TERMS AGREEMENT
WorldCom, Inc.
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
May 9, 2001
Ladies and Gentlemen:
We (the "Managers") understand that WorldCom, Inc., a Georgia
corporation (the "Company"), proposes to issue and sell to the several
underwriters named below (the "Underwriters"), $1,500,000,000 aggregate
principal amount of its 6.50% Notes due 2004 (the "2004 U.S. Dollar Notes"),
$4,000,000,000 aggregate principal amount of its 7.50% Notes due 2011 (the "2011
U.S. Dollar Notes") $4,600,000,000 aggregate principal amount of its 8.25% Notes
due 2031 (the "2031 U.S. Dollar Notes, and together with the 2004 U.S. Dollar
Notes, the 2011 U.S. Dollar Notes and the 2031 U.S. Dollar Notes, the "U.S.
Dollar Notes"), (euro)1,250,000,000 aggregate principal amount of its 6.75%
Notes due 2008 (the "Euro Notes") and (pound)500,000,000 aggregate principal
amount of its 7.25% Notes due 2008 (the "Sterling Notes") (collectively, the
"Offered Securities").
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell all of the Offered
Securities. Each of the Underwriters named below under the table relating to
U.S. Dollar Notes agrees, severally and not jointly, to purchase the respective
principal amount of U.S. Dollar Notes set forth opposite its name below, in the
case of the 2004 U.S. Dollar Notes, at a purchase price of 99.573% of the
principal amount of such securities; in the case of the 2011 U.S. Dollar Notes,
at a purchase price of 98.454% of the principal amount of such securities; and
in the case of the 2031 U.S. Dollar Notes, at a purchase price of 97.223% of the
principal amount of such securities, plus, in each case, accrued interest, if
any, from May 16, 2001 to the date of payment and delivery.
Each of the Underwriters named below under the table relating to
Euro Notes agrees, severally and not jointly, to purchase the respective
principal amount of Euro Notes set forth opposite its name below at a purchase
price of 99.519% of the principal amount of such securities, plus accrued
interest, if any, from May 16, 2001 to the date of payment and delivery.
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Each of the Underwriters named below under the table relating to
Sterling Notes agrees, severally and not jointly, to purchase the respective
principal amount of Sterling Notes set forth opposite its name below at a
purchase price of 99.370% of the principal amount of such securities, plus
accrued interest, if any, from May 16, 2001 to the date of payment and delivery.
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U.S. DOLLAR NOTES
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Principal Principal Principal
Amount of 2004 U.S. Amount of 2011 U.S. Amount of 2031 U.S.
Name Dollar Notes Dollar Notes Dollar Notes
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X.X. Xxxxxx Securities $480,000,000 $1,290,000,000 $1,472,000,000
Inc.
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Xxxxxxx Xxxxx Barney 480,000,000 1,290,000,000 1,472,000,000
Inc.
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Banc of America 165,000,000 440,000,000 506,000,000
Securities LLC
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ABN AMRO Incorporated 120,000,000 320,000,000 368,000,000
----------------------------------------------------------------------------------------
Deutsche Banc Alex. 120,000,000 320,000,000 368,000,000
Xxxxx Inc
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Tokyo-Mitsubishi 30,000,000 80,000,000 92,000,000
International plc
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Westdeutsche Landesbank 30,000,000 80,000,000 92,000,000
Girozentrale
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BNP Paribas 15,000,000 40,000,000 46,000,000
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Caboto Holding SIM 15,000,000 40,000,000 46,000,000
S.p.A
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Fleet Securities, Inc. 15,000,000 40,000,000 46,000,000
----------------------------------------------------------------------------------------
Mizuho International 15,000,000 40,000,000 46,000,000
plc
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Xxxxxxxx & Partners, 7,500,000 20,000,000 23,000,000
L.P.
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Xxxxxxxx Capital 7,500,000 0 23,000,000
Partners, L.P.
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Total $1,500,000,000 $4,000,000,000 $4,600,000,000
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EURO NOTES and STERLING NOTES
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Principal Amount of Principal Amount of
Name Euro Notes Sterling Notes
--------------------------------------------------------------------------------
X.X. Xxxxxx Securities Ltd. (euro)403,125,000 (pound)160,000,000
--------------------------------------------------------------------------------
Salomon Brothers International 403,125,000 160,000,000
Limited
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Banc of America Securities Limited 137,500,000 55,000,000
--------------------------------------------------------------------------------
ABN AMRO Bank N.V. 100,000,000 40,000,000
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Deutsche Bank AG London 100,000,000 40,000,000
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Tokyo-Mitsubishi International plc 25,000,000 10,000,000
--------------------------------------------------------------------------------
Westdeutsche Landesbank Girozentrale 25,000,000 10,000,000
--------------------------------------------------------------------------------
BNP Paribas 12,500,000 5,000,000
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Caboto Holding SIM S.p.A 12,500,000 5,000,000
--------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxxxx International 12,500,000 5,000,000
Limited
--------------------------------------------------------------------------------
Mizuho International plc 12,500,000 5,000,000
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Xxxxxxxx & Partners , L.P. 6,250,000 2,500,000
--------------------------------------------------------------------------------
Xxxxxxxx Capital Partners, L.P. 0 2,500,000
--------------------------------------------------------------------------------
Total (euro)1,250,000,000 (pound)500,000,000
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The Underwriters will pay for such offered Securities upon delivery
thereof at the offices of Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, at 10:00 a.m., (New York City time) on May 16, 2001 or at such other
time, not later than 10:00 a.m. (New York City time), on such date as shall be
jointly designated by the Underwriters and the Company.
The Offered Securities shall have the terms set forth in the
Prospectus dated May 1, 2001 (the "Prospectus"), and the Prospectus Supplement
dated May 9, 2001 (the "Prospectus Supplement"), including the following:
Maturity Date: In the case of the 2004 U.S. Dollar Notes, May 15, 2004; in the
case of the 2011 U.S. Dollar Notes, May 15, 2011; in the case of the 2031 U.S.
Dollar Notes, May 15, 2031; in the case of the Euro Notes, May 15, 2008; and in
the case of the Sterling Notes, May 15, 2008.
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Interest Rate: In the case of the 2004 U.S. Dollar Notes, 6.50%; in the case of
the 2011 U.S. Dollar Notes, 7.50%; in the case of the 2031 U.S. Dollar Notes,
8.25%; in the case of the Euro Notes, 6.75%; and in the case of the Sterling
Notes, 7.25%.
Redemption Provisions: The 2011 U.S. Dollar Notes, the 2031 U.S. Dollar Notes,
the Euro Notes and the Sterling Notes will be redeemable in whole or in part, at
the option of the Company, at any time or from time to time, on at least 30
days, but not more than 60 days, prior notice mailed to the registered address
of each holder of Offered Securities to be redeemed and published in Luxembourg
as described in the Prospectus at redemption prices equal to the greater of:
In the case of the U.S. Dollar notes, the greater of:
o 100% of the principal amount of the U.S. Dollar Notes to be redeemed
and
o the sum of the present values of Remaining Scheduled Payments, as
defined in the Prospectus, discounted on a semiannual basis,
assuming a 360-day year consisting of twelve 30-day months, at the
Treasury Rate, as defined in the Prospectus, plus:
o 30 basis points for the 2011 U.S. Dollar Notes; and
o 35 basis points for the 2031 U.S. Dollar Notes;
In the case of the Euro Notes, the greater of:
o 100% of the principal amount of the Euro Notes to be redeemed
and
o the sum of the present values of the Remaining Scheduled
Payments, as defined in the Prospectus, discounted, on an
annual basis (based on the actual number of days elapsed
divided by 365 or 366, as the case may be), at the Reference
Euro Dealer Rate, as defined in the Prospectus, plus 25 basis
points;
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In the case of the Sterling Notes, the greater of:
o 100% of the principal amount of the Sterling Notes to be
redeemed and
o the price expressed as a percentage (rounded to three decimal
places, with .0005 being rounded up) at which the Gross
Redemption Yield, as defined in the Prospectus, on the
outstanding principal amount of the Sterling Notes on the
Reference Date, as defined in the Prospectus, is equal to the
Gross Redemption Yield (determined by reference to the
middle-market price) at 3:00 p.m. (London time) on that date
on the Benchmark Gilt, as defined in the Prospectus, plus 25
basis points;
plus, in the case of the U.S. Dollar Notes, the Sterling Notes and the Euro
Notes, accrued interest to the date of redemption which has not been paid.
Interest Payment Dates: Interest on the 2004 U.S. Dollar Notes, the 2011 U.S.
Notes and the 2031 U.S. Dollar Notes is payable semiannually in arrears on May
15 and November 15 of each year beginning November 15, 2001.
Interest on the Euro Notes is payable annually in arrears on May 15
of each year, beginning on May 15, 2002.
Interest on the Sterling Notes is payable annually in arrears on May
15 of each year, beginning May 15, 2002.
Form and Denomination: The Offered Securities initially will be represented by
one or more global securities deposited with the Depository Trust Company and
registered in the name of the nominee thereof in the case of U.S. Dollar Notes
and in the name of a common depositary for Clearstream Societe Anonyme,
Luxembourg, and Euroclear N.A. and S.A., as operator of the Euroclear system in
the case of the Euro Notes and the Sterling Notes. Each of the Offered
Securities will be available for purchases in denominations of $1,000 for the
U.S. Dollar Notes, (euro)1,000 for the Euro Notes and (pound)1,000 for the
Sterling Notes, and integral multiples thereof, in book-entry form only.
Senior or Subordinated: Senior
Other Terms: Each of the Underwriters hereby represents and agrees that it has
not and will not offer, sell or deliver any of the Offered Securities directly
or indirectly, or
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distribute the Prospectus Supplement or the Prospectus or any other offering
material relating to the Offered Securities, in or from any jurisdiction except
under circumstances that will result in compliance with the applicable laws and
regulations thereof and that will not impose any obligations on the Company,
except as set forth herein. In particular, each Underwriter represents and
agrees that:
1. It has not offered or sold and will not offer or sell any Offered
Securities to persons in the United Kingdom prior to the expiry of the period of
six months from the issue date of the Offered Securities except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purpose of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995.
2. It has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of the
Offered Securities to a person who is of a kind described in Article 11(3) of
the Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order
1996 (as amended) or is a person to whom such document may otherwise lawfully be
issued or passed on.
3. It has complied and will comply with all applicable provisions of the
Financial Services Xxx 0000 with respect to anything done by it in relation to
any Offered Securities in, from or otherwise involving the United Kingdom.
4. It has not offered or sold and it will not offer or sell any Offered
Securities directly or indirectly in Japan or to, or for the benefit of any
Japanese person or to any persons, for re-offering or re-sale directly or
indirectly in Japan or to any Japanese person except pursuant to an exemption
from the registration requirements of the Securities and Exchange Law of Japan
available thereunder and otherwise under circumstances which will result in
compliance with all applicable laws, regulations and guidelines promulgated by
the relevant governmental and regulatory authorities in effect at the relevant
time. For purposes of this paragraph, "Japanese person" shall mean any person
resident in Japan, including any corporation or other entity organized under the
laws of Japan.
All communications with the Underwriters will be in writing and
effective only upon receipt, and will be mailed, delivered or telegraphed and
confirmed to them in
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care of (a) Xxxxxxx Xxxxx Xxxxxx Inc., General Counsel (fax no.: (212)
000-0000), 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 and (b) X.X. Xxxxxx
Securities Inc., General Counsel (fax no.: (000) 000-0000), 00 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
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All provisions of the Underwriting Agreement dated May 9, 2001,
among WorldCom and the Underwriters, are herein incorporated by reference in
their entirety and shall be deemed to be a part of this agreement to the same
extent as if such provisions had been set forth in full herein.
Please confirm your agreement by having an authorized officer sign a
copy of this agreement in the space set forth below and returning the signed
copy to us.
Very truly yours,
X.X. XXXXXX SECURITIES INC.
XXXXXXX XXXXX BARNEY INC.
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
X.X. XXXXXX SECURITIES INC.
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
By: /s/ Xxx Xxxxxx
------------------------------------
XXXXXXX XXXXX XXXXXX INC.
Name: Xxx Xxxxxx
Title: Managing Director
X.X. XXXXXX SECURITIES LTD.
SALOMON BROTHERS INTERNATIONAL LIMITED
By: /s/ Xxxxx Xxxx
------------------------------------
X.X. XXXXXX SECURITIES LTD.
Name: Xxxxx Xxxx
Title: Vice President
By: /s/ Xxxx Xxxxxx
------------------------------------
SALOMON BROTHERS
INTERNATIONAL LIMITED
Name: Xxxx Xxxxxx
Title: Attorney-in-Fact
Acting severally on
behalf of themselves as
Managers and Underwriters
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and on behalf of the other
several Underwriters,
if any, named in this Terms
Agreement.
Accepted on the date set forth above:
WORLDCOM, INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chief Financial Officer
