1
EXHIBIT 4.10
TRUST AGREEMENT GUARANTEE (this "Agreement"), dated as of
November 12, 1998, among Wilmington Trust Company ("Wilmington"), a Delaware
banking corporation duly organized and existing under the laws of Delaware, as
property trustee and Delaware trustee (in each such capacity, the "Property
Trustee" and the "Delaware Trustee", respectively), the undersigned
administrative trustee (the "Administrative Trustee", and together with the
Property Trustee and the Delaware Trustee, the "Trustees"), MCI Communications
Corporation, a Delaware corporation, formerly known as TC Investments Corp
("MCI" or the "Company"), and MCI WORLDCOM, Inc., a Georgia corporation ("MCI
WorldCom" or the "Guarantor").
WHEREAS, MCI and the Trustees are parties to an Amended and
Restated Trust Agreement, dated as of May 29, 1996 (the "Trust Agreement"),
pursuant to which (i) they declared and established MCI Capital I, a Delaware
business trust (the "Trust") pursuant to the Delaware Business Trust Act (ii)
the Trust issued to the public $750,000,000 aggregate liquidation amount of its
8.00% Cumulative Quarterly Income Preferred Securities, Series A (the
"Preferred Securities"), representing undivided beneficial interests in the
assets of the Trust, (iii) the Trust issued to MCI $23,195,900 of its Common
Securities (the "Common Securities"), and (iv) the Trust used the proceeds of
the issuance of the Preferred Securities and Common Securities to purchase
$773,195,900 in aggregate principal amount of the Company's 8.00% Junior
Subordinated Deferrable Interest Debentures, Series A (the "Debentures"),
issued pursuant to that certain indenture dated as of May 29, 1996 (as
supplemented, the "Indenture") by and between MCI and Wilmington, as trustee
(in such capacity, the "Indenture Trustee"); and
WHEREAS, the Guarantor desires to unconditionally and irrevocably
guarantee, on a subordinated basis, the full and punctual payment and
performance (within applicable grace periods) of all the obligations of the
Company in its capacity as depositor under the Trust Agreement (in such
capacity, the "Depositor").
NOW, THEREFORE, the Company, the Guarantor and the Trustees hereby
agree as follows:
SECTION 1. Definitions. Capitalized terms used but not defined
herein have the meanings ascribed to them in the Trust Agreement. In addition,
the following terms shall have the following meanings:
"Debt" means, with respect to any Person, whether recourse is to
all or a portion of the assets of such Person and whether or not contingent,
(i) every obligation of such Person for money borrowed; (ii) every obligation
of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the acquisition
of property, assets or businesses; (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued
2
for the account of such Person; (iv) every obligation of such Person issued
or assumed as the deferred purchase price of property or services (but
excluding trade accounts payable or accrued liabilities arising in the ordinary
course of business); (v) every capital lease obligation of such Person; and
(vi) every guarantee of or responsibility or liability for, direct or indirect,
as obligor or otherwise (a) any obligation of the types referred to in clauses
(i) through (v) of another Person or (b) the payment of any and all dividends
of another Person.
"Guarantee" shall have the meaning ascribed to it in Section 2 of
this Agreement.
"Guarantor Senior Debt" means the principal of (and premium, if
any) and interest, if any (including, without limitation, interest accruing on
or after the filing of any petition in bankruptcy or for reorganization
relating to the Guarantor whether or not such claim for post-petition interest
is allowed in such proceeding), on Debt of the Guarantor, whether incurred on
or prior to the date of this Agreement or thereafter incurred, unless, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is expressly provided that such obligations are not superior in
right of payment to the Guarantee or to other Debt of the Guarantor which is
pari passu with, or subordinated to, the Guarantee, provided, however, that
Guarantor Senior Debt shall not be deemed to include (a) any Debt of the
Guarantor which, when incurred and without respect to any election under
Section 1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to
the Guarantor, (b) any Debt of the Guarantor to any of its Subsidiaries, other
than Debt to a Subsidiary the proceeds of which the Guarantor used to pay
Guarantor Senior Debt (c) any Debt to any employee of the Guarantor, (d) any
liability for taxes, or (e) any Debt or other monetary obligations to trade
creditors created or assumed by the Guarantor or any of its Subsidiaries in the
ordinary course of business in connection with the obtaining of goods,
materials or services.
"Holder" shall mean any holder, as registered on the books and
records of the Trust, of any Preferred Securities.
"Indenture" shall have the meaning ascribed to it in the
Recitals.
"Subsidiary" of any Person means a corporation more than 50% of
the outstanding voting stock of which is owned, directly or indirectly, by such
Person or one or more other Subsidiaries of such Person, or by such Person and
one or more other Subsidiaries of such Person. For purposes of this
definition, "voting stock" means stock which ordinarily has voting power for
the election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
SECTION 2. The Guarantee. (a) The Guarantor irrevocably and
unconditionally guarantees on a subordinated basis as set forth herein (the
"Guarantee"), to each Holder of Preferred Securities and to the Trustees and
their successors and assigns (without duplication of amounts theretofore paid
by the Depositor), the full and punctual payment and performance (within
applicable grace periods) of all the obligations of the Depositor under the
Trust Agreement.
-2-
3
(b) The Guarantor further agrees that the Guarantee constitutes
a guarantee of payment, performance and compliance and not merely of
collection.
(c) The Guarantor's obligation to make any payment hereunder may
be satisfied by causing the Depositor to make such payment.
(d) The Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustees or any
Holder of Preferred Securities in enforcing any of their respective rights
under the Guarantee.
(e) Except as specifically provided herein, the obligations of
the Depositor under the Trust Agreement remain in full force and effect.
SECTION 3. Waiver of Notice and Demand. The Guarantor hereby
waives notice of acceptance of the Guarantee and of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Depositor, any Trustee, the Trust or any other
Person before proceeding against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
SECTION 4. Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under the Guarantee shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Depositor of any express or implied
agreement, covenant, term or condition relating to the Trust Agreement or the
Preferred Securities to be performed or observed by the Depositor;
(b) the extension of time for the payment by the Depositor of
all or any portion of (i) any payment of any monetary obligation of the
Depositor under the Trust Agreement (including obligations to the Trustees) and
the Preferred Securities, or (ii) the extension of time for the full and
punctual performance within applicable grace periods of all other obligations
of the Depositor under the Trust Agreement and the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders of the Preferred Securities or the Trustees to enforce,
assert or exercise any right, privilege, power or remedy conferred on the
Holders of the Preferred Securities or the Trustees pursuant to the terms of
the Trust Agreement or the Preferred Securities, or any action on the part of
the Depositor granting indulgence or extension of any kind;
(d) voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Depositor or any of the
assets of the Depositor;
-3-
4
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities or the Trust Agreement;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Agreement that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders of the Preferred
Securities or the Trustees to give notice to, or obtain the consent of, the
Guarantor with respect to the happening of any of the foregoing.
SECTION 5. Subordination. (a) Guarantee Subordinate to
Guarantor Senior Debt. The Guarantee is hereby expressly subordinated in right
of payment to the prior payment in full of all Guarantor Senior Debt, and such
subordination is for the benefit of the holders of such Guarantor Senior Debt.
(b) Payment Over of Proceeds Upon Dissolution, Etc. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Guarantor (each such event, if any, herein sometimes
referred to as a "Proceeding"), then the holders of Guarantor Senior Debt shall
be entitled to receive payment in full of principal of (and premium, if any)
and interest, if any, on such Guarantor Senior Debt, or provision shall be made
for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Guarantor Senior Debt, before any payment is
made in respect of the Guarantee.
In the event that, notwithstanding the foregoing provisions of
this Section, any Trustee or any Holder of the Preferred Securities shall have
received any payment of the Guarantor in respect of the Guarantee, before all
Guarantor Senior Debt is paid in full or payment thereof is provided for in
cash or cash equivalents or otherwise in a manner satisfactory to the holders
of Guarantor Senior Debt, and if such fact shall, at or prior to the time of
such payment or distribution, have been made known to such Trustee or, as the
case may be, such Holder, then and in such event such payment or distribution
shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person
making payment or distribution of assets of the Guarantor for application to
the payment of all Guarantor Senior Debt remaining unpaid, to the extent
necessary to pay all Guarantor Senior Debt in full, after giving effect to any
concurrent payment or distribution to or for the holders of Guarantor Senior
Debt.
-4-
5
(c) Prior Payment of Guarantor Senior Debt. In the event that
any payments are due pursuant to the Guarantee, then and in such event the
holders of the Guarantor Senior Debt shall be entitled to receive payment in
full of all amounts due on or in respect of such Guarantor Senior Debt
(including any amounts due upon acceleration or otherwise), or provision shall
be made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Guarantor Senior Debt, before any payments are
made on account of the Guarantee.
In the event that, notwithstanding the foregoing, the Guarantor
shall make any payment to any Trustee or any Holder of the Preferred Securities
prohibited by the foregoing provisions of this Section 5(c), and if such fact
shall, at or prior to the time of such payment, have been made known to such
Trustee or, as the case may be, such Holder, then and in such event such
payment shall be paid over and delivered forthwith to the Guarantor.
The provisions of this Section 5(c) shall not apply to any
payment with respect to which Section 5(b) of this Agreement would be
applicable.
(d) No Payment When Guarantor Senior Debt in Default. (i) In
the event and during the continuation of any default in the payment of
principal of (or premium, if any) or interest on any Guarantor Senior Debt, or
in the event that any event of default with respect to any Guarantor Senior
Debt shall have occurred and be continuing and shall have resulted in such
Guarantor Senior Debt becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable, unless and until
such event of default shall have been cured or waived or shall have ceased to
exist and such acceleration shall have been rescinded or annulled, or (ii) in
the event any judicial proceeding shall be pending with respect to any default
in payment or such event of default, then no payment shall be made by the
Guarantor on account of the Guarantee.
In the event that, notwithstanding the foregoing, the Guarantor
shall make any payment to any Trustee or any Holder of any Preferred Security
prohibited by the foregoing provisions of this Section 5(d), and if such fact
shall, at or prior to the time of such payment, have been made known to such
Trustee or, as the case may be, such Holder, then and in such event such
payment shall be paid over and delivered forthwith to the Guarantor.
The provisions of this Section 5(d) shall not apply to any
payment with respect to which Section 5(b) of this Agreement would be
applicable.
(e) Payment Permitted If No Default. Nothing contained in this
Section 5 or elsewhere in this Agreement or in the Trust Agreement or in the
Preferred Securities shall prevent (i) the Guarantor, at any time except during
the pendency of any Proceeding referred to in Section 5(b) of this Agreement or
under the conditions described in Sections 5(c) and 5(d) of this Agreement,
from making payments at any time in respect of the Guarantee.
-5-
6
(f) Subrogation to Rights of Holders of Guarantor Senior Debt.
Subject to the payment in full of all Guarantor Senior Debt, or the provision
for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Guarantor Senior Debt, the Trustees and the
Holders of the Preferred Securities shall be subrogated to the extent of the
payments or distributions made to the holders of such Guarantor Senior Debt
pursuant to the provisions of this Section 5 (equally and ratably with the
holders of all indebtedness of the Guarantor which by its express terms is
subordinated to Guarantor Senior Debt to substantially the same extent as the
Guarantee is subordinated to the Guarantor Senior Debt and is entitled to like
rights of subrogation by reason of any payments or distributions made to
holders of such Guarantor Senior Debt) to the rights of the holders of such
Guarantor Senior Debt to receive payments and distributions of cash, property
and securities applicable to the Guarantor Senior Debt until the payments due
under the Guarantee shall be paid in full. For purposes of such subrogation,
no payments or distributions to the holders of the Guarantor Senior Debt of any
cash, property or securities to which the Holders of the Preferred Securities
or the Trustees would be entitled except for the provisions of this Section 5,
and no payments over pursuant to the provisions of this Section 5 to the
holders of Guarantor Senior Debt by Holders of the Preferred Securities or the
Trustees, shall, as among the Guarantor, its creditors other than holders of
Guarantor Senior Debt, and the Holders of the Preferred Securities and the
Trustees, be deemed to be a payment or distribution by the Guarantor to or on
account of the Guarantor Senior Debt.
(g) Provisions Solely to Define Relative Rights. The provisions
of this Section 5 are and are intended solely for the purpose of defining the
relative rights of the Holders of the Preferred Securities and the Trustees on
the one hand and the holders of Guarantor Senior Debt on the other hand.
Nothing contained in this Section 5 or elsewhere in this Agreement or in the
Trust Agreement or in the Preferred Securities is intended to or shall (i)
impair, as between the Guarantor and the Holders of the Preferred Securities
and the Trustees, the obligations of the Guarantor, which are absolute and
unconditional, to pay to the Holders of the Preferred Securities and the
Trustees all payments due on the Guarantee; or (ii) affect the relative rights
against the Guarantor of the Holders of the Preferred Securities or the
Trustees and creditors of the Guarantor other than their rights in relation to
the holders of Guarantor Senior Debt; or (iii) prevent the Trustees or the
Holders of the Preferred Securities from exercising all remedies otherwise
permitted by applicable law upon default under this Agreement, including,
without limitation, filing and voting claims in any Proceeding, subject to the
rights, if any, under this Section 5 of the holders of Guarantor Senior Debt to
receive cash, property and securities otherwise payable or deliverable to the
Trustees or such Holders.
(h) No Waiver of Subordination Provisions. No right of any
present or future holder of any Guarantor Senior Debt to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Guarantor or by any act or failure
to act, in good faith, by any such holder, or by any noncompliance by the
Guarantor with the terms, provisions and covenants of this Section 5,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with.
-6-
7
SECTION 6. Subrogation to Rights of Depositor. The Guarantor
shall be subrogated to all (if any) rights of the Depositor in respect of any
amounts paid by the Guarantor under this Agreement; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Agreement.
SECTION 7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
SECTION 8. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but all of
which when taken together shall constitute but one instrument.
SECTION 9. Headings. The headings of this Agreement are for
reference only and shall not limit or otherwise affect the meaning hereof.
SECTION 10. Separability. In case any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein.
SECTION 11. Termination. This Agreement shall terminate
automatically upon the termination of the Trust Agreement in accordance with
its terms.
SECTION 13. Successors and Assigns. All guarantees and
agreements of the Guarantor contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Trustees and the Holders of the Preferred
Securities then outstanding. In the event that the Guarantor shall assign its
obligations contained in this Agreement, the Guarantor shall be discharged from
all obligations and covenants of the Guarantor under this Agreement to the
fullest extent permitted by law.
-7-
8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
WILMINGTON TRUST COMPANY, as
Delaware Trustee and Property Trustee
By: /s/ XXXXX X. XXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
/s/ XXXXX X. XXXXXXXX
------------------------------------------
Xxxxx X. Xxxxxxxx, as
Administrative Trustee
MCI WORLDCOM, INC.
By: /s/ XXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chief Financial Officer
MCI COMMUNICATION CORPORATION
By: /s/ XXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chief Financial Officer
-8-
