EXHIBIT 1
MCI COMMUNICATIONS CORPORATION
Debt Securities
UNDERWRITING AGREEMENT BASIC PROVISIONS
MCI Communications Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell its senior debt securities (the "Senior
Securities") and/or subordinated debt securities (the "Subordinated Securities"
and, together with the Senior Securities, the "Securities") in one or more
offerings on terms determined at the time of sale. The Senior Securities will be
issued under an Indenture dated as of February 17, 1995, as amended or
supplemented from time to time (the "Senior Indenture"), between the Company and
Citibank, N.A., as trustee (the "Senior Trustee"), and the Subordinated
Securities will be issued under an Indenture dated as of October 15, 1989, as
amended by the Trust Indenture Reform Act of 1990 (the "Subordinated Indenture",
and together with the Senior Indenture, the "Indentures"), between the Company
and Bankers Trust Company, as trustee (the "Subordinated Trustee", and together
with the Senior Trustee, the "Trustees"). Each issue of Securities may vary as
to aggregate principal amount, maturity date, currency, interest rate or formula
and timing of payments thereof, any redemption, repayment or sinking fund
requirements and any other variable terms as the Senior Indenture or the
Subordinated Indenture, as the case may be, contemplates and as may be set forth
in the Senior Securities or Subordinated Securities issued from time to time.
This is to confirm the arrangements with respect to the
purchase of Securities (the "Offered Securities") from the Company by one or
more Representatives (collectively, the "Representative") and the several
Underwriters (collectively, the "Underwriters") listed in the applicable terms
agreement (the "Terms Agreement") entered into between the Company and the
Representative, which Terms Agreement shall be substantially in the form of
Annex A hereto. With respect to any particular Terms Agreement, the Terms
Agreement, together with the provisions hereof incorporated therein by
reference, is referred to herein as the "Agreement".
The Company has filed with the Securities and Exchange
Commission (the "Commission") the registration statements on Form S-3 (Nos.
33-57155 and 333-11193) in respect of certain of the
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Company's debt securities under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"). Such registration statement has been declared effective by
the Commission and each of the Indentures has been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"). Such registration statement
(and any further registration statement which may be filed by the Company for
the purpose of registering additional debt securities and in connection with
which this Agreement is included or incorporated by reference as an exhibit) and
the prospectuses constituting a part thereof, and any prospectus supplement
relating to the Offered Securities, including all documents incorporated therein
by reference, as from time to time amended or supplemented by the filing of
documents pursuant to the Securities Exchange Act of 1934, as amended (the "1934
Act"), or the 1933 Act or otherwise, are collectively referred to herein as the
"Registration Statement" and the "Prospectus", respectively; provided, however,
that the supplement to the Prospectus relating to the Offered Securities shall
be deemed to have supplemented the Prospectus only with respect to the offering
of Offered Securities to which it relates.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to the Representative
and to each Underwriter named in the Terms Agree ment as of the date of such
Terms Agreement (the "Representation Date"), as follows:
(i) Due Incorporation and Qualification. The Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the state of its incorporation with
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus; and the
Company is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qual
ification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so
qualify would not have a material adverse effect on the condition,
financial or otherwise, or the earnings or business affairs of the
Company and its subsi diaries considered as one enterprise.
(ii) Subsidiaries. Each subsidiary of the Company which is a
significant subsidiary as defined in Rule 405 of Regulation C of the
1933 Act Regulations (each, a "Signifi cant Subsidiary") has been duly
incorporated and is validly
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existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus, and is duly qualified as a foreign
corporation to transact busi ness and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the
earnings or business affairs of the Company and its subsidiaries
considered as one enterprise; and all of the issued and outstanding
capital stock of each Significant Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and all such
shares owned by the Company, directly or through subsidiaries, are
owned free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or security (except for any lien or encumbrance
pursuant to the Indentures, the Revolving Credit Agreement, dated as of
July 8, 1994, between the Company and Bank of America National Trust
and Savings Association, as agent for the financial institutions party
thereto, the Indenture, dated as of October 15, 1989, between the
Company and Bankers Trust Company, as trustee, the Indenture, dated as
of October 15, 1989, between the Company and Citibank, N.A., as
trustee, and the Junior Subordinated Indenture, dated as of May 29,
1996, between the Company and Wilmington Trust Company, as trustee).
(iii) Registration Statement and Prospectus. At the time the
Registration Statement became effective, the Registration Statement
complied, and as of the Representa tion Date will comply, in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and the 1939 Act and the rules and regulations of the
Commission promulgated thereunder. The Registration State ment, at the
time it became effective, did not, and at each time thereafter at which
any amendment to the Registration Statement becomes effective and any
Annual Report on Form 10-K is filed by the Company with the Commission
and as of the Representation Date, will not, contain an untrue state
ment of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and the Prospectus, as of the Representation Date (unless
the term "Prospectus" refers to a prospectus which has been provided to
the Underwriters by the Company for use in connection with the offering
of the Offered Securities which differs from the Prospectus on file
with the Commission as of the Representation Date, in which case at the
time it is first provided to the
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Underwriters for such use) and at the Closing Time referred to in
Section 2 will not, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omis
sions from the Registration Statement or the Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by the Representative expressly for use in the
Registration Statement or Prospectus or to that part of the
Registration Statement which constitutes the Statements of Eligibility
under the 1939 Act (Form T-1) of the Trustees.
(iv) Incorporated Documents. The documents incorpo rated by
reference in the Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations promulgated thereunder (the "1934 Act Regulations"), and,
when read together and with the other information in the Prospectus,
did not and will not, as the case may be, include an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were or are made, not
misleading.
(v) Accountants. The accountants who certified the financial
statements included or incorporated by reference in the Prospectus are
independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(vi) Financial Statements. The financial statements of the Company
and its consolidated subsidiaries included or incorporated by reference
in the Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the consolidated results of
their operations for the periods specified; and, except as stated
therein, said financial statements have been prepared in conformity
with generally accepted accounting principles in the United States
applied on a consistent basis.
(vii) Material Changes. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein or contemplated thereby, there has
been no material adverse change in the condition, financial or
otherwise, or in the earnings or business affairs of the Company and
its subsi-
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diaries considered as one enterprise, whether or not arising
in the ordinary course of business.
(viii) No Defaults. Neither the Company nor any of its subsidiaries
is in violation of its charter or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which it is a party or by which it or any
of them or their properties is bound, except where such xxxxx tion or
default would not have a material adverse effect on the condition,
financial or otherwise, or the earnings or business affairs of the
Company and its subsidiaries con sidered as one enterprise; and the
execution and delivery of any applicable Terms Agreement to which this
Agreement is attached and forms a part thereof and the applicable
Indenture and the consummation of the transactions contem plated herein
and therein have been duly authorized by all necessary corporate action
and do not conflict with or constitute a breach of, or default under,
or result in the creation or imposition or violation of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to, (A) the charter or by-laws of the
Company, (B) any law, administrative regulation or administrative or
court order or decree applicable to the Company, (C) any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company or any such subsidiary is a party or by which it or
any of them is bound or to which any of the property or assets of the
Company or any such subsidiary is subject where, in the case of clause
(C), such conflict, breach or default, or creation, imposition or
violation, would have a material adverse effect on the condition,
financial or otherwise, or the earnings or business affairs of the
Company and its subsidiaries considered as one enterprise.
(ix) Legal Proceedings; Contracts. Except as set forth or
incorporated by reference in the Prospectus, there is no action, suit
or proceeding before or by any court or govern mental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened against or affecting the Company or any of its subsidiaries
which might, in the opinion of the Company, result in any material
adverse change in the condition, financial or otherwise, or in the
earnings or business affairs of the Company and its subsidiaries
considered as one enterprise, or might materi ally and adversely affect
the properties or assets thereof or might materially and adversely
affect the consummation of the transactions contemplated by this
Agreement, any
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applicable Terms Agreement or the applicable Indenture; and there are
no contracts or documents of the Company or any of its subsidiaries
which are required to be filed as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have not
been so filed or incorporated by reference as exhibits thereto.
(x) No Authorization, Approval or Consent Required. No
authorization, approval, consent, order or decree of any court or
governmental authority or agency is necessary in connection with the
sale of the Offered Securities, except those which have been obtained
prior to the execution and delivery of the applicable Terms Agreement
to which this Agreement is attached and forms a part thereof.
(xi) Regulatory Certificates, Authorities and Permits. The Company
and its subsidiaries possess such certificates, authorities or permits
issued by the appropriate state, federal or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them,
except where the failure to possess such certificates, authorities or
permits would not have a material adverse effect on the con dition,
financial or otherwise, or the earnings or business affairs of the
Company and its subsidiaries considered as one enterprise; and neither
the Company nor any of its sub sidiaries has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
materially and adversely affect the condition, xxxxx cial or otherwise,
or the earnings or business affairs of the Company and its subsidiaries
considered as one enter prise.
(xii) Authorization and Validity of the Offered Securities. The
Offered Securities have been duly author ized for issuance and sale
pursuant to this Agreement and any applicable Terms Agreement and, when
issued, authenti cated and delivered pursuant to the provisions of this
Agreement, such Terms Agreement and the applicable Indenture against
payment of the consideration therefor specified in such Terms
Agreement, such Offered Securities will consti tute valid and binding
obligations of the Company enforce able against it in accordance with
their terms, except as enforcement thereof may be limited by
bankruptcy, insol vency, or other similar laws relating to or affecting
enforcement of creditors' rights generally or by general equity
principles and except further as enforcement thereof may be limited by
(i) requirements that a claim with respect to Offered Securities
denominated other than in U.S. dollars
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(or a foreign currency or currency unit judgment in respect of such
claim) be converted into United States dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or (ii) any
statute, law, judgment, decree, order, regulation or rule of any court
or governmental authority that limits, delays or prohibits the making
of payments in a foreign currency or currency unit or payments outside
the United States; the Offered Securities will be in the form(s)
prescribed in or pursuant to the applicable Indenture, and the Offered
Securities and the applicable Indenture conform in all material
respects to all statements relating thereto contained in the
Prospectus; and each holder of Offered Securities will be entitled to
the benefits provided by the applicable Indenture.
(xiii) Authorization of this Agreement and Terms Agreement. This
Agreement and the applicable Terms Agree ment, as of the Representation
Date, will have been, duly authorized, executed and delivered by the
Company.
(xiv) Doing Business with Cuba. The Company has complied, and as of
the Representation Date will comply, with all of the provisions of
Section 517.075 of the Florida Statutes, and all rules and regulations
promulgated thereunder, relating to issuers doing business in Cuba.
(b) Additional Certifications. Any certificate signed by any
officer of the Company and delivered to the Representative or to counsel for the
Underwriters in connection with an offering of Offered Securities shall be
deemed a representation and war ranty by the Company to each Underwriter
participating in such offering as to the matters covered thereby on the date of
such certificate.
SECTION 2. Purchase and Sale.
(a) The obligations of the Underwriters to purchase, and the Company to
sell, the Offered Securities shall be evidenced by the Terms Agreement. The
several commitments of the Underwriters to purchase Offered Securities pursuant
to such Terms Agreement shall be deemed to have been made on the basis of the
represen tations and warranties herein contained and shall be subject to the
terms and conditions herein set forth. The Terms Agreement shall specify the
principal amount of the Senior Securities and/ or Subordinated Securities, the
names of the Underwriters parti cipating in the offering (subject to
substitution as provided in Section 10 hereof) and the principal amount of
Offered Securities which each Underwriter severally has agreed to purchase, the
purchase price to be paid by the Underwriters for the Offered Securities, the
initial public offering price, if any, of the
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Offered Securities, any delayed delivery arrangements and any terms of the
Offered Securities not already specified in the applicable Indenture pursuant to
which they are being issued (including, but not limited to, designations,
denominations, current ratings, interest rates or formulas and payment dates,
maturity dates, redemption and/or repayment provisions and sinking fund
requirements).
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and condi tions herein set forth, the Company
may grant, subject to any applicable laws or regulations, if so provided in the
Terms Agreement relating to the Offered Securities, an option to the
Underwriters named in such Terms Agreement, severally and not jointly, to
purchase up to the amount of Option Securities set forth therein at the same
price as is applicable to the Offered Securities. Such option, if granted, will
expire 30 days after the date of the applicable Terms Agreement relating to the
Offered Securities, and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in connection
with the offering and distribu tion of the Offered Securities upon notice by the
Representative to the Company setting forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time,
date and place of payment and delivery for such Option Securities. Any such time
and date of delivery (a "Date of Delivery") shall be determined by the
Representative, but shall not be later than three full business days after the
exer cise of said option, nor in any event prior to Closing Time, unless
otherwise agreed upon by the Representative and the Company. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of
Offered Securities each such Underwriter has agreed to pur chase as set forth in
the applicable Terms Agreement bears to the total number of Offered Securities,
subject to such adjustments as the Representative in its discretion shall make
to eliminate any sales or purchases of fractional Securities.
(c) Payment of the purchase price for, and delivery of, any Offered
Securities to be purchased by the Underwriters shall be made at the office of
Xxxxx & Xxxx LLP, Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as shall be agreed upon by the Representative and the Company, at
10:00 A.M., New York City time, on the third business day (unless postponed in
accordance with the provisions of Section 10) following the date of the
applicable Terms Agreement, or at such other time as shall be agreed upon by the
Representative and the Company (each such time and date being referred to herein
as a "Closing Time").
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In addition, in the event that notice of the exercise of the option to purchase
any or all of the Option Securities is given pursuant to subsection (b) of this
Section 2, payment of the purchase price for, and delivery of, such Option
Securities shall be made at the above-mentioned offices of Xxxxx & Wood LLP, or
at such other place as shall be agreed upon by the Representative and the
Company, on each Date of Delivery as specified in the notice from the
Representative to the Company. In either case, unless otherwise specified in the
applicable Terms Agreement, payment shall be made to the Company by a certified
or official bank check or checks in Federal or similar same-day funds payable to
the order of the Company against delivery to the Representative for the
respective accounts of the Underwriters of the Offered Securities to be
purchased by them. Such Offered Securities shall be in such denominations and
registered in such names as the Representative may request in writing at least
two business days prior to the applicable Closing Time or Date of Delivery, as
the case may be. The Offered Securities, which may be in temporary form, will be
made available for examination and packaging by the Representative on or before
the first business day prior to Closing Time or Date of Delivery, as the case
may be.
SECTION 3. Covenants of the Company.
The Company covenants with the Representative and with each
Underwriter participating in an offering of the Offered Securities, as follows:
(a) Preparation of Prospectus Supplement. Immediately
following the execution of the applicable Terms Agreement, the Company will
prepare a supplement to the Prospectus setting forth the principal amount of
Senior Securities or Subordinated Securities covered thereby, the terms of the
Offered Securities not otherwise specified in the applicable Indenture, the
names of the Underwriters participating in the offering and the principal amount
of the Offered Securities which each severally has agreed to purchase, the name
of the Underwriter or Underwriters acting as the Representative in connection
with the offering, the price at which the Offered Securities are to be purchased
by the Underwriters from the Company, the initial public offering price, the
selling concession and reallowance, if any, and such other information as the
Representative and the Company deem appropri ate in connection with the offering
of the Offered Securities. The Company will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424 of the
1933 Act Regulations and will furnish to the Underwriters named therein as many
copies of the Prospectus and such Prospectus Supplement as the Representative
shall reasonably request.
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(b) Notice of Certain Events. The Company will notify the
Representative immediately (i) of the effectiveness of any amendment to the
Registration Statement, (ii) of the transmittal to the Commission for filing of
any supplement to the Prospectus or any document to be filed pursuant to the
1934 Act which will be incorporated by reference in the Prospectus, (iii) of the
receipt of any comments from the Commission with respect to the Registration
Statement or the Prospectus, (iv) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose. The Company
will make every reasonable effort to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(c) Notice of Certain Proposed Filings. The Company will give
the Representative notice of its intention to file or prepare any amendment to
the Registration Statement (including any post-effective amendment or any
additional registration statement with respect to the registration of additional
debt securities of the Company) or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Offered Securities that
differs from the prospec tus on file with the Commission at the time the
Registration Statement became effective, whether or not such revised prospec tus
is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations, and
including the documents incorporated by reference into the Prospectus), whether
by the filing of docu ments pursuant to the 1934 Act, the 1933 Act or otherwise,
and will furnish the Representative with copies of any such amendment or
supplement a reasonable time in advance of such proposed filing or use, as the
case may be and will not file any such amendment or supplement or use any such
prospectus to which the Representative or counsel to the Underwriters shall
reasonably object.
(d) Copies of the Registration Statement and the Prospectus.
The Company will deliver to the Representative one signed copy and as many
conformed copies of the Registration Statement (as originally filed) and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated by reference in the Prospec tus) as
the Representative may reasonably request. The Company will furnish to the
Representative as many copies of the Prospectus (as amended or supplemented) as
the Representative shall reasonably request so long as the Underwriters are
required
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to deliver a Prospectus in connection with sales or solicitations of offers to
purchase the Offered Securities.
(e) Revisions of Prospectus -- Material Changes. If
at any time when the Prospectus is required by the 1933 Act to be
delivered in connection with sales of the Offered Securities any
event shall occur or condition exist as a result of which it is
necessary, in the reasonable opinion of counsel for the
Underwriters or counsel for the Company, to amend or supplement
the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered
to a purchaser, not misleading, then, after the receipt by the
Company of such opinion, the Company will forthwith amend or
supplement the Prospectus by either (i) preparing and furnishing
to the Representative a reasonable number of copies of an
amendment or amendments of, or a supplement or supplements to,
the Prospectus (in form and substance reasonably satisfactory to
counsel for the Underwriters) or (ii) making an appropriate
filing pursuant to Section 13 or 14 under the 1934 Act (in form
and substance reasonably satisfactory to counsel for the
Underwriters), so that, as so amended or supplemented, the
Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not
misleading, and the Company will furnish to the Representative a
reasonable number of copies of such amendment or supplement.
(f) Earnings Statements. The Company will make generally
available to its security holders as soon as practicable, but not later than 90
days after the close of the period covered thereby, an earnings statement (in
form complying with the provi sions of Rule 158 under the 0000 Xxx) covering
each twelve month period beginning, in each case, not later than the first day
of the Company's fiscal quarter next following the "effective date" (as defined
in such Rule 158) of the Registration Statement with respect to each sale of the
Offered Securities.
(g) Blue Sky Qualifications. The Company will endeavor, in
cooperation with the Representative, to qualify the Offered Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Representative may designate;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. The Company will file such
statements and reports as may be
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required by the laws of each jurisdiction in which the Offered Securities have
been qualified as provided above.
(h) 1934 Act Filings. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file all
documents required to be filed with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the 1934 Act on or before the time such documents are
required to be filed.
(i) Stand-Off Agreement. The Company will not, be tween the
date of any Terms Agreement and the applicable Closing Time, without the
Representative's prior written consent, offer or sell, or enter into any
agreement to sell, any debt securities of the Company (other than the Offered
Securities which are to be sold pursuant to such Terms Agreement, commercial
paper in the ordinary course of business and borrowings under the Company's
revolving credit facilities).
SECTION 4. Payment of Expenses.
The Company will pay all expenses incident to the per formance
of its obligations under this Agreement or any Terms Agreement, including:
(i) The preparation and filing of the Registration
Statement and all amendments thereto and the Prospectus and
any amendments or supplements thereto;
(ii) The preparation and filing of this Agreement and each Terms
Agreement;
(iii) The preparation, printing, issuance and delivery of the
Offered Securities, including any fees and expenses relating to the
issuance of Offered Securities in book-entry form;
(iv) The fees and disbursements of the Company's accountants and
counsel, of the applicable Trustee and its counsel, and of any issuing
and paying agent, calculation agent or exchange rate agent;
(v) The qualification of the Offered Securities under securities
laws in accordance with the provisions of Section 3(g), including the
reasonable fees and disbursements of counsel to the Underwriters (other
than filing fees) in connection therewith and in connection with the
preparation of any Blue Sky Survey and any Legal Investment Survey up
to a maximum of $10,000 for any series of Offered Securities and filing
fees;
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(vi) The printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registra tion Statement and any
amendments thereto, and of the Pro spectus and any amendments or
supplements thereto, and the delivery by the Underwriters of the
Prospectus and any amendments or supplements thereto in connection with
solic itations or confirmations of sales of Offered Securities;
(vii) The preparation and delivery to the Underwriters of copies of
the applicable Indenture;
(viii) Any fees charged by rating agencies for the rating of the
Offered Securities; and
(ix) The fees and expenses, if any, incurred with respect to any
filing with the National Association of Securities Dealers, Inc.
If the applicable Terms Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or clause (i) of
Section 9 hereof, the Company shall reimburse the Underwriters named in such
Terms Agreement for all of their out-of-pocket expenses, including the
reasonable fees and disburse ments of counsel for such Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the Underwriters hereunder are sub ject to
the accuracy of the representations and warranties of the Company herein
contained, to the performance by the Company in all material respects under the
then pertaining circumstances of its obligations hereunder, and to the following
further condi tions:
(a) At the applicable Closing Time, no stop order suspend ing the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission.
(b) At the applicable Closing Time, the Representative shall have
received:
(1) Opinion of Company Counsel. The opinion of Kramer, Levin,
Naftalis & Xxxxxxx, counsel to the Company, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware.
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(ii) The Company has the corporate power and authority to
own, lease and operate its properties and conduct its business
as described in the Registration Statement.
(iii) This Agreement and the applicable Terms Agreement
have each been duly authorized, executed and delivered by the
Company.
(iv) The Indenture under which the Offered Securities are
to be issued has been duly and validly authorized, executed
and delivered by the Company and (assuming such Indenture has
been duly authorized, exe cuted and delivered by the
applicable Trustee) consti tutes a valid and binding agreement
of the Company, enforceable against it in accordance with its
terms, except that (i) enforceability may be limited by bank
ruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and by gen eral
principles of equity and (ii) the remedy of speci fic
performance and injunctive and other forms of equi table
relief are subject to certain equitable defenses and to the
discretion of the court before which any proceeding therefor
may be brought, and except further as enforcement thereof may
be limited by (A) require ments that a claim with respect to
Offered Securities denominated other than in U.S. dollars (or
a foreign currency or foreign currency unit judgment in
respect of such claim) be converted into United States dollars
at a rate of exchange prevailing on a date determined pursuant
to applicable law or (B) any statute, law, judgment, decree,
order, regulation or rule of any court or governmental
authority that limits, delays or prohibits the making of
payments in a foreign currency or currency unit or payments
outside the United States.
(v) The Offered Securities, in the form(s) certified
by the Company to be a true and correct copy, are in the
form(s) prescribed in or pursuant to the applicable Indenture,
have been duly and validly authorized by all necessary
corporate action on the part of the Company and, when executed
and authenti cated as specified in or pursuant to the
applicable Indenture and delivered against payment of the con
sideration therefor determined in accordance with this
Agreement and the applicable Terms Agreement, will be valid
and binding obligations of the Company, enforce able against
it in accordance with their terms, except that (i)
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws
14
affecting creditors' rights generally and by general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law) and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief are subject to
certain equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought, and
except further as enforce ment thereof may be limited by (A)
requirements that a claim with respect to Offered Securities
denominated other than in U.S. dollars (or a foreign currency
or foreign currency unit judgment in respect of such claim) be
converted into United States dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or
(B) any statute, law, judgment, decree, order, regulation or
rule of any court or governmental authority that limits,
delays or prohibits the making of payments in a foreign
currency or currency unit or payments outside the United
States; and each holder of Offered Securities will be entitled
to the benefits of the applicable Indenture.
(vi) The statements in the Prospectus under the captions
"Description of Debentures", "Description of Senior
Securities" or "Description of Subordinated Securities", as
the case may be, and "Federal Income Tax Consequences",
insofar as they purport to summarize certain provisions of
documents specifically referred to therein, are accurate
summaries of such provisions in all material respects.
(vii) The applicable Indenture is qualified under the 1939
Act.
(viii) The Registration Statement is effective under the
1933 Act and, to the best of such counsel's knowl edge, no
stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(ix) At the time the Registration Statement became
effective and at the Representation Date, the Registra tion
Statement (other than the financial statements and notes
thereto and related schedules and other financial and
statistical data included or incorporated by reference therein
or omitted therefrom) complied as to form in all material
respects with the requirements of the 1933 Act, the 1939 Act
and the regulations of the Commission under each of those
Acts.
15
(x) No authorization, approval, consent, order or
decree of any United States or Delaware court or gov ernmental
authority or agency is necessary in connec tion with the sale
of the Offered Securities, except such as may be required
under the 1933 Act, the 1939 Act, the regulations of the
Commission promulgated under each of those Acts or state
securities or Blue Sky laws.
(xi) Each document filed pursuant to the 1934 Act and
incorporated by reference in the Prospectus (other than the
financial statements and notes thereto and related schedules
and other financial and statistical data included or
incorporated by reference therein or omitted therefrom)
complied when filed as to form in all material respects with
the 1934 Act and the 1934 Act Regulations thereunder.
(xii) The execution and delivery of the applicable Terms
Agreement to which this Agreement is attached and forms a part
thereof and the applicable Indenture and the consummation of
the transactions contemplated herein and therein do not
conflict with or result in any violation of the provisions of
the charter or by-laws of the Company.
(2) Opinion of General Counsel. The opinion of the General
Counsel of the Company to the effect that:
(i) To the best of such counsel's knowledge, the
Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which
such qualification is required, except where the failure to so
qualify would not have a material adverse effect on the
Company and its subsidiaries considered as one enterprise.
(ii) Each Significant Subsidiary of the Company has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own, lease and operate its properties and conduct
its business as described in the Registration Statement, and,
to the best of such counsel's knowledge, is duly qualified as
a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualifica tion is
required, except where the failure to so quali fy would not
have a material adverse effect on the Company and its
subsidiaries considered as one enter-
16
prise; all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly
issued and is fully paid and non-assessable, and all of such
capital stock owned by the Company, directly or through
subsidiaries, is owned free and clear of any mortgage, pledge,
lien, encum brance, claim or equity (except for any lien or
encum brance pursuant to the Indentures, the Revolving Credit
Agreement, dated as of July 8, 1994, between the Company and
Bank of America National Trust and Savings Association, as
agent for the financial institutions party thereto, the
Indenture, dated as of October 15, 1989, between the Company
and Bankers Trust Company, as trustee, the Indenture, dated as
of October 15, 1989, between the Company and Citibank, N.A.,
as trustee, and the Junior Subordinated Indenture, dated as of
May 29, 1996, between the Company and Wilmington Trust
Company, as trustee).
(iii) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened which
are required to be disclosed in the Prospectus, other than
those disclosed therein, and all pending legal or governmental
proceedings to which the Company or any subsidiary is a party
or of which any of their property is the subject which are not
described in the Registration Statement, including ordinary
routine litigation incidental to the business, are, in the
aggregate, not material to the Company and its subsidiaries
considered as one enterprise.
(iv) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments or docu ments required to be
described or referred to in the Registration Statement or to
be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as
exhi bits thereto, the descriptions thereof or references
thereto are correct in all material respects, and no default
exists in the due performance or observance of any material
obligation, agreement, covenant or condi tion contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument so described, referred to, filed or
incorporated by refer ence which would have a material adverse
effect on the Company and its subsidiaries considered as one
enterprise.
17
(v) To the best of such counsel's knowledge, the
execution and delivery of the applicable Terms Agreement to
which this Agreement is attached and forms a part thereof and
the applicable Indenture and the consummation of the
transactions contemplated herein and therein do not conflict
with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance
upon any material property or assets of the Company or any of
its subsidiaries pursuant to, any material contract,
indenture, mortgage, loan agreement, note, lease or other
instrument known to such counsel and to which the Company or
any of its subsidiaries is a party or by which it or any of
them is bound or to which any of the material property or
assets of the Company or any of its subsidiaries is subject,
or any material United States or Delaware law, administrative
regulation or administrative or court order or decree known to
such counsel to be applicable to the Company of any United
States or Delaware court or governmental agency, authority or
body or any arbitrator having jurisdiction over the Company.
(3) Opinion of Counsel to the Company Relating to the Communications
Act. The opinion of the General Counsel of the Company, or other counsel to the
Company satisfactory to the Underwriters, to the effect that, under the
Communications Act of 1934, as amended, or the Telecommunications Act of 1996
(collectively, the "Communications Act") (as to which matters the opinions
required pursuant to subsection (b)(1) (and (b)(2), if the General Counsel of
the Company is not rendering the opinions required by this subsection (b)(3) of
this Section 5) of this Section 5 shall not cover):
(i) Nothing in the Communications Act prevents, impairs,
limits or otherwise adversely affects (i) the due and valid
authorization, execution and delivery of the Offered Securities or the
applicable Indenture, (ii) the valid and binding nature or
enforceability of any of the provisions of the Offered Securities or
the applicable Indenture or (iii) any holder of Offered Securities from
being entitled to the benefits of the applicable Indenture.
(ii) To the best of such counsel's knowledge, under the
Communications Act there are no legal or governmental pro ceedings
pending or threatened which are required to be disclosed in the
Prospectus, other than those disclosed therein, and all pending legal
or governmental proceedings to which the Company or any subsidiary is a
party or of which any of their property is the subject which are not
18
described in the Registration Statement, including ordinary routine
litigation incidental to the business, are, in the aggregate, not
material to the Company and its subsidiaries considered as one
enterprise.
(iii) Insofar as such relates to the Communications Act, no
authorization, approval, consent, order or decree of any court or
governmental authority or agency is necessary in connection with the
sale of the Offered Securities; and, to the best of such counsel's
knowledge, the execution and delivery of the applicable Terms Agreement
to which this Agreement is attached and forms a part thereof and the
applicable Indenture and the consummation of the transac tions
contemplated herein and therein do not conflict with, violate or result
in the creation or imposition of any lien, charge or encumbrance upon
any material property or assets of the Company or any of its
subsidiaries pursuant to the Communications Act or any administrative
regulations there under.
(4) Opinion of Counsel to the Underwriters. The opinion of
Xxxxx & Xxxx LLP, counsel to the Underwriters, with respect to such
matters as the Representative may reasonably request.
(5) Rule 10b-5 Opinion. In giving their opinions required by
subsections (b)(1), (b)(2), (b)(3) and (b)(4), respectively, of this
Section 5, Kramer, Levin, Naftalis & Xxxxxxx, the General Counsel of
the Company, counsel rendering the opinions required by subsection
(b)(3) (as to any matters under the Communications Act) and Xxxxx &
Wood LLP shall each additionally state that nothing has come to their
attention that has caused them to believe that the Registration
Statement (other than the financial statements and notes thereto and
related schedules and other financial and statistical data included or
incorporated by reference therein or omitted therefrom and the
Statements of Eligibility of the Trustees on Form T-1, as to which such
counsel need not express any belief), at the time it became effective
or (if an amendment to the Registration Statement or an Annual Report
on Form 10-K has been filed by the Company with the Commission
subsequent to the effectiveness of the Registration Statement) at the
time such amendment became effective or at the time of the most recent
such filing, or at the Representation Date, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (other than the financial
statements and notes thereto and related schedules and other financial
and statistical data
19
included or incorporated by reference therein or omitted therefrom), at
the Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the Company
for use in connection with the offering of the Offered Securities that
differs from the Prospectus on file at the Commission as of the
Representation Date, in which case at the time it is first provided to
the Underwriters for such use) or at Closing Time, included or includes
an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(c) Officer's Certificate. At the applicable Closing Time,
there shall not have been, since the date of the applicable Terms Agreement or
since the respective dates as of which infor mation is given in the Registration
Statement and the Prospectus, any material adverse change in the condition,
financial or other wise, or in the earnings or business affairs of the Company
and its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business; and the Representa tive shall have received (1) a
certificate of the Chief Financial Officer and the Treasurer of the Company,
dated as of such Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the other representations and warranties of the
Company contained in Section 1 are true and correct with the same force and
effect as though expressly made at and as of the date of such Closing Time,
(iii) the Company has in all material respects complied with all agreements and
satis fied all conditions on its part to be performed or satisfied at or prior
to such Closing Time and (iv) to such officers' knowl edge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or threatened by the
Commission and (2) a certificate of the Chief Financial Officer or the
Controller of the Company, dated as of such Closing Time, to the effect that
there was no material decrease, on a consolidated basis, in the net assets of
the Company at a specified date not more than five days prior to the date of
such certificate, as compared with the amounts shown on the most recent
consolidated balance sheet of the Company incorporated by reference in the
Registration Statement and the Prospectus or, during the period from the date of
such balance sheet to a specified date not more than five days prior to the date
of such certificate, there were no material decreases, as compared with the
corresponding period in the preceding year, on a consolidated basis, in the
revenue or net income of the Company, except in each such case as set forth in
or contemplated by the Registration Statement and the Prospectus and except for
such exceptions enumerated in such
20
certificate as shall have been agreed to by the Representative
and the Company.
(d) Comfort Letter. Prior to the close of business on the
first business day succeeding the date of the applicable Terms Agreement, the
Representative shall have received a letter from Price Waterhouse LLP or their
successors as the Company's independent accountants (the "Independent
Accountants"), dated the date of such Terms Agreement, in form and substance
satis factory to the Representative, to the effect that:
(i) they are independent public accountants with respect to
the Company and its subsidiaries within the meaning of the 1933 Act and
the 1933 Act Regulations;
(ii) in their opinion, the consolidated financial statements of the
Company audited by them and incorporated by reference in the
Registration Statement and the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act and the 1933 Act Regulations with respect to registration
statements on Form S-3 or the 1934 Act and the 1934 Act Regulations;
(iii) they have performed specified procedures, not constituting an
audit, including a reading of the latest available interim unaudited
consolidated financial informa tion of the Company, a reading of the
minute books of the Company since the end of the most recent year with
respect to which an audit report has been issued, inquiries of and
discussions with certain officials of the Company responsi ble for
financial and accounting matters with respect to the unaudited
consolidated financial statements incorporated by reference in the
Registration Statement and the Prospectus and the latest available
interim unaudited consolidated financial information of the Company and
such other inquiries and procedures as may be specified in such letter,
and on the basis of such inquiries and procedures nothing came to their
attention that caused them to believe that: (A) the unaudited
consolidated financial statements of the Company incorporated by
reference in the Registration Statement and the Prospectus do not
comply as to form in all material respects with the applicable
accounting require ments of the 1934 Act and the 1934 Act Regulations
or that any material modifications should be made to such unaudited
consolidated financial statements for them to be in conform ity with
generally accepted accounting principles, (B) at the date of the latest
available interim unaudited xxxxxxx dated financial information, there
was any decrease in the consolidated capital stock or any increase in
consolidated
21
long-term debt of the Company or any decrease in the consolidated net
assets of the Company, in each case as compared with the amounts shown
on the most recent con solidated balance sheet of the Company
incorporated by reference in the Registration Statement and the
Prospectus or, during the period from the date of such balance sheet to
the date of the latest available interim unaudited xxxxxxx dated
financial information, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated revenues or
net income of the Company, except in each such case as set forth in or
contemplated by the Registration Statement and the Prospectus or except
for such exceptions enumerated in such letter as shall have been agreed
to by the Representative and the Company or (C) at a specified date not
more than five days prior to the date of such letter, there was any
decrease of 5% or more in the consolidated capital stock or any
increase of 5% or more in consolidated debt of the Company consisting
of commercial paper, bank borrowings or publicly registered debt, in
each case as compared with the amounts shown on the most recent
consolidated balance sheet of the Company, except in each such case as
set forth in or contemplated by the Registration Statement and the
Prospectus or except for such exceptions enumerated in such letter as
shall have been agreed to by the Representative and the Company;
(iv) the letter shall also state that they have:
(A) Compared the dollar amounts set forth under
the columns under the captions "Capitaliza
tion" and "Selected Consolidated Financial
Data" to the appropriate consolidated state
ments of operations included in the Company's
Annual Reports to Stockholders and the quar
terly reports on Form 10-Q, or to accounts in
the Company's accounting records subject to
its system of internal accounting controls
and to schedules prepared by the Company
therefrom, as appropriate;
(B) Compared the dollar amounts set forth under
the caption "Recent Developments", if any, to
the appropriate unaudited consolidated state
ments of operations of the Company; and
(C) Compared the dollar amounts set forth under
the columns in the exhibit "Computation of
Ratio of Earnings to Fixed Charges" to the
appropriate consolidated statements of oper
ations and disclosures included in the
22
Company's Annual Reports to Stockholders and
the quarterly reports on Form 10-Q, or to
accounts in the Company's accounting records
and to schedules prepared by the Company
therefrom, as appropriate, and computed the
ratios set forth in the same exhibit.
(v) In addition to the examination referred to in their report
included or incorporated by reference in the Registration Statement and
the Prospectus, and the limited procedures referred to in clauses (iii)
and (iv) above, they have carried out certain other specified
procedures, not constituting an audit, with respect to certain amounts,
percentages and financial information which are included or
incorporated by reference in the Registration Statement and the
Prospectus and which are specified by the Representa tive, and have
found such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other records of
the Company and its subsidi aries identified in such letter.
(e) Bring-Down Comfort Letter and Certificate. At the
applicable Closing Time, the Representative shall have received
from the specified officers of the Company a certificate, and
from the Independent Accountants a letter, each dated as of such
Closing Time, to the effect that they each reaffirm the state
ments made in the certificate furnished pursuant to subsection
(c)(2) and the letter furnished pursuant to subsection (d) of
this Section 5, respectively, except that the "specified date"
referred to shall be a date not more than five days prior to
Closing Time.
(f) Other Documents. At the applicable Closing Time, counsel
for the Underwriters shall have been furnished with such documents and opinions
as such counsel may reasonably require for the purpose of enabling such counsel
to pass upon the issuance and sale of Offered Securities as herein contemplated
and related proceedings, or in order to evidence the accuracy and complete ness
of any of the representations and warranties, or the ful fillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of Offered Securities as herein
contemplated shall be reasonably satisfactory in form and substance to the
Represen tative and to counsel for the Underwriters.
(g) Option Securities. In the event the Underwriters exercise
their option provided in the applicable Terms Agreement as set forth in Section
2(b) hereof to purchase all or any por tion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certif icates furnished by the Company hereunder shall be true
and cor rect as of each Date of Delivery, and the Representative shall have
received:
23
(1) A certificate of the Chief Financial Officer and Treasurer
of the Company, dated such Date of Delivery, confirming that the
certificate delivered at Closing Time pursuant to Section 5(c)(1)
hereof remains true and correct as of such Date of Delivery.
(2) The opinion of Kramer, Levin, Naftalis & Xxxxxxx, Counsel
for the Company, in form and substance reasonably satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to
the Option Securities and otherwise to the same effect as the opinion
required by Section 5(b)(1) and (b)(5) hereof.
(3) The opinion of the General Counsel of the Company, in form
and substance reasonably satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities and
otherwise to the same effect as the opinion required by Section 5(b)(2)
and (b)(5) hereof.
(4) The opinion of counsel to the Company relating to matters
under the Communications Act, in form and substance reasonably
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and otherwise to the same
effect as the opinion required by Section 5(b)(3) and (b)(5) hereof.
(5) The favorable opinion of Xxxxx & Wood LLP, Counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Section 5(b)(4) and (b)(5) hereof.
(6) A certificate of the specified officers of the Company and
a letter from the Independent Accountants, in form and substance
satisfactory to the Representative, each dated such Date of Delivery,
substantially the same in scope and substance as the certificate and
letter furnished to the Representative pursuant to Section 5(e) hereof,
except that the "specified date" in the letter furnished pursuant to
this Section 5(g)(6) shall be a date not more than five days prior to
such Date of Delivery.
(h) If any condition specified in this Section 5 shall not
have been fulfilled when and as required to be fulfilled, the applicable Terms
Agreement may be terminated by the Representa tive by notice to the Company at
any time at or prior to the applicable Closing Time, and such termination shall
be without
24
liability of any party to any other party, except that the covenant set forth in
Section 3(f) hereof, the provisions of Section 4 hereof, the indemnity and
contribution agreements set forth in Sections 6 and 7 hereof, and the provisions
of Sections 8, 12 and 13 hereof shall remain in effect.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amend ment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or neces sary to make the statements therein not misleading or
aris ing out of any untrue statement or alleged untrue statement of a
material fact included in the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circum stances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such settle ment is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever (including, subject to
Section 6(c) hereof, the reasonable fees and disbursements of counsel
chosen by the Underwriters), as incurred, reasonably incurred in
investigating, preparing or defending against any litigation, or
investigation or pro ceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent
25
arising out of any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written information
furnished to the Company by the Repre sentative expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supple ment thereto), or made in reliance upon the Statements of
Eligibility under the 1939 Act of the Trustees filed as an exhibit to the
Registration Statement; provided, further, that if it shall ultimately be
determined that the Underwriters are not entitled to be indemnified by the
Company, the Underwriters shall repay to the Company any sums paid to the
Underwriters by the Company pursuant to this Section 6.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section 6, as incurred, but only
with re spect to untrue statements or omissions, or alleged untrue state ments
or omissions, made in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supple ment thereto) in reliance upon and in
conformity with written information furnished to the Company by the
Representative ex pressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto);
provided, however, that if it shall ultimately be determined that the Company is
not entitled to be indemnified by the Underwriters, the Company shall repay to
the Underwriters any sums paid to the Company by the Underwriters pursuant to
this Section 6.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liabil ity which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own ex pense in the
defense of such action. In no event shall the indemnifying parties be liable for
the fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
SECTION 7. Contribution.
26
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 6 is for
any reason held to be unenforceable by the in demnified parties although
applicable in accordance with its terms, the Company and the Underwriters with
respect to the Offered Securities shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contem plated by said
indemnity agreement incurred by the Company and one or more of the Underwriters
in respect of such offering, as incurred, in such proportions that such
Underwriters are responsible for that portion represented by the percentage that
the underwriting discount appearing on the cover page of the Prospectus in
respect of such offering bears to the initial public offering price appearing
thereon and the Company is responsible for the balance; provided, however, that
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepre sentation. For purposes of this Section,
each person, if any, who controls an Underwriter within the meaning of Section
15 of the 1933 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act shall have the same
rights to contri bution as the Company.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery.
All representations, warranties and agreements con tained in
this Agreement or any Terms Agreement, or contained in certificates of officers
of the Company submitted pursuant here to, shall remain operative and in full
force and effect, regard less of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Offered Securities.
SECTION 9. Termination of Agreement.
The Representative may terminate the applicable Terms
Agreement, immediately upon notice to the Company, at any time at or prior to
the applicable Closing Time (i) if there has been, since the date of such Terms
Agreement or since the respective dates as of which information is given in the
Registration State ment and the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordi-
27
nary course of business, or (ii) if there shall have occurred any material
adverse change in the financial markets in the United States or any outbreak or
escalation of hostilities or other national or international calamity or crisis,
the effect of which shall be such as to make it, in the reasonable judgment of
the Representative, impracticable to market the Offered Securities or enforce
contracts for the sale of the Offered Securities, or (iii) if trading in any
securities of the Company shall have been suspended by the Commission or a
national securities exchange, or if trading generally on either the American
Stock Exchange or the New York Stock Exchange shall have been suspended, or
minimum or maximum prices for trading shall have been fixed, or maximum ranges
for prices for securities shall have been required, by either of said exchanges
or by order of the Commission or any other governmental authority, or if a
banking moratorium shall have been declared by either Federal or New York
authorities, or (iv) if the rating assigned by any nationally recognized securi
ties rating agency to any debt securities of the Company as of the date of any
applicable Terms Agreement shall have been lowered since that date of such Terms
Agreement or if any such rating agency shall have publicly announced that it has
placed any debt securities of the Company on what is commonly termed a "watch
list" for possible downgrading, or (v) if there shall have come to the
Representative's attention any facts that would cause the Representative
reasonably to believe that the Prospectus, at the time it was required to be
delivered to a purchaser of Offered Securities, included an untrue statement of
a material fact or omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances existing at the time of
such delivery, not misleading. In the event of any such termination, (x) the
covenants set forth in Section 3 with respect to any offering of Offered
Securities shall remain in effect so long as any Underwriter owns any such
Offered Securities purchased from the Company pursuant to the applicable Terms
Agreement and (y) the covenant set forth in Section 3(f) hereof, the provisions
of Section 4 hereof, the indemnity and contribution agreements set forth in
Sections 6 and 7 hereof, and the provisions of Sections 8, 12 and 13 hereof
shall remain in effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters participating in an
offering of Offered Securities shall fail at the applicable Closing Time to
purchase the Offered Securities which it or they are obligated to purchase
hereunder and under the applicable Terms Agreement (the "Defaulted Securities"),
then the Represen tative shall have the right, within the first 24 hours there
after, to make arrangements for one or more of the non-defaulting Underwriters,
or any other underwriters, to purchase all, but not
28
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, within such first 24 hour period, the
Representative is unable to make arrangements for the purchase of all of the
Defaulted Securities, then the Company shall have the right, within the next 24
hours thereafter, to make arrangements for any other underwriter(s) reasonably
satisfactory to the non-defaulting Underwriters to purchase all, but not less
than all, of the Defaulted Securities in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, after such 48 hours neither the
Representative nor the Company shall have completed such arrange ments for the
purchase of all of the Defaulted Securities, then:
(a) if the aggregate principal amount of Defaulted Securities
does not exceed 10% of the aggregate principal amount of Offered
Securities to be purchased pursuant to such Terms Agreement, the
non-defaulting Underwriters named in such Terms Agreement shall be
obligated to purchase the full amount thereof in the proportions that
their respective underwriting obligations bear to the underwriting
obliga tions of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Securities
exceeds 10% of the aggregate principal amount of Offered Securities to
be purchased pursuant to such Terms Agreement, the applicable Terms
Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default under this
Agreement and the applicable Terms Agreement.
In the event of any such default by any Underwriter or
Underwriters as set forth in this Section 10, either the Repre sentative or the
Company shall have the right to postpone the applicable Closing Time for a
period not exceeding seven days in order to effect any required changes in the
Registration State ment or Prospectus or in any other documents or arrangements.
SECTION 11. Notices.
All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, delivered by
courier service or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed to the address of the
Representative set forth in the applicable Terms Agreement; and notices to the
Company shall be
29
directed to it at 0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000, Attention: General Counsel.
SECTION 12. Parties.
This Agreement and any Terms Agreement shall inure to the
benefit of and be binding upon the Company and any Under writer who becomes a
party to a Terms Agreement, and their re spective successors. Nothing expressed
or mentioned in this Agreement or any Terms Agreement is intended or shall be
con strued to give any person, firm or corporation, other than the parties
hereto and their respective successors and the control ling persons and officers
and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any Terms Agreement or any provision herein or
therein contained. This Agreement and any Terms Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the parties hereto and thereto and their respective successors and
said controlling persons and officer and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Offered Securities from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. Governing Law.
This Agreement and any Terms Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be per formed in such state.
SECTION 14. Counterparts.
The Terms Agreement may be executed in one or more
counterparts, and if executed in more than one counterpart the executed
counterparts shall constitute a single instrument.
30
ANNEX A
MCI COMMUNICATIONS CORPORATION
TERMS AGREEMENT
April 17, 1998
MCI Communications Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Dear Sirs:
We (the "Representative") understand that MCI Communications
Corporation (the "Company") proposes to issue and sell $500,000,000 aggregate
principal amount of its 6.50% Senior Notes due 2010 (the "Senior Notes") and
$700,000,000 aggregate principal amount of its 6.125% Callable/Redeemable Notes
due 2012 (the "Callable/Redeemable Notes" and together with the Senior Notes,
the "Notes"). Subject to the terms and conditions set forth herein or
incorporated by reference herein, each of the underwriters named below (the
"Underwriters") agree to purchase, severally and not jointly, the principal
amount of the Senior Notes and the Callable/Redeemable Notes set forth opposite
its name below.
Principal Amount of Principal Amount of
Underwriter Senior Notes Callable/Redeemable Notes
Xxxxxx Brothers Inc. 175,000,000 245,000,000
Chase Securities Inc. 150,000,000 210,000,000
Citicorp Securities, Inc. 50,000,000 70,000,000
X.X. Xxxxxx Securities Inc. 50,000,000 70,000,000
NationsBanc Xxxxxxxxxx Securities LLC 50,000,000 70,000,000
Xxxxxxxx & Partners, L.P. 25,000,000 35,000,000
Total $500,000,000 $700,000,000
1
The Senior Notes shall have the following terms:
Title of Debt Securities: 6.50% Senior Notes due April 15, 2010
Principal Amount: $500,000,000
Senior/subordinate: Senior
Interest Rate 6.50%
Interest Payment Dates: April 15 and October 15, commencing
October 15, 1998
Date of maturity: April 15, 2010
Public Offering Price: 99.595%, plus accrued interest, if any,
from April 22, 1998
Purchase Price: 98.920%, plus accrued interest, if any,
from April 22, 1998 (payable in same-
day funds)
Delivery: Through the facilities of The Depository
Trust Company
Closing time and location: April 22, 1998, 10:00 a.m.,
New York City time,
Xxxxx & Wood LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Redemption or repayment provisions: The Senior Notes are subject to
redemption at the option of the
Company in the manner set forth in the
Senior Note
Sinking fund requirements: None
Number of Option Securities, if any, that None may be purchased by Underwriters:
Authorized Denominations: $1,000 and integral multiples thereof.
2
The Callable/Redeemable Notes shall have the following terms:
Title of Debt Securities 6.125% Callable/Redeemable Notes
due April 15, 2012
Principal Amount: $700,000,000
Senior/Subordinated: Senior
Interest Rate: 6.125% until the Coupon Reset Date
and, thereafter at the Interest Rate
determined pursuant to the Coupon
Reset Process as set forth in the
Callable/Redeemable Note
Interest Payment Dates: April 15 and October 15, commencing
October 15, 1998
Date of maturity: April 15, 2012
Coupon Reset Date: April 15, 2002
Public Offering Price: 99.733%, plus accrued interest, if any,
from April 22, 1998
Purchase Price: 99.208%, plus accrued interest, if any,
from April 22, 1998
Purchase Price of Call Option: 2.93%
NationsBanc Xxxxxxxxxx Securities
Callholder: LLC
Delivery: Through the facilities of The
Depository Trust Company
Closing time and location: April 22, 1998, 10:00 a.m.,
New York City time,
Xxxxx & Wood LLP
One world Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
3
Redemption or repayment provisions: On the Coupon Reset Date, the
Callable/Redeemable Notes are
subject to repurchase at the option of
the Callholder or, if the Callholder
fails for any reason to exercise such
option, to mandatory redemption by
the Company, in each case, in the
manner set forth in the
Callable/Redeemable Note. The
Callable, Redeemable Notes are
subject to redemption at the option of
the Company after the Coupon Reset
Date in the manner set forth in the
Callable/Redeemable Note
Sinking fund requirements: None
Number of Option Securities that may be None purchased by Underwriters:
Authorized Denominations: $25,000 and integral multiples of
$1,000 in excess thereof.
Other Terms:
Pursuant to Section 5(f) of the Underwriting Agreement, the legal opinion
pursuant to Section 5(b)(1) thereof shall be modified further to include the
following additional opinion:
"Each of the Assignment Agreement and the Calculation Agent
Agreement has been duly and validly authorized, executed and delivered by
the Company and (assuming due authorization, execution and delivery thereof
by the Callholder and Calculation Agent, respectively) constitutes a legal,
valid and binding agreement of the Company, enforceable in accordance with
its terms, except (A) as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and by general principles of equity, (B) that the remedy
of specific performance and injunctive and other forms of equi table relief
are subject to certain equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought, and (C) as such
enforceability may be subject to limitations on rights to indemnity or
contribution or both by Federal or state securities laws or the public
policies underlying such laws."
4
All of the provisions in the document attached as Exhibit A hereto
entitled "MCI Communications Corporation--Debt Securities--Underwriting
Agreement Basic Provisions" (the "Underwriting Agreement") are hereby
incorporated by reference in their entirety and shall be deemed to be a
part of this Terms Agreement to the same extent as if set forth in full
herein.
The obligations of the Underwriters under the Underwriting Agreement
and hereunder are several and not joint.
[Remainder of page intentionally left blank]
5
Please accept this offer by signing a copy of this Terms Agreement in
the space set forth below and returning the signed copy to us.
Very truly yours,
XXXXXX BROTHERS INC.
CHASE SECURITIES INC.
CITICORP SECURITIES, INC.
X.X. XXXXXX SECURITIES, INC.
NATIONSBANC XXXXXXXXXX
SECURITIES LLC
XXXXXXXX & PARTNERS, L.P.
By: XXXXXX BROTHERS INC.
For itself and the other Underwriters
named herein.
By: _/s/XXXXXX BROTHERS INC
Name:
Title:
Accepted:
MCI COMMUNICATIONS CORPORATION
By: /s/ MCI COMMUNICATIONS CORPORATION
Name:
Title:
6
