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AMENDED AND RESTATED
TRANSFER AND ADMINISTRATION AGREEMENT
between
ENTERPRISE FUNDING CORPORATION,
as Company
WORLDCOM FUNDING CORPORATION,
as Transferor
WORLDCOM, INC.,
individually and
as Collection Agent
SHEFFIELD RECEIVABLES CORPORATION
and
NATIONSBANK, N.A.
as Agent and Bank Investor
Dated as of December 31, 1996
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms . . . . . . . . . . . . . . . . 1
SECTION 1.2. Other Terms . . . . . . . . . . . . . . . . . . . . 37
SECTION 1.3. Computation of Time Periods . . . . . . . . . . . . 37
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. Facility . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 2.2. Transfers; Certificate;
Eligible Receivables . . . . . . . . . . . . . . . . 39
SECTION 2.3. Selection of Enterprise Tranche
Periods Sheffield Tranche
Periods, Enterprise Tranche
Rates and Sheffield Tranche
Rates . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 2.4. Discount, Fees and Other Costs
and Expenses . . . . . . . . . . . . . . . . . . . . 50
SECTION 2.5. Non-Liquidation Settlement and
Reinvestment Procedures . . . . . . . . . . . . . . 51
SECTION 2.6. Liquidation Settlement Procedures . . . . . . . . . . 52
SECTION 2.7. Fees . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 2.8. Protection of Ownership Interest
of the Company, Sheffield and
Bank Investors . . . . . . . . . . . . . . . . . . . 54
SECTION 2.9. Deemed Collections; Application
of Payments . . . . . . . . . . . . . . . . . . . . 56
SECTION 2.10. Payments and Computations, Etc. . . . . . . . . . . 57
SECTION 2.11. Reports . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 2.12. Collection Account . . . . . . . . . . . . . . . . . 58
SECTION 2.13 Sharing of Payments . . . . . . . . . . . . . . . . 59
SECTION 2.14 Right of Setoff . . . . . . . . . . . . . . . . . . 60
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties
of the Transferor . . . . . . . . . . . . . . . . . 61
SECTION 3.2. Reaffirmation of Representations
and Warranties of the
Transferor . . . . . . . . . . . . . . . . . . . . 66
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SECTION 3.3. Representations and Warranties
of WorldCom . . . . . . . . . . . . . . . . . . . . 66
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. . . . . . . . . . . . . . . . 71
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of Transferor . . . . . . . . . 73
SECTION 5.2. Negative Covenants of Transferor . . . . . . . . . . 79
SECTION 5.3. Financial Covenants of WorldCom . . . . . . . . . . 82
SECTION 5.4. Affirmative Covenants of WorldCom . . . . . . . . . 83
SECTION 5.5. Negative Covenants of WorldCom . . . . . . . . . . . 85
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Appointment of Collection Agent . . . . . . . . . . . 87
SECTION 6.2. Duties of Collection Agent . . . . . . . . . . . . . 87
SECTION 6.3. Rights After Designation of New
Collection Agent . . . . . . . . . . . . . . . . . . 90
SECTION 6.4. Collection Agent Default . . . . . . . . . . . . . . 91
SECTION 6.5. Responsibilities of the Transferor . . . . . . . . . 92
ARTICLE VII
TERMINATION EVENTS
SECTION 7.1. Termination Events . . . . . . . . . . . . . . . . . 93
SECTION 7.2. Termination . . . . . . . . . . . . . . . . . . . . . 96
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ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. Indemnities by the Transferor . . . . . . . . . . . . 98
SECTION 8.2. Indemnity for Taxes,
Reserves and Expenses . . . . . . . . . . . . . . . 102
SECTION 8.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 8.4. Other Costs, Expenses and Related
Matters . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 8.5. Reconveyance Under Certain
Circumstances . . . . . . . . . . . . . . . . . . . 107
ARTICLE IX
THE AGENT; THE ENTERPRISE AGENT; BANK COMMITMENT
SECTION 9.1. Authorization and Action . . . . . . . . . . . . . . 108
SECTION 9.2. Agent's Reliance, Etc. . . . . . . . . . . . . . . . 111
SECTION 9.3. Credit Decision . . . . . . . . . . . . . . . . . . . 112
SECTION 9.4. Indemnification of the Enterprise Agent . . . . . . . 112
SECTION 9.5. Successor Agent and Enterprise Agent . . . . . . . . 113
SECTION 9.6. Payments by the Agent and Enterprise
Agent . . . . . . . . . . . . . . . . . . . . . . . 114
SECTION 9.7. Bank Commitment; Assignment to Bank Investors . . . . 115
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Term of Agreement . . . . . . . . . . . . . . . . . 121
SECTION 10.2. Waivers; Amendments . . . . . . . . . . . . . . . . 121
SECTION 10.3. Notices . . . . . . . . . . . . . . . . . . . . . . 122
SECTION 10.4. Governing Law; Submission to
Jurisdiction; Integration . . . . . . . . . . . . . 124
SECTION 10.5. Severability; Counterparts . . . . . . . . . . . . . 125
SECTION 10.6. Successors and Assigns . . . . . . . . . . . . . . . 125
SECTION 10.7. Waiver of Confidentiality . . . . . . . . . . . . . 126
SECTION 10.8. Confidentiality Agreement . . . . . . . . . . . . . 126
SECTION 10.9. No Bankruptcy Petition Against the
Company or Sheffield . . . . . . . . . . . . . . . 126
SECTION 10.10. No Recourse Against Stockholders,
Officers and Directors . . . . . . . . . . . . . . 127
SECTION 10.11. Characterization of the Transactions
Contemplated by the Agreement . . . . . . . . . . . 127
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EXHIBITS
EXHIBIT A Forms of Contracts
EXHIBIT B Credit and Collection Policies and
Practices
EXHIBIT C List of Lock-Box Banks and Accounts
EXHIBIT D Form of Lock-Box Agreement
EXHIBIT E Form of Investor Report
EXHIBIT F Form of Transfer Certificate
EXHIBIT G Form of Assignment and Assumption
Agreement
EXHIBIT H List of Actions and Suits
EXHIBIT I Location of Records
EXHIBIT J List of Subsidiaries, Divisions
and Tradenames
EXHIBIT K Forms of Opinions of Counsel for
the Transferor and WorldCom
EXHIBIT L Forms of Secretary's Certificate
for the Transferor, WorldCom
and Permitted Originators
EXHIBIT M Form of Company Certificate
EXHIBIT N Form of Weekly Report
EXHIBIT O Section 5.3 Definitions
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AMENDED AND RESTATED
TRANSFER AND ADMINISTRATION AGREEMENT
THIS AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT (as
amended, supplemented or otherwise modified and in effect from time to time,
this "Agreement"), dated as of December 31, 1996, by and among WORLDCOM FUNDING
CORPORATION, a Delaware corporation, as transferor (in such capacity, the
"Transferor"), WORLDCOM, INC., a Georgia corporation, individually and as
collection agent (in such capacity, the "Collection Agent"), ENTERPRISE FUNDING
CORPORATION, a Delaware corporation (the "Company"), SHEFFIELD RECEIVABLES
CORPORATION, a Delaware corporation ("Sheffield") and NATIONSBANK, N.A., a
national banking association ("NationsBank"), as agent for the Company,
Sheffield and the Bank Investors (in such capacity, the "Agent") and as a Bank
Investor.
PRELIMINARY STATEMENTS
WHEREAS, the Transferor, the Collection Agent, the Company and the
Agent entered into a Transfer and Administration Agreement dated as of October
25, 1996 (the "Existing Agreement");
WHEREAS, the Transferor has requested that the Existing Agreement be
amended and restated, among other things, to provide for the addition of
Sheffield as a purchaser and to provide for an increase to the aggregate
facility limit;
WHEREAS, the Transferor may desire to convey, transfer and assign, from
time to time, undivided percentage interests in certain accounts receivable,
and the Company may desire to, and the Bank Investors and Sheffield, if
requested, shall, accept such conveyance, transfer and assignment of such
undivided percentage interests, subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Administrative Agent" means NationsBank, N.A., as administrative agent
for the Company.
"Adverse Claim" means a lien, security interest, charge or encumbrance,
or other right or claim in, of or on any Person's assets or properties in favor
of any other Person (including any UCC financing statement or any similar
instrument filed against such Person's assets or properties).
"Affected Assets" means, collectively, the Receivables and the Related
Security, Collections and Proceeds relating thereto.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the power
to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of voting stock, by contract or
otherwise.
"Agent" means NationsBank, N.A., in its capacity as agent for the
Company, Sheffield and the Bank Investors, and any successor thereto appointed
pursuant to Article IX.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of
(i) the aggregate accrued and unpaid Enterprise Discount and Sheffield Discount
with respect to all Enterprise Tranche Periods and Sheffield Tranche Periods,
as applicable, at such time, (ii) the Enterprise Net Investment and Sheffield
Net Investment, as applicable, at such time, and (iii) all other amounts owed
(whether due or accrued) hereunder by the Transferor
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to the Company, Sheffield, the Bank Investors, the Enterprise Agent and the
Agent at such time.
"Assignment Amount" with respect to a Bank Investor means, at any time,
an amount equal to the lesser of (i) such Bank Investor's Pro Rata Share of the
Enterprise Net Investment at such time and (ii) such Bank Investor's unused
Commitment.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement substantially in the form of Exhibit G attached hereto.
"Bank Investor Commitment Fee" means the commitment fee payable to the
Bank Investors in an amount agreed upon from time to time by the Transferor,
WorldCom and NationsBank, N.A.
"Bank Investors" means NationsBank, N.A. and its successors and
assigns.
"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C. et
seq), as amended.
"Base Rate" or "BR" means, a rate per annum equal to the greater of (i)
the prime rate of interest announced by the Agent from time to time, changing
when and as said prime rate changes (such rate not necessarily being the lowest
or best rate charged by the Agent) and (ii) the sum of (a) 1.50% and (b) the
rate equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for such day for such transactions received by
the Agent from three Federal funds brokers of recognized standing selected by
it.
"Benefit Plan" means any employee benefit plan as defined in Section
3(3) of ERISA in respect of which the Transferor, WorldCom or any ERISA
Affiliate of the Transferor or WorldCom is, or at any time during the
immediately preceding six years was, an "employer" as defined in Section 3(5)
of ERISA.
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"Billing Adjustments" means, for any period, an amount equal to the
aggregate actual billing adjustments or credits made by the Transferor or the
Collection Agent with respect to Receivables during such period.
"Billing Adjustments Ratio" means, the ratio (expressed as a
percentage) computed as of the last day of each calendar month by dividing (i)
the amount of Billing Adjustments for such calendar month by (ii) credit sales
on all Receivables for the calendar month immediately preceding the then
current calendar month.
"Business Day" means any day excluding Saturday, Sunday and any day on
which banks in New York, New York, Charlotte, North Carolina or Jackson,
Mississippi are authorized or required by law to close, and, when used with
respect to the determination of any Eurodollar Rate or any notice with respect
thereto, any such day which is also a day for trading by and between banks in
United States dollar deposits in the London interbank market.
"Capitalized Lease" of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.
"Certificate" means the certificate issued to the Agent for the benefit
of the Company, Sheffield and the Bank Investors pursuant to Section 2.2(d)
hereof.
"Closing Date" means December 31, 1996.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agent" means NationsBank, N.A., as collateral agent for any
Liquidity Provider, any Credit Support Provider, the holders of Commercial
Paper issued by the Company and certain other parties.
"Collection Account" means the account, established by the Agent, for
the benefit of the Company, Sheffield and the Bank Investors, pursuant to
Section 2.12.
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"Collection Agent" means at any time the Person then authorized
pursuant to Section 6.1 to service, administer and collect Receivables.
"Collection Agent Default" has the meaning specified in Section 6.4
hereof.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all Finance Charges, if any, and cash proceeds of Related Security
with respect to such Receivable.
"Commercial Paper" means the short- term promissory notes of the
Company or Sheffield issued by the Company or Sheffield, as applicable, in the
commercial paper market.
"Commitment" means for each Bank Investor, the commitment of such Bank
Investor to make acquisitions from the Transferor or the Company in accordance
herewith in an amount not to exceed the dollar amount set forth opposite such
Bank Investor's signature on the signature page hereto under the heading
"Commitment."
"Commitment Termination Date" means October 24, 1997, or such later
date to which the Commitment Termination Date may be extended by Transferor,
the Enterprise Agent and the Bank Investors not later than sixty (60) days
prior to the then current Commitment Termination Date.
"Company" means Enterprise Funding Corporation, and its successors and
assigns.
"Concentration Factor" means for any Designated Obligor on any date of
determination (a) 3% of the Eligible Receivables on such date; provided
however, that with respect to any Designated Obligor and its affiliates whose
long term unsecured debt obligations are rated at least "A1" by Moody's and at
least "A+" by Standard & Poor's and with respect to which rating neither
Moody's nor Standard & Poor's shall have made a public announcement
anticipating a downgrading of such Designated Obligor's long term unsecured
debt obligations to a rating less than the aforementioned ratings ("A1/A+ Rated
Obligors") 5% of the Eligible Receivables on such date,
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or (b) such other amount determined by the Agent in the reasonable exercise of
its good faith judgment and disclosed in a written notice delivered to the
Transferor.
"Contract" means an agreement or invoice in substantially the form of
one of the forms attached hereto as Exhibit A or otherwise approved by the
Company and Sheffield, pursuant to or under which an Obligor shall be obligated
to pay for merchandise purchased or services rendered.
"Credit Agreement" means the Amended and Restated Credit Agreement
dated as of June 28, 1996 among WorldCom, Inc., as borrower, NationsBank of
Texas, N.A., as managing agent and administrative agent, the agents named
therein and the lenders named therein, as the same may be amended from time to
time.
"Credit and Collection Policy" means the Transferor's credit and
collection policy or policies and practices, relating to Contracts and
Receivables existing on the date hereof and referred to in Exhibit B attached
hereto, as modified from time to time in compliance with Section 5.2(c).
"Credit Support Agreement" means any agreement between the Company or
Sheffield and any Credit Support Provider evidencing the obligation of such
Credit Support Provider to provide credit support to the Company or Sheffield
in connection with the issuance by the Company or Sheffield, as applicable, of
Commercial Paper.
"Credit Support Provider" means the Person or Persons who provides
credit support to the Company or Sheffield in connection with the issuance by
the Company or Sheffield, as applicable, of Commercial Paper.
"Deemed Collections" means any Collections on any Receivable deemed to
have been received pursuant to Section 2.9(a) or (b) hereof.
"Default Ratio" means the ratio (expressed as a percentage) computed as
of the last day of each calendar month by dividing (i) the aggregate
Outstanding Balance of all Defaulted Receivables as of such date by (ii) the
aggregate Outstanding Balance of all Receivables as of such date.
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"Defaulted Receivable" means a Receivable: (i) as to which any
payment, or part thereof, remains unpaid for ninety-one (91) days or more from
the original due date for such Receivable; (ii) as to which an Event of
Bankruptcy has occurred and is continuing with respect to the Obligor thereof;
(iii) which has been identified by the Transferor, WorldCom or the Collection
Agent as uncollectible; or (iv) which, consistent with the Credit and
Collection Policy, should be written off as uncollectible.
"Delinquency Ratio" means the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the
aggregate Outstanding Balance of all Delinquent Receivables as of such date by
(ii) the aggregate Outstanding Balance of all Receivables (other than Defaulted
Receivables) as of such date.
"Delinquent Receivable" means a Receivable: (i) as to which any
payment, or part thereof, remains unpaid for more than thirty (30) days from
the original due date for such Receivable but less than ninety-one (91) days
from the original due date for such Receivable and (ii) which is not a
Defaulted Receivable.
"Designated Obligor" means, at any time, each Obligor, provided,
however, that any Obligor shall cease to be a Designated Obligor upon notice to
the Transferor from the Enterprise Agent or Sheffield, delivered at any time.
"Eligible Investments" means any of the following (a) negotiable
instruments or securities represented by instruments in bearer or registered or
in book-entry form which evidence (i) obligations fully guaranteed by the
United States of America; (ii) time deposits in, or bankers acceptances issued
by, any depositary institution or trust company incorporated under the laws of
the United States of America or any state thereof and subject to supervision
and examination by Federal or state banking or depositary institution
authorities; provided, however, that at the time of investment or contractual
commitment to invest therein, the certificates of deposit or short-term
deposits, if any, or long-term unsecured debt obligations (other than such
obligation whose rating is based on collateral or on the credit of a Person
other than such institution or trust company)
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of such depositary institution or trust company shall have a credit rating from
Moody's and S&P of at least "P-1" and "A-1", respectively, in the case of the
certificates of deposit or short-term deposits, or a rating not lower than one
of the two highest investment categories granted by Moody's and by S&P; (iii)
certificates of deposit having, at the time of investment or contractual
commitment to invest therein, a rating from Moody's and S&P of at least "P-1"
and "A-1", respectively; or (iv) investments in money market funds rated in the
highest investment category or otherwise approved in writing by the applicable
rating agencies; (b) demand deposits in any depositary institution or trust
company referred to in (a)(ii) above; (c) commercial paper (having original or
remaining maturities of no more than 30 days) having, at the time of investment
or contractual commitment to invest therein, a credit rating from Moody's and
S&P of at least "P-1" and "A-1", respectively; (d) Eurodollar time deposits
having a credit rating from Moody's and S&P of at least "P-1" and "A-1",
respectively; and (e) repurchase agreements involving any of the Eligible
Investments described in clauses (a)(i), (a)(iii) and (d) hereof so long as the
other party to the repurchase agreement has at the time of investment therein,
a rating from Moody's and S&P of at least "P-1" and "A-1", respectively.
"Eligible Receivable" means, at any time, any Receivable:
(i)(A) which has been originated by WorldCom or a Permitted
Originator, (B) if originated by a Permitted Originator, which has been
sold to WorldCom pursuant to (and in accordance with) a valid purchase and
sale agreement, (C) which has been sold by WorldCom to the Transferor
pursuant to (and in accordance with) the Receivables Purchase Agreement and
(D) as to which the Transferor has good title thereto, free and clear of
all Adverse Claims;
(ii) which (together with the Collections and Related Security
related thereto) has been the subject of either a valid transfer and
assignment from the Transferor to
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the Agent, on behalf of the Company, Sheffield and the Bank Investors, of
all of the Transferor's right, title and interest therein or the grant of a
first priority perfected security interest therein (and in the Collections
and Related Security related thereto), effective until the termination of
this Agreement;
(iii) the Obligor of which is a United States resident, is a
Designated Obligor at the time of the initial creation of an interest
therein hereunder and is not an Affiliate of any of the parties hereto;
(iv) which is not a Defaulted Receivable at the time of the
initial creation of an interest therein hereunder;
(v) which, (A) except with respect to any Private Line Receivable,
arises pursuant to a Contract with respect to which each of WorldCom or the
applicable Permitted Originator and the Transferor has performed all
obligations required to be performed by it thereunder, including without
limitation shipment of the merchandise and/or the performance of the
services purchased thereunder; (B) has been billed; and (C) according to
the Contract related thereto, is required to be paid in full (1) in the
case of a Switched Service Receivable, within thirty (30) days, (2) in the
case of a Private Line Receivable, within forty (40) days of the original
billing date therefor and (3) in the case of a Rebiller, within forty-five
(45) days of the original billing date therefor;
(vi) which is an "eligible asset" as defined in Rule 3a-7 under
the Investment Company Act of 1940, as amended;
(vii) a purchase of which with the proceeds of Commercial Paper
would constitute a "current transaction" within the meaning of Section
3(a)(3) of the Securities Act of 1933, as amended;
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(viii) which is an "account" within the meaning of Article 9 of
the UCC of all applicable jurisdictions;
(ix) which is denominated and payable only in United States
dollars in the United States;
(x) which, arises under a Contract that together with the
Receivable related thereto, is in full force and effect and constitutes the
legal, valid and binding obligation of the related Obligor enforceable
against such Obligor in accordance with its terms and is not subject to any
litigation, dispute, offset, counterclaim or other defense;
(xi) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no part of the Contract related thereto
is in violation of any such law, rule or regulation in any material
respect;
(xii) which (A) satisfies all applicable requirements of the
Credit and Collection Policy, (B) is assignable without the consent of, or
notice to, the Obligor thereunder, and (C) complies with such other
criteria and requirements as the Agent may from time to time specify to the
Transferor following five (5) days' notice;
(xiii) which was generated in the ordinary course of business of
WorldCom or a Permitted Originator;
(xiv) the Obligor of which has been directed to make all payments
to a specified account of the Collection Agent with
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respect to which there shall be a Lock-Box Agreement in effect;
(xv) as to which neither the Enterprise Agent nor Sheffield has
notified the Transferor that the Enterprise Agent or Sheffield, as
applicable, has determined, in its sole discretion, based on non- arbitrary
credit considerations with respect to the Obligor, that such Receivable (or
class of Receivables) is not acceptable for purchase hereunder, which
notice shall set forth the reasons for such determination;
(xvi) the assignment of which by a Permitted Originator to
WorldCom (if applicable) and by WorldCom to the Transferor under the
Receivables Purchase Agreement and hereunder by the Transferor to the Agent
on behalf of Enterprise, Sheffield and the Bank Investors does not violate,
conflict or contravene any applicable laws, rules, regulations, orders or
writs or any contractual or other restriction, limitation or encumbrance;
(xvii) which has not been compromised, adjusted or modified
(including by the extension of time for payment or the granting of any
discounts, allowances or credits); provided, however, that only such
portion of such Receivable that is the subject of such compromise,
adjustment or modification shall be deemed to be ineligible pursuant to the
terms of this clause (xviii);
(xviii) if the Obligor of such Receivable is a government agency
or subdivision, the Outstanding Balance of which, when added to the
aggregate Outstanding Balance of all Receivables the Obligor of which is a
government agency or subdivision, does not exceed 5% of the aggregate
Outstanding Balance of all Receivables;
(xix) if such Receivable is a Private Line Receivable, (A) the
Contract related thereto requires the Obligor to give
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WorldCom or the Permitted Originator at least thirty (30) days' notice of
cancellation and (B) the related Obligor has not provided notice to cancel
the related Contract; and
(xx) if such Receivable is a Private Line Receivable, the
Outstanding Balance thereof, when combined with the aggregate Outstanding
Balance of all other Private Line Receivables, does not exceed 20% of the
aggregate Outstanding Balance of all Receivables.
"Enterprise Agent" means NationsBank, N.A., in its capacity as agent
for the Company and the Bank Investors, and any successor thereto appointed
pursuant to Article IX.
"Enterprise Billing Adjustments Reserve" means, at any time, an amount
equal to the product of (i) the greater of (A) 5% and (B) 1.5 multiplied by the
highest Billing Adjustment Ratio over the last twelve (12) months and (ii) the
sum of the Enterprise Net Investment, the Enterprise Discount Reserve and the
Enterprise Servicing Fee Reserve at such time.
Notwithstanding the foregoing, the Enterprise Billing Adjustments Reserve shall
at all times be at least equal to $10,000,000.
"Enterprise BR Tranche" means an Enterprise Tranche as to which
Enterprise Discount is calculated at the Base Rate.
"Enterprise BR Tranche Period" means, with respect to an Enterprise BR
Tranche, either (i) prior to the Enterprise Termination Date, a period of up
to 30 days requested by the Transferor and agreed to by the Company,
NationsBank on behalf of any Liquidity Provider, or the Enterprise Agent, as
the case may be, commencing on a Business Day requested by the Transferor and
agreed to by the Company, NationsBank or the Enterprise Agent, as the case may
be, or (ii) after the Enterprise Termination Date, a period of one day. If
such Enterprise BR Tranche Period would end on a day which is not a Business
Day, such Enterprise BR Tranche Period shall end on the next succeeding
Business Day.
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"Enterprise CP Rate" means, with respect to any Enterprise CP Tranche
Period, the rate equivalent to the rate (or if more than one rate, the weighted
average of the rates) at which Commercial Paper issued by the Company having a
term equal to such Enterprise CP Tranche Period may be sold by any placement
agent or commercial paper dealer selected by the Company, provided, however,
that if the rate (or rates) as agreed between any such agent or dealer and the
Company is a discount rate, then the rate (or if more than one rate, the
weighted average of the rates) resulting from the Company's converting such
discount rate (or rates) to an interest-bearing equivalent rate per annum.
"Enterprise CP Tranche" means an Enterprise Tranche as to which
Enterprise Discount is calculated at an Enterprise CP Rate.
"Enterprise CP Tranche Period" means, with respect to an Enterprise CP
Tranche, a period of days not to exceed ninety (90) days commencing on a
Business Day requested by the Transferor and agreed to by the Company pursuant
to Section 2.3. If an Enterprise CP Tranche Period would end on a day which is
not a Business Day, such Enterprise CP Tranche Period shall end on the next
succeeding Business Day.
"Enterprise Dealer Fee" means the fee payable by the Transferor to the
Agent, pursuant to Section 2.4 hereof, the terms of which are set forth in the
Enterprise Fee Letter.
"Enterprise Discount" means, with respect to any Enterprise Tranche
Period:
(TR x TNI x AD)
360
Where:
TR = the Enterprise Tranche Rate applicable
to such Enterprise Tranche Period.
TNI = the portion of the Enterprise Net
Investment allocated to such
Enterprise Tranche Period.
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<PAGE> 19
AD = the actual number of days during such
Enterprise Tranche Period.
provided, however, that no provision of this Agreement shall require the
payment or permit the collection of Enterprise Discount in excess of the
maximum amount permitted by applicable law; and provided, further, that
Enterprise Discount shall not be considered paid by any distribution if at any
time such distribution is rescinded or must be returned for any reason.
"Enterprise Discount Reserve" means, at any time, an amount equal to:
TD + LY
Where:
TD = the sum of the unpaid Enterprise
Discount for all Enterprise Tranche Periods.
LY = the Enterprise Liquidation Yield.
"Enterprise Early Collection Fee" means, for any Enterprise Tranche
Period (such Enterprise Tranche Period to be determined without regard to the
last sentence in Section 2.3(a) hereof) during which the portion of the
Enterprise Net Investment that was allocated to such Enterprise Tranche Period
is reduced for any reason whatsoever, the excess, if any, of (i) the additional
Enterprise Discount that would have accrued during such Enterprise Tranche
Period if such reductions had not occurred, minus (ii) the income, if any,
received by the recipient of such reductions from investing the proceeds of
such reductions.
"Enterprise Eurodollar Tranche" means an Enterprise Tranche as to which
Enterprise Discount is calculated at the Eurodollar Rate.
"Enterprise Eurodollar Tranche Period" means, with respect to an
Enterprise Eurodollar Tranche, prior to the Enterprise Termination Date, a
period of up to one month requested by the Transferor and agreed to by the
Company, NationsBank, on behalf of Enterprise's Liquidity Provider, or the
Enterprise Agent, as the case may be, commencing on a Business Day requested by
the Transferor
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<PAGE> 20
and agreed to by the Company, NationsBank or the Enterprise Agent, as
applicable; provided, however, that if such Enterprise Eurodollar Tranche
Period would expire on a day which is not a Business Day, such Enterprise
Eurodollar Tranche Period shall expire on the next succeeding Business Day;
provided, further, that if such Enterprise Eurodollar Tranche Period would
expire on (a) a day which is not a Business Day but is a day of the month after
which no further Business Day occurs in such month, such Enterprise Eurodollar
Tranche Period shall expire on the next preceding Business Day or (b) a
Business Day for which there is no numerically corresponding day in the
applicable subsequent calendar month, such Enterprise Eurodollar Tranche Period
shall expire on the last Business Day of such month.
"Enterprise Facility Fee" means the fee payable by the Transferor to
the Company pursuant to Section 2.7(a) hereof, the terms of which are set forth
in the Enterprise Fee Letter.
"Enterprise Fee Letter" means the letter agreement dated October 25,
1996 between the Transferor and the Company with respect to the fees to be paid
by the Transferor hereunder, as amended, modified or supplemented from time to
time.
"Enterprise Liquidation Yield" means, at any time, an amount equal to:
(RVF x LBR x NI) x (EMP x 1.5)
-----------
360
Where:
RVF = the Enterprise Rate Variance Factor at such time;
LBR = the Base Rate at such time which is applicable to the liquidation
period after a Termination Event;
NI = the Enterprise Net Investment at such time; and
EMP = the Estimated Maturity Period of the Receivables.
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<PAGE> 21
"Enterprise Loss Reserve" means, on any day, an amount equal to:
LP x (NI + DR + SFR)
Where:
LP = the Loss Percentage at the close of business of the Collection Agent on
such day;
NI = the Enterprise Net Investment at the close of business of the
Collection Agent on such day;
DR = the Enterprise Discount Reserve at the close of business of the
Collection Agent on such day; and
SFR = the Enterprise Servicing Fee Reserve at the close of business of the
Collection Agent on such day.
Notwithstanding the foregoing, the Enterprise Loss Reserve shall at all times
be at least equal to $30,000,000.
"Enterprise Maximum Net Investment" means $306,000,000; provided that
such amount may not at any time exceed the aggregate Commitments at any time in
effect; provided, further, that from and after the Enterprise Termination Date,
the Enterprise Maximum Net Investment shall at all times equal the Enterprise
Net Investment.
"Enterprise Net Investment" means the sum of the cash amounts paid to
the Transferor by Enterprise or the Bank Investors for each Incremental
Transfer less the aggregate amount of Collections received and applied by the
Agent to reduce such Enterprise Net Investment pursuant to Section 2.6 or 2.9
hereof; provided that the Enterprise Net Investment shall be restored and
reinstated in the amount of any Collections so received and applied if at any
time the distribution of such Collections is rescinded or must otherwise be
returned for any reason; and provided further that the Enterprise Net
Investment may be increased by the amount described in Section 9.7(d) as
described therein.
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<PAGE> 22
"Enterprise Percentage Factor" means the fraction (expressed as a
percentage) computed at any time of determination as follows:
NI + LR + BAR + DR + SFR
-------------------------
NRB
Where:
NI = the Enterprise Net Investment at the time of such computation;
LR = the Enterprise Loss Reserve at the time of such computation;
BAR = the Enterprise Billing Adjustment Reserve at the time of such
computation;
DR = the Enterprise Discount Reserve at the time of such computation;
SFR = the Enterprise Servicing Fee Reserve at the time of such computation;
and
NRB = the Net Receivables Balance at the time of such computation.
The Enterprise Percentage Factor shall be calculated by the Collection Agent
from time to time as described in Section 2.2(e).
"Enterprise Program Fee" means the fee payable by the Transferor to the
Company pursuant to Section 2.7 hereof, the terms of which are set forth in the
Enterprise Fee Letter.
"Enterprise Rate Variance Factor" means 1.15 or such other number
computed from time to time in good faith by the Enterprise Agent and set forth
in a written notice by the Enterprise Agent to the Transferor and the
Collection Agent.
"Enterprise Servicing Fee Reserve" means at any time an amount equal to
the product of (i) the aggregate Outstanding Balance of all Receivables at such
time, (ii) 0.5%, (iii) a fraction having, as the numerator, the sum of (a) 1.5
times the Estimated Maturity Period plus (b)
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<PAGE> 23
30 and, as the denominator, 360 and (iv) a fraction the numerator of which is
the Enterprise Net Investment and the denominator of which is the Net
Investment.
"Enterprise Termination Date" means the earliest of (i) the Business
Day designated by the Transferor to the Company as the "Enterprise Termination
Date" at any time following 60 days' written notice to the Company, (ii) the
date of termination of the commitment of any Liquidity Provider under any
Liquidity Provider Agreement, but only with respect to the Company, (iii) the
date of termination of the commitment of any Credit Support Provider under any
Credit Support Agreement, but only with respect to the Company (iv) the day
upon which the Termination Date is declared or automatically occurs pursuant to
Section 7.2(a) hereof, (v) two (2) Business Days prior to the Commitment
Termination Date, (vi) the day on which a Reinvestment Termination Date shall
occur, (vii) the Purchase Termination Date, (viii) October 24, 1997, (ix) on or
after the occurrence of a Sheffield Termination Date, the Business Day
designated by the Enterprise Agent, at its option, as the Enterprise
Termination Date or (x) the Business Day designated as the Enterprise
Termination Date by the Enterprise Agent on or after the day on which the
Commercial Paper issued by the Company shall not be rated at least "A-2" by
Standard & Poor's and at least "P-2" by Moody's.
"Enterprise Tranche" means a portion of the Enterprise Net Investment
allocated to an Enterprise Tranche Period pursuant to Section 2.3 hereof.
"Enterprise Tranche Period" means an Enterprise CP Tranche Period, an
Enterprise BR Tranche Period or an Enterprise Eurodollar Tranche Period.
"Enterprise Tranche Rate" means the Enterprise CP Rate, the Base Rate
or the Eurodollar Rate.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means, with respect to any Person, (i) any
corporation which is a member of the same controlled group of corporations
(within the meaning of
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<PAGE> 24
Section 414(b) of the Code (as in effect from time to time, the "Code")) as
such Person; (ii) a trade or business (whether or not incorporated) under
common control (within the meaning of Section 414(c) of the Code) with such
Person; or (iii) a member of the same affiliated service group (within the
meaning of Section 414(n) of the Code) as such Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above.
"Estimated Maturity Period" means, at any time, the period, rounded
upward to the nearest whole number of days, equal to the weighted average
number of days until due of the Receivables as calculated by the Collection
Agent in good faith and set forth in the most recent Investor Report, such
calculation to be based on the assumptions that (a) each Receivable within a
particular aging category, (as set forth in the Investor Report) will be paid
on the last day of such aging category and (b) the last day of the last such
aging category coincides with the last date on which any Outstanding Balance of
any Receivables would be written off as uncollectible or charged against any
applicable reserve or similar account in accordance with the objective
requirements of the Credit and Collection Policy and WorldCom's normal
accounting practices applied on a basis consistent with those reflected in
WorldCom's financial statements; provided, however, that if the Agent, the
Enterprise Agent, the Company, Sheffield or any of the Bank Investors shall
reasonably disagree with any such calculation, the Agent may recalculate the
Estimated Maturity Period, and such recalculation, in the absence of manifest
error, shall be conclusive.
"Eurodollar Rate" means, with respect to any Enterprise Eurodollar
Tranche Period or Sheffield Eurodollar Tranche Period, a rate which is 0.625%
in excess of a rate per annum equal to the sum (rounded upwards, if necessary,
to the next higher 1/100 of 1%) of (A) the rate obtained by dividing (i) the
applicable LIBOR Rate by (ii) a percentage equal to 100% minus the reserve
percentage used for determining the maximum reserve requirement as specified in
Regulation D (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) that is applicable to the Agent during
such Enterprise Eurodollar Tranche Period or Sheffield Eurodollar Tranche
Period in respect of
19
<PAGE> 25
eurocurrency or eurodollar funding, lending or liabilities (or, if more than
one percentage shall be so applicable, the daily average of such percentage for
those days in such Enterprise Eurodollar Tranche Period or Sheffield Eurodollar
Tranche Period during which any such percentage shall be applicable) plus (B)
the then daily net annual assessment rate (rounded upwards, if necessary, to
the nearest 1/100 of 1%) as estimated by the Agent for determining the current
annual assessment payable by the Agent to the Federal Deposit Insurance
Corporation in respect of eurocurrency or eurodollar funding, lending or
liabilities.
"Event of Bankruptcy" means, with respect to any Person, (i) that such
Person (a) shall generally not pay its debts as such debts become due or (b)
shall admit in writing its inability to pay its debts generally or (c) shall
make a general assignment for the benefit of creditors; (ii) any proceeding
shall be instituted by or against such Person seeking to adjudicate it as
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or any substantial part of
its property or (iii) if such Person is a corporation, such Person or any
Subsidiary shall take any corporate action to authorize any of the actions set
forth in the preceding clauses (i) or (ii).
"Excluded Taxes" shall have the meaning specified in Section 8.3
hereof.
"Finance Charges" means, with respect to a Contract, any finance,
interest, late or similar charges owing by an Obligor pursuant to such
Contract.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
accounting profession, which are in effect as of the date of this Agreement.
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<PAGE> 26
"Guaranty" means, with respect to any Person any agreement by which
such Person assumes, guarantees, endorses, contingently agrees to purchase or
provide funds for the payment of, or otherwise becomes liable upon, the
obligation of any other Person, or agrees to maintain the net worth or working
capital or other financial condition of any other Person or otherwise assures
any other creditor of such other Person against loss, including, without
limitation, any comfort letter, operating agreement or take-or-pay contract and
shall include, without limitation, the contingent liability of such Person in
connection with any application for a letter of credit.
"Incremental Transfer" means a Transfer which is made pursuant to
Section 2.2(a) hereof.
"Indebtedness" means, with respect to any Person such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of such Person's business on terms customary in the trade, (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease obligations and (vi) obligations for which
such Person is obligated pursuant to a Guaranty.
"Indemnified Amounts" has the meaning specified in Section 8.1 hereof.
"Indemnified Parties" has the meaning specified in Section 8.1 hereof.
"Interest Component" means (i) with respect to any Commercial Paper
issued on an interest-bearing basis, the interest payable on such Commercial
Paper at its maturity (including any dealer commissions) and (ii) with respect
to any Commercial Paper issued on a discount basis, the portion of the face
amount of such Commercial Paper representing the discount incurred in respect
thereof (including any dealer commissions).
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<PAGE> 27
"Investor Report" means a report, in substantially the form attached
hereto as Exhibit E or in such other form as is mutually agreed to by the
Transferor, the Enterprise Agent and Sheffield, furnished by the Collection
Agent pursuant to Section 2.11 hereof.
"Law" means any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award
of any Official Body.
"LIBOR Rate" means, with respect to any Enterprise Eurodollar Tranche
Period or Sheffield Eurodollar Tranche Period, the rate at which deposits in
dollars are offered to the Agent, in the London interbank market at
approximately 11:00 A.M. (London time) two Business Days before the first day
of such Enterprise Eurodollar Tranche Period or Sheffield Eurodollar Tranche
Period in an amount approximately equal to the Enterprise Eurodollar Tranche
Period or Sheffield Eurodollar Tranche to which the Eurodollar Rate is to apply
and for a period of time approximately equal to the applicable Enterprise
Eurodollar Tranche Period or Sheffield Eurodollar Tranche Period.
"Liquidity Provider" means the Person or Persons who will provide
liquidity support to the Company or Sheffield in connection with the issuance
by the Company or Sheffield, as applicable, of its Commercial Paper.
"Liquidity Provider Agreement" means the agreement between the Company
or Sheffield, as applicable, and the Liquidity Provider evidencing the
obligation of such Liquidity Provider to provide liquidity support to the
Company or Sheffield in connection with the issuance by the Company or
Sheffield, as applicable, of its Commercial Paper.
"Lock-Box Account" means an account maintained by the Collection Agent
at a Lock- Box Bank for the purpose of receiving Collections from Receivables.
"Lock-Box Agreement" means an agreement between the Collection Agent
and a Lock-Box Bank in substantially the form of Exhibit D hereto or such other
form of agreement as shall have been approved by the Agent.
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<PAGE> 28
"Lock-Box Bank" means each of the banks set forth in Exhibit C hereto
and such banks as may be added thereto or deleted therefrom pursuant to Section
2.8 hereof.
"Loss Percentage" means, on any day, the greatest of (i) 2.5 times the
highest two- month rolling average Loss-to-Liquidation Ratio as of the last day
of each of the twelve (12) calendar months preceding the then current month and
(ii) 15%.
"Loss-to-Liquidation Ratio" means the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the
aggregate Outstanding Balance of all Receivables which have been written off as
uncollectible by the Collection Agent during such calendar month, together with
the aggregate Outstanding Balance of all Receivables which are 91-120 days past
due, by (ii) the aggregate amount of Collections received by the Collection
Agent during such calendar month.
"Majority Investors" shall have the meaning specified in Section 9.1(a)
hereof.
"Material Adverse Effect" means any event or condition which would (i)
have a material and adverse effect on the collectibility of the Receivables,
(ii) have a material and adverse effect on the businesses, properties,
condition (financial or otherwise) or results of operations of the Transferor
or WorldCom, in each case considered as a whole (iii) cause a material
impairment of the ability of the Transferor or WorldCom to perform any of its
payment or material obligations under the Transaction Documents to which it is
a party or the ability of the Company, Sheffield, the Bank Investors, the
Enterprise Agent or the Agent to enforce such obligations or any of their
rights under the Transaction Documents and (iv) have a material and adverse
effect on the interests of the Agent, the Enterprise Agent, the Company,
Sheffield or the Bank Investors under the Transaction Documents.
"Maximum Net Investment" means the sum of the Enterprise Maximum Net
Investment and the Sheffield Maximum Net Investment.
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<PAGE> 29
"Maximum Percentage Factor" means 98%.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is or was at any time during the current year or the
immediately preceding five years contributed to by the Transferor, WorldCom or
any ERISA Affiliate of the Transferor or WorldCom on behalf of its employees.
"Net Asset Test" means, in connection with any assignment by the
Company to the Bank Investors of an interest in the Enterprise Net Investment
pursuant to Section 9.7 hereof, that on the day immediately prior to the day on
which such assignment is to take effect, the Net Receivables Balance shall be
greater than the sum of the Enterprise Net Investment plus the Sheffield Net
Investment plus the Enterprise Liquidation Yield plus the Sheffield Liquidation
Yield.
"Net Investment" means the sum of Enterprise Net Investment and the
Sheffield Net Investment.
"Net Receivables Balance" means at any time the Outstanding Balance of
the Eligible Receivables at such time reduced by the sum of (i) the aggregate
amount by which the Outstanding Balance of all Eligible Receivables of each
Designated Obligor exceeds the Concentration Factor for such Designated
Obligor, plus (ii) the aggregate Outstanding Balance of all Eligible
Receivables which are Defaulted Receivables, plus (iii) the product of (A) 30%
and (B) the aggregate Outstanding Balance of all Receivables which are Private
Line Receivables plus, (iv) at the request of the Enterprise Agent or
Sheffield, the aggregate Outstanding Balance of all Eligible Receivables of
each Obligor with respect to which either 25% or more of such Obligor's
Receivables are Defaulted Receivables or 50% or more of such Obligor's
Receivables are Delinquent Receivables.
"Obligor" means a Person obligated to make payments for the provision
of goods and services pursuant to a Contract.
"Official Body" means any government or political subdivision or any
agency, authority, bureau, central
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<PAGE> 30
bank, commission, department or instrumentality of any such government or
political subdivision, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"Other Transferor" means any Person other than the Transferor that has
entered into a receivables purchase agreement or transfer and administration
agreement with the Company.
"Outstanding Balance" means, with respect to any Receivable at any
time, the then outstanding principal amount thereof excluding any accrued and
outstanding Finance Charges related thereto.
"Percentage Factor" means the sum of the Enterprise Percentage Factor
and the Sheffield Percentage Factor.
"Permitted Originator" means Com Systems Inc., a California
corporation, WorldCom Network Services, Inc., a Delaware corporation, and any
other Affiliate of WorldCom designated as a "Permitted Originator" in writing
by the Agent.
"Permitted Originator Receivables Purchase Agreement" shall have the
meaning specified in the Receivables Purchase Agreement.
"Person" means any corporation, limited liability company, natural
person, firm, joint venture, partnership, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"Potential Termination Event" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Termination Event.
"Private Line Receivable" means any right to payment from an Obligor,
whether constituting an account, chattel paper, instrument or general
intangible, arising from the sale by WorldCom or a Permitted Originator of
Private Line Services related to telecommunications, and includes the right to
payment of any interest or finance charges and other obligations of such
Obligor with respect thereto.
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<PAGE> 31
"Private Line Services" means dedicated telecommunications services
provided by WorldCom or a Permitted Originator to its customers between
designated customer premises.
"Pro Rata Share" means, for a Bank Investor, the Commitment of such
Bank Investor divided by the sum of the Commitments of all Bank Investors.
"Proceeds" means "proceeds" as defined in Section 9-306(1) of the UCC.
"Purchased Interest" means the interest in the Receivables acquired by
a Liquidity Provider through purchase pursuant to the terms of a Liquidity
Provider Agreement.
"Purchase Termination Date" means the date upon which the Transferor
shall cease, for any reason whatsoever, to make purchases of Receivables from
WorldCom under the Receivables Purchase Agreement or the Receivables Purchase
Agreement shall terminate for any reason whatsoever.
"Rebiller" means any customer of WorldCom and the Permitted Originators
which purchases long distance service in bulk and resells such service to
smaller end-users.
"Receivable" means the indebtedness owed to WorldCom or any Permitted
Originator by any Obligor, with the exception of Cherry Communications,
American Teletronics Long Distance, Universal Network Services, Conetco,
Unidial, Oncor, Century and any other operator billed service (without giving
effect to any purchase under the Receivables Purchase Agreement by the
Transferor at any time) under a Contract (and, if originated by a Permitted
Originator, sold by such Permitted Originator to WorldCom) and, in either case,
sold by WorldCom to the Transferor pursuant to the Receivables Purchase
Agreement, whether constituting an account, chattel paper, instrument,
investment property or general intangible, arising in connection with the sale
or lease of merchandise or the rendering of services by WorldCom or a Permitted
Originator, and includes the right to payment of any Finance Charges and other
obligations of such Obligor with respect thereto. Notwithstanding the
foregoing,
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<PAGE> 32
once a Receivable has been deemed collected pursuant to Section 2.9 hereof, it
shall no longer constitute a Receivable hereunder.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement dated as of October 25, 1996 by and between WorldCom, as seller, and
the Transferor, as purchaser, as such agreement may be amended, supplemented or
otherwise modified and in effect from time to time.
"Records" means all Contracts and other documents, books, records and
other information (including, without limitation, computer programs, tapes,
discs, punch cards, data processing software and related property and rights)
maintained with respect to Receivables and the related Obligors.
"Reinvestment Termination Date" means the second Business Day after the
delivery by the Company to the Transferor of written notice that the Company
elects to commence the amortization of its interest in the Enterprise Net
Investment.
"Related Commercial Paper" means, with respect to Commercial Paper
issued by the Company or Sheffield, Commercial Paper issued by the Company or
Sheffield, respectively, the proceeds of which were used to acquire, or
refinance the acquisition of, an interest in Receivables with respect to the
Transferor.
"Related Security" means, with respect to any Receivable, all of the
Transferor's rights, title and interest in, to and under:
(i) all of the Transferor's interest, if any, in the merchandise
(including returned or repossessed merchandise), if any, the sale of which
by the Transferor gave rise to such Receivable;
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing
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<PAGE> 33
statements signed by an Obligor describing any collateral securing such
Receivable;
(iii) all guarantees, indemnities, warranties, insurance (and
proceeds and premium refunds thereof) or other agreements or arrangements
of any kind from time to time supporting or securing payment of such
Receivable whether pursuant to the Contract related to such Receivable or
otherwise;
(iv) all Records related to such Receivable;
(v) all rights and remedies of (A) the Transferor under the
Receivables Purchase Agreement, together with all financing statements
filed by the Transferor against WorldCom in connection therewith and (B)
WorldCom under a sale and assignment agreement with a Permitted Originator,
together with all financing statements filed by WorldCom against such
Permitted Originator in connection therewith; and
(vi) all Proceeds of any of the foregoing.
"Section 8.2 Costs" has the meaning specified in Section 8.2(d) hereof.
"Servicing Fee" means the fees payable by the Company, Sheffield or
the Bank Investors to the Collection Agent, with respect to an Enterprise
Tranche or a Sheffield Tranche, as applicable, in an amount equal to 0.50% per
annum on the amount of the Enterprise Net Investment or Sheffield Net
Investment allocated to such Enterprise Tranche or Sheffield Tranche pursuant
to Section 2.3 hereof. Such fee shall accrue from the date of the initial
purchase of an interest in the Receivables to the later of the Termination Date
or the date on which the Enterprise Percentage Factor or
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<PAGE> 34
Sheffield Percentage Factor, as applicable, is reduced to zero. On or prior to
the Enterprise Termination Date or the Sheffield Termination Date, as
applicable, such fee shall be payable only from Collections pursuant to, and
subject to the priority of payments set forth in, Section 2.5 hereof. After
the Enterprise Termination Date or the Sheffield Termination Date, as
applicable,such fee shall be payable only from Collections pursuant to, and
subject to the priority of payments set forth in, Section 2.6 hereof.
"Sheffield" means Sheffield Receivables Corporation, a Delaware
corporation, and its successors and permitted assigns.
"Sheffield Billing Adjustments Reserve" means, at any time, an amount
equal to the product of (i) the greater of (A) 5% and (B) 1.5 multiplied by the
highest Billing Adjustment Ratio over the last twelve (12) months and (ii) the
sum of the Sheffield Net Investment, the Sheffield Discount Reserve and the
Sheffield Servicing Fee Reserve at such time.
Notwithstanding the foregoing, the Sheffield Billing Adjustments Reserve shall
at all times be at least equal to $2,500,000.
"Sheffield BR Tranche" means a Sheffield Tranche as to which Sheffield
Discount is calculated at the Base Rate.
"Sheffield BR Tranche Period" means, with respect to a Sheffield BR
Tranche, either (i) prior to the Sheffield Termination Date, a period of up to
30 days requested by the Transferor and agreed to by Sheffield, commencing on a
Business Day requested by the Transferor and agreed to by Sheffield, or (ii)
after the Sheffield Termination Date, a period of one day. If such Sheffield
BR Tranche Period would end on a day which is not a Business Day, such
Sheffield BR Tranche Period shall end on the next succeeding Business Day.
"Sheffield CP Rate" means, with respect to any Sheffield CP Tranche
Period, the rate equivalent to the rate (or if more than one rate, the weighted
average of the rates) at which Commercial Paper issued by Sheffield having a
term equal to such Sheffield CP Tranche Period may be sold by any placement
agent or commercial paper dealer selected by Sheffield, provided, however, that
if the rate (or rates) as agreed between any such agent or dealer and Sheffield
is a discount rate, then the rate (or if more than one rate, the weighted
average of the rates) resulting from Sheffield's converting such
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<PAGE> 35
discount rate (or rates) to an interest-bearing equivalent rate per annum.
"Sheffield CP Tranche" means a Sheffield Tranche as to which Sheffield
Discount is calculated at a Sheffield CP Rate.
"Sheffield CP Tranche Period" means, with respect to a Sheffield CP
Tranche, a period of days not to exceed ninety (90) days commencing on a
Business Day requested by the Transferor and agreed to by Sheffield pursuant to
Section 2.3. If a Sheffield CP Tranche Period would end on a day which is not
a Business Day, such Sheffield CP Tranche Period shall end on the next
succeeding Business Day.
"Sheffield Dealer Fee" means the fee payable by the Transferor to
Sheffield, pursuant to Section 2.4 hereof, the terms of which are set forth in
the Sheffield Fee Letter.
"Sheffield Discount" means, with respect to any Sheffield Tranche
Period:
(TR x TNI x AD)
--
360
Where:
TR = the Sheffield Tranche Rate applicable to such Sheffield Tranche Period.
TNI = the portion of the Sheffield Net Investment allocated to such Sheffield
Tranche Period.
AD = the actual number of days during such Sheffield Tranche Period.
provided, however, that no provision of this Agreement shall require the
payment or permit the collection of Sheffield Discount in excess of the maximum
amount permitted by applicable law; and provided, further, that Sheffield
Discount shall not be considered paid by any distribution if at any time such
distribution is rescinded or must be returned for any reason.
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<PAGE> 36
"Sheffield Discount Reserve" means, at any time, an amount equal to:
TD + LY
Where:
TD = the sum of the unpaid Sheffield Discount for all Sheffield Tranche
Periods.
LY = the Sheffield Liquidation Yield.
"Sheffield Early Collection Fee" means, for any Sheffield Tranche
Period (such Sheffield Tranche Period to be determined without regard to the
last sentence in Section 2.3(a) hereof) during which the portion of the
Sheffield Net Investment that was allocated to such Sheffield Tranche Period is
reduced for any reason whatsoever, the excess, if any, of (i) the additional
Sheffield Discount that would have accrued during such Sheffield Tranche Period
if such reductions had not occurred, minus (ii) the income, if any, received by
the recipient of such reductions from investing the proceeds of such
reductions.
"Sheffield Eurodollar Tranche" means a Sheffield Tranche as to which
Sheffield Discount is calculated at the Eurodollar Rate.
"Sheffield Eurodollar Tranche Period" means, with respect to a
Sheffield Eurodollar Tranche, prior to the Sheffield Termination Date, a period
of up to one month requested by the Transferor and agreed to by Sheffield,
commencing on a Business Day requested by the Transferor and agreed to by
Sheffield; provided, however, that if such Sheffield Eurodollar Tranche Period
would expire on a day which is not a Business Day, such Sheffield Eurodollar
Tranche Period shall expire on the next succeeding Business Day; provided,
further, that if such Sheffield Eurodollar Tranche Period would expire on (a) a
day which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Sheffield Eurodollar Tranche
Period shall expire on the next preceding Business Day or (b) a Business Day
for which there is no numerically corresponding day in the applicable
subsequent calendar month, such
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<PAGE> 37
Sheffield Eurodollar Tranche Period shall expire on the last Business Day of
such month.
"Sheffield Facility Fee" means the fee payable by the Transferor to
Sheffield pursuant to Section 2.7(b) hereof, the terms of which are set forth
in the Sheffield Fee Letter.
"Sheffield Fee Letter" means the letter agreement dated the date hereof
between the Transferor and Sheffield with respect to the fees to be paid by the
Transferor hereunder, as amended, modified or supplemented from time to time.
"Sheffield Liquidation Yield" means, at any time, an amount equal to:
(RVF x LBR x NI) x (EMP x 1.5)
-----------
360
Where:
RVF = the Sheffield Rate Variance Factor at such time;
LBR = the Base Rate at such time which is applicable to the liquidation
period after a Termination Event;
NI = the Sheffield Net Investment at such time; and
EMP = the Estimated Maturity Period of the Receivables.
"Sheffield Loss Reserve" means, on any day, an amount equal to:
LP x (NI + DR + SFR)
Where:
LP = the Loss Percentage at the close of business of the Collection Agent on
such day;
NI = the Sheffield Net Investment at the close of business of the Collection
Agent on such day;
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<PAGE> 38
DR = the Sheffield Discount Reserve at the close of business of the
Collection Agent on such day; and
SFR = the Sheffield Servicing Fee Reserve at the close of business of the
Collection Agent on such day.
Notwithstanding the foregoing, the Sheffield Loss Reserve shall at all times be
at least equal to $7,500,000.
"Sheffield Maximum Net Investment" means $75,000,000; provided,
further, that from and after the Sheffield Termination Date, the Sheffield
Maximum Net Investment shall at all times equal the Sheffield Net Investment.
"Sheffield Net Investment" means the sum of the cash amounts paid to
the Transferor by Sheffield for each Incremental Transfer less the aggregate
amount of Collections received and applied by Sheffield to reduce such
Sheffield Net Investment pursuant to Section 2.6 or 2.9 hereof; provided that
the Sheffield Net Investment shall be restored and reinstated in the amount of
any Collections so received and applied if at any time the distribution of such
Collections is rescinded or must otherwise be returned for any reason.
"Sheffield Percentage Factor" means the fraction (expressed as a
percentage) computed at any time of determination as follows:
NI + LR + BAR + DR + SFR
-------------------------
NRB
Where:
NI = the Sheffield Net Investment at the time of such computation;
LR = the Sheffield Loss Reserve at the time of such computation;
BAR = the Sheffield Billing Adjustment Reserve at the time of such
computation;
DR = the Sheffield Discount Reserve at the time of such computation;
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<PAGE> 39
SFR = the Sheffield Servicing Fee Reserve at the time of such computation;
and
NRB = the Net Receivables Balance at the time of such computation.
The Sheffield Percentage Factor shall be calculated by the Collection Agent
from time to time as described in Section 2.2(e).
"Sheffield Program Fee" means the fee payable by the Transferor to
Sheffield pursuant to Section 2.7(b) hereof, the terms of which are set forth
in the Sheffield Fee Letter.
"Sheffield Rate Variance Factor" means 1.15 or such other number
computed from time to time in good faith by Sheffield and set forth in a
written notice by Sheffield to the Transferor and the Collection Agent.
"Sheffield Servicing Fee Reserve" means at any time an amount equal to
the product of (i) the aggregate Outstanding Balance of all Receivables at such
time, (ii) 0.5%, (iii) a fraction having, as the numerator, the sum of (a) 1.5
times the Estimated Maturity Period plus (b) 30 and, as the denominator, 360
and (iv) a fraction the numerator of which is the Sheffield Net Investment and
the denominator of which is the Net Investment.
"Sheffield Termination Date" means the earliest of (i) the Business Day
designated by the Transferor to Sheffield as the "Sheffield Termination Date"
at any time following 60 days' written notice to Sheffield, (ii) the date of
termination of the commitment of any Liquidity Provider under any Liquidity
Provider Agreement, but only with respect to Sheffield, (iii) the date of
termination of the commitment of any Credit Support Provider under any Credit
Support Agreement, but only with respect to Sheffield, (iv) the day upon which
the Termination Date is declared or automatically occurs pursuant to Section
7.2(a) hereof, (v) the Purchase Termination Date, (vi) October 24, 1997, or
(vii) on or after the occurrence of an Enterprise Termination Date, the
Business Day designated by Sheffield, at its option, as the Sheffield
Termination Date.
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<PAGE> 40
"Sheffield Tranche" means a portion of the Sheffield Net Investment
allocated to a Sheffield Tranche Period pursuant to Section 2.3 hereof.
"Sheffield Tranche Period" means a Sheffield CP Tranche Period, a
Sheffield BR Tranche Period or a Sheffield Eurodollar Tranche Period.
"Sheffield Tranche Rate" means the Sheffield CP Rate, the Base Rate or
the Eurodollar Rate.
"Standard & Poor's" or "S&P" means Standard & Poor's Ratings Services,
a Division of The McGraw-Hill Companies.
"Subordinated Note" shall have the meaning specified in the Receivables
Purchase Agreement.
"Subsidiary" of a Person means any Person more than 50% of the
outstanding voting interests of which shall at any time be owned or controlled,
directly or indirectly, by such Person or by one or more Subsidiaries of such
Person or any similar business organization which is so owned or controlled.
"Switched Service Receivable" means any right to payment from an
Obligor, whether constituting an account, chattel paper, instrument or general
intangible, arising from the sale by WorldCom or a Permitted Originator of
Switched Services related to telecommunications, and includes the right to
payment of any interest or finance charges and other obligations of such
Obligor with respect thereto.
"Switched Services" means the measured services provided by WorldCom or
a Permitted Originator to its customers for originating and/or terminating
telecommunications transmissions.
"Taxes" shall have the meaning specified in Section 8.3 hereof.
"Termination Date" shall have the meaning specified in Section 7.2 (a)
hereof.
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<PAGE> 41
"Termination Event" means an event described in Section 7.1 hereof.
"Transaction Costs" has the meaning specified in Section 8.4(a) hereof.
"Transaction Documents" means, collectively, this Agreement, the
Receivables Purchase Agreement, the Enterprise Fee Letter, the Sheffield Fee
Letter, the Lock-Box Agreements, the Certificates, the Transfer Certificates
and all of the other instruments, documents and other agreements executed and
delivered by WorldCom or the Transferor in connection with any of the
foregoing, in each case, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Transfer" means a conveyance, transfer and assignment by the
Transferor to the Company, Sheffield or the Bank Investors of an undivided
percentage ownership interest in Receivables hereunder (including, without
limitation, as a result of any reinvestment of Collections in Transferred
Interests pursuant to Section 2.2(b) and 2.5).
"Transfer Certificate" has the meaning specified in Section 2.2(a)
hereof.
"Transfer Date" means, with respect to each Transfer, the Business Day
on which such Transfer is made.
"Transfer Price" means with respect to any Incremental Transfer, the
amount paid to the Transferor by the Company, Sheffield or the Bank Investors
as described in the applicable Transfer Certificate. The Transfer Price for
any Transfer shall be comprised of (a) a cash component equal to the Enterprise
Net Investment or the Sheffield Net Investment, as applicable, less the
Enterprise Net Investment or Sheffield Net Investment, as applicable, paid for
all prior Transfers, and (b) a deferred payment component payable in accordance
with Section 2.6 hereof.
"Transferor" means WorldCom Funding Corporation, a Delaware
corporation, and its successors and permitted assigns.
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<PAGE> 42
"Transferred Interest" means, at any time of determination, an
undivided percentage ownership interest in (i) each and every then outstanding
Receivable, (ii) all Related Security with respect to each such Receivable,
(iii) all Collections with respect thereto, and (iv) other Proceeds of the
foregoing, which undivided ownership interest shall be equal to the Percentage
Factor at such time, and only at such time (without regard to prior
calculations). The Transferred Interest in each Receivable, together with
Related Security, Collections and Proceeds with respect thereto, shall at all
times be equal to the Transferred Interest in each other Receivable, together
with Related Security, Collections and Proceeds with respect thereto. To the
extent that the Transferred Interest shall decrease as a result of a
recalculation of the Percentage Factor, the Company, Sheffield or the Bank
Investors, as applicable, shall be considered to have reconveyed to the
Transferor an undivided percentage ownership interest in each Receivable,
together with Related Security, Collections and Proceeds with respect thereto,
in an amount equal to such decrease such that in each case the Transferred
Interest in each Receivable shall be equal to the Transferred Interest in each
other Receivable.
"UCC" means, with respect to any state, the Uniform Commercial Code as
from time to time in effect in such state.
"U.S." or "United States" means the United States of America.
"WorldCom" means WorldCom, Inc., a Georgia corporation, and its
successors and assigns.
SECTION 1.2. Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. All terms used in
Article 9 of the UCC in the State of New York, and not specifically defined
herein, are used herein as defined in such Article 9.
SECTION 1.3. Computation of Time Periods. Unless otherwise stated
in this Agreement, in the computation of a period of time from a specified date
to a later specified date, the word "from" means "from and including", the
words "to" and "until" each means "to but
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<PAGE> 43
excluding", and the word "within" means "from and excluding a specified date
and to and including a later specified date".
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<PAGE> 44
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. Facility. Upon the terms and subject to the
conditions herein set forth, at any time prior to the Enterprise Termination
Date (with respect to the Company and the Bank Investors) and the Sheffield
Termination Date (with respect to Sheffield)(x) the Transferor may, at its
option, convey, transfer and assign to the Company or the Bank Investors, as
applicable, and Sheffield and (y) the Company may, at its option, or Sheffield
and the Bank Investors shall, if so requested, accept such conveyance, transfer
and assignment from the Transferor of, without recourse except as provided
herein, undivided percentage ownership interests in the Receivables, together
with Related Security, Collections and Proceeds with respect thereto, from time
to time. By accepting any conveyance, transfer and assignment hereunder,
neither the Company, Sheffield, any Bank Investor nor the Agent assumes or
shall have any obligations or liability under any of the Contracts, all of
which shall remain the obligations and liabilities of the Transferor and
WorldCom.
SECTION 2.2. Transfers; Certificates; Eligible Receivables
(a) Incremental Transfers. Upon the terms and subject to the conditions herein
set forth the Transferor may, at its option, convey, transfer and assign to the
Company, Sheffield or the Bank Investors, as applicable, and (y) the Company
may, at its option, or Sheffield and the Bank Investors shall, if so requested,
accept such conveyance, transfer and assignment from the Transferor, without
recourse except as provided herein, undivided percentage ownership interests in
the Receivables, together with Related Security, Collections and Proceeds with
respect thereto (each, an "Incremental Transfer") from time to time prior to
the occurrence of the Enterprise Termination Date (with respect to the Company
and the Bank Investors) or the Sheffield Termination Date (with respect to
Sheffield); provided that after giving effect to the issuance of Related
Commercial Paper, or any drawings under any Liquidity Provider Agreement or any
Credit Support Agreement, to fund the cash portion of the Transfer Price of any
Incremental Transfer and the payment to the Transferor of the cash portion of
such Transfer Price
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<PAGE> 45
(i) the Enterprise Net Investment will not exceed $300,000,000, (ii) the
Sheffield Net Investment will not exceed $75,000,000, (iii) the Percentage
Factor will not exceed 98% and (iv) the sum of the Enterprise Net Investment
plus the Interest Component of all outstanding Related Commercial Paper issued
by the Company would not exceed the Enterprise Maximum Net Investment; and,
provided further, that the representations and warranties set forth in Section
3.1 shall be true and correct both immediately before and immediately after
giving effect to any such Incremental Transfer and the payment to the
Transferor of the cash portion of the Transfer Price related thereto and an
Investor Report shall have been delivered with respect to such Incremental
Transfer as required by Section 3.2 hereof.
The Transferor shall, by notice to the Agent given by telecopy, offer
to convey, transfer and assign to the Company, Sheffield or the Bank Investors,
as applicable, undivided percentage ownership interests in the Receivables and
the other Affected Assets relating thereto at least three (3) Business Days
prior to the proposed date of any Incremental Transfer. Each such notice shall
specify (w) whether, as between the Company and the Bank Investors, such
request is made to the Company or the Bank Investors (it being understood and
agreed that once the Bank Investors acquire any Transferred Interest hereunder,
the Bank Investors shall be required to purchase all Transferred Interests held
by the Company, pro rata and in accordance with Section 9.7 and thereafter the
Company shall no longer accept any additional Incremental Transfers hereunder),
(x) to the amount of the desired Transfer Price to be funded by the Company or
the Bank Investors on the one hand and Sheffield on the other (such amounts to
be a ratio to each other equal to 300/the amount of the Sheffield Maximum Net
Investment), the desired aggregate Transfer Price (which shall be at least
$1,000,000 or integral multiples of $500,000 in excess thereof) or to the
extent that the then available unused portion of the Maximum Net Investment is
less than such amount, such lesser amount equal to such available portion of
the Maximum Net Investment), (y) the desired date of such Incremental Transfer
and (z) the desired Enterprise Tranche Period and Sheffield Tranche Period and
allocations of the Enterprise Net Investment and Sheffield Net Investment of
such Incremental Transfer thereto as required by Section 2.3. The
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<PAGE> 46
Agent will promptly notify the Company or each of the Bank Investors, as the
case may be, and Sheffield of the Agent's receipt of any request for an
Incremental Transfer to be made to such Person. To the extent that any such
Incremental Transfer is requested of the Company, the Company shall accept or
reject such offer by notice given to the Transferor and the Agent by telephone
or telecopy by no later than the close of its business on the Business Day
following its receipt of any such request. Notwithstanding the foregoing, the
Incremental Transfer to occur on December 31, 1996 shall be wholly funded by
Sheffield in the amount of $75,000,000.
Each notice of proposed Transfer shall be irrevocable and binding on
the Transferor and the Transferor shall indemnify the Company, Sheffield and
each Bank Investor against any loss or expense incurred by the Company,
Sheffield or any Bank Investor, either directly or indirectly (including, in
the case of the Company, or Sheffield through any Liquidity Provider Agreement)
as a result of any failure by the Transferor to complete such Incremental
Transfer including, without limitation, any loss (including loss of anticipated
profits) or expense incurred by the Company, Sheffield or any Bank Investor,
either directly or indirectly (including, in the case of the Company or
Sheffield, pursuant to any Liquidity Provider Agreement) by reason of the
liquidation or reemployment of funds acquired by the Company, Sheffield (or the
Liquidity Provider) or any Bank Investor (including, without limitation, funds
obtained by issuing commercial paper or promissory notes or obtaining deposits
as loans from third parties) for the Company, Sheffield or any Bank Investor to
fund such Incremental Transfer.
On the date of the initial Incremental Transfer to Sheffield, Sheffield
shall deliver written confirmation to the Transferor of the cash portion of the
Transfer Price, the Sheffield Tranche Period and the Sheffield Tranche Rate
relating to such Transfer and the Transferor shall deliver to the Agent the
Transfer Certificate in the form of Exhibit F hereto (the "Transfer
Certificate"). The Agent shall indicate the amount of the initial Incremental
Transfer together with the date thereof on the grid attached to the Transfer
Certificate and shall also indicate the amount of any Incremental Transfer
funded by the Company prior to such date. On the date of each subsequent
Incremental Transfer, the
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<PAGE> 47
Agent shall send written confirmation to the Transferor of the cash portion of
the Transfer Price, the Enterprise Tranche Period and Sheffield Tranche Period,
the Transfer Date and the Enterprise Tranche Rate and Sheffield Tranche Rate
applicable to such Incremental Transfer. The Agent shall indicate the amount
of the Incremental Transfer together with the date thereof as well as any
decrease in the Enterprise Net Investment and Sheffield Net Investment on the
grid attached to the Transfer Certificate. The Transfer Certificate shall
evidence the Incremental Transfers. Following each Incremental Transfer, the
Agent shall deposit to the Transferor's account at the location indicated in
Section 10.3 hereof, in immediately available funds, an amount equal to the
cash portion of the Transfer Price for such Incremental Transfer made to the
Company or the Bank Investors and Sheffield.
By no later than 11:00 A.M. (New York time) on any Transfer Date, the
Company, Sheffield or each Bank Investor, as the case may be, shall remit its
share (which, in the case of an Incremental Transfer to the Bank Investors,
shall be equal to such Bank Investor's Pro Rata Share) of the aggregate
Transfer Price for such Transfer to the account of the Agent specified therefor
from time to time by the Agent by notice to such Persons. The obligation of
each Bank Investor to remit its Pro Rata Share of any such Transfer Price shall
be several from that of each other Bank Investor, and the failure of any Bank
Investor to so make such amount available to the Agent shall not relieve any
other Bank Investor of its obligation hereunder. Following each Incremental
Transfer and the Agent's receipt of funds from the Company, Sheffield or the
Bank Investors as aforesaid, the Agent shall remit the Transfer Price to the
Transferor's account at the location indicated in Section 10.3 hereof, in
immediately available funds, an amount equal to the cash portion of the
Transfer Price for such Incremental Transfer. Unless the Agent shall have
received notice from the Company, Sheffield or any Bank Investor, as
applicable, that such Person will not make its share of any Transfer Price
relating to any Incremental Transfer available on the applicable Transfer Date
therefor, the Agent may (but shall have no obligation to) make the Company's,
Sheffield's or any such Bank Investor's share of any such Transfer Price
available to the Transferor in anticipation of the receipt by the Agent of such
amount
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<PAGE> 48
from the Company, Sheffield or such Bank Investor. To the extent the Company,
Sheffield or any such Bank Investor fails to remit any such amount to the Agent
after any such advance by the Agent on such Transfer Date, the Company,
Sheffield or such Bank Investor, on the one hand, and the Transferor, on the
other hand, shall be required to pay such amount, together with interest
thereon at a per annum rate equal to the Federal funds rate (as determined in
accordance with clause (ii) of the definition of "Base Rate"), in the case of
the Company, Sheffield or any such Bank Investor, or the Base Rate, in the case
of the Transferor, to the Agent upon its demand therefor (provided that neither
the Company nor Sheffield shall have any obligation to pay such interest
amounts except to the extent that it shall have sufficient funds to pay the
face amount of its Commercial Paper in full). Until such amount shall be
repaid, such amount shall be deemed to be Net Investment paid by the Agent and
the Agent shall be deemed to be the owner of a Transferred Interest hereunder.
Upon the payment of such amount to the Agent (x) by the Transferor, the amount
of the Agent's Net Investment shall be reduced by such amount or (y) by the
Company, Sheffield or such Bank Investor, such payment shall constitute such
Person's payment of its share of the applicable Transfer Price for such
Transfer. If agreed by the Agent and Sheffield (with notice to the Transferor
and the Collection Agent), Sheffield may remit its share of any Transfer Price
directly to the Transferor.
(b) Reinvestment Transfers. On each Business Day occurring after
the Incremental Transfer hereunder on the date hereof and prior to the
Enterprise Termination Date or Sheffield Termination Date, as applicable, the
Transferor hereby agrees to convey, transfer and assign to the Company,
Sheffield or the Bank Investors then owning any Transferred Interests, and in
consideration of Transferor's agreement to maintain at all times prior to the
Enterprise Termination Date or Sheffield Termination Date, as applicable, a Net
Receivables Balance in an amount at least sufficient to maintain the Percentage
Factor at an amount not greater than the Maximum Percentage Factor, the Company
may, and Sheffield and the Bank Investors shall (in either case, to the extent
such Persons then own any Transferred Interest), agree to purchase from the
Transferor undivided percentage ownership interests in each and every
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<PAGE> 49
Receivable, together with Related Security, Collections and Proceeds with
respect thereto, to the extent that Collections are available for such Transfer
in accordance with Section 2.5 hereof, such that after giving effect to such
Transfer, (i) the amount of the Enterprise Net Investment and the Sheffield Net
Investment at the close of business on such Business Day shall be equal to the
amount of the Enterprise Net Investment and the Sheffield Net Investment,
respectively, at the close of the business on the Business Day immediately
preceding such Business Day plus the cash portion of the Transfer Price of any
Incremental Transfer made by Enterprise or the Bank Investors and Sheffield
made on such day, if any, and (ii) the Transferred Interest in each Receivable,
together with Related Security, Collections and Proceeds with respect thereto,
shall be equal to the Transferred Interest in each other Receivable, together
with Related Security, Collections and Proceeds with respect thereto.
(c) All Transfers. Each Transfer shall constitute a purchase of
undivided percentage ownership interests in each and every Receivable, together
with Related Security, Collections and Proceeds with respect thereto, then
existing, as well as in each and every Receivable, together with Related
Security, Collections and Proceeds with respect thereto, which arises at any
time after the date of such Transfer. The Company's, Sheffield's or the Bank
Investors', as applicable, aggregate undivided percentage ownership interest in
the Receivables, together with the Related Security, Collections and Proceeds
with respect thereto, shall equal the Enterprise Percentage Factor or Sheffield
Percentage Factor, as applicable, in effect from time to time. So long as the
Company, on the one hand, or the Bank Investors, on the other hand, own all of
the Transferred Interests related to the Enterprise Net Investment at such
time, each of the Company's and each Bank Investor's undivided percentage
ownership interest in the Affected Assets shall equal such Person's ratable
share (determined on the basis of the relationship that such Person's Net
Investment bears to the Enterprise Net Investment at such time) of the
Enterprise Percentage Factor at such time.
(d) Certificate. The Transferor shall issue to the Agent the
Certificate, in the form of Exhibit M, on or prior to the date hereof.
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(e) Percentage Factor. The Percentage Factor shall be initially
computed as of the opening of business on November 30, 1996. Thereafter until
the Enterprise Termination Date or the Sheffield Termination Date, the
Enterprise Percentage Factor and the Sheffield Percentage Factor, respectively,
shall be deemed to be recomputed as of the close of business by the Collection
Agent on each Business Day. Each Percentage Factor shall remain constant from
the time as of which any such computation or recomputation is made until the
time as of which the next such recomputation shall be made, notwithstanding any
additional Receivables arising, any Incremental Transfer made pursuant to
Section 2.2(a) or any reinvestment Transfer made pursuant to Section 2.2(b) and
2.5 during any period between computations of the Enterprise Percentage Factor
or the Sheffield Percentage Factor, as applicable. Each of the Enterprise
Percentage Factor and the Sheffield Percentage Factor, as calculated at the
close of business on the Business Day immediately preceding the Enterprise
Termination Date or Sheffield Termination Date, as applicable, shall remain
constant at all times thereafter until such time as the Agent, on behalf of the
Company, Sheffield and the Bank Investors, as applicable, shall have received
its Aggregate Unpaids, in cash, at which time the Enterprise Percentage Factor
or Sheffield Percentage Factor, as applicable, shall be recomputed in
accordance with Section 2.6.
SECTION 2.3. Selection of Enterprise Tranche Periods, Sheffield
Tranche Periods, Enterprise Tranche Rates and Sheffield Tranche Rates.
(a) Prior to the Enterprise Termination Date or Sheffield
Termination Date.
(i) Transferred Interest held by Company. At all times hereafter, but
prior to the Enterprise Termination Date and not with respect to any portion of
the Transferred Interest held by the Bank Investors (or any of them), the
Transferor may, subject to the Company's approval and the limitations described
below, request Enterprise
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<PAGE> 51
Tranche Periods and allocate a portion of the Enterprise Net Investment to each
selected Enterprise Tranche Period, so that the aggregate amounts allocated to
outstanding Enterprise Tranche Periods at all times shall equal the Enterprise
Net Investment held by the Company. The Transferor shall give the Company
irrevocable notice by telephone of the new requested Enterprise Tranche Period
at least three (3) Business Days prior to the expiration of any then existing
Enterprise Tranche Period; provided, however, that the Company may select, in
its sole discretion, any such new Enterprise Tranche Period if (i) the
Transferor fails to provide such notice on a timely basis or (ii) the Company
determines, in its sole discretion, that the Enterprise Tranche Period
requested by the Transferor is commercially undesirable to the Company or the
Transferor. The Company confirms that it is its intention to allocate all or
substantially all of the Enterprise Net Investment held by it to one or more
Enterprise CP Tranche Periods; provided that the Company may determine, from
time to time, in its sole discretion, that funding such Enterprise Net
Investment by means of one or more Enterprise CP Tranche Periods is not
possible or is not desirable for any reason. If the Liquidity Provider
acquires from the Company a Purchased Interest with respect to the Receivables
pursuant to the terms of a Liquidity Provider Agreement, NationsBank, N.A.
"NationsBank" on behalf of such Liquidity Provider, may exercise the right of
selection granted to the Company hereby. The initial Enterprise Tranche Period
applicable to any such Purchased Interest shall be a period of not greater than
14 days and such Enterprise Tranche shall be an Enterprise BR Tranche.
Thereafter, provided that the Enterprise Termination Date shall not have
occurred, the Enterprise Tranche Period applicable thereto shall be the BR Rate
or the Eurodollar Rate, as determined by NationsBank. In the case of any
Enterprise Tranche Period outstanding upon the Enterprise Termination Date,
such Enterprise Tranche Period shall end on such date.
(ii) Transferred Interest held by Sheffield. At all times hereafter,
but prior to the Sheffield Termination Date, the Transferor may, subject to
Sheffield's approval and the limitations described below, request Sheffield
Tranche Periods and allocate a portion of the Sheffield Net Investment to each
selected Sheffield Tranche Period, so that the aggregate amounts allocated to
outstanding Sheffield Tranche Periods at all times shall equal the Sheffield
Net Investment held by Sheffield. The Transferor shall give Sheffield
irrevocable notice by telephone of the new requested Sheffield Tranche
Period(s) at least three (3) Business Days prior to the expiration of any then
existing Sheffield Tranche Period; provided, however, that Sheffield may
select, in
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<PAGE> 52
its sole discretion, any such new Sheffield Tranche Period if (i) the
Transferor fails to provide such notice on a timely basis or (ii) Sheffield
determines, in its sole discretion, that the Sheffield Tranche Period requested
by the Transferor is unavailable or commercially undesirable to Sheffield or
the Transferor. Sheffield confirms that it is its intention to allocate all or
substantially all of the Sheffield Net Investment held by it to one or more
Sheffield CP Tranche Periods; provided that Sheffield may determine, from time
to time, in its sole discretion, that funding such Sheffield Net Investment by
means of one or more Sheffield CP Tranche Periods is not possible or is not
desirable for any reason. In the case of any Sheffield Tranche Period
outstanding upon the Sheffield Termination Date, such Sheffield Tranche Period
shall end on such date.
(b) After the Termination Date; Transferred Interest Held by
Company. At all times on and after the Enterprise Termination Date, with
respect to any portion of the Transferred Interest which shall not have been
transferred to the Bank Investors (or any of them), the Company or NationsBank,
as applicable, shall select all Enterprise Tranche Periods and Enterprise
Tranche Rates applicable thereto.
(c) Prior to the Enterprise Termination Date; Transferred
Interest Held by Bank Investor. At all times with respect to any portion of
the Transferred Interest transferred to the Bank Investors (or any of them)
pursuant to Section 9.7, but prior to the Enterprise Termination Date, the
initial Enterprise Tranche Period applicable to such portion of the Enterprise
Net Investment allocable thereto shall be a period of not greater than 14 days
and such Enterprise Tranche shall be an Enterprise BR Tranche. Thereafter,
with respect to such portion, and with respect to any other portion of the
Transferred Interest held by the Bank Investors (or any of them), provided that
the Enterprise Termination Date shall not have occurred, the Enterprise Tranche
Period applicable thereto shall be, at the Transferor's option, either an
Enterprise BR Tranche or an Enterprise Eurodollar Tranche. The Transferor
shall give the Enterprise Agent irrevocable notice by telephone of the new
requested Enterprise Tranche Period at least three (3) Business Days prior to
the expiration of any then existing Enterprise Tranche Period. In the case of
any
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Enterprise Tranche Period outstanding upon the occurrence of a Termination
Date, such Enterprise Tranche Period shall end on the date of such occurrence.
(d) After the Sheffield Termination Date or Enterprise
Termination Date; Transferred Interest Held by Sheffield or Bank Investor. At
all times on and after the Enterprise Termination Date, with respect to any
portion of the Transferred Interest which shall have been owned or transferred
to the Bank Investors (or any of them), respectively, the Enterprise Agent
shall select all Enterprise Tranche Periods and Enterprise Tranche Rates
applicable thereto. At all times on and after the Sheffield Termination Date,
with respect to any portion of the Transferred Interest which shall have been
owned or transferred to Sheffield, Sheffield shall select all Sheffield Tranche
Periods and Sheffield Tranche Rates applicable thereto.
(e) Eurodollar Rate Protection; Illegality. (i) If the Agent is
unable to obtain on a timely basis the information necessary to determine the
LIBOR Rate for any proposed Enterprise Eurodollar Tranche or Sheffield
Eurodollar Tranche, then
(A) the Agent shall forthwith notify the Company, Sheffield or Bank
Investors, as applicable and the Transferor that the Eurodollar Rate cannot
be determined for such Enterprise Eurodollar Tranche or Sheffield
Eurodollar Tranche, and
(B) while such circumstances exist, none of the Company, Sheffield,
the Bank Investor or the Agent shall allocate the Enterprise Net Investment
or the Sheffield Net Investment of any additional Transferred Interests
purchased during such period or reallocate the Enterprise Net Investment or
the Sheffield Net Investment allocated to any then existing Enterprise
Tranche or Sheffield Tranche ending during such period, to an Enterprise
Eurodollar Tranche or Sheffield Eurodollar Tranche.
(ii) If, with respect to any outstanding Enterprise Eurodollar Tranche
or Sheffield Eurodollar Tranche, the Company, Sheffield or any of the Bank
Investors owning any Transferred Interest therein notifies the Agent that it is
unable to obtain matching deposits in
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the London interbank market to fund its purchase or maintenance of such
Transferred Interest or that the Eurodollar Rate applicable to such Transferred
Interest will not adequately reflect the cost to the Person of funding or
maintaining its respective Transferred Interest for such Enterprise Tranche
Period or Sheffield Tranche Period then the Agent shall forthwith so notify the
Transferor, whereupon neither the Agent nor the Company, Sheffield or the Bank
Investors, as applicable, shall, while such circumstances exist, allocate any
Enterprise Net Investment or Sheffield Net Investment of any additional
Transferred Interest purchased during such period or reallocate the Enterprise
Net Investment or the Sheffield Net Investment allocated to any Enterprise
Tranche Period or Sheffield Tranche Period ending during such period, to an
Enterprise Eurodollar Tranche or a Sheffield Eurodollar Tranche.
(iii) Notwithstanding any other provision of this Agreement, if the
Company, Sheffield or any of the Bank Investors, as applicable, shall notify
the Agent that such Person has determined (or has been notified by any
Liquidity Provider) that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful (either for the
Company, such Bank Investor, or such Liquidity Provider, as applicable), or any
central bank or other governmental authority asserts that it is unlawful, for
the Company, Sheffield, such Bank Investor or such Liquidity Provider, as
applicable, to fund the purchases or maintenance of Transferred Interests at
the Eurodollar Rate, then (x) as of the effective date of such notice from such
Person to the Agent, the obligation or ability of the Company, Sheffield or
such Bank Investor, as applicable, to fund its purchase or maintenance of
Transferred Interests at the Eurodollar Rate shall be suspended until such
Person notifies the Agent that the circumstances causing such suspension no
longer exist and (y) the Enterprise Net Investment or Sheffield Net Investment
of each Enterprise Eurodollar Tranche or Sheffield Eurodollar Tranche in which
such Person owns an interest shall either (1) if such Person may lawfully
continue to maintain such Transferred Interest at the Eurodollar Rate until the
last day of the applicable Enterprise Tranche Period or Sheffield Tranche
Period, be reallocated on the last day of such Enterprise Tranche Period or
Sheffield Tranche Period to another Enterprise Tranche Period or Sheffield
Tranche
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Period in respect of which the Enterprise Net Investment or Sheffield Net
Investment allocated thereto accrues discount at an Enterprise Tranche Rate or
Sheffield Tranche Rate other than the Eurodollar Rate or (2) if such Person
shall determine that it may not lawfully continue to maintain such Transferred
Interest at the Eurodollar Rate until the end of the applicable Enterprise
Tranche Period or Sheffield Tranche Period, such Person's share of the
Enterprise Net Investment or Sheffield Net Investment allocated to such
Eurodollar Tranche shall be deemed to accrue discount at the Base Rate from the
effective date of such notice until the end of such Enterprise Tranche Period
or Sheffield Tranche Period.
SECTION 2.4. Discount, Fees and Other Costs and Expenses.
Notwithstanding the limitation on recourse under Section 2.1 hereof, the
Transferor shall pay, as and when due in accordance with this Agreement, all
fees hereunder, Enterprise Discount and Sheffield Discount , all amounts
payable pursuant to Article VIII hereof, if any, and the Servicing Fees. On
the last day of each Enterprise Tranche Period and Sheffield Tranche Period,
the Transferor shall pay to the Agent, on behalf of the Company, Sheffield or
the Bank Investors, as applicable, an amount equal to the accrued and unpaid
Enterprise Discount and/or Sheffield Discount for such Enterprise Tranche
Period or Sheffield Tranche Period together with, in the event any portion of
the Transferred Interest is held by the Company, an amount equal to the
discount accrued on the Company's Commercial Paper to the extent such
Commercial Paper was issued in order to fund the Transferred Interest in an
amount in excess of the cash portion of the Transfer Price of an Incremental
Transfer, and together with, in the event any portion of the Transferred
Interest is held by Sheffield, an amount equal to any interest accrued on
advances made to Sheffield to the extent the proceeds of such advances were
used by Sheffield in order to fund the Transferred Interest in an amount equal
to the excess of the portion thereof funded by Sheffield's Commercial Paper.
Notwithstanding the foregoing, if agreed by the Transferor, the Agent and
Sheffield (with notice to the Collection Agent), the Transferor may remit
amounts in respect of Sheffield Discount directly to Sheffield. The Transferor
shall pay to the Agent, on behalf of the Company, on each day on which
Commercial Paper is issued by the Company, the Enterprise
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Dealer Fee. The Transferor shall pay to Sheffield, on each day on which
Commercial Paper is issued by Sheffield, the Sheffield Dealer Fee. All the
foregoing amounts may be paid out of Collections pursuant to Section 2.5 or
2.6, as applicable. Enterprise Discount shall accrue with respect to each
Enterprise Tranche on each day occurring during the Enterprise Tranche Period
related thereto. Sheffield Discount shall accrue with respect to each
Sheffield Tranche on each day occurring during the Sheffield Tranche Period
related thereto. Nothing in this Agreement shall limit in any way the
obligations of the Transferor to pay the amounts set forth in this Section 2.4.
SECTION 2.5. Non-Liquidation Settlement and Reinvestment Procedures.
On each day after the date of any Incremental Transfer but prior to the
Sheffield Termination Date with respect to Sheffield and the Enterprise
Termination Date with respect to the Company and the Bank Investors and
provided in either case that no Potential Termination Event shall have occurred
and be continuing, the Collection Agent shall out of the applicable Enterprise
Percentage Factor and Sheffield Percentage Factor of Collections received on or
prior to such day and not previously applied or accounted for: (i) set aside
and hold in trust for the Company or the Bank Investors, as applicable and
Sheffield (or deposit into the Collection Account if so required pursuant to
Section 2.12 hereof) an amount equal to all Enterprise Discount and Sheffield
Discount and the Servicing Fee accrued through such day and not so previously
set aside or paid and (ii) apply the balance of the Enterprise Percentage
Factor or Sheffield Percentage Factor of Collections remaining after
application of Collections as provided in clause (i) of this Section 2.5 hereof
to the Transferor, for the benefit of the Company or the Bank Investors, as
applicable, and Sheffield to the purchase of additional undivided percentage
interests in each Receivable pursuant to Section 2.2(b) hereof. On the last
day of each Enterprise Tranche Period and Sheffield Tranche Period, from the
applicable amounts set aside as described in clause (i) of the first sentence
of this Section 2.5 hereof, the Collection Agent shall deposit to the Agent's
account, for the benefit of the Company or the Bank Investors, as applicable,
and Sheffield an amount equal to the accrued and unpaid Enterprise Discount and
Sheffield Discount for such Enterprise Tranche Period or
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Sheffield Tranche Period and shall deposit to its own account an amount equal
to the accrued and unpaid Servicing Fee for such Enterprise Tranche Period or
Sheffield Tranche Period. The Agent, upon its receipt of such amounts in the
Agent's account, shall distribute such amounts to the Company and/or Sheffield
and the Bank Investors entitled thereto as set forth above; provided that if
the Agent shall have insufficient funds to pay all of the above amounts in full
on any such date, the Agent shall pay such amounts ratably (based on the
amounts owing to each such Person) to all such Persons entitled to payment
thereof. In addition, the Collection Agent shall remit to the Transferor at
the end of each Enterprise Tranche Period and Sheffield Tranche Period, such
portion of Collections not allocated to the Company, Sheffield and the Bank
Investors.
SECTION 2.6. Liquidation Settlement Procedures. If at any time on or
prior to the Enterprise Termination Date or the Sheffield Termination Date, the
Percentage Factor is greater than the Maximum Percentage Factor, then the
Transferor shall immediately pay to the Agent, for the benefit of the Company
or the Bank Investors, as applicable, and Sheffield from previously received
Collections, an amount equal to the amount such that, when applied in reduction
of the Net Investment, will result in a Percentage Factor less than or equal to
the Maximum Percentage Factor. Such amounts shall be applied pro rata to the
reduction of the Enterprise Net Investment of Enterprise Tranche Periods
selected by the Enterprise Agent and the Sheffield Net Investment of Sheffield
Tranche Periods selected by Sheffield. On the Sheffield Termination Date, with
respect to Sheffield, and the Enterprise Termination Date with respect to the
Company and the Bank Investors and on each day thereafter, and on each day on
which a Potential Termination Event has occurred and is continuing, the
Collection Agent shall set aside and hold in trust for the Company, Sheffield
and the Bank Investors, as applicable (or deposit into the Collection Account
if so required pursuant to Section 2.12 hereof) the Enterprise Percentage
Factor and the Sheffield Percentage Factor of all Collections received on such
day and shall set aside and hold in trust for the Transferor such portion of
Collections not allocated to the Company, Sheffield or the Bank Investors, as
applicable. On the Sheffield Termination Date, the Enterprise Termination Date
or the day on which
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a Potential Termination Event occurs, the Collection Agent shall deposit to the
Agent's account, for the benefit of the Company, Sheffield or the Bank
Investors, as applicable, any amounts set aside pursuant to Section 2.5(i)
above. On the last day of each Enterprise Tranche Period to occur on or after
the Enterprise Termination Date and the last day of each Sheffield Tranche
Period to occur on or after the Sheffield Termination Date, or in either case
during the continuance of a Potential Termination Event, the Collection Agent
shall deposit to the Agent's account, for the benefit of the Company, Sheffield
or the Bank Investors, as applicable, the amounts so set aside for the Company,
Sheffield or the Bank Investors pursuant to the second preceding sentence, but
not to exceed the sum of (i) the accrued Enterprise Discount or Sheffield
Discount for such Enterprise Tranche Period or Sheffield Tranche Period, as
applicable, (ii) the portion of the Enterprise Net Investment or Sheffield Net
Investment allocated to such Enterprise Tranche Period or Sheffield Tranche
Period, as applicable, and (iii) all other Aggregate Unpaids. On such day, the
Collection Agent shall deposit to its account, from the amounts set aside for
the Company, Sheffield and the Bank Investors pursuant to the preceding
sentence which remain after payment in full of the aforementioned amounts, the
accrued Servicing Fee for such Enterprise Tranche Period or Sheffield Tranche
Period. If there shall be insufficient funds on deposit for the Collection
Agent to distribute funds in payment in full of the aforementioned amounts, the
Collection Agent shall distribute funds first, in payment of the accrued
Enterprise Discount and Sheffield Discount, second, if the Transferor, WorldCom
or any Affiliate of the Transferor or WorldCom is not then the Collection
Agent, to the Collection Agent's account, in payment of the Servicing Fee
payable to the Collection Agent, third, in reduction of the Enterprise Net
Investment and Sheffield Net Investment allocated to any Enterprise Tranche
Period or Sheffield Tranche Period ending on such date, fourth, in payment of
all fees payable by the Transferor hereunder, fifth, in payment of all other
Aggregate Unpaids and sixth, if the Transferor, WorldCom or any Affiliate of
the Transferor or WorldCom is the Collection Agent, to its account as
Collection Agent, in payment of the Servicing Fee payable to such Person as
Collection Agent. The Agent, upon its receipt of such amounts in the Agent's
account, shall distribute such amounts to the
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Company and/or the Bank Investors and Sheffield entitled thereto as set forth
above; provided that if the Agent shall have insufficient funds to pay all of
the above amounts in full on any such date, the Agent shall pay such amounts in
the order of priority set forth above and, with respect to any such category
above for which the Agent shall have insufficient funds to pay all amounts
owing on such date, ratably (based on the amounts in such categories owing to
such Persons) among all such Persons entitled to payment thereof.
Following the date on which the Net Investment has been reduced to
zero, all accrued Enterprise Discount and Sheffield Discount and Servicing Fees
have been paid in full and all other Aggregate Unpaids have been paid in full,
(i) the Collection Agent shall recompute the Enterprise Percentage Factor and
the Sheffield Percentage Factor, (ii) the Agent, on behalf of the Company,
Sheffield and the Bank Investors, shall be considered to have reconveyed to the
Transferor all of the Company's, Sheffield's and the Bank Investors' right,
title and interest in and to the Affected Assets (including the Transferred
Interest), (iii) the Collection Agent shall pay to the Transferor any remaining
Collections set aside and held by the Collection Agent pursuant to the third
sentence of this Section 2.6 and (iv) the Agent, on behalf of the Company,
Sheffield and the Bank Investors, shall execute and deliver to the Transferor,
at the Transferor's expense, such documents or instruments as are necessary to
terminate the Company's, Sheffield's and the Bank Investors' respective
interests in the Affected Assets. Any such documents shall be prepared by or
on behalf of the Transferor. On the last day of each Enterprise Tranche Period
and Sheffield Tranche Period, the Collection Agent shall remit to