EXHIBIT 1.1
WorldCom, Inc.
Dealer Managers Agreement
June [ ], 1997
Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
WorldCom, Inc., a Georgia corporation (the "Company"), plans to make
an offer to exchange (i) its 9-3/8% Senior Notes due January 15, 2004 (the
"WorldCom 2004 Notes") for any and all outstanding 9-3/8% Senior Discount Notes
due January 15, 2004 (the "MFS 2004 Notes") of MFS Communications Company, Inc.,
a Delaware corporation and wholly owned subsidiary of the Company ("MFS"),
properly tendered, and (ii) its 8-7/8% Senior Notes due January 15, 2006 (the
"WorldCom 2006 Notes" and, together with the WorldCom 2004 Notes, the "WorldCom
Notes") for any and all outstanding 8-7/8% Senior Discount Notes due January 15,
2006 of MFS (the "MFS 2006 Notes" and, together with the MFS 2004 Notes, the
"MFS Notes") properly tendered (each an "Exchange Offer" and collectively, the
"Exchange Offers"), in each case on the terms and subject to the conditions set
forth in the Prospectus (as hereinafter defined).
Concurrently with the Exchange Offers, the Company is soliciting
consents ("Consents") from (i) the holders of the MFS 2004 Notes to certain
amendments to the indenture dated as of January 15, 1994 (as supplemented by the
First Supplemental Indenture thereto dated as of March 31, 1995, the "1994
Indenture") between MFS and IBJ Xxxxxxxx Bank & Trust Company (the "MFS
Trustee") pursuant to which the MFS 2004 Notes were issued and (ii) the holders
of the MFS 2006 Notes to certain amendments to the indenture dated as of January
15, 1996 (as supplemented by the First Supplemental Indenture thereto dated as
of January 15, 1996, the "1996 Indenture") between MFS and the MFS Trustee
pursuant to which the MFS 2006 Notes were issued (each a "Solicitation" and
collectively, the "Solicitations").
The WorldCom Notes are to be issued pursuant to the Senior Indenture
(the "Original Indenture"), dated as of March 1, 1997 between the Company and
Mellon Bank, N.A., as trustee (the "Trustee"), as supplemented by a first
supplemental indenture establishing the terms of the WorldCom Notes (the "First
Supplemental Indenture" and together with the Original Indenture, the
"Indenture"). The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement (File No. 333-27345) on Form S-4 for
the registration of the WorldCom Notes under the Securities Act of 1933, as
amended, and the rules and regulations thereunder (collectively, the "Act") and
the offering thereof pursuant to the
Exchange Offers, including a prospectus relating to such offering. The Company
proposes to file with the Commission one of the following: (i) prior to
effectiveness of such registration statement, an amendment to such registration
statement, including the form of final prospectus or (ii) a final prospectus in
accordance with Rule 424(b) under the Act ("Rule 424(b)"). As filed, such
amendment and form of final prospectus, or such final prospectus, shall be in
the form furnished to you prior to the execution of this Dealer Managers
Agreement (the "Agreement") or, to the extent not completed at the time of
execution of this Agreement, in such form as the Company and you shall agree to
prior to the filing thereof. Such registration statement either has been
declared effective by the Commission or will be declared effective by the
Commission prior to the date that the Prospectus is first distributed to the
holders of the MFS Notes (the "Commencement Date"). The term "Registration
Statement" means the aforementioned registration statement, including
incorporated documents, exhibits and financial statements, as amended to the
date of execution of this Agreement (or, if not effective at such execution
time, in the form in which it shall become effective) and, in the event any
post-effective amendment thereto becomes effective prior to the Exchange Date
(as defined in the Prospectus), shall also mean such registration statement as
so amended. The term "Prospectus" means the prospectus relating to the
aforementioned offering that is first filed pursuant to Rule 424(b) after the
execution of this Agreement or, if no filing pursuant to Rule 424(b) is
required, shall mean the form of final prospectus relating to such offering
included in the Registration Statement when it was declared effective. Any
reference herein to the Registration Statement or the Prospectus shall include,
in each case, the material, if any, incorporated by reference therein on or
before the effective date or issue date of such Registration Statement or
Prospectus; any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus shall
be deemed to refer to and include the filing of any document under the
Securities Exchange Act of 1934, as amended and the applicable rules and
regulations of the Commission thereunder (collectively, the "Exchange Act")
after the effective date of the Registration Statement or the issue date of the
Prospectus, as the case may be, deemed to be incorporated therein by reference.
The term "you" or "your" as used herein, unless the context otherwise requires,
shall mean Salomon Brothers Inc and Xxxxxxx, Xxxxx & Co.
Section 1. Appointment as Dealer Managers.
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(a) Each of you, severally, and the Company hereby agree that each of
you (the "Dealer Managers") will act, in accordance with your customary
practices, as the exclusive Dealer Managers for the Exchange Offers and the
Solicitations including, without limitation, the solicitation of tenders
pursuant to the Exchange Offers, the solicitation of Consents pursuant to the
Solicitations and assisting in the distribution of the Prospectus. Nothing
contained in this Agreement shall constitute the Dealer Managers partners or
joint venturers with the Company or any of its subsidiaries.
(b) The Company agrees that it will not file, use or publish any
material in connection with either Exchange Offer or either Solicitation, or
refer to either of you in any such material, without first consulting each of
you. The Company will promptly inform each of you of any litigation or
administrative action with respect to either Exchange Offer or either
Solicitation. Each of you agrees not to give any written information to
beneficial owners or
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holders of the MFS Notes in connection with the Exchange Offers and
Solicitations other than any written information which has been previously
approved by the Company in writing, it being understood that each of the
following documents are approved by the Company: (i) the Prospectus and
documents incorporated by reference in the Prospectus; and (ii) the Ancillary
Documents (as defined below in Section 2(b)). Each of you agrees not to make any
representations to beneficial owners or holders of MFS Notes in connection with
the Exchange Offers and Solicitations that are inconsistent with the Prospectus
or the Ancillary Documents.
(c) Each of you, severally, agree that all actions taken by you as a
Dealer Manager will comply in all material respects with all applicable laws,
regulations and rules of the United States including, without limitation, the
applicable rules and regulations of the registered national securities exchanges
of which you are a member and of the National Association of Securities Dealers,
Inc. You further agree to be regarded as the broker-dealers that are making the
Exchange Offers on behalf of the Company to holders of MFS Notes in any states
of the United States in which it is required that such offers be made by or
through a registered or licensed broker-dealer, and you represent that you are
registered or licensed in each of such states.
(d) The Company acknowledges and agrees that (i) the Dealer
Managers, in their sole discretion, may continue to own or dispose of, in any
manner they may elect, any MFS Notes they may beneficially own at the date
hereof or hereafter acquire, in any such case, subject to applicable law, and
(ii) in particular, the Dealer Managers have no obligation to the Company,
pursuant to this Agreement or otherwise, to tender or refrain from tendering MFS
Notes beneficially owned by them in either Exchange Offer (and thereby deliver
Consents in the related Solicitation). The Dealer Managers acknowledge and
agree that if either Exchange Offer or either Solicitation is not consummated
for any reason, the Company shall have no obligation, pursuant to this Agreement
or otherwise, to acquire any MFS Notes from the Dealer Managers or to otherwise
hold the Dealer Managers harmless with respect to any losses they may incur in
connection with the resale to any third parties of any MFS Notes.
Section 2. Representations and Warranties. The Company represents
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and warrants to each of you as of the date hereof that:
(a) The Company meets the requirements for the use of Form S-4
under the Act. The Registration Statement has become effective or will become
effective prior to the Commencement Date, as applicable; if the Registration
Statement has become effective, no stop order suspending the effectiveness of
the Registration Statement is in effect, and no proceedings for such purpose are
pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act, and incorporated by reference in the Prospectus, or in the
Prospectus as supplemented, complied or will comply when so filed in all
material respects with the Exchange Act, (ii) each part of the Registration
Statement, when such part became effective (each such date, the "Effective
Date"), did not contain, and each such part, when amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact
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required to be stated therein or necessary to make the statements therein not
misleading, (iii) on the Effective Date the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Exchange Date, the Prospectus (and any supplements thereto)
did or will, comply in all material respects with the Act, the Exchange Act, and
the Trust Indenture Act of 1939, as amended, and the applicable rules and
regulations of the Commission thereunder (collectively, the "Trust Indenture
Act") and (iv) on the Effective Date, the Prospectus, if not filed pursuant to
424(b), did not or will not, and on the date of any filing pursuant to Rule
424(b) and on the Exchange Date, the Prospectus (together with any supplement
thereto) will not, and on each of such dates the Letters of Transmittal and
Consent, Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9, Notices of Guaranteed Delivery, Letter to Brokers, Letter
to Clients (each of the foregoing, substantially in the form attached hereto as
Exhibit E) and, if in existence on such date, any press release or "tombstone"
advertisement issued by the Company in connection with this transaction
(collectively, the "Ancillary Documents") did not and will not, contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes no
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representations or warranties as to (A) the information contained in or
omitted from the Registration Statement, the Prospectus (or any supplement
thereto) or the Ancillary Documents in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of either of you
specifically for inclusion in the Registration Statement, the Prospectus (or any
supplement thereto) or the Ancillary Documents or (B) to that part, if any, of
the Registration Statement that constitutes the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act. The only information
furnished in writing to the Company by or on behalf of the Dealer Managers is
described in Section 6(b) hereof.
(c) No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency or body
that would prevent the issuance of the WorldCom Notes, suspend the effectiveness
of the Registration Statement, prevent or suspend the use of the Prospectus (or
any supplement thereto), or suspend the sale of the WorldCom Notes in any
jurisdiction; provided, however, that to the extent this representation relates
to state securities or "blue sky" laws and laws of jurisdictions other than the
United States and its political subdivisions, it shall be limited to the
knowledge of the Company. No injunction, restraining order or order of any
nature by a Federal or state court of competent jurisdiction has been issued and
served on the Company or any of its subsidiaries with respect to the Company or
any of the subsidiaries that relates to any document incorporated in the
Registration Statement, that would prevent or suspend the issuance or sale of
the WorldCom Notes, the effectiveness of the Registration Statement, or the use
of the Prospectus (or any supplement thereto).
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth in
the Prospectus (as supplemented), neither the Company nor any of the
Subsidiaries has incurred any liabilities or obligations, direct or contingent,
that are material to the Company and the Subsidiaries taken as a whole, nor
entered into any material transaction not in the ordinary course of business,
and there
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has not been, singularly or in the aggregate, any material adverse change in the
properties, business, results of operations, financial condition, affairs or
business prospects of the Company and its Subsidiaries taken as a whole (a
"Material Adverse Change"). Without limiting the foregoing, neither the Company
nor any of its Subsidiaries has sustained since the date of the latest audited
financial statements included, or incorporated by reference, in the Prospectus
(as supplemented) any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus (as supplemented); and,
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, except as set forth in the Prospectus (as
supplemented), there has not been any material change in the capital stock or
long-term debt of the Company or any of the Subsidiaries.
(e) The Subsidiaries of the Company listed on Exhibit A hereto
(individually a "Subsidiary" and collectively, the "Subsidiaries") are the only
Significant Subsidiaries of the Company (within the meaning of Rule 405 under
the Act). Each of the Company and the Subsidiaries (x) has been duly organized
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of organization, (y) has the requisite corporate power and
authority to carry on its business as it is currently being conducted and as
described in the Prospectus (as supplemented), and to own, lease and operate its
properties and (z) is duly qualified and is authorized to do business and is in
good standing in each jurisdiction where the operation, ownership or leasing of
property or the conduct of its business requires such qualification, except
where any failure to be so qualified or be in good standing would not,
singularly or when aggregated with failures to be qualified elsewhere, have a
material adverse effect on the properties, business, results of operations,
financial condition, affairs or prospects of the Company and its Subsidiaries
taken as a whole (a "Material Adverse Effect"). The Company has the requisite
power and authority to authorize the offering of the WorldCom Notes to be sold
by it, to execute, deliver and perform this Agreement and to issue, sell and
deliver the WorldCom Notes to be sold by it.
(f) The Company has an authorized capitalization as set forth in the
Prospectus (as supplemented), and all of the issued shares of capital stock of
the Company have been duly and validly authorized and are fully paid and non-
assessable. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued, are fully paid and
non-assessable and (except as set forth in the Prospectus (as supplemented)) are
owned, directly or through Subsidiaries, by the Company, free and clear of any
liens, claims or encumbrances ("Liens"). There are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments of sale or Liens related to or entitling any person to purchase or
otherwise to acquire any shares of the capital stock of any Subsidiary, except
as set forth in the Prospectus (as supplemented).
(g) This Agreement has been duly authorized and validly executed and
delivered by the Company and constitutes a valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its terms
(assuming the due execution and delivery of this Agreement by the Dealer
Managers).
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(h) The Original Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company, and constitutes the valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general principles of equity.
(i) The First Supplemental Indenture has been or will be prior to
the Exchange Date duly qualified under the Trust Indenture Act and has been or
will be prior to the Exchange Date duly authorized, executed and delivered by
the Company, and does or will prior to the Exchange Date constitute the valid
and legally binding obligation of the Company enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity.
(j) The WorldCom Notes have been or will be prior to the Exchange
Date duly authorized, and, when executed by the Company and authenticated by the
Trustee in accordance with the terms of the Indenture, and delivered to the
holders of MFS Notes who tender their MFS Notes in accordance with the terms of
the Exchange Offers, will be entitled to the benefits of the Indenture and will
conform in all material respects to the description thereof in the Prospectus
(as supplemented) and will constitute valid and legally binding obligations of
the Company enforceable against the Company in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general principles of equity.
(k) The performance by the Company of the Exchange Offers and the
Solicitations, and the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Original Indenture, the First Supplemental Indenture, the Indenture and the
WorldCom Notes will not (x) conflict with or result in a breach or violation of
any of the respective charters or by-laws of the Company or any of the
Subsidiaries or (y) after giving effect to the waivers and consents obtained on
or prior to the date hereof, if any, conflict with or result in a breach or
violation of any term or provision of, constitute a default or cause an
acceleration of any obligation under, or result in the imposition or creation of
(or the obligation to create or impose) a Lien with respect to, any bond, note,
debenture or other evidence of indebtedness or any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which it or any of them is bound, or to which any
properties of the Company or any of the Subsidiaries is subject, or (z)
contravene any order of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries or any of their
properties, or violate or conflict with any statute, rule or regulation or
administrative or court decree applicable to the Company or any of the
Subsidiaries, or any of their respective properties except, in the case of state
public utility commissions exercising jurisdiction over the Company or any of
its Subsidiaries ("State Regulatory Agencies"), where such contravention,
violation or conflict would not have a Material Adverse Effect. No
authorization, approval or consent or order of, or
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filing, registration or qualification with, any court or governmental body or
agency is required for the performance by the Company of either Exchange Offer
or either Solicitation or its obligations under this Agreement, the Indenture,
or the WorldCom Notes except (i) such as may have been or will be obtained prior
to the Commencement Date under the Act, (ii) such as may be required by and made
with or obtained prior to the Commencement Date from the National Association of
Securities Dealers, Inc. (the "NASD") or state securities or "blue sky" laws or
regulations or have been obtained and made prior to the Commencement Date under
the Act and (iii) in the case of authorizations, approvals, consents,
registrations or qualifications required by State Regulatory Agencies, where the
failure to obtain such authorizations, approvals, consents, registrations or
qualifications would not have a Material Adverse Effect.
(l) There is no action, suit or proceeding before or by any court,
arbitrator or governmental official, agency or body, domestic or foreign,
pending against or affecting the Company or any of the Subsidiaries, or any of
their respective properties, that is required to be disclosed in the
Registration Statement or the Prospectus (as supplemented) and is not so
disclosed, or that, if determined adversely, is reasonably expected to affect
adversely the performance by the Company of the Exchange Offers or the
Solicitations or issuance of the WorldCom Notes or in any manner draw into
question the validity of this Agreement, the Exchange Offers, the Solicitations
or the WorldCom Notes or to result, singularly or when aggregated with other
pending actions and actions known to be threatened, in a Material Adverse
Effect, or that is reasonably expected to materially and adversely affect the
consummation of the Exchange Offers or the Solicitations as contemplated in the
Prospectus (as supplemented), and, to the best of the Company's knowledge, no
such proceedings are contemplated or threatened. No contract or document of a
character required to be described in the Registration Statement or the
Prospectus (as supplemented) or to be filed as an exhibit to the Registration
Statement is not so described or filed and the statements included or
incorporated in the Registration Statement and the Prospectus (as supplemented)
describing any legal proceedings or material contracts or agreements relating to
the Company fairly summarize such matters.
(m) The firm of accountants that has certified or shall certify the
applicable consolidated financial statements and supporting schedules of the
Company filed or to be filed as part of the Registration Statement or the
Prospectus (as supplemented) are independent public accountants with respect to
the Company and its subsidiaries, as required by the Act. The consolidated
historical statements and any pro forma information, together with related
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schedules and notes, if any, included in the Registration Statement or the
Prospectus (as supplemented) comply as to form in all material respects with the
requirements of the Act. Such historical financial statements fairly present
the consolidated financial position of the Company and its Subsidiaries at the
respective dates indicated and the results of their operations and their cash
flows for the respective periods indicated, in accordance with generally
accepted accounting principles ("GAAP"), except as otherwise expressly stated
therein, as consistently applied throughout such periods. Such pro forma
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information has been prepared on a basis consistent with such historical
financial statements, except for the pro forma adjustments specified therein,
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and gives effect to assumptions made on a reasonable basis and fairly presents
and gives effect to the transactions described therein pertaining to such pro
---
forma information. The other financial and statistical information and data
-----
included in the Registration Statement and in the Prospectus
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(as supplemented), historical and pro forma, are, in all material respects,
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accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company.
(n) Each of the Company and the Subsidiaries has all certificates,
consents, exemptions, orders, permits, licenses, authorizations, or other
approvals (each, an "Authorization") of and from, and has made all declarations
and filings with, all Federal, state, local and other governmental authorities,
all self-regulatory organizations and all courts and other tribunals, necessary
or required to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Registration Statement and
the Prospectus (as supplemented), except to the extent that the failure to
obtain or file any such Authorizations would not, singularly or in the
aggregate, reasonably be expected to have a Material Adverse Effect. All such
Authorizations are in full force and effect with respect to the Company and the
Subsidiaries, and the Company and the Subsidiaries are in compliance in all
material respects with the terms and conditions of all such Authorizations and
with the rules and regulations of the regulatory authorities and governing
bodies having jurisdiction with respect thereto.
(o) Except as disclosed in the Prospectus (as supplemented), no
holder of any security of the Company has or will have any right to require the
registration of such security by virtue of the filing of the Registration
Statement or any transactions contemplated by this Agreement other than any such
right that has been expressly waived in writing. No holder of any of the
outstanding shares of capital stock of the Company or other person is entitled
to preemptive or other rights to subscribe for the WorldCom Notes.
(p) Subsequent to the initial filing of the Registration Statement,
the Company did not and will not, except as contemplated by this Agreement, (i)
take, directly or indirectly, any action designed to cause or to result in, or
that has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company or MFS
to facilitate the sale or resale of the WorldCom Notes; or (ii) sell, bid for,
purchase, or pay anyone any compensation for soliciting purchases of, the
WorldCom Notes, the MFS Notes or any other debt securities of the Company or MFS
which were offered, or will be offered, by the Company pursuant to a
registration statement filed under the Act or pursuant to the exemption from
registration provided by Rule 144A promulgated under the Act.
(q) The Company has, or has arranged to obtain, sufficient funds
available and authority to use such funds under applicable law to pay, in
accordance with the terms and subject to the conditions of the Exchange Offers
and the Solicitations, the cash portion of the purchase price for the WorldCom
Notes, any related consent fee and all fees and expenses related thereto; the
Company will cause each MFS Note accepted pursuant to the Exchange Offers to be
cancelled promptly thereafter.
(r) The Company has complied with and will comply with, in all
material respects, all laws, regulations and rules and corporate requirements
applicable to the Exchange Offers, the Solicitations and this Agreement and the
Company has provided or filed, as applicable, all exchange and other notices
required to be provided or filed by the Company in
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connection with the Exchange Offers and the Solicitations. The Exchange Offer
and the Solicitation with respect to the MFS 2004 Notes are in full compliance
with all provisions of the 1994 Indenture and the Exchange Offer and the
Solicitation with respect to the MFS 2006 Notes are in full compliance with all
provisions of the 1996 Indenture.
(s) At such time as the second supplemental indenture, as
contemplated in the Prospectus (as supplemented), to the 1994 Indenture (the
"1994 Second Supplemental Indenture") is executed by MFS and the MFS Trustee
(assuming receipt of the Requisite Consent or the Supermajority Consent, as the
case may be, as such terms are defined in the Prospectus (as supplemented)) (x)
the 1994 Second Supplemental Indenture will be duly authorized, executed and
delivered by MFS, (y) assuming the due authorization, execution and delivery of
the 1994 Second Supplemental Indenture by the MFS Trustee, the 1994 Second
Supplemental Indenture will constitute a valid amendment to the 1994 Indenture
that is permitted by the terms of the 1994 Indenture and that conforms in all
material respects to the description thereof contained in the Prospectus (as
supplemented) and (z) assuming the due authorization, execution and delivery of
the 1994 Second Supplemental Indenture by the MFS Trustee, the 1994 Indenture as
amended by the 1994 Second Supplemental Indenture, will constitute a valid and
legally binding obligation of MFS, enforceable against MFS in accordance with
its terms subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general principles of equity.
(t) At such time as the second supplemental indenture, as
contemplated in the Prospectus (as supplemented), to the 1996 Indenture (the
"1996 Second Supplemental Indenture") is executed by MFS and the MFS Trustee
(assuming receipt of the Requisite Consent or the Supermajority Consent, as the
case may be, as such terms are defined in the Prospectus (as supplemented)) (x)
the 1996 Second Supplemental Indenture will be duly authorized, executed and
delivered by MFS, (y) assuming the due authorization, execution and delivery of
the 1996 Second Supplemental Indenture by the MFS Trustee, the 1996 Second
Supplemental Indenture will constitute a valid amendment to the 1996 Indenture
that is permitted by the terms of the 1996 Indenture and that conforms in all
material respects to the description thereof contained in the Prospectus (as
supplemented) and (z) assuming the due authorization, execution and delivery of
the 1996 Second Supplemental Indenture by the MFS Trustee, the 1996 Indenture as
amended by the 1996 Second Supplemental Indenture, will constitute a valid and
legally binding obligation of MFS, enforceable against MFS in accordance with
its terms subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general principles of equity.
Section 3. Agreements. The Company agrees with each of you, and in
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the case of paragraph (f) of this Section 3, each of you agree with the Company:
(a) The Company will use its reasonable efforts to maintain the
effectiveness of the Registration Statement, and to cause any amendment thereof
to be declared effective by the Commission. Between the date of entering into
this Agreement and the termination of the offering of the WorldCom Notes
pursuant to the Exchange Offers, the Company will not file (x) any amendment to
the Registration Statement, (y) any document incorporated in the Prospectus,
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or (z) any supplement to the Prospectus without first providing each of you
with a copy of such amendment or supplement, and will not file such amendment or
supplement if either of you reasonably objects to such filing. Subject to the
foregoing sentence, if filing of the Prospectus is required under Rule 424(b),
the Company will cause the Prospectus, properly completed, and any supplement
thereto to be filed with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to each of you of such timely filing. The Company will promptly
advise each of you (i) when the Registration Statement, and any amendment
thereto, shall have become effective, (ii) when the Prospectus, and any
supplement thereto or any document incorporated therein, shall have been filed
(if required) with the Commission pursuant to Rule 424(b), (iii) when, prior to
termination of the offering of the WorldCom Notes pursuant to the Exchange
Offers, any amendment to the Registration Statement shall have been filed or
become effective, (iv) of any request by the Commission for any amendment of the
Registration Statement or supplement to the Prospectus or for any additional
information, (v) of the issuance by the Commission of any order relating to any
document incorporated in the Prospectus or any stop order suspending the
effectiveness of the Registration Statement or the Company becoming aware of the
institution or threatening of any proceeding for any such purpose and (vi) of
the receipt by the Company of any notification with respect to the suspension of
the qualification of the WorldCom Notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The Company will
use its reasonable efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal thereof.
(b) As soon as practicable, the Company will make generally
available to its security holders and to the Dealer Managers an earnings
statement or statements of the Company and its Subsidiaries which will satisfy
the provisions of Section 11(a) of the Act and Rule 158 under the Act.
(c) To furnish each of you, without charge, two manually or
facsimile signed copies of the Registration Statement (as originally filed) and
each amendment thereto (including exhibits thereto and documents incorporated
therein by reference) and, during the period mentioned in paragraph (d) below,
as many copies of the Prospectus, any documents incorporated therein by
reference, and any supplements thereto as each of you may reasonably request.
(d) If, at any time prior to the Termination Date (as defined in
Section 11 of this Agreement), any event occurs as a result of which the
Prospectus as then supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it shall be necessary to amend the Registration Statement or
supplement the Prospectus to comply with the Act, the Exchange Act, the Company
will (i) promptly prepare and file with the Commission, subject to the second
sentence of paragraph (a) of this Section 3, an amendment or supplement which
will correct such statement or omission or effect such compliance and (ii) give
each of the Dealer Managers immediate notice, confirmed in writing, to cease the
Exchange Offers and the Solicitations.
10
(e) The Company will cooperate with the Dealer Managers and counsel
for the Dealer Managers in connection with obtaining, and use its reasonable
efforts to obtain, qualification of the WorldCom Notes for offering and sale
under the laws of such jurisdictions as the Dealer Managers may designate, will
maintain such qualifications in effect so long as required for the distribution
of the Dealer Managers, and will pay the fee of the NASD, if any, in connection
with its review of the offering; provided, however, that the Company shall not
be required to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. The
Company will file such statements and reports as may be required by the laws of
each jurisdiction in which the WorldCom Notes have been qualified as above
provided. The Company will promptly advise you of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
WorldCom Notes for sale in any such state or jurisdiction or the initiating or
threatening of any proceeding for such purpose.
(f) During the period beginning on the Commencement Date and
continuing to and including the Termination Date, the Company will not offer,
sell, contract to sell or otherwise dispose of any debt securities of the
Company which were offered, or will be offered, by the Company pursuant to a
registration statement filed under the Act or pursuant to the exemption from
registration provided by Rule 144A promulgated under the Act (other than the
WorldCom Notes) without the prior written consent of Salomon Brothers Inc. The
foregoing shall not restrict the Company from borrowings under existing or new
revolving credit agreements and lines of credit and issuances of commercial
paper or interest rate swaps.
Section 4. Conditions of the Dealer Managers' Obligations. The
----------------------------------------------
obligations of the Dealer Managers under this Agreement are at all times subject
to the following conditions:
(a) That, at the Commencement Date and the Exchange Date, the
Company shall have furnished to the Dealer Managers opinions of the General
Counsel--Corporate Development or other authorized legal representative of the
Company, addressed to the Dealer Managers and dated the Commencement Date and
the Exchange Date, respectively, substantially to the effect described in
Exhibit B hereto, opinions of Xxxxx Xxxx LLP, special counsel to the Company,
addressed to the Dealer Managers and dated the Commencement Date and the
Exchange Date, respectively, substantially to the effect described in Exhibit C
hereto, and opinions of Xxxxxx Xxxx & Xxxxxx LLP, special communications counsel
to the Company, addressed to the Dealer Managers and dated the Commencement Date
and the Exchange Date, respectively, substantially to the effect described in
Exhibit D hereto.
(b) That, at the Exchange Date, the Dealer Managers shall have
received an opinion of counsel for the Dealer Managers, addressed to the Dealer
Managers and dated the Exchange Date, in form and substance satisfactory to the
Dealer Managers.
(c) That the representations and warranties of the Company in this
Agreement shall be true and correct in all material respects and that the
statements of the Company made in any certificates pursuant to Section 4(h) of
this Agreement shall be accurate (and in the case of
11
certificates pursuant to any other provision of this Agreement, accurate in all
material respects or where statements or representations contained therein are
qualified as to materiality, accurate), in either case, on the Commencement Date
and at all times thereafter up to and including the Exchange Date with the same
effect as if made on the Commencement Date or at such time, respectively, and
the Company shall have complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Commencement Date and the Exchange Date; it is understood that the agreement of
any Dealer Manager to act in such capacity at a time when it should know that
any such representation or warranty is or may be untrue or incorrect in a
material respect shall be without prejudice to any rights it has to subsequently
to cease so to act by reason of such untruth or incorrectness.
(d) That no order relating to any document incorporated in the
Prospectus (as supplemented) or any stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for such
purpose shall have been instituted or, to the Company's knowledge, threatened.
(e) That subsequent to the execution and delivery of this Agreement
and on or prior to the Exchange Date, there shall not have occurred any
downgrading, nor shall any notice have been given to the Company of (A) any
intended or potential downgrading or (B) any review or possible change that does
not indicate the direction of a possible change, in the rating accorded any of
the Company's securities by any of Standard & Poor's Ratings Group, Xxxxx'x
Investors Service, Inc. or any other "nationally recognized statistical rating
organization" (as defined for purpose of Rule 436(g) under the Act).
(f) Subsequent to the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto), there shall
have occurred no Material Adverse Change, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(g) That, at the Commencement Date and at the Exchange Date, there
shall not have been (i) any change or decrease specified in the letter to be
delivered pursuant to (i) of this Section 5, except as disclosed or contemplated
in the Prospectus (exclusive of any supplement thereto), or (ii) any change, or
any development involving a prospective change, in or affecting the business or
properties of the Company and the Subsidiaries the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of each of the
Dealer Managers, so material and adverse as to make it impractical or
inadvisable to proceed with the Exchange Offers and Solicitations or the
delivery of the WorldCom Notes as contemplated by the Registration Statement
(exclusive of any amendment thereto) and the Prospectus (exclusive of any
supplement thereto).
(h) That, at the Commencement Date and at the Exchange Date, the
Company shall have furnished to the Dealer Managers a certificate of the
Company, signed by the Chief Executive Officer, the President, the Chief
Operating Officer or any Senior Vice-President and by the principal financial or
accounting officer, the Treasurer or the Controller of the Company, each in his
official capacity as an officer of the Company and not as an individual, dated
12
respectively as of the Commencement Date and the Exchange Date, to the effect of
subparagraphs (c) through (g) of this Section 4.
(i) That, at the Commencement Date and at the Exchange Date, the
Company's independent public accountants shall have furnished to the Dealer
Managers a letter or letters, dated respectively as of the Commencement Date and
the Exchange Date, in form and substance satisfactory to the Dealer Managers.
(j) That the Company shall have delivered to the Dealer Managers
and their counsel such documents as they may reasonably request relating to the
Exchange Offers, the Solicitations, the issuance and sale of the WorldCom Notes
or otherwise related to the matters contemplated hereby.
(k) No stop order or restraining order shall have been issued and no
litigation shall have been commenced or threatened with respect to the Exchange
Offers, the Solicitations or with respect to any of the transactions in
connection with, or contemplated by, the Exchange Offers, the Solicitations or
this Agreement before any agency, court or other governmental body of any
jurisdiction which you, in good faith after consultation with us, believe
renders it inadvisable for you to continue to act hereunder.
(l) The Company shall have obtained all consents, approvals,
authorizations and orders of, and shall have duly made all registrations,
qualifications and filings with, any court or regulatory authority or other
governmental agency or instrumentality in the United States required in
connection with the making and consummation of the Exchange Offers and the
Solicitations and the execution, delivery and performance of this Agreement, and
will have available funds, and authorization to use such funds under applicable
law, to pay the cash portion of the purchase price of the MFS Notes that it may
become committed to purchase pursuant to the Exchange Offers, to make Consent
Payments (as defined in the Prospectus) that it may become committed to pay in
connection with the Solicitations and, in each case, to pay all related fees and
expenses.
(m) If any of the conditions specified in this Section 4 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Dealer Managers and their counsel,
this Agreement and all obligations of the Dealer Managers hereunder may be
cancelled at, or at any time prior to, the Exchange Date by either of the Dealer
Managers. Notice of such cancellation shall be given to the Company in writing
or by telephone or fax confirmed in writing.
Section 5. Payment of Fees and Reimbursement of Dealer Managers'
-----------------------------------------------------
Expenses. We agree to pay each of you a fee in connection with each Exchange
--------
Offer and the related Solicitation as set forth on Schedule A hereto. We will
also promptly reimburse you, regardless of whether any MFS Notes are tendered or
accepted pursuant to the Exchange Offers, for your reasonable out-of-pocket
expenses in preparing for and performing your functions as Dealer Managers,
including the reasonable fees, costs and out-of-pocket expenses of a single
13
firm as counsel for their representation of you in connection herewith. You
shall provide to the Company documentation with reasonable detail in connection
with and at the time of your request for reimbursement for such expenses.
Section 6. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each Dealer
Manager, each officer and director of each Dealer Manager and each person who
controls any Dealer Manager within the meaning of the Act against any and all
losses, claims, expenses, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, expenses, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
Prospectus or the Prospectus (as supplemented if the Company shall have
furnished any supplements thereto) or in any Ancillary Document, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, expense, damage, liability or action; provided,
--------
however, the Company will not be liable in any such case to the extent that any
-------
such loss, claim, expense, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Dealer Manager
specifically for inclusion in such document. This indemnity agreement is in
addition to any liability which the Company may otherwise have.
(b) Each of the Dealer Managers severally agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within the
meaning of the Act, to the same extent as the foregoing indemnity from the
Company to each Dealer Manager, but only with reference to written information
furnished to the Company by or on behalf of such Dealer Manager specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Dealer
Manager may otherwise have. The Dealer Managers and the Company acknowledge and
agree that the information set forth (i) in the third to last sentence on the
cover page of the Prospectus which specifies the identity of the Dealer Managers
for the Exchange Offers and the Solicitations; (ii) in the second sentence of
the penultimate paragraph on the continuation cover page of the Prospectus which
describes the Dealer Managers' intentions to make a market in the WorldCom
Notes; (iii) in the first sentence of the back cover page of the Prospectus
which specifies the identity of the Dealer Managers for the Exchange Offers and
the Solicitations, and gives their respective addresses and phone numbers; (iv)
under the captions "Prospectus Summary - Dealer Managers", "Prospectus Summary -
Dealer Manager Market Activity," and "the Exchange Offers - Dealer Managers";
(v) in paragraphs [ ], [ ] and [ ] of the Ancillary Documents, is the only
14
information furnished to the Company by or on behalf of the Dealer Managers
specifically for inclusion in the documents referred to in the foregoing
indemnity.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 6, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above except to
the extent such failure results in an increase in the amount of the liability of
the indemnifying party or the forfeiture or impairment of any substantial rights
or defenses of the indemnifying party and (ii) will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a) or (b) above. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to appoint counsel satisfactory to such indemnified party to represent
the indemnified party in such action (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that if the defendants in any such action include both the
-------- -------
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to appoint counsel to defend
such action and approval by the indemnified party of such counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (plus any local counsel), approved by each of the Dealer
Managers in the case of paragraph (a) of this Section 6, representing the
indemnified parties under such paragraph (a) who are parties to such action),
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii). An indemnifying party will not,
without the prior written consent of each of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
15
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) or (b)
of this Section 6 is due in accordance with its terms but is for any reason held
by a court to be unavailable from the Company on grounds of policy or otherwise,
the Company and the Dealer Managers shall contribute to the aggregate losses,
claims, expenses, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively, the "Losses") to which the Company and one or more of the Dealer
Managers may be subject (i) in such proportion as is appropriate to reflect the
relative benefits received (or anticipated to be received) by the Company on the
one hand and the Dealer Managers on the other from the Exchange Offers and the
Solicitations provided, however, that in no case shall any Dealer Manager be
-----------------
responsible for any amount in excess of the fee received (or anticipated to be
received) by such Dealer Manager hereunder or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the Dealer
Managers on the other in connection with the statements or omissions which
resulted in such losses, claims, demands or liabilities as well as any other
relevant equitable considerations. The relative benefits received (or
anticipated to be received) by the Company on the one hand and the Dealer
Managers on the other shall be deemed to be in the same proportion as the
aggregate consideration payable (or anticipated to be paid) by the Company in
cash or securities in the Exchange Offers and the Solicitations (before
deducting expenses) bears to the total compensation payable (or anticipated to
be paid) by the Company to the Dealer Managers, in each case, pursuant to this
Agreement. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Dealer Managers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, expenses, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Company and
the Dealer Managers agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. For purposes of this Section 6, each person who controls a Dealer
Manager within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of a Dealer Manager shall have the same
rights to contribution as such Dealer Manager, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, each officer
of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d). The Dealer Managers' obligations in this subsection (d) to
contribute are several in proportion to their respective rights to receive a
percentage of the aggregate fees payable to the Dealer Managers hereunder and
not joint. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or
16
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
Section 7. Survival. The respective agreements, representations,
--------
warranties, indemnities and other statements of the Company or its officers and
of the Dealer Managers set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Dealer Manager or the Company or any of the officers, directors or
controlling persons referred to in Section 6 hereof, and Sections 1, 2, 3(b), 5,
6, 7, 8, 9 and 10 hereof shall survive the termination or cancellation of this
Agreement.
Section 8. Notices. All communications hereunder will be in writing
-------
and effective only on receipt, and, if sent to the Dealer Managers, will be
mailed, delivered or faxed and confirmed to them, at Salomon Brothers Inc, 0
Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, to the attention of Xxxxx Xxxxxx (fax:
000-000-0000) or, if sent to the Company, will be mailed, delivered or faxed and
confirmed to it at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000, to the
attention of Xxxxxxxxx X. Xxxxx, Director of Financial Reporting (fax: 601-360-
8671) with a copy mailed, delivered or faxed to P. Xxxxx Xxxxxxxxx, General
Counsel-Corporate Development (fax: 000-000-0000).
Section 9. Successors. This Agreement will inure to the benefit of
----------
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 6 hereof,
and no other person will have any right or obligation hereunder.
Section 10. Applicable Law. This Agreement will be governed by and
--------------
construed in accordance with the substantive laws of the State of New York
without regard to such state's rules concerning conflicts of laws. Any right to
trial by jury with respect to any claim or proceeding related to or arising out
of this engagement or any transactions or conduct in connection herewith, is
waived.
Section 11. Termination. This Agreement shall terminate with respect
------------
to each Exchange Offer and the related Solicitation upon the earliest to occur
of (i) the Exchange Date, (ii) the earliest date on which the Dealer Managers
shall have both (a) given notice to the Company that any of the conditions
specified in Section 4 have not been fulfilled in all material respects as of
any date such conditions are required to be fulfilled pursuant to Section 4 with
respect to such Exchange Offer and the related Solicitation and (b) given notice
that the conditions specified pursuant to clause (ii)(a) of this sentence have
not been satisfied within a time satisfactory to the Dealer Managers following
the date of notice given pursuant to clause (ii)(a) of this sentence or (iii)
the date on which the Company terminates or withdraws such Exchange Offer and
the related Solicitation for any reason (the earliest to occur of clauses (i),
(ii) or (iii) being referred to as the "Termination Date").
17
Section 12. General.
-------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original.
WORLDCOM, INC.
By:
--------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
SALOMON BROTHERS INC
By:
----------------------
Name:
Title:
XXXXXXX, XXXXX & CO.
By:
----------------------
Name:
Title:
18
SCHEDULE A
If, as of the expiration or termination of the applicable Exchange
Offer and Solicitation, a majority in aggregate principal amount at stated
maturity of the Outstanding (as defined in the 1994 Indenture) MFS 2004 Notes
have been tendered (and not validly revoked) in such Exchange Offer and
Solicitation, then the Dealer Managers shall be entitled to receive an aggregate
fee equal to 0.25% of the aggregate Accreted Value (as defined in the
Prospectus), as of July 15, 1997, of all MFS 2004 Notes tendered (and not
validly revoked) as of such expiration or termination. Of the foregoing amount,
the Company shall pay 60% to Salomon Brothers Inc and 40% to Xxxxxxx, Xxxxx &
Co. The parties acknowledge that 0.25% of the Accreted Value, as of July 15,
1997, of an MFS 2004 Note having a principal amount of $1,000 at stated maturity
is equal to [$ ].
If, as of the expiration or termination of the applicable Exchange
Offer and Solicitation, a majority in aggregate principal amount at stated
maturity of the Outstanding (as defined in the 1996 Indenture) MFS 2006 Notes
have been tendered (and not validly revoked) in such Exchange Offer and
Solicitation, then the Dealer Managers shall be entitled to receive an aggregate
fee equal to 0.25% of the aggregate Accreted Value (as defined in the
Prospectus), as of July 15, 1997, of all MFS 2006 Notes tendered (and not
validly revoked) as of such expiration or termination. Of the foregoing amount,
the Company shall pay 60% to Salomon Brothers Inc and 40% to Xxxxxxx, Xxxxx &
Co. The parties acknowledge that 0.25% of the Accreted Value, as of July 15,
1997, of an MFS 2004 Note having a principal amount of $1,000 at stated maturity
is equal to [$ ].
19
EXHIBIT A
WORLDCOM, INC.
SIGNIFICANT SUBSIDIARIES
------------------------
Name Jurisdiction in which Organized
---- -------------------------------
WorldCom Network Services, Inc. Delaware
MFS Communications Company, Inc. Delaware
IDB WorldCom, Inc. Delaware
UUNET Technologies, Inc. Delaware
20
EXHIBIT B
The opinion of General Counsel-Corporate Development for the Company
shall be substantially to the effect that:
(1) The Significant Subsidiaries on Exhibit A to the Dealer Managers
Agreement (the "Subsidiaries") are the only Significant Subsidiaries (within the
meaning of Rule 405 under the Act) of the Company. Each of the Company and the
Subsidiaries has been duly incorporated or formed and is validly existing as a
corporation in the jurisdiction of its incorporation or formation, and has all
consents, authorizations, approvals, orders, certificates, permits and
exemptions (together, "Authorizations") of and from, has made all declarations
and filings with, all federal, state, local and other governmental authorities,
all self-regulatory organizations, and all courts or other tribunals, and has
the corporate power and authority, necessary to conduct its business and to own
lease, license and use its property and assets in the manner described in the
Prospectus except to the extent that the lack of such Authorizations would not
have a material adverse effect on the Company and its Subsidiaries, taken as a
whole. The Company has the requisite corporate power and authority to authorize
the Exchange Offers and the Solicitations, to execute, deliver and perform the
Dealer Managers Agreement and to issue, offer, sell and deliver the WorldCom
Notes.
(2) All the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and are duly issued and are fully paid and
nonassessable, and have not been issued and are not owned or held in violation
of any statutory preemptive right of stockholders; to the knowledge of such
counsel after due inquiry such shares are not held in violation of any other
preemptive right of stockholders; and all outstanding shares of capital stock of
the Subsidiaries are owned by the Company either directly or through wholly-
owned Subsidiaries free and clear of any perfected security interest and, to my
knowledge after due inquiry, any other material security interests,
stockholders' agreements or voting trusts.
(3) To the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of the
Subsidiaries, or any of their respective properties, of a character required to
be disclosed in the Registration Statement or the Prospectus that is not
adequately disclosed in the Registration Statement or the Prospectus, and there
is no contract or other document of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement, which is not described or filed as required.
(4) (A) As of the Commencement Date, an opinion to the effect that
neither the performance by the Company of the Exchange Offers or the
Solicitations and the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Dealer Managers
Agreement and the Original Indenture (as supplemented by the First Supplemental
Indenture, if and when executed by the Company and the Trustee) nor the issuance
and sale of the WorldCom Notes, nor the execution and delivery by MFS of, and
the
21
performance by MFS of its obligations under, the 1994 Indenture (as supplemented
by the 1994 Second Supplemental Indenture, if and when executed by MFS and the
MFS Trustee) or the 1996 Indenture (as supplemented by the 1996 Second
Supplemental Indenture, if and when executed and delivered by MFS and the MFS
Trustee) nor the consummation of any other of the transactions contemplated in
the Dealer Managers Agreement nor the fulfillment of the terms thereof will
conflict with, result in a breach of or constitute a default under the articles
of incorporation or the bylaws of the Company or MFS or the terms of any
agreement filed as an exhibit to the Registration Statement or the Prospectus to
which the Company or any of its Subsidiaries is a party or by which the Company
is bound or any of its properties is subject, or any judgment, order or
regulation known to such counsel to be applicable to the Company or any of its
Subsidiaries, or any of their properties, of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction over
the Company or any of its Subsidiaries or any of their respective properties,
except in the case of any judgment, order or regulation of any State Regulatory
Agency (as defined in the Dealer Managers Agreement) to the extent that any such
conflict, breach or default would not have a Material Adverse Effect on the
Company and its Subsidiaries.
(B) As of the Exchange Date, an opinion to the effect that neither
the performance by the Company of the Exchange Offers or the Solicitations and
the execution and delivery by the Company of, and the performance by the Company
of its obligations under, the Dealer Managers Agreement and the Original
Indenture (as supplemented by the First Supplemental Indenture) nor the issuance
and sale of the WorldCom Notes, nor the execution and delivery by MFS of, and
the performance by MFS of its obligations under, the 1994 Indenture (as
supplemented by the 1994 Second Supplemental Indenture) or the 1996 Indenture
(as supplemented by the 1996 Second Supplemental Indenture) nor the consummation
of any other of the transactions contemplated in the Dealer Managers Agreement
nor the fulfillment of the terms thereof will conflict with, result in a breach
of or constitute a default under the articles of incorporation or the bylaws of
the Company or MFS or the terms of any agreement filed as an exhibit to the
Registration Statement or the Prospectus to which the Company or any of its
Subsidiaries is a party or by which the Company is bound or any of its
properties is subject, or any judgment, order or regulation known to such
counsel to be applicable to the Company or any of its Subsidiaries, or any of
their properties, of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company or any of
its Subsidiaries or any of their respective properties, except in the case of
any judgment, order or regulation of any State Regulatory Agency (as defined in
the Dealer Managers Agreement) to the extent that any such conflict, breach or
default would not have a Material Adverse Effect on the Company and its
Subsidiaries.
(5) To my knowledge, no consent, approval, authorization, license,
certificate, permit or order of, or filing, registration or qualification with,
any court or governmental agency or body is required for the performance of the
Exchange Offers, the Solicitations or any of the transactions contemplated under
the Dealer Managers Agreement, except such as have been obtained under the Act
and such as may be required by the Federal Communications Commission or similar
state regulatory authorities or under the blue sky laws of any jurisdiction in
connection with the Exchange Offers and the Solicitations (as to which such
counsel expresses
22
no opinion regarding such requirements or the consequence of any failure to
comply with the same on any of the foregoing opinions herein) as described in
the Prospectus and such other approvals as have been obtained.
Such counsel shall also state that he has not checked the accuracy or
completeness of, or otherwise verified, the information furnished with respect
to other matters in the Registration Statement or the Prospectus. He has
generally reviewed and discussed with certain other officers and employees of
and counsel for the Company the information so furnished. On the basis of such
communication, review and discussion, but without independent check or
verification, except as stated, nothing has come to his attention that would
lead him to believe that (i) the Registration Statement (other than the
financial statements and related schedules and other financial and statistical
information contained therein, omitted therefrom, or incorporated by reference
therein, as to which he need not express a belief), except for that part of the
Registration Statement that constitutes the Statement of Eligibility and
Qualification (Form T-1 under the Trust Indenture Act), contains, or on the date
of the effectiveness of the Registration Statement did contain, any untrue
statement of a material fact or omits, or on the date of the effectiveness of
the Registration Statement did omit, to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading or (ii) the Prospectus
(except as aforesaid) on the date such opinion is given contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading or (iii) the Registration Statement or the
Prospectus (other than the financial statements and related schedules and other
financial and statistical information contained therein, omitted therefrom as to
which such counsel need not express a belief) did not comply as to form in all
material respects with the Act, the Exchange Act and the Trust Indenture Act, as
applicable. As used in this opinion, the term "Prospectus" shall refer to the
Prospectus as supplemented on the date such opinion is given.
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EXHIBIT C
The opinion of Xxxxx Xxxx LLP shall be substantially to the effect
that:
(1) The Original Indenture, in the case of an opinion delivered at the
Commencement Date, and the Indenture, in the case of an opinion delivered at the
Exchange Date has been duly qualified under the Trust Indenture Act and has been
duly authorized, executed and delivered by the Company and is a valid and
legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law), and except to the extent enforceability of
any indemnification provisions may be limited by public policy.
(2) The WorldCom Notes have been duly authorized and, when executed by
the Company and authenticated by the Trustee in accordance with the provisions
of the Indenture and delivered in exchange for the MFS Notes in accordance with
the Exchange Offers will be valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, and will be entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws of general applicability relating to or affecting
creditors' rights and to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law), and
except to the extent enforceability of any indemnification provisions may be
limited by public policy, and, in the case of the opinion delivered as of the
Exchange Date, all conditions precedent to the issuance of the WorldCom Notes
provided for in the Indenture have been complied with and the terms of the
WorldCom Notes have been established in conformity with the provisions of the
Indenture.
(3) The MFS Notes outstanding after completion of the Exchange Offers
and the Solicitations will be valid and legally binding obligations of MFS,
enforceable against MFS in accordance with their respective terms, and will be
entitled to the benefits of the 1994 Indenture as supplemented by the 1994
Second Supplemental Indenture or the 1996 Indenture as supplemented by the 1996
Second Supplemental Indenture, as the case may be, subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws of general applicability relating to or affecting creditors' rights
and to general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law), and except to the extent
enforceability of any indemnification provisions may be limited by public
policy.
(4) (A) As of the Commencement Date, an opinion to the effect that if
the holders of a majority in aggregate principal amount outstanding (or the
holders of at least 75% of the aggregate principal amount outstanding with
respect to the modification of the term "Change in Control") of the MFS 2004
Notes consent to the Proposed Amendments to the 1994 Indenture, then the 1994
Second Supplemental Indenture, if executed and delivered in the manner and in
the
24
form contemplated in the Prospectus, will be a valid amendment to the 1994
Indenture, permitted by the terms of the 1994 Indenture; assuming due
authorization and execution by the parties thereto the 1994 Indenture as amended
by the 1994 Second Supplemental Indenture, will constitute a valid and binding
obligation of MFS, enforceable against MFS in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws of general applicability relating to or affecting
creditors' rights and to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law), and
except to the extent enforceability of any indemnification provisions may be
limited by public policy.
(B) As of the Exchange Date, an opinion to the effect that the 1994
Second Supplemental Indenture (x) is duly authorized, executed and delivered by
MFS and (y) is a valid amendment to the 1994 Indenture, permitted by the terms
of the 1994 Indenture; the 1994 Indenture as amended by the 1994 Second
Supplemental Indenture constitutes a valid and binding obligation of MFS,
enforceable against MFS in accordance with its terms, subject to the applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws of general applicability relating to or affecting creditors' rights
and to general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(5) At the Commencement Date and the Exchange Date, opinions regarding
the MFS 2006 Notes, the 1996 Indenture and the 1996 Second Supplemental
Indenture substantially similar to the opinions required by paragraph 4 above
regarding the MFS 2004 Notes, the 1994 Indenture and the 1994 Second
Supplemental Indenture.
(6) The Dealer Manager Agreement has been duly authorized and validly
executed and delivered by the Company and is a valid and legally binding
agreement of the Company.
(7) The statements under "Description of the WorldCom Notes" in the
Prospectus which purport to summarize the terms of the Indenture and the
WorldCom Notes do fairly summarize the material terms of the Indenture and the
WorldCom Notes.
(8) The Registration Statement has become effective under the Act; any
required filing of the Prospectus and any supplement or amendment thereto has
been made in the manner and within the time period required by the Act and the
rules thereunder; and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued, no proceedings for
that purpose have been instituted or threatened, and the Registration Statement
and the Prospectus (excluding financial and statistical information contained
therein or omitted therefrom and any information incorporated by reference
therein) appear on their face to have been appropriately responsive in all
material respects to the applicable requirements of the Act. The Company met
the requirements for the use of Form S-4 at the time it filed the Registration
Statement.
25
EXHIBIT D
The opinion of the Xxxxxx Xxxx & Xxxxxx LLP shall be substantially to
the effect that:
The Company and its Significant Subsidiaries have the consents,
approvals authorizations, licenses, certificates or permits required by the FCC,
if any, for the performance of the Exchange Offers and the Solicitations, and
the consummation of the transactions contemplated in the Dealer Managers
Agreement. Where necessary, if at all, the Company and its Significant
Subsidiaries have the consents, approvals, authorizations, licenses,
certificates, or permits required by the State Regulatory Agencies for the
consummation of the transactions contemplated in the Agreement, where the
failure to obtain such a consent, approval, authorization, license, certificate,
permit or order would have a Material Adverse Effect.
26
EXHIBIT E
27
