<\/p>\n ARTICLE VIII<\/p>\n
INDEMNIFICATION; EXPENSES; RELATED MATTERS<\/p>\n
SECTION 8.1. Indemnities by the Transferor . . . . . . . . . . . . 98
\nSECTION 8.2. Indemnity for Taxes,
\n Reserves and Expenses . . . . . . . . . . . . . . . 102
\nSECTION 8.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 105
\nSECTION 8.4. Other Costs, Expenses and Related
\n Matters . . . . . . . . . . . . . . . . . . . . . . 106
\nSECTION 8.5. Reconveyance Under Certain
\n Circumstances . . . . . . . . . . . . . . . . . . . 107<\/p>\n
ARTICLE IX<\/p>\n
THE AGENT; THE ENTERPRISE AGENT; BANK COMMITMENT<\/p>\n
SECTION 9.1. Authorization and Action . . . . . . . . . . . . . . 108
\nSECTION 9.2. Agent’s Reliance, Etc. . . . . . . . . . . . . . . . 111
\nSECTION 9.3. Credit Decision . . . . . . . . . . . . . . . . . . . 112
\nSECTION 9.4. Indemnification of the Enterprise Agent . . . . . . . 112
\nSECTION 9.5. Successor Agent and Enterprise Agent . . . . . . . . 113
\nSECTION 9.6. Payments by the Agent and Enterprise
\n Agent . . . . . . . . . . . . . . . . . . . . . . . 114
\nSECTION 9.7. Bank Commitment; Assignment to Bank Investors . . . . 115<\/p>\n
ARTICLE X<\/p>\n
MISCELLANEOUS<\/p>\n
SECTION 10.1. Term of Agreement . . . . . . . . . . . . . . . . . 121
\nSECTION 10.2. Waivers; Amendments . . . . . . . . . . . . . . . . 121
\nSECTION 10.3. Notices . . . . . . . . . . . . . . . . . . . . . . 122
\nSECTION 10.4. Governing Law; Submission to
\n Jurisdiction; Integration . . . . . . . . . . . . . 124
\nSECTION 10.5. Severability; Counterparts . . . . . . . . . . . . . 125
\nSECTION 10.6. Successors and Assigns . . . . . . . . . . . . . . . 125
\nSECTION 10.7. Waiver of Confidentiality . . . . . . . . . . . . . 126
\nSECTION 10.8. Confidentiality Agreement . . . . . . . . . . . . . 126
\nSECTION 10.9. No Bankruptcy Petition Against the
\n Company or Sheffield . . . . . . . . . . . . . . . 126
\nSECTION 10.10. No Recourse Against Stockholders,
\n Officers and Directors . . . . . . . . . . . . . . 127
\nSECTION 10.11. Characterization of the Transactions
\n Contemplated by the Agreement . . . . . . . . . . . 127
\n<\/c><\/s><\/table>\n
iii
\n 5
\n EXHIBITS<\/p>\n
EXHIBIT A Forms of Contracts<\/p>\n
EXHIBIT B Credit and Collection Policies and
\n Practices<\/p>\n
EXHIBIT C List of Lock-Box Banks and Accounts<\/p>\n
EXHIBIT D Form of Lock-Box Agreement<\/p>\n
EXHIBIT E Form of Investor Report<\/p>\n
EXHIBIT F Form of Transfer Certificate<\/p>\n
EXHIBIT G Form of Assignment and Assumption
\n Agreement<\/p>\n
EXHIBIT H List of Actions and Suits<\/p>\n
EXHIBIT I Location of Records<\/p>\n
EXHIBIT J List of Subsidiaries, Divisions
\n and Tradenames<\/p>\n
EXHIBIT K Forms of Opinions of Counsel for
\n the Transferor and WorldCom<\/p>\n
EXHIBIT L Forms of Secretary’s Certificate
\n for the Transferor, WorldCom
\n and Permitted Originators<\/p>\n
EXHIBIT M Form of Company Certificate<\/p>\n
EXHIBIT N Form of Weekly Report<\/p>\n
EXHIBIT O Section 5.3 Definitions<\/p>\n
iv
\n 6<\/p>\n
AMENDED AND RESTATED
\n TRANSFER AND ADMINISTRATION AGREEMENT<\/p>\n
THIS AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT (as
\namended, supplemented or otherwise modified and in effect from time to time,
\nthis “Agreement”), dated as of December 31, 1996, by and among WORLDCOM FUNDING
\nCORPORATION, a Delaware corporation, as transferor (in such capacity, the
\n“Transferor”), WORLDCOM, INC., a Georgia corporation, individually and as
\ncollection agent (in such capacity, the “Collection Agent”), ENTERPRISE FUNDING
\nCORPORATION, a Delaware corporation (the “Company”), SHEFFIELD RECEIVABLES
\nCORPORATION, a Delaware corporation (“Sheffield”) and NATIONSBANK, N.A., a
\nnational banking association (“NationsBank”), as agent for the Company,
\nSheffield and the Bank Investors (in such capacity, the “Agent”) and as a Bank
\nInvestor.<\/p>\n
PRELIMINARY STATEMENTS<\/p>\n
WHEREAS, the Transferor, the Collection Agent, the Company and the
\nAgent entered into a Transfer and Administration Agreement dated as of October
\n25, 1996 (the “Existing Agreement”);<\/p>\n
WHEREAS, the Transferor has requested that the Existing Agreement be
\namended and restated, among other things, to provide for the addition of
\nSheffield as a purchaser and to provide for an increase to the aggregate
\nfacility limit;<\/p>\n
WHEREAS, the Transferor may desire to convey, transfer and assign, from
\ntime to time, undivided percentage interests in certain accounts receivable,
\nand the Company may desire to, and the Bank Investors and Sheffield, if
\nrequested, shall, accept such conveyance, transfer and assignment of such
\nundivided percentage interests, subject to the terms and conditions of this
\nAgreement.<\/p>\n
NOW, THEREFORE, the parties hereby agree as follows:<\/p>\n
7<\/p>\n
ARTICLE I<\/p>\n
DEFINITIONS<\/p>\n
SECTION 1.1. Certain Defined Terms. As used in this
\nAgreement, the following terms shall have the following meanings:<\/p>\n
“Administrative Agent” means NationsBank, N.A., as administrative agent
\nfor the Company.<\/p>\n
“Adverse Claim” means a lien, security interest, charge or encumbrance,
\nor other right or claim in, of or on any Person’s assets or properties in favor
\nof any other Person (including any UCC financing statement or any similar
\ninstrument filed against such Person’s assets or properties).<\/p>\n
“Affected Assets” means, collectively, the Receivables and the Related
\nSecurity, Collections and Proceeds relating thereto.<\/p>\n
“Affiliate” means, with respect to any Person, any other Person
\ndirectly or indirectly controlling, controlled by, or under direct or indirect
\ncommon control with, such Person. A Person shall be deemed to control another
\nPerson if the controlling Person possesses, directly or indirectly, the power
\nto direct or cause the direction of the management or policies of the
\ncontrolled Person, whether through ownership of voting stock, by contract or
\notherwise.<\/p>\n
“Agent” means NationsBank, N.A., in its capacity as agent for the
\nCompany, Sheffield and the Bank Investors, and any successor thereto appointed
\npursuant to Article IX.<\/p>\n
“Aggregate Unpaids” means, at any time, an amount equal to the sum of
\n(i) the aggregate accrued and unpaid Enterprise Discount and Sheffield Discount
\nwith respect to all Enterprise Tranche Periods and Sheffield Tranche Periods,
\nas applicable, at such time, (ii) the Enterprise Net Investment and Sheffield
\nNet Investment, as applicable, at such time, and (iii) all other amounts owed
\n(whether due or accrued) hereunder by the Transferor<\/p>\n
2
\n 8
\nto the Company, Sheffield, the Bank Investors, the Enterprise Agent and the
\nAgent at such time.<\/p>\n
“Assignment Amount” with respect to a Bank Investor means, at any time,
\nan amount equal to the lesser of (i) such Bank Investor’s Pro Rata Share of the
\nEnterprise Net Investment at such time and (ii) such Bank Investor’s unused
\nCommitment.<\/p>\n
“Assignment and Assumption Agreement” means an Assignment and
\nAssumption Agreement substantially in the form of Exhibit G attached hereto.<\/p>\n
“Bank Investor Commitment Fee” means the commitment fee payable to the
\nBank Investors in an amount agreed upon from time to time by the Transferor,
\nWorldCom and NationsBank, N.A.<\/p>\n
“Bank Investors” means NationsBank, N.A. and its successors and
\nassigns.<\/p>\n
“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. et
\nseq), as amended.<\/p>\n
“Base Rate” or “BR” means, a rate per annum equal to the greater of (i)
\nthe prime rate of interest announced by the Agent from time to time, changing
\nwhen and as said prime rate changes (such rate not necessarily being the lowest
\nor best rate charged by the Agent) and (ii) the sum of (a) 1.50% and (b) the
\nrate equal to the weighted average of the rates on overnight Federal funds
\ntransactions with members of the Federal Reserve System arranged by Federal
\nfunds brokers, as published for such day (or, if such day is not a Business
\nDay, for the next preceding Business Day) by the Federal Reserve Bank of New
\nYork, or, if such rate is not so published for any day that is a Business Day,
\nthe average of the quotations for such day for such transactions received by
\nthe Agent from three Federal funds brokers of recognized standing selected by
\nit.<\/p>\n
“Benefit Plan” means any employee benefit plan as defined in Section
\n3(3) of ERISA in respect of which the Transferor, WorldCom or any ERISA
\nAffiliate of the Transferor or WorldCom is, or at any time during the
\nimmediately preceding six years was, an “employer” as defined in Section 3(5)
\nof ERISA.<\/p>\n
3
\n 9
\n “Billing Adjustments” means, for any period, an amount equal to the
\naggregate actual billing adjustments or credits made by the Transferor or the
\nCollection Agent with respect to Receivables during such period.<\/p>\n
“Billing Adjustments Ratio” means, the ratio (expressed as a
\npercentage) computed as of the last day of each calendar month by dividing (i)
\nthe amount of Billing Adjustments for such calendar month by (ii) credit sales
\non all Receivables for the calendar month immediately preceding the then
\ncurrent calendar month.<\/p>\n
“Business Day” means any day excluding Saturday, Sunday and any day on
\nwhich banks in New York, New York, Charlotte, North Carolina or Jackson,
\nMississippi are authorized or required by law to close, and, when used with
\nrespect to the determination of any Eurodollar Rate or any notice with respect
\nthereto, any such day which is also a day for trading by and between banks in
\nUnited States dollar deposits in the London interbank market.<\/p>\n
“Capitalized Lease” of a Person means any lease of property by such
\nPerson as lessee which would be capitalized on a balance sheet of such Person
\nprepared in accordance with GAAP.<\/p>\n
“Certificate” means the certificate issued to the Agent for the benefit
\nof the Company, Sheffield and the Bank Investors pursuant to Section 2.2(d)
\nhereof.<\/p>\n
“Closing Date” means December 31, 1996.<\/p>\n
“Code” means the Internal Revenue Code of 1986, as amended.<\/p>\n
“Collateral Agent” means NationsBank, N.A., as collateral agent for any
\nLiquidity Provider, any Credit Support Provider, the holders of Commercial
\nPaper issued by the Company and certain other parties.<\/p>\n
“Collection Account” means the account, established by the Agent, for
\nthe benefit of the Company, Sheffield and the Bank Investors, pursuant to
\nSection 2.12.<\/p>\n
4
\n 10
\n “Collection Agent” means at any time the Person then authorized
\npursuant to Section 6.1 to service, administer and collect Receivables.<\/p>\n
“Collection Agent Default” has the meaning specified in Section 6.4
\nhereof.<\/p>\n
“Collections” means, with respect to any Receivable, all cash
\ncollections and other cash proceeds of such Receivable, including, without
\nlimitation, all Finance Charges, if any, and cash proceeds of Related Security
\nwith respect to such Receivable.<\/p>\n
“Commercial Paper” means the short- term promissory notes of the
\nCompany or Sheffield issued by the Company or Sheffield, as applicable, in the
\ncommercial paper market.<\/p>\n
“Commitment” means for each Bank Investor, the commitment of such Bank
\nInvestor to make acquisitions from the Transferor or the Company in accordance
\nherewith in an amount not to exceed the dollar amount set forth opposite such
\nBank Investor’s signature on the signature page hereto under the heading
\n“Commitment.”<\/p>\n
“Commitment Termination Date” means October 24, 1997, or such later
\ndate to which the Commitment Termination Date may be extended by Transferor,
\nthe Enterprise Agent and the Bank Investors not later than sixty (60) days
\nprior to the then current Commitment Termination Date.<\/p>\n
“Company” means Enterprise Funding Corporation, and its successors and
\nassigns.<\/p>\n
“Concentration Factor” means for any Designated Obligor on any date of
\ndetermination (a) 3% of the Eligible Receivables on such date; provided
\nhowever, that with respect to any Designated Obligor and its affiliates whose
\nlong term unsecured debt obligations are rated at least “A1” by Moody’s and at
\nleast “A+” by Standard & Poor’s and with respect to which rating neither
\nMoody’s nor Standard & Poor’s shall have made a public announcement
\nanticipating a downgrading of such Designated Obligor’s long term unsecured
\ndebt obligations to a rating less than the aforementioned ratings (“A1\/A+ Rated
\nObligors”) 5% of the Eligible Receivables on such date,<\/p>\n
5
\n 11
\nor (b) such other amount determined by the Agent in the reasonable exercise of
\nits good faith judgment and disclosed in a written notice delivered to the
\nTransferor.<\/p>\n
“Contract” means an agreement or invoice in substantially the form of
\none of the forms attached hereto as Exhibit A or otherwise approved by the
\nCompany and Sheffield, pursuant to or under which an Obligor shall be obligated
\nto pay for merchandise purchased or services rendered.<\/p>\n
“Credit Agreement” means the Amended and Restated Credit Agreement
\ndated as of June 28, 1996 among WorldCom, Inc., as borrower, NationsBank of
\nTexas, N.A., as managing agent and administrative agent, the agents named
\ntherein and the lenders named therein, as the same may be amended from time to
\ntime.<\/p>\n
“Credit and Collection Policy” means the Transferor’s credit and
\ncollection policy or policies and practices, relating to Contracts and
\nReceivables existing on the date hereof and referred to in Exhibit B attached
\nhereto, as modified from time to time in compliance with Section 5.2(c).<\/p>\n
“Credit Support Agreement” means any agreement between the Company or
\nSheffield and any Credit Support Provider evidencing the obligation of such
\nCredit Support Provider to provide credit support to the Company or Sheffield
\nin connection with the issuance by the Company or Sheffield, as applicable, of
\nCommercial Paper.<\/p>\n
“Credit Support Provider” means the Person or Persons who provides
\ncredit support to the Company or Sheffield in connection with the issuance by
\nthe Company or Sheffield, as applicable, of Commercial Paper.<\/p>\n
“Deemed Collections” means any Collections on any Receivable deemed to
\nhave been received pursuant to Section 2.9(a) or (b) hereof.<\/p>\n
“Default Ratio” means the ratio (expressed as a percentage) computed as
\nof the last day of each calendar month by dividing (i) the aggregate
\nOutstanding Balance of all Defaulted Receivables as of such date by (ii) the
\naggregate Outstanding Balance of all Receivables as of such date.<\/p>\n
6
\n 12
\n “Defaulted Receivable” means a Receivable: (i) as to which any
\npayment, or part thereof, remains unpaid for ninety-one (91) days or more from
\nthe original due date for such Receivable; (ii) as to which an Event of
\nBankruptcy has occurred and is continuing with respect to the Obligor thereof;
\n(iii) which has been identified by the Transferor, WorldCom or the Collection
\nAgent as uncollectible; or (iv) which, consistent with the Credit and
\nCollection Policy, should be written off as uncollectible.<\/p>\n
“Delinquency Ratio” means the ratio (expressed as a percentage)
\ncomputed as of the last day of each calendar month by dividing (i) the
\naggregate Outstanding Balance of all Delinquent Receivables as of such date by
\n(ii) the aggregate Outstanding Balance of all Receivables (other than Defaulted
\nReceivables) as of such date.<\/p>\n
“Delinquent Receivable” means a Receivable: (i) as to which any
\npayment, or part thereof, remains unpaid for more than thirty (30) days from
\nthe original due date for such Receivable but less than ninety-one (91) days
\nfrom the original due date for such Receivable and (ii) which is not a
\nDefaulted Receivable.<\/p>\n
“Designated Obligor” means, at any time, each Obligor, provided,
\nhowever, that any Obligor shall cease to be a Designated Obligor upon notice to
\nthe Transferor from the Enterprise Agent or Sheffield, delivered at any time.<\/p>\n
“Eligible Investments” means any of the following (a) negotiable
\ninstruments or securities represented by instruments in bearer or registered or
\nin book-entry form which evidence (i) obligations fully guaranteed by the
\nUnited States of America; (ii) time deposits in, or bankers acceptances issued
\nby, any depositary institution or trust company incorporated under the laws of
\nthe United States of America or any state thereof and subject to supervision
\nand examination by Federal or state banking or depositary institution
\nauthorities; provided, however, that at the time of investment or contractual
\ncommitment to invest therein, the certificates of deposit or short-term
\ndeposits, if any, or long-term unsecured debt obligations (other than such
\nobligation whose rating is based on collateral or on the credit of a Person
\nother than such institution or trust company)<\/p>\n
7
\n 13
\nof such depositary institution or trust company shall have a credit rating from
\nMoody’s and S&P of at least “P-1” and “A-1”, respectively, in the case of the
\ncertificates of deposit or short-term deposits, or a rating not lower than one
\nof the two highest investment categories granted by Moody’s and by S&P; (iii)
\ncertificates of deposit having, at the time of investment or contractual
\ncommitment to invest therein, a rating from Moody’s and S&P of at least “P-1”
\nand “A-1”, respectively; or (iv) investments in money market funds rated in the
\nhighest investment category or otherwise approved in writing by the applicable
\nrating agencies; (b) demand deposits in any depositary institution or trust
\ncompany referred to in (a)(ii) above; (c) commercial paper (having original or
\nremaining maturities of no more than 30 days) having, at the time of investment
\nor contractual commitment to invest therein, a credit rating from Moody’s and
\nS&P of at least “P-1” and “A-1”, respectively; (d) Eurodollar time deposits
\nhaving a credit rating from Moody’s and S&P of at least “P-1” and “A-1”,
\nrespectively; and (e) repurchase agreements involving any of the Eligible
\nInvestments described in clauses (a)(i), (a)(iii) and (d) hereof so long as the
\nother party to the repurchase agreement has at the time of investment therein,
\na rating from Moody’s and S&P of at least “P-1” and “A-1”, respectively.<\/p>\n
“Eligible Receivable” means, at any time, any Receivable:<\/p>\n
(i)(A) which has been originated by WorldCom or a Permitted
\n Originator, (B) if originated by a Permitted Originator, which has been
\n sold to WorldCom pursuant to (and in accordance with) a valid purchase and
\n sale agreement, (C) which has been sold by WorldCom to the Transferor
\n pursuant to (and in accordance with) the Receivables Purchase Agreement and
\n (D) as to which the Transferor has good title thereto, free and clear of
\n all Adverse Claims;<\/p>\n
(ii) which (together with the Collections and Related Security
\n related thereto) has been the subject of either a valid transfer and
\n assignment from the Transferor to<\/p>\n
8
\n 14
\n the Agent, on behalf of the Company, Sheffield and the Bank Investors, of
\n all of the Transferor’s right, title and interest therein or the grant of a
\n first priority perfected security interest therein (and in the Collections
\n and Related Security related thereto), effective until the termination of
\n this Agreement;<\/p>\n
(iii) the Obligor of which is a United States resident, is a
\n Designated Obligor at the time of the initial creation of an interest
\n therein hereunder and is not an Affiliate of any of the parties hereto;<\/p>\n
(iv) which is not a Defaulted Receivable at the time of the
\n initial creation of an interest therein hereunder;<\/p>\n
(v) which, (A) except with respect to any Private Line Receivable,
\n arises pursuant to a Contract with respect to which each of WorldCom or the
\n applicable Permitted Originator and the Transferor has performed all
\n obligations required to be performed by it thereunder, including without
\n limitation shipment of the merchandise and\/or the performance of the
\n services purchased thereunder; (B) has been billed; and (C) according to
\n the Contract related thereto, is required to be paid in full (1) in the
\n case of a Switched Service Receivable, within thirty (30) days, (2) in the
\n case of a Private Line Receivable, within forty (40) days of the original
\n billing date therefor and (3) in the case of a Rebiller, within forty-five
\n (45) days of the original billing date therefor;<\/p>\n
(vi) which is an “eligible asset” as defined in Rule 3a-7 under
\n the Investment Company Act of 1940, as amended;<\/p>\n
(vii) a purchase of which with the proceeds of Commercial Paper
\n would constitute a “current transaction” within the meaning of Section
\n 3(a)(3) of the Securities Act of 1933, as amended;<\/p>\n
9
\n 15
\n (viii) which is an “account” within the meaning of Article 9 of
\n the UCC of all applicable jurisdictions;<\/p>\n
(ix) which is denominated and payable only in United States
\n dollars in the United States;<\/p>\n
(x) which, arises under a Contract that together with the
\n Receivable related thereto, is in full force and effect and constitutes the
\n legal, valid and binding obligation of the related Obligor enforceable
\n against such Obligor in accordance with its terms and is not subject to any
\n litigation, dispute, offset, counterclaim or other defense;<\/p>\n
(xi) which, together with the Contract related thereto, does not
\n contravene in any material respect any laws, rules or regulations
\n applicable thereto (including, without limitation, laws, rules and
\n regulations relating to truth in lending, fair credit billing, fair credit
\n reporting, equal credit opportunity, fair debt collection practices and
\n privacy) and with respect to which no part of the Contract related thereto
\n is in violation of any such law, rule or regulation in any material
\n respect;<\/p>\n
(xii) which (A) satisfies all applicable requirements of the
\n Credit and Collection Policy, (B) is assignable without the consent of, or
\n notice to, the Obligor thereunder, and (C) complies with such other
\n criteria and requirements as the Agent may from time to time specify to the
\n Transferor following five (5) days’ notice;<\/p>\n
(xiii) which was generated in the ordinary course of business of
\n WorldCom or a Permitted Originator;<\/p>\n
(xiv) the Obligor of which has been directed to make all payments
\n to a specified account of the Collection Agent with<\/p>\n
10
\n 16
\n respect to which there shall be a Lock-Box Agreement in effect;<\/p>\n
(xv) as to which neither the Enterprise Agent nor Sheffield has
\n notified the Transferor that the Enterprise Agent or Sheffield, as
\n applicable, has determined, in its sole discretion, based on non- arbitrary
\n credit considerations with respect to the Obligor, that such Receivable (or
\n class of Receivables) is not acceptable for purchase hereunder, which
\n notice shall set forth the reasons for such determination;<\/p>\n
(xvi) the assignment of which by a Permitted Originator to
\n WorldCom (if applicable) and by WorldCom to the Transferor under the
\n Receivables Purchase Agreement and hereunder by the Transferor to the Agent
\n on behalf of Enterprise, Sheffield and the Bank Investors does not violate,
\n conflict or contravene any applicable laws, rules, regulations, orders or
\n writs or any contractual or other restriction, limitation or encumbrance;<\/p>\n
(xvii) which has not been compromised, adjusted or modified
\n (including by the extension of time for payment or the granting of any
\n discounts, allowances or credits); provided, however, that only such
\n portion of such Receivable that is the subject of such compromise,
\n adjustment or modification shall be deemed to be ineligible pursuant to the
\n terms of this clause (xviii);<\/p>\n
(xviii) if the Obligor of such Receivable is a government agency
\n or subdivision, the Outstanding Balance of which, when added to the
\n aggregate Outstanding Balance of all Receivables the Obligor of which is a
\n government agency or subdivision, does not exceed 5% of the aggregate
\n Outstanding Balance of all Receivables;<\/p>\n
(xix) if such Receivable is a Private Line Receivable, (A) the
\n Contract related thereto requires the Obligor to give<\/p>\n
11
\n 17
\n WorldCom or the Permitted Originator at least thirty (30) days’ notice of
\n cancellation and (B) the related Obligor has not provided notice to cancel
\n the related Contract; and<\/p>\n
(xx) if such Receivable is a Private Line Receivable, the
\n Outstanding Balance thereof, when combined with the aggregate Outstanding
\n Balance of all other Private Line Receivables, does not exceed 20% of the
\n aggregate Outstanding Balance of all Receivables.<\/p>\n
“Enterprise Agent” means NationsBank, N.A., in its capacity as agent
\nfor the Company and the Bank Investors, and any successor thereto appointed
\npursuant to Article IX.<\/p>\n
“Enterprise Billing Adjustments Reserve” means, at any time, an amount
\nequal to the product of (i) the greater of (A) 5% and (B) 1.5 multiplied by the
\nhighest Billing Adjustment Ratio over the last twelve (12) months and (ii) the
\nsum of the Enterprise Net Investment, the Enterprise Discount Reserve and the
\nEnterprise Servicing Fee Reserve at such time.<\/p>\n
Notwithstanding the foregoing, the Enterprise Billing Adjustments Reserve shall
\nat all times be at least equal to $10,000,000.<\/p>\n
“Enterprise BR Tranche” means an Enterprise Tranche as to which
\nEnterprise Discount is calculated at the Base Rate.<\/p>\n
“Enterprise BR Tranche Period” means, with respect to an Enterprise BR
\nTranche, either (i) prior to the Enterprise Termination Date, a period of up
\nto 30 days requested by the Transferor and agreed to by the Company,
\nNationsBank on behalf of any Liquidity Provider, or the Enterprise Agent, as
\nthe case may be, commencing on a Business Day requested by the Transferor and
\nagreed to by the Company, NationsBank or the Enterprise Agent, as the case may
\nbe, or (ii) after the Enterprise Termination Date, a period of one day. If
\nsuch Enterprise BR Tranche Period would end on a day which is not a Business
\nDay, such Enterprise BR Tranche Period shall end on the next succeeding
\nBusiness Day.<\/p>\n
12
\n 18
\n “Enterprise CP Rate” means, with respect to any Enterprise CP Tranche
\nPeriod, the rate equivalent to the rate (or if more than one rate, the weighted
\naverage of the rates) at which Commercial Paper issued by the Company having a
\nterm equal to such Enterprise CP Tranche Period may be sold by any placement
\nagent or commercial paper dealer selected by the Company, provided, however,
\nthat if the rate (or rates) as agreed between any such agent or dealer and the
\nCompany is a discount rate, then the rate (or if more than one rate, the
\nweighted average of the rates) resulting from the Company’s converting such
\ndiscount rate (or rates) to an interest-bearing equivalent rate per annum.<\/p>\n
“Enterprise CP Tranche” means an Enterprise Tranche as to which
\nEnterprise Discount is calculated at an Enterprise CP Rate.<\/p>\n
“Enterprise CP Tranche Period” means, with respect to an Enterprise CP
\nTranche, a period of days not to exceed ninety (90) days commencing on a
\nBusiness Day requested by the Transferor and agreed to by the Company pursuant
\nto Section 2.3. If an Enterprise CP Tranche Period would end on a day which is
\nnot a Business Day, such Enterprise CP Tranche Period shall end on the next
\nsucceeding Business Day.<\/p>\n
“Enterprise Dealer Fee” means the fee payable by the Transferor to the
\nAgent, pursuant to Section 2.4 hereof, the terms of which are set forth in the
\nEnterprise Fee Letter.<\/p>\n
“Enterprise Discount” means, with respect to any Enterprise Tranche
\nPeriod:<\/p>\n
(TR x TNI x AD)
\n 360<\/p>\n
Where:<\/p>\n
TR = the Enterprise Tranche Rate applicable
\n to such Enterprise Tranche Period.<\/p>\n
TNI = the portion of the Enterprise Net
\n Investment allocated to such
\n Enterprise Tranche Period.<\/p>\n
13
\n 19
\nAD = the actual number of days during such
\n Enterprise Tranche Period.<\/p>\n
provided, however, that no provision of this Agreement shall require the
\npayment or permit the collection of Enterprise Discount in excess of the
\nmaximum amount permitted by applicable law; and provided, further, that
\nEnterprise Discount shall not be considered paid by any distribution if at any
\ntime such distribution is rescinded or must be returned for any reason.<\/p>\n
“Enterprise Discount Reserve” means, at any time, an amount equal to:<\/p>\n
TD + LY<\/p>\n
Where:<\/p>\n
TD = the sum of the unpaid Enterprise
\n Discount for all Enterprise Tranche Periods.<\/p>\n
LY = the Enterprise Liquidation Yield.<\/p>\n
“Enterprise Early Collection Fee” means, for any Enterprise Tranche
\nPeriod (such Enterprise Tranche Period to be determined without regard to the
\nlast sentence in Section 2.3(a) hereof) during which the portion of the
\nEnterprise Net Investment that was allocated to such Enterprise Tranche Period
\nis reduced for any reason whatsoever, the excess, if any, of (i) the additional
\nEnterprise Discount that would have accrued during such Enterprise Tranche
\nPeriod if such reductions had not occurred, minus (ii) the income, if any,
\nreceived by the recipient of such reductions from investing the proceeds of
\nsuch reductions.<\/p>\n
“Enterprise Eurodollar Tranche” means an Enterprise Tranche as to which
\nEnterprise Discount is calculated at the Eurodollar Rate.<\/p>\n
“Enterprise Eurodollar Tranche Period” means, with respect to an
\nEnterprise Eurodollar Tranche, prior to the Enterprise Termination Date, a
\nperiod of up to one month requested by the Transferor and agreed to by the
\nCompany, NationsBank, on behalf of Enterprise’s Liquidity Provider, or the
\nEnterprise Agent, as the case may be, commencing on a Business Day requested by
\nthe Transferor<\/p>\n
14
\n 20
\nand agreed to by the Company, NationsBank or the Enterprise Agent, as
\napplicable; provided, however, that if such Enterprise Eurodollar Tranche
\nPeriod would expire on a day which is not a Business Day, such Enterprise
\nEurodollar Tranche Period shall expire on the next succeeding Business Day;
\nprovided, further, that if such Enterprise Eurodollar Tranche Period would
\nexpire on (a) a day which is not a Business Day but is a day of the month after
\nwhich no further Business Day occurs in such month, such Enterprise Eurodollar
\nTranche Period shall expire on the next preceding Business Day or (b) a
\nBusiness Day for which there is no numerically corresponding day in the
\napplicable subsequent calendar month, such Enterprise Eurodollar Tranche Period
\nshall expire on the last Business Day of such month.<\/p>\n
“Enterprise Facility Fee” means the fee payable by the Transferor to
\nthe Company pursuant to Section 2.7(a) hereof, the terms of which are set forth
\nin the Enterprise Fee Letter.<\/p>\n
“Enterprise Fee Letter” means the letter agreement dated October 25,
\n1996 between the Transferor and the Company with respect to the fees to be paid
\nby the Transferor hereunder, as amended, modified or supplemented from time to
\ntime.<\/p>\n
“Enterprise Liquidation Yield” means, at any time, an amount equal to:<\/p>\n
(RVF x LBR x NI) x (EMP x 1.5)
\n ———–
\n 360<\/p>\n
Where:<\/p>\n
RVF = the Enterprise Rate Variance Factor at such time;<\/p>\n
LBR = the Base Rate at such time which is applicable to the liquidation
\n period after a Termination Event;<\/p>\n
NI = the Enterprise Net Investment at such time; and<\/p>\n
EMP = the Estimated Maturity Period of the Receivables.<\/p>\n
15
\n 21
\n “Enterprise Loss Reserve” means, on any day, an amount equal to:<\/p>\n
LP x (NI + DR + SFR)<\/p>\n
Where:<\/p>\n
LP = the Loss Percentage at the close of business of the Collection Agent on
\n such day;<\/p>\n
NI = the Enterprise Net Investment at the close of business of the
\n Collection Agent on such day;<\/p>\n
DR = the Enterprise Discount Reserve at the close of business of the
\n Collection Agent on such day; and<\/p>\n
SFR = the Enterprise Servicing Fee Reserve at the close of business of the
\n Collection Agent on such day.<\/p>\n
Notwithstanding the foregoing, the Enterprise Loss Reserve shall at all times
\nbe at least equal to $30,000,000.<\/p>\n
“Enterprise Maximum Net Investment” means $306,000,000; provided that
\nsuch amount may not at any time exceed the aggregate Commitments at any time in
\neffect; provided, further, that from and after the Enterprise Termination Date,
\nthe Enterprise Maximum Net Investment shall at all times equal the Enterprise
\nNet Investment.<\/p>\n
“Enterprise Net Investment” means the sum of the cash amounts paid to
\nthe Transferor by Enterprise or the Bank Investors for each Incremental
\nTransfer less the aggregate amount of Collections received and applied by the
\nAgent to reduce such Enterprise Net Investment pursuant to Section 2.6 or 2.9
\nhereof; provided that the Enterprise Net Investment shall be restored and
\nreinstated in the amount of any Collections so received and applied if at any
\ntime the distribution of such Collections is rescinded or must otherwise be
\nreturned for any reason; and provided further that the Enterprise Net
\nInvestment may be increased by the amount described in Section 9.7(d) as
\ndescribed therein.<\/p>\n
16
\n 22
\n “Enterprise Percentage Factor” means the fraction (expressed as a
\npercentage) computed at any time of determination as follows:<\/p>\n
NI + LR + BAR + DR + SFR
\n ————————-
\n NRB
\nWhere:<\/p>\n
NI = the Enterprise Net Investment at the time of such computation;<\/p>\n
LR = the Enterprise Loss Reserve at the time of such computation;<\/p>\n
BAR = the Enterprise Billing Adjustment Reserve at the time of such
\n computation;<\/p>\n
DR = the Enterprise Discount Reserve at the time of such computation;<\/p>\n
SFR = the Enterprise Servicing Fee Reserve at the time of such computation;
\n and<\/p>\n
NRB = the Net Receivables Balance at the time of such computation.<\/p>\n
The Enterprise Percentage Factor shall be calculated by the Collection Agent
\nfrom time to time as described in Section 2.2(e).<\/p>\n
“Enterprise Program Fee” means the fee payable by the Transferor to the
\nCompany pursuant to Section 2.7 hereof, the terms of which are set forth in the
\nEnterprise Fee Letter.<\/p>\n
“Enterprise Rate Variance Factor” means 1.15 or such other number
\ncomputed from time to time in good faith by the Enterprise Agent and set forth
\nin a written notice by the Enterprise Agent to the Transferor and the
\nCollection Agent.<\/p>\n
“Enterprise Servicing Fee Reserve” means at any time an amount equal to
\nthe product of (i) the aggregate Outstanding Balance of all Receivables at such
\ntime, (ii) 0.5%, (iii) a fraction having, as the numerator, the sum of (a) 1.5
\ntimes the Estimated Maturity Period plus (b)<\/p>\n
17
\n 23
\n30 and, as the denominator, 360 and (iv) a fraction the numerator of which is
\nthe Enterprise Net Investment and the denominator of which is the Net
\nInvestment.<\/p>\n
“Enterprise Termination Date” means the earliest of (i) the Business
\nDay designated by the Transferor to the Company as the “Enterprise Termination
\nDate” at any time following 60 days’ written notice to the Company, (ii) the
\ndate of termination of the commitment of any Liquidity Provider under any
\nLiquidity Provider Agreement, but only with respect to the Company, (iii) the
\ndate of termination of the commitment of any Credit Support Provider under any
\nCredit Support Agreement, but only with respect to the Company (iv) the day
\nupon which the Termination Date is declared or automatically occurs pursuant to
\nSection 7.2(a) hereof, (v) two (2) Business Days prior to the Commitment
\nTermination Date, (vi) the day on which a Reinvestment Termination Date shall
\noccur, (vii) the Purchase Termination Date, (viii) October 24, 1997, (ix) on or
\nafter the occurrence of a Sheffield Termination Date, the Business Day
\ndesignated by the Enterprise Agent, at its option, as the Enterprise
\nTermination Date or (x) the Business Day designated as the Enterprise
\nTermination Date by the Enterprise Agent on or after the day on which the
\nCommercial Paper issued by the Company shall not be rated at least “A-2” by
\nStandard & Poor’s and at least “P-2” by Moody’s.<\/p>\n
“Enterprise Tranche” means a portion of the Enterprise Net Investment
\nallocated to an Enterprise Tranche Period pursuant to Section 2.3 hereof.<\/p>\n
“Enterprise Tranche Period” means an Enterprise CP Tranche Period, an
\nEnterprise BR Tranche Period or an Enterprise Eurodollar Tranche Period.<\/p>\n
“Enterprise Tranche Rate” means the Enterprise CP Rate, the Base Rate
\nor the Eurodollar Rate.<\/p>\n
“ERISA” means the U.S. Employee Retirement Income Security Act of 1974,
\nas amended from time to time, and the regulations promulgated and rulings
\nissued thereunder.<\/p>\n
“ERISA Affiliate” means, with respect to any Person, (i) any
\ncorporation which is a member of the same controlled group of corporations
\n(within the meaning of<\/p>\n
18
\n 24
\nSection 414(b) of the Code (as in effect from time to time, the “Code”)) as
\nsuch Person; (ii) a trade or business (whether or not incorporated) under
\ncommon control (within the meaning of Section 414(c) of the Code) with such
\nPerson; or (iii) a member of the same affiliated service group (within the
\nmeaning of Section 414(n) of the Code) as such Person, any corporation
\ndescribed in clause (i) above or any trade or business described in clause (ii)
\nabove.<\/p>\n
“Estimated Maturity Period” means, at any time, the period, rounded
\nupward to the nearest whole number of days, equal to the weighted average
\nnumber of days until due of the Receivables as calculated by the Collection
\nAgent in good faith and set forth in the most recent Investor Report, such
\ncalculation to be based on the assumptions that (a) each Receivable within a
\nparticular aging category, (as set forth in the Investor Report) will be paid
\non the last day of such aging category and (b) the last day of the last such
\naging category coincides with the last date on which any Outstanding Balance of
\nany Receivables would be written off as uncollectible or charged against any
\napplicable reserve or similar account in accordance with the objective
\nrequirements of the Credit and Collection Policy and WorldCom’s normal
\naccounting practices applied on a basis consistent with those reflected in
\nWorldCom’s financial statements; provided, however, that if the Agent, the
\nEnterprise Agent, the Company, Sheffield or any of the Bank Investors shall
\nreasonably disagree with any such calculation, the Agent may recalculate the
\nEstimated Maturity Period, and such recalculation, in the absence of manifest
\nerror, shall be conclusive.<\/p>\n
“Eurodollar Rate” means, with respect to any Enterprise Eurodollar
\nTranche Period or Sheffield Eurodollar Tranche Period, a rate which is 0.625%
\nin excess of a rate per annum equal to the sum (rounded upwards, if necessary,
\nto the next higher 1\/100 of 1%) of (A) the rate obtained by dividing (i) the
\napplicable LIBOR Rate by (ii) a percentage equal to 100% minus the reserve
\npercentage used for determining the maximum reserve requirement as specified in
\nRegulation D (including, without limitation, any marginal, emergency,
\nsupplemental, special or other reserves) that is applicable to the Agent during
\nsuch Enterprise Eurodollar Tranche Period or Sheffield Eurodollar Tranche
\nPeriod in respect of<\/p>\n
19
\n 25
\neurocurrency or eurodollar funding, lending or liabilities (or, if more than
\none percentage shall be so applicable, the daily average of such percentage for
\nthose days in such Enterprise Eurodollar Tranche Period or Sheffield Eurodollar
\nTranche Period during which any such percentage shall be applicable) plus (B)
\nthe then daily net annual assessment rate (rounded upwards, if necessary, to
\nthe nearest 1\/100 of 1%) as estimated by the Agent for determining the current
\nannual assessment payable by the Agent to the Federal Deposit Insurance
\nCorporation in respect of eurocurrency or eurodollar funding, lending or
\nliabilities.<\/p>\n
“Event of Bankruptcy” means, with respect to any Person, (i) that such
\nPerson (a) shall generally not pay its debts as such debts become due or (b)
\nshall admit in writing its inability to pay its debts generally or (c) shall
\nmake a general assignment for the benefit of creditors; (ii) any proceeding
\nshall be instituted by or against such Person seeking to adjudicate it as
\nbankrupt or insolvent, or seeking liquidation, winding up, reorganization,
\narrangement, adjustment, protection, relief or composition of it or its debts
\nunder any law relating to bankruptcy, insolvency or reorganization or relief of
\ndebtors, or seeking the entry of an order for relief or the appointment of a
\nreceiver, trustee or other similar official for it or any substantial part of
\nits property or (iii) if such Person is a corporation, such Person or any
\nSubsidiary shall take any corporate action to authorize any of the actions set
\nforth in the preceding clauses (i) or (ii).<\/p>\n
“Excluded Taxes” shall have the meaning specified in Section 8.3
\nhereof.<\/p>\n
“Finance Charges” means, with respect to a Contract, any finance,
\ninterest, late or similar charges owing by an Obligor pursuant to such
\nContract.<\/p>\n
“GAAP” means generally accepted accounting principles set forth in the
\nopinions and pronouncements of the Accounting Principles Board of the American
\nInstitute of Certified Public Accountants and statements and pronouncements of
\nthe Financial Accounting Standards Board or in such other statements by such
\naccounting profession, which are in effect as of the date of this Agreement.<\/p>\n
20
\n 26
\n “Guaranty” means, with respect to any Person any agreement by which
\nsuch Person assumes, guarantees, endorses, contingently agrees to purchase or
\nprovide funds for the payment of, or otherwise becomes liable upon, the
\nobligation of any other Person, or agrees to maintain the net worth or working
\ncapital or other financial condition of any other Person or otherwise assures
\nany other creditor of such other Person against loss, including, without
\nlimitation, any comfort letter, operating agreement or take-or-pay contract and
\nshall include, without limitation, the contingent liability of such Person in
\nconnection with any application for a letter of credit.<\/p>\n
“Incremental Transfer” means a Transfer which is made pursuant to
\nSection 2.2(a) hereof.<\/p>\n
“Indebtedness” means, with respect to any Person such Person’s (i)
\nobligations for borrowed money, (ii) obligations representing the deferred
\npurchase price of property other than accounts payable arising in the ordinary
\ncourse of such Person’s business on terms customary in the trade, (iii)
\nobligations, whether or not assumed, secured by liens or payable out of the
\nproceeds or production from property now or hereafter owned or acquired by such
\nPerson, (iv) obligations which are evidenced by notes, acceptances, or other
\ninstruments, (v) Capitalized Lease obligations and (vi) obligations for which
\nsuch Person is obligated pursuant to a Guaranty.<\/p>\n
“Indemnified Amounts” has the meaning specified in Section 8.1 hereof.<\/p>\n
“Indemnified Parties” has the meaning specified in Section 8.1 hereof.<\/p>\n
“Interest Component” means (i) with respect to any Commercial Paper
\nissued on an interest-bearing basis, the interest payable on such Commercial
\nPaper at its maturity (including any dealer commissions) and (ii) with respect
\nto any Commercial Paper issued on a discount basis, the portion of the face
\namount of such Commercial Paper representing the discount incurred in respect
\nthereof (including any dealer commissions).<\/p>\n
21
\n 27
\n “Investor Report” means a report, in substantially the form attached
\nhereto as Exhibit E or in such other form as is mutually agreed to by the
\nTransferor, the Enterprise Agent and Sheffield, furnished by the Collection
\nAgent pursuant to Section 2.11 hereof.<\/p>\n
“Law” means any law (including common law), constitution, statute,
\ntreaty, regulation, rule, ordinance, order, injunction, writ, decree or award
\nof any Official Body.<\/p>\n
“LIBOR Rate” means, with respect to any Enterprise Eurodollar Tranche
\nPeriod or Sheffield Eurodollar Tranche Period, the rate at which deposits in
\ndollars are offered to the Agent, in the London interbank market at
\napproximately 11:00 A.M. (London time) two Business Days before the first day
\nof such Enterprise Eurodollar Tranche Period or Sheffield Eurodollar Tranche
\nPeriod in an amount approximately equal to the Enterprise Eurodollar Tranche
\nPeriod or Sheffield Eurodollar Tranche to which the Eurodollar Rate is to apply
\nand for a period of time approximately equal to the applicable Enterprise
\nEurodollar Tranche Period or Sheffield Eurodollar Tranche Period.<\/p>\n
“Liquidity Provider” means the Person or Persons who will provide
\nliquidity support to the Company or Sheffield in connection with the issuance
\nby the Company or Sheffield, as applicable, of its Commercial Paper.<\/p>\n
“Liquidity Provider Agreement” means the agreement between the Company
\nor Sheffield, as applicable, and the Liquidity Provider evidencing the
\nobligation of such Liquidity Provider to provide liquidity support to the
\nCompany or Sheffield in connection with the issuance by the Company or
\nSheffield, as applicable, of its Commercial Paper.<\/p>\n
“Lock-Box Account” means an account maintained by the Collection Agent
\nat a Lock- Box Bank for the purpose of receiving Collections from Receivables.<\/p>\n
“Lock-Box Agreement” means an agreement between the Collection Agent
\nand a Lock-Box Bank in substantially the form of Exhibit D hereto or such other
\nform of agreement as shall have been approved by the Agent.<\/p>\n
22
\n 28
\n “Lock-Box Bank” means each of the banks set forth in Exhibit C hereto
\nand such banks as may be added thereto or deleted therefrom pursuant to Section
\n2.8 hereof.<\/p>\n
“Loss Percentage” means, on any day, the greatest of (i) 2.5 times the
\nhighest two- month rolling average Loss-to-Liquidation Ratio as of the last day
\nof each of the twelve (12) calendar months preceding the then current month and
\n(ii) 15%.<\/p>\n
“Loss-to-Liquidation Ratio” means the ratio (expressed as a percentage)
\ncomputed as of the last day of each calendar month by dividing (i) the
\naggregate Outstanding Balance of all Receivables which have been written off as
\nuncollectible by the Collection Agent during such calendar month, together with
\nthe aggregate Outstanding Balance of all Receivables which are 91-120 days past
\ndue, by (ii) the aggregate amount of Collections received by the Collection
\nAgent during such calendar month.<\/p>\n
“Majority Investors” shall have the meaning specified in Section 9.1(a)
\nhereof.<\/p>\n
“Material Adverse Effect” means any event or condition which would (i)
\nhave a material and adverse effect on the collectibility of the Receivables,
\n(ii) have a material and adverse effect on the businesses, properties,
\ncondition (financial or otherwise) or results of operations of the Transferor
\nor WorldCom, in each case considered as a whole (iii) cause a material
\nimpairment of the ability of the Transferor or WorldCom to perform any of its
\npayment or material obligations under the Transaction Documents to which it is
\na party or the ability of the Company, Sheffield, the Bank Investors, the
\nEnterprise Agent or the Agent to enforce such obligations or any of their
\nrights under the Transaction Documents and (iv) have a material and adverse
\neffect on the interests of the Agent, the Enterprise Agent, the Company,
\nSheffield or the Bank Investors under the Transaction Documents.<\/p>\n
“Maximum Net Investment” means the sum of the Enterprise Maximum Net
\nInvestment and the Sheffield Maximum Net Investment.<\/p>\n
23
\n 29
\n “Maximum Percentage Factor” means 98%.<\/p>\n
“Moody’s” means Moody’s Investors Service, Inc.<\/p>\n
“Multiemployer Plan” means a “multiemployer plan” as defined in Section
\n4001(a)(3) of ERISA which is or was at any time during the current year or the
\nimmediately preceding five years contributed to by the Transferor, WorldCom or
\nany ERISA Affiliate of the Transferor or WorldCom on behalf of its employees.<\/p>\n
“Net Asset Test” means, in connection with any assignment by the
\nCompany to the Bank Investors of an interest in the Enterprise Net Investment
\npursuant to Section 9.7 hereof, that on the day immediately prior to the day on
\nwhich such assignment is to take effect, the Net Receivables Balance shall be
\ngreater than the sum of the Enterprise Net Investment plus the Sheffield Net
\nInvestment plus the Enterprise Liquidation Yield plus the Sheffield Liquidation
\nYield.<\/p>\n
“Net Investment” means the sum of Enterprise Net Investment and the
\nSheffield Net Investment.<\/p>\n
“Net Receivables Balance” means at any time the Outstanding Balance of
\nthe Eligible Receivables at such time reduced by the sum of (i) the aggregate
\namount by which the Outstanding Balance of all Eligible Receivables of each
\nDesignated Obligor exceeds the Concentration Factor for such Designated
\nObligor, plus (ii) the aggregate Outstanding Balance of all Eligible
\nReceivables which are Defaulted Receivables, plus (iii) the product of (A) 30%
\nand (B) the aggregate Outstanding Balance of all Receivables which are Private
\nLine Receivables plus, (iv) at the request of the Enterprise Agent or
\nSheffield, the aggregate Outstanding Balance of all Eligible Receivables of
\neach Obligor with respect to which either 25% or more of such Obligor’s
\nReceivables are Defaulted Receivables or 50% or more of such Obligor’s
\nReceivables are Delinquent Receivables.<\/p>\n
“Obligor” means a Person obligated to make payments for the provision
\nof goods and services pursuant to a Contract.<\/p>\n
“Official Body” means any government or political subdivision or any
\nagency, authority, bureau, central<\/p>\n
24
\n 30
\nbank, commission, department or instrumentality of any such government or
\npolitical subdivision, or any court, tribunal, grand jury or arbitrator, in
\neach case whether foreign or domestic.<\/p>\n
“Other Transferor” means any Person other than the Transferor that has
\nentered into a receivables purchase agreement or transfer and administration
\nagreement with the Company.<\/p>\n
“Outstanding Balance” means, with respect to any Receivable at any
\ntime, the then outstanding principal amount thereof excluding any accrued and
\noutstanding Finance Charges related thereto.<\/p>\n
“Percentage Factor” means the sum of the Enterprise Percentage Factor
\nand the Sheffield Percentage Factor.<\/p>\n
“Permitted Originator” means Com Systems Inc., a California
\ncorporation, WorldCom Network Services, Inc., a Delaware corporation, and any
\nother Affiliate of WorldCom designated as a “Permitted Originator” in writing
\nby the Agent.<\/p>\n
“Permitted Originator Receivables Purchase Agreement” shall have the
\nmeaning specified in the Receivables Purchase Agreement.<\/p>\n
“Person” means any corporation, limited liability company, natural
\nperson, firm, joint venture, partnership, trust, unincorporated organization,
\nenterprise, government or any department or agency of any government.<\/p>\n
“Potential Termination Event” means an event which but for the lapse of
\ntime or the giving of notice, or both, would constitute a Termination Event.<\/p>\n
“Private Line Receivable” means any right to payment from an Obligor,
\nwhether constituting an account, chattel paper, instrument or general
\nintangible, arising from the sale by WorldCom or a Permitted Originator of
\nPrivate Line Services related to telecommunications, and includes the right to
\npayment of any interest or finance charges and other obligations of such
\nObligor with respect thereto.<\/p>\n
25
\n 31
\n “Private Line Services” means dedicated telecommunications services
\nprovided by WorldCom or a Permitted Originator to its customers between
\ndesignated customer premises.<\/p>\n
“Pro Rata Share” means, for a Bank Investor, the Commitment of such
\nBank Investor divided by the sum of the Commitments of all Bank Investors.<\/p>\n
“Proceeds” means “proceeds” as defined in Section 9-306(1) of the UCC.<\/p>\n
“Purchased Interest” means the interest in the Receivables acquired by
\na Liquidity Provider through purchase pursuant to the terms of a Liquidity
\nProvider Agreement.<\/p>\n
“Purchase Termination Date” means the date upon which the Transferor
\nshall cease, for any reason whatsoever, to make purchases of Receivables from
\nWorldCom under the Receivables Purchase Agreement or the Receivables Purchase
\nAgreement shall terminate for any reason whatsoever.<\/p>\n
“Rebiller” means any customer of WorldCom and the Permitted Originators
\nwhich purchases long distance service in bulk and resells such service to
\nsmaller end-users.<\/p>\n
“Receivable” means the indebtedness owed to WorldCom or any Permitted
\nOriginator by any Obligor, with the exception of Cherry Communications,
\nAmerican Teletronics Long Distance, Universal Network Services, Conetco,
\nUnidial, Oncor, Century and any other operator billed service (without giving
\neffect to any purchase under the Receivables Purchase Agreement by the
\nTransferor at any time) under a Contract (and, if originated by a Permitted
\nOriginator, sold by such Permitted Originator to WorldCom) and, in either case,
\nsold by WorldCom to the Transferor pursuant to the Receivables Purchase
\nAgreement, whether constituting an account, chattel paper, instrument,
\ninvestment property or general intangible, arising in connection with the sale
\nor lease of merchandise or the rendering of services by WorldCom or a Permitted
\nOriginator, and includes the right to payment of any Finance Charges and other
\nobligations of such Obligor with respect thereto. Notwithstanding the
\nforegoing,<\/p>\n
26
\n 32
\nonce a Receivable has been deemed collected pursuant to Section 2.9 hereof, it
\nshall no longer constitute a Receivable hereunder.<\/p>\n
“Receivables Purchase Agreement” means the Receivables Purchase
\nAgreement dated as of October 25, 1996 by and between WorldCom, as seller, and
\nthe Transferor, as purchaser, as such agreement may be amended, supplemented or
\notherwise modified and in effect from time to time.<\/p>\n
“Records” means all Contracts and other documents, books, records and
\nother information (including, without limitation, computer programs, tapes,
\ndiscs, punch cards, data processing software and related property and rights)
\nmaintained with respect to Receivables and the related Obligors.<\/p>\n
“Reinvestment Termination Date” means the second Business Day after the
\ndelivery by the Company to the Transferor of written notice that the Company
\nelects to commence the amortization of its interest in the Enterprise Net
\nInvestment.<\/p>\n
“Related Commercial Paper” means, with respect to Commercial Paper
\nissued by the Company or Sheffield, Commercial Paper issued by the Company or
\nSheffield, respectively, the proceeds of which were used to acquire, or
\nrefinance the acquisition of, an interest in Receivables with respect to the
\nTransferor.<\/p>\n
“Related Security” means, with respect to any Receivable, all of the
\nTransferor’s rights, title and interest in, to and under:<\/p>\n
(i) all of the Transferor’s interest, if any, in the merchandise
\n (including returned or repossessed merchandise), if any, the sale of which
\n by the Transferor gave rise to such Receivable;<\/p>\n
(ii) all other security interests or liens and property subject
\n thereto from time to time, if any, purporting to secure payment of such
\n Receivable, whether pursuant to the Contract related to such Receivable or
\n otherwise, together with all financing<\/p>\n
27
\n 33
\n statements signed by an Obligor describing any collateral securing such
\n Receivable;<\/p>\n
(iii) all guarantees, indemnities, warranties, insurance (and
\n proceeds and premium refunds thereof) or other agreements or arrangements
\n of any kind from time to time supporting or securing payment of such
\n Receivable whether pursuant to the Contract related to such Receivable or
\n otherwise;<\/p>\n
(iv) all Records related to such Receivable;<\/p>\n
(v) all rights and remedies of (A) the Transferor under the
\n Receivables Purchase Agreement, together with all financing statements
\n filed by the Transferor against WorldCom in connection therewith and (B)
\n WorldCom under a sale and assignment agreement with a Permitted Originator,
\n together with all financing statements filed by WorldCom against such
\n Permitted Originator in connection therewith; and<\/p>\n
(vi) all Proceeds of any of the foregoing.<\/p>\n
“Section 8.2 Costs” has the meaning specified in Section 8.2(d) hereof.<\/p>\n
“Servicing Fee” means the fees payable by the Company, Sheffield or
\nthe Bank Investors to the Collection Agent, with respect to an Enterprise
\nTranche or a Sheffield Tranche, as applicable, in an amount equal to 0.50% per
\nannum on the amount of the Enterprise Net Investment or Sheffield Net
\nInvestment allocated to such Enterprise Tranche or Sheffield Tranche pursuant
\nto Section 2.3 hereof. Such fee shall accrue from the date of the initial
\npurchase of an interest in the Receivables to the later of the Termination Date
\nor the date on which the Enterprise Percentage Factor or<\/p>\n
28
\n 34
\nSheffield Percentage Factor, as applicable, is reduced to zero. On or prior to
\nthe Enterprise Termination Date or the Sheffield Termination Date, as
\napplicable, such fee shall be payable only from Collections pursuant to, and
\nsubject to the priority of payments set forth in, Section 2.5 hereof. After
\nthe Enterprise Termination Date or the Sheffield Termination Date, as
\napplicable,such fee shall be payable only from Collections pursuant to, and
\nsubject to the priority of payments set forth in, Section 2.6 hereof.<\/p>\n
“Sheffield” means Sheffield Receivables Corporation, a Delaware
\ncorporation, and its successors and permitted assigns.<\/p>\n
“Sheffield Billing Adjustments Reserve” means, at any time, an amount
\nequal to the product of (i) the greater of (A) 5% and (B) 1.5 multiplied by the
\nhighest Billing Adjustment Ratio over the last twelve (12) months and (ii) the
\nsum of the Sheffield Net Investment, the Sheffield Discount Reserve and the
\nSheffield Servicing Fee Reserve at such time.<\/p>\n
Notwithstanding the foregoing, the Sheffield Billing Adjustments Reserve shall
\nat all times be at least equal to $2,500,000.<\/p>\n
“Sheffield BR Tranche” means a Sheffield Tranche as to which Sheffield
\nDiscount is calculated at the Base Rate.<\/p>\n
“Sheffield BR Tranche Period” means, with respect to a Sheffield BR
\nTranche, either (i) prior to the Sheffield Termination Date, a period of up to
\n30 days requested by the Transferor and agreed to by Sheffield, commencing on a
\nBusiness Day requested by the Transferor and agreed to by Sheffield, or (ii)
\nafter the Sheffield Termination Date, a period of one day. If such Sheffield
\nBR Tranche Period would end on a day which is not a Business Day, such
\nSheffield BR Tranche Period shall end on the next succeeding Business Day.<\/p>\n
“Sheffield CP Rate” means, with respect to any Sheffield CP Tranche
\nPeriod, the rate equivalent to the rate (or if more than one rate, the weighted
\naverage of the rates) at which Commercial Paper issued by Sheffield having a
\nterm equal to such Sheffield CP Tranche Period may be sold by any placement
\nagent or commercial paper dealer selected by Sheffield, provided, however, that
\nif the rate (or rates) as agreed between any such agent or dealer and Sheffield
\nis a discount rate, then the rate (or if more than one rate, the weighted
\naverage of the rates) resulting from Sheffield’s converting such<\/p>\n
29
\n 35
\ndiscount rate (or rates) to an interest-bearing equivalent rate per annum.<\/p>\n
“Sheffield CP Tranche” means a Sheffield Tranche as to which Sheffield
\nDiscount is calculated at a Sheffield CP Rate.<\/p>\n
“Sheffield CP Tranche Period” means, with respect to a Sheffield CP
\nTranche, a period of days not to exceed ninety (90) days commencing on a
\nBusiness Day requested by the Transferor and agreed to by Sheffield pursuant to
\nSection 2.3. If a Sheffield CP Tranche Period would end on a day which is not
\na Business Day, such Sheffield CP Tranche Period shall end on the next
\nsucceeding Business Day.<\/p>\n
“Sheffield Dealer Fee” means the fee payable by the Transferor to
\nSheffield, pursuant to Section 2.4 hereof, the terms of which are set forth in
\nthe Sheffield Fee Letter.<\/p>\n
“Sheffield Discount” means, with respect to any Sheffield Tranche
\nPeriod:<\/p>\n
(TR x TNI x AD)
\n —
\n 360<\/p>\n
Where:<\/p>\n
TR = the Sheffield Tranche Rate applicable to such Sheffield Tranche Period.<\/p>\n
TNI = the portion of the Sheffield Net Investment allocated to such Sheffield
\n Tranche Period.<\/p>\n
AD = the actual number of days during such Sheffield Tranche Period.<\/p>\n
provided, however, that no provision of this Agreement shall require the
\npayment or permit the collection of Sheffield Discount in excess of the maximum
\namount permitted by applicable law; and provided, further, that Sheffield
\nDiscount shall not be considered paid by any distribution if at any time such
\ndistribution is rescinded or must be returned for any reason.<\/p>\n
30
\n 36
\n “Sheffield Discount Reserve” means, at any time, an amount equal to:<\/p>\n
TD + LY<\/p>\n
Where:<\/p>\n
TD = the sum of the unpaid Sheffield Discount for all Sheffield Tranche
\n Periods.<\/p>\n
LY = the Sheffield Liquidation Yield.<\/p>\n
“Sheffield Early Collection Fee” means, for any Sheffield Tranche
\nPeriod (such Sheffield Tranche Period to be determined without regard to the
\nlast sentence in Section 2.3(a) hereof) during which the portion of the
\nSheffield Net Investment that was allocated to such Sheffield Tranche Period is
\nreduced for any reason whatsoever, the excess, if any, of (i) the additional
\nSheffield Discount that would have accrued during such Sheffield Tranche Period
\nif such reductions had not occurred, minus (ii) the income, if any, received by
\nthe recipient of such reductions from investing the proceeds of such
\nreductions.<\/p>\n
“Sheffield Eurodollar Tranche” means a Sheffield Tranche as to which
\nSheffield Discount is calculated at the Eurodollar Rate.<\/p>\n
“Sheffield Eurodollar Tranche Period” means, with respect to a
\nSheffield Eurodollar Tranche, prior to the Sheffield Termination Date, a period
\nof up to one month requested by the Transferor and agreed to by Sheffield,
\ncommencing on a Business Day requested by the Transferor and agreed to by
\nSheffield; provided, however, that if such Sheffield Eurodollar Tranche Period
\nwould expire on a day which is not a Business Day, such Sheffield Eurodollar
\nTranche Period shall expire on the next succeeding Business Day; provided,
\nfurther, that if such Sheffield Eurodollar Tranche Period would expire on (a) a
\nday which is not a Business Day but is a day of the month after which no
\nfurther Business Day occurs in such month, such Sheffield Eurodollar Tranche
\nPeriod shall expire on the next preceding Business Day or (b) a Business Day
\nfor which there is no numerically corresponding day in the applicable
\nsubsequent calendar month, such<\/p>\n
31
\n 37
\nSheffield Eurodollar Tranche Period shall expire on the last Business Day of
\nsuch month.<\/p>\n
“Sheffield Facility Fee” means the fee payable by the Transferor to
\nSheffield pursuant to Section 2.7(b) hereof, the terms of which are set forth
\nin the Sheffield Fee Letter.<\/p>\n
“Sheffield Fee Letter” means the letter agreement dated the date hereof
\nbetween the Transferor and Sheffield with respect to the fees to be paid by the
\nTransferor hereunder, as amended, modified or supplemented from time to time.<\/p>\n
“Sheffield Liquidation Yield” means, at any time, an amount equal to:<\/p>\n
(RVF x LBR x NI) x (EMP x 1.5)
\n ———–
\n 360<\/p>\n
Where:<\/p>\n
RVF = the Sheffield Rate Variance Factor at such time;<\/p>\n
LBR = the Base Rate at such time which is applicable to the liquidation
\n period after a Termination Event;<\/p>\n
NI = the Sheffield Net Investment at such time; and<\/p>\n
EMP = the Estimated Maturity Period of the Receivables.<\/p>\n
“Sheffield Loss Reserve” means, on any day, an amount equal to:<\/p>\n
LP x (NI + DR + SFR)<\/p>\n
Where:<\/p>\n
LP = the Loss Percentage at the close of business of the Collection Agent on
\n such day;<\/p>\n
NI = the Sheffield Net Investment at the close of business of the Collection
\n Agent on such day;<\/p>\n
32
\n 38
\nDR = the Sheffield Discount Reserve at the close of business of the
\n Collection Agent on such day; and<\/p>\n
SFR = the Sheffield Servicing Fee Reserve at the close of business of the
\n Collection Agent on such day.<\/p>\n
Notwithstanding the foregoing, the Sheffield Loss Reserve shall at all times be
\nat least equal to $7,500,000.<\/p>\n
“Sheffield Maximum Net Investment” means $75,000,000; provided,
\nfurther, that from and after the Sheffield Termination Date, the Sheffield
\nMaximum Net Investment shall at all times equal the Sheffield Net Investment.<\/p>\n
“Sheffield Net Investment” means the sum of the cash amounts paid to
\nthe Transferor by Sheffield for each Incremental Transfer less the aggregate
\namount of Collections received and applied by Sheffield to reduce such
\nSheffield Net Investment pursuant to Section 2.6 or 2.9 hereof; provided that
\nthe Sheffield Net Investment shall be restored and reinstated in the amount of
\nany Collections so received and applied if at any time the distribution of such
\nCollections is rescinded or must otherwise be returned for any reason.<\/p>\n
“Sheffield Percentage Factor” means the fraction (expressed as a
\npercentage) computed at any time of determination as follows:<\/p>\n
NI + LR + BAR + DR + SFR
\n ————————-
\n NRB
\nWhere:<\/p>\n
NI = the Sheffield Net Investment at the time of such computation;<\/p>\n
LR = the Sheffield Loss Reserve at the time of such computation;<\/p>\n
BAR = the Sheffield Billing Adjustment Reserve at the time of such
\n computation;<\/p>\n
DR = the Sheffield Discount Reserve at the time of such computation;<\/p>\n
33
\n 39
\nSFR = the Sheffield Servicing Fee Reserve at the time of such computation;
\n and<\/p>\n
NRB = the Net Receivables Balance at the time of such computation.<\/p>\n
The Sheffield Percentage Factor shall be calculated by the Collection Agent
\nfrom time to time as described in Section 2.2(e).<\/p>\n
“Sheffield Program Fee” means the fee payable by the Transferor to
\nSheffield pursuant to Section 2.7(b) hereof, the terms of which are set forth
\nin the Sheffield Fee Letter.<\/p>\n
“Sheffield Rate Variance Factor” means 1.15 or such other number
\ncomputed from time to time in good faith by Sheffield and set forth in a
\nwritten notice by Sheffield to the Transferor and the Collection Agent.<\/p>\n
“Sheffield Servicing Fee Reserve” means at any time an amount equal to
\nthe product of (i) the aggregate Outstanding Balance of all Receivables at such
\ntime, (ii) 0.5%, (iii) a fraction having, as the numerator, the sum of (a) 1.5
\ntimes the Estimated Maturity Period plus (b) 30 and, as the denominator, 360
\nand (iv) a fraction the numerator of which is the Sheffield Net Investment and
\nthe denominator of which is the Net Investment.<\/p>\n
“Sheffield Termination Date” means the earliest of (i) the Business Day
\ndesignated by the Transferor to Sheffield as the “Sheffield Termination Date”
\nat any time following 60 days’ written notice to Sheffield, (ii) the date of
\ntermination of the commitment of any Liquidity Provider under any Liquidity
\nProvider Agreement, but only with respect to Sheffield, (iii) the date of
\ntermination of the commitment of any Credit Support Provider under any Credit
\nSupport Agreement, but only with respect to Sheffield, (iv) the day upon which
\nthe Termination Date is declared or automatically occurs pursuant to Section
\n7.2(a) hereof, (v) the Purchase Termination Date, (vi) October 24, 1997, or
\n(vii) on or after the occurrence of an Enterprise Termination Date, the
\nBusiness Day designated by Sheffield, at its option, as the Sheffield
\nTermination Date.<\/p>\n
34
\n 40
\n “Sheffield Tranche” means a portion of the Sheffield Net Investment
\nallocated to a Sheffield Tranche Period pursuant to Section 2.3 hereof.<\/p>\n
“Sheffield Tranche Period” means a Sheffield CP Tranche Period, a
\nSheffield BR Tranche Period or a Sheffield Eurodollar Tranche Period.<\/p>\n
“Sheffield Tranche Rate” means the Sheffield CP Rate, the Base Rate or
\nthe Eurodollar Rate.<\/p>\n
“Standard & Poor’s” or “S&P” means Standard & Poor’s Ratings Services,
\na Division of The McGraw-Hill Companies.<\/p>\n
“Subordinated Note” shall have the meaning specified in the Receivables
\nPurchase Agreement.<\/p>\n
“Subsidiary” of a Person means any Person more than 50% of the
\noutstanding voting interests of which shall at any time be owned or controlled,
\ndirectly or indirectly, by such Person or by one or more Subsidiaries of such
\nPerson or any similar business organization which is so owned or controlled.<\/p>\n
“Switched Service Receivable” means any right to payment from an
\nObligor, whether constituting an account, chattel paper, instrument or general
\nintangible, arising from the sale by WorldCom or a Permitted Originator of
\nSwitched Services related to telecommunications, and includes the right to
\npayment of any interest or finance charges and other obligations of such
\nObligor with respect thereto.<\/p>\n
“Switched Services” means the measured services provided by WorldCom or
\na Permitted Originator to its customers for originating and\/or terminating
\ntelecommunications transmissions.<\/p>\n
“Taxes” shall have the meaning specified in Section 8.3 hereof.<\/p>\n
“Termination Date” shall have the meaning specified in Section 7.2 (a)
\nhereof.<\/p>\n
35
\n 41
\n “Termination Event” means an event described in Section 7.1 hereof.<\/p>\n
“Transaction Costs” has the meaning specified in Section 8.4(a) hereof.<\/p>\n
“Transaction Documents” means, collectively, this Agreement, the
\nReceivables Purchase Agreement, the Enterprise Fee Letter, the Sheffield Fee
\nLetter, the Lock-Box Agreements, the Certificates, the Transfer Certificates
\nand all of the other instruments, documents and other agreements executed and
\ndelivered by WorldCom or the Transferor in connection with any of the
\nforegoing, in each case, as the same may be amended, restated, supplemented or
\notherwise modified from time to time.<\/p>\n
“Transfer” means a conveyance, transfer and assignment by the
\nTransferor to the Company, Sheffield or the Bank Investors of an undivided
\npercentage ownership interest in Receivables hereunder (including, without
\nlimitation, as a result of any reinvestment of Collections in Transferred
\nInterests pursuant to Section 2.2(b) and 2.5).<\/p>\n
“Transfer Certificate” has the meaning specified in Section 2.2(a)
\nhereof.<\/p>\n
“Transfer Date” means, with respect to each Transfer, the Business Day
\non which such Transfer is made.<\/p>\n
“Transfer Price” means with respect to any Incremental Transfer, the
\namount paid to the Transferor by the Company, Sheffield or the Bank Investors
\nas described in the applicable Transfer Certificate. The Transfer Price for
\nany Transfer shall be comprised of (a) a cash component equal to the Enterprise
\nNet Investment or the Sheffield Net Investment, as applicable, less the
\nEnterprise Net Investment or Sheffield Net Investment, as applicable, paid for
\nall prior Transfers, and (b) a deferred payment component payable in accordance
\nwith Section 2.6 hereof.<\/p>\n
“Transferor” means WorldCom Funding Corporation, a Delaware
\ncorporation, and its successors and permitted assigns.<\/p>\n
36
\n 42
\n “Transferred Interest” means, at any time of determination, an
\nundivided percentage ownership interest in (i) each and every then outstanding
\nReceivable, (ii) all Related Security with respect to each such Receivable,
\n(iii) all Collections with respect thereto, and (iv) other Proceeds of the
\nforegoing, which undivided ownership interest shall be equal to the Percentage
\nFactor at such time, and only at such time (without regard to prior
\ncalculations). The Transferred Interest in each Receivable, together with
\nRelated Security, Collections and Proceeds with respect thereto, shall at all
\ntimes be equal to the Transferred Interest in each other Receivable, together
\nwith Related Security, Collections and Proceeds with respect thereto. To the
\nextent that the Transferred Interest shall decrease as a result of a
\nrecalculation of the Percentage Factor, the Company, Sheffield or the Bank
\nInvestors, as applicable, shall be considered to have reconveyed to the
\nTransferor an undivided percentage ownership interest in each Receivable,
\ntogether with Related Security, Collections and Proceeds with respect thereto,
\nin an amount equal to such decrease such that in each case the Transferred
\nInterest in each Receivable shall be equal to the Transferred Interest in each
\nother Receivable.<\/p>\n
“UCC” means, with respect to any state, the Uniform Commercial Code as
\nfrom time to time in effect in such state.<\/p>\n
“U.S.” or “United States” means the United States of America.<\/p>\n
“WorldCom” means WorldCom, Inc., a Georgia corporation, and its
\nsuccessors and assigns.<\/p>\n
SECTION 1.2. Other Terms. All accounting terms not specifically
\ndefined herein shall be construed in accordance with GAAP. All terms used in
\nArticle 9 of the UCC in the State of New York, and not specifically defined
\nherein, are used herein as defined in such Article 9.<\/p>\n
SECTION 1.3. Computation of Time Periods. Unless otherwise stated
\nin this Agreement, in the computation of a period of time from a specified date
\nto a later specified date, the word “from” means “from and including”, the
\nwords “to” and “until” each means “to but<\/p>\n
37
\n 43
\nexcluding”, and the word “within” means “from and excluding a specified date
\nand to and including a later specified date”.<\/p>\n
38
\n 44
\n ARTICLE II<\/p>\n
PURCHASES AND SETTLEMENTS<\/p>\n
SECTION 2.1. Facility. Upon the terms and subject to the
\nconditions herein set forth, at any time prior to the Enterprise Termination
\nDate (with respect to the Company and the Bank Investors) and the Sheffield
\nTermination Date (with respect to Sheffield)(x) the Transferor may, at its
\noption, convey, transfer and assign to the Company or the Bank Investors, as
\napplicable, and Sheffield and (y) the Company may, at its option, or Sheffield
\nand the Bank Investors shall, if so requested, accept such conveyance, transfer
\nand assignment from the Transferor of, without recourse except as provided
\nherein, undivided percentage ownership interests in the Receivables, together
\nwith Related Security, Collections and Proceeds with respect thereto, from time
\nto time. By accepting any conveyance, transfer and assignment hereunder,
\nneither the Company, Sheffield, any Bank Investor nor the Agent assumes or
\nshall have any obligations or liability under any of the Contracts, all of
\nwhich shall remain the obligations and liabilities of the Transferor and
\nWorldCom.<\/p>\n
SECTION 2.2. Transfers; Certificates; Eligible Receivables
\n(a) Incremental Transfers. Upon the terms and subject to the conditions herein
\nset forth the Transferor may, at its option, convey, transfer and assign to the
\nCompany, Sheffield or the Bank Investors, as applicable, and (y) the Company
\nmay, at its option, or Sheffield and the Bank Investors shall, if so requested,
\naccept such conveyance, transfer and assignment from the Transferor, without
\nrecourse except as provided herein, undivided percentage ownership interests in
\nthe Receivables, together with Related Security, Collections and Proceeds with
\nrespect thereto (each, an “Incremental Transfer”) from time to time prior to
\nthe occurrence of the Enterprise Termination Date (with respect to the Company
\nand the Bank Investors) or the Sheffield Termination Date (with respect to
\nSheffield); provided that after giving effect to the issuance of Related
\nCommercial Paper, or any drawings under any Liquidity Provider Agreement or any
\nCredit Support Agreement, to fund the cash portion of the Transfer Price of any
\nIncremental Transfer and the payment to the Transferor of the cash portion of
\nsuch Transfer Price<\/p>\n
39
\n 45
\n(i) the Enterprise Net Investment will not exceed $300,000,000, (ii) the
\nSheffield Net Investment will not exceed $75,000,000, (iii) the Percentage
\nFactor will not exceed 98% and (iv) the sum of the Enterprise Net Investment
\nplus the Interest Component of all outstanding Related Commercial Paper issued
\nby the Company would not exceed the Enterprise Maximum Net Investment; and,
\nprovided further, that the representations and warranties set forth in Section
\n3.1 shall be true and correct both immediately before and immediately after
\ngiving effect to any such Incremental Transfer and the payment to the
\nTransferor of the cash portion of the Transfer Price related thereto and an
\nInvestor Report shall have been delivered with respect to such Incremental
\nTransfer as required by Section 3.2 hereof.<\/p>\n
The Transferor shall, by notice to the Agent given by telecopy, offer
\nto convey, transfer and assign to the Company, Sheffield or the Bank Investors,
\nas applicable, undivided percentage ownership interests in the Receivables and
\nthe other Affected Assets relating thereto at least three (3) Business Days
\nprior to the proposed date of any Incremental Transfer. Each such notice shall
\nspecify (w) whether, as between the Company and the Bank Investors, such
\nrequest is made to the Company or the Bank Investors (it being understood and
\nagreed that once the Bank Investors acquire any Transferred Interest hereunder,
\nthe Bank Investors shall be required to purchase all Transferred Interests held
\nby the Company, pro rata and in accordance with Section 9.7 and thereafter the
\nCompany shall no longer accept any additional Incremental Transfers hereunder),
\n(x) to the amount of the desired Transfer Price to be funded by the Company or
\nthe Bank Investors on the one hand and Sheffield on the other (such amounts to
\nbe a ratio to each other equal to 300\/the amount of the Sheffield Maximum Net
\nInvestment), the desired aggregate Transfer Price (which shall be at least
\n$1,000,000 or integral multiples of $500,000 in excess thereof) or to the
\nextent that the then available unused portion of the Maximum Net Investment is
\nless than such amount, such lesser amount equal to such available portion of
\nthe Maximum Net Investment), (y) the desired date of such Incremental Transfer
\nand (z) the desired Enterprise Tranche Period and Sheffield Tranche Period and
\nallocations of the Enterprise Net Investment and Sheffield Net Investment of
\nsuch Incremental Transfer thereto as required by Section 2.3. The<\/p>\n
40
\n 46
\nAgent will promptly notify the Company or each of the Bank Investors, as the
\ncase may be, and Sheffield of the Agent’s receipt of any request for an
\nIncremental Transfer to be made to such Person. To the extent that any such
\nIncremental Transfer is requested of the Company, the Company shall accept or
\nreject such offer by notice given to the Transferor and the Agent by telephone
\nor telecopy by no later than the close of its business on the Business Day
\nfollowing its receipt of any such request. Notwithstanding the foregoing, the
\nIncremental Transfer to occur on December 31, 1996 shall be wholly funded by
\nSheffield in the amount of $75,000,000.<\/p>\n
Each notice of proposed Transfer shall be irrevocable and binding on
\nthe Transferor and the Transferor shall indemnify the Company, Sheffield and
\neach Bank Investor against any loss or expense incurred by the Company,
\nSheffield or any Bank Investor, either directly or indirectly (including, in
\nthe case of the Company, or Sheffield through any Liquidity Provider Agreement)
\nas a result of any failure by the Transferor to complete such Incremental
\nTransfer including, without limitation, any loss (including loss of anticipated
\nprofits) or expense incurred by the Company, Sheffield or any Bank Investor,
\neither directly or indirectly (including, in the case of the Company or
\nSheffield, pursuant to any Liquidity Provider Agreement) by reason of the
\nliquidation or reemployment of funds acquired by the Company, Sheffield (or the
\nLiquidity Provider) or any Bank Investor (including, without limitation, funds
\nobtained by issuing commercial paper or promissory notes or obtaining deposits
\nas loans from third parties) for the Company, Sheffield or any Bank Investor to
\nfund such Incremental Transfer.<\/p>\n
On the date of the initial Incremental Transfer to Sheffield, Sheffield
\nshall deliver written confirmation to the Transferor of the cash portion of the
\nTransfer Price, the Sheffield Tranche Period and the Sheffield Tranche Rate
\nrelating to such Transfer and the Transferor shall deliver to the Agent the
\nTransfer Certificate in the form of Exhibit F hereto (the “Transfer
\nCertificate”). The Agent shall indicate the amount of the initial Incremental
\nTransfer together with the date thereof on the grid attached to the Transfer
\nCertificate and shall also indicate the amount of any Incremental Transfer
\nfunded by the Company prior to such date. On the date of each subsequent
\nIncremental Transfer, the<\/p>\n
41
\n 47
\nAgent shall send written confirmation to the Transferor of the cash portion of
\nthe Transfer Price, the Enterprise Tranche Period and Sheffield Tranche Period,
\nthe Transfer Date and the Enterprise Tranche Rate and Sheffield Tranche Rate
\napplicable to such Incremental Transfer. The Agent shall indicate the amount
\nof the Incremental Transfer together with the date thereof as well as any
\ndecrease in the Enterprise Net Investment and Sheffield Net Investment on the
\ngrid attached to the Transfer Certificate. The Transfer Certificate shall
\nevidence the Incremental Transfers. Following each Incremental Transfer, the
\nAgent shall deposit to the Transferor’s account at the location indicated in
\nSection 10.3 hereof, in immediately available funds, an amount equal to the
\ncash portion of the Transfer Price for such Incremental Transfer made to the
\nCompany or the Bank Investors and Sheffield.<\/p>\n
By no later than 11:00 A.M. (New York time) on any Transfer Date, the
\nCompany, Sheffield or each Bank Investor, as the case may be, shall remit its
\nshare (which, in the case of an Incremental Transfer to the Bank Investors,
\nshall be equal to such Bank Investor’s Pro Rata Share) of the aggregate
\nTransfer Price for such Transfer to the account of the Agent specified therefor
\nfrom time to time by the Agent by notice to such Persons. The obligation of
\neach Bank Investor to remit its Pro Rata Share of any such Transfer Price shall
\nbe several from that of each other Bank Investor, and the failure of any Bank
\nInvestor to so make such amount available to the Agent shall not relieve any
\nother Bank Investor of its obligation hereunder. Following each Incremental
\nTransfer and the Agent’s receipt of funds from the Company, Sheffield or the
\nBank Investors as aforesaid, the Agent shall remit the Transfer Price to the
\nTransferor’s account at the location indicated in Section 10.3 hereof, in
\nimmediately available funds, an amount equal to the cash portion of the
\nTransfer Price for such Incremental Transfer. Unless the Agent shall have
\nreceived notice from the Company, Sheffield or any Bank Investor, as
\napplicable, that such Person will not make its share of any Transfer Price
\nrelating to any Incremental Transfer available on the applicable Transfer Date
\ntherefor, the Agent may (but shall have no obligation to) make the Company’s,
\nSheffield’s or any such Bank Investor’s share of any such Transfer Price
\navailable to the Transferor in anticipation of the receipt by the Agent of such
\namount<\/p>\n
42
\n 48
\nfrom the Company, Sheffield or such Bank Investor. To the extent the Company,
\nSheffield or any such Bank Investor fails to remit any such amount to the Agent
\nafter any such advance by the Agent on such Transfer Date, the Company,
\nSheffield or such Bank Investor, on the one hand, and the Transferor, on the
\nother hand, shall be required to pay such amount, together with interest
\nthereon at a per annum rate equal to the Federal funds rate (as determined in
\naccordance with clause (ii) of the definition of “Base Rate”), in the case of
\nthe Company, Sheffield or any such Bank Investor, or the Base Rate, in the case
\nof the Transferor, to the Agent upon its demand therefor (provided that neither
\nthe Company nor Sheffield shall have any obligation to pay such interest
\namounts except to the extent that it shall have sufficient funds to pay the
\nface amount of its Commercial Paper in full). Until such amount shall be
\nrepaid, such amount shall be deemed to be Net Investment paid by the Agent and
\nthe Agent shall be deemed to be the owner of a Transferred Interest hereunder.
\nUpon the payment of such amount to the Agent (x) by the Transferor, the amount
\nof the Agent’s Net Investment shall be reduced by such amount or (y) by the
\nCompany, Sheffield or such Bank Investor, such payment shall constitute such
\nPerson’s payment of its share of the applicable Transfer Price for such
\nTransfer. If agreed by the Agent and Sheffield (with notice to the Transferor
\nand the Collection Agent), Sheffield may remit its share of any Transfer Price
\ndirectly to the Transferor.<\/p>\n
(b) Reinvestment Transfers. On each Business Day occurring after
\nthe Incremental Transfer hereunder on the date hereof and prior to the
\nEnterprise Termination Date or Sheffield Termination Date, as applicable, the
\nTransferor hereby agrees to convey, transfer and assign to the Company,
\nSheffield or the Bank Investors then owning any Transferred Interests, and in
\nconsideration of Transferor’s agreement to maintain at all times prior to the
\nEnterprise Termination Date or Sheffield Termination Date, as applicable, a Net
\nReceivables Balance in an amount at least sufficient to maintain the Percentage
\nFactor at an amount not greater than the Maximum Percentage Factor, the Company
\nmay, and Sheffield and the Bank Investors shall (in either case, to the extent
\nsuch Persons then own any Transferred Interest), agree to purchase from the
\nTransferor undivided percentage ownership interests in each and every<\/p>\n
43
\n 49
\nReceivable, together with Related Security, Collections and Proceeds with
\nrespect thereto, to the extent that Collections are available for such Transfer
\nin accordance with Section 2.5 hereof, such that after giving effect to such
\nTransfer, (i) the amount of the Enterprise Net Investment and the Sheffield Net
\nInvestment at the close of business on such Business Day shall be equal to the
\namount of the Enterprise Net Investment and the Sheffield Net Investment,
\nrespectively, at the close of the business on the Business Day immediately
\npreceding such Business Day plus the cash portion of the Transfer Price of any
\nIncremental Transfer made by Enterprise or the Bank Investors and Sheffield
\nmade on such day, if any, and (ii) the Transferred Interest in each Receivable,
\ntogether with Related Security, Collections and Proceeds with respect thereto,
\nshall be equal to the Transferred Interest in each other Receivable, together
\nwith Related Security, Collections and Proceeds with respect thereto.<\/p>\n
(c) All Transfers. Each Transfer shall constitute a purchase of
\nundivided percentage ownership interests in each and every Receivable, together
\nwith Related Security, Collections and Proceeds with respect thereto, then
\nexisting, as well as in each and every Receivable, together with Related
\nSecurity, Collections and Proceeds with respect thereto, which arises at any
\ntime after the date of such Transfer. The Company’s, Sheffield’s or the Bank
\nInvestors’, as applicable, aggregate undivided percentage ownership interest in
\nthe Receivables, together with the Related Security, Collections and Proceeds
\nwith respect thereto, shall equal the Enterprise Percentage Factor or Sheffield
\nPercentage Factor, as applicable, in effect from time to time. So long as the
\nCompany, on the one hand, or the Bank Investors, on the other hand, own all of
\nthe Transferred Interests related to the Enterprise Net Investment at such
\ntime, each of the Company’s and each Bank Investor’s undivided percentage
\nownership interest in the Affected Assets shall equal such Person’s ratable
\nshare (determined on the basis of the relationship that such Person’s Net
\nInvestment bears to the Enterprise Net Investment at such time) of the
\nEnterprise Percentage Factor at such time.<\/p>\n
(d) Certificate. The Transferor shall issue to the Agent the
\nCertificate, in the form of Exhibit M, on or prior to the date hereof.<\/p>\n
44
\n 50<\/p>\n
(e) Percentage Factor. The Percentage Factor shall be initially
\ncomputed as of the opening of business on November 30, 1996. Thereafter until
\nthe Enterprise Termination Date or the Sheffield Termination Date, the
\nEnterprise Percentage Factor and the Sheffield Percentage Factor, respectively,
\nshall be deemed to be recomputed as of the close of business by the Collection
\nAgent on each Business Day. Each Percentage Factor shall remain constant from
\nthe time as of which any such computation or recomputation is made until the
\ntime as of which the next such recomputation shall be made, notwithstanding any
\nadditional Receivables arising, any Incremental Transfer made pursuant to
\nSection 2.2(a) or any reinvestment Transfer made pursuant to Section 2.2(b) and
\n2.5 during any period between computations of the Enterprise Percentage Factor
\nor the Sheffield Percentage Factor, as applicable. Each of the Enterprise
\nPercentage Factor and the Sheffield Percentage Factor, as calculated at the
\nclose of business on the Business Day immediately preceding the Enterprise
\nTermination Date or Sheffield Termination Date, as applicable, shall remain
\nconstant at all times thereafter until such time as the Agent, on behalf of the
\nCompany, Sheffield and the Bank Investors, as applicable, shall have received
\nits Aggregate Unpaids, in cash, at which time the Enterprise Percentage Factor
\nor Sheffield Percentage Factor, as applicable, shall be recomputed in
\naccordance with Section 2.6.<\/p>\n
SECTION 2.3. Selection of Enterprise Tranche Periods, Sheffield
\nTranche Periods, Enterprise Tranche Rates and Sheffield Tranche Rates.<\/p>\n
(a) Prior to the Enterprise Termination Date or Sheffield
\nTermination Date.<\/p>\n
(i) Transferred Interest held by Company. At all times hereafter, but
\nprior to the Enterprise Termination Date and not with respect to any portion of
\nthe Transferred Interest held by the Bank Investors (or any of them), the
\nTransferor may, subject to the Company’s approval and the limitations described
\nbelow, request Enterprise<\/p>\n
45
\n 51
\nTranche Periods and allocate a portion of the Enterprise Net Investment to each
\nselected Enterprise Tranche Period, so that the aggregate amounts allocated to
\noutstanding Enterprise Tranche Periods at all times shall equal the Enterprise
\nNet Investment held by the Company. The Transferor shall give the Company
\nirrevocable notice by telephone of the new requested Enterprise Tranche Period
\nat least three (3) Business Days prior to the expiration of any then existing
\nEnterprise Tranche Period; provided, however, that the Company may select, in
\nits sole discretion, any such new Enterprise Tranche Period if (i) the
\nTransferor fails to provide such notice on a timely basis or (ii) the Company
\ndetermines, in its sole discretion, that the Enterprise Tranche Period
\nrequested by the Transferor is commercially undesirable to the Company or the
\nTransferor. The Company confirms that it is its intention to allocate all or
\nsubstantially all of the Enterprise Net Investment held by it to one or more
\nEnterprise CP Tranche Periods; provided that the Company may determine, from
\ntime to time, in its sole discretion, that funding such Enterprise Net
\nInvestment by means of one or more Enterprise CP Tranche Periods is not
\npossible or is not desirable for any reason. If the Liquidity Provider
\nacquires from the Company a Purchased Interest with respect to the Receivables
\npursuant to the terms of a Liquidity Provider Agreement, NationsBank, N.A.
\n“NationsBank” on behalf of such Liquidity Provider, may exercise the right of
\nselection granted to the Company hereby. The initial Enterprise Tranche Period
\napplicable to any such Purchased Interest shall be a period of not greater than
\n14 days and such Enterprise Tranche shall be an Enterprise BR Tranche.
\nThereafter, provided that the Enterprise Termination Date shall not have
\noccurred, the Enterprise Tranche Period applicable thereto shall be the BR Rate
\nor the Eurodollar Rate, as determined by NationsBank. In the case of any
\nEnterprise Tranche Period outstanding upon the Enterprise Termination Date,
\nsuch Enterprise Tranche Period shall end on such date.<\/p>\n
(ii) Transferred Interest held by Sheffield. At all times hereafter,
\nbut prior to the Sheffield Termination Date, the Transferor may, subject to
\nSheffield’s approval and the limitations described below, request Sheffield
\nTranche Periods and allocate a portion of the Sheffield Net Investment to each
\nselected Sheffield Tranche Period, so that the aggregate amounts allocated to
\noutstanding Sheffield Tranche Periods at all times shall equal the Sheffield
\nNet Investment held by Sheffield. The Transferor shall give Sheffield
\nirrevocable notice by telephone of the new requested Sheffield Tranche
\nPeriod(s) at least three (3) Business Days prior to the expiration of any then
\nexisting Sheffield Tranche Period; provided, however, that Sheffield may
\nselect, in<\/p>\n
46
\n 52
\nits sole discretion, any such new Sheffield Tranche Period if (i) the
\nTransferor fails to provide such notice on a timely basis or (ii) Sheffield
\ndetermines, in its sole discretion, that the Sheffield Tranche Period requested
\nby the Transferor is unavailable or commercially undesirable to Sheffield or
\nthe Transferor. Sheffield confirms that it is its intention to allocate all or
\nsubstantially all of the Sheffield Net Investment held by it to one or more
\nSheffield CP Tranche Periods; provided that Sheffield may determine, from time
\nto time, in its sole discretion, that funding such Sheffield Net Investment by
\nmeans of one or more Sheffield CP Tranche Periods is not possible or is not
\ndesirable for any reason. In the case of any Sheffield Tranche Period
\noutstanding upon the Sheffield Termination Date, such Sheffield Tranche Period
\nshall end on such date.<\/p>\n
(b) After the Termination Date; Transferred Interest Held by
\nCompany. At all times on and after the Enterprise Termination Date, with
\nrespect to any portion of the Transferred Interest which shall not have been
\ntransferred to the Bank Investors (or any of them), the Company or NationsBank,
\nas applicable, shall select all Enterprise Tranche Periods and Enterprise
\nTranche Rates applicable thereto.<\/p>\n
(c) Prior to the Enterprise Termination Date; Transferred
\nInterest Held by Bank Investor. At all times with respect to any portion of
\nthe Transferred Interest transferred to the Bank Investors (or any of them)
\npursuant to Section 9.7, but prior to the Enterprise Termination Date, the
\ninitial Enterprise Tranche Period applicable to such portion of the Enterprise
\nNet Investment allocable thereto shall be a period of not greater than 14 days
\nand such Enterprise Tranche shall be an Enterprise BR Tranche. Thereafter,
\nwith respect to such portion, and with respect to any other portion of the
\nTransferred Interest held by the Bank Investors (or any of them), provided that
\nthe Enterprise Termination Date shall not have occurred, the Enterprise Tranche
\nPeriod applicable thereto shall be, at the Transferor’s option, either an
\nEnterprise BR Tranche or an Enterprise Eurodollar Tranche. The Transferor
\nshall give the Enterprise Agent irrevocable notice by telephone of the new
\nrequested Enterprise Tranche Period at least three (3) Business Days prior to
\nthe expiration of any then existing Enterprise Tranche Period. In the case of
\nany<\/p>\n
47
\n 53
\nEnterprise Tranche Period outstanding upon the occurrence of a Termination
\nDate, such Enterprise Tranche Period shall end on the date of such occurrence.<\/p>\n
(d) After the Sheffield Termination Date or Enterprise
\nTermination Date; Transferred Interest Held by Sheffield or Bank Investor. At
\nall times on and after the Enterprise Termination Date, with respect to any
\nportion of the Transferred Interest which shall have been owned or transferred
\nto the Bank Investors (or any of them), respectively, the Enterprise Agent
\nshall select all Enterprise Tranche Periods and Enterprise Tranche Rates
\napplicable thereto. At all times on and after the Sheffield Termination Date,
\nwith respect to any portion of the Transferred Interest which shall have been
\nowned or transferred to Sheffield, Sheffield shall select all Sheffield Tranche
\nPeriods and Sheffield Tranche Rates applicable thereto.<\/p>\n
(e) Eurodollar Rate Protection; Illegality. (i) If the Agent is
\nunable to obtain on a timely basis the information necessary to determine the
\nLIBOR Rate for any proposed Enterprise Eurodollar Tranche or Sheffield
\nEurodollar Tranche, then<\/p>\n
(A) the Agent shall forthwith notify the Company, Sheffield or Bank
\n Investors, as applicable and the Transferor that the Eurodollar Rate cannot
\n be determined for such Enterprise Eurodollar Tranche or Sheffield
\n Eurodollar Tranche, and<\/p>\n
(B) while such circumstances exist, none of the Company, Sheffield,
\n the Bank Investor or the Agent shall allocate the Enterprise Net Investment
\n or the Sheffield Net Investment of any additional Transferred Interests
\n purchased during such period or reallocate the Enterprise Net Investment or
\n the Sheffield Net Investment allocated to any then existing Enterprise
\n Tranche or Sheffield Tranche ending during such period, to an Enterprise
\n Eurodollar Tranche or Sheffield Eurodollar Tranche.<\/p>\n
(ii) If, with respect to any outstanding Enterprise Eurodollar Tranche
\nor Sheffield Eurodollar Tranche, the Company, Sheffield or any of the Bank
\nInvestors owning any Transferred Interest therein notifies the Agent that it is
\nunable to obtain matching deposits in<\/p>\n
48
\n 54
\nthe London interbank market to fund its purchase or maintenance of such
\nTransferred Interest or that the Eurodollar Rate applicable to such Transferred
\nInterest will not adequately reflect the cost to the Person of funding or
\nmaintaining its respective Transferred Interest for such Enterprise Tranche
\nPeriod or Sheffield Tranche Period then the Agent shall forthwith so notify the
\nTransferor, whereupon neither the Agent nor the Company, Sheffield or the Bank
\nInvestors, as applicable, shall, while such circumstances exist, allocate any
\nEnterprise Net Investment or Sheffield Net Investment of any additional
\nTransferred Interest purchased during such period or reallocate the Enterprise
\nNet Investment or the Sheffield Net Investment allocated to any Enterprise
\nTranche Period or Sheffield Tranche Period ending during such period, to an
\nEnterprise Eurodollar Tranche or a Sheffield Eurodollar Tranche.<\/p>\n
(iii) Notwithstanding any other provision of this Agreement, if the
\nCompany, Sheffield or any of the Bank Investors, as applicable, shall notify
\nthe Agent that such Person has determined (or has been notified by any
\nLiquidity Provider) that the introduction of or any change in or in the
\ninterpretation of any law or regulation makes it unlawful (either for the
\nCompany, such Bank Investor, or such Liquidity Provider, as applicable), or any
\ncentral bank or other governmental authority asserts that it is unlawful, for
\nthe Company, Sheffield, such Bank Investor or such Liquidity Provider, as
\napplicable, to fund the purchases or maintenance of Transferred Interests at
\nthe Eurodollar Rate, then (x) as of the effective date of such notice from such
\nPerson to the Agent, the obligation or ability of the Company, Sheffield or
\nsuch Bank Investor, as applicable, to fund its purchase or maintenance of
\nTransferred Interests at the Eurodollar Rate shall be suspended until such
\nPerson notifies the Agent that the circumstances causing such suspension no
\nlonger exist and (y) the Enterprise Net Investment or Sheffield Net Investment
\nof each Enterprise Eurodollar Tranche or Sheffield Eurodollar Tranche in which
\nsuch Person owns an interest shall either (1) if such Person may lawfully
\ncontinue to maintain such Transferred Interest at the Eurodollar Rate until the
\nlast day of the applicable Enterprise Tranche Period or Sheffield Tranche
\nPeriod, be reallocated on the last day of such Enterprise Tranche Period or
\nSheffield Tranche Period to another Enterprise Tranche Period or Sheffield
\nTranche<\/p>\n
49
\n 55
\nPeriod in respect of which the Enterprise Net Investment or Sheffield Net
\nInvestment allocated thereto accrues discount at an Enterprise Tranche Rate or
\nSheffield Tranche Rate other than the Eurodollar Rate or (2) if such Person
\nshall determine that it may not lawfully continue to maintain such Transferred
\nInterest at the Eurodollar Rate until the end of the applicable Enterprise
\nTranche Period or Sheffield Tranche Period, such Person’s share of the
\nEnterprise Net Investment or Sheffield Net Investment allocated to such
\nEurodollar Tranche shall be deemed to accrue discount at the Base Rate from the
\neffective date of such notice until the end of such Enterprise Tranche Period
\nor Sheffield Tranche Period.<\/p>\n
SECTION 2.4. Discount, Fees and Other Costs and Expenses.
\nNotwithstanding the limitation on recourse under Section 2.1 hereof, the
\nTransferor shall pay, as and when due in accordance with this Agreement, all
\nfees hereunder, Enterprise Discount and Sheffield Discount , all amounts
\npayable pursuant to Article VIII hereof, if any, and the Servicing Fees. On
\nthe last day of each Enterprise Tranche Period and Sheffield Tranche Period,
\nthe Transferor shall pay to the Agent, on behalf of the Company, Sheffield or
\nthe Bank Investors, as applicable, an amount equal to the accrued and unpaid
\nEnterprise Discount and\/or Sheffield Discount for such Enterprise Tranche
\nPeriod or Sheffield Tranche Period together with, in the event any portion of
\nthe Transferred Interest is held by the Company, an amount equal to the
\ndiscount accrued on the Company’s Commercial Paper to the extent such
\nCommercial Paper was issued in order to fund the Transferred Interest in an
\namount in excess of the cash portion of the Transfer Price of an Incremental
\nTransfer, and together with, in the event any portion of the Transferred
\nInterest is held by Sheffield, an amount equal to any interest accrued on
\nadvances made to Sheffield to the extent the proceeds of such advances were
\nused by Sheffield in order to fund the Transferred Interest in an amount equal
\nto the excess of the portion thereof funded by Sheffield’s Commercial Paper.
\nNotwithstanding the foregoing, if agreed by the Transferor, the Agent and
\nSheffield (with notice to the Collection Agent), the Transferor may remit
\namounts in respect of Sheffield Discount directly to Sheffield. The Transferor
\nshall pay to the Agent, on behalf of the Company, on each day on which
\nCommercial Paper is issued by the Company, the Enterprise<\/p>\n
50
\n 56
\nDealer Fee. The Transferor shall pay to Sheffield, on each day on which
\nCommercial Paper is issued by Sheffield, the Sheffield Dealer Fee. All the
\nforegoing amounts may be paid out of Collections pursuant to Section 2.5 or
\n2.6, as applicable. Enterprise Discount shall accrue with respect to each
\nEnterprise Tranche on each day occurring during the Enterprise Tranche Period
\nrelated thereto. Sheffield Discount shall accrue with respect to each
\nSheffield Tranche on each day occurring during the Sheffield Tranche Period
\nrelated thereto. Nothing in this Agreement shall limit in any way the
\nobligations of the Transferor to pay the amounts set forth in this Section 2.4.<\/p>\n
SECTION 2.5. Non-Liquidation Settlement and Reinvestment Procedures.
\nOn each day after the date of any Incremental Transfer but prior to the
\nSheffield Termination Date with respect to Sheffield and the Enterprise
\nTermination Date with respect to the Company and the Bank Investors and
\nprovided in either case that no Potential Termination Event shall have occurred
\nand be continuing, the Collection Agent shall out of the applicable Enterprise
\nPercentage Factor and Sheffield Percentage Factor of Collections received on or
\nprior to such day and not previously applied or accounted for: (i) set aside
\nand hold in trust for the Company or the Bank Investors, as applicable and
\nSheffield (or deposit into the Collection Account if so required pursuant to
\nSection 2.12 hereof) an amount equal to all Enterprise Discount and Sheffield
\nDiscount and the Servicing Fee accrued through such day and not so previously
\nset aside or paid and (ii) apply the balance of the Enterprise Percentage
\nFactor or Sheffield Percentage Factor of Collections remaining after
\napplication of Collections as provided in clause (i) of this Section 2.5 hereof
\nto the Transferor, for the benefit of the Company or the Bank Investors, as
\napplicable, and Sheffield to the purchase of additional undivided percentage
\ninterests in each Receivable pursuant to Section 2.2(b) hereof. On the last
\nday of each Enterprise Tranche Period and Sheffield Tranche Period, from the
\napplicable amounts set aside as described in clause (i) of the first sentence
\nof this Section 2.5 hereof, the Collection Agent shall deposit to the Agent’s
\naccount, for the benefit of the Company or the Bank Investors, as applicable,
\nand Sheffield an amount equal to the accrued and unpaid Enterprise Discount and
\nSheffield Discount for such Enterprise Tranche Period or<\/p>\n
51
\n 57
\nSheffield Tranche Period and shall deposit to its own account an amount equal
\nto the accrued and unpaid Servicing Fee for such Enterprise Tranche Period or
\nSheffield Tranche Period. The Agent, upon its receipt of such amounts in the
\nAgent’s account, shall distribute such amounts to the Company and\/or Sheffield
\nand the Bank Investors entitled thereto as set forth above; provided that if
\nthe Agent shall have insufficient funds to pay all of the above amounts in full
\non any such date, the Agent shall pay such amounts ratably (based on the
\namounts owing to each such Person) to all such Persons entitled to payment
\nthereof. In addition, the Collection Agent shall remit to the Transferor at
\nthe end of each Enterprise Tranche Period and Sheffield Tranche Period, such
\nportion of Collections not allocated to the Company, Sheffield and the Bank
\nInvestors.<\/p>\n
SECTION 2.6. Liquidation Settlement Procedures. If at any time on or
\nprior to the Enterprise Termination Date or the Sheffield Termination Date, the
\nPercentage Factor is greater than the Maximum Percentage Factor, then the
\nTransferor shall immediately pay to the Agent, for the benefit of the Company
\nor the Bank Investors, as applicable, and Sheffield from previously received
\nCollections, an amount equal to the amount such that, when applied in reduction
\nof the Net Investment, will result in a Percentage Factor less than or equal to
\nthe Maximum Percentage Factor. Such amounts shall be applied pro rata to the
\nreduction of the Enterprise Net Investment of Enterprise Tranche Periods
\nselected by the Enterprise Agent and the Sheffield Net Investment of Sheffield
\nTranche Periods selected by Sheffield. On the Sheffield Termination Date, with
\nrespect to Sheffield, and the Enterprise Termination Date with respect to the
\nCompany and the Bank Investors and on each day thereafter, and on each day on
\nwhich a Potential Termination Event has occurred and is continuing, the
\nCollection Agent shall set aside and hold in trust for the Company, Sheffield
\nand the Bank Investors, as applicable (or deposit into the Collection Account
\nif so required pursuant to Section 2.12 hereof) the Enterprise Percentage
\nFactor and the Sheffield Percentage Factor of all Collections received on such
\nday and shall set aside and hold in trust for the Transferor such portion of
\nCollections not allocated to the Company, Sheffield or the Bank Investors, as
\napplicable. On the Sheffield Termination Date, the Enterprise Termination Date
\nor the day on which<\/p>\n
52
\n 58
\na Potential Termination Event occurs, the Collection Agent shall deposit to the
\nAgent’s account, for the benefit of the Company, Sheffield or the Bank
\nInvestors, as applicable, any amounts set aside pursuant to Section 2.5(i)
\nabove. On the last day of each Enterprise Tranche Period to occur on or after
\nthe Enterprise Termination Date and the last day of each Sheffield Tranche
\nPeriod to occur on or after the Sheffield Termination Date, or in either case
\nduring the continuance of a Potential Termination Event, the Collection Agent
\nshall deposit to the Agent’s account, for the benefit of the Company, Sheffield
\nor the Bank Investors, as applicable, the amounts so set aside for the Company,
\nSheffield or the Bank Investors pursuant to the second preceding sentence, but
\nnot to exceed the sum of (i) the accrued Enterprise Discount or Sheffield
\nDiscount for such Enterprise Tranche Period or Sheffield Tranche Period, as
\napplicable, (ii) the portion of the Enterprise Net Investment or Sheffield Net
\nInvestment allocated to such Enterprise Tranche Period or Sheffield Tranche
\nPeriod, as applicable, and (iii) all other Aggregate Unpaids. On such day, the
\nCollection Agent shall deposit to its account, from the amounts set aside for
\nthe Company, Sheffield and the Bank Investors pursuant to the preceding
\nsentence which remain after payment in full of the aforementioned amounts, the
\naccrued Servicing Fee for such Enterprise Tranche Period or Sheffield Tranche
\nPeriod. If there shall be insufficient funds on deposit for the Collection
\nAgent to distribute funds in payment in full of the aforementioned amounts, the
\nCollection Agent shall distribute funds first, in payment of the accrued
\nEnterprise Discount and Sheffield Discount, second, if the Transferor, WorldCom
\nor any Affiliate of the Transferor or WorldCom is not then the Collection
\nAgent, to the Collection Agent’s account, in payment of the Servicing Fee
\npayable to the Collection Agent, third, in reduction of the Enterprise Net
\nInvestment and Sheffield Net Investment allocated to any Enterprise Tranche
\nPeriod or Sheffield Tranche Period ending on such date, fourth, in payment of
\nall fees payable by the Transferor hereunder, fifth, in payment of all other
\nAggregate Unpaids and sixth, if the Transferor, WorldCom or any Affiliate of
\nthe Transferor or WorldCom is the Collection Agent, to its account as
\nCollection Agent, in payment of the Servicing Fee payable to such Person as
\nCollection Agent. The Agent, upon its receipt of such amounts in the Agent’s
\naccount, shall distribute such amounts to the<\/p>\n
53
\n 59
\nCompany and\/or the Bank Investors and Sheffield entitled thereto as set forth
\nabove; provided that if the Agent shall have insufficient funds to pay all of
\nthe above amounts in full on any such date, the Agent shall pay such amounts in
\nthe order of priority set forth above and, with respect to any such category
\nabove for which the Agent shall have insufficient funds to pay all amounts
\nowing on such date, ratably (based on the amounts in such categories owing to
\nsuch Persons) among all such Persons entitled to payment thereof.<\/p>\n
Following the date on which the Net Investment has been reduced to
\nzero, all accrued Enterprise Discount and Sheffield Discount and Servicing Fees
\nhave been paid in full and all other Aggregate Unpaids have been paid in full,
\n(i) the Collection Agent shall recompute the Enterprise Percentage Factor and
\nthe Sheffield Percentage Factor, (ii) the Agent, on behalf of the Company,
\nSheffield and the Bank Investors, shall be considered to have reconveyed to the
\nTransferor all of the Company’s, Sheffield’s and the Bank Investors’ right,
\ntitle and interest in and to the Affected Assets (including the Transferred
\nInterest), (iii) the Collection Agent shall pay to the Transferor any remaining
\nCollections set aside and held by the Collection Agent pursuant to the third
\nsentence of this Section 2.6 and (iv) the Agent, on behalf of the Company,
\nSheffield and the Bank Investors, shall execute and deliver to the Transferor,
\nat the Transferor’s expense, such documents or instruments as are necessary to
\nterminate the Company’s, Sheffield’s and the Bank Investors’ respective
\ninterests in the Affected Assets. Any such documents shall be prepared by or
\non behalf of the Transferor. On the last day of each Enterprise Tranche Period
\nand Sheffield Tranche Period, the Collection Agent shall remit to the
\nTransferor such portion of Collections set aside for the Transferor pursuant to
\nthis Section 2.6.<\/p>\n
SECTION 2.7. Fees. Notwithstanding any limitation on recourse
\ncontained in this Agreement, the Transferor shall pay the following
\nnon-refundable fees:<\/p>\n
(a) On the last day of each month, to the Company solely for its
\nown account, the Enterprise Program Fee and the Enterprise Facility Fee, and to
\nthe Enterprise Agent for distribution to the Bank Investors<\/p>\n
54
\n 60
\nas agreed upon by the Bank Investors, the Bank
\nInvestor Commitment Fee; and<\/p>\n
(b) On the last day of each month, to Sheffield solely for its
\nown account, the Sheffield Program Fee and the Sheffield Facility Fee.<\/p>\n
SECTION 2.8. Protection of Ownership Interest of the Company,
\nSheffield and the Bank Investors. (a) The Transferor agrees that it will, and
\nwill cause WorldCom to, from time to time, at its expense, promptly execute and
\ndeliver all instruments and documents and take all actions as may be necessary
\nor as the Agent may reasonably request in order to perfect or protect the
\nTransferred Interest or to enable the Agent, the Company, Sheffield or the Bank
\nInvestors to exercise or enforce any of their respective rights hereunder.
\nWithout limiting the foregoing, the Transferor will, and will cause WorldCom
\nto, upon the request of the Agent, the Company, Sheffield or any of the Bank
\nInvestors, in order to accurately reflect this purchase and sale transaction,
\n(x) execute and file such financing or continuation statements or amendments
\nthereto or assignments thereof (as permitted pursuant to Section 9.7 hereof) as
\nmay be requested by the Agent, Sheffield, the Company or any of the Bank
\nInvestors and (y) mark its respective master data processing records and other
\ndocuments with a legend describing the conveyance to the Transferor (in the
\ncase of WorldCom), the Agent, for the benefit of the Company, Sheffield and the
\nBank Investors, of the Transferred Interest. The Transferor shall, and will
\ncause WorldCom to, upon request of the Agent, the Company, Sheffield or any of
\nthe Bank Investors, obtain such additional search reports as the Agent, the
\nCompany, Sheffield or any of the Bank Investors shall request. To the fullest
\nextent permitted by applicable law, the Agent shall be permitted to sign and
\nfile continuation statements and amendments thereto and assignments thereof
\nwithout the Transferor’s or WorldCom’s signature. Carbon, photographic or
\nother reproduction of this Agreement or any financing statement shall be
\nsufficient as a financing statement. The Transferor shall not, and shall not
\npermit WorldCom to, change its respective name, identity or corporate structure
\n(within the meaning of Section 9-402(7) of the UCC) nor relocate its respective
\nchief executive office or any office where Records are kept unless it shall
\nhave: (i) given the Agent at least thirty (30) days prior notice<\/p>\n
55
\n 61
\nthereof and (ii) prepared at Transferor’s expense and delivered to the Agent
\nall financing statements, instruments and other documents necessary to preserve
\nand protect the Transferred Interest or requested by the Agent in connection
\nwith such change or relocation. Any filings under the UCC or otherwise that
\nare occasioned by such change in name or location shall be made at the expense
\nof Transferor.<\/p>\n
(b) The Collection Agent shall instruct all Obligors to cause all
\nCollections to be deposited directly with a Lock-Box Bank. Any Lock-Box
\nAccount maintained by a Lock-Box Bank pursuant to the related Lock-Box
\nAgreement shall be under the exclusive ownership and control of the Agent which
\nis hereby granted to the Agent by WorldCom and the Transferor. The Collection
\nAgent shall be permitted to give instructions to the Lock-Box Banks for so long
\nas neither a Collection Agent Default nor any other Termination Event has
\noccurred hereunder. The Collection Agent shall not add any bank as a Lock-Box
\nBank to those listed on Exhibit C attached hereto unless such bank has entered
\ninto a Lock-Box Agreement. The Collection Agent shall not terminate any bank
\nas a Lock- Box Bank unless the Administrative Agent shall have received fifteen
\n(15) days’ prior notice of such termination. If the Transferor, WorldCom or
\nthe Collection Agent receives any Collections, the Transferor, WorldCom or the
\nCollection Agent, as applicable, shall immediately, but in any event within
\nforty- eight (48) hours of receipt, remit (and shall cause WorldCom to remit)
\nsuch Collections to a Lock-Box Account.<\/p>\n
SECTION 2.9. Deemed Collections; Application of Payments. (a) If on
\nany day the Outstanding Balance of a Receivable is either (x) reduced as a
\nresult of any defective, rejected or returned merchandise or services, any
\ndiscount, credit, rebate, dispute, warranty claim, repossessed or returned
\ngoods, chargeback, allowance, any billing adjustment, dilutive factor or other
\nadjustment, or (y) reduced or canceled as a result of a setoff or offset in
\nrespect of any claim by any Person (whether such claim arises out of the same
\nor a related transaction or an unrelated transaction), and if such reduction or<\/p>\n
56
\n 62
\ncancellation shall result in the Percentage Factor exceeding the Maximum
\nPercentage Factor, the Transferor shall be deemed to have received on such day
\na Collection of such Receivable in the amount of such reduction or cancellation
\nand the Transferor shall pay to the Collection Agent an amount equal to such
\nreduction or cancellation and such amount shall be applied by the Collection
\nAgent as a Collection in accordance with Section 2.5 or 2.6 hereof, as
\napplicable. The Enterprise Net Investment and Sheffield Net Investment shall
\nbe reduced by the amount of such payment applied pursuant to Section 2.5 or
\nSection 2.6 to the reduction of the Enterprise Net Investment or Sheffield Net
\nInvestment, as applicable.<\/p>\n
(b) If on any day any of the representations or warranties in
\nArticle III was or becomes untrue with respect to a Receivable (whether on or
\nafter the date of any transfer of an interest therein to the Agent, the
\nCompany, Sheffield or the Bank Investors as contemplated hereunder), the
\nTransferor shall be deemed to have received on such day a Collection of such
\nReceivable in full and the Transferor shall on such day pay to the Collection
\nAgent an amount equal to the Outstanding Balance of such Receivable and such
\namount shall be allocated and applied by the Collection Agent as a Collection
\nallocable to the Transferred Interest in accordance with Section 2.5 or 2.6
\nhereof, as applicable. The Enterprise Net Investment and Sheffield Net
\nInvestment shall be reduced by the amount of such payment applied pursuant to
\nSection 2.5 or Section 2.6 to the reduction of the Enterprise Net Investment or
\nSheffield Net Investment, as applicable.<\/p>\n
(c) Any payment by an Obligor in respect of any indebtedness owed
\nby it to the Transferor or WorldCom shall, except as otherwise specified by
\nsuch Obligor or otherwise required by contract or law and unless otherwise
\ninstructed by the Agent, be applied as a Collection of any Receivable of such
\nObligor included in the Transferred Interest (starting with the oldest such
\nReceivable) to the extent of any amounts then due and payable thereunder before
\nbeing applied to any other receivable or other indebtedness of such Obligor.<\/p>\n
SECTION 2.10. Payments and Computations, Etc. All amounts to be paid
\nor deposited by the Transferor or the Collection Agent hereunder shall be paid
\nor deposited in accordance with the terms hereof no later than 11:00 A.M.
\n(Central time) on the day when due in immediately available funds; if such
\namounts are payable to the Company, Sheffield or any Bank Investor they shall
\nbe<\/p>\n
57
\n 63
\npaid or deposited in the account indicated in Section 10.3 hereof, until
\notherwise notified by the Agent. The Transferor shall, to the extent permitted
\nby law, pay to the Agent, for the benefit of the Company, Sheffield and the
\nBank Investors upon demand, interest on all amounts not paid or deposited when
\ndue hereunder at a rate equal to 2% per annum plus the Base Rate. All
\ncomputations of Enterprise Discount and Sheffield Discount, interest and all
\nper annum fees hereunder shall be made on the basis of a year of 360 days for
\nthe actual number of days (including the first but excluding the last day)
\nelapsed. Any computations by the Agent of amounts payable by the Transferor
\nhereunder shall be binding upon the Transferor absent manifest error.<\/p>\n
SECTION 2.11. Reports. (a) On the 25th day of each month, (or the
\nnext succeeding Business Day if such 25th day is not a Business Day), the
\nCollection Agent shall prepare and forward to the Agent and the Administrative
\nAgent (i) an Investor Report as of the end of the last day of the immediately
\npreceding month, (ii) as soon as is reasonably practicable after receipt of a
\nrequest by the Agent or the Administrative Agent, the Collection Agent shall
\nprepare and forward to the Agent or the Administrative Agent, a listing by
\nObligor of all Receivables together with an aging of such Receivables and (iii)
\nwithin a reasonable time after request therefor, such other information as the
\nAgent or the Administrative Agent may reasonably request. The Agent shall
\npromptly upon receipt forward a copy of any such report or listing to
\nSheffield.<\/p>\n
(b) Promptly upon receipt by the Collection Agent of each weekly
\nreport described in this Section 2.11(b), the Collection Agent shall forward to
\nthe Administrative Agent and the Agent, a copy of each such report setting
\nforth the information contained therein in substantially the form of Exhibit N
\nattached hereto. The Agent shall promptly upon receipt forward a copy of any
\nsuch report to Sheffield.<\/p>\n
SECTION 2.12. Collection Account. There shall be established on the
\nday of the initial Incremental Transfer hereunder and maintained, for the
\nbenefit of the Company, Sheffield and the Bank Investors, with the Agent, a
\nsegregated account (the “Collection Account”), bearing a designation clearly
\nindicating that the funds<\/p>\n
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\n 64
\ndeposited therein are held for the benefit of the Company, Sheffield and the
\nBank Investors. On and after the occurrence of a Collection Agent Default or a
\nTermination Event or a Potential Termination Event, the Collection Agent shall
\nremit daily within forty-eight hours of receipt to the Collection Account all
\nCollections received with respect to any Receivables. Funds on deposit in the
\nCollection Account (other than investment earnings) shall be invested by the
\nAgent in Eligible Investments that will mature so that such funds will be
\navailable prior to the last day of each successive Enterprise Tranche Period
\nand Sheffield Tranche Period following such investment. On the last day of
\neach Enterprise Tranche Period and Sheffield Tranche Period, all interest and
\nearnings (net of losses and investment expenses) on funds on deposit in the
\nCollection Account shall be retained in the Collection Account and be available
\nto make any payments required to be made hereunder (including Enterprise
\nDiscount or Sheffield Discount) by the Transferor. On the date on which the
\nNet Investment is zero, all accrued Enterprise Discount and Sheffield Discount
\nand Servicing Fees have been paid in full and all other Aggregate Unpaids have
\nbeen paid in full, any funds remaining on deposit in the Collection Account
\nshall be paid to the Transferor.<\/p>\n
SECTION 2.13. Sharing of Payments, Etc. If the Company, Sheffield or
\nany Bank Investor (for purposes of this Section 2.13 only, being a “Recipient”)
\nshall obtain any payment (whether voluntary, involuntary, through the exercise
\nof any right of setoff, or otherwise) on account of Transferred Interest owned
\nby it (other than pursuant to Section 2.7, or Article VIII and other than as a
\nresult of the differences in the timing of the applications of Collections
\npursuant to Section 2.5 or 2.6) in excess of its ratable share of payments on
\naccount of Transferred Interest obtained by the Company and\/or the Bank
\nInvestors and Sheffield entitled thereto, such Recipient shall forthwith
\npurchase from the Company and\/or the Bank Investors or Sheffield entitled to a
\nshare of such amount participations in the Percentage Interests owned by such
\nPersons as shall be necessary to cause such Recipient to share the excess
\npayment ratably with each such other Person entitled thereto; provided,
\nhowever, that if all or any portion of such excess payment is thereafter
\nrecovered from such Recipient, such purchase from each such other Person shall
\nbe rescinded<\/p>\n
59
\n 65
\nand each such other Person shall repay to the Recipient the purchase price paid
\nby such Recipient for such participation to the extent of such recovery,
\ntogether with an amount equal to such other Person’s ratable share (according
\nto the proportion of (a) the amount of such other Person’s required payment to
\n(b) the total amount so recovered from the Recipient) of any interest or other
\namount paid or payable by the Recipient in respect of the total amount so
\nrecovered.<\/p>\n
SECTION 2.14. Right of Setoff. Without in any way limiting the
\nprovisions of Section 2.13, each of the Company, Sheffield and the Bank
\nInvestors is hereby authorized (in addition to any other rights it may have) at
\nany time after the occurrence of the Sheffield Termination Date, in the case of
\nSheffield and the Enterprise Termination Date, in the case of the Bank
\nInvestors and Enterprise, or during the continuance of a Potential Termination
\nEvent, in either case, to set-off, appropriate and apply (without presentment,
\ndemand, protest or other notice which are hereby expressly waived) any deposits
\nand any other indebtedness held or owing by the Company, Sheffield or such Bank
\nInvestor to, or for the account of, the Transferor against the amount of the
\nAggregate Unpaids owing by the Transferor to such Person (even if contingent or
\nunmatured).<\/p>\n
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\n 66
\n ARTICLE III<\/p>\n
REPRESENTATIONS AND WARRANTIES<\/p>\n
SECTION 3.1. Representations and Warranties of the Transferor. The
\nTransferor represents and warrants to the Agent, the Company, Sheffield and the
\nBank Investors that:<\/p>\n
(a) Corporate Existence and Power. The Transferor is a
\ncorporation duly organized, validly existing and in good standing under the
\nlaws of its jurisdiction of incorporation and has all corporate power and all
\nmaterial governmental licenses, authorizations, consents and approvals required
\nto carry on its business in each jurisdiction in which its business is now
\nconducted. The Transferor is duly qualified to do business in, and is in good
\nstanding in, every other jurisdiction in which the nature of its business
\nrequires it to be so qualified, except where the failure to be so qualified or
\nin good standing would not have a Material Adverse Effect.<\/p>\n
(b) Corporate and Governmental Authorization; Contravention. The
\nexecution, delivery and performance by the Transferor of this Agreement, the
\nReceivables Purchase Agreement, the Enterprise Fee Letter, the Sheffield Fee
\nLetter, the Certificates, the Transfer Certificates and the other Transaction
\nDocuments to which the Transferor is a party are within the Transferor’s
\ncorporate powers, have been duly authorized by all necessary corporate action,
\nrequire no action by or in respect of, or filing with, any Official Body or
\nofficial thereof (except as contemplated by Section 3.1(d) hereof), and do not
\ncontravene, or constitute a default under, any provision of applicable law,
\nrule or regulation or of the Certificate of Incorporation or Bylaws of the
\nTransferor or of any agreement, judgment, injunction, order, writ, decree or
\nother instrument binding upon the Transferor or result in the creation or
\nimposition of any Adverse Claim on the assets of the Transferor or any of its
\nSubsidiaries (except as contemplated by Section 3.1(d) hereof).<\/p>\n
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\n 67
\n (c) Binding Effect. Each of this Agreement, the Receivables
\nPurchase Agreement, the Fee Letter, the Certificates and the other Transaction
\nDocuments to which the Transferor is a party constitutes and the Transfer
\nCertificate upon payment of the Transfer Price set forth therein will
\nconstitute the legal, valid and binding obligation of the Transferor,
\nenforceable against it in accordance with its terms, subject to applicable
\nbankruptcy, insolvency, moratorium or other similar laws affecting the rights
\nof creditors generally.<\/p>\n
(d) Perfection. Immediately preceding each Transfer hereunder,
\nthe Transferor shall be the owner of all of the Receivables, free and clear of
\nall Adverse Claims. On or prior to each Transfer and each recomputation of the
\nTransferred Interest, all financing statements and other documents required to
\nbe recorded or filed in order to perfect and protect the Transferred Interest
\nagainst all creditors of and purchasers from the Transferor and WorldCom will
\nhave been duly filed in each filing office necessary for such purpose and all
\nfiling fees and taxes, if any, payable in connection with such filings shall
\nhave been paid in full.<\/p>\n
(e) Accuracy of Information. All information heretofore
\nfurnished by the Transferor (including without limitation, the Investor
\nReports, any reports delivered pursuant to Section 2.11 hereof and the
\nTransferor’s financial statements) to the Company, Sheffield, any Bank
\nInvestors, the Agent or the Administrative Agent for purposes of or in
\nconnection with this Agreement or any transaction contemplated hereby is, and
\nall such information hereafter furnished by the Transferor to the Company,
\nSheffield, any Bank Investors, the Agent or the Administrative Agent will be,
\ntrue and accurate in every material respect, on the date such information is
\nstated or certified.<\/p>\n
(f) Tax Status. The Transferor has filed all material tax
\nreturns (federal, state and local) required to be filed and has paid or made
\nadequate provision for the payment of all taxes, assessments and other
\ngovernmental charges.<\/p>\n
(g) Action, Suits. Except as set forth in Exhibit H hereof,
\nthere are no actions, suits or proceedings pending, or to the knowledge of the
\nTransferor<\/p>\n
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\n 68
\nthreatened, against or affecting the Transferor or any Affiliate of the
\nTransferor or their respective properties, in or before any court, arbitrator
\nor other body, which may, individually or in the aggregate, have a Material
\nAdverse Effect.<\/p>\n
(h) Use of Proceeds. No proceeds of any Transfer will be used by
\nthe Transferor to acquire any security in any transaction which is subject to
\nSection 13 or 14 of the Securities Exchange Act of 1934, as amended.<\/p>\n
(i) Place of Business. The principal place of business and chief
\nexecutive office of the Transferor are located at the address of the Transferor
\nindicated in Section 9.3 hereof and the offices where the Transferor keeps all
\nits Records, are located at the address(es) described on Exhibit I or such
\nother locations notified to the Company in accordance with Section 2.8 hereof
\nin jurisdictions where all action required by Section 2.8 hereof has been taken
\nand completed.<\/p>\n
(j) Good Title. Upon each Transfer and each recomputation of
\nthe Transferred Interest, the Company shall acquire a valid and perfected first
\npriority undivided percentage ownership interest to the extent of the
\nTransferred Interest or a first priority perfected security interest in each
\nReceivable that exists on the date of such Transfer and recomputation and in
\nthe Related Security and Collections with respect thereto free and clear of any
\nAdverse Claim.<\/p>\n
(k) Tradenames, Etc. As of the date hereof: (i) the
\nTransferor’s chief executive office is located at the address for notices set
\nforth in Section 9.3 hereof; (ii) the Transferor has only the subsidiaries and
\ndivisions listed on Exhibit J hereto; and (iii) the Transferor has, within the
\nlast five (5) years, operated only under the tradenames identified in Exhibit J
\nhereto, and, within the last five (5) years, has not changed its name, merged
\nwith or into or consolidated with any other corporation or been the subject of
\nany proceeding under Title 11, United States Code (Bankruptcy), except as
\ndisclosed in Exhibit J hereto.<\/p>\n
(l) Nature of Receivables. Each Receivable (x) represented by
\nthe Transferor or the Collection<\/p>\n
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\n 69
\nAgent to be an Eligible Receivable (including in any Investor Report or other
\nreport delivered pursuant to Section 2.11 hereof) or (y) included in the
\ncalculation of the Net Receivables Balance in fact satisfies at such time the
\ndefinition of “Eligible Receivable” set forth herein and, in the case of clause
\n(y) above, is not a Receivable of the type described in clauses (i) through
\n(iii) of the definition of “Net Receivables Balance.”<\/p>\n
(m) Coverage Requirement; Amount of Receivables. The Percentage
\nFactor does not exceed the Maximum Percentage Factor. As of November 30, 1996,
\nthe aggregate Outstanding Balance of the Receivables in existence was at least
\n$809,000,000 and the Net Receivable Balance was at least $597,000,000.<\/p>\n
(n) Credit and Collection Policy. Since September 27, 1996,
\nthere have been no material changes in the Credit and Collection Policy other
\nthan as permitted hereunder. Since such date, no material adverse change has
\noccurred in the overall rate of collection of the Receivables.<\/p>\n
(o) Collections and Servicing. Since September 27, 1996, there
\nhas been no material adverse change in the ability of the Collection Agent (to
\nthe extent it is WorldCom, the Transferor or any Subsidiary or Affiliate of any
\nof the foregoing) to service and collect the Receivables.<\/p>\n
(p) No Termination Event. No event has occurred and is
\ncontinuing and no condition exists which constitutes a Termination Event or a
\nPotential Termination Event.<\/p>\n
(q) Not an Investment Company. The Transferor is not, and is not
\ncontrolled by, an “investment company” within the meaning of the Investment
\nCompany Act of 1940, as amended, or is exempt from all provisions of such Act.<\/p>\n
(r) ERISA. Each of the Transferor and its ERISA Affiliates is in
\ncompliance in all material respects with ERISA and no lien exists in favor of
\nthe Pension Benefit Guaranty Corporation on any of the Receivables.<\/p>\n
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\n 70
\n (s) Lock-Box Accounts. The names and addresses of all the
\nLock-Box Banks, together with the account numbers of the Lock- Box Accounts at
\nsuch Lock-Box Banks, are specified in Exhibit C hereto (or at such other
\nLock-Box Banks and\/or with such other Lock-Box Accounts as have been notified
\nto the Agent and for which Lock-Box Agreements have been executed in accordance
\nwith Section 2.8(b) hereof and delivered to the Collection Agent). All
\nObligors have been instructed to make payment to a Lock-Box Account and only
\nCollections are deposited into the Lock-Box Accounts.<\/p>\n
(t) Bulk Sales. No transaction contemplated hereby or by the
\nReceivables Purchase Agreement requires compliance with any bulk sales act or
\nsimilar law.<\/p>\n
(u) Transfers Under Receivables Purchase Agreement. Each
\nReceivable which has been transferred to the Transferor by WorldCom has been
\npurchased by the Transferor from WorldCom pursuant to, and in accordance with,
\nthe terms of the Receivables Purchase Agreement.<\/p>\n
(v) Preference; Voidability. The Transferor shall have given
\nreasonably equivalent value to WorldCom in consideration for the transfer to
\nthe Transferor of the Receivables and Related Security from WorldCom, and each
\nsuch transfer shall not have been made for or on account of an antecedent debt
\nowed by WorldCom to the Transferor and no such transfer is or may be voidable
\nunder any Section of the Bankruptcy Reform Act of 1978 (11 U.S.C. Section
\nSection 101 et seq.), as amended.<\/p>\n
(w) Representations and Warranties of WorldCom. Each of the
\nrepresentations and warranties of WorldCom set forth in the Receivables
\nPurchase Agreement are true and correct in all material respects and the
\nTransferor hereby remakes all such representations and warranties for the
\nbenefit of the Agent, the Company, Sheffield, the Bank Investors and the
\nAdministrative Agent.<\/p>\n
Any document, instrument, certificate or notice delivered to the
\nCompany hereunder shall be deemed a representation and warranty by the
\nTransferor.<\/p>\n
65
\n 71<\/p>\n
SECTION 3.2. Reaffirmation of Representations and Warranties by the
\nTransferor. On each day that a Transfer is made hereunder, the Transferor, by
\naccepting the proceeds of such Transfer, whether delivered to the Transferor
\npursuant to Section 2.2(a) or Section 2.5 hereof, shall be deemed to have
\ncertified that all representations and warranties described in Section 3.1
\nhereof are correct on and as of such day as though made on and as of such day.
\nEach Incremental Transfer shall be subject to the further condition precedent
\nthat prior to the date of such Incremental Transfer, the Collection Agent shall
\nhave delivered to the Agent and the Administrative Agent, in form and substance
\nsatisfactory to the Agent and the Administrative Agent, a completed Investor
\nReport dated within ten (10) days prior to the date of such Incremental
\nTransfer, together with a listing by Obligor, if requested, and such additional
\ninformation as may be reasonably requested by the Administrative Agent or the
\nAgent; and the Transferor shall be deemed to have represented and warranted
\nthat such conditions precedent have been satisfied. The Agent shall promptly
\nupon receipt forward a copy of any such report to Sheffield.<\/p>\n
SECTION 3.3. Representations and Warranties of WorldCom. WorldCom
\nrepresents and warrants to the Company, Sheffield and the Bank Investors that:<\/p>\n
(a) Corporate Existence and Power. WorldCom is a corporation
\nduly organized, validly existing and in good standing under the laws of its
\njurisdiction of incorporation and has all corporate power and all material
\ngovernmental licenses, authorizations, consents and approvals required to carry
\non its business in each jurisdiction in which its business is now conducted.
\nWorldCom is duly qualified to do business in, and is in good standing in, every
\nother jurisdiction in which the nature of its business requires it to be so
\nqualified, except where the failure to be so qualified or in good standing
\nwould not have a Material Adverse Effect.<\/p>\n
(b) Corporate and Governmental Authorization; Contravention.
\nThe execution, delivery and performance by WorldCom of this Agreement and the
\nReceivables Purchase Agreement are within WorldCom’s corporate powers, have
\nbeen duly authorized by all necessary corporate action, require no action by or
\nin respect of, or filing with, any Official Body or official thereof<\/p>\n
66
\n 72
\n(except for the filing of UCC financing statements as required by the
\nReceivables Purchase Agreement), and do not contravene, or constitute a default
\nunder, any provision of applicable law, rule or regulation or of the
\nCertificate of Incorporation or Bylaws of WorldCom or of any agreement,
\njudgment, injunction, order, writ, decree or other instrument binding upon
\nWorldCom or result in the creation or imposition of any Adverse Claim on the
\nassets of WorldCom or any of its Subsidiaries (except those created by the
\nReceivables Purchase Agreement).<\/p>\n
(c) Binding Effect. Each of this Agreement and the Receivables
\nPurchase Agreement will constitute the legal, valid and binding obligation of
\nWorldCom, enforceable in accordance with its terms, subject to applicable
\nbankruptcy, insolvency, moratorium or other similar laws affecting the rights
\nof creditors.<\/p>\n
(d) Perfection. Immediately preceding the sale of the
\nReceivables and related property pursuant to the Receivables Purchase
\nAgreement, WorldCom was the owner of all of the Receivables, free and clear of
\nall liens, encumbrances, security interests, preferences or other security
\narrangement of any kind or nature whatsoever. On or prior to the date hereof,
\nall financing statements and other documents required to be recorded or filed
\nin order to perfect and protect the ownership interest of the Transferor in and
\nto the Receivables against all creditors of and purchasers from WorldCom will
\nhave been duly filed in each filing office necessary for such purpose and all
\nfiling fees and taxes, if any, payable in connection with such filings shall
\nhave been paid in full.<\/p>\n
(e) Accuracy of Information. All information heretofore
\nfurnished by WorldCom to the Transferor, the Agent, the Company, Sheffield and
\nthe Bank Investor or the Administrative Agent for purposes of or in connection
\nwith the Receivables Purchase Agreement or any transaction contemplated thereby
\nis, and all such information hereafter furnished by WorldCom to the Transferor,
\nthe Agent, the Enterprise Agent, the Company, Sheffield and Bank Investor or
\nthe Administrative Agent will be, true and accurate in every material respect,
\non the date such information is stated or certified.<\/p>\n
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\n 73
\n (f) Tax Status. WorldCom has filed all material tax returns
\n(federal, state and local) required to be filed and has paid or made adequate
\nprovision for the payment of all taxes, assessments and other governmental
\ncharges.<\/p>\n
(g) Action, Suits. Except as set forth in the Receivables
\nPurchase Agreement, there are no actions, suits or proceedings pending, or to
\nthe knowledge of WorldCom threatened, against or affecting WorldCom or any
\nAffiliate of WorldCom or their respective properties, in or before any court,
\narbitrator or other body, which may, individually or in the aggregate, have a
\nMaterial Adverse Effect.<\/p>\n
(h) Place of Business. The principal place of business and chief
\nexecutive office of WorldCom are located at Jackson, Mississippi and the
\noffices where WorldCom keeps all its Records, are located at the address(es)
\ndescribed on Exhibit I or such other locations notified to the Transferor in
\naccordance with the Receivables Purchase Agreement in jurisdictions where all
\naction required by the terms of the Receivables Purchase Agreement has been
\ntaken and completed.<\/p>\n
(i) Good Title. Upon the sale of the Receivables and related
\nproperty to the Transferor pursuant to the receivable Purchase Agreement, the
\nTransferor shall acquire a valid and perfected first priority ownership
\ninterest in each Receivable (and in the Related Security, Collections and
\nProceeds with respect thereto) that exists on the date of the Receivables
\nPurchase Agreement and each Receivable created or acquired by WorldCom and in
\nthe Related Security, Collections and Proceeds with respect thereto until the
\nTermination Date (as defined in the Receivables Purchase Agreement) in each
\ncase free and clear of any Adverse Claim.<\/p>\n
(j) Tradenames, Etc. As of the date hereof: (i) WorldCom’s
\nchief executive office is located at the address for notices set forth in
\nSection 10.3; (ii) WorldCom has only the subsidiaries and divisions listed on
\nExhibit J hereto; and (iii) WorldCom has, within the last five (5) years,
\noperated only under the tradenames identified in Exhibit J hereto, and, within
\nthe last five (5) years, has not changed its name, merged with or into or
\nconsolidated with any other corporation<\/p>\n
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\n 74
\nor been the subject of any proceeding under Title 11, United States Code
\n(Bankruptcy), except as disclosed in Exhibit J hereto.<\/p>\n
(k) Nature of Receivables. Each Receivable (x) represented by
\nWorldCom to be an Eligible Receivable, or (y) included in the calculation of
\nthe Net Receivables Balance in fact satisfies at such time the definition of
\n“Eligible Receivable” and is an “eligible asset” as defined in Rule 3a-7 under
\nthe Investment Company Act, of 1940, as amended, and in the case of clause (y)
\nabove, is not a Receivable of the type described in clauses (i) through (iii)
\nof the definition of “Net Receivables Balance”.<\/p>\n
(l) Amount of Receivables. As of November 30, 1996, the
\naggregate Outstanding Balance of the Receivables in existence was at least
\n$809,000,000 and the Net Receivable Balance was at least $597,000,000.<\/p>\n
(m) Credit and Collection Policy. Since September 27, 1996,
\nthere have been no material changes in the Credit and Collection Policy other
\nthan as permitted hereunder. Since such date, no material adverse change has
\noccurred in the overall rate of collection of the Receivables.<\/p>\n
(n) Collections and Servicing. Since September 27, 1996, there
\nhas been no material adverse change in the ability of WorldCom to service and
\ncollect the Receivables.<\/p>\n
(o) Not an Investment Company. WorldCom is not, and is not
\ncontrolled by, an “investment company” within the meaning of the Investment
\nCompany Act of 1940, as amended, or is exempt from all provisions of such Act.<\/p>\n
(p) ERISA. Each of WorldCom and its ERISA Affiliates is in
\ncompliance in all material respects with ERISA and no lien exists in favor of
\nthe Pension Benefit Guaranty Corporation on any of the Receivables.<\/p>\n
(q) Lock-Box Accounts. The names and addresses of all the
\nLock-Box Banks, together with the account numbers of the Lock- Box Accounts at
\nsuch Lock-Box Banks, are specified in Exhibit C hereto (or at such<\/p>\n
69
\n 75
\nother Lock-Box Banks and\/or with such other Lock-Box Accounts as have been
\nnotified to the Transferor and the Agent and for which Lock-Box Agreements have
\nbeen executed in accordance with Section 2.8(b) hereof and delivered to the
\nCollection Agent). All Obligors have been instructed to make payment to a
\nLock-Box Account and only Collections are deposited into the Lock-Box Accounts.<\/p>\n
(r) Bulk Sales. No transaction contemplated by the Receivables
\nPurchase Agreement requires compliance with any bulk sales act or similar law.<\/p>\n
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK<\/p>\n
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\n 76
\n ARTICLE IV<\/p>\n
CONDITIONS PRECEDENT<\/p>\n
SECTION 4.1. Conditions to Closing. On or prior to the date of
\nexecution hereof, the Transferor shall deliver to the Agent the following
\ndocuments, instruments and fees all of which shall be in a form and substance
\nacceptable to the Agent:<\/p>\n
(a) A copy of the resolutions of the Board of Directors of the
\nTransferor certified by its Secretary approving the execution, delivery and
\nperformance by the Transferor of this Agreement, the Receivables Purchase
\nAgreement and the other Transaction Documents to be delivered by the Transferor
\nhereunder or thereunder.<\/p>\n
(b) The Articles of Incorporation of the Transferor certified by
\nthe Secretary of State or other similar official of the Transferor’s
\njurisdiction of incorporation dated a date reasonably prior to the Closing
\nDate, or a certification from the Treasurer of the Transferor to the effect
\nthat such Articles have not been amended or modified since a date on or prior
\nto October 25, 1996.<\/p>\n
(c) A Good Standing Certificate for the Transferor issued by the
\nSecretary of State or a similar official of the Transferor’s jurisdiction of
\nincorporation and certificates of qualification as a foreign corporation issued
\nby the Secretaries of State or other similar officials of each jurisdiction
\nwhere such qualification is material to the transactions contemplated by this
\nAgreement and the other Transaction Documents, in each case, dated a date
\nreasonably prior to the Closing Date.<\/p>\n
(d) A Certificate of the Secretary of the Transferor
\nsubstantially in the form of Exhibit L-1 attached hereto.<\/p>\n
(e) Copies of proper financing statements (Form UCC-1) or
\namendments, dated a date reasonably near to the date of the initial Incremental
\nTransfer naming the Transferor as the debtor in favor of the Agent, for the
\nbenefit of the Company, Sheffield and the Bank Investors,<\/p>\n
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\n 77
\nsecured party or other similar instruments or documents as may be necessary or
\nin the reasonable opinion of the Agent desirable under the UCC of all
\nappropriate jurisdictions or any comparable law to perfect the Agent’s
\nundivided percentage interest in all Receivables and the Related Security and
\nCollections relating thereto.<\/p>\n
(f) Certified copies of request for information or copies (Form
\nUCC-11) (or a similar search report certified by parties acceptable to the
\nAgent) dated a date reasonably near the date of the initial Incremental
\nTransfer listing all effective financing statements which name the Transferor,
\nWorldCom or any Permitted Originator (under their respective present names and
\nany previous names) as debtor and which are filed in jurisdictions in which the
\nfilings were made pursuant to items (e) above together with copies of such
\nfinancing statements (none of which shall cover any Receivables or Contracts).<\/p>\n
(g) An opinion of Hall, Estill, Hardwick, Gable, Golden & Nelson,
\nspecial counsel to the Transferor, each Permitted Originator, the Collection
\nAgent and WorldCom, covering the matters set forth in Exhibit K hereto.<\/p>\n
(h) An opinion of William E. Anderson, Esq., counsel to WorldCom
\ncovering certain corporate matters in form and substance to the Enterprise
\nAgent and Sheffield and their respective counsel.<\/p>\n
(i) An executed copy of this Agreement, the Receivables Purchase
\nAgreement, the Sheffield Fee Letter and each of the other Transaction Documents
\nto be executed by WorldCom or the Transferor.<\/p>\n
(j) The Transfer Certificate, duly executed by the Transferor.<\/p>\n
(k) The Certificate, duly executed by the Transferor and
\nappropriately completed.<\/p>\n
(l) An Investor Report for November 1996.<\/p>\n
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\n 78
\n (m) Such other documents, instruments, certificates and opinions
\nas the Enterprise Agent or Sheffield shall reasonably request.<\/p>\n
73
\n 79
\n ARTICLE V<\/p>\n
COVENANTS<\/p>\n
SECTION 5.1. Affirmative Covenants of Transferor. At all times from
\nthe date hereof to the later to occur of (i) the Enterprise Termination Date or
\nSheffield Termination Date or (ii) the date on which the Net Investment has
\nbeen reduced to zero, all accrued Enterprise Discount and Sheffield Discount
\nand Servicing Fees shall have been paid in full and all other Aggregate Unpaids
\nshall have been paid in full, in cash, unless the Agent and Sheffield shall
\notherwise consent in writing:<\/p>\n
(a) Financial Reporting. The Transferor will, and will cause
\nWorldCom and each of the Transferor’s and WorldCom’s Subsidiaries to, maintain,
\nfor itself and each of its respective Subsidiaries, a system of accounting
\nestablished and administered in accordance with GAAP, and furnish to the Agent
\n(which shall promptly upon receipt thereof forward a copy to Sheffield):<\/p>\n
(i) Annual Reporting. Promptly after preparation, and no
\n later than ninety (90) days after the last day of each fiscal year of
\n WorldCom, financial statements showing the consolidated (as to WorldCom
\n and its Subsidiaries) financial condition and results of operations of
\n WorldCom and its Subsidiaries as of, and for the year ended on, such last
\n day, accompanied by:<\/p>\n
(1) the unqualified opinion of a firm of nationally
\n -recognized independent certified public accountants, based on an audit
\n using generally accepted auditing standards, that such financial
\n statements were prepared in accordance with GAAP and present fairly the
\n consolidated financial condition and results of operations of WorldCom and
\n its Subsidiaries;<\/p>\n
(2) any management letter prepared by such
\n accounting firm;<\/p>\n
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\n 80
\n (3) a certificate from such accounting firm to the
\n Agent indicating that during its audit it obtained no knowledge of any
\n Termination Event or Potential Termination Event or, if it obtained such
\n knowledge, the nature and period of existence thereof;<\/p>\n
(4) a letter from such accounting firm addressed
\n to WorldCom, with a copy to the Agent, acknowledging that (A) WorldCom
\n plans to provide the Agent with such audited financial statements and
\n accompanying audit report, (B) the Agent has informed WorldCom that the
\n Agent intends to rely on such firm’s audit report accompanying such
\n financial statements, and (C) WorldCom intends for the Agent to so rely;
\n and<\/p>\n
(5) promptly after preparation, and no later than
\n ninety (90) days after the last day of each fiscal year of the Transferor,
\n unaudited financial statements showing the financial condition and results
\n of operations of the Transferor as of, and for the year ended on, such
\n last day,<\/p>\n
(ii) Quarterly Reporting. Promptly after preparation,
\n and no later than 45 days after the last day of each fiscal quarter of
\n WorldCom and the Transferor (other than the fourth fiscal quarter of each
\n fiscal year), financial statements (which may be unaudited in the case of
\n the Transferor) showing the financial condition and results of operations
\n of the Transferor and WorldCom for such fiscal quarter and for the period
\n from the beginning of the current fiscal year to such last day (which
\n statements in the case of WorldCom shall show the consolidated financial
\n condition of Worldcom), accompanied by a compliance certificate with
\n respect to such Financial Statements.<\/p>\n
(iii) Compliance Certificate. Together with the financial
\n statements required hereunder, a compliance certificate signed by the
\n Transferor’s or WorldCom’s, as applicable, chief financial officer or
\n Treasurer stating<\/p>\n
75
\n 81
\n that (x) the attached financial statements have been prepared in
\n accordance with GAAP and accurately reflect the financial condition of the
\n Transferor or WorldCom as applicable and (y) to the best of such Person’s
\n knowledge, no Termination Event or Potential Termination Event exists, or
\n if any Termination Event or Potential Termination Event exists, stating
\n the nature and status thereof and showing the computation of, and showing
\n compliance with each of the financial ratios and restrictions set forth in
\n Section 5.3 hereof.<\/p>\n
(iv) Shareholders Statements and Reports. Promptly upon
\n the furnishing thereof to the shareholders of the Transferor or WorldCom,
\n copies of all financial statements, reports and proxy statements so
\n furnished.<\/p>\n
(v) S.E.C. Filings. Promptly upon the filing thereof,
\n copies of all registration statements and annual, quarterly, monthly or
\n other regular reports which WorldCom or any subsidiary files with the
\n Securities and Exchange Commission (other than filings on Form S-8 or Form
\n S-3 for secondary markets sales of securities held by selling
\n shareholders).<\/p>\n
(vi) Notice of Termination Events or Potential Termination
\n Events. As soon as possible and in any event within three (3) business
\n days after the Transferor becomes aware or should be aware of the
\n occurrence of a Termination Event or a Potential Termination Event, a
\n statement of the chief financial officer or chief accounting officer of
\n the Transferor setting forth details of such Termination Event or
\n Potential Termination Event and the action which the Transferor proposes
\n to take with respect thereto.<\/p>\n
(vii) Change in Credit and Collection Policy and Debt
\n Ratings. Within ten (10) days after the date any material change in or
\n amendment to the Credit and Collection<\/p>\n
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\n 82
\n Policy is made, a copy of the Credit and Collection Policy then in effect
\n indicating such change or amendment. Within five (5) days after the date
\n of any downgrade in the Transferor’s or WorldCom’s public or private debt
\n ratings, if any, a written certification of the Transferor’s or WorldCom’s
\n public and private debt ratings after giving effect to any such change.<\/p>\n
(viii) Credit and Collection Policy. Within ninety (90)
\n days after the close of each of WorldCom’s and the Transferor’s fiscal
\n years, a complete copy of the Credit and Collection Policy then in effect,
\n unless a copy thereof has been delivered during such fiscal year pursuant
\n to clause (vii) above and no other changes to the Credit and Collection
\n Policy have occurred since such delivery.<\/p>\n
(ix) ERISA. Promptly after the filing or receiving
\n thereof, copies of all reports and notices with respect to any Reportable
\n Event (as defined in Article IV of ERISA) which the Transferor, WorldCom
\n or any ERISA Affiliate of the Transferor or WorldCom files under ERISA
\n with the Internal Revenue Service, the Pension Benefit Guaranty
\n Corporation or the U.S. Department of Labor or which the Transferor,
\n WorldCom or any ERISA Affiliates of the Transferor or WorldCom receives
\n from the Internal Revenue Service, the Pension Benefit Guaranty
\n Corporation or the U.S. Department of Labor.<\/p>\n
(x) Other Information. Such other information including
\n non- financial information) as the Agent or the Administrative Agent may
\n from time to time reasonably request with respect to WorldCom, the
\n Transferor or any Subsidiary of any of the foregoing.<\/p>\n
(b) Conduct of Business. The Transferor will, and will cause
\nWorldCom and each of the Transferor’s and WorldCom’s Subsidiaries to, carry on
\nand conduct its business in substantially the same manner and in substantially
\nthe same fields of enterprise as it is<\/p>\n
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\n 83
\npresently conducted and do all things necessary to remain duly incorporated,
\nvalidly existing and in good standing as a domestic corporation in its
\njurisdiction of incorporation and maintain all requisite authority to conduct
\nits business in each jurisdiction in which its business is conducted.<\/p>\n
(c) Compliance with Laws. The Transferor will, and will cause
\nWorldCom and each of the Transferor’s and WorldCom’s Subsidiaries to, comply in
\nall material respects with all laws, rules, regulations, orders, writs,
\njudgments, injunctions, decrees or awards to which it or its respective
\nproperties may be subject.<\/p>\n
(d) Furnishing of Information and Inspection of Records. The
\nTransferor will, and will cause WorldCom to, furnish to the Enterprise Agent
\nand Sheffield from time to time such information with respect to the
\nReceivables as the Agent the Company or Sheffield may reasonably request,
\nincluding, without limitation, listings identifying the Obligor and the
\nOutstanding Balance for each Receivable. The Transferor will, and will cause
\nWorldCom to, at any time and from time to time during regular business hours
\npermit the Enterprise Agent and Sheffield, or their respective agents or
\nrepresentatives, (i) to examine and make copies of and abstracts from all
\nRecords and (ii) to visit the offices and properties of the Transferor or
\nWorldCom, as applicable, for the purpose of examining such Records, and to
\ndiscuss matters relating to Receivables or the Transferor’s or WorldCom’s
\nperformance hereunder and under the other Transaction Documents to which such
\nPerson is a party with any of the officers, directors, employees or independent
\npublic accountants of the Transferor or WorldCom, as applicable, having
\nknowledge of such matters.<\/p>\n
(e) Keeping of Records and Books of Account. The Transferor
\nwill, and will cause WorldCom and any Permitted Originator to, maintain and
\nimplement administrative and operating procedures (including, without
\nlimitation, an ability to recreate records evidencing Receivables in the event
\nof the destruction of the originals thereof), and keep and maintain, all
\ndocuments, books, records and other information reasonably necessary or
\nadvisable for the collection of all Receivables (including, without limitation,
\nrecords adequate to permit the daily identification of each new Receivable<\/p>\n
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\n 84
\nand all Collections of and adjustments to each existing Receivable). The
\nTransferor will, and will cause WorldCom and any Permitted Originator to, give
\nthe Agent notice of any material change in the administrative and operating
\nprocedures of the Transferor, WorldCom or the Permitted Originator, as
\napplicable, referred to in the previous sentence.<\/p>\n
(f) Performance and Compliance with Receivables and Contracts.
\nThe Transferor, at its expense, will, and will cause WorldCom and each
\nPermitted Originator to, timely and fully perform and comply with all material
\nprovisions, covenants and other promises required to be observed by the
\nTransferor, WorldCom or the Permitted Originators under the Contracts related
\nto the Receivables.<\/p>\n
(g) Credit and Collection Policies. The Transferor will, and
\nwill cause WorldCom and each Permitted Originator to, comply in all material
\nrespects with the Credit and Collection Policy in regard to each Receivable and
\nthe related Contract.<\/p>\n
(h) Collections. The Transferor shall, and shall cause
\nWorldCom and each Permitted Originator to, instruct all Obligors to cause all
\nCollections to be remitted directly to a Lock-Box Account.<\/p>\n
(i) Collections Received. The Transferor shall, and shall
\ncause WorldCom and each Permitted Originator to, hold in trust, and deposit,
\nimmediately, but in any event not later than forty-eight (48) hours of its
\nreceipt thereof, to a Lock-Box Account all Collections received from time to
\ntime by the Transferor, WorldCom or the Permitted Originators, as the case may
\nbe.<\/p>\n
(j) Sale Treatment. The Transferor will not (i) and will not
\npermit WorldCom to, account for (including for accounting and tax purposes), or
\notherwise treat, the transactions contemplated by the Receivables Purchase
\nAgreement in any manner other than as a sale of Receivables by WorldCom to the
\nTransferor, or (ii) account for (other than for tax purposes) or otherwise
\ntreat the transactions contemplated hereby in any manner other than a sale of
\nReceivables by the Transferor to the Company or the Bank Investors, as
\napplicable. In addition, the Transferor shall, and shall cause WorldCom to,<\/p>\n
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\n 85
\ndisclose (in a footnote or otherwise) in all of its respective financial
\nstatements (including any such financial statements consolidated with any other
\nPersons’ financial statements) the existence and nature of the transaction
\ncontemplated hereby and by the Receivables Purchase Agreement and the interest
\nof the Transferor (in the case of WorldCom’s financial statements), the
\nCompany, Sheffield and the Bank Investors in the Affected Assets.<\/p>\n
(k) Separate Business. The Transferor shall at all times
\ncomply in all respects with Articles X, XV and XVII of its Certificate of
\nIncorporation. The officers and directors of the Transferor (as appropriate)
\nshall make decisions with respect to the business and daily operations of the
\nTransferor independent of and not dictated by any controlling entity. The
\nTransferor shall not engage in any business not permitted by its Certificate of
\nIncorporation as in effect on the Closing Date.<\/p>\n
(l) Corporate Documents. The Transferor shall only amend,
\nalter, change or repeal its Certificate of Incorporation with the prior written
\nconsent of the Agent.<\/p>\n
SECTION 5.2. Negative Covenants of the Transferor.
\nDuring the term of this Agreement, unless the Agent and Sheffield shall
\notherwise consent in writing:<\/p>\n
(a) No Sales, Liens, Etc. Except as otherwise provided herein
\nand the Receivables Purchase Agreement, the Transferor will not, and will not
\npermit WorldCom to, sell, assign (by operation of law or otherwise) or
\notherwise dispose of, or create or suffer to exist any Adverse Claim upon (or
\nthe filing of any financing statement) or with respect to (x) any of the
\nAffected Assets, (y) any inventory or goods, the sale of which may give rise to
\na Receivable or any Receivable or related Contract, or (z) any account which
\nconcentrates in a Lock-Box Bank to which any Collections of any Receivable are
\nsent, or assign any right to receive income in respect thereof.<\/p>\n
(b) No Extension or Amendment of Receivables. Except as
\notherwise permitted in Section 6.2 hereof, the Transferor will not, and will
\nnot permit WorldCom to, extend, amend or otherwise modify the terms<\/p>\n
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\n 86
\nof any Receivable, or amend, modify or waive any term or condition of any
\nContract related thereto.<\/p>\n
(c) No Change in Business or Credit and Collection Policy. The
\nTransferor will not, and will not permit WorldCom to, make any change in the
\ncharacter of its business or in the Credit and Collection Policy, which change
\nwould, in either case, impair the collectibility of any Receivable or otherwise
\nhave a Material Adverse Effect.<\/p>\n
(d) No Mergers, Etc. The Transferor will not, and except as
\notherwise permitted pursuant to the Receivables Purchase Agreement and Section
\n7.2.6 of the Credit Agreement, as amended and provided NationsBank of Texas,
\nN.A. remains as managing agent thereunder, will not permit WorldCom to, (i)
\nconsolidate or merge with or into any other Person, or (ii) sell, lease or
\ntransfer all or substantially all of its assets to any other Person.<\/p>\n
(e) Change in Payment Instructions to Obligors. The Transferor
\nwill not, and will not permit WorldCom to, add or terminate any bank as a
\nLock-Box Bank or any account as a Lock-Box Account to or from those listed in
\nExhibit C hereto or make any change in its instructions to Obligors regarding
\npayments to be made to any Lock-Box Account, unless (i) such instructions are
\nto deposit such payments to another existing Lock-Box Account or (ii) the Agent
\nshall have received written notice of such addition, termination or change at
\nleast 30 days prior thereto and the Agent shall have received a Lock-Box
\nAgreement executed by each new Lock-Box Bank or an existing Lock-Box Bank with
\nrespect to each new Lock-Box Account, as applicable.<\/p>\n
(f) Deposits to Lock-Box Accounts. The Transferor will not,
\nand will not permit WorldCom to, deposit or otherwise credit, or cause or
\npermit to be so deposited or credited, to any Lock-Box Account cash or cash
\nproceeds other than Collections of Receivables.<\/p>\n
(g) Change of Name, Etc. The Transferor will not, and will not
\npermit WorldCom to, change its name, identity or structure or the location of
\nits chief executive office, unless at least ten (10) days prior to the
\neffective date of any such change the Transferor or<\/p>\n
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\n 87
\nWorldCom, as applicable, delivers to the Agent (i) such documents, instruments
\nor agreements, executed by the Transferor or WorldCom, as applicable, as are
\nnecessary to reflect such change and to continue the perfection of the Agent’s
\nownership interests or security interests in the Affected Assets and (ii) new
\nor revised Lock-Box Agreements executed by the Lock-Box Banks which reflect
\nsuch change and enable the Agent to continue to exercise its rights contained
\nin Section 2.8 hereof.<\/p>\n
(h) Amendment to Receivables Purchase Agreement. The
\nTransferor will not, and will not permit WorldCom to, amend, modify, or
\nsupplement the Receivables Purchase Agreement, except with the prior written
\nconsent of the Agent and the Administrative Agent; nor shall the Transferor
\ntake, or permit WorldCom to take, any other action under the Receivables
\nPurchase Agreement that shall have a material adverse affect on the Agent, the
\nEnterprise Agent, the Company, Sheffield or any Bank Investor or which is
\ninconsistent with the terms of this Agreement.<\/p>\n
(i) ERISA Matters. The Transferor will not, and will not
\npermit WorldCom to, (i) engage or permit any of its respective ERISA Affiliates
\nto engage in any prohibited transaction (as defined in Section 4975 of the Code
\nand Section 406 of ERISA) for which an exemption is not available or has not
\npreviously been obtained from the U.S. Department of Labor; (ii) permit to
\nexist any accumulated funding deficiency (as defined in Section 302(a) of ERISA
\nand Section 412(a) of the Code) or funding deficiency with respect to any
\nBenefit Plan other than a Multiemployer Plan; (iii) fail to make any payments
\nto any Multiemployer Plan that the Transferor, WorldCom or any ERISA Affiliate
\nof the Transferor or WorldCom is required to make under the agreement relating
\nto such Multiemployer Plan or any law pertaining thereto; (iv) terminate any
\nBenefit Plan so as to result in any liability; or (v) permit to exist any
\noccurrence of any reportable event described in Title IV of ERISA which
\nrepresents a material risk of a liability to the Transferor, WorldCom, or any
\nERISA Affiliate of the Transferor of WorldCom under ERISA or the Code, if such
\nprohibited transactions, accumulated funding deficiencies, payments,
\nterminations and reportable events occurring within any fiscal year of the
\nTransferor and WorldCom, in the aggregate, involve a payment of money or an
\nincurrence of<\/p>\n
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\n 88
\nliability by the Transferor, WorldCom or any ERISA Affiliate of the Transferor
\nor WorldCom, in an amount in excess of $10,000,000.<\/p>\n
(j) Payment to WorldCom. With respect to any Receivable sold
\nby WorldCom to the Transferor, the Transferor shall, and shall cause WorldCom
\nto, effect such sale under, and pursuant to the terms of, the Receivables
\nPurchase Agreement, including, without limitation, the payment by the
\nTransferor either in cash or by increase in the amount of the Subordinated Note
\n(as defined in the Receivables Purchase Agreement) to WorldCom of an amount
\nequal to the purchase price for such Receivable as required by the terms of the
\nReceivables Purchase Agreement.<\/p>\n
SECTION 5.3. Financial Covenants. As calculated on a consolidated
\nbasis for WorldCom and its Subsidiaries:<\/p>\n
(a) WorldCom shall not permit its Leverage Ratio to exceed the
\n following during the applicable period:<\/p>\n
\n\n Maximum Ratio
\n Period Permitted
\n —— ———
\n
\n Closing Date – June 30, 1998 4.00 : 1.00
\n July 1, 1998 – December 31, 1999 3.50 : 1.00
\n January 1, 2000 and thereafter 3.00 : 1.00
\n<\/c><\/s><\/caption>\n<\/table>\n (b) WorldCom shall not permit its ratio of the Operating Cash
\n Flow to the Interest Expense for any 6-month period ending on the date of
\n determination to be less than the following during the applicable period:<\/p>\n
\n\n Maximum Ratio
\n Period Permitted
\n —— ———
\n
\n Closing Date – December 31, 1996 2.50 : 1.00
\n January 1, 1997 – December 31, 1997 2.75 : 1.00
\n January 1, 1998 and thereafter 3.00 : 1.00
\n<\/c><\/s><\/caption>\n<\/table>\n 83<\/p>\n
89
\n (c) WorldCom shall not permit its Fixed Charge Ratio for any
\n12-month period ending on the date of determination to be less than 1.50 : 1.00.<\/p>\n
All capitalized terms used in this Section 5.3, but not defined in Article I
\nshall be defined in Exhibit O hereto.<\/p>\n
SECTION 5.4. Affirmative Covenants of WorldCom. At all times from
\nthe date hereof to the date on which all Receivables sold hereunder have been
\npaid or charged-off in accordance with the Credit and Collection Policy, unless
\nthe Agent and Sheffield shall otherwise consent in writing:<\/p>\n
(a) Conduct of Business. WorldCom will, and will cause each of
\nits Subsidiaries to, carry on and conduct its business in substantially the
\nsame manner and in substantially the same fields of enterprise as it is
\npresently conducted and do all things necessary to remain duly incorporated,
\nvalidly existing and in good standing as a domestic corporation in its
\njurisdiction of incorporation and maintain all requisite authority to conduct
\nits business in each jurisdiction in which its business is conducted.<\/p>\n
(b) Compliance with Laws. WorldCom will, and will cause each
\nof its Subsidiaries to, comply in all material respects with all laws, rules,
\nregulations, orders, writs, judgments, injunctions, decrees or awards to which
\nit or its properties may be subject.<\/p>\n
(c) Furnishing of Information and Inspection of Records.
\nWorldCom will furnish to the Transferor and the Agent from time to time such
\ninformation with respect to the Receivables as the Transferor, the Enterprise
\nAgent or Sheffield may reasonably request, including, without limitation,
\nlistings identifying the Obligor and the Outstanding Balance for each
\nReceivable. WorldCom will at any time and from time to time during regular
\nbusiness hours permit the Transferor, the<\/p>\n
84<\/p>\n
90
\nEnterprise Agent and Sheffield, or their respective agents or representatives,
\n(i) to examine and make copies of and abstracts from all Records and (ii) to
\nvisit the offices and properties of WorldCom for the purpose of examining such
\nRecords, and to discuss matters relating to Receivables or WorldCom’s
\nperformance hereunder with any of the officers, directors, employees or
\nindependent public accountants of WorldCom having knowledge of such matters.<\/p>\n
(d) Keeping of Records and Books of Account. WorldCom will
\nmaintain and implement administrative and operating procedures (including,
\nwithout limitation, an ability to recreate records evidencing Receivables in
\nthe event of the destruction of the originals thereof), and keep and maintain,
\nall documents, books, records and other information reasonably necessary or
\nadvisable for the collection of all Receivables (including, without limitation,
\nrecords adequate to permit the daily identification of each new Receivable and
\nall Collections of and adjustments to each existing Receivable). WorldCom will
\ngive the Transferor notice of any material change in the administrative and
\noperating procedures referred to in the previous sentence.<\/p>\n
(e) Performance and Compliance with Receivables and Contracts.
\nWorldCom, at its expense, will, and will cause each Permitted Originator to,
\ntimely and fully perform and will, and will cause each Permitted Originator to,
\ncomply with all material provisions, covenants and other promises required to
\nbe observed by it or a Permitted Originator under the Contracts related to the
\nReceivables.<\/p>\n
(f) Credit and Collection Policies. WorldCom will, and will
\ncause each Permitted Originator to, comply in all material respects with the
\nCredit and Collection Policy in regard to each Receivable and the related
\nContract.<\/p>\n
(g) Collections. WorldCom shall, and shall cause each
\nPermitted Originator to, instruct all Obligors to cause all Collections to be
\ndeposited directly to a Lock-Box Account.<\/p>\n
(h) Collections Received. WorldCom shall, and shall cause each
\nPermitted Originator to, hold in trust, and deposit, immediately, but in any
\nevent not<\/p>\n
85<\/p>\n
91
\nlater than forty-eight (48) hours of its receipt thereof, to a Lock-Box Account
\nall Collections received from time to time by WorldCom.<\/p>\n
(i) Sale Treatment. WorldCom shall report the transactions
\ncontemplated by the Receivables Purchase Agreement for financial reporting
\npurposes and tax reporting purposes as a sale of the Receivables to the
\nTransferor.<\/p>\n
(j) Information Requests. Promptly upon receipt, one or more
\ncomputer tapes in the aggregate setting forth all Receivables and the
\nOutstanding Balances thereon and such other information as the Agent may
\nreasonably request.<\/p>\n
SECTION 5.5. Negative Covenants of WorldCom. During the term of
\nthis Agreement, unless the Agent shall otherwise consent in writing:<\/p>\n
(a) No Sales, Liens, Etc. Except as otherwise provided herein,
\nthe WorldCom will not sell, assign (by operation of law or otherwise) or
\notherwise dispose of, or create or suffer to exist any Adverse Claim upon (or
\nthe filing of any financing statement) or with respect to (x) any of the
\nAffected Assets, (y) any inventory or goods, the sale of which may give rise to
\na Receivable or any Receivable or related Contract, or (z) any account which
\nconcentrates in a Lock-Box Bank to which any Collections of any Receivable are
\nsent, or assign any right to receive income in respect thereof.<\/p>\n
(b) No Extension or Amendment of Receivables. Except as
\notherwise permitted in Section 6.2, WorldCom will not, and will cause each
\nPermitted Originator not to, extend, amend or otherwise modify the terms of any
\nReceivable, or amend, modify or waive any term or condition of any Contract
\nrelated thereto.<\/p>\n
(c) No Change in Business or Credit and Collection Policy.
\nWorldCom will not, and will cause each Permitted Originator to not, make any
\nchange in the character of its business or in the Credit and Collection Policy,
\nwhich change would, in either case, impair the collectibility of any Receivable
\nor otherwise have a Material Adverse Effect.<\/p>\n
86<\/p>\n
92
\n (d) Change in Payment Instructions to Obligors. WorldCom will
\nnot add or terminate any bank as a Lock-Box Bank or any account as a Lock-Box
\nAccount to or from those listed in Exhibit C hereto or make any change in its
\ninstructions to Obligors regarding payments to be made to any Lock-Box Account,
\nunless (i) such instructions are to deposit such payments to another existing
\nLock- Box Account or (ii) the Transferor and the Agent shall have received
\nwritten notice of such addition, termination or change at least 30 days prior
\nthereto and the Agent shall have received a Lock-Box Agreement executed by each
\nnew Lock-Box Bank or an existing Lock-Box Bank with respect to each new
\nLock-Box Account, as applicable.<\/p>\n
(e) Deposits to Lock-Box Accounts. WorldCom will not deposit
\nor otherwise credit, or cause or permit to be so deposited or credited, to any
\nLock-Box Account cash or cash proceeds other than Collections of Receivables.<\/p>\n
(f) Change of Name, Etc. WorldCom will not change its name,
\nidentity or structure or location of its chief executive office, unless, at
\nleast ten (10) days prior to the effective date of any such change, WorldCom
\ndelivers to the Transferor and the Agent (i) such documents, instruments or
\nagreements, executed by the Transferor, as are necessary to reflect such change
\nand to continue the perfection of the Transferor’s ownership interest in the
\nReceivables and (ii) new or revised Lock-Box Agreements executed by the
\nLock-Box Banks which reflect such change and enable the Agent to continue to
\nexercise its rights contained in Section 2.8 hereof.<\/p>\n
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK<\/p>\n
87<\/p>\n
93
\n ARTICLE VI<\/p>\n
ADMINISTRATION AND COLLECTIONS<\/p>\n
SECTION 6.1. Appointment of Collection Agent. The servicing,
\nadministering and collection of the Receivables shall be conducted by such
\nPerson (the “Collection Agent”) so designated from time to time in accordance
\nwith this Section 6.1. Until the Agent gives notice to WorldCom of the
\ndesignation of a new Collection Agent, WorldCom is hereby designated as, and
\nhereby agrees to perform the duties and obligations of, the Collection Agent
\npursuant to the terms hereof. The Collection Agent may not delegate any of its
\nrights, duties or obligations hereunder (provided that it may delegate certain
\nservicing activities to WorldCom Network Services, Inc. as long as it remains a
\nsubsidiary of WorldCom), or designate a substitute Collection Agent, without
\nthe prior written consent of the Agent, and provided that the Collection Agent
\nshall continue to remain solely liable for the performance of the duties as
\nCollection Agent hereunder notwithstanding any such assignment hereunder. The
\nAgent may, and upon the direction of the Enterprise Agent or Sheffield, the
\nAgent shall, after the occurrence of (i) a Collection Agent Default, (ii) any
\nevent which materially adversely affects the collectibility of the Receivables
\nor any other event which materially adversely affects the ability of the
\nTransferor or Collection Agent to collect Receivables or the ability of the
\nTransferor or Collection Agent to perform hereunder or (iii) any other
\nTermination Event other than as specified in Section 7.1(k)-(q) designate as
\nCollection Agent any Person (including itself) to succeed WorldCom or any
\nsuccessor Collection Agent, on the condition in each case that any such Person
\nso designated shall agree to perform the duties and obligations of the
\nCollection Agent pursuant to the terms hereof. The Agent may notify any
\nObligor of the Transferred Interest.<\/p>\n
SECTION 6.2. Duties of Collection Agent.<\/p>\n
(a) The Collection Agent shall take or cause to be taken all
\nsuch action as may be necessary or advisable to collect each Receivable from
\ntime to time, all in accordance with applicable laws, rules and regulations,<\/p>\n
88<\/p>\n
94
\nwith reasonable care and diligence, and in accordance with the Credit and
\nCollection Policy. Each of the Transferor, the Company, the Agent, Sheffield
\nand the Bank Investors hereby appoints as its agent the Collection Agent, from
\ntime to time designated pursuant to Section 6.1 hereof, to enforce its
\nrespective rights and interests in and under the Affected Assets. To the
\nextent permitted by applicable law, each of the Transferor and WorldCom (to the
\nextent not then acting as Collection Agent hereunder) hereby grants to any
\nCollection Agent appointed hereunder an irrevocable power of attorney to take
\nany and all steps in the Transferor’s and\/or WorldCom’s name and on behalf of
\nthe Transferor or WorldCom necessary or desirable, in the reasonable
\ndetermination of the Collection Agent, to collect all amounts due under any and
\nall Receivables, including, without limitation, endorsing the Transferor’s
\nand\/or WorldCom’s name on checks and other instruments representing Collections
\nand enforcing such Receivables and the related Contracts. The Collection Agent
\nshall set aside for the account of the Transferor and the Company their
\nrespective allocable shares of the Collections of Receivables in accordance
\nwith Sections 2.5 and 2.6 hereof. The Collection Agent shall segregate and
\ndeposit to the Agent’s account the Company’s, Sheffield’s and the Bank
\nInvestors’ allocable share of Collections of Receivables when required pursuant
\nto Article II hereof. So long as no Sheffield Termination Date or Enterprise
\nTermination Date shall have occurred and be continuing, the Collection Agent
\nmay, in accordance with the Credit and Collection Policy, extend the maturity
\nof Receivables or adjust the Outstanding Balance as the Collection Agent may
\ndetermine to be appropriate to maximize Collections thereof; provided, however,
\nthat such extension or adjustment shall not alter the status of such Receivable
\nas a Delinquent Receivable or a Defaulted Receivable. The Transferor shall
\ndeliver to the Collection Agent and the Collection Agent shall hold in trust
\nfor the Transferor, the Company, the Agent, Sheffield and the Bank Investors,
\nin accordance with their respective interests, all Records which evidence or
\nrelate to Receivables or Related Security. Notwithstanding anything to the
\ncontrary contained herein, the Agent shall have the absolute and unlimited
\nright to direct the Collection Agent (whether the Collection Agent is WorldCom
\nor any other Person) to commence or settle any legal action to enforce
\ncollection of any Receivable or to foreclose upon or repossess any<\/p>\n
89<\/p>\n
95
\nRelated Security. The Collection Agent shall not make the Agent, the Company,
\nSheffield or any of the Bank Investors a party to any litigation without the
\nprior written consent of such Person.<\/p>\n
(b) The Collection Agent shall, as soon as practicable
\nfollowing receipt thereof, turn over to the Transferor any collections of any
\nindebtedness of any Person which is not on account of a Receivable. If the
\nCollection Agent is not the Transferor or WorldCom or an Affiliate of the
\nTransferor or WorldCom, the Collection Agent, by giving three Business Days’
\nprior written notice to the Agent, may revise the percentage used to calculate
\nthe Servicing Fee so long as the revised percentage will not result in a
\nServicing Fee that exceeds 110% of the reasonable and appropriate out-of-pocket
\ncosts and expenses of such Collection Agent incurred in connection with the
\nperformance of its obligations hereunder as documented to the reasonable
\nsatisfaction of the Agent, provided, however, that at any time after the
\nPercentage Factor equals or exceeds 100%, any compensation to the Collection
\nAgent in excess of the Servicing Fee initially provided for herein shall be an
\nobligation of the Transferor and shall not be payable, in whole or in part,
\nfrom Collections allocated to the Company, Sheffield or the Bank Investors, as
\napplicable. The Collection Agent, if other than the Transferor or WorldCom or
\nan Affiliate of the Transferor or WorldCom, shall as soon as practicable upon
\ndemand, deliver to WorldCom all Records in its possession which evidence or
\nrelate to indebtedness of an Obligor which is not a Receivable.<\/p>\n
(c) On or before 90 days after the end of each fiscal year,
\nbeginning with the fiscal year ending December 31, 1996, (i) the Collection
\nAgent, at its expense, shall cause a firm of nationally recognized independent
\npublic accountants (who may also render other services to the Collection Agent,
\nthe Transferor, WorldCom or any Affiliates of any of the foregoing) or (ii)
\nupon mutual agreement of the Collection Agent and the Agent and at the
\nCollection Agent’s expense, cause an audit team chosen by the Agent to furnish
\na report to the Agent, in either case, to the effect that they have (i)
\ncompared the information contained in the Investor Reports delivered during
\nsuch fiscal year then ended with the information contained in the Contracts and
\nthe<\/p>\n
90<\/p>\n
96
\nCollection Agent’s records and computer systems for such period, and that, on
\nthe basis of such examination and comparison, such firm is of the opinion that
\nthe information contained in the Investor Reports reconciles with the
\ninformation contained in the Contracts and the Collection Agent’s records and
\ncomputer system and that the servicing of the Receivables has been conducted in
\ncompliance with this Agreement, (ii) confirmed the Net Receivables Balance as
\nof the end of each Enterprise Tranche Period and Sheffield Tranche Period
\nduring such fiscal year, and (iii) verified that the Receivables treated by the
\nCollection Agent as Eligible Receivables in fact satisfied the requirements of
\nthe definition thereof contained herein and (iv) conducted a ‘negative
\nconfirmation’ of a sample of the Receivables and verified that the Collection
\nAgent’s records and computer system used in servicing the Receivables contained
\ncorrect information with regard to due dates and outstanding balances, except,
\nin each case for (a) such exceptions as such firm shall believe to be
\nimmaterial (which exceptions need not be enumerated) and (b) such other
\nexceptions as shall be set forth in such statement. The Agent shall promptly
\nupon receipt forward a copy of such report to Sheffield.<\/p>\n
(d) Notwithstanding anything to the contrary contained in this
\nArticle VI, the Collection Agent, if not the Transferor, WorldCom or any
\nAffiliate of the Transferor or WorldCom, shall have no obligation to collect,
\nenforce or take any other action described in this Article VI with respect to
\nany indebtedness that is not included in the Transferred Interest other than to
\ndeliver to the Transferor the collections and documents with respect to any
\nsuch indebtedness as described in Section 6.2(b) hereof.<\/p>\n
SECTION 6.3. Rights After Designation of New Collection Agent. At
\nany time following the designation of a Collection Agent (other than the
\nTransferor, WorldCom or any Affiliate of the Transferor or WorldCom) pursuant
\nto Section 6.1 hereof:<\/p>\n
(i) The Agent may direct that payment of all amounts
\n payable under any Receivable be made directly to the Agent or its
\n designee.<\/p>\n
91
\n 97
\n (ii) The Transferor shall, at the Agent’s request and at
\n the Transferor’s expense, give notice of the Agent’s ownership of
\n Receivables to each Obligor and direct that payments be made directly to
\n the Agent or its designee.<\/p>\n
(iii) The Transferor shall, at the Agent’s
\n request, (A) assemble all of the Records, and shall make the same
\n available to the Agent or its designee at a place selected by the Agent or
\n its designee, and (B) segregate all cash, checks and other instruments
\n received by it from time to time constituting Collections of Receivables
\n in a manner acceptable to the Agent and shall, promptly upon receipt,
\n remit all such cash, checks and instruments, duly endorsed or with duly
\n executed instruments of transfer, to the Agent or its designee.<\/p>\n
(iv) The Transferor and WorldCom hereby
\n authorize the Agent to take any and all steps in the Transferor’s or
\n WorldCom’s name and on behalf of the Transferor and WorldCom necessary or
\n desirable, in the determination of the Agent, to collect all amounts due
\n under any and all Receivables, including, without limitation, endorsing
\n the Transferor’s or WorldCom’s name on checks and other instruments
\n representing Collections and enforcing such Receivables and the related
\n Contracts.<\/p>\n
SECTION 6.4. Collection Agent Default. The occurrence of any one or
\nmore of the following events shall constitute a Collection Agent Default:<\/p>\n
(a) failure of any Collection Agent (other than WorldCom) or
\nany of its Subsidiaries to pay when due any amounts due under any agreement
\nunder which any Indebtedness greater than $1,000,000 is governed; or the
\ndefault by any Collection Agent (other than WorldCom) or any of its
\nSubsidiaries in the performance of any term, provision or condition contained
\nin any agreement under which any Indebtedness greater than $1,000,000 was
\ncreated or is governed, regardless of whether such event is an “event of
\ndefault” or “default” under any such agreement; or any Indebtedness of any
\nCollection Agent<\/p>\n
92
\n 98
\n(other than WorldCom) or any of its Subsidiaries greater than $5,000,000 shall
\nbe declared to be due and payable or required to be prepaid (other than by a
\nregularly scheduled payment) prior to the scheduled date of maturity thereof;
\nor<\/p>\n
(b) any Event of Bankruptcy shall occur with respect to any
\nCollection Agent (other than WorldCom) or any of its Subsidiaries; or<\/p>\n
(c) there shall have occurred any material adverse change in
\nthe operations of the Collection Agent (other than WorldCom) since the end of
\nlast fiscal year ending prior to the date of its appointment as Collection
\nAgent hereunder or any other event shall have occurred which, in the
\ncommercially reasonably judgment of the Agent, materially and adversely affects
\nsuch Collection Agent’s ability to either collect the Receivables or to perform
\nunder this Agreement.<\/p>\n
SECTION 6.5. Responsibilities of the Transferor and WorldCom.
\nAnything herein to the contrary notwithstanding, the Transferor shall, and\/or
\nshall cause WorldCom to, (i) perform all of WorldCom’s obligations under the
\nContracts related to the Receivables to the same extent as if interests in such
\nReceivables had not been sold hereunder and under the Receivables Purchase
\nAgreement and the exercise by the Agent, the Enterprise Agent the Company,
\nSheffield and the Bank Investors of their rights hereunder and under the
\nReceivables Purchase Agreement shall not relieve the Transferor or WorldCom
\nfrom such obligations and (ii) pay when due any taxes with respect to which the
\nfailure to pay could cause a Material Adverse Effect, including without
\nlimitation, any sales taxes payable in connection with the Receivables and
\ntheir creation and satisfaction. Neither the Agent, the Enterprise Agent, the
\nCompany, Sheffield nor any of the Bank Investors shall have any obligation or
\nliability with respect to any Receivable or related Contracts, nor shall it be
\nobligated to perform any of the obligations of WorldCom thereunder.<\/p>\n
93
\n 99
\n ARTICLE VII<\/p>\n
TERMINATION EVENTS<\/p>\n
SECTION 7.1. Termination Events. The occurrence of any one or more
\nof the following events shall constitute a Termination Event:<\/p>\n
(a) the Transferor, WorldCom or the Collection Agent shall fail
\nto make any payment or deposit to be made by it hereunder or under the
\nReceivables Purchase Agreement when due hereunder or thereunder; or<\/p>\n
(b) any representation, warranty, certification or statement
\nmade by the Transferor, the Collection Agent or WorldCom in this Agreement, any
\nother Transaction Document to which it is a party or in any other document
\ndelivered pursuant hereto or thereto shall prove to have been incorrect in any
\nmaterial respect when made or deemed made; or<\/p>\n
(c) the Transferor, WorldCom or the Collection Agent, shall
\ndefault in the performance of any payment or undertaking (other than those
\ncovered by clause (a) above) (i) to be performed or observed under Sections
\n5.1(a)(vi), 5.1(a)(vii), 5.1(b), 5.1(f), 5.1(g), 5.1(h), 5.1(i), 5.1(k),
\n5.1(l), 5.2(a), (c), (d), (e), (f) or (g) or Section 5.3 or (ii) to be
\nperformed or observed under any other provision hereof and such default in the
\ncase of this clause (ii) shall continue for ten (10) days;<\/p>\n
(d) failure of the Transferor, WorldCom or any Subsidiary of
\nthe Transferor or WorldCom to pay when due any amounts due under any agreement
\nto which any such Person is a party and under which any Indebtedness
\n(individually or collectively) greater than $20,000,000 is governed; or the
\ndefault by the Transferor, WorldCom or any Subsidiary of the Transferor or
\nWorldCom in the performance of any term, provision or condition contained in
\nany agreement to which any such Person is a party and under which any
\nIndebtedness owing by the Transferor, WorldCom or any Subsidiary of the
\nTransferor or WorldCom (individually or collectively) greater<\/p>\n
94
\n 100
\nthan $20,000,000 was created or is governed; or any Indebtedness owing by the
\nTransferor, WorldCom or any Subsidiary of the Transferor or WorldCom
\n(individually or collectively) greater than $20,000,000 shall be declared to be
\ndue and payable or required to be prepaid (other than by a regularly scheduled
\npayment) prior to the stated maturity thereof, unless and so long as such
\ndefault (described in the previous clause) is being contested by such Person in
\ngood faith by appropriate proceedings and adequate reserves in respect thereof
\nhave been established on the books of such Person to the extent required by
\nGAAP; or<\/p>\n
(e) any Event of Bankruptcy shall occur with respect to the
\nTransferor, WorldCom or any Subsidiary of either the Transferor or WorldCom; or<\/p>\n
(f) the Agent, on behalf of the Company and\/or the Bank
\nInvestors and Sheffield, shall, for any reason, fail or cease to have a valid
\nand perfected first priority ownership or security interest in the Affected
\nAssets free and clear of any Adverse Claims; or<\/p>\n
(g) a Collection Agent Default shall have occurred; or<\/p>\n
(h) a Termination Event shall have occurred under the
\nReceivables Purchase Agreement; or<\/p>\n
(i) the Transferor shall enter into any transaction or merger
\nwhereby it is not the surviving entity; or<\/p>\n
(j) there shall have occurred any material adverse change in
\nthe operations of the Transferor or WorldCom since June 30, 1996 or any other
\nMaterial Adverse Effect shall have occurred; or<\/p>\n
(k) any Liquidity Provider or Credit Support Provider shall
\nhave given notice that an event of default has occurred and is continuing under
\nany of its respective agreements with the Company or Sheffield; or<\/p>\n
(l) the failure of the Board of Directors of the Transferor to
\nprovide to the Agent and Sheffield, prior to January 15, 1997, evidence (in
\nform and substance satisfactory to the Agent, Sheffield and their respective
\ncounsel) that the Board of Directors of the Transferor has ratified the
\ntransactions contemplated hereby; or<\/p>\n
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\n 101
\n (m) (i) the Percentage Factor exceeds the Maximum Percentage
\nFactor unless the Transferor reduces the Enterprise Net Investment and
\nSheffield Net Investment or increases the balance of the Affected Assets on the
\nnext Business Day so as to reduce the Percentage Factor to less than or equal
\nto 98%; (ii) the Percentage Factor as reported on any Investor Report equals
\nor exceeds 100%; or (iii) the Enterprise Net Investment plus the Interest
\nComponent of all outstanding Related Commercial Paper issued by the Company
\nshall exceed the Enterprise Maximum Net Investment; or<\/p>\n
(n) the Billing Adjustments Ratio for any consecutive
\nthree-month period during the preceding twelve months exceeds 10%; or<\/p>\n
(o) the Loss to Liquidation Ratio for any consecutive
\nthree-month period during the preceding twelve months exceeds 10%; or<\/p>\n
(p) the Delinquency Ratio for any consecutive three-month
\nperiod during the preceding twelve months exceeds 20%; or<\/p>\n
(q) the Default Ratio for any consecutive three-month period
\nduring the preceding twelve months exceeds 17%; or<\/p>\n
(r) a default shall have occurred and be continuing under any
\ninstrument or agreement evidencing, securing or providing for the issuance of
\nIndebtedness of the Transferor; or<\/p>\n
(s) the termination of any Permitted Originator Receivables
\nPurchase Agreement.<\/p>\n
96
\n 102
\n SECTION 7.2. Termination.<\/p>\n
(a) Upon the occurrence of any Termination Event, the Agent
\nmay, or at the direction of either the Enterprise Agent or Sheffield shall, by
\nnotice to the Transferor and the Collection Agent declare the “Termination
\nDate” to have occurred; provided, however, that in the case of any event
\ndescribed in Section 7.1(e), 7.1(f), 7.1(m)(ii) and 7.1(m)(iii) above, the
\nTermination Date shall be deemed to have occurred automatically upon the
\noccurrence of such event. At all times after the declaration or automatic
\noccurrence of the Termination Date pursuant to Section 7.2(a) (other than a
\nTermination Event relating to Section 7.1(k)), the Base Rate plus 2.00% shall
\nbe the Enterprise Tranche Rate and Sheffield Tranche Rate applicable to the
\nEnterprise Net Investment and Sheffield Net Investment for all existing and
\nfuture Enterprise Tranches and Sheffield Tranches. If an event or condition
\nspecified in Section 7.1(k) occurs, the Agent shall, upon the direction of the
\nEnterprise Agent (if such event relates to the Company) or Sheffield (if such
\nevent relates to Sheffield), by notice to the Transferor, declare a Termination
\nEvent to have occurred and declare all outstanding Enterprise Tranche Periods
\nand Sheffield Tranche Periods, as applicable, to be ended and shall designate
\nthe Base Rate to be applicable to the Enterprise Net Investment and Sheffield
\nNet Investment, as applicable. In addition, if a Termination Event shall be
\ndeclared, the Transferor hereby requests that the Company assign its portion of
\nthe Transferred Interest and all of its rights hereunder (other than its rights
\nto receive payments in respect of Enterprise Discount accrued to the date of
\nsuch assignment and other fees, costs, expenses and indemnities due the Company
\nhereunder) to the Bank Investors. If an event or condition shall have occurred
\nwhich constitutes a Potential Termination Event, the Agent may, and shall if
\ndirected by either Sheffield or the Enterprise Agent, by notice to the
\nTransferor, declare such event or condition a Potential Termination Event.<\/p>\n
(b) In addition, if any Termination Event occurs hereunder (i)
\nthe Agent shall promptly notify the Transferor in writing whether it has
\ndeclared a Termination Event or a Potential Termination Event and whether it
\nwill be exercising the remedies specified in this<\/p>\n
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\n 103
\nSection 7.2, (ii) the Company, Sheffield and the Agent shall have all of the
\nrights and remedies provided to a secured creditor or a purchaser of accounts
\nunder the UCC by applicable law in respect thereto, (iii) the Enterprise
\nMaximum Net Investment and the Sheffield Maximum Net Investment shall be
\nreduced as of each calendar date thereafter equal to the Enterprise Net
\nInvestment and Sheffield Net Investment, respectively, as of such date and (iv)
\nno Commercial Paper with respect to the Transferor will thereafter be issued.<\/p>\n
98
\n 104
\n ARTICLE VIII<\/p>\n
INDEMNIFICATION; EXPENSES; RELATED MATTERS<\/p>\n
SECTION 8.1. Indemnities by the Transferor. Without limiting any
\nother rights which the Agent, the Company, Sheffield or the Bank Investors may
\nhave hereunder or under applicable law, the Transferor hereby agrees to
\nindemnify the Company, the Bank Investors, Sheffield, the Agent, the Enterprise
\nAgent, the Administrative Agent, the Collateral Agent, any Liquidity Provider,
\nany Credit Support Provider,and any successors and permitted assigns and their
\nrespective any officers, directors and employees (collectively, “Indemnified
\nParties”) from and against any and all damages, losses, claims, liabilities,
\ncosts and expenses, including, without limitation, reasonable attorneys’ fees
\n(which such attorneys may be employees of the an Indemnified Party) and
\ndisbursements (all of the foregoing being collectively referred to as
\n“Indemnified Amounts”) awarded against or incurred by any of them in any action
\nor proceeding between the Transferor or WorldCom (including, in its capacity as
\nthe Collection Agent) and any of the Indemnified Parties or between any of the
\nIndemnified Parties and any third party or otherwise arising out of or as a
\nresult of this Agreement, the other Transaction Documents, the ownership or
\nmaintenance, either directly or indirectly, by the Agent, the Company,
\nSheffield or any Bank Investor of the Transferred Interest or any of the other
\ntransactions contemplated hereby or thereby, excluding, however, (i)
\nIndemnified Amounts to the extent resulting from gross negligence or willful
\nmisconduct on the part of an Indemnified Party or (ii) recourse (except as
\notherwise specifically provided in this Agreement) for uncollectible
\nReceivables. Without limiting the generality of the foregoing, the Transferor
\nshall indemnify each Indemnified Party for Indemnified Amounts relating to or
\nresulting from:<\/p>\n
(i) any representation or warranty made by the
\n Transferor or WorldCom (including, in its capacity as the Collection
\n Agent) or any officers of the Transferor or WorldCom (including, in its
\n capacity as the Collection Agent) under or in connection with this
\n Agreement, the Receivable Purchase Agreement, any of the other Transaction
\n Documents,<\/p>\n
99
\n 105
\n any Investor Report or any other information or report delivered by the
\n Transferor or the Collection Agent pursuant hereto, which shall have been
\n false or incorrect in any material respect when made or deemed made;<\/p>\n
(ii) the failure
\n by the Transferor, WorldCom (including, in its capacity as the Collection
\n Agent) or any Permitted Originator to comply with any applicable law, rule
\n or regulation with respect to any Receivable or the related Contract, or
\n the nonconformity of any Receivable or the related Contract with any such
\n applicable law, rule or regulation;<\/p>\n
(iii) the failure to vest and maintain vested in the
\n Company and\/or Sheffield and the Bank Investors, an undivided first
\n priority, perfected percentage ownership interest, to the extent of the
\n Transferred Interest, in the Affected Assets free and clear of any Adverse
\n Claim or (y) to create or maintain a valid and perfected first priority
\n security interest in favor of the Agent, for the benefit of the Company
\n and\/or the Bank Investors and Sheffield, in the Affected Assets as
\n contemplated pursuant to Section 10.11, free and clear of any Adverse
\n Claim;<\/p>\n
(iv) the failure to file, or any delay in filing,
\n financing statements, continuation statements, or other similar
\n instruments or documents under the UCC of any applicable jurisdiction or
\n other applicable laws with respect to any of the Affected Assets;<\/p>\n
(v) any dispute, claim, offset or defense (other than
\n discharge in bankruptcy) of the Obligor to the payment of any
\n Receivable (including, without limitation, a defense based on such
\n Receivable or the related Contract not being legal, valid and binding
\n obligation of such Obligor enforceable against it in accordance with its
\n terms), or any other claim resulting from the sale of merchandise or<\/p>\n
100
\n 106
\n services related to such Receivable or the furnishing or failure to
\n furnish such merchandise or services;<\/p>\n
(vi) any failure of the Collection Agent to perform its
\n duties or obligations in accordance with the provisions hereof; or<\/p>\n
(vii) any products liability claim or personal injury
\n or property damage suit or other similar or related claim or action of
\n whatever sort arising out of or in connection with merchandise or services
\n which are the subject of any Receivable;<\/p>\n
(viii) the transfer of an ownership interest in any
\n Receivable other than an Eligible Receivable;<\/p>\n
(ix) the failure by the Transferor or WorldCom
\n (individually or as Collection Agent) to comply with any term, provision
\n or covenant contained in this Agreement or any of the other Transaction
\n Documents to which it is a party or to perform any of its respective
\n duties under the Contracts;<\/p>\n
(x) the Percentage Factor exceeding 98% at any time on
\n or prior to the later of (a) the Enterprise Termination Date or (b) the
\n Sheffield Termination Date;<\/p>\n
(xi) the failure of WorldCom or any Transferring
\n Subsidiary to pay when due any taxes, including without limitation, sales,
\n excise or personal property taxes payable in connection with any of the
\n Receivables;<\/p>\n
(xii) any repayment by any Indemnified Party of any
\n amount previously distributed in reduction of the Net Investment which
\n such Indemnified Party believes in good faith is required to be made;<\/p>\n
(xiii) the commingling by the Transferor, WorldCom, any
\n Permitted Originator<\/p>\n
101<\/p>\n
107
\n or the Collection Agent of Collections of Receivables at any time with
\n other funds;<\/p>\n
(xiv) any investigation, litigation or proceeding
\n related to this Agreement, any of the other Transaction Documents, the use
\n of proceeds of Transfers by the Transferor or WorldCom, the ownership of
\n Transferred Interests, or any Receivable, Related Security or Contract;<\/p>\n
(xv) the failure of any Lock-Box Bank to remit any
\n amounts held in the Lock-Boxes and\/or the Lock-Box Accounts pursuant to
\n the instructions of the Collection Agent, the Transferor, WorldCom or the
\n Agent (to the extent such Person is entitled to give such instructions in
\n accordance with the terms hereof and of any applicable Lock-Box Agreement)
\n whether by reason of the exercise of set-off rights or otherwise;<\/p>\n
(xvi) any inability to obtain any judgment in or
\n utilize the court or other adjudication system of, any state in which an
\n Obligor may be located as a result of the failure of the Transferor or
\n WorldCom to qualify to do business or file any notice of business activity
\n report or any similar report;<\/p>\n
(xvii) any failure of the Transferor to give reasonably
\n equivalent value to WorldCom in consideration of the purchase by the
\n Transferor from WorldCom of any Receivable, or any attempt by any Person
\n to void, rescind or set-aside any such transfer under statutory provisions
\n or common law or equitable action, including, without limitation, any
\n provision of the Bankruptcy Code; or<\/p>\n
(xviii) any action taken by the Transferor, WorldCom, or
\n the Collection Agent (if the Transferor, WorldCom or any Affiliate or
\n designee of the Transferor or WorldCom) in the enforcement or collection
\n of any Receivable;<\/p>\n
102<\/p>\n
108
\nprovided, however, that if the Company enters into agreements for the purchase
\nof interests in receivables from one or more Other Transferors, the Company
\nshall allocate such Indemnified Amounts which are in connection with any
\nLiquidity Provider Agreement, any Credit Support Agreement or the credit
\nsupport furnished by any Credit Support Provider to the Transferor and each
\nOther Transferor; and provided, further, that if such Indemnified Amounts are
\nattributable to the Transferor, WorldCom or the Collection Agent and not
\nattributable to any Other Transferor, the Transferor shall be solely liable for
\nsuch Indemnified Amounts or if such Indemnified Amounts are attributable to
\nOther Transferors and not attributable to the Transferor, WorldCom or the
\nCollection Agent, such Other Transferors shall be solely liable for such
\nIndemnified Amounts.<\/p>\n
SECTION 8.2. Indemnity for Taxes, Reserves and Expenses. (a) If
\nafter the date hereof, the adoption of any Law or bank regulatory guideline or
\nany amendment or change in the interpretation of any existing or future Law or
\nbank regulatory guideline by any Official Body charged with the administration,
\ninterpretation or application thereof, or the compliance with any directive of
\nany Official Body (in the case of any bank regulatory guideline, whether or not
\nhaving the force of Law):<\/p>\n
(i) shall subject any Indemnified Party to any tax,
\n duty or other charge (other than Excluded Taxes) with respect to this
\n Agreement, the other Transaction Documents, the ownership, maintenance or
\n financing of the Transferred Interest, the Receivables or payments of
\n amounts due hereunder, or shall change the basis of taxation of payments
\n to any Indemnified Party of amounts payable in respect of this Agreement,
\n the other Transaction Documents, the ownership, maintenance or financing
\n of the Transferred Interest, the Receivables or payments of amounts due
\n hereunder or its obligation to advance funds hereunder, under any
\n Liquidity Provider Agreement or otherwise in respect of this Agreement,
\n the other Transaction Documents, the ownership, maintenance or financing
\n of the Transferred Interest or the Receivables (except for changes in the
\n rate of general corporate, franchise, net income or<\/p>\n
103<\/p>\n
109
\n other income tax imposed on such Indemnified Party by the jurisdiction in
\n which such Indemnified Party’s principal executive office is located);<\/p>\n
(ii) shall impose, modify or deem applicable any
\n reserve, special deposit or similar requirement (including, without
\n limitation, any such requirement imposed by the Board of Governors of the
\n Federal Reserve System) against assets of, deposits with or for the
\n account of, or credit extended by, any Indemnified Party or shall impose
\n on any Indemnified Party or on the United States market for certificates
\n of deposit or the London interbank market any other condition affecting
\n this Agreement, the other Transaction Documents, the ownership,
\n maintenance or financing of the Transferred Interest, the Receivables or
\n payments of amounts due hereunder or its obligation to advance funds
\n hereunder under any Liquidity Provider Agreement or the credit support
\n provided by any Credit Support Provider or otherwise in respect of this
\n Agreement, the other Transaction Documents, the ownership, maintenance or
\n financing of the Transferred Interest or the Receivables; or<\/p>\n
(iii) imposes upon any Indemnified Party any other
\n expense (including, without limitation, reasonable attorneys’ fees and
\n expenses, and expenses of litigation or preparation therefor in contesting
\n any of the foregoing) with respect to this Agreement, the other
\n Transaction Documents, the ownership, maintenance or financing of the
\n Transferred Interest, the Receivables or payments of amounts due hereunder
\n or its obligation to advance funds hereunder under any Liquidity Provider
\n Agreement or the credit support furnished by any Credit Support Provider
\n or otherwise in respect of this Agreement, the other Transaction
\n Documents, the ownership, maintenance or financing of the Transferred
\n Interests or the Receivables,<\/p>\n
104<\/p>\n
110<\/p>\n
and the result of any of the foregoing is to increase the cost to such
\nIndemnified Party with respect to this Agreement, the other Transaction
\nDocuments, the ownership, maintenance or financing of the Transferred Interest,
\nthe Receivables, the obligations hereunder, the funding of any purchases
\nhereunder, any Liquidity Provider Agreement or any Credit Support Agreement ,
\nby an amount deemed by such Indemnified Party to be material, then, within ten
\n(10) days after demand by such Indemnified Party through the Agent, the
\nTransferor or WorldCom shall pay to the Agent, for the benefit of such
\nIndemnified Party, such additional amount or amounts as will compensate such
\nIndemnified Party for such increased cost or reduction.<\/p>\n
(b) If any Indemnified Party shall have determined that after
\nthe date hereof, the adoption of any applicable Law or bank regulatory
\nguideline regarding capital adequacy, or any change therein, or any change in
\nthe interpretation thereof by any Official Body, or any directive regarding
\ncapital adequacy (in the case of any bank regulatory guideline, whether or not
\nhaving the force of law) of any such Official Body, has or would have the
\neffect of reducing the rate of return on capital of such Indemnified Party (or
\nits parent) as a consequence of such Indemnified Party’s obligations hereunder
\nor with respect hereto to a level below that which such Indemnified Party (or
\nits parent) could have achieved but for such adoption, change, request or
\ndirective (taking into consideration its policies with respect to capital
\nadequacy) by an amount deemed by such Indemnified Party to be material, then
\nfrom time to time, within ten (10) days after demand by such Indemnified Party
\nthrough the Agent, the Transferor shall pay to the Agent, for the benefit of
\nsuch Indemnified Party, such additional amount or amounts as will compensate
\nsuch Indemnified Party (or its parent) for such reduction.<\/p>\n
(c) The Agent and Sheffield will promptly notify the Transferor
\nand WorldCom of any event of which it has knowledge, occurring after the date
\nhereof, which will entitle an Indemnified Party to compensation pursuant to
\nthis Section 8.2. A notice by the Agent or the applicable Indemnified Party
\nclaiming compensation under this Section 8.2 and setting forth the additional
\namount or amounts to be paid to it hereunder shall be conclusive in the absence
\nof manifest error. In determining such<\/p>\n
105<\/p>\n
111
\namount, the Agent or any applicable Indemnified Party may use any reasonable
\naveraging and attributing methods.<\/p>\n
(d) Anything in this Section 8.2 to the contrary
\nnotwithstanding, if the Company enters into agreements for the acquisition of
\ninterests in receivables from one or more Other Transferors, the Company shall
\nallocate the liability for any amounts under this Section 8.2 which are in
\nconnection with any Liquidity Provider Agreement, any Credit Support Agreement
\nor the credit support provided by any Credit Support Provider (“Section 8.2
\nCosts”) to the Transferor and each Other Transferor; provided, however, that if
\nsuch Section 8.2 Costs are attributable to the Transferor, WorldCom or the
\nCollection Agent and not attributable to any Other Transferor, the Transferor
\nshall be solely liable for such Section 8.2 Costs or if such Section 8.2 Costs
\nare attributable to Other Transferors and not attributable to the Transferor,
\nWorldCom or the Collection Agent, such Other Transferors shall be solely liable
\nfor such Section 8.2 Costs.<\/p>\n
SECTION 8.3. Taxes. All payments made hereunder by the
\nTransferor, WorldCom or the Collection Agent (each, a “payor”) to the Company,
\nSheffield, any Bank Investor or the Agent (each, a “recipient”) shall be made
\nfree and clear of and without deduction for any present or future income,
\nexcise, stamp or franchise taxes and any other taxes, fees, duties,
\nwithholdings or other charges of any nature whatsoever imposed by any taxing
\nauthority on any recipient (or any assignee of such parties) (such
\nnon-excluded items being called “Taxes”), but excluding franchise taxes and
\ntaxes imposed on or measured by the recipient’s net income or gross receipts
\n(“Excluded Taxes”). In the event that any withholding or deduction from any
\npayment made by the payor hereunder is required in respect of any Taxes, then
\nsuch payor shall:<\/p>\n
(a) pay directly to the relevant authority the full amount
\nrequired to be so withheld or deducted;<\/p>\n
(b) promptly forward to the Agent an official receipt or other
\ndocumentation satisfactory to the Agent evidencing such payment to such
\nauthority; and<\/p>\n
106<\/p>\n
112
\n (c) pay to the recipient such additional amount or amounts as
\nis necessary to ensure that the net amount actually received by the recipient
\nwill equal the full amount such recipient would have received had no such
\nwithholding or deduction been required.<\/p>\n
Moreover, if any Taxes are directly asserted against any recipient with respect
\nto any payment received by such recipient hereunder, the recipient may pay such
\nTaxes and the payor will promptly pay such additional amounts (including any
\npenalties, interest or expenses) as shall be necessary in order that the net
\namount received by the recipient after the payment of such Taxes (including any
\nTaxes on such additional amount) shall equal the amount such recipient would
\nhave received had such Taxes not been asserted.<\/p>\n
If the payor fails to pay any Taxes when due to the appropriate
\ntaxing authority or fails to remit to the recipient the required receipts or
\nother required documentary evidence, the payor shall indemnify the recipient
\nfor any incremental Taxes, interest, or penalties that may become payable by
\nany recipient as a result of any such failure.<\/p>\n
SECTION 8.4. Other Costs, Expenses and Related Matters. (a) The
\nTransferor agrees, upon receipt of a written invoice, to pay or cause to be
\npaid, and to save the Company, the Bank Investors, Sheffield and the Agent
\nharmless against liability for the payment of, all reasonable out-of-pocket
\nexpenses (including, without limitation, attorneys’, accountants’ and other
\nthird parties’ fees and expenses, any filing fees and expenses incurred by
\nofficers or employees of the Company, the Bank Investors, Sheffield and\/or the
\nAgent) or intangible, documentary or recording taxes incurred by or on behalf
\nof the Company, Sheffield, any Bank Investor and the Agent (i) in connection
\nwith the negotiation, execution, delivery and preparation of this Agreement,
\nthe other Transaction Documents and any documents or instruments delivered
\npursuant hereto and thereto and the transactions contemplated hereby or thereby
\n(including, without limitation, the perfection or protection of the Transferred
\nInterest) and (ii) from time to time (a) relating to any amendments, waivers or
\nconsents under this Agreement and the other Transaction Documents, (b) arising
\nin connection with the Company’s, Sheffield’s, any Bank Investor’s, the<\/p>\n
107<\/p>\n
113
\nAgent’s or the Collateral Agent’s enforcement or preservation of rights
\n(including, without limitation, the perfection and protection of the
\nTransferred Interest under this Agreement), or (c) arising in connection with
\nany audit, dispute, disagreement, litigation or preparation for litigation
\ninvolving this Agreement or any of the other Transaction Documents (all of such
\namounts, collectively, “Transaction Costs”) provided that any of the foregoing
\nTransaction Costs arising in connection with the closing of the transaction
\ncontemplated hereby shall be payable by WorldCom.<\/p>\n
(b) The Transferor shall pay the Agent, for the account of the
\nCompany, Sheffield and the Bank Investors, as applicable, on demand any
\nEnterprise Early Collection Fee or Sheffield Early Collection Fee due on
\naccount of the reduction of an Enterprise Tranche or Sheffield Tranche,
\nrespectively, on a day prior to the last day of its Enterprise Tranche Period
\nor Sheffield Tranche Period, as applicable.<\/p>\n
SECTION 8.5. Reconveyance Under Certain Circumstances. The
\nTransferor agrees to accept the reconveyance from the Agent, on behalf of the
\nCompany and\/or the Bank Investors and Sheffield, of the Transferred Interest if
\nthe Agent notifies Transferor of a material breach of any representation or
\nwarranty made or deemed made pursuant to Article III of this Agreement and
\nTransferor shall fail to cure such breach within 15 days (or, in the case of
\nthe representations and warranties in Sections 3.1(d) and 3.1(j), 3 days) of
\nsuch notice. The reconveyance price shall be paid by the Transferor to the
\nAgent, for the account of the Company, Sheffield and the Bank Investors, as
\napplicable, in immediately available funds on such 15th day (or 3rd day, if
\napplicable) in an amount equal to the Aggregate Unpaids.<\/p>\n
108<\/p>\n
114
\n ARTICLE IX<\/p>\n
THE AGENT; THE ENTERPRISE AGENT; BANK COMMITMENT<\/p>\n
SECTION 9.1. Authorization and Action. (a) (i) The Company,
\nSheffield and each Bank Investor hereby appoints and authorizes the Agent to
\ntake such action as agent on its behalf and to exercise such powers under this
\nAgreement and the other Transaction Documents as are delegated to the Agent by
\nthe terms hereof and thereof, together with such powers as are reasonably
\nincidental thereto. In furtherance, and without limiting the generality, of
\nthe foregoing, the Company, Sheffield and each Bank Investor hereby appoints
\nthe Agent as its agent to execute and deliver all further instruments and
\ndocuments, and take all further action that the Agent may deem necessary or
\nappropriate or that the Company, Sheffield or a Bank Investor may reasonably
\nrequest in order to perfect, protect or more fully evidence the interests
\ntransferred or to be transferred from time to time by the Transferor hereunder,
\nor to enable any of them to exercise or enforce any of their respective rights
\nhereunder, including, without limitation, the execution by the Agent as secured
\nparty\/assignee of such financing or continuation statements, or amendments
\nthereto or assignments thereof, relative to all or any of the Receivables now
\nexisting or hereafter arising, and such other instruments or notices, as may be
\nnecessary or appropriate for the purposes stated hereinabove. The Majority
\nInvestors may direct the Agent to take any such incidental action hereunder.
\nWith respect to other actions which are incidental to the actions specifically
\ndelegated to the Agent hereunder, the Agent shall not be required to take any
\nsuch incidental action hereunder, but shall be required to act or to refrain
\nfrom acting (and shall be fully protected in acting or refraining from acting)
\nupon the direction of the Majority Investors; provided, however, that Agent
\nshall not be required to take any action hereunder if the taking of such
\naction, in the reasonable determination of the Agent, shall be in violation of
\nany applicable law, rule or regulation or contrary to any provision of this
\nAgreement or shall expose the Agent to liability hereunder or otherwise. Upon
\nthe occurrence and during the continuance of any Termination Event or Potential
\nTermination Event, the Agent shall take no action hereunder (other than<\/p>\n
109<\/p>\n
115
\nministerial actions or such actions as are specifically provided for herein)
\nwithout the prior consent of the Majority Investors. The Agent shall not,
\nwithout the prior written consent of the Company, Sheffield and all Bank
\nInvestors, agree to (i) amend, modify or waive any provision of this Agreement
\nin any way which would (A) reduce or impair Collections or the payment of
\nEnterprise Discount or Sheffield Discount or fees payable hereunder to the
\nCompany, Sheffield or the Bank Investors or delay the scheduled dates for
\npayment of such amounts, (B) increase the Servicing Fee (other than as
\npermitted pursuant to Section 6.2(b)), (C) modify any provisions of this
\nAgreement or the Receivables Purchase Agreement relating to the timing of
\npayments required to be made by the Transferor or WorldCom or the application
\nof the proceeds of such payments, (D) the appointment of any Person (other than
\nthe Agent) as successor Collection Agent, or (E) release any property from the
\nlien provided by this Agreement (other than as expressly contemplated herein).
\nThe Agent shall not agree to any amendment of this Agreement which increases
\nthe dollar amount of either Sheffield’s commitment or a Bank Investor’s
\nCommitment without the prior consent of Sheffield or such Bank Investor, as
\napplicable. In addition, the Agent shall not agree to any amendment of this
\nAgreement not specifically described in the two preceding sentences without the
\nconsent of the related Majority Investors. “Majority Investors” means, at any
\ntime, the Agent, and Sheffield and those Bank Investors which hold Commitments
\naggregating in excess of 51% of the Maximum Net Investment as of such date
\n(determined as if Sheffield had a Commitment equal to the Sheffield Maximum Net
\nInvestment). In the event the Agent requests the Company’s, Sheffield’s or a
\nBank Investor’s consent pursuant to the foregoing provisions and the Agent does
\nnot receive a consent (either positive or negative) from the Company, Sheffield
\nor such Bank Investor within 10 Business Days of the Company’s, Sheffield’s or
\nBank Investor’s receipt of such request, then the Company, Sheffield or such
\nBank Investor (and its percentage interest hereunder) shall be disregarded in
\ndetermining whether the Agent shall have obtained sufficient consent hereunder.<\/p>\n
(ii) The Company and each Bank Investor hereby appoints and
\nauthorizes the Enterprise Agent to take such action as agent on its behalf and
\nto exercise such powers under this Agreement and the other Transaction
\nDocuments<\/p>\n
110<\/p>\n
116
\nas are delegated to the Enterprise Agent by the terms hereof and thereof,
\ntogether with such powers as are reasonably incidental thereto. In
\nfurtherance, and without limiting the generality, of the foregoing, the Company
\nand each Bank Investor hereby appoints the Enterprise Agent as its agent to
\nexecute and deliver all further instruments and documents, and take all further
\naction that the Enterprise Agent may deem necessary or appropriate or that the
\nCompany or a Bank Investor may reasonably request in order to perfect, protect
\nor more fully evidence the interests transferred or to be transferred from time
\nto time by the Transferor hereunder, or to enable any of them to exercise or
\nenforce any of their respective rights hereunder, including, without
\nlimitation, the execution by the Enterprise Agent of such instruments or
\nnotices, as may be necessary or appropriate for the purposes stated
\nhereinabove. The Company and the Majority Enterprise Investors may direct the
\nEnterprise Agent to take any such incidental action hereunder. With respect to
\nother actions which are incidental to the actions specifically delegated to the
\nEnterprise Agent hereunder, the Enterprise Agent shall not be required to take
\nany such incidental action hereunder, but shall be required to act or to
\nrefrain from acting (and shall be fully protected in acting or refraining from
\nacting) upon the direction of the Majority Enterprise Investors; provided,
\nhowever, that the Enterprise Agent shall not be required to take any action
\nhereunder if the taking of such action, in the reasonable determination of the
\nEnterprise Agent, shall be in violation of any applicable law, rule or
\nregulation or contrary to any provision of this Agreement or shall expose the
\nEnterprise Agent to liability hereunder or otherwise. Upon the occurrence and
\nduring the continuance of any Termination Event or Potential Termination Event,
\nthe Enterprise Agent shall take no action hereunder (other than ministerial
\nactions or such actions as are specifically provided for herein) without the
\nprior consent of the Majority Enterprise Investors. The Enterprise Agent shall
\nnot agree to any amendment of this Agreement which increases the dollar amount
\nof a Bank Investor’s Commitment without the prior consent of such Bank
\nInvestor, as applicable. In addition, the Enterprise Agent shall not agree to
\nany amendment of this Agreement not specifically described in the preceding
\nsentence without the consent of the related Majority Enterprise Investors.
\n“Majority Enterprise Investors” means, at any time, the Agent, and those Bank<\/p>\n
111<\/p>\n
117
\nInvestors which hold Commitments aggregating in excess of 51% of the Maximum
\nEnterprise Net Investment as of such date. In the event the Enterprise Agent
\nrequests the Company’s or a Bank Investor’s consent pursuant to the foregoing
\nprovisions and the Enterprise Agent does not receive a consent (either positive
\nor negative) from the Company or such Bank Investor within 10 Business Days of
\nthe Company’s or Bank Investor’s receipt of such request, then the Company or
\nsuch Bank Investor (and its percentage interest hereunder) shall be disregarded
\nin determining whether the Enterprise Agent shall have obtained sufficient
\nconsent hereunder.<\/p>\n
(b) (i) The Agent shall exercise such rights and powers vested
\nin it by this Agreement and the other Transaction Documents, and use the same
\ndegree of care and skill in their exercise, as a prudent person would exercise
\nor use under the circumstances in the conduct of such person’s own affairs.<\/p>\n
(ii) The Enterprise Agent shall exercise such rights and powers
\nvested in it by this Agreement and the other Transaction Documents, and use the
\nsame degree of care and skill in their exercise, as a prudent person would
\nexercise or use under the circumstances in the conduct of such person’s own
\naffairs.<\/p>\n
SECTION 9.2. Agent’s Reliance, Etc. Neither the Agent, the
\nEnterprise Agent nor any of their respective directors, officers, agents or
\nemployees shall be liable for any action taken or omitted to be taken by it or
\nthem as Agent or Enterprise Agent under or in connection with this Agreement or
\nany of the other Transaction Documents, except for its or their own gross
\nnegligence or willful misconduct. Without limiting the foregoing, the Agent
\nand the Enterprise Agent: (i) may consult with legal counsel (including
\ncounsel for the Transferor or WorldCom), independent public accountants and
\nother experts selected by it and shall not be liable for any action taken or
\nomitted to be taken in good faith by it in accordance with the advice of such
\ncounsel, accountants or experts; (ii) makes no warranty or representation to
\nthe Company, Sheffield or any Bank Investor and shall not be responsible to the
\nCompany, Sheffield or any Bank Investor for any statements, warranties or
\nrepresentations made in or in connection with this Agreement; (iii) shall not
\nhave any duty to ascertain or to inquire<\/p>\n
112<\/p>\n
118
\nas to the performance or observance of any of the terms, covenants or
\nconditions of this Agreement or any of the other Transaction Documents on the
\npart of the Transferor, the Collection Agent or WorldCom or to inspect the
\nproperty (including the books and records) of the Transferor, the Collection
\nAgent or WorldCom; (iv) shall not be responsible to the Company, Sheffield or
\nany Bank Investor for the due execution, legality, validity, enforceability,
\ngenuineness, sufficiency or value of this Agreement, any of the other
\nTransaction Documents or any other instrument or document furnished pursuant
\nhereto or thereto; and (v) shall incur no liability under or in respect of this
\nAgreement or any of the other Transaction Documents by acting upon any notice
\n(including notice by telephone), consent, certificate or other instrument or
\nwriting (which may be by telex) believed by it to be genuine and signed or sent
\nby the proper party or parties.<\/p>\n
SECTION 9.3. Credit Decision. The Company, Sheffield and each Bank
\nInvestor acknowledges that it has, independently and without reliance upon the
\nAgent or the Enterprise Agent, any of the Agent’s or the Enterprise Agent’s
\nAffiliates, any other Bank Investor, Sheffield or the Company (in the case of
\nany Bank Investor) and based upon such documents and information as it has
\ndeemed appropriate, made its own evaluation and decision to enter into this
\nAgreement and the other Transaction Documents to which it is a party and, if it
\nso determines, to accept the transfer of any undivided ownership interest in
\nthe Affected Assets hereunder. The Company, Sheffield and each Bank Investor
\nalso acknowledges that it will, independently and without reliance upon the
\nAgent and the Enterprise Agent, any of the Agent’s or the Enterprise Agent’s
\nAffiliates, any other Bank Investor, Sheffield or the Company (in the case of
\nany Bank Investor) and based on such documents and information as it shall deem
\nappropriate at the time, continue to make its own decisions in taking or not
\ntaking action under this Agreement and the other Transaction Documents to which
\nit is a party.<\/p>\n
SECTION 9.4. Indemnification of the Enterprise Agent. The Bank
\nInvestors agree to indemnify the Enterprise Agent (to the extent not reimbursed
\nby the Transferor), ratably in accordance with their Pro Rata Shares, from and
\nagainst any and all liabilities, obligations,<\/p>\n
113<\/p>\n
119
\nlosses, damages, penalties, actions, judgments, suits, costs, expenses or
\ndisbursements of any kind or nature whatsoever which may be imposed on,
\nincurred by, or asserted against the Enterprise Agent in any way relating to or
\narising out of this Agreement or any action taken or omitted by the Enterprise
\nAgent, any of the other Transaction Documents hereunder or thereunder, provided
\nthat the Bank Investors shall not be liable for any portion of such
\nliabilities, obligations, losses, damages, penalties, actions, judgments,
\nsuits, costs, expenses or disbursements resulting from the Enterprise Agent’s
\ngross negligence or willful misconduct. Without limitation of the foregoing,
\nthe Bank Investors agree to reimburse the Enterprise Agent, ratably in
\naccordance with their Pro Rata Shares, promptly upon demand for any
\nout-of-pocket expenses (including counsel fees) incurred by the Enterprise
\nAgent in connection with the administration, modification, amendment or
\nenforcement (whether through negotiations, legal proceedings or otherwise) of,
\nor legal advice in respect of rights or responsibilities under, this Agreement
\nand the other Transaction Documents, to the extent that such expenses are
\nincurred in the interests of or otherwise in respect of the Bank Investors
\nhereunder and\/or thereunder and to the extent that the Enterprise Agent is not
\nreimbursed for such expenses by the Transferor.<\/p>\n
SECTION 9.5. Successor Agent and Enterprise Agent. (a) The Agent
\nmay resign at any time by giving written notice thereof to each Bank Investor,
\nSheffield, the Company and the Transferor and may be removed at any time with
\ncause by the Majority Investors. Upon any such resignation or removal, the
\nMajority Investors shall appoint a successor Agent. The Company, Sheffield and
\neach Bank Investor agrees that it shall not unreasonably withhold or delay its
\napproval of the appointment of a successor Agent. If no such successor Agent
\nshall have been so appointed, and shall have accepted such appointment, within
\n30 days after the retiring Agent’s giving of notice of resignation or the
\nMajority Investors’ removal of the retiring Agent, then the retiring Agent may,
\non behalf of the Company, Sheffield and the Bank Investors, appoint a successor
\nAgent which successor Agent shall be either (i) a commercial bank organized
\nunder the laws of the United States or of any state thereof and have a combined
\ncapital and surplus of at least $50,000,000 or (ii) an Affiliate of such a
\nbank. Upon the acceptance of<\/p>\n
114<\/p>\n
120
\nany appointment as Agent hereunder by a successor Agent, such successor Agent
\nshall thereupon succeed to and become vested with all the rights, powers,
\nprivileges and duties of the retiring Agent, and the retiring Agent shall be
\ndischarged from its duties and obligations under this Agreement. After any
\nretiring Agent’s resignation or removal hereunder as Agent, the provisions of
\nthis Article IX shall continue to inure to its benefit as to any actions taken
\nor omitted to be taken by it while it was Agent under this Agreement.<\/p>\n
(b) The Enterprise Agent may resign at any time by giving written notice
\nthereof to each Bank Investor, the Company and the Transferor and may be
\nremoved at any time with cause by the Majority Enterprise Investors. Upon any
\nsuch resignation or removal, the Company and the Majority Enterprise Investors
\nshall appoint a successor Enterprise Agent. The Company and each Bank Investor
\nagrees that it shall not unreasonably withhold or delay its approval of the
\nappointment of a successor Enterprise Agent. If no such successor Enterprise
\nAgent shall have been so appointed, and shall have accepted such appointment,
\nwithin 30 days after the retiring Enterprise Agent’s giving of notice of
\nresignation or the Majority Enterprise Investors’ removal of the retiring
\nEnterprise Agent, then the retiring Enterprise Agent may, on behalf of the
\nCompany and the Bank Investors, appoint a successor Enterprise Agent which
\nsuccessor Enterprise Agent shall be either (i) a commercial bank organized
\nunder the laws of the United States or of any state thereof and have a combined
\ncapital and surplus of at least $50,000,000 or (ii) an Affiliate of such a
\nbank. Upon the acceptance of any appointment as Enterprise Agent hereunder by
\na successor Enterprise Agent, such successor Enterprise Agent shall thereupon
\nsucceed to and become vested with all the rights, powers, privileges and duties
\nof the retiring Enterprise Agent, and the retiring Enterprise Agent shall be
\ndischarged from its duties and obligations under this Agreement. After any
\nretiring Enterprise Agent’s resignation or removal hereunder as Enterprise
\nAgent, the provisions of this Article IX shall continue to inure to its benefit
\nas to any actions taken or omitted to be taken by it while it was Enterprise
\nAgent under this Agreement.<\/p>\n
SECTION 9.6. Payments by the Agent and Enterprise Agent. Unless
\nspecifically allocated to the<\/p>\n
115<\/p>\n
121
\nCompany, a Bank Investor or Sheffield pursuant to the terms of this Agreement,
\nall amounts received by the Agent on behalf of the Company, the Bank Investors
\nor Sheffield shall be paid by the Agent to the Company, the Bank Investors (at
\ntheir respective accounts specified in their respective Assignment and
\nAssumption Agreements) in accordance with their respective related pro rata
\ninterests in the Enterprise Net Investment or Sheffield on the Business Day
\nreceived by the Agent, unless such amounts are received after 12:00 noon (New
\nYork time) on such Business Day, in which case the Agent shall use its
\nreasonable efforts to pay such amounts to the Company, the Bank Investors and
\nSheffield on such Business Day, but, in any event, shall pay such amounts to
\nthe Company, Sheffield and the Bank Investors in accordance with the Bank
\nInvestors’ respective related pro rata interests in the Enterprise Net
\nInvestment not later than the following Business Day.<\/p>\n
SECTION 9.7. Bank Commitment; Assignment to Bank Investors.<\/p>\n
(a) Bank Commitment. At any time on or prior to the Commitment
\nTermination Date, in the event that the Company does not effect an Incremental
\nTransfer as requested under Section 2.2(a), then at any time, the Transferor
\nshall have the right to require the Company to assign its interest in the
\nEnterprise Net Investment in whole to the Bank Investors pursuant to this
\nSection 9.7. In addition, at any time on or prior to the Commitment
\nTermination Date (i) upon the occurrence of a Termination Event or (ii) the
\nCompany elects to give notice to the Transferor of a Reinvestment Termination
\nDate, the Transferor hereby requests and directs that the Company assign its
\ninterest in the Enterprise Net Investment in whole to the Bank Investors
\npursuant to this Section 9.7 and the Transferor hereby agrees to pay the
\namounts described in Section 9.7(d) hereof. Provided that (i) the Net Asset
\nTest is satisfied and (ii) the Transferor shall have paid to the Company all
\namounts due as described in Section 9.7(d) hereof, upon any such election by
\nthe Company or any such request by the Transferor, the Company shall make such
\nassignment and the Bank Investors shall accept such assignment and shall assume
\nall of the Company’s obligations hereunder. In connection with any assignment
\nfrom the Company to the Bank Investors pursuant to this Section 9.7, each Bank
\nInvestor shall, on the date of<\/p>\n
116<\/p>\n
122
\nsuch assignment, pay to the Company an amount equal to its Assignment Amount.
\nIn addition, at any time on or prior to the Commitment Termination Date the
\nTransferor shall have the right to request funding under this Agreement
\ndirectly from the Bank Investors provided that at such time all conditions
\nprecedent set forth herein for an Incremental Transfer shall be satisfied and
\nprovided further that in connection with such funding by the Bank Investors,
\nthe Bank Investors accept the assignment of all of the Company’s interest in
\nthe Enterprise Net Investment and assume all of the Company’s obligations
\nhereunder concurrently with or prior to any such Incremental Transfer. Upon
\nany assignment by the Company to the Bank Investors contemplated hereunder, the
\nCompany shall cease to make any additional Incremental Transfers hereunder.<\/p>\n
(b) Assignment. No Bank Investor may assign all or a portion
\nof its interests in the Enterprise Net Investment, the Receivables, and
\nCollections, Related Property and Proceeds with respect thereto and its rights
\nand obligations hereunder to any Person unless approved in writing by the
\nEnterprise Agent. In the case of an assignment by the Company to the Bank
\nInvestors or by a Bank Investor to another Person, the assignor shall deliver
\nto the assignee(s) an Assignment and Assumption Agreement in substantially the
\nform of Exhibit G attached hereto, duly executed, assigning to the assignee a
\npro rata interest in the Enterprise Net Investment, the Receivables, and
\nCollections, Related Property and Proceeds with respect thereto and the
\nassignor’s rights and obligations hereunder and the assignor shall promptly
\nexecute and deliver all further instruments and documents, and take all further
\naction, that the assignee may reasonably request, in order to protect, or more
\nfully evidence the assignee’s right, title and interest in and to such interest
\nand to enable the Agent, on behalf of such assignee, to exercise or enforce any
\nrights hereunder and under the other Transaction Documents to which such
\nassignor is or, immediately prior to such assignment, was a party. Upon any
\nsuch assignment, (i) the assignee shall have all of the rights and obligations
\nof the assignor hereunder and under the other Transaction Documents to which
\nsuch assignor is or, immediately prior to such assignment, was a party with
\nrespect to such interest for all purposes of this Agreement and under the other
\nTransaction Documents to which such assignor is or,<\/p>\n
117<\/p>\n
123
\nimmediately prior to such assignment, was a party (it being understood that the
\nBank Investors, as assignees, shall (x) be obligated to effect Incremental
\nTransfers under Section 2.2(a) in accordance with the terms thereof,
\nnotwithstanding that the Company was not so obligated and (y) not have the
\nright to elect the commencement of the amortization of the Enterprise Net
\nInvestment pursuant to the definition of “Reinvestment Termination Date”,
\nnotwithstanding that the Company had such right) and (ii) the assignor shall
\nrelinquish its rights with respect to such interest for all purposes of this
\nAgreement and under the other Transaction Documents to which such assignor is
\nor, immediately prior to such assignment, was a party. No such assignment
\nshall be effective unless a fully executed copy of the related Assignment and
\nAssumption Agreement shall be delivered to the Enterprise Agent and the
\nTransferor. All out-of-pocket and legal expenses of the Enterprise Agent and
\nthe assignor incurred in connection with any preparation and filing of any
\nassignment hereunder shall be borne by the Transferor and not by the assignor
\nor any such assignee. No Bank Investor shall assign any portion of its
\nCommitment hereunder without also simultaneously assigning an equal portion of
\nits interest in Enterprise’s Liquidity Provider Agreement.<\/p>\n
(c) Effects of Assignment. By executing and delivering an
\nAssignment and Assumption Agreement, the assignor and assignee thereunder
\nconfirm to and agree with each other and the other parties hereto as follows:
\n(i) other than as provided in such Assignment and Assumption Agreement, the
\nassignor makes no representation or warranty and assumes no responsibility with
\nrespect to any statements, warranties or representations made in or in
\nconnection with this Agreement, the other Transaction Documents or any other
\ninstrument or document furnished pursuant hereto or thereto or the execution,
\nlegality, validity, enforceability, genuineness, sufficiency or value or this
\nAgreement, the other Transaction Documents or any such other instrument or
\ndocument; (ii) the assignor makes no representation or warranty and assumes no
\nresponsibility with respect to the financial condition of the Transferor,
\nWorldCom or the Collection Agent or the performance or observance by the
\nTransferor, WorldCom or the Collection Agent of any of their respective
\nobligations under this Agreement, the Receivables Purchase Agreement, the other
\nTransaction Documents or any other instrument or document furnished pursuant
\nhereto; (iii)<\/p>\n
118<\/p>\n
124
\nsuch assignee confirms that it has received a copy of this Agreement, the
\nReceivables Purchase Agreement and such other instruments, documents and
\ninformation as it has deemed appropriate to make its own credit analysis and
\ndecision to enter into such Assignment and Assumption Agreement and to purchase
\nsuch interest; (iv) such assignee will, independently and without reliance upon
\nthe Agent, or any of its Affiliates, or the assignor and based on such
\nagreements, documents and information as it shall deem appropriate at the time,
\ncontinue to make its own credit decisions in taking or not taking action under
\nthis Agreement and the other Transaction Documents; (v) such assignee appoints
\nand authorizes the Agent to take such action as agent on its behalf and to
\nexercise such powers under this Agreement, the other Transaction Documents and
\nany other instrument or document furnished pursuant hereto or thereto as are
\ndelegated to the Agent by the terms hereof or thereof, together with such
\npowers as are reasonably incidental thereto and to enforce its respective
\nrights and interests in and under this Agreement, the other Transaction
\nDocuments, the Receivables, the Contracts and the Related Security; (vi) such
\nassignee agrees that it will perform in accordance with their terms all of the
\nobligations which by the terms of this Agreement and the other Transaction
\nDocuments are required to be performed by it as the assignee of the assignor;
\nand (vii) such assignee agrees that it will not institute against the Company
\nany proceeding of the type referred to in Section 10.9 prior to the date which
\nis one year and one day after the payment in full of all Commercial Paper
\nissued by the Company.<\/p>\n
(d) Transferor’s Obligation to Pay Certain Amounts; Additional
\nAssignment Amount. The Transferor shall pay to the Agent, for the account of
\nthe Company, in connection with any assignment by the Company to the Bank
\nInvestors pursuant to this Section 9.7, an aggregate amount equal to all
\nEnterprise Discount to accrue through the end of each outstanding Enterprise
\nTranche Period plus all other Aggregate Unpaids (other than the Enterprise Net
\nInvestment) due the Company. To the extent that such Enterprise Discount
\nrelates to interest or discount on Commercial Paper issued by the Company to
\nfund the Enterprise Net Investment, if the Transferor fails to make payment of
\nsuch amounts at or prior to the time of assignment by the Company to the Bank
\nInvestors, such amount shall be paid by the Bank<\/p>\n
119<\/p>\n
125
\nInvestors (in accordance with their respective Pro Rata Shares) to the Company
\nas additional consideration for the interests assigned to the Bank Investors
\nand the amount of the “Enterprise Net Investment” hereunder held by the Bank
\nInvestors shall be increased by an amount equal to the additional amount so
\npaid by the Bank Investors.<\/p>\n
(e) Administration of Agreement After Assignment; Discount.
\nAfter any assignment by the Company to the Bank Investors pursuant to this
\nSection 9.7 (and the payment of all amounts owing to the Company in connection
\ntherewith), all rights of the Administrative Agent and the Collateral Agent set
\nforth herein shall be deemed to be afforded to the Agent on behalf of the Bank
\nInvestors instead of either such party.<\/p>\n
(f) Payments. After any assignment by the Company to the Bank
\nInvestors pursuant to this Section 9.7, all payments to be made hereunder by
\nthe Transferor or the Collection Agent to the Bank Investors shall be made to
\nthe Agent’s account as such account shall have been notified to the Transferor
\nand the Collection Agent.<\/p>\n
(g) Downgrade of Bank Investor. If at any time prior to any
\nassignment by the Company to the Bank Investors as contemplated pursuant to
\nthis Section 9.7, the short term debt rating of any Bank Investor shall be
\n“A-2” or “P-2” from Standard & Poor’s or Moody’s, respectively, with negative
\ncredit implications, such Bank Investor, upon request of the Agent, shall,
\nwithin 30 days of such request, assign its rights and obligations hereunder to
\nanother financial institution (which institution’s short term debt shall be
\nrated at least “A-2” and “P-2” from Standard & Poor’s and Moody’s,
\nrespectively, and which shall not be so rated with negative credit
\nimplications). If the short term debt rating of a Bank Investor shall be “A-3”
\nor “P-3”, or lower, from Standard & Poor’s or Moody’s, respectively (or such
\nrating shall have been withdrawn by Standard & Poor’s or Moody’s), such Bank
\nInvestor, upon request of the Enterprise Agent, shall, within five (5) Business
\nDays of such request, assign its rights and obligations hereunder to another
\nfinancial institution (which institution’s short term debt shall be rated at
\nleast “A-2” and “P-2” from Standard & Poor’s and Moody’s, respectively, and
\nwhich shall not be so rated with negative credit implications).<\/p>\n
120<\/p>\n
126
\nIn either such case, if any such Bank Investor shall not have assigned its
\nrights and obligations under this Agreement within the applicable time period
\ndescribed above, the Company shall have the right to require such Bank Investor
\nto accept the assignment of such Bank Investor’s Pro Rata Share of the
\nEnterprise Net Investment; such assignment shall occur in accordance with the
\napplicable provisions of this Section 9.7. Such Bank Investor shall be
\nobligated to pay to the Company, in connection with such assignment, in
\naddition to the Pro Rata Share of the Enterprise Net Investment, an amount
\nequal to the interest component of the outstanding Commercial Paper issued by
\nthe Company to fund the portion of the Enterprise Net Investment being assigned
\nto such Bank Investor, as reasonably determined by the Enterprise Agent.
\nNotwithstanding anything contained herein to the contrary, upon any such
\nassignment to a downgraded Bank Investor as contemplated pursuant to the
\nimmediately preceding sentence, the aggregate available amount of the Maximum
\nEnterprise Net Investment, solely as it relates to new Incremental Transfers by
\nthe Company, shall be reduced by the amount of unused Commitment of such
\ndowngraded Bank Investor; it being understood and agreed, that nothing in this
\nsentence or the two preceding sentences shall affect or diminish in any way any
\nsuch downgraded Bank Investor’s Commitment to the Transferor or such downgraded
\nBank Investor’s other obligations and liabilities hereunder and under the other
\nTransaction Documents.<\/p>\n
121<\/p>\n
127
\n ARTICLE X<\/p>\n
MISCELLANEOUS<\/p>\n
SECTION 10.1. Term of Agreement. This Agreement shall terminate on
\nthe date following the Enterprise Termination Date and the Sheffield
\nTermination Date upon which the Net Investment has been reduced to zero, all
\naccrued Enterprise Discount and Sheffield Discount and Servicing Fees have been
\npaid in full and all other Aggregate Unpaids have been paid in full, in each
\ncase, in cash; provided, however, that (i) the rights and remedies of the
\nAgent, the Enterprise Agent, the Company, Sheffield, the Bank Investors and the
\nAdministrative Agent with respect to any representation and warranty made or
\ndeemed to be made by the Transferor pursuant to this Agreement, (ii) the
\nindemnification and payment provisions of Article VIII, and (iii) the agreement
\nset forth in Section 10.9 hereof, shall be continuing and shall survive any
\ntermination of this Agreement.<\/p>\n
SECTION 10.2. Waivers; Amendments. No failure or delay on the part
\nof the Agent, the Enterprise Agent, the Company, Sheffield, the Administrative
\nAgent or any Bank Investor in exercising any power, right or remedy under this
\nAgreement shall operate as a waiver thereof, nor shall any single or partial
\nexercise of any such power, right or remedy preclude any other further exercise
\nthereof or the exercise of any other power, right or remedy. The rights and
\nremedies herein provided shall be cumulative and nonexclusive of any rights or
\nremedies provided by law. Any provision of this Agreement may be waived,
\namended, supplemented or otherwise modified, if, but only if, such waiver,
\namendment, supplement or other modification is in writing and is signed by the
\nTransferor, the Company, Sheffield, the Agent and the Majority Enterprise
\nInvestors, provided, however, that to the extent the Agent determines that
\nthere have been no other material changes to the Credit Agreement since the
\ndate upon which the financial covenants set forth in Section 5.3 hereof and the
\ndefinitions relating thereto in Exhibit O have last been amended, supplemented
\nor otherwise modified hereunder, the Agent, the Transferor and WorldCom may,
\nwithout the consent of any of the Bank Investors, the Company or Sheffield,
\namend, supplement or otherwise modify the financial covenants set forth in<\/p>\n
122<\/p>\n
128
\nSection 5.3 hereof and the definitions relating thereto in Exhibit O in any
\nmanner (including, without limitation adding, deleting or modifying any of the
\nfinancial covenants hereunder) to make the financial covenants in Section 5.3
\nand the definitions relating thereto in Exhibit O substantively identical to
\nthe financial covenants set forth in the Credit Agreement.<\/p>\n
SECTION 10.3. Notices. Except as provided below, all communications
\nand notices provided for hereunder shall be in writing (including telecopy or
\nelectronic facsimile transmission or similar writing) and shall be given to the
\nother party at its address or telecopy number set forth below or at such other
\naddress or telecopy number as such party may hereafter specify for the purposes
\nof notice to such party. Each such notice or other communication shall be
\neffective (i) if given by telecopy, when such telecopy is transmitted to the
\ntelecopy number specified in this Section 10.3 and confirmation is received,
\n(ii) if given by mail 3 Business Days following such posting, postage prepaid,
\nU.S. certified or registered, (iii) if given by overnight courier, one (1)
\nBusiness Day after deposit thereof with a national overnight courier service,
\nor (iv) if given by any other means, when received at the address specified in
\nthis Section 10.3. However, anything in this Section to the contrary
\nnotwithstanding, the Transferor hereby authorizes the Company to effect
\nTransfers, Tranche Period and Tranche Rate selections based on telephonic
\nnotices made by any Person which the Company in good faith believes to be
\nacting on behalf of the Transferor. The Transferor agrees to deliver promptly
\nto the Company a written confirmation of each telephonic notice signed by an
\nauthorized officer of Transferor. However, the absence of such confirmation
\nshall not affect the validity of such notice. If the written confirmation
\ndiffers in any material respect from the action taken by the Company or
\nSheffield, the records of the Company or Sheffield shall govern absent manifest
\nerror.<\/p>\n
If to the Company:<\/p>\n
Enterprise Funding Corporation
\n c\/o Merrill Lynch Money Markets Inc.
\n World Financial Center–South Tower
\n 225 Liberty Street
\n New York, New York 10080<\/p>\n
123<\/p>\n
129
\n Telephone: (212) 236-7200
\n Telecopy: (212) 236-7584<\/p>\n
(with a copy to the Administrative Agent)<\/p>\n
If to Sheffield:<\/p>\n
SHEFFIELD RECEIVABLES CORPORATION
\n c\/o Barclays Bank PLC, New York Branch
\n 222 Broadway, 8th Floor
\n New York, New York 10038
\n Attention: Andrew Shuster
\n Telephone: (212) 412-7554
\n Telecopy: (212) 412-6846
\n Payment Information:
\n Barclays Bank PLC
\n ABA 026002574
\n Account 050786393
\n Reference Sheffield 3A Funding Account<\/p>\n
If to the Transferor:<\/p>\n
WORLDCOM FUNDING CORPORATION
\n 515 East Amite, 6th Floor
\n Jackson, Mississippi 39201-2002
\n Attention: Margaret Barry
\n Telephone: (601) 360-8693
\n Telecopy: (601) 974-8247
\n Payment Information:
\n NationsBank, N.A.
\n ABA 111000012
\n Account 3750777826
\n Reference WorldCom Funding Corporation<\/p>\n
If to WorldCom:<\/p>\n
WORLDCOM, INC.
\n 515 East Amite, 6th Floor
\n Jackson, Mississippi 39201-2002
\n Attention: David F. Myers
\n Telephone: (601) 360-8760
\n Telecopy: (601) 360-8190<\/p>\n
If to the Collateral Agent:<\/p>\n
NATIONSBANK, N.A.
\n NationsBank Corporate Center<\/p>\n
124<\/p>\n
130
\n 100 North Tryon Street
\n NC1-007-10-07
\n Charlotte, North Carolina 28255
\n Attention: Michelle M. Heath–
\n Structured Finance
\n Telephone: (704) 386-7922
\n Telecopy: (704) 388-9169<\/p>\n
If to the Agent, the Enterprise Agent
\n or the Administrative Agent:<\/p>\n
NATIONSBANK, N.A.
\n NationsBank Corporate Center
\n 100 North Tryon Street
\n NC1-007-10-07
\n Charlotte, North Carolina 28255
\n Attention: Michelle M. Heath–
\n Structured Finance
\n Telephone: (704) 386-7922
\n Telecopy: (704) 388-9169
\n Payment Information:
\n NationsBank, N.A.
\n ABA 053-000-196
\n for the account of
\n NationsBank Charlotte
\n Account No. 10822016511
\n Attn.: Camille Zerbinos<\/p>\n
If to the Bank Investors, at their respective addresses set forth on
\nthe signature pages hereto or of the Assignment and Assumption Agreement
\npursuant to which it became a party hereto.<\/p>\n
SECTION 10.4. Governing Law; Submission to Jurisdiction;
\nIntegration.<\/p>\n
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
\nACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE TRANSFEROR HEREBY
\nSUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT
\nFOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING
\nIN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
\nRELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY; PROVIDED,
\nHOWEVER, THAT THE TRANSFEROR HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
\nTHE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF
\nANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR<\/p>\n
125<\/p>\n
131
\nPURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO SECTION 7.1(U)
\nHEREOF. The Transferor hereby irrevocably waives, to the fullest extent it may
\neffectively do so, any objection which it may now or hereafter have to the
\nlaying of the venue of any such proceeding brought in such a court and any
\nclaim that any such proceeding brought in such a court has been brought in an
\ninconvenient forum. Nothing in this Section 10.4 shall affect the right of the
\nCompany to bring any action or proceeding against the Transferor or its
\nproperty in the courts of other jurisdictions.<\/p>\n
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE
\nA JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
\nOR OTHERWISE AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR
\nINCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT
\nOR THE OTHER TRANSACTION DOCUMENTS.<\/p>\n
(c) This Agreement contains the final and complete integration
\nof all prior expressions by the parties hereto with respect to the subject
\nmatter hereof and shall constitute the entire Agreement among the parties
\nhereto with respect to the subject matter hereof superseding all prior oral or
\nwritten understandings.<\/p>\n
SECTION 10.5. Severability; Counterparts. This Agreement may be
\nexecuted in any number of counterparts and by different parties hereto in
\nseparate counterparts, each of which when so executed shall be deemed to be an
\noriginal and all of which when taken together shall constitute one and the same
\nAgreement. Any provisions of this Agreement which are prohibited or
\nunenforceable in any jurisdiction shall, as to such jurisdiction, be
\nineffective to the extent of such prohibition or unenforceability without
\ninvalidating the remaining provisions hereof, and any such prohibition or
\nunenforceability in any jurisdiction shall not invalidate or render
\nunenforceable such provision in any other jurisdiction.<\/p>\n
SECTION 10.6. Successors and Assigns. (a) This Agreement shall be
\nbinding on the parties hereto and their respective successors and assigns;
\nprovided, however, that neither the Transferor nor WorldCom may assign any of
\nits rights or delegate any of<\/p>\n
126<\/p>\n
132
\nits duties hereunder or under the Receivables Purchase Agreement or under any
\nof the other Transaction Documents to which it is a party without the prior
\nwritten consent of the Agent. No provision of this Agreement shall in any
\nmanner restrict the ability of the Company or any Bank Investor to assign,
\nparticipate, grant security interests in, or otherwise transfer any portion of
\nthe Transferred Interest.<\/p>\n
(b) Each of the Transferor and WorldCom hereby agrees and
\nconsents to the assignment by the Company from time to time of all or any part
\nof its rights under, interest in and title to this Agreement and the
\nTransferred Interest to any Liquidity Provider. In addition, each of the
\nTransferor and WorldCom hereby consents to and acknowledges the assignment by
\nthe Company of all of its rights under, interest in and title to this Agreement
\nand the Transferred Interest to the Collateral Agent.<\/p>\n
SECTION 10.7. Waiver of Confidentiality. Each of the Transferor and
\nWorldCom hereby consents to the disclosure of any non-public information with
\nrespect to it received by the Company, the Agent, the Enterprise Agent,
\nSheffield, any Bank Investor or the Administrative Agent to any of the Company,
\nthe Agent, the Enterprise Agent, any nationally recognized rating agency rating
\nthe Company’s Commercial Paper, the Administrative Agent, the Collateral Agent,
\nany Bank Investor or potential Bank Investor, Sheffield, the Liquidity Provider
\nor the Credit Support Provider in relation to this Agreement.<\/p>\n
SECTION 10.8. Confidentiality Agreement. Each of the Transferor and
\nWorldCom hereby agrees that it will not disclose the contents of this Agreement
\nor any other proprietary or confidential information of the Company, the Agent,
\nthe Enterprise Agent, the Administrative Agent, the Collateral Agent, any
\nLiquidity Provider, Sheffield or any Bank Investor to any other Person except
\n(i) its auditors and attorneys, employees or financial advisors (other than any
\ncommercial bank) and any nationally recognized rating agency, provided such
\nauditors, attorneys, employees, financial advisors or rating agencies are
\ninformed of the highly confidential nature of such information or (ii) as
\notherwise required by applicable law or order of a court of competent
\njurisdiction.<\/p>\n
127<\/p>\n
133
\n SECTION 10.9. No Bankruptcy Petition Against the Company or
\nSheffield. Each of the Transferor and WorldCom hereby covenants and agrees
\nthat, prior to the date which is one year and one day after the payment in full
\nof all outstanding Commercial Paper or other indebtedness of the Company and
\nSheffield, it will not institute against, or join any other Person in
\ninstituting against, the Company or Sheffield any bankruptcy, reorganization,
\narrangement, insolvency or liquidation proceedings or other similar proceeding
\nunder the laws of the United States or any state of the United States.<\/p>\n
SECTION 10.10. Limited Recourse; Waiver of Setoff. <\/p>\n
(a) Notwithstanding anything to the contrary contained herein,
\nthe obligations of the Company and Sheffield under this Agreement are solely
\nthe corporate obligations of the Company and Sheffield, respectively, and shall
\nbe payable at such time as funds are received from the Transferor, WorldCom and
\nother transferors or from any party to any agreement with the Company or
\nSheffield in accordance with the terms thereof in excess of funds necessary to
\npay matured and maturing Commercial Paper and, to the extent funds are not
\navailable to pay such obligations, the claims relating thereto shall continue
\nto accrue. Each party hereto agrees that the payment of any claim (as defined
\nin Section 101 of Title 11 of the Bankruptcy Code) of any such party against
\nthe Company or Sheffield shall be subordinated to the payment in full of all of
\nthe Company’s or Sheffield’s Commercial Paper, respectively. No recourse shall
\nbe had for the payment of any amount owing in respect of any obligation of, or
\nclaim against, the Company or Sheffield arising out of or based upon this
\nAgreement against any stockholder, employee, officer, director or incorporator
\nof the Company or Sheffield, respectively, or any Affiliate thereof or against
\nany stockholder, employee, officer, director, incorporator or Affiliate of the
\nAgent or the Enterprise Agent; provided, however, that the foregoing shall not
\nrelieve any such person or entity from any liability they might otherwise have
\nas a result of fraudulent actions or omissions taken by them.<\/p>\n
(b) Each of the Transferor, the Collection Agent and WorldCom
\nhereby agrees to waive any right of setoff which it may have or to which it may
\nbe<\/p>\n
128<\/p>\n
134
\nentitled against the Company or Sheffield and their respective assets.<\/p>\n
SECTION 10.11. Characterization of the Transactions Contemplated by
\nthe Agreement. It is the intention of the parties that the transactions
\ncontemplated hereby constitute the sale of the Transferred Interest, conveying
\ngood title thereto free and clear of any Adverse Claims to the Agent, on behalf
\nof the Company, Sheffield and the Bank Investors, and that the Transferred
\nInterest not be part of the Transferor’s estate in the event of an insolvency.
\nIf, notwithstanding the foregoing, the transactions contemplated hereby should
\nbe deemed a financing, the parties intend that the Transferor shall be deemed
\nto have granted to the Agent, on behalf of the Company, Sheffield and the Bank
\nInvestors, and the Transferor hereby grants to the Agent, on behalf of the
\nCompany, Sheffield and the Bank Investors, a first priority perfected and
\ncontinuing security interest in all of the Transferor’s right, title and
\ninterest in, to and under the Receivables, together with Related Security,
\nCollections and Proceeds with respect thereto, and together with all of the
\nTransferor’s rights under the Receivables Purchase Agreement with respect to
\nthe Receivables and with respect to any obligations thereunder of WorldCom with
\nrespect to the Receivables, and that this Agreement shall constitute a security
\nagreement under applicable law. The Transferor hereby assigns to the Agent, on
\nbehalf of the Company, Sheffield and the Bank Investors, all of its rights and
\nremedies under the Receivables Purchase Agreement with respect to the
\nReceivables and with respect to any obligations thereunder of WorldCom with
\nrespect to the Receivables. The Transferor agrees that it shall not give any
\nconsent or waiver required or permitted to be given under the Receivables
\nPurchase Agreement without the prior consent of the Agent.<\/p>\n
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK<\/p>\n
129
\n 135<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed and delivered
\nthis Amended and Restated Transfer and Administration Agreement as of the date
\nfirst written above.<\/p>\n
ENTERPRISE FUNDING CORPORATION,
\n as Company <\/p>\n
By: \/s\/ STEWART L. CUTLER
\n ——————————————
\n Name: Stewart L. Cutler
\n Title: <\/p>\n
WORLDCOM FUNDING CORPORATION,
\n as Transferor <\/p>\n
By: \/s\/ DAVID F. MYERS
\n ——————————————
\n Name: David F. Myers
\n Title: Treasurer <\/p>\n
WORLDCOM, INC., individually
\n and as Collection Agent<\/p>\n
By: \/s\/ SCOTT D. SULLIVAN
\n ——————————————
\n Name: Scott D. Sullivan
\n Title: Chief Financial Officer<\/p>\n
SHEFFIELD RECEIVABLES CORPORA
\n By Barclays Bank PLC,
\n as Attorney-in-fact <\/p>\n
By: \/s\/ ANDREW SHUSTER
\n ——————————————
\n Name: Andrew Shuster
\n Title: Associate Director<\/p>\n
Commitment NATIONSBANK, N.A., as Agent
\n———- and a Bank Investor
\n$306,000,000.00 <\/p>\n
By: \/s\/ BRIAN C. BLAKELY
\n ——————————————
\n Name: Brian C. Blakely
\n Title: Investment Banking Officer<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6846,9361],"corporate_contracts_industries":[9415,9519],"corporate_contracts_types":[9613,9620],"class_list":["post-42934","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-bank-of-america-corp","corporate_contracts_companies-worldcom-inc","corporate_contracts_industries-financial__banks","corporate_contracts_industries-telecommunications__telephone","corporate_contracts_types-operations","corporate_contracts_types-operations__services"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42934","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42934"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42934"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42934"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42934"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}