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EXHIBIT 10(r)(iv)
SUPPORT AGREEMENT
THIS SUPPORT AGREEMENT ("Agreement") is executed as of this
29th day of August, 1996 by LCI International, Inc., a Delaware corporation
("Parent") in favor of LCI SPC I, Inc., a Delaware corporation (the
"Transferor") (the Transferor and its respective successors and assigns are
referred to herein as the "SPC Parties").
PRELIMINARY STATEMENTS
1. The Transferor and LCI International Telecom Corp., a
Delaware corporation (in its individual capacity, being "LCI")(LCI and any
other Person that becomes a party to the RPA referred to below as a "Seller"
being collectively, the "Sellers" and each individually, a "Seller") have
executed that certain Receivables Purchase Agreement of even date herewith (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "RPA") pursuant to which the Transferor may, from time to time,
purchase Receivables from the Sellers.
2. The Transferor, LCI International Telecom Corp., a
Delaware corporation, as the initial collection agent (in such capacity, the
"Collection Agent"), Enterprise Funding Corporation, a Delaware corporation
(the "Company"), NationsBank, N.A. (the "Agent"), and the "Bank Investors"
have entered into that certain Transfer and Administration Agreement of even
date herewith (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the "TAA") pursuant to which the Company and/or the
Bank Investors may from time to time purchase percentage interests in the
Transferor's Receivables, including those Receivables purchased by the
Transferor from the Sellers pursuant to the RPA.
3. It is a condition precedent to the initial Purchase by the
Transferor under the RPA, and the initial Transfer under (and as such term is
defined in) the TAA that Parent execute this Agreement and deliver it to the
SPC Parties.
4. It is intended by the parties hereto that this Agreement
not create any recourse against the Sellers or Parent for the payment of any
uncollectible Receivable for which the Sellers (or any of them) would not
otherwise be liable under the RPA.
In consideration of the premises set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1. Definitions. Unless otherwise defined in this
Agreement, all defined terms used in this Agreement, including the Preliminary
Statements hereof, shall have the meanings ascribed to such terms in the RPA.
ARTICLE II
PERFORMANCE SUPPORT OBLIGATION
Section 2.01. Performance Support Obligation. Parent hereby
unconditionally and irrevocably guarantees for the benefit of each of the SPC
Parties, the due and punctual performance, observance and payment by each of
the Sellers and its respective successors and assigns of all of the terms,
covenants, conditions, agreements, undertakings, indemnities and obligations
(whether individually or as the Collection Agent, the Sub-Collection Agent or
otherwise) to be paid, performed or observed by such Seller under the RPA,
including, without limitation, under Articles II, V, VI and VII and Sections
8.05, 8.06 and 8.09 thereof (all such terms, covenants, conditions, agreements,
undertakings and obligations collectively called the "Sellers' Obligations").
In the event that any of the Sellers shall fail in any manner whatsoever to
perform, observe, or pay any of the Sellers' Obligations when the same shall be
required to be performed, observed or paid, then Parent will itself duly and
punctually perform, observe and pay, or cause to be duly and punctually
performed, observed or paid such Sellers' Obligations, and it shall not be a
condition to the accrual of the obligation of Parent hereunder to perform,
observe or pay any of the Sellers' Obligations (or to cause the same to be
performed, observed or paid) that the SPC Parties shall have first made any
request of or demand upon or given any notice to Parent or to the Sellers or
their respective successors and assigns or have initiated any action or
proceeding against Parent or the Sellers or any of their respective successors
and assigns in respect thereof. The SPC Parties may proceed to enforce the
obligations of Parent under this Section 2.01 without first pursuing or
exhausting any right or remedy which the SPC Parties may have against the
Sellers (or any of them), any other Person, the Receivables or any other
property. The SPC Parties hereby acknowledge that the Sellers' Obligations do
not (i) include any obligation of the Sellers to repurchase the Receivables
acquired by the Transferor under the RPA, except as described in Section
2.03(b) of the RPA or (ii) create recourse against the Sellers or Parent for
the payment of any Receivable which is uncollectible
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as a result of the lack of creditworthiness of the Obligor thereon, except to
the extent otherwise provided in the RPA.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of Parent.
Parent hereby represents and warrants, until this Agreement is terminated
pursuant to Section 5.06, as follows:
(i) Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and is duly qualified to do business, and is in good standing, in
every jurisdiction where the nature of its business requires it to be
so qualified, except where the failure to be so qualified would not
have a material affect on its ability to perform its obligations
hereunder.
(ii) The execution, delivery and performance by Parent
of this Agreement, and the transactions contemplated hereby, are
within Parent's corporate powers, have been duly authorized by all
necessary corporate action, do not contravene (A) Parent's charter or
by-laws, (B) any material law, rule or regulation applicable to
Parent, (C) any material contractual restriction contained in any
indenture, loan or credit agreement, lease, mortgage, security
agreement, bond, note or other agreement or instrument binding on
Parent or its property or (D) any order, writ, judgment, award,
injunction or decree binding on Parent or its property, except to the
extent that a contravention as described in clauses (B), (C) or (D)
would not materially adversely affect Parent's ability to perform its
obligations hereunder, and do not result in or require the creation of
any Adverse Claim upon or with respect to any of its properties.
(iii) The audited consolidated and the unaudited
consolidating balance sheets of the Parent and its consolidated
Subsidiaries, in each case, dated as of December 31, 1995, and the
consolidated and unconsolidated statements of income, cash flows and
changes in financial position relating thereto for the fiscal year
then ended, copies of which have been furnished to the Agent, fairly
present the financial condition of each such Persons as at such date
and the results of the operations and cash flows of each such Person
for the period ended on such date, all in accordance with generally
accepted accounting principles
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consistently applied. Since December 31, 1995, there has been no
material adverse change in the business, properties or condition
(financial or otherwise) of the Parent, any of the Sellers or any of
the foregoing's respective Subsidiaries.
(iv) This Agreement has been duly executed and delivered
on behalf of Parent and constitutes the legal, valid and binding
obligation of Parent enforceable against Parent in accordance with its
terms.
(v) Parent is the direct or indirect owner of one
hundred percent of the issued and outstanding capital stock of each of
the Sellers and the Transferor.
ARTICLE IV
COVENANTS
SECTION 4.01. Affirmative Covenants of Parent. During the
term of this Agreement, unless the Transferor shall otherwise consent in
writing:
(a) Financial Reporting. Parent covenants and
agrees that, until this Agreement is terminated pursuant to Section 5.06,
Parent shall maintain, for itself and each of its respective Subsidiaries, a
system of accounting established and administered in accordance with GAAP, and
furnish to the Agent:
(i) Annual Reporting. Within ninety
(90) days after the close of each Fiscal Year, audited financial
statements, prepared in accordance with GAAP on a consolidated and
consolidating basis (consolidating statements need not be audited by
such accountants) for itself and its its consolidated Subsidiaries, in
each case, including balance sheets as of the end of such period,
related statements of operations, shareholder's equity and cash flows,
accompanied by an unqualified audit report certified by independent
certified public accountants, acceptable to the Agent, prepared in
accordance with generally accepted auditing principles and any
management letter prepared by said accountants and by a certificate of
said accountants that, in the course of the foregoing, they have
obtained no knowledge of any Termination Event or Potential
Termination Event, or if, in the opinion of such accountants, any
Termination Event or Potential Termination Event shall exist, stating
the nature and status thereof.
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(ii) Quarterly Reporting. Within
forty-five (45) days after the close of the first three quarterly
periods of each of Fiscal Year, for itself and its consolidated
Subsidiaries, in each case, consolidated and consolidating unaudited
balance sheets as at the close of each such period and consolidated
and consolidating related statements of operations, shareholder's
equity and cash flows for the period from the beginning of such Fiscal
Year to the end of such quarter, all certified by its chief financial
officer.
(iii) Compliance Certificate. Together with
the financial statements required hereunder, a compliance certificate
signed by the Parent's chief financial officer stating that (x) the
attached financial statements have been prepared in accordance with
GAAP and accurately reflect the financial condition of the Parent and
its Subsidiaries, respectively and (y) to the best of such Person's
knowledge, no Termination Event or Potential Termination Event exists,
or if any Termination Event or Potential Termination Event exists,
stating the nature and status thereof and showing the computation of,
and showing compliance with, each of the financial ratios and
restrictions set forth in Section 7.1(r) of the TAA applicable to such
Person.
(iv) Shareholders Statements and
Reports. Promptly upon the furnishing thereof to the shareholders of
the Parent, copies of all financial statements, reports and proxy
statements so furnished.
(v) S.E.C. Filings. Promptly upon the
filing thereof, copies of all registration statements and annual,
quarterly, monthly or other regular reports which the Parent files
with the Securities and Exchange Commission.
(vi) Change in Debt Ratings. Within
five (5) days after the date of any change in the Parent's public or
private debt ratings, if any, written notice of such change and such
Person's credit rating after giving effect to such change.
(vii) Other Information. Such other
information (including non-financial information) as the Agent or the
Administrative Agent may from time to time reasonably request with
respect to the Parent, any of the Sellers, the Transferor or any
Subsidiary of any of the foregoing.
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(b) Compliance with Laws. Parent will comply
with all the laws, rules, regulations, orders, writs, judgments, injunctions,
decrees, awards, licenses and authorizations (including without limitation, FCC
Licenses and PUC Authorizations) to which it or its respective properties may
be subject.
(c) Merger Restrictions. Parent covenants and
agrees that, until this Agreement is terminated pursuant to Section 5.06,
Parent shall not merge or consolidate with any Person unless (i) Parent shall
be the surviving entity of any such merger or consolidation, (ii) such
surviving entity expressly assumes the obligations of Parent hereunder, (iii)
such merger or consolidation does not materially adversely affect Parent's
ability to perform hereunder, or (iv) no Termination Event or Potential
Termination Event shall occur as a result thereof.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Validity of Obligations. Parent agrees that
its obligations under this Agreement shall be unconditional, irrespective of
(i) the validity, enforceability, avoidance, subordination, discharge, or
disaffirmance by any Person (including a trustee in bankruptcy) of the Sellers'
Obligations, any of the Receivables, the TAA or the RPA, (ii) the absence of
any attempt to collect any Receivable from the Obligors related thereto or any
guarantor, or to collect the Sellers' Obligations from any applicable Seller or
any other Person, (iii) any law, regulation or order of any jurisdiction
affecting any term of any of the Sellers' Obligations, any Receivable, or the
rights of any of the SPC Parties with respect thereto, (iv) the failure by any
of the SPC Parties to take any steps to perfect and maintain perfected its
respective interest in any Receivable or other property acquired by any of the
SPC Parties from the Sellers or in any security or collateral related to the
Sellers' Obligations, (v) any exchange or release of any Receivable or other
property acquired by the SPC Parties from the Sellers, (vi) any failure to
obtain any authorization or approval from or other action by or to notify or
file with, any governmental authority or regulatory body required in connection
with the performance of the obligations hereunder by Parent or (vii) any
impossibility or impracticability of performance, illegality, force majeure,
any act of government, or other circumstances which might constitute a default
available to, or a discharge of the Sellers or Parent, or any other
circumstance, event or happening whatsoever whether foreseen or unforeseen and
whether similar to or dissimilar to anything referred to above. Parent
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further agrees that its obligations under this Agreement shall not be limited
by any valuation, estimation or disallowance made in connection with any
proceedings involving the Sellers filed under the Bankruptcy Code, whether
pursuant to Section 502 of the Bankruptcy Code or any other Section thereof.
Parent further agrees that none of the SPC Parties shall be under any
obligation to xxxxxxxx any assets in favor of or against or in payment of any
or all of the Sellers' Obligations. Parent further agrees that, to the extent
that any Seller makes a payment or payments to any of the SPC Parties, which
payment or payments (or any part thereof) are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to the Sellers, their estates, trustees or receivers or any other party,
including, without limitation, Parent, under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, the Sellers' Obligation or part thereof which had been paid,
reduced or satisfied by such amount shall be reinstated and continued in full
force and effect as of the date such initial payment, reduction or satisfaction
occurred. Parent waives all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor and notices
of acceptance of this Agreement. Parent's obligations under this Agreement
shall not be limited if the SPC Parties are precluded for any reason (including
without limitation, the application of the automatic stay under Section 362 of
the Bankruptcy Code) from enforcing or exercising any right or remedy with
respect to the Sellers' Obligations, and Parent shall pay to the SPC Parties,
upon demand, the amount of the Sellers' Obligations that would otherwise have
been due and payable had such rights and remedies been permitted to be
exercised.
SECTION 5.02. Irrevocability.
(a) Parent agrees that its obligations under this
Agreement shall be irrevocable and unconditional, notwithstanding any
amendment, restatement, supplement or other modification to any other
Transaction Document.
(b) Parent hereby waives notice and consent of
any such amendment, restatement, supplement or modification (other than with
respect to any such agreement to which it is a party), and shall be deemed upon
each and every such amendment, restatement, supplement or modification (i) to
have ratified and confirmed this Agreement and all of its obligations hereunder
(after giving effect to such amendments, restatements, supplements or
modifications) and (ii) to have acknowledged and agreed that this Agreement and
all of its obligations hereunder (after giving effect to such amendments,
restatements, supplements or modifications) shall continue in full force and
effect as against such person.
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(c) In the event that under applicable law
(notwithstanding Parent's agreement regarding the irrevocable nature of its
obligations hereunder), Parent shall have the right to revoke this Agreement,
this Agreement shall continue in full force and effect until a written
revocation hereof specifically referring hereto, signed by Parent is actually
received by the Transferor at its address set forth on the signature page
hereto (or as may otherwise be notified to the transferor by Parent). Any such
revocation shall not affect the right of any of the SPC Parties to enforce
their respective rights under this Agreement with respect to (i) any Seller
Obligation (including any Seller Obligation that is contingent or unmatured)
which arose on or prior to the date the aforementioned revocation was received
by the Transferor or (ii) any receivable which was a Receivable on the date the
aforementioned revocation was received by the Transferor. If any of the SPC
Parties acquire Receivables or take other action in reliance on this Agreement
after any such revocation by Parent but prior to the receipt by the Transferor
of said written notice, the rights of the SPC Parties with respect thereto
shall be the same as if such revocation had not occurred. Without limiting the
foregoing, this Agreement may not be revoked at any time on or after the
Termination Date.
SECTION 5.03. Waiver. Parent hereby waives promptness,
diligence, notice of acceptance, notice of default by the Sellers, notice of
the incurrence of any Seller Obligation and any other notice with respect to
any of the Sellers' Obligations, this Agreement, the TAA, the RPA, and/or any
other document related thereto and any requirement that the SPC Parties exhaust
any right or take any action against the Sellers, any other Person or any
property. Parent warrants to the SPC Parties that it has adequate means to
obtain from the Sellers on a continuing basis, all information concerning the
financial condition of the Sellers and the collectibility of the Receivables,
and that it is not relying on any of the SPC Parties to provide such
information either now or in the future.
SECTION 5.04. Subrogation. Parent will not exercise or
assert any rights which it may acquire by way of subrogation under this
Agreement unless and until all of the Sellers' Obligations shall have been paid
and performed in full and the Termination Date shall have occurred under the
RPA. If any payment shall be made to Parent on account of any subrogation
rights at any time prior to the occurrence of the events described in the
preceding sentence, each and every amount so paid will be held in trust for the
benefit of the SPC Parties and forthwith be paid to the Transferor to be
credited and applied to the Sellers' Obligations to the extent then
unsatisfied, in accordance with the terms of the RPA or any document delivered
in connection therewith.
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SECTION 5.05 Costs and Expenses. Parent shall pay all
reasonable costs and expenses including, without limitation, all court costs
and reasonable attorneys' fees and expenses paid or incurred by any of the SPC
Parties in connection with (a) the collection of all or any part of the
obligations of Parent hereunder or (b) the enforcement of any term or provision
of this Agreement.
SECTION 5.06. Binding Effect; Assignability. This Agreement
shall be binding upon Parent and upon the successors and assigns of Parent and
shall inure to the benefit of the respective successors and assigns of the SPC
Parties; all references herein to Parent and to the Sellers shall be deemed to
include their respective successors and assigns, such successors and assigns to
include, without limitation, a receiver, trustee or debtor-in-possession of or
for any such Person. Parent may not assign any of its rights and obligations
hereunder or any interest herein without the prior written consent of the
Transferor. Any of the SPC Parties may assign at any time its rights and
obligations hereunder and interests herein to any other Person without the
consent of Parent. Parent agrees that any assignee of the Transferor (to the
extent of its interest so assigned) shall have the right to enforce this
Agreement and to exercise directly all of the SPC Parties' rights and remedies
under this Agreement, and Parent agrees to cooperate fully with any such
assignee in the exercise of such rights and remedies. All references to the
singular shall be deemed to include the plural where the context so requires.
SECTION 5.07. Termination. This Agreement shall terminate
after the later to occur of (i) the date on which all the Sellers' Obligations
are fully and indefeasibly paid and/or performed in full in cash, and (ii) the
Termination Date under the RPA; provided, however, that if any payment in
respect of any Seller's Obligation is rescinded, set aside and/or required to
be repaid or returned to the Seller or Parent, whether as a fraudulent
conveyance, preference, or otherwise, such Seller's Obligation and the rights
and remedies of the SPC Parties under this Agreement shall be reinstated and
revived, and this Agreement shall be deemed to be in full force and effect
until such Seller's Obligation and all other Sellers' Obligations are fully and
indefeasibly paid and/or performed in full, in cash.
SECTION 5.08. Integration; Conditions. This Agreement
contains a final and complete integration of all prior expressions of the
parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings. No course of dealing, course of performance or
trade usage and no parol evidence shall be used to supplement or modify any
term hereof. This Agreement is fully effective as of the date set forth above.
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SECTION 5.09. GOVERNING LAW; SUBMISSION TO JURISDICTION;
WAIVER OF JURY TRIAL.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. PARENT HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. PARENT HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. NOTHING IN THIS SECTION 5.09 SHALL AFFECT THE RIGHT OF THE
COMPANY, ANY BANK INVESTOR, THE AGENT OR THE ADMINISTRATIVE AGENT TO
BRING ANY ACTION OR PROCEEDING AGAINST PARENT OR ITS PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTIONS.
(ii) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE AMONG ANY OF THEM ARISING OUT OF,
CONNECTED WITH, RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN
THEM IN CONNECTION WITH THIS AGREEMENT OR THE OTHER TRANSACTION
DOCUMENTS.
SECTION 5.10 Severability. Wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
SECTION 5.11. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.
SECTION 5.12 No Proceeding.
(a) No Bankruptcy Petition Against the Company.
Parent hereby covenants and agrees that, prior to the date which is one year
and one day after the payment in full of all outstanding Commercial Paper or
other indebtedness of the Company, it will not institute against, or join any
other Person
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in instituting against, the Company any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
(b) No Bankruptcy Petition Against the
Transferor. Parent hereby covenants and agrees that, prior to the date which
is one year and one day after the payment in full of the amounts owing under
the TAA, it will not institute against, or join any other Person in instituting
against, the Transferor any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings or other similar proceeding under the laws of the
United States or any state of the United States.
The provisions of this SECTION 5.12 shall survive the
termination of this Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed by
Parent as of the day and year first above written.
LCI INTERNATIONAL, INC.
By /s/ XXXX X. XXXXXX
--------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President - Finance
and Treasurer
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Attn.: Xxxx X. Xxxxxx
----------------
Telecopy: (000) 000-0000
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Telephone: (000) 000-0000
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Acknowledged and accepted
as of the date and year first
above written
LCI SPC I, INC.
By /s/ XXXX X. XXXXXX
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Attn.: Xxxxx Xxxxx
----------------
Telecopy: ( ) -
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Telephone: ( ) -
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