similar search report certified by parties acceptable to the
Agent) dated a date reasonably near the date of the initial Incremental
Transfer listing all effective financing statements which name the Transferor,
WorldCom or any Permitted Originator (under their respective present names and
any previous names) as debtor and which are filed in jurisdictions in which the
filings were made pursuant to items (e) above together with copies of such
financing statements (none of which shall cover any Receivables or Contracts).
(g) An opinion of Hall, Estill, Hardwick, Gable, Golden & ▇▇▇▇▇▇,
special counsel to the Transferor, each Permitted Originator, the Collection
Agent and WorldCom, covering the matters set forth in Exhibit K hereto.
(h) An opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., counsel to WorldCom
covering certain corporate matters in form and substance to the Enterprise
Agent and Sheffield and their respective counsel.
(i) An executed copy of this Agreement, the Receivables Purchase
Agreement, the Sheffield Fee Letter and each of the other Transaction Documents
to be executed by WorldCom or the Transferor.
(j) The Transfer Certificate, duly executed by the Transferor.
(k) The Certificate, duly executed by the Transferor and
appropriately completed.
(l) An Investor Report for November 1996.
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(m) Such other documents, instruments, certificates and opinions
as the Enterprise Agent or Sheffield shall reasonably request.
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ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of Transferor. At all times from
the date hereof to the later to occur of (i) the Enterprise Termination Date or
Sheffield Termination Date or (ii) the date on which the Net Investment has
been reduced to zero, all accrued Enterprise Discount and Sheffield Discount
and Servicing Fees shall have been paid in full and all other Aggregate Unpaids
shall have been paid in full, in cash, unless the Agent and Sheffield shall
otherwise consent in writing:
(a) Financial Reporting. The Transferor will, and will cause
WorldCom and each of the Transferor's and WorldCom's Subsidiaries to, maintain,
for itself and each of its respective Subsidiaries, a system of accounting
established and administered in accordance with GAAP, and furnish to the Agent
(which shall promptly upon receipt thereof forward a copy to Sheffield):
(i) Annual Reporting. Promptly after preparation, and no
later than ninety (90) days after the last day of each fiscal year of
WorldCom, financial statements showing the consolidated (as to WorldCom
and its Subsidiaries) financial condition and results of operations of
WorldCom and its Subsidiaries as of, and for the year ended on, such last
day, accompanied by:
(1) the unqualified opinion of a firm of nationally
-recognized independent certified public accountants, based on an audit
using generally accepted auditing standards, that such financial
statements were prepared in accordance with GAAP and present fairly the
consolidated financial condition and results of operations of WorldCom and
its Subsidiaries;
(2) any management letter prepared by such
accounting firm;
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(3) a certificate from such accounting firm to the
Agent indicating that during its audit it obtained no knowledge of any
Termination Event or Potential Termination Event or, if it obtained such
knowledge, the nature and period of existence thereof;
(4) a letter from such accounting firm addressed
to WorldCom, with a copy to the Agent, acknowledging that (A) WorldCom
plans to provide the Agent with such audited financial statements and
accompanying audit report, (B) the Agent has informed WorldCom that the
Agent intends to rely on such firm's audit report accompanying such
financial statements, and (C) WorldCom intends for the Agent to so rely;
and
(5) promptly after preparation, and no later than
ninety (90) days after the last day of each fiscal year of the Transferor,
unaudited financial statements showing the financial condition and results
of operations of the Transferor as of, and for the year ended on, such
last day,
(ii) Quarterly Reporting. Promptly after preparation,
and no later than 45 days after the last day of each fiscal quarter of
WorldCom and the Transferor (other than the fourth fiscal quarter of each
fiscal year), financial statements (which may be unaudited in the case of
the Transferor) showing the financial condition and results of operations
of the Transferor and WorldCom for such fiscal quarter and for the period
from the beginning of the current fiscal year to such last day (which
statements in the case of WorldCom shall show the consolidated financial
condition of Worldcom), accompanied by a compliance certificate with
respect to such Financial Statements.
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate signed by the
Transferor's or WorldCom's, as applicable, chief financial officer or
Treasurer stating
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that (x) the attached financial statements have been prepared in
accordance with GAAP and accurately reflect the financial condition of the
Transferor or WorldCom as applicable and (y) to the best of such Person's
knowledge, no Termination Event or Potential Termination Event exists, or
if any Termination Event or Potential Termination Event exists, stating
the nature and status thereof and showing the computation of, and showing
compliance with each of the financial ratios and restrictions set forth in
Section 5.3 hereof.
(iv) Shareholders Statements and Reports. Promptly upon
the furnishing thereof to the shareholders of the Transferor or WorldCom,
copies of all financial statements, reports and proxy statements so
furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof,
copies of all registration statements and annual, quarterly, monthly or
other regular reports which WorldCom or any subsidiary files with the
Securities and Exchange Commission (other than filings on Form S-8 or Form
S-3 for secondary markets sales of securities held by selling
shareholders).
(vi) Notice of Termination Events or Potential Termination
Events. As soon as possible and in any event within three (3) business
days after the Transferor becomes aware or should be aware of the
occurrence of a Termination Event or a Potential Termination Event, a
statement of the chief financial officer or chief accounting officer of
the Transferor setting forth details of such Termination Event or
Potential Termination Event and the action which the Transferor proposes
to take with respect thereto.
(vii) Change in Credit and Collection Policy and Debt
Ratings. Within ten (10) days after the date any material change in or
amendment to the Credit and Collection
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Policy is made, a copy of the Credit and Collection Policy then in effect
indicating such change or amendment. Within five (5) days after the date
of any downgrade in the Transferor's or WorldCom's public or private debt
ratings, if any, a written certification of the Transferor's or WorldCom's
public and private debt ratings after giving effect to any such change.
(viii) Credit and Collection Policy. Within ninety (90)
days after the close of each of WorldCom's and the Transferor's fiscal
years, a complete copy of the Credit and Collection Policy then in effect,
unless a copy thereof has been delivered during such fiscal year pursuant
to clause (vii) above and no other changes to the Credit and Collection
Policy have occurred since such delivery.
(ix) ERISA. Promptly after the filing or receiving
thereof, copies of all reports and notices with respect to any Reportable
Event (as defined in Article IV of ERISA) which the Transferor, WorldCom
or any ERISA Affiliate of the Transferor or WorldCom files under ERISA
with the Internal Revenue Service, the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or which the Transferor,
WorldCom or any ERISA Affiliates of the Transferor or WorldCom receives
from the Internal Revenue Service, the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor.
(x) Other Information. Such other information including
non- financial information) as the Agent or the Administrative Agent may
from time to time reasonably request with respect to WorldCom, the
Transferor or any Subsidiary of any of the foregoing.
(b) Conduct of Business. The Transferor will, and will cause
WorldCom and each of the Transferor's and WorldCom's Subsidiaries to, carry on
and conduct its business in substantially the same manner and in substantially
the same fields of enterprise as it is
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presently conducted and do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is conducted.
(c) Compliance with Laws. The Transferor will, and will cause
WorldCom and each of the Transferor's and WorldCom's Subsidiaries to, comply in
all material respects with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it or its respective
properties may be subject.
(d) Furnishing of Information and Inspection of Records. The
Transferor will, and will cause WorldCom to, furnish to the Enterprise Agent
and Sheffield from time to time such information with respect to the
Receivables as the Agent the Company or Sheffield may reasonably request,
including, without limitation, listings identifying the Obligor and the
Outstanding Balance for each Receivable. The Transferor will, and will cause
WorldCom to, at any time and from time to time during regular business hours
permit the Enterprise Agent and Sheffield, or their respective agents or
representatives, (i) to examine and make copies of and abstracts from all
Records and (ii) to visit the offices and properties of the Transferor or
WorldCom, as applicable, for the purpose of examining such Records, and to
discuss matters relating to Receivables or the Transferor's or WorldCom's
performance hereunder and under the other Transaction Documents to which such
Person is a party with any of the officers, directors, employees or independent
public accountants of the Transferor or WorldCom, as applicable, having
knowledge of such matters.
(e) Keeping of Records and Books of Account. The Transferor
will, and will cause WorldCom and any Permitted Originator to, maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing 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 Receivables (including, without limitation,
records adequate to permit the daily identification of each new Receivable
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and all Collections of and adjustments to each existing Receivable). The
Transferor will, and will cause WorldCom and any Permitted Originator to, give
the Agent notice of any material change in the administrative and operating
procedures of the Transferor, WorldCom or the Permitted Originator, as
applicable, referred to in the previous sentence.
(f) Performance and Compliance with Receivables and Contracts.
The Transferor, at its expense, will, and will cause WorldCom and each
Permitted Originator to, timely and fully perform and comply with all material
provisions, covenants and other promises required to be observed by the
Transferor, WorldCom or the Permitted Originators under the Contracts related
to the Receivables.
(g) Credit and Collection Policies. The Transferor will, and
will cause WorldCom and each Permitted Originator to, comply in all material
respects with the Credit and Collection Policy in regard to each Receivable and
the related Contract.
(h) Collections. The Transferor shall, and shall cause
WorldCom and each Permitted Originator to, instruct all Obligors to cause all
Collections to be remitted directly to a Lock-Box Account.
(i) Collections Received. The Transferor shall, and shall
cause WorldCom and each Permitted Originator to, hold in trust, and deposit,
immediately, but in any event not later than forty-eight (48) hours of its
receipt thereof, to a Lock-Box Account all Collections received from time to
time by the Transferor, WorldCom or the Permitted Originators, as the case may
be.
(j) Sale Treatment. The Transferor will not (i) and will not
permit WorldCom to, account for (including for accounting and tax purposes), or
otherwise treat, the transactions contemplated by the Receivables Purchase
Agreement in any manner other than as a sale of Receivables by WorldCom to the
Transferor, or (ii) account for (other than for tax purposes) or otherwise
treat the transactions contemplated hereby in any manner other than a sale of
Receivables by the Transferor to the Company or the Bank Investors, as
applicable. In addition, the Transferor shall, and shall cause WorldCom to,
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disclose (in a footnote or otherwise) in all of its respective financial
statements (including any such financial statements consolidated with any other
Persons' financial statements) the existence and nature of the transaction
contemplated hereby and by the Receivables Purchase Agreement and the interest
of the Transferor (in the case of WorldCom's financial statements), the
Company, Sheffield and the Bank Investors in the Affected Assets.
(k) Separate Business. The Transferor shall at all times
comply in all respects with Articles X, XV and XVII of its Certificate of
Incorporation. The officers and directors of the Transferor (as appropriate)
shall make decisions with respect to the business and daily operations of the
Transferor independent of and not dictated by any controlling entity. The
Transferor shall not engage in any business not permitted by its Certificate of
Incorporation as in effect on the Closing Date.
(l) Corporate Documents. The Transferor shall only amend,
alter, change or repeal its Certificate of Incorporation with the prior written
consent of the Agent.
SECTION 5.2. Negative Covenants of the Transferor.
During the term of this Agreement, unless the Agent and Sheffield shall
otherwise consent in writing:
(a) No Sales, Liens, Etc. Except as otherwise provided herein
and the Receivables Purchase Agreement, the Transferor will not, and will not
permit WorldCom to, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim upon (or
the filing of any financing statement) or with respect to (x) any of the
Affected Assets, (y) any inventory or goods, the sale of which may give rise to
a Receivable or any Receivable or related Contract, or (z) any account which
concentrates in a Lock-Box Bank to which any Collections of any Receivable are
sent, or assign any right to receive income in respect thereof.
(b) No Extension or Amendment of Receivables. Except as
otherwise permitted in Section 6.2 hereof, the Transferor will not, and will
not permit WorldCom to, extend, amend or otherwise modify the terms
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of any Receivable, or amend, modify or waive any term or condition of any
Contract related thereto.
(c) No Change in Business or Credit and Collection Policy. The
Transferor will not, and will not permit WorldCom to, make any change in the
character of its business or in the Credit and Collection Policy, which change
would, in either case, impair the collectibility of any Receivable or otherwise
have a Material Adverse Effect.
(d) No Mergers, Etc. The Transferor will not, and except as
otherwise permitted pursuant to the Receivables Purchase Agreement and Section
7.2.6 of the Credit Agreement, as amended and provided NationsBank of Texas,
N.A. remains as managing agent thereunder, will not permit WorldCom to, (i)
consolidate or merge with or into any other Person, or (ii) sell, lease or
transfer all or substantially all of its assets to any other Person.
(e) Change in Payment Instructions to Obligors. The Transferor
will not, and will not permit WorldCom to, add or terminate any bank as a
Lock-Box Bank or any account as a Lock-Box Account to or from those listed in
Exhibit C hereto or make any change in its instructions to Obligors regarding
payments to be made to any Lock-Box Account, unless (i) such instructions are
to deposit such payments to another existing Lock-Box Account or (ii) the Agent
shall have received written notice of such addition, termination or change at
least 30 days prior thereto and the Agent shall have received a Lock-Box
Agreement executed by each new Lock-Box Bank or an existing Lock-Box Bank with
respect to each new Lock-Box Account, as applicable.
(f) Deposits to Lock-Box Accounts. The Transferor will not,
and will not permit WorldCom to, 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 Receivables.
(g) Change of Name, Etc. The Transferor will not, and will not
permit WorldCom to, change its name, identity or structure or the location of
its chief executive office, unless at least ten (10) days prior to the
effective date of any such change the Transferor or
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WorldCom, as applicable, delivers to the Agent (i) such documents, instruments
or agreements, executed by the Transferor or WorldCom, as applicable, as are
necessary to reflect such change and to continue the perfection of the Agent's
ownership interests or security interests in the Affected Assets and (ii) new
or revised Lock-Box Agreements executed by the Lock-Box Banks which reflect
such change and enable the Agent to continue to exercise its rights contained
in Section 2.8 hereof.
(h) Amendment to Receivables Purchase Agreement. The
Transferor will not, and will not permit WorldCom to, amend, modify, or
supplement the Receivables Purchase Agreement, except with the prior written
consent of the Agent and the Administrative Agent; nor shall the Transferor
take, or permit WorldCom to take, any other action under the Receivables
Purchase Agreement that shall have a material adverse affect on the Agent, the
Enterprise Agent, the Company, Sheffield or any Bank Investor or which is
inconsistent with the terms of this Agreement.
(i) ERISA Matters. The Transferor will not, and will not
permit WorldCom to, (i) engage or permit any of its respective ERISA Affiliates
to engage in any prohibited transaction (as defined in Section 4975 of the Code
and Section 406 of ERISA) for which an exemption is not available or has not
previously been obtained from the U.S. Department of Labor; (ii) permit to
exist any accumulated funding deficiency (as defined in Section 302(a) of ERISA
and Section 412(a) of the Code) or funding deficiency with respect to any
Benefit Plan other than a Multiemployer Plan; (iii) fail to make any payments
to any Multiemployer Plan that the Transferor, WorldCom or any ERISA Affiliate
of the Transferor or WorldCom is required to make under the agreement relating
to such Multiemployer Plan or any law pertaining thereto; (iv) terminate any
Benefit Plan so as to result in any liability; or (v) permit to exist any
occurrence of any reportable event described in Title IV of ERISA which
represents a material risk of a liability to the Transferor, WorldCom, or any
ERISA Affiliate of the Transferor of WorldCom under ERISA or the Code, if such
prohibited transactions, accumulated funding deficiencies, payments,
terminations and reportable events occurring within any fiscal year of the
Transferor and WorldCom, in the aggregate, involve a payment of money or an
incurrence of
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liability by the Transferor, WorldCom or any ERISA Affiliate of the Transferor
or WorldCom, in an amount in excess of $10,000,000.
(j) Payment to WorldCom. With respect to any Receivable sold
by WorldCom to the Transferor, the Transferor shall, and shall cause WorldCom
to, effect such sale under, and pursuant to the terms of, the Receivables
Purchase Agreement, including, without limitation, the payment by the
Transferor either in cash or by increase in the amount of the Subordinated Note
(as defined in the Receivables Purchase Agreement) to WorldCom of an amount
equal to the purchase price for such Receivable as required by the terms of the
Receivables Purchase Agreement.
SECTION 5.3. Financial Covenants. As calculated on a consolidated
basis for WorldCom and its Subsidiaries:
(a) WorldCom shall not permit its Leverage Ratio to exceed the
following during the applicable period:
Maximum Ratio
Period Permitted
------ ---------
Closing Date - June 30, 1998 4.00 : 1.00
July 1, 1998 - December 31, 1999 3.50 : 1.00
January 1, 2000 and thereafter 3.00 : 1.00
(b) WorldCom shall not permit its ratio of the Operating Cash
Flow to the Interest Expense for any 6-month period ending on the date of
determination to be less than the following during the applicable period:
Maximum Ratio
Period Permitted
------ ---------
Closing Date - December 31, 1996 2.50 : 1.00
January 1, 1997 - December 31, 1997 2.75 : 1.00
January 1, 1998 and thereafter 3.00 : 1.00
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(c) WorldCom shall not permit its Fixed Charge Ratio for any
12-month period ending on the date of determination to be less than 1.50 : 1.00.
All capitalized terms used in this Section 5.3, but not defined in Article I
shall be defined in Exhibit O hereto.
SECTION 5.4. Affirmative Covenants of WorldCom. At all times from
the date hereof to the date on which all Receivables sold hereunder have been
paid or charged-off in accordance with the Credit and Collection Policy, unless
the Agent and Sheffield shall otherwise consent in writing:
(a) Conduct of Business. WorldCom will, and will cause each of
its Subsidiaries to, carry on and conduct its business in substantially the
same manner and in substantially the same fields of enterprise as it is
presently conducted and do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is conducted.
(b) Compliance with Laws. WorldCom will, and will cause each
of its Subsidiaries to, comply in all material respects with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it or its properties may be subject.
(c) Furnishing of Information and Inspection of Records.
WorldCom will furnish to the Transferor and the Agent from time to time such
information with respect to the Receivables as the Transferor, the Enterprise
Agent or Sheffield may reasonably request, including, without limitation,
listings identifying the Obligor and the Outstanding Balance for each
Receivable. WorldCom will at any time and from time to time during regular
business hours permit the Transferor, the
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Enterprise Agent and Sheffield, or their respective agents or representatives,
(i) to examine and make copies of and abstracts from all Records and (ii) to
visit the offices and properties of WorldCom for the purpose of examining such
Records, and to discuss matters relating to Receivables or WorldCom's
performance hereunder with any of the officers, directors, employees or
independent public accountants of WorldCom having knowledge of such matters.
(d) Keeping of Records and Books of Account. WorldCom will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing 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 Receivables (including, without limitation,
records adequate to permit the daily identification of each new Receivable and
all Collections of and adjustments to each existing Receivable). WorldCom will
give the Transferor notice of any material change in the administrative and
operating procedures referred to in the previous sentence.
(e) Performance and Compliance with Receivables and Contracts.
WorldCom, at its expense, will, and will cause each Permitted Originator to,
timely and fully perform and will, and will cause each Permitted Originator to,
comply with all material provisions, covenants and other promises required to
be observed by it or a Permitted Originator under the Contracts related to the
Receivables.
(f) Credit and Collection Policies. WorldCom will, and will
cause each Permitted Originator to, comply in all material respects with the
Credit and Collection Policy in regard to each Receivable and the related
Contract.
(g) Collections. WorldCom shall, and shall cause each
Permitted Originator to, instruct all Obligors to cause all Collections to be
deposited directly to a Lock-Box Account.
(h) Collections Received. WorldCom shall, and shall cause each
Permitted Originator to, hold in trust, and deposit, immediately, but in any
event not
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later than forty-eight (48) hours of its receipt thereof, to a Lock-Box Account
all Collections received from time to time by WorldCom.
(i) Sale Treatment. WorldCom shall report the transactions
contemplated by the Receivables Purchase Agreement for financial reporting
purposes and tax reporting purposes as a sale of the Receivables to the
Transferor.
(j) Information Requests. Promptly upon receipt, one or more
computer tapes in the aggregate setting forth all Receivables and the
Outstanding Balances thereon and such other information as the Agent may
reasonably request.
SECTION 5.5. Negative Covenants of WorldCom. During the term of
this Agreement, unless the Agent shall otherwise consent in writing:
(a) No Sales, Liens, Etc. Except as otherwise provided herein,
the WorldCom will not sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim upon (or
the filing of any financing statement) or with respect to (x) any of the
Affected Assets, (y) any inventory or goods, the sale of which may give rise to
a Receivable or any Receivable or related Contract, or (z) any account which
concentrates in a Lock-Box Bank to which any Collections of any Receivable are
sent, or assign any right to receive income in respect thereof.
(b) No Extension or Amendment of Receivables. Except as
otherwise permitted in Section 6.2, WorldCom will not, and will cause each
Permitted Originator not to, extend, amend or otherwise modify the terms of any
Receivable, or amend, modify or waive any term or condition of any Contract
related thereto.
(c) No Change in Business or Credit and Collection Policy.
WorldCom will not, and will cause each Permitted Originator to not, make any
change in the character of its business or in the Credit and Collection Policy,
which change would, in either case, impair the collectibility of any Receivable
or otherwise have a Material Adverse Effect.
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(d) Change in Payment Instructions to Obligors. WorldCom will
not add or terminate any bank as a Lock-Box Bank or any account as a Lock-Box
Account to or from those listed in Exhibit C hereto or make any change in its
instructions to Obligors regarding payments to be made to any Lock-Box Account,
unless (i) such instructions are to deposit such payments to another existing
Lock- Box Account or (ii) the Transferor and the Agent shall have received
written notice of such addition, termination or change at least 30 days prior
thereto and the Agent shall have received a Lock-Box Agreement executed by each
new Lock-Box Bank or an existing Lock-Box Bank with respect to each new
Lock-Box Account, as applicable.
(e) Deposits to Lock-Box Accounts. WorldCom will not 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 Receivables.
(f) Change of Name, Etc. WorldCom will not change its name,
identity or structure or location of its chief executive office, unless, at
least ten (10) days prior to the effective date of any such change, WorldCom
delivers to the Transferor and the Agent (i) such documents, instruments or
agreements, executed by the Transferor, as are necessary to reflect such change
and to continue the perfection of the Transferor's ownership interest in the
Receivables and (ii) new or revised Lock-Box Agreements executed by the
Lock-Box Banks which reflect such change and enable the Agent to continue to
exercise its rights contained in Section 2.8 hereof.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Appointment of Collection Agent. The servicing,
administering and collection of the Receivables shall be conducted by such
Person (the "Collection Agent") so designated from time to time in accordance
with this Section 6.1. Until the Agent gives notice to WorldCom of the
designation of a new Collection Agent, WorldCom is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Collection Agent
pursuant to the terms hereof. The Collection Agent may not delegate any of its
rights, duties or obligations hereunder (provided that it may delegate certain
servicing activities to WorldCom Network Services, Inc. as long as it remains a
subsidiary of WorldCom), or designate a substitute Collection Agent, without
the prior written consent of the Agent, and provided that the Collection Agent
shall continue to remain solely liable for the performance of the duties as
Collection Agent hereunder notwithstanding any such assignment hereunder. The
Agent may, and upon the direction of the Enterprise Agent or Sheffield, the
Agent shall, after the occurrence of (i) a Collection Agent Default, (ii) any
event which materially adversely affects the collectibility of the Receivables
or any other event which materially adversely affects the ability of the
Transferor or Collection Agent to collect Receivables or the ability of the
Transferor or Collection Agent to perform hereunder or (iii) any other
Termination Event other than as specified in Section 7.1(k)-(q) designate as
Collection Agent any Person (including itself) to succeed WorldCom or any
successor Collection Agent, on the condition in each case that any such Person
so designated shall agree to perform the duties and obligations of the
Collection Agent pursuant to the terms hereof. The Agent may notify any
Obligor of the Transferred Interest.
SECTION 6.2. Duties of Collection Agent.
(a) The Collection Agent shall take or cause to be taken all
such action as may be necessary or advisable to collect each Receivable from
time to time, all in accordance with applicable laws, rules and regulations,
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with reasonable care and diligence, and in accordance with the Credit and
Collection Policy. Each of the Transferor, the Company, the Agent, Sheffield
and the Bank Investors hereby appoints as its agent the Collection Agent, from
time to time designated pursuant to Section 6.1 hereof, to enforce its
respective rights and interests in and under the Affected Assets. To the
extent permitted by applicable law, each of the Transferor and WorldCom (to the
extent not then acting as Collection Agent hereunder) hereby grants to any
Collection Agent appointed hereunder an irrevocable power of attorney to take
any and all steps in the Transferor's and/or WorldCom's name and on behalf of
the Transferor or WorldCom necessary or desirable, in the reasonable
determination of the Collection Agent, to collect all amounts due under any and
all Receivables, including, without limitation, endorsing the Transferor's
and/or WorldCom's name on checks and other instruments representing Collections
and enforcing such Receivables and the related Contracts. The Collection Agent
shall set aside for the account of the Transferor and the Company their
respective allocable shares of the Collections of Receivables in accordance
with Sections 2.5 and 2.6 hereof. The Collection Agent shall segregate and
deposit to the Agent's account the Company's, Sheffield's and the Bank
Investors' allocable share of Collections of Receivables when required pursuant
to Article II hereof. So long as no Sheffield Termination Date or Enterprise
Termination Date shall have occurred and be continuing, the Collection Agent
may, in accordance with the Credit and Collection Policy, extend the maturity
of Receivables or adjust the Outstanding Balance as the Collection Agent may
determine to be appropriate to maximize Collections thereof; provided, however,
that such extension or adjustment shall not alter the status of such Receivable
as a Delinquent Receivable or a Defaulted Receivable. The Transferor shall
deliver to the Collection Agent and the Collection Agent shall hold in trust
for the Transferor, the Company, the Agent, Sheffield and the Bank Investors,
in accordance with their respective interests, all Records which evidence or
relate to Receivables or Related Security. Notwithstanding anything to the
contrary contained herein, the Agent shall have the absolute and unlimited
right to direct the Collection Agent (whether the Collection Agent is WorldCom
or any other Person) to commence or settle any legal action to enforce
collection of any Receivable or to foreclose upon or repossess any
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Related Security. The Collection Agent shall not make the Agent, the Company,
Sheffield or any of the Bank Investors a party to any litigation without the
prior written consent of such Person.
(b) The Collection Agent shall, as soon as practicable
following receipt thereof, turn over to the Transferor any collections of any
indebtedness of any Person which is not on account of a Receivable. If the
Collection Agent is not the Transferor or WorldCom or an Affiliate of the
Transferor or WorldCom, the Collection Agent, by giving three Business Days'
prior written notice to the Agent, may revise the percentage used to calculate
the Servicing Fee so long as the revised percentage will not result in a
Servicing Fee that exceeds 110% of the reasonable and appropriate out-of-pocket
costs and expenses of such Collection Agent incurred in connection with the
performance of its obligations hereunder as documented to the reasonable
satisfaction of the Agent, provided, however, that at any time after the
Percentage Factor equals or exceeds 100%, any compensation to the Collection
Agent in excess of the Servicing Fee initially provided for herein shall be an
obligation of the Transferor and shall not be payable, in whole or in part,
from Collections allocated to the Company, Sheffield or the Bank Investors, as
applicable. The Collection Agent, if other than the Transferor or WorldCom or
an Affiliate of the Transferor or WorldCom, shall as soon as practicable upon
demand, deliver to WorldCom all Records in its possession which evidence or
relate to indebtedness of an Obligor which is not a Receivable.
(c) On or before 90 days after the end of each fiscal year,
beginning with the fiscal year ending December 31, 1996, (i) the Collection
Agent, at its expense, shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Collection Agent,
the Transferor, WorldCom or any Affiliates of any of the foregoing) or (ii)
upon mutual agreement of the Collection Agent and the Agent and at the
Collection Agent's expense, cause an audit team chosen by the Agent to furnish
a report to the Agent, in either case, to the effect that they have (i)
compared the information contained in the Investor Reports delivered during
such fiscal year then ended with the information contained in the Contracts and
the
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Collection Agent's records and computer systems for such period, and that, on
the basis of such examination and comparison, such firm is of the opinion that
the information contained in the Investor Reports reconciles with the
information contained in the Contracts and the Collection Agent's records and
computer system and that the servicing of the Receivables has been conducted in
compliance with this Agreement, (ii) confirmed the Net Receivables Balance as
of the end of each Enterprise Tranche Period and Sheffield Tranche Period
during such fiscal year, and (iii) verified that the Receivables treated by the
Collection Agent as Eligible Receivables in fact satisfied the requirements of
the definition thereof contained herein and (iv) conducted a 'negative
confirmation' of a sample of the Receivables and verified that the Collection
Agent's records and computer system used in servicing the Receivables contained
correct information with regard to due dates and outstanding balances, except,
in each case for (a) such exceptions as such firm shall believe to be
immaterial (which exceptions need not be enumerated) and (b) such other
exceptions as shall be set forth in such statement. The Agent shall promptly
upon receipt forward a copy of such report to Sheffield.
(d) Notwithstanding anything to the contrary contained in this
Article VI, the Collection Agent, if not the Transferor, WorldCom or any
Affiliate of the Transferor or WorldCom, shall have no obligation to collect,
enforce or take any other action described in this Article VI with respect to
any indebtedness that is not included in the Transferred Interest other than to
deliver to the Transferor the collections and documents with respect to any
such indebtedness as described in Section 6.2(b) hereof.
SECTION 6.3. Rights After Designation of New Collection Agent. At
any time following the designation of a Collection Agent (other than the
Transferor, WorldCom or any Affiliate of the Transferor or WorldCom) pursuant
to Section 6.1 hereof:
(i) The Agent may direct that payment of all amounts
payable under any Receivable be made directly to the Agent or its
designee.
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(ii) The Transferor shall, at the Agent's request and at
the Transferor's expense, give notice of the Agent's ownership of
Receivables to each Obligor and direct that payments be made directly to
the Agent or its designee.
(iii) The Transferor shall, at the Agent's
request, (A) assemble all of the Records, and shall make the same
available to the Agent or its designee at a place selected by the Agent or
its designee, and (B) segregate all cash, checks and other instruments
received by it from time to time constituting Collections of Receivables
in a manner acceptable to the Agent and shall, promptly upon receipt,
remit all such cash, checks and instruments, duly endorsed or with duly
executed instruments of transfer, to the Agent or its designee.
(iv) The Transferor and WorldCom hereby
authorize the Agent to take any and all steps in the Transferor's or
WorldCom's name and on behalf of the Transferor and WorldCom necessary or
desirable, in the determination of the Agent, to collect all amounts due
under any and all Receivables, including, without limitation, endorsing
the Transferor's or WorldCom's name on checks and other instruments
representing Collections and enforcing such Receivables and the related
Contracts.
SECTION 6.4. Collection Agent Default. The occurrence of any one or
more of the following events shall constitute a Collection Agent Default:
(a) failure of any Collection Agent (other than WorldCom) or
any of its Subsidiaries to pay when due any amounts due under any agreement
under which any Indebtedness greater than $1,000,000 is governed; or the
default by any Collection Agent (other than WorldCom) or any of its
Subsidiaries in the performance of any term, provision or condition contained
in any agreement under which any Indebtedness greater than $1,000,000 was
created or is governed, regardless of whether such event is an "event of
default" or "default" under any such agreement; or any Indebtedness of any
Collection Agent
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(other than WorldCom) or any of its Subsidiaries greater than $5,000,000 shall
be declared to be due and payable or required to be prepaid (other than by a
regularly scheduled payment) prior to the scheduled date of maturity thereof;
or
(b) any Event of Bankruptcy shall occur with respect to any
Collection Agent (other than WorldCom) or any of its Subsidiaries; or
(c) there shall have occurred any material adverse change in
the operations of the Collection Agent (other than WorldCom) since the end of
last fiscal year ending prior to the date of its appointment as Collection
Agent hereunder or any other event shall have occurred which, in the
commercially reasonably judgment of the Agent, materially and adversely affects
such Collection Agent's ability to either collect the Receivables or to perform
under this Agreement.
SECTION 6.5. Responsibilities of the Transferor and WorldCom.
Anything herein to the contrary notwithstanding, the Transferor shall, and/or
shall cause WorldCom to, (i) perform all of WorldCom's obligations under the
Contracts related to the Receivables to the same extent as if interests in such
Receivables had not been sold hereunder and under the Receivables Purchase
Agreement and the exercise by the Agent, the Enterprise Agent the Company,
Sheffield and the Bank Investors of their rights hereunder and under the
Receivables Purchase Agreement shall not relieve the Transferor or WorldCom
from such obligations and (ii) pay when due any taxes with respect to which the
failure to pay could cause a Material Adverse Effect, including without
limitation, any sales taxes payable in connection with the Receivables and
their creation and satisfaction. Neither the Agent, the Enterprise Agent, the
Company, Sheffield nor any of the Bank Investors shall have any obligation or
liability with respect to any Receivable or related Contracts, nor shall it be
obligated to perform any of the obligations of WorldCom thereunder.
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ARTICLE VII
TERMINATION EVENTS
SECTION 7.1. Termination Events. The occurrence of any one or more
of the following events shall constitute a Termination Event:
(a) the Transferor, WorldCom or the Collection Agent shall fail
to make any payment or deposit to be made by it hereunder or under the
Receivables Purchase Agreement when due hereunder or thereunder; or
(b) any representation, warranty, certification or statement
made by the Transferor, the Collection Agent or WorldCom in this Agreement, any
other Transaction Document to which it is a party or in any other document
delivered pursuant hereto or thereto shall prove to have been incorrect in any
material respect when made or deemed made; or
(c) the Transferor, WorldCom or the Collection Agent, shall
default in the performance of any payment or undertaking (other than those
covered by clause (a) above) (i) to be performed or observed under Sections
5.1(a)(vi), 5.1(a)(vii), 5.1(b), 5.1(f), 5.1(g), 5.1(h), 5.1(i), 5.1(k),
5.1(l), 5.2(a), (c), (d), (e), (f) or (g) or Section 5.3 or (ii) to be
performed or observed under any other provision hereof and such default in the
case of this clause (ii) shall continue for ten (10) days;
(d) failure of the Transferor, WorldCom or any Subsidiary of
the Transferor or WorldCom to pay when due any amounts due under any agreement
to which any such Person is a party and under which any Indebtedness
(individually or collectively) greater than $20,000,000 is governed; or the
default by the Transferor, WorldCom or any Subsidiary of the Transferor or
WorldCom in the performance of any term, provision or condition contained in
any agreement to which any such Person is a party and under which any
Indebtedness owing by the Transferor, WorldCom or any Subsidiary of the
Transferor or WorldCom (individually or collectively) greater
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than $20,000,000 was created or is governed; or any Indebtedness owing by the
Transferor, WorldCom or any Subsidiary of the Transferor or WorldCom
(individually or collectively) greater than $20,000,000 shall be declared to be
due and payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the stated maturity thereof, unless and so long as such
default (described in the previous clause) is being contested by such Person in
good faith by appropriate proceedings and adequate reserves in respect thereof
have been established on the books of such Person to the extent required by
GAAP; or
(e) any Event of Bankruptcy shall occur with respect to the
Transferor, WorldCom or any Subsidiary of either the Transferor or WorldCom; or
(f) the Agent, on behalf of the Company and/or the Bank
Investors and Sheffield, shall, for any reason, fail or cease to have a valid
and perfected first priority ownership or security interest in the Affected
Assets free and clear of any Adverse Claims; or
(g) a Collection Agent Default shall have occurred; or
(h) a Termination Event shall have occurred under the
Receivables Purchase Agreement; or
(i) the Transferor shall enter into any transaction or merger
whereby it is not the surviving entity; or
(j) there shall have occurred any material adverse change in
the operations of the Transferor or WorldCom since June 30, 1996 or any other
Material Adverse Effect shall have occurred; or
(k) any Liquidity Provider or Credit Support Provider shall
have given notice that an event of default has occurred and is continuing under
any of its respective agreements with the Company or Sheffield; or
(l) the failure of the Board of Directors of the Transferor to
provide to the Agent and Sheffield, prior to January 15, 1997, evidence (in
form and substance satisfactory to the Agent, Sheffield and their respective
counsel) that the Board of Directors of the Transferor has ratified the
transactions contemplated hereby; or
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(m) (i) the Percentage Factor exceeds the Maximum Percentage
Factor unless the Transferor reduces the Enterprise Net Investment and
Sheffield Net Investment or increases the balance of the Affected Assets on the
next Business Day so as to reduce the Percentage Factor to less than or equal
to 98%; (ii) the Percentage Factor as reported on any Investor Report equals
or exceeds 100%; or (iii) the Enterprise Net Investment plus the Interest
Component of all outstanding Related Commercial Paper issued by the Company
shall exceed the Enterprise Maximum Net Investment; or
(n) the Billing Adjustments Ratio for any consecutive
three-month period during the preceding twelve months exceeds 10%; or
(o) the Loss to Liquidation Ratio for any consecutive
three-month period during the preceding twelve months exceeds 10%; or
(p) the Delinquency Ratio for any consecutive three-month
period during the preceding twelve months exceeds 20%; or
(q) the Default Ratio for any consecutive three-month period
during the preceding twelve months exceeds 17%; or
(r) a default shall have occurred and be continuing under any
instrument or agreement evidencing, securing or providing for the issuance of
Indebtedness of the Transferor; or
(s) the termination of any Permitted Originator Receivables
Purchase Agreement.
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SECTION 7.2. Termination.
(a) Upon the occurrence of any Termination Event, the Agent
may, or at the direction of either the Enterprise Agent or Sheffield shall, by
notice to the Transferor and the Collection Agent declare the "Termination
Date" to have occurred; provided, however, that in the case of any event
described in Section 7.1(e), 7.1(f), 7.1(m)(ii) and 7.1(m)(iii) above, the
Termination Date shall be deemed to have occurred automatically upon the
occurrence of such event. At all times after the declaration or automatic
occurrence of the Termination Date pursuant to Section 7.2(a) (other than a
Termination Event relating to Section 7.1(k)), the Base Rate plus 2.00% shall
be the Enterprise Tranche Rate and Sheffield Tranche Rate applicable to the
Enterprise Net Investment and Sheffield Net Investment for all existing and
future Enterprise Tranches and Sheffield Tranches. If an event or condition
specified in Section 7.1(k) occurs, the Agent shall, upon the direction of the
Enterprise Agent (if such event relates to the Company) or Sheffield (if such
event relates to Sheffield), by notice to the Transferor, declare a Termination
Event to have occurred and declare all outstanding Enterprise Tranche Periods
and Sheffield Tranche Periods, as applicable, to be ended and shall designate
the Base Rate to be applicable to the Enterprise Net Investment and Sheffield
Net Investment, as applicable. In addition, if a Termination Event shall be
declared, the Transferor hereby requests that the Company assign its portion of
the Transferred Interest and all of its rights hereunder (other than its rights
to receive payments in respect of Enterprise Discount accrued to the date of
such assignment and other fees, costs, expenses and indemnities due the Company
hereunder) to the Bank Investors. If an event or condition shall have occurred
which constitutes a Potential Termination Event, the Agent may, and shall if
directed by either Sheffield or the Enterprise Agent, by notice to the
Transferor, declare such event or condition a Potential Termination Event.
(b) In addition, if any Termination Event occurs hereunder (i)
the Agent shall promptly notify the Transferor in writing whether it has
declared a Termination Event or a Potential Termination Event and whether it
will be exercising the remedies specified in this
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Section 7.2, (ii) the Company, Sheffield and the Agent shall have all of the
rights and remedies provided to a secured creditor or a purchaser of accounts
under the UCC by applicable law in respect thereto, (iii) the Enterprise
Maximum Net Investment and the Sheffield Maximum Net Investment shall be
reduced as of each calendar date thereafter equal to the Enterprise Net
Investment and Sheffield Net Investment, respectively, as of such date and (iv)
no Commercial Paper with respect to the Transferor will thereafter be issued.
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ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. Indemnities by the Transferor. Without limiting any
other rights which the Agent, the Company, Sheffield or the Bank Investors may
have hereunder or under applicable law, the Transferor hereby agrees to
indemnify the Company, the Bank Investors, Sheffield, the Agent, the Enterprise
Agent, the Administrative Agent, the Collateral Agent, any Liquidity Provider,
any Credit Support Provider,and any successors and permitted assigns and their
respective any officers, directors and employees (collectively, "Indemnified
Parties") from and against any and all damages, losses, claims, liabilities,
costs and expenses, including, without limitation, reasonable attorneys' fees
(which such attorneys may be employees of the an Indemnified Party) and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them in any action
or proceeding between the Transferor or WorldCom (including, in its capacity as
the Collection Agent) and any of the Indemnified Parties or between any of the
Indemnified Parties and any third party or otherwise arising out of or as a
result of this Agreement, the other Transaction Documents, the ownership or
maintenance, either directly or indirectly, by the Agent, the Company,
Sheffield or any Bank Investor of the Transferred Interest or any of the other
transactions contemplated hereby or thereby, excluding, however, (i)
Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of an Indemnified Party or (ii) recourse (except as
otherwise specifically provided in this Agreement) for uncollectible
Receivables. Without limiting the generality of the foregoing, the Transferor
shall indemnify each Indemnified Party for Indemnified Amounts relating to or
resulting from:
(i) any representation or warranty made by the
Transferor or WorldCom (including, in its capacity as the Collection
Agent) or any officers of the Transferor or WorldCom (including, in its
capacity as the Collection Agent) under or in connection with this
Agreement, the Receivable Purchase Agreement, any of the other Transaction
Documents,
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any Investor Report or any other information or report delivered by the
Transferor or the Collection Agent pursuant hereto, which shall have been
false or incorrect in any material respect when made or deemed made;
(ii) the failure
by the Transferor, WorldCom (including, in its capacity as the Collection
Agent) or any Permitted Originator to comply with any applicable law, rule
or regulation with respect to any Receivable or the related Contract, or
the nonconformity of any Receivable or the related Contract with any such
applicable law, rule or regulation;
(iii) the failure to vest and maintain vested in the
Company and/or Sheffield and the Bank Investors, an undivided first
priority, perfected percentage ownership interest, to the extent of the
Transferred Interest, in the Affected Assets free and clear of any Adverse
Claim or (y) to create or maintain a valid and perfected first priority
security interest in favor of the Agent, for the benefit of the Company
and/or the Bank Investors and Sheffield, in the Affected Assets as
contemplated pursuant to Section 10.11, free and clear of any Adverse
Claim;
(iv) the failure to file, or any delay in filing,
financing statements, continuation statements, or other similar
instruments or documents under the UCC of any applicable jurisdiction or
other applicable laws with respect to any of the Affected Assets;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any
Receivable (including, without limitation, a defense based on such
Receivable or the related Contract not being 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 merchandise or
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services related to such Receivable or the furnishing or failure to
furnish such merchandise or services;
(vi) any failure of the Collection Agent to perform its
duties or obligations in accordance with the provisions hereof; or
(vii) any products liability claim or personal injury
or property damage suit or other similar or related claim or action of
whatever sort arising out of or in connection with merchandise or services
which are the subject of any Receivable;
(viii) the transfer of an ownership interest in any
Receivable other than an Eligible Receivable;
(ix) the failure by the Transferor or WorldCom
(individually or as Collection Agent) to comply with any term, provision
or covenant contained in this Agreement or any of the other Transaction
Documents to which it is a party or to perform any of its respective
duties under the Contracts;
(x) the Percentage Factor exceeding 98% at any time on
or prior to the later of (a) the Enterprise Termination Date or (b) the
Sheffield Termination Date;
(xi) the failure of WorldCom or any Transferring
Subsidiary to pay when due any taxes, including without limitation, sales,
excise or personal property taxes payable in connection with any of the
Receivables;
(xii) any repayment by any Indemnified Party of any
amount previously distributed in reduction of the Net Investment which
such Indemnified Party believes in good faith is required to be made;
(xiii) the commingling by the Transferor, WorldCom, any
Permitted Originator
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or the Collection Agent of Collections of Receivables at any time with
other funds;
(xiv) any investigation, litigation or proceeding
related to this Agreement, any of the other Transaction Documents, the use
of proceeds of Transfers by the Transferor or WorldCom, the ownership of
Transferred Interests, or any Receivable, Related Security or Contract;
(xv) the failure of any Lock-Box Bank to remit any
amounts held in the Lock-Boxes and/or the Lock-Box Accounts pursuant to
the instructions of the Collection Agent, the Transferor, WorldCom or the
Agent (to the extent such Person is entitled to give such instructions in
accordance with the terms hereof and of any applicable Lock-Box Agreement)
whether by reason of the exercise of set-off rights or otherwise;
(xvi) any inability to obtain any judgment in or
utilize the court or other adjudication system of, any state in which an
Obligor may be located as a result of the failure of the Transferor or
WorldCom to qualify to do business or file any notice of business activity
report or any similar report;
(xvii) any failure of the Transferor to give reasonably
equivalent value to WorldCom in consideration of the purchase by the
Transferor from WorldCom of any Receivable, or any attempt by any Person
to void, rescind or set-aside any such transfer under statutory provisions
or common law or equitable action, including, without limitation, any
provision of the Bankruptcy Code; or
(xviii) any action taken by the Transferor, WorldCom, or
the Collection Agent (if the Transferor, WorldCom or any Affiliate or
designee of the Transferor or WorldCom) in the enforcement or collection
of any Receivable;
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provided, however, that if the Company enters into agreements for the purchase
of interests in receivables from one or more Other Transferors, the Company
shall allocate such Indemnified Amounts which are in connection with any
Liquidity Provider Agreement, any Credit Support Agreement or the credit
support furnished by any Credit Support Provider to the Transferor and each
Other Transferor; and provided, further, that if such Indemnified Amounts are
attributable to the Transferor, WorldCom or the Collection Agent and not
attributable to any Other Transferor, the Transferor shall be solely liable for
such Indemnified Amounts or if such Indemnified Amounts are attributable to
Other Transferors and not attributable to the Transferor, WorldCom or the
Collection Agent, such Other Transferors shall be solely liable for such
Indemnified Amounts.
SECTION 8.2. Indemnity for Taxes, Reserves and Expenses. (a) If
after the date hereof, the adoption of any Law or bank regulatory guideline or
any amendment or change in the interpretation of any existing or future Law or
bank regulatory guideline by any Official Body charged with the administration,
interpretation or application thereof, or the compliance with any directive of
any Official Body (in the case of any bank regulatory guideline, whether or not
having the force of Law):
(i) shall subject any Indemnified Party to any tax,
duty or other charge (other than Excluded Taxes) with respect to this
Agreement, the other Transaction Documents, the ownership, maintenance or
financing of the Transferred Interest, the Receivables or payments of
amounts due hereunder, or shall change the basis of taxation of payments
to any Indemnified Party of amounts payable in respect of this Agreement,
the other Transaction Documents, the ownership, maintenance or financing
of the Transferred Interest, the Receivables or payments of amounts due
hereunder or its obligation to advance funds hereunder, under any
Liquidity Provider Agreement or otherwise in respect of this Agreement,
the other Transaction Documents, the ownership, maintenance or financing
of the Transferred Interest or the Receivables (except for changes in the
rate of general corporate, franchise, net income or
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other income tax imposed on such Indemnified Party by the jurisdiction in
which such Indemnified Party's principal executive office is located);
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System) against assets of, deposits with or for the
account of, or credit extended by, any Indemnified Party or shall impose
on any Indemnified Party or on the United States market for certificates
of deposit or the London interbank market any other condition affecting
this Agreement, the other Transaction Documents, the ownership,
maintenance or financing of the Transferred Interest, the Receivables or
payments of amounts due hereunder or its obligation to advance funds
hereunder under any Liquidity Provider Agreement or the credit support
provided by any Credit Support Provider or otherwise in respect of this
Agreement, the other Transaction Documents, the ownership, maintenance or
financing of the Transferred Interest or the Receivables; or
(iii) imposes upon any Indemnified Party any other
expense (including, without limitation, reasonable attorneys' fees and
expenses, and expenses of litigation or preparation therefor in contesting
any of the foregoing) with respect to this Agreement, the other
Transaction Documents, the ownership, maintenance or financing of the
Transferred Interest, the Receivables or payments of amounts due hereunder
or its obligation to advance funds hereunder under any Liquidity Provider
Agreement or the credit support furnished by any Credit Support Provider
or otherwise in respect of this Agreement, the other Transaction
Documents, the ownership, maintenance or financing of the Transferred
Interests or the Receivables,
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and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Agreement, the other Transaction
Documents, the ownership, maintenance or financing of the Transferred Interest,
the Receivables, the obligations hereunder, the funding of any purchases
hereunder, any Liquidity Provider Agreement or any Credit Support Agreement ,
by an amount deemed by such Indemnified Party to be material, then, within ten
(10) days after demand by such Indemnified Party through the Agent, the
Transferor or WorldCom shall pay to the Agent, for the benefit of such
Indemnified Party, such additional amount or amounts as will compensate such
Indemnified Party for such increased cost or reduction.
(b) If any Indemnified Party shall have determined that after
the date hereof, the adoption of any applicable Law or bank regulatory
guideline regarding capital adequacy, or any change therein, or any change in
the interpretation thereof by any Official Body, or any directive regarding
capital adequacy (in the case of any bank regulatory guideline, whether or not
having the force of law) of any such Official Body, has or would have the
effect of reducing the rate of return on capital of such Indemnified Party (or
its parent) as a consequence of such Indemnified Party's obligations hereunder
or with respect hereto to a level below that which such Indemnified Party (or
its parent) could have achieved but for such adoption, change, request or
directive (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Indemnified Party to be material, then
from time to time, within ten (10) days after demand by such Indemnified Party
through the Agent, the Transferor shall pay to the Agent, for the benefit of
such Indemnified Party, such additional amount or amounts as will compensate
such Indemnified Party (or its parent) for such reduction.
(c) The Agent and Sheffield will promptly notify the Transferor
and WorldCom of any event of which it has knowledge, occurring after the date
hereof, which will entitle an Indemnified Party to compensation pursuant to
this Section 8.2. A notice by the Agent or the applicable Indemnified Party
claiming compensation under this Section 8.2 and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such
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amount, the Agent or any applicable Indemnified Party may use any reasonable
averaging and attributing methods.
(d) Anything in this Section 8.2 to the contrary
notwithstanding, if the Company enters into agreements for the acquisition of
interests in receivables from one or more Other Transferors, the Company shall
allocate the liability for any amounts under this Section 8.2 which are in
connection with any Liquidity Provider Agreement, any Credit Support Agreement
or the credit support provided by any Credit Support Provider ("Section 8.2
Costs") to the Transferor and each Other Transferor; provided, however, that if
such Section 8.2 Costs are attributable to the Transferor, WorldCom or the
Collection Agent and not attributable to any Other Transferor, the Transferor
shall be solely liable for such Section 8.2 Costs or if such Section 8.2 Costs
are attributable to Other Transferors and not attributable to the Transferor,
WorldCom or the Collection Agent, such Other Transferors shall be solely liable
for such Section 8.2 Costs.
SECTION 8.3. Taxes. All payments made hereunder by the
Transferor, WorldCom or the Collection Agent (each, a "payor") to the Company,
Sheffield, any Bank Investor or the Agent (each, a "recipient") shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and any other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority on any recipient (or any assignee of such parties) (such
non-excluded items being called "Taxes"), but excluding franchise taxes and
taxes imposed on or measured by the recipient's net income or gross receipts
("Excluded Taxes"). In the event that any withholding or deduction from any
payment made by the payor hereunder is required in respect of any Taxes, then
such payor shall:
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
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(c) pay to the recipient such additional amount or amounts as
is necessary to ensure that the net amount actually received by the recipient
will equal the full amount such recipient would have received had no such
withholding or deduction been required.
Moreover, if any Taxes are directly asserted against any recipient with respect
to any payment received by such recipient hereunder, the recipient may pay such
Taxes and the payor will promptly pay such additional amounts (including any
penalties, interest or expenses) as shall be necessary in order that the net
amount received by the recipient after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount such recipient would
have received had such Taxes not been asserted.
If the payor fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the recipient the required receipts or
other required documentary evidence, the payor shall indemnify the recipient
for any incremental Taxes, interest, or penalties that may become payable by
any recipient as a result of any such failure.
SECTION 8.4. Other Costs, Expenses and Related Matters. (a) The
Transferor agrees, upon receipt of a written invoice, to pay or cause to be
paid, and to save the Company, the Bank Investors, Sheffield and the Agent
harmless against liability for the payment of, all reasonable out-of-pocket
expenses (including, without limitation, attorneys', accountants' and other
third parties' fees and expenses, any filing fees and expenses incurred by
officers or employees of the Company, the Bank Investors, Sheffield and/or the
Agent) or intangible, documentary or recording taxes incurred by or on behalf
of the Company, Sheffield, any Bank Investor and the Agent (i) in connection
with the negotiation, execution, delivery and preparation of this Agreement,
the other Transaction Documents and any documents or instruments delivered
pursuant hereto and thereto and the transactions contemplated hereby or thereby
(including, without limitation, the perfection or protection of the Transferred
Interest) and (ii) from time to time (a) relating to any amendments, waivers or
consents under this Agreement and the other Transaction Documents, (b) arising
in connection with the Company's, Sheffield's, any Bank Investor's, the
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Agent's or the Collateral Agent's enforcement or preservation of rights
(including, without limitation, the perfection and protection of the
Transferred Interest under this Agreement), or (c) arising in connection with
any audit, dispute, disagreement, litigation or preparation for litigation
involving this Agreement or any of the other Transaction Documents (all of such
amounts, collectively, "Transaction Costs") provided that any of the foregoing
Transaction Costs arising in connection with the closing of the transaction
contemplated hereby shall be payable by WorldCom.
(b) The Transferor shall pay the Agent, for the account of the
Company, Sheffield and the Bank Investors, as applicable, on demand any
Enterprise Early Collection Fee or Sheffield Early Collection Fee due on
account of the reduction of an Enterprise Tranche or Sheffield Tranche,
respectively, on a day prior to the last day of its Enterprise Tranche Period
or Sheffield Tranche Period, as applicable.
SECTION 8.5. Reconveyance Under Certain Circumstances. The
Transferor agrees to accept the reconveyance from the Agent, on behalf of the
Company and/or the Bank Investors and Sheffield, of the Transferred Interest if
the Agent notifies Transferor of a material breach of any representation or
warranty made or deemed made pursuant to Article III of this Agreement and
Transferor shall fail to cure such breach within 15 days (or, in the case of
the representations and warranties in Sections 3.1(d) and 3.1(j), 3 days) of
such notice. The reconveyance price shall be paid by the Transferor to the
Agent, for the account of the Company, Sheffield and the Bank Investors, as
applicable, in immediately available funds on such 15th day (or 3rd day, if
applicable) in an amount equal to the Aggregate Unpaids.
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ARTICLE IX
THE AGENT; THE ENTERPRISE AGENT; BANK COMMITMENT
SECTION 9.1. Authorization and Action. (a) (i) The Company,
Sheffield and each Bank Investor hereby appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement and the other Transaction Documents as are delegated to the Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. In furtherance, and without limiting the generality, of
the foregoing, the Company, Sheffield and each Bank Investor hereby appoints
the Agent as its agent to execute and deliver all further instruments and
documents, and take all further action that the Agent may deem necessary or
appropriate or that the Company, Sheffield or a Bank Investor may reasonably
request in order to perfect, protect or more fully evidence the interests
transferred or to be transferred from time to time by the Transferor hereunder,
or to enable any of them to exercise or enforce any of their respective rights
hereunder, including, without limitation, the execution by the Agent as secured
party/assignee of such financing or continuation statements, or amendments
thereto or assignments thereof, relative to all or any of the Receivables now
existing or hereafter arising, and such other instruments or notices, as may be
necessary or appropriate for the purposes stated hereinabove. The Majority
Investors may direct the Agent to take any such incidental action hereunder.
With respect to other actions which are incidental to the actions specifically
delegated to the Agent hereunder, the Agent shall not be required to take any
such incidental action hereunder, but shall be required to act or to refrain
from acting (and shall be fully protected in acting or refraining from acting)
upon the direction of the Majority Investors; provided, however, that Agent
shall not be required to take any action hereunder if the taking of such
action, in the reasonable determination of the Agent, shall be in violation of
any applicable law, rule or regulation or contrary to any provision of this
Agreement or shall expose the Agent to liability hereunder or otherwise. Upon
the occurrence and during the continuance of any Termination Event or Potential
Termination Event, the Agent shall take no action hereunder (other than
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ministerial actions or such actions as are specifically provided for herein)
without the prior consent of the Majority Investors. The Agent shall not,
without the prior written consent of the Company, Sheffield and all Bank
Investors, agree to (i) amend, modify or waive any provision of this Agreement
in any way which would (A) reduce or impair Collections or the payment of
Enterprise Discount or Sheffield Discount or fees payable hereunder to the
Company, Sheffield or the Bank Investors or delay the scheduled dates for
payment of such amounts, (B) increase the Servicing Fee (other than as
permitted pursuant to Section 6.2(b)), (C) modify any provisions of this
Agreement or the Receivables Purchase Agreement relating to the timing of
payments required to be made by the Transferor or WorldCom or the application
of the proceeds of such payments, (D) the appointment of any Person (other than
the Agent) as successor Collection Agent, or (E) release any property from the
lien provided by this Agreement (other than as expressly contemplated herein).
The Agent shall not agree to any amendment of this Agreement which increases
the dollar amount of either Sheffield's commitment or a Bank Investor's
Commitment without the prior consent of Sheffield or such Bank Investor, as
applicable. In addition, the Agent shall not agree to any amendment of this
Agreement not specifically described in the two preceding sentences without the
consent of the related Majority Investors. "Majority Investors" means, at any
time, the Agent, and Sheffield and those Bank Investors which hold Commitments
aggregating in excess of 51% of the Maximum Net Investment as of such date
(determined as if Sheffield had a Commitment equal to the Sheffield Maximum Net
Investment). In the event the Agent requests the Company's, Sheffield's or a
Bank Investor's consent pursuant to the foregoing provisions and the Agent does
not receive a consent (either positive or negative) from the Company, Sheffield
or such Bank Investor within 10 Business Days of the Company's, Sheffield's or
Bank Investor's receipt of such request, then the Company, Sheffield or such
Bank Investor (and its percentage interest hereunder) shall be disregarded in
determining whether the Agent shall have obtained sufficient consent hereunder.
(ii) The Company and each Bank Investor hereby appoints and
authorizes the Enterprise Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Transaction
Documents
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as are delegated to the Enterprise Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. In
furtherance, and without limiting the generality, of the foregoing, the Company
and each Bank Investor hereby appoints the Enterprise Agent as its agent to
execute and deliver all further instruments and documents, and take all further
action that the Enterprise Agent may deem necessary or appropriate or that the
Company or a Bank Investor may reasonably request in order to perfect, protect
or more fully evidence the interests transferred or to be transferred from time
to time by the Transferor hereunder, or to enable any of them to exercise or
enforce any of their respective rights hereunder, including, without
limitation, the execution by the Enterprise Agent of such instruments or
notices, as may be necessary or appropriate for the purposes stated
hereinabove. The Company and the Majority Enterprise Investors may direct the
Enterprise Agent to take any such incidental action hereunder. With respect to
other actions which are incidental to the actions specifically delegated to the
Enterprise Agent hereunder, the Enterprise Agent shall not be required to take
any such incidental action hereunder, but shall be required to act or to
refrain from acting (and shall be fully protected in acting or refraining from
acting) upon the direction of the Majority Enterprise Investors; provided,
however, that the Enterprise Agent shall not be required to take any action
hereunder if the taking of such action, in the reasonable determination of the
Enterprise Agent, shall be in violation of any applicable law, rule or
regulation or contrary to any provision of this Agreement or shall expose the
Enterprise Agent to liability hereunder or otherwise. Upon the occurrence and
during the continuance of any Termination Event or Potential Termination Event,
the Enterprise Agent shall take no action hereunder (other than ministerial
actions or such actions as are specifically provided for herein) without the
prior consent of the Majority Enterprise Investors. The Enterprise Agent shall
not agree to any amendment of this Agreement which increases the dollar amount
of a Bank Investor's Commitment without the prior consent of such Bank
Investor, as applicable. In addition, the Enterprise Agent shall not agree to
any amendment of this Agreement not specifically described in the preceding
sentence without the consent of the related Majority Enterprise Investors.
"Majority Enterprise Investors" means, at any time, the Agent, and those Bank
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Investors which hold Commitments aggregating in excess of 51% of the Maximum
Enterprise Net Investment as of such date. In the event the Enterprise Agent
requests the Company's or a Bank Investor's consent pursuant to the foregoing
provisions and the Enterprise Agent does not receive a consent (either positive
or negative) from the Company or such Bank Investor within 10 Business Days of
the Company's or Bank Investor's receipt of such request, then the Company or
such Bank Investor (and its percentage interest hereunder) shall be disregarded
in determining whether the Enterprise Agent shall have obtained sufficient
consent hereunder.
(b) (i) The Agent shall exercise such rights and powers vested
in it by this Agreement and the other Transaction Documents, and use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of such person's own affairs.
(ii) The Enterprise Agent shall exercise such rights and powers
vested in it by this Agreement and the other Transaction Documents, and use the
same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
SECTION 9.2. Agent's Reliance, Etc. Neither the Agent, the
Enterprise 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 Agent or Enterprise Agent under or in connection with this Agreement or
any of the other Transaction Documents, except for its or their own gross
negligence or willful misconduct. Without limiting the foregoing, the Agent
and the Enterprise Agent: (i) may consult with legal counsel (including
counsel for the Transferor or WorldCom), 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
the Company, Sheffield or any Bank Investor and shall not be responsible to the
Company, Sheffield or any Bank Investor for any statements, warranties or
representations made in or in connection with this Agreement; (iii) shall not
have any duty to ascertain or to inquire
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as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or any of the other Transaction Documents on the
part of the Transferor, the Collection Agent or WorldCom or to inspect the
property (including the books and records) of the Transferor, the Collection
Agent or WorldCom; (iv) shall not be responsible to the Company, Sheffield or
any Bank Investor for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, any of the other
Transaction Documents or any other instrument or document furnished pursuant
hereto or thereto; and (v) shall incur no liability under or in respect of this
Agreement or any of the other Transaction Documents by acting upon any notice
(including notice by telephone), consent, certificate or other instrument or
writing (which may be by telex) believed by it to be genuine and signed or sent
by the proper party or parties.
SECTION 9.3. Credit Decision. The Company, Sheffield and each Bank
Investor acknowledges that it has, independently and without reliance upon the
Agent or the Enterprise Agent, any of the Agent's or the Enterprise Agent's
Affiliates, any other Bank Investor, Sheffield or the Company (in the case of
any Bank Investor) and based upon such documents and information as it has
deemed appropriate, made its own evaluation and decision to enter into this
Agreement and the other Transaction Documents to which it is a party and, if it
so determines, to accept the transfer of any undivided ownership interest in
the Affected Assets hereunder. The Company, Sheffield and each Bank Investor
also acknowledges that it will, independently and without reliance upon the
Agent and the Enterprise Agent, any of the Agent's or the Enterprise Agent's
Affiliates, any other Bank Investor, Sheffield or the Company (in the case of
any Bank Investor) 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 to which
it is a party.
SECTION 9.4. Indemnification of the Enterprise Agent. The Bank
Investors agree to indemnify the Enterprise Agent (to the extent not reimbursed
by the Transferor), ratably in accordance with their Pro Rata Shares, from and
against any and all liabilities, obligations,
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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 the Enterprise Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by the Enterprise
Agent, any of the other Transaction Documents hereunder or thereunder, provided
that the Bank Investors shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Enterprise Agent's
gross negligence or willful misconduct. Without limitation of the foregoing,
the Bank Investors agree to reimburse the Enterprise Agent, ratably in
accordance with their Pro Rata Shares, promptly upon demand for any
out-of-pocket expenses (including counsel fees) incurred by the Enterprise
Agent 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
and the other Transaction Documents, to the extent that such expenses are
incurred in the interests of or otherwise in respect of the Bank Investors
hereunder and/or thereunder and to the extent that the Enterprise Agent is not
reimbursed for such expenses by the Transferor.
SECTION 9.5. Successor Agent and Enterprise Agent. (a) The Agent
may resign at any time by giving written notice thereof to each Bank Investor,
Sheffield, the Company and the Transferor and may be removed at any time with
cause by the Majority Investors. Upon any such resignation or removal, the
Majority Investors shall appoint a successor Agent. The Company, Sheffield and
each Bank Investor agrees that it shall not unreasonably withhold or delay its
approval of the appointment of a successor Agent. If no such successor Agent
shall have been so appointed, and shall have accepted such appointment, within
30 days after the retiring Agent's giving of notice of resignation or the
Majority Investors' removal of the retiring Agent, then the retiring Agent may,
on behalf of the Company, Sheffield and the Bank Investors, appoint a successor
Agent which successor Agent shall be either (i) a commercial bank organized
under the laws of the United States or of any state thereof and have a combined
capital and surplus of at least $50,000,000 or (ii) an Affiliate of such a
bank. Upon the acceptance of
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any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article IX shall continue to inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
(b) The Enterprise Agent may resign at any time by giving written notice
thereof to each Bank Investor, the Company and the Transferor and may be
removed at any time with cause by the Majority Enterprise Investors. Upon any
such resignation or removal, the Company and the Majority Enterprise Investors
shall appoint a successor Enterprise Agent. The Company and each Bank Investor
agrees that it shall not unreasonably withhold or delay its approval of the
appointment of a successor Enterprise Agent. If no such successor Enterprise
Agent shall have been so appointed, and shall have accepted such appointment,
within 30 days after the retiring Enterprise Agent's giving of notice of
resignation or the Majority Enterprise Investors' removal of the retiring
Enterprise Agent, then the retiring Enterprise Agent may, on behalf of the
Company and the Bank Investors, appoint a successor Enterprise Agent which
successor Enterprise Agent shall be either (i) a commercial bank organized
under the laws of the United States or of any state thereof and have a combined
capital and surplus of at least $50,000,000 or (ii) an Affiliate of such a
bank. Upon the acceptance of any appointment as Enterprise Agent hereunder by
a successor Enterprise Agent, such successor Enterprise Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Enterprise Agent, and the retiring Enterprise Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Enterprise Agent's resignation or removal hereunder as Enterprise
Agent, the provisions of this Article IX shall continue to inure to its benefit
as to any actions taken or omitted to be taken by it while it was Enterprise
Agent under this Agreement.
SECTION 9.6. Payments by the Agent and Enterprise Agent. Unless
specifically allocated to the
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Company, a Bank Investor or Sheffield pursuant to the terms of this Agreement,
all amounts received by the Agent on behalf of the Company, the Bank Investors
or Sheffield shall be paid by the Agent to the Company, the Bank Investors (at
their respective accounts specified in their respective Assignment and
Assumption Agreements) in accordance with their respective related pro rata
interests in the Enterprise Net Investment or Sheffield on the Business Day
received by the Agent, unless such amounts are received after 12:00 noon (New
York time) on such Business Day, in which case the Agent shall use its
reasonable efforts to pay such amounts to the Company, the Bank Investors and
Sheffield on such Business Day, but, in any event, shall pay such amounts to
the Company, Sheffield and the Bank Investors in accordance with the Bank
Investors' respective related pro rata interests in the Enterprise Net
Investment not later than the following Business Day.
SECTION 9.7. Bank Commitment; Assignment to Bank Investors.
(a) Bank Commitment. At any time on or prior to the Commitment
Termination Date, in the event that the Company does not effect an Incremental
Transfer as requested under Section 2.2(a), then at any time, the Transferor
shall have the right to require the Company to assign its interest in the
Enterprise Net Investment in whole to the Bank Investors pursuant to this
Section 9.7. In addition, at any time on or prior to the Commitment
Termination Date (i) upon the occurrence of a Termination Event or (ii) the
Company elects to give notice to the Transferor of a Reinvestment Termination
Date, the Transferor hereby requests and directs that the Company assign its
interest in the Enterprise Net Investment in whole to the Bank Investors
pursuant to this Section 9.7 and the Transferor hereby agrees to pay the
amounts described in Section 9.7(d) hereof. Provided that (i) the Net Asset
Test is satisfied and (ii) the Transferor shall have paid to the Company all
amounts due as described in Section 9.7(d) hereof, upon any such election by
the Company or any such request by the Transferor, the Company shall make such
assignment and the Bank Investors shall accept such assignment and shall assume
all of the Company's obligations hereunder. In connection with any assignment
from the Company to the Bank Investors pursuant to this Section 9.7, each Bank
Investor shall, on the date of
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such assignment, pay to the Company an amount equal to its Assignment Amount.
In addition, at any time on or prior to the Commitment Termination Date the
Transferor shall have the right to request funding under this Agreement
directly from the Bank Investors provided that at such time all conditions
precedent set forth herein for an Incremental Transfer shall be satisfied and
provided further that in connection with such funding by the Bank Investors,
the Bank Investors accept the assignment of all of the Company's interest in
the Enterprise Net Investment and assume all of the Company's obligations
hereunder concurrently with or prior to any such Incremental Transfer. Upon
any assignment by the Company to the Bank Investors contemplated hereunder, the
Company shall cease to make any additional Incremental Transfers hereunder.
(b) Assignment. No Bank Investor may assign all or a portion
of its interests in the Enterprise Net Investment, the Receivables, and
Collections, Related Property and Proceeds with respect thereto and its rights
and obligations hereunder to any Person unless approved in writing by the
Enterprise Agent. In the case of an assignment by the Company to the Bank
Investors or by a Bank Investor to another Person, the assignor shall deliver
to the assignee(s) an Assignment and Assumption Agreement in substantially the
form of Exhibit G attached hereto, duly executed, assigning to the assignee a
pro rata interest in the Enterprise Net Investment, the Receivables, and
Collections, Related Property and Proceeds with respect thereto and the
assignor's rights and obligations hereunder and the assignor shall promptly
execute and deliver all further instruments and documents, and take all further
action, that the assignee may reasonably request, in order to protect, or more
fully evidence the assignee's right, title and interest in and to such interest
and to enable the Agent, on behalf of such assignee, to exercise or enforce any
rights hereunder and under the other Transaction Documents to which such
assignor is or, immediately prior to such assignment, was a party. Upon any
such assignment, (i) the assignee shall have all of the rights and obligations
of the assignor hereunder and under the other Transaction Documents to which
such assignor is or, immediately prior to such assignment, was a party with
respect to such interest for all purposes of this Agreement and under the other
Transaction Documents to which such assignor is or,
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immediately prior to such assignment, was a party (it being understood that the
Bank Investors, as assignees, shall (x) be obligated to effect Incremental
Transfers under Section 2.2(a) in accordance with the terms thereof,
notwithstanding that the Company was not so obligated and (y) not have the
right to elect the commencement of the amortization of the Enterprise Net
Investment pursuant to the definition of "Reinvestment Termination Date",
notwithstanding that the Company had such right) and (ii) the assignor shall
relinquish its rights with respect to such interest for all purposes of this
Agreement and under the other Transaction Documents to which such assignor is
or, immediately prior to such assignment, was a party. No such assignment
shall be effective unless a fully executed copy of the related Assignment and
Assumption Agreement shall be delivered to the Enterprise Agent and the
Transferor. All out-of-pocket and legal expenses of the Enterprise Agent and
the assignor incurred in connection with any preparation and filing of any
assignment hereunder shall be borne by the Transferor and not by the assignor
or any such assignee. No Bank Investor shall assign any portion of its
Commitment hereunder without also simultaneously assigning an equal portion of
its interest in Enterprise's Liquidity Provider Agreement.
(c) Effects of Assignment. By executing and delivering an
Assignment and Assumption Agreement, the assignor and assignee thereunder
confirm to and agree with each other and the other parties hereto as follows:
(i) other than as provided in such Assignment and Assumption Agreement, the
assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement, the other Transaction Documents or any other
instrument or document furnished pursuant hereto or thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value or this
Agreement, the other Transaction Documents or any such other instrument or
document; (ii) the assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Transferor,
WorldCom or the Collection Agent or the performance or observance by the
Transferor, WorldCom or the Collection Agent of any of their respective
obligations under this Agreement, the Receivables Purchase Agreement, the other
Transaction Documents or any other instrument or document furnished pursuant
hereto; (iii)
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such assignee confirms that it has received a copy of this Agreement, the
Receivables Purchase Agreement and such other instruments, documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Assumption Agreement and to purchase
such interest; (iv) such assignee will, independently and without reliance upon
the Agent, or any of its Affiliates, or the assignor and based on such
agreements, documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Transaction Documents; (v) such assignee appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement, the other Transaction Documents and
any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto and to enforce its respective
rights and interests in and under this Agreement, the other Transaction
Documents, the Receivables, the Contracts and the Related Security; (vi) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Transaction
Documents are required to be performed by it as the assignee of the assignor;
and (vii) such assignee agrees that it will not institute against the Company
any proceeding of the type referred to in Section 10.9 prior to the date which
is one year and one day after the payment in full of all Commercial Paper
issued by the Company.
(d) Transferor's Obligation to Pay Certain Amounts; Additional
Assignment Amount. The Transferor shall pay to the Agent, for the account of
the Company, in connection with any assignment by the Company to the Bank
Investors pursuant to this Section 9.7, an aggregate amount equal to all
Enterprise Discount to accrue through the end of each outstanding Enterprise
Tranche Period plus all other Aggregate Unpaids (other than the Enterprise Net
Investment) due the Company. To the extent that such Enterprise Discount
relates to interest or discount on Commercial Paper issued by the Company to
fund the Enterprise Net Investment, if the Transferor fails to make payment of
such amounts at or prior to the time of assignment by the Company to the Bank
Investors, such amount shall be paid by the Bank
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Investors (in accordance with their respective Pro Rata Shares) to the Company
as additional consideration for the interests assigned to the Bank Investors
and the amount of the "Enterprise Net Investment" hereunder held by the Bank
Investors shall be increased by an amount equal to the additional amount so
paid by the Bank Investors.
(e) Administration of Agreement After Assignment; Discount.
After any assignment by the Company to the Bank Investors pursuant to this
Section 9.7 (and the payment of all amounts owing to the Company in connection
therewith), all rights of the Administrative Agent and the Collateral Agent set
forth herein shall be deemed to be afforded to the Agent on behalf of the Bank
Investors instead of either such party.
(f) Payments. After any assignment by the Company to the Bank
Investors pursuant to this Section 9.7, all payments to be made hereunder by
the Transferor or the Collection Agent to the Bank Investors shall be made to
the Agent's account as such account shall have been notified to the Transferor
and the Collection Agent.
(g) Downgrade of Bank Investor. If at any time prior to any
assignment by the Company to the Bank Investors as contemplated pursuant to
this Section 9.7, the short term debt rating of any Bank Investor shall be
"A-2" or "P-2" from Standard & Poor's or ▇▇▇▇▇'▇, respectively, with negative
credit implications, such Bank Investor, upon request of the Agent, shall,
within 30 days of such request, assign its rights and obligations hereunder to
another financial institution (which institution's short term debt shall be
rated at least "A-2" and "P-2" from Standard & Poor's and ▇▇▇▇▇'▇,
respectively, and which shall not be so rated with negative credit
implications). If the short term debt rating of a Bank Investor shall be "A-3"
or "P-3", or lower, from Standard & Poor's or ▇▇▇▇▇'▇, respectively (or such
rating shall have been withdrawn by Standard & Poor's or ▇▇▇▇▇'▇), such Bank
Investor, upon request of the Enterprise Agent, shall, within five (5) Business
Days of such request, assign its rights and obligations hereunder to another
financial institution (which institution's short term debt shall be rated at
least "A-2" and "P-2" from Standard & Poor's and ▇▇▇▇▇'▇, respectively, and
which shall not be so rated with negative credit implications).
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In either such case, if any such Bank Investor shall not have assigned its
rights and obligations under this Agreement within the applicable time period
described above, the Company shall have the right to require such Bank Investor
to accept the assignment of such Bank Investor's Pro Rata Share of the
Enterprise Net Investment; such assignment shall occur in accordance with the
applicable provisions of this Section 9.7. Such Bank Investor shall be
obligated to pay to the Company, in connection with such assignment, in
addition to the Pro Rata Share of the Enterprise Net Investment, an amount
equal to the interest component of the outstanding Commercial Paper issued by
the Company to fund the portion of the Enterprise Net Investment being assigned
to such Bank Investor, as reasonably determined by the Enterprise Agent.
Notwithstanding anything contained herein to the contrary, upon any such
assignment to a downgraded Bank Investor as contemplated pursuant to the
immediately preceding sentence, the aggregate available amount of the Maximum
Enterprise Net Investment, solely as it relates to new Incremental Transfers by
the Company, shall be reduced by the amount of unused Commitment of such
downgraded Bank Investor; it being understood and agreed, that nothing in this
sentence or the two preceding sentences shall affect or diminish in any way any
such downgraded Bank Investor's Commitment to the Transferor or such downgraded
Bank Investor's other obligations and liabilities hereunder and under the other
Transaction Documents.
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ARTICLE X
MISCELLANEOUS
SECTION 10.1. Term of Agreement. This Agreement shall terminate on
the date following the Enterprise Termination Date and the Sheffield
Termination Date upon which the Net Investment has been reduced to zero, all
accrued Enterprise Discount and Sheffield Discount and Servicing Fees have been
paid in full and all other Aggregate Unpaids have been paid in full, in each
case, in cash; provided, however, that (i) the rights and remedies of the
Agent, the Enterprise Agent, the Company, Sheffield, the Bank Investors and the
Administrative Agent with respect to any representation and warranty made or
deemed to be made by the Transferor pursuant to this Agreement, (ii) the
indemnification and payment provisions of Article VIII, and (iii) the agreement
set forth in Section 10.9 hereof, shall be continuing and shall survive any
termination of this Agreement.
SECTION 10.2. Waivers; Amendments. No failure or delay on the part
of the Agent, the Enterprise Agent, the Company, Sheffield, the Administrative
Agent or any Bank Investor in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other further exercise
thereof or the exercise of any other power, right or remedy. The rights and
remedies herein provided shall be cumulative and nonexclusive of any rights or
remedies provided by law. Any provision of this Agreement may be waived,
amended, supplemented or otherwise modified, if, but only if, such waiver,
amendment, supplement or other modification is in writing and is signed by the
Transferor, the Company, Sheffield, the Agent and the Majority Enterprise
Investors, provided, however, that to the extent the Agent determines that
there have been no other material changes to the Credit Agreement since the
date upon which the financial covenants set forth in Section 5.3 hereof and the
definitions relating thereto in Exhibit O have last been amended, supplemented
or otherwise modified hereunder, the Agent, the Transferor and WorldCom may,
without the consent of any of the Bank Investors, the Company or Sheffield,
amend, supplement or otherwise modify the financial covenants set forth in
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Section 5.3 hereof and the definitions relating thereto in Exhibit O in any
manner (including, without limitation adding, deleting or modifying any of the
financial covenants hereunder) to make the financial covenants in Section 5.3
and the definitions relating thereto in Exhibit O substantively identical to
the financial covenants set forth in the Credit Agreement.
SECTION 10.3. Notices. Except as provided below, all communications
and notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy number set forth below or at such other
address or telecopy number as such party may hereafter specify for the purposes
of notice to such party. Each such notice or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section 10.3 and confirmation is received,
(ii) if given by mail 3 Business Days following such posting, postage prepaid,
U.S. certified or registered, (iii) if given by overnight courier, one (1)
Business Day after deposit thereof with a national overnight courier service,
or (iv) if given by any other means, when received at the address specified in
this Section 10.3. However, anything in this Section to the contrary
notwithstanding, the Transferor hereby authorizes the Company to effect
Transfers, Tranche Period and Tranche Rate selections based on telephonic
notices made by any Person which the Company in good faith believes to be
acting on behalf of the Transferor. The Transferor agrees to deliver promptly
to the Company a written confirmation of each telephonic notice signed by an
authorized officer of Transferor. However, the absence of such confirmation
shall not affect the validity of such notice. If the written confirmation
differs in any material respect from the action taken by the Company or
Sheffield, the records of the Company or Sheffield shall govern absent manifest
error.
If to the Company:
Enterprise Funding Corporation
c/o Merrill ▇▇▇▇▇ Money Markets Inc.
World Financial Center--South Tower
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to the Administrative Agent)
If to Sheffield:
SHEFFIELD RECEIVABLES CORPORATION
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇ Branch
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Information:
Barclays Bank PLC
ABA ▇▇▇▇▇▇▇▇▇
Account 050786393
Reference Sheffield 3A Funding Account
If to the Transferor:
WORLDCOM FUNDING CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Information:
NationsBank, N.A.
ABA ▇▇▇▇▇▇▇▇▇
Account 3750777826
Reference WorldCom Funding Corporation
If to WorldCom:
WORLDCOM, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Collateral Agent:
NATIONSBANK, N.A.
NationsBank Corporate Center
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100 North ▇▇▇▇▇ Street
NC1-007-10-07
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇--
Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Agent, the Enterprise Agent
or the Administrative Agent:
NATIONSBANK, N.A.
NationsBank Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇--
Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Information:
NationsBank, N.A.
ABA ▇▇▇-▇▇▇-▇▇▇
for the account of
NationsBank Charlotte
Account No. 10822016511
Attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
If to the Bank Investors, at their respective addresses set forth on
the signature pages hereto or of the Assignment and Assumption Agreement
pursuant to which it became a party hereto.
SECTION 10.4. Governing Law; Submission to Jurisdiction;
Integration.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE TRANSFEROR HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING
IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY; PROVIDED,
HOWEVER, THAT THE TRANSFEROR HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF
ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR
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PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO SECTION 7.1(U)
HEREOF. The Transferor hereby irrevocably waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum. Nothing in this Section 10.4 shall affect the right of the
Company to bring any action or proceeding against the Transferor or its
property in the courts of other jurisdictions.
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT
OR THE OTHER TRANSACTION DOCUMENTS.
(c) This Agreement contains the final and complete integration
of all prior expressions by the parties hereto with respect to the subject
matter hereof and shall constitute the entire Agreement among the parties
hereto with respect to the subject matter hereof superseding all prior oral or
written understandings.
SECTION 10.5. Severability; Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.6. Successors and Assigns. (a) This Agreement shall be
binding on the parties hereto and their respective successors and assigns;
provided, however, that neither the Transferor nor WorldCom may assign any of
its rights or delegate any of
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its duties hereunder or under the Receivables Purchase Agreement or under any
of the other Transaction Documents to which it is a party without the prior
written consent of the Agent. No provision of this Agreement shall in any
manner restrict the ability of the Company or any Bank Investor to assign,
participate, grant security interests in, or otherwise transfer any portion of
the Transferred Interest.
(b) Each of the Transferor and WorldCom hereby agrees and
consents to the assignment by the Company from time to time of all or any part
of its rights under, interest in and title to this Agreement and the
Transferred Interest to any Liquidity Provider. In addition, each of the
Transferor and WorldCom hereby consents to and acknowledges the assignment by
the Company of all of its rights under, interest in and title to this Agreement
and the Transferred Interest to the Collateral Agent.
SECTION 10.7. Waiver of Confidentiality. Each of the Transferor and
WorldCom hereby consents to the disclosure of any non-public information with
respect to it received by the Company, the Agent, the Enterprise Agent,
Sheffield, any Bank Investor or the Administrative Agent to any of the Company,
the Agent, the Enterprise Agent, any nationally recognized rating agency rating
the Company's Commercial Paper, the Administrative Agent, the Collateral Agent,
any Bank Investor or potential Bank Investor, Sheffield, the Liquidity Provider
or the Credit Support Provider in relation to this Agreement.
SECTION 10.8. Confidentiality Agreement. Each of the Transferor and
WorldCom hereby agrees that it will not disclose the contents of this Agreement
or any other proprietary or confidential information of the Company, the Agent,
the Enterprise Agent, the Administrative Agent, the Collateral Agent, any
Liquidity Provider, Sheffield or any Bank Investor to any other Person except
(i) its auditors and attorneys, employees or financial advisors (other than any
commercial bank) and any nationally recognized rating agency, provided such
auditors, attorneys, employees, financial advisors or rating agencies are
informed of the highly confidential nature of such information or (ii) as
otherwise required by applicable law or order of a court of competent
jurisdiction.
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SECTION 10.9. No Bankruptcy Petition Against the Company or
Sheffield. Each of the Transferor and WorldCom hereby covenants and agrees
that, prior to the date which is one year and one day after the payment in full
of all outstanding Commercial Paper or other indebtedness of the Company and
Sheffield, it will not institute against, or join any other Person in
instituting against, the Company or Sheffield any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
SECTION 10.10. Limited Recourse; Waiver of Setoff.
(a) Notwithstanding anything to the contrary contained herein,
the obligations of the Company and Sheffield under this Agreement are solely
the corporate obligations of the Company and Sheffield, respectively, and shall
be payable at such time as funds are received from the Transferor, WorldCom and
other transferors or from any party to any agreement with the Company or
Sheffield in accordance with the terms thereof in excess of funds necessary to
pay matured and maturing Commercial Paper and, to the extent funds are not
available to pay such obligations, the claims relating thereto shall continue
to accrue. Each party hereto agrees that the payment of any claim (as defined
in Section 101 of Title 11 of the Bankruptcy Code) of any such party against
the Company or Sheffield shall be subordinated to the payment in full of all of
the Company's or Sheffield's Commercial Paper, respectively. No recourse shall
be had for the payment of any amount owing in respect of any obligation of, or
claim against, the Company or Sheffield arising out of or based upon this
Agreement against any stockholder, employee, officer, director or incorporator
of the Company or Sheffield, respectively, or any Affiliate thereof or against
any stockholder, employee, officer, director, incorporator or Affiliate of the
Agent or the Enterprise Agent; provided, however, that the foregoing shall not
relieve any such person or entity from any liability they might otherwise have
as a result of fraudulent actions or omissions taken by them.
(b) Each of the Transferor, the Collection Agent and WorldCom
hereby agrees to waive any right of setoff which it may have or to which it may
be
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entitled against the Company or Sheffield and their respective assets.
SECTION 10.11. Characterization of the Transactions Contemplated by
the Agreement. It is the intention of the parties that the transactions
contemplated hereby constitute the sale of the Transferred Interest, conveying
good title thereto free and clear of any Adverse Claims to the Agent, on behalf
of the Company, Sheffield and the Bank Investors, and that the Transferred
Interest not be part of the Transferor's estate in the event of an insolvency.
If, notwithstanding the foregoing, the transactions contemplated hereby should
be deemed a financing, the parties intend that the Transferor shall be deemed
to have granted to the Agent, on behalf of the Company, Sheffield and the Bank
Investors, and the Transferor hereby grants to the Agent, on behalf of the
Company, Sheffield and the Bank Investors, a first priority perfected and
continuing security interest in all of the Transferor's right, title and
interest in, to and under the Receivables, together with Related Security,
Collections and Proceeds with respect thereto, and together with all of the
Transferor's rights under the Receivables Purchase Agreement with respect to
the Receivables and with respect to any obligations thereunder of WorldCom with
respect to the Receivables, and that this Agreement shall constitute a security
agreement under applicable law. The Transferor hereby assigns to the Agent, on
behalf of the Company, Sheffield and the Bank Investors, all of its rights and
remedies under the Receivables Purchase Agreement with respect to the
Receivables and with respect to any obligations thereunder of WorldCom with
respect to the Receivables. The Transferor agrees that it shall not give any
consent or waiver required or permitted to be given under the Receivables
Purchase Agreement without the prior consent of the Agent.
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amended and Restated Transfer and Administration Agreement as of the date
first written above.
ENTERPRISE FUNDING CORPORATION,
as Company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
WORLDCOM FUNDING CORPORATION,
as Transferor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
WORLDCOM, INC., individually
and as Collection Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
SHEFFIELD RECEIVABLES CORPORA
By Barclays Bank PLC,
as Attorney-in-fact
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Associate Director
Commitment NATIONSBANK, N.A., as Agent
---------- and a Bank Investor
$306,000,000.00
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Investment Banking Officer