EXHIBIT 10.13
EXECUTION COPY
STOCK SUBSCRIPTION AGREEMENT dated as of June 28, 2001
(this "AGREEMENT"), between WORLDCOM, INC. ("WORLDCOM"), a
Georgia corporation, and WILDCAT ACQUISITION CORP., a Delaware
corporation (the "CORPORATION").
WorldCom hereby subscribes for and offers to purchase, and the
Corporation hereby accepts such offer and agrees to issue to WorldCom, 500,000
shares of common stock, par value $.01 per share (the "COMMON STOCK"), of the
Corporation in consideration of the payment by WorldCom to the Corporation on or
before the date hereof of cash in the amount of $5,000, the receipt of which is
hereby acknowledged and 70,750 shares of Junior Preferred Stock, par value $1.00
per share (the "JUNIOR PREFERRED STOCK"), of the Corporation, in consideration
of the payment by WorldCom to the Corporation on or before the date hereof of
cash in the amount of $70,750 (the "CASH PAYMENT"), and a note in the form
attached as Exhibit A hereto in the amount of $7,074,929,250 (the "NOTE"), the
receipt of which is hereby acknowledged. Each share of Junior Preferred Stock
shall have a liquidation value of $100,000 per share (the "LIQUIDATION VALUE").
As of the date of its issuance and at all times thereafter, the aggregate
Liquidation Value of the Junior Preferred Stock shall be $7,075,000,000.
In addition, in connection with this Agreement and the Note, upon
the exchange of the Note for Exchange Notes (the "EXCHANGE NOTES") pursuant to
Section 404 of the Note, WorldCom shall enter into a Registration Rights
Agreement (the "REGISTRATION RIGHTS AGREEMENT") in the form attached as Exhibit
B hereto providing holders of Exchange Notes with registration rights customary
in offerings pursuant to Rule 144A under the Securities Act of 1933, as amended
(the "ACT"). The Exchange Notes will be issued pursuant to the Indenture dated
as of May 15, 2000, between WorldCom and Chase Manhattan Trust Company, N.A., as
Trustee (the "Trustee").
1. Representations and Warranties of the Corporation
The Corporation represents and warrants to, and agrees with,
WorldCom that:
(a) The Corporation has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware. The
Corporation has no subsidiaries.
(b) The shares of Common Stock and Junior Preferred Stock to be sold
pursuant to this Agreement (the "OFFERED SECURITIES") and all other outstanding
shares of capital stock of the Corporation have been duly authorized and validly
issued, and are fully paid and nonassessable. At the close of business on June
27, 2001, 1,000 shares of Common Stock and 0 shares of preferred stock of the
Corporation were issued and
outstanding and there were no options or warrants to purchase any capital stock
of the Corporation or securities convertible into or exchangeable for any
capital stock of the Corporation or any other agreements or instruments
providing for the issuance of any capital stock of the Corporation.
(c) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required to be obtained or
made by the Corporation for the consummation of the transactions contemplated by
this Agreement.
(d) The execution, delivery and performance of this Agreement, and
the consummation of the transactions contemplated herein will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, (i) any statute, rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over the
Corporation or any of its properties, (ii) any agreement or instrument to which
the Corporation is a party or by which the Corporation is bound or to which any
of the properties of the Corporation is subject, or (iii) the charter, by-laws
or other organizational documents of the Corporation.
(e) This Agreement has been duly authorized, executed and delivered
by the Corporation and constitutes a valid and legally binding obligation of the
Corporation enforceable against the Corporation in accordance with its terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally, (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (iii) an implied covenant of good faith and fair dealing.
(f) The Offer and sale of the Offered Securities in the manner
contemplated by this Agreement will be exempt from the registration requirements
of the Act, by reason of Section 4(2) thereof; and it is not necessary to
qualify an indenture in respect of the Offered Securities under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
(g) The aggregate Liquidation Value of the Junior Preferred Stock
purchased by WorldCom pursuant to the terms of this Agreement on the date of its
issuance is, and at any time thereafter shall be, $7,075,000,000.
2. Representations and Warranties of WorldCom
WorldCom represents and warrants to, and agrees with, the
Corporation that:
(a) WorldCom has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Georgia.
(b) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required to be obtained or
made by WorldCom for the consummation of the transactions contemplated by this
Agreement.
(c) The execution, delivery and performance of this Agreement, and
the consummation of the transactions contemplated herein will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, (i) any statue, rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over
WorldCom or any of its properties, (ii) any agreement or instrument to which
WorldCom is a party or by which WorldCom is bound or to which any of its
properties is subject, or (iii) the charter, by-laws or other organizational
documents of WorldCom.
(d) This Agreement has been duly authorized, executed and delivered
by WorldCom and constitutes a valid and legally binding obligation of WorldCom
enforceable against WorldCom in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and (iii) an implied covenant of good faith and fair dealing.
(e) The Note has been duly authorized, executed and delivered by
WorldCom and constitutes a valid and legally binding obligation of WorldCom
enforceable against WorldCom in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and (iii) an implied covenant of good faith and fair dealing.
(f) The delivery of the Note to the Corporation in the manner
contemplated in this Agreement will be exempt from the registration requirements
of the Act by reason of Section 4(2) thereof; and it is not necessary to qualify
an indenture in respect of the Note under the Trust Indenture Act of 1939, as
amended. No registration under the Act of the Note is required for the delivery
of the Note to the Corporation as contemplated by this Agreement.
(g) The Indenture has been duly authorized, executed and delivered
by WorldCom and, assuming that the Indenture is a valid and legally binding
obligation of the Trustee, constitutes a valid and legally binding obligation of
WorldCom enforceable against WorldCom in accordance with its terms, except as
such enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditor's rights generally, (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and (iii) an implied covenant of good faith and fair dealing. The Indenture has
been duly qualified under the Trust Indenture Act.
(h) The Exchange Notes have been duly authorized by WorldCom and,
when duly executed and delivered by WorldCom in exchange for the Note in
accordance with its terms and duly authenticated by the Trustee, will constitute
valid and legally
binding obligations of WorldCom enforceable against WorldCom in accordance with
their terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and (iii) an implied covenant of good faith
and fair dealing and entitled to the benefits of the Indenture.
(i) The Registration Rights Agreement has been duly authorized by
WorldCom and, when duly executed and delivered by WorldCom following the
exchange of the Note for Exchange Notes and assuming that the Registration
Rights Agreement is a valid and legally binding obligation of the other parties
thereto, will constitute a valid and legally binding obligation of WorldCom
enforceable against WorldCom in accordance with their terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and (iii) an implied covenant of good faith and fair dealing.
(j) The delivery of the Exchange Notes upon the exchange of the Note
will be exempt from the registration requirements of the Act by reason of
Section 4(2) thereof. No registration under the Act of the Exchange Notes is
required for the delivery of the Exchange Notes as contemplated by the Note.
This Agreement may be executed in one or more counterparts, each of
which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York without regard to principles of
conflict of laws.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date hereof.
WORLDCOM, INC.,
by /s/ XXXXXXX X. XXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
WILDCAT ACQUISITION CORP.,
by /s/ XXXX X. XXXXXX
-----------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Secretary
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THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR
THE BENEFIT OF WORLDCOM, INC. (THE "COMPANY") THAT THIS NOTE MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT
WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING
THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2) SO
LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS NOTE), (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS NOTE), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE WHICH MAY BE
OBTAINED FROM THE COMPANY IS DELIVERED BY THE TRANSFEREE TO THE COMPANY, (5)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS NOTE AGREES THAT IT
WILL FURNISH TO THE COMPANY SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY
REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS NOTE COMPLIES WITH
THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN INSTITUTION THAT
IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT AND THAT IT IS HOLDING THIS NOTE FOR INVESTMENT PURPOSES AND
NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (K)(2)(I)
OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
No. 001 U.S. $7,074,929,250
June 28, 2001
WORLDCOM, INC.
7.69% Note Due 2009
Pursuant to this Note (this "Note"), WorldCom, Inc., a Georgia
corporation (the "Company"), for value received promises to pay to WILDCAT
ACQUISITION CORP., a Delaware corporation ("Wildcat"), c/o WORLDCOM, INC., 000
Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx 00000, or registered assigns, the
principal
sum of $7,074,929,250 (SEVEN BILLION SEVENTY-FOUR MILLION NINE HUNDRED
TWENTY-NINE THOUSAND TWO HUNDRED FIFTY DOLLARS) on June 15, 2009 (the "Maturity
Date"), and to pay iinterest thereon at the interest rate per annum of 7.69%
(the "Interest Rate"), semiannually in arrears on June 15 and December 15 of
each year, commencing December 15, 2001 (each, an "Interest Payment Date") or if
such date is not a Business Day, on the next succeeding Business Day, to the
Holder of this Note as of the close of business on the Regular Record Date, as
defined below, with respect to such Interest Payment Date, until the principal
hereof is paid.
Reference is made to the Stock Subscription Agreement dated as of
June 28, 2001 (the "Stock Subscription Agreement"), between the Company and
Wildcat.
ARTICLE ONE
Section 101. DEFINITIONS.
(a) For all purposes of this Note, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP, and, except as otherwise
herein expressly provided, the term "GAAP" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted in the United States of America at the date of such
computation; and
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Note as a whole and not to any particular Article,
Section or other subdivision;
(4) "or" is not exclusive; and
(5) "including" means including without limitation.
(b) For all purposes of this Note, the following terms have the
respective meanings set forth below or set forth in the Section hereof following
such term:
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such
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specified Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Bankruptcy Law" has the meaning specified in Section 301.
"Board of Directors" means either the board of directors of the
Company, or the executive or any other committee of that board duly authorized
to act in respect hereof or any person to whom such authority has been duly
delegated.
"Business Day", means, unless otherwise specified, any day that is
not a Saturday or Sunday, that is neither a legal holiday nor a day on which
banking institutions are authorized or required by law or executive order to
close in New York City.
"Company" means WorldCom, Inc., a Georgia corporation, until a
successor corporation shall have become such pursuant to the applicable
provisions herein, and thereafter "Company" shall mean such successor
corporation.
"corporation" includes corporations, associations, companies and
business trusts.
"Custodian" has the meaning specified in Section 301.
"Defaulted Interest" has the meaning specified in Section 202(c).
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
"Event of Default" has the meaning specified in Section 301.
"GAAP" means United States generally accepted accounting principles
as in effect as of the date of determination, unless stated otherwise.
"Holder" means, with respect to this Note, the Person in whose name
this Note is registered in the Security Register.
"Indenture" shall have the meaning specified in Section 404(a) of
this Note.
"Initial Holder" means Wildcat.
"Interest Payment Date" has the meaning specified in the preamble
hereto.
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"Interest Rate" has the meaning specified in the preamble hereto.
"Maturity", when used with respect to this Note, means the date on
which the principal of this Note or an installment of principal becomes due and
payable as herein provided, whether at the Stated Maturity or by declaration of
acceleration or otherwise.
"Maturity Date" has the meaning specified in the preamble hereto.
"Note" has the meaning specified in the preamble hereto.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, estate, unincorporated
organization or government or any agency or political subdivision thereof.
"Regular Record Date" for any interest payable on this Note on an
Interest Payment Date means the June 1 (whether or not a Business Day) preceding
the June 15 Interest Payment Date or the December 1 (whether or not a Business
Day) preceding the December 15 Interest Payment Date.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" has the meaning specified in Section 201(a).
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed pursuant to Section 202(c).
"Stated Maturity" means the date specified herein as the date on
which the principal of this Note or such installment of principal or interest is
due and payable.
"Trustee" shall have the meaning specified in Section 404(a) of this
Note.
"United States" means the United States of America (including the
States thereof and the District of Columbia), its territories and possessions
and other areas subject to its jurisdiction.
"Wildcat" shall have the meaning specified in the preamble hereto.
Section 102. EFFECT OF HEADINGS.
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
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Section 103. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Note by the parties hereto
shall bind their respective successors and assigns and inure to the benefit of
their permitted successors and assigns, whether so expressed or not.
Section 104. SEPARABILITY CLAUSE.
In case any provision in this Note shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 105. BENEFITS OF THIS NOTE.
Nothing in this Note, express or implied, shall give to any Person,
other than the parties hereto and their respective successors hereunder, any
benefit or any legal or equitable right, remedy or claim under this Note.
SECTION 106. GOVERNING LAW.
THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE AND TO BE PERFORMED
ENTIRELY IN THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD TO THE
CONFLICTS OF LAW RULES OF SAID STATE.
Section 107. LEGAL HOLIDAYS.
In any case where any Interest Payment Date or Maturity of this Note
shall not be a Business Day in New York City, then (notwithstanding any other
provision herein) payment of principal or interest need not be made on such
date, but may be made on the next succeeding Business Day in New York City with
the same force and effect as if made on the Interest Payment Date or at the
Maturity, and no interest shall accrue on such payment for the period from and
after such Interest Payment Date or Maturity, as the case may be, to such
Business Day if such payment is made or duly provided for on such Business Day.
Section 108. AMENDMENT.
This Note may not be amended except by an instrument in writing
signed by the Company and the Holder.
Section 109. LIMITATION OF INDIVIDUAL LIABILITY.
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No recourse under or upon any obligation, covenant or agreement
contained herein, or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or any successor
corporation, either directly or through the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Note is for solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors, as such, of the Company or any successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained herein; and that
any and all such personal liability of every name and nature, either at common
law or in equity or by constitution or statute, of and any and all such rights
and claims against, every such incorporator, stockholder, officer or director,
as such, because of the creation of the indebtedness hereby authorized, or under
or by reason of obligations, covenants or agreements contained herein, are
hereby expressly waived and released as a condition of, and as a consideration
for, the execution and the issuance of this Note.
ARTICLE TWO
Section 201. REGISTRATION; REGISTRATION OF TRANSFER; TRANSFER RESTRICTION.
(a) The Company shall cause to be kept at 000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000, a register for this Note (the register maintained in
such office of the Company being herein sometimes referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of this Note and the transfers of
this Note; PROVIDED that this Note shall not be transferred in part in an
aggregate principal amount of less than $1,000 (or such lesser aggregate
principal amount as may be outstanding under this Note at the time of such
transfer) without the written consent of the Company, such consent not to be
unreasonably withheld. Such Security Register shall be in written form or in any
other form capable of being converted into written form within a reasonable
period of time.
Upon acceptance by the Company of surrender for registration of
transfer of this Note at the principal executive office of the Company, the
Company shall execute and deliver, in the name of the designated transferee, a
new note or notes of like tenor and aggregate principal amount.
(b) Any new note issued upon any transfer or exchange of this Note
shall be the valid obligation of the Company, evidencing the same debt, and
entitled to the same benefits herein, as the Note surrendered upon such
registration of transfer.
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This Note when presented or surrendered for registration of transfer
shall be duly endorsed, or be accompanied by a written instrument of transfer in
a form satisfactory to the Company duly executed by the Holder thereof or such
Holder's attorney-in-fact duly authorized in writing.
No service charge shall be made for any transfer of this Note. The
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer of this
Note.
(c) Notwithstanding the foregoing, prior to registering any transfer
of this Note, the Company may request the Holder to deliver an opinion of
counsel, certifications or other information to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not subject to the
registration requirements of the Securities Act.
Section 202. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
(a) Interest on this Note that is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Holder at
the close of business on the Regular Record Date for such interest. Payment of
interest on this Note shall be made by check mailed to the address of the Holder
as such address shall appear in the Security Register or at the option of such
Holder by wire transfer to an account designated in writing by such Holder. The
Company will continue to pay interest on this Note by the method used to make
the interest payment on the immediately preceding Interest Payment Date unless
the Holder notifies the Company in writing of a different method or location for
payment not less than 10 days before the Regular Record Date for such Interest
Payment Date.
(b) Interest payable on this Note on any Interest Payment Date will
include interest accrued from and including the immediately preceding Interest
Payment Date in respect of which interest has been paid or duly provided for (or
from and including June 28, 2001 if no interest has been paid or duly provided
for with respect to this Note) to but excluding such Interest Payment Date.
(c) Any interest on this Note that is payable but is not punctually
paid or duly provided for on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of his having been such a Holder, and such
Defaulted Interest may be paid by the Company, as provided below:
The Company may make payment of any Defaulted Interest to the Holder
at the close of business on a special record date for the payment of such
Defaulted Interest (a "Special Record Date"), which shall be fixed in the
following manner. The
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Company shall notify the Holder in writing of the amount of Defaulted Interest
proposed to be paid on this Note and the date of the proposed payment, and at
the same time the Company shall deposit an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Holder for such deposit prior to the
date of the proposed payment, such money when deposited to be held in trust for
the benefit of the Holder entitled to such Defaulted Interest as in this clause
provided. Thereupon the Company shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Holder of the notice of the proposed payment. The
Company shall promptly notify the Holder of such Special Record Date and, in the
name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to the Holder at his address as it appears
in the Security Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Holder at the close of business on such Special Record
Date.
Section 203. COMPUTATION OF INTEREST.
Interest on this Note shall be computed on the basis of a 360-day
year of twelve 30-day months.
Section 204. CURRENCY OF PAYMENTS.
Payment of the principal and interest on this Note will be made in
Dollars.
ARTICLE THREE
Section 301. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to this Note,
means any one of the following events (whatever the reason for such Event of
Default and whether or not it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest upon this Note when such
interest becomes due and payable, and continuance of such default for a period
of 30 days; or
(b) default in the payment of the principal of this Note when it
becomes due and payable at its Maturity; or
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(c) default in the performance, or breach, of any covenant or
warranty of the Company herein (other than a covenant or warranty a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Company by
the Holder a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;
or
(d) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(iv) makes a general assignment for the benefit of its
creditors; or
(e) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company in an involuntary case,
(ii) appoints a Custodian of the Company or for all or
substantially all of its property, or
(iii) orders the liquidation of the Company,
and, in any such case, such order or decree remains unstayed and in effect for
90 days.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar Federal or
State law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or other similar official under any Bankruptcy
Law.
Section 302. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
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If an Event of Default with respect to this Note occurs, then and in
every such case, so long as such Event of Default shall not have been remedied,
unless the principal of this Note shall have already become due and payable, the
Holder, by notice in writing to the Company may declare the principal amount of
and all accrued but unpaid interest on this Note to be due and payable
immediately, and upon any such declaration such principal amount (or specified
amount) and interest shall become immediately due and payable, anything herein
to the contrary notwithstanding. Upon payment in full of such amounts in
Dollars, all obligations of the Company in respect of the payment of principal
of and interest on this Note shall terminate. This provision, however, is
subject to the condition that if, at any time after the principal of this Note
shall have been so declared due and payable, and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Company shall pay a sum in Dollars, sufficient to pay
all matured installments of interest upon this Note and the principal of this
Note which shall have become due otherwise than by acceleration (with interest
on such principal and to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest, at the rate borne by
this Note) and the reasonable expenses of the Holder, and any and all Events of
Default, other than the nonpayment of principal on this Note which shall have
become due as a result of the acceleration being rescinded, shall have been
cured, remedied or waived, then, and in every such case, the Holder by written
notice to the Company, may waive all defaults and rescind and annul such
declaration and its consequences, but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default, or shall impair any
right consequent thereon.
In case the Holder shall have proceeded to enforce any right under
this Note and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Holder, then, and in every such case, the Company
and the Holder shall be restored respectively to their several positions and
rights hereunder, and all rights, remedies and powers of the Company and the
Holder shall continue as though no such proceedings had been taken.
Section 303. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST.
The Holder shall have the right, which is absolute and unconditional,
to receive payment of the principal of and (subject to Section 202) interest on
the respective Stated Maturity expressed in this Note and to institute suit for
the enforcement of any such payment, and such right shall not be impaired
without the consent of the Holder.
Section 304. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided elsewhere herein, no right or remedy
herein conferred upon or reserved to the Holder is intended to be exclusive of
any other right or
15
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 305. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Holder to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy made available herein or by law to the Holder may be
exercised from time to time, and as often as may be deemed expedient, by the
Holder.
Section 306. WAIVER OF PAST DEFAULTS.
The Holder may waive any past default hereunder and its consequences.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Note; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
ARTICLE FOUR
Section 401. PAYMENT OF PRINCIPAL AND INTEREST.
The Company covenants that it will duly and punctually pay, or cause
to be paid, the principal of and interest on this Note in accordance with the
terms herein. The interest on this Note shall be payable without presentation of
this Note, and only to or upon the written order of the Holder thereof and may
be paid by check to the order of the Holder, mailed to its address as it appears
on the Security Register or by wire transfer as set forth in Section 202.
The Company shall pay interest on overdue principal at a rate equal
to 2% over the Interest Rate, and it shall pay interest on overdue installations
of interest at the same rate to the extent lawful.
Section 402. OPTIONAL PREPAYMENTS.
The Company may, at its option, upon notice as provided below,
prepay at any time all, or from time to time any part of, this Note, at 100% of
the principal amount so
16
prepaid, plus accrued and unpaid interest on such amount. The Company will give
the Holder written notice of each optional prepayment under this Section 402 not
less than 15 days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify such date, the aggregate principal
amount of this Note to be prepaid, and the interest to be paid on the prepayment
date with respect to such principal amount being repaid.
Section 403. MATURITY; SURRENDER, ETC.
In the case of each prepayment of this Note pursuant to this Article
IV, the principal amount of this Note to be prepaid shall mature and become due
and payable on the date fixed for such prepayment, together with interest on
such principal amount accrued and unpaid to such date. From and after such date,
unless the Company shall fail to pay such principal amount when so due and
payable, as aforesaid, interest on such principal amount shall cease to accrue.
If this Note is paid or prepaid in full it shall be surrendered to the Company
and cancelled and shall not be reissued. A new Note shall not be issued in lieu
of any prepaid principal amount of any Note. If this Note is prepaid in part a
new note shall be issued representing the aggregate principal amount of the Note
not prepaid.
Section 404. EXCHANGE.
(a) At its option, the Initial Holder may in connection with the
transfer of this Note in whole or in part to one or more unaffiliated third
parties exchange the Note or portion thereof into a like aggregate principal
amount of debt securities of the Company (the "Exchange Notes") having the same
Interest Rate and Maturity Date as this Note and which Exchange Notes shall be
in the form attached as Annex A hereto and shall be issued under the indenture
dated May 15, 2000 (the "Indenture"), between the Company and Chase Manhattan
Trust Company, N.A., as trustee (the "Trustee"), on substantially the same terms
as the $4,000,000,000 7.50% Notes due 2011 issued under such Indenture and
offered pursuant to a prospectus supplement dated May 9, 2001 to a prospectus
dated May 9, 2001, and duly authenticated by the Trustee pursuant to the
Company's instructions; PROVIDED, that the Exchange Notes will provide for
transfer restrictions and legends in accordance with applicable law and
registration rights. In the event of a prepayment of the Note under Section 402,
the right to exchange the Note or portion thereof subject to prepayment will
terminate at the close of business on the Business Day immediately preceding the
date fixed for such prepayment and such right shall be lost if not exercised
prior to such time.
(b) To exchange the Note, the Initial Holder must (i) surrender the
Note to be exchanged, duly endorsed in a form satisfactory to the Company, at
the office of the Company, (ii) notify the Company at such office of the
election to exchange the Note and the aggregate principal amount thereof to be
exchanged and the proposed date of such
17
exchange which date shall be not less than 10 days from the date of such notice,
(iii) state in writing the name or names in which the certificate or
certificates for such Exchange Notes are to be issued, and (iv) pay any transfer
or similar tax if required. In the event that the Initial Holder fails to notify
the Company of the aggregate principal amount to be exchanged, the Initial
Holder shall be deemed to have elected to exchange 100% of the aggregate
principal amount of the Note. The later of (A) the date on which the Initial
Holder satisfies (i) through (iv) above, and (B) if the Initial Holder satisfies
(i) through (iv) above prior to such 10th day, the date which is 10 days from
the delivery of the notice referred to in (ii) is the "Exchange Date". On the
Exchange Date, the Company shall deliver a certificate or certificates for the
aggregate principal amount of Exchange Notes issuable upon the exchange duly
executed by the Company and duly authenticated by the Trustee, and a new
certificate representing the aggregate principal amount of the Note not
exchanged, if any. The person in whose name an Exchange Note is registered shall
be treated as the holder of the Exchange Note of record on and after the
Exchange Date. No payment will be made for accrued and unpaid interest on the
Note or portion thereof surrendered for exchange, but interest on any Exchange
Note issued shall accrue from the last Interest Payment Date as to which
interest was paid on the Note. If the Note is surrendered for exchange during
the period from the close of business on any record date for the payment of
interest to the opening of business of the corresponding Interest Payment Date,
the Note must be accompanied by a payment in cash in an amount equal to the
interest payable on such Interest Payment Date. If the last day on which the
Note may be exchanged is not a Business Day, the Note may be surrendered for
exchange on the next succeeding Business Day.
(c) If the Initial Holder exchanges the Note or portion thereof, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the exchange of the Note into Exchange Notes. However, the Initial Holder shall
pay any such tax that is due because the Exchange Notes are issued in a name
other than the Initial Holder's name.
(d) Upon any exchange of this Note for Exchange Notes, the Company
shall enter into a Registration Rights Agreement substantially in the form of
Annex B for the benefit of the holder of the Exchange Note.
18
ARTICLE FIVE
Section 501. NOTICES.
Any notice or communication shall be in writing and delivered in
person or mailed by first-class mail addressed as follows:
if to the Company:
WORLDCOM, INC.
0000 00xx Xxxxxx XX
Xxxxxxxxxx, XX 00000
Attention of: Xxxx X. Xxxxxxx
if to the Initial Holder:
WILDCAT ACQUISITION CORP.,
c/o WORLDCOM, INC.
0000 00xx Xxxxxx XX
Xxxxxxxxxx, XX 00000
Attention of: Xxxx X. Xxxxxxx
The Company or the Initial Holder by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to the Holder shall be mailed,
first class mail, to the Holder at the Holder's address as it appears on the
Security Register and shall be sufficiently given if so mailed within the time
prescribed.
If a notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it.
Section 502. COUNTERPARTS.
This Note may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Note.
19
20
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and a facsimile of its corporate seal to be
imprinted hereon.
WORLDCOM, INC.
By: /S/ XXXXXXX X. XXXXXX
--------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
The foregoing is hereby
agreed to as of the date hereof
WILDCAT ACQUISITION CORP.
By: /s/ XXXX X. XXXXXX
---------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Secretary
21
ANNEX A
TO WORLDCOM NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR
THE BENEFIT OF WORLDCOM, INC. (THE "COMPANY") THAT THIS NOTE MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT
WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING
THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2) SO
LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS NOTE), (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS NOTE), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND TRUSTEE,(5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR
(6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS NOTE AGREES
THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS NOTE COMPLIES WITH THE FOREGOING RESTRICTIONS.
WORLDCOM, INC.
7.69% NOTE DUE 2009
PRINCIPAL AMOUNT NO.
$[ ] CUSIP
ISIN NO.:
WORLDCOM, INC., a corporation duly organized and existing under the
laws of the State of Georgia (herein called the "Company," which term includes
any successor corporation under the Indenture referred to below), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of [ ] on June 15, 2009
(the "Stated Maturity"), and to pay interest thereon from the most recent
Interest Payment Date to which interest has been paid or duly provided for, or,
if no interest has been paid, from [LAST INTEREST PAYMENT DATE OF NOTE FOR WHICH
THIS NOTE WAS EXCHANGED], payable semiannually in arrears on June 15 and
December 15 in each year (each, an "Interest Payment Date"), commencing on [NEXT
SUCCEEDING INTEREST PAYMENT DATE], and at Maturity, at the rate of 7.69% per
annum, until the principal hereof is paid or duly provided for. Each payment of
interest in respect of an Interest Payment Date shall include interest accrued
through the day prior to such Interest Payment Date. The interest so payable,
and paid or duly provided for, on any Interest Payment Date shall, as provided
in the Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the June 1 or December 1 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date, at the office or agency of the Company maintained for such purpose in The
City of New York, New York. Interest shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
Except as otherwise provided in the Indenture, any such interest not
so paid or duly provided for shall forthwith cease to be payable to the Holder
on the related Regular Record Date and may either be paid to the Person in whose
name this Note (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Notes (as defined below) not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Notes may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture.
If any Interest Payment Date, any Redemption Date, the Stated
Maturity or the Maturity shall not be a Business Day (as hereinafter defined),
payment of the amount due on this Note on such date may be made on the next
succeeding Business Day; and, if such payment is made or duly provided for on
such Business Day, no interest shall accrue on such amounts for the period from
and after such Interest Payment Date, such Redemption Date, the Stated Maturity,
or the Maturity as the case may be, to such Business Day.
Payment of the principal of (and premium, if any) and interest on
this Note at Maturity shall be made upon presentation hereof at the office or
agency of the Company, one of which will be maintained in Pittsburgh,
Pennsylvania (which initially will be the Corporate Trust Office of Chase
Manhattan Trust Company, National Association in Pittsburgh, Pennsylvania) or at
such other office or agency permitted under the Indenture, including the office
or agency of the Company maintained for such purpose in the City of New York,
New York. Payment of the principal of (and premium, if any) and interest on this
Note shall be payable in immediately available funds; provided however, that
payment of interest may be made at the option of the Company by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register. Payment of the principal of (and premium, if any) and
interest, if any, on this Note, as aforesaid, shall be made in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts. Interest payable on
any Interest Payment Date will be paid to DTC with respect to any portion of
this Note held for its account by Cede & Co. or a successor depositary, as the
case may be, for the purpose of permitting such party to credit the interest
received by it in respect of this Note to the accounts of the beneficial owners
hereof.
This Note is one of a duly authorized issue of unsecured senior debt
securities of the Company known as the Company's 7.69% Notes Due 2009, initially
in the aggregate principal amount of $[ ] (herein called the "Notes" or the
"Securities"), issued under an Indenture dated as of May 15, 2000 (such
Indenture as originally executed and delivered and as hereafter supplemented or
amended, together with the Board Resolution setting forth certain terms of the
Notes adopted on June 7, 2001 and delivered to the Trustee by the Company
pursuant to Section 301 of such Indenture, being herein called the "Indenture")
from the Company to Chase Manhattan Trust Company, National Association, as
trustee (herein called the "Trustee" which term includes any other successor
trustees under the Indenture), to which Indenture, all indentures supplemental
thereto and all Board Resolutions relating thereto reference is hereby made for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the Notes
and of the terms upon which the Notes are, and are to be, authenticated and
delivered. The acceptance of this Note shall be deemed to constitute the consent
and agreement of the Holder hereof to all of the terms and provisions of the
Indenture. All capitalized terms used in this Note which are not defined herein
shall have the meaning assigned to them in the Indenture.
This Note shall be redeemable, as a whole or in part, at the option
of the Company, at any time or from time to time, at a Redemption Price equal to
the greater of (i) 100% of the principal amount to be redeemed and (ii) the sum
of the present values of the Remaining Scheduled Payments discounted, on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months),
at the Treasury Rate plus 30 basis points, plus in the case of each of (i) and
(ii) accrued interest thereon to the Redemption Date which has not been paid.
Notice of redemption shall be given by mail to Holders of the Notes not less
than 30 days nor more than 60 days prior to the Redemption Date, all as provided
in the Indenture. As provided in the Indenture, on or prior to the Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent an
amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, the
Notes to be redeemed on such date. In the event of redemption of this Note in
part only, a new Note or Notes, of like tenor, for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the surrender hereof, all
as provided in the Indenture. On and after the Redemption Date, interest will
cease to accrue on this Note (or any portion thereof) if so called for
redemption, unless the Company defaults in the payment of such Redemption Price
and accrued interest.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of all Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Notes do not have the benefit of any sinking fund obligations.
The Company's obligations under this Note and under the covenants
provided in the Indenture are subject to defeasance and discharge as provided in
the Indenture.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
WORLDCOM, INC.
Attested:
By:
----------------------------- ---------------------------
Secretary President and Chief Executive Officer
Certificate of Authentication:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: [ ] CHASE MANHATTAN TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee
By:
--------------------------
Authorized Representative
Reverse of Note
WORLDCOM, INC.
7.69% Note Due 2009
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Notes.
"Comparable Treasury Price" means, with respect to any Redemption
Date, (i) the average of four Reference U.S. Treasury Dealer Quotations for that
Redemption Date, after excluding the highest and lowest of such Reference U.S.
Treasury Dealer Quotations; or (ii) if the Trustee obtains fewer than four
Reference U.S. Treasury Dealer Quotations, the average of all quotations
obtained by the Trustee.
"Independent Investment Banker" means one of the Reference U.S.
Treasury Dealers, to be appointed by the Company.
"Reference U.S. Treasury Dealer" means each of X.X. Xxxxxx
Securities Inc. and Xxxxxxx Xxxxx Barney Inc., and two other treasury dealers
selected by the Company, and their respective successors; provided, however,
that if any of the foregoing shall cease to be a primary U.S. Government
securities dealer (a "Primary Treasury Dealer"), the Company shall substitute
therefor another nationally recognized investment banking firm that is a Primary
Treasury Dealer.
"Reference U.S. Treasury Dealer Quotations" means, with respect to
each Reference U.S. Treasury Dealer and any Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference U.S. Treasury Dealer at 3:30
p.m., New York City time on the third Business Day preceding such Redemption
Date.
"Remaining Scheduled Payments" means, with respect to each Note to
be redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related Redemption Date but for
such redemption; provided, however, that, if such Redemption Date is not an
Interest Payment Date with respect to such Note, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date, (i) the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15(519)" or any successor publication which is published weekly by
the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Comparable Treasury Issue, provided that
if no maturity is within three months before or after the maturity date for the
Notes, yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue will be determined and the Treasury Rate will be
interpolated or extrapolated from those yields on a straight line basis,
rounding to the nearest month; or (ii) if that release, or any successor
release, is not published during the week preceding the calculation date or does
not contain such yields, the rate per annum equal to the semiannual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for that Redemption Date. The
Treasury Rate will be calculated on the third Business Day preceding the
Redemption Date.
PAYMENT OF ADDITIONAL AMOUNTS. The Company will, subject to certain
exceptions and limitations set forth below, pay such Additional Amounts to the
beneficial owner of this Note who is a Non-U.S. Holder (as defined below) as may
be necessary in order that every net payment of principal of and interest on
such Note and any other amounts payable on such Note, after withholding for or
on account of any present or future tax, assessment or governmental charge
imposed upon or as a result of such payment by the United States (or any
political subdivision or taxing authority thereof or therein), will not be less
than the amount provided for in this Note to be then due and payable. The
Company will not, however, be required to make any such payment of Additional
Amounts to any beneficial owner for or on account of:
(a) any such tax, assessment or other governmental charge that would
not have been so imposed or withheld but for the existence of any present
or former connection between such beneficial owner (or between a
fiduciary, settlor, beneficiary, member or shareholder of such beneficial
owner, if such beneficial owner is an estate, a trust, a partnership or a
corporation) and the United States and its possessions, including, without
limitation, such beneficial owner (or such fiduciary, settlor,
beneficiary, member or shareholder) being or having been a citizen or
resident thereof or being or having been engaged in a trade or business or
present therein or having, or having had, a permanent establishment
therein;
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, assessment or governmental charge;
(c) any tax, assessment or other governmental charge imposed or
withheld by reason of such beneficial owner's past or present status as a
personal holding company or foreign personal holding company or controlled
foreign corporation or passive foreign investment company with respect to
the United States or as a corporation that accumulates earnings to avoid
United States federal income tax;
(d) any tax, assessment or other governmental charge that is payable
otherwise than by withholding from payments on or in respect of this Note;
(e) any tax, assessment or other governmental charge that would not
have been imposed or withheld but for the failure to comply with
certification, information or other reporting requirements concerning the
nationality, residence or identity of the beneficial owner of this Note,
if such compliance is required by
statute or by regulation of the United States or of any political
subdivision or taxing authority thereof or therein or by an applicable
income tax treaty to which the United States is a party as a precondition
to relief or exemption from such tax, assessment or other governmental
charge;
(f) any tax, assessment or other governmental charge imposed or
withheld by reason of such beneficial owner's past or present status as
the actual or constructive owner of 10% or more of the total combined
voting power of all classes of the Company's stock entitled to vote or as
a controlled foreign corporation that is related directly or indirectly to
the Company through stock ownership;
(g) to the extent applicable, any tax, assessment or governmental
charge that is imposed or withheld solely because of a change in law,
regulation, or administrative or judicial interpretation that becomes
effective more than 15 days after the payment becomes due or is duly
provided for, whichever occurs later;
(h) any tax, assessment or governmental charge any Paying Agent must
withhold from any payment of principal of or interest on any note, if such
payment can be made without such withholding by any other Paying Agent; or
(i) any combination of clauses (a) through (h) above.
Such Additional Amounts shall also not be paid with respect to any
payment on this Note to a Non-U.S. Holder who is a fiduciary or partnership or
other than the sole beneficial owner of such payment to the extent such payment
would be required by the laws of the United States (or any political subdivision
thereof) to be included in the income, for tax purposes, of a beneficiary or
settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner who would not have been entitled to such Additional Amounts had
such beneficiary, settlor, member or beneficial owner, as the case my be, held
its interest in this Note directly.
The term "Non-U.S. Holder" means any person that is, for United
States federal income tax purposes, (i) an individual that is not a citizen or
resident of the U.S., (ii) a corporation organized or created under non-U.S.
law, (iii) an estate or trust that is not subject to U.S. federal income tax on
its worldwide income, or (iv) a foreign partnership to the extent that one or
more of its members is a foreign corporation, a nonresident alien individual or
a nonresident alien fiduciary of a foreign estate or trust.
The Notes are subject in all cases to any tax, fiscal or other law
or regulation or administrative or judicial interpretation applicable. Except as
specifically provided herein the Company does not have to make any payment with
respect to any tax, assessment or governmental charge imposed by any government
or a political subdivision or taxing authority.
All references to payments of principal, premium, if any, or
interest in respect of the Notes are deemed to include Additional Amounts if
any.
TAX REDEMPTION. This Note may be redeemed as a whole, at the
Company's option at any time prior to maturity, upon the giving of a notice of
redemption as described
below, if (a) the Company determines that, as a result of any change in or
amendment to the laws (or any regulations or rulings promulgated thereunder) of
the United States or of any political subdivision or taxing authority thereof or
therein, or any change in official position regarding the application or
interpretation of such laws, regulations or rulings, which change or amendment
becomes effective on or after June 28, 2001, the Company has or will become
obligated to pay Additional Amounts as described in the preceding Section
entitled "Payment of Additional Amounts" or (b) a taxing authority of the United
States takes an action on or after June 28, 2001 whether or not with respect to
the Company or any of its Affiliates (as defined in the Indenture) that results
in a substantial probability that the Company will or my be required to pay such
Additional Amounts, in either case, with respect to this Note for reasons
outside its control and after taking reasonable measures to avoid such
obligation. The Notes will be redeemed at a redemption price equal to 100% of
the principal amount thereof, together with accrued interest to the date fixed
for redemption. Prior to the giving of any notice of redemption pursuant to this
paragraph, the Company will deliver to the Trustee:
(a) an Officer's Certificate (as defined in the Indenture) stating
that the Company is entitled to effect such redemption and setting forth a
statement of facts showing that the conditions precedent to its right to
so redeem have occurred, and
(b) an Opinion of Counsel (as defined in the Indenture) who is
independent satisfactory to the Trustee to the effect that the Company has
or will become obligated or there is a substantial probability that the
Company will or may be required to pay such Additional Amounts for the
reasons described above;
provided that no such notice of redemption pursuant to this paragraph
entitled "Tax Redemption" shall be given earlier than 60 days prior to the
earliest date on which the Company would be obligated to pay such
Additional Amounts if a payment in respect of the Note were then due.
Notice of redemption pursuant to the preceding paragraph entitled
"Tax Redemption" will be given not less than 30 nor more than 60 days prior to
the date fixed for redemption, which date and the applicable redemption price
will be specified in the notice.
REGISTRATION RIGHTS. The Company shall enter into a registration
rights agreement (the "Registration Agreement") with the holder of this Note in
the form of Exhibit A to this Note concurrently with the delivery of this Note.
Capitalized terms used in this paragraph but not defined herein have the
meanings assigned to them in the form of Registration Agreement attached hereto
as Exhibit A. If (i) the Exchange Offer Registration Statement is not filed with
the Commission on or prior to 90 days after the date this Note was issued to the
holder hereof (the "Issue Date"), (ii) the Exchange Offer Registration Statement
is not declared effective within 180 days after the Issue Date, or (iii) the
Registered Exchange Offer is not consummated or the Shelf Registration Statement
is not declared effective on or prior to 210 days after the Issue Date (each
such event referred to in clauses (i) through (iii), a "REGISTRATION DEFAULT"),
the Company will be obligated to pay liquidated damages to each Holder of
Transfer Restricted Securities, during the period of one or more such
Registration Defaults, in an amount equal to $0.192 per week per $1,000
principal amount of Transfer Restricted Securities held by
such Holder until (i) the Exchange Offer Registration Statement is filed, (ii)
the Exchange Offer Registration Statement is declared effective or (iii) the
Registered Exchange Offer is consummated or the Shelf Registration Statement is
declared effective, as the case may be. Following the cure of all Registration
Defaults, the accrual of liquidated damages will cease. In addition, if the
Shelf Registration Statement is declared effective within 210 days after the
Issue Date, and the Company fails to keep the Shelf Registration Statement
continuously (x) effective or (y) useable for resales of the Transfer Restricted
Securities for the period required by Section 2(b) of the Registration Rights
Agreement, and such failure continues for more than 60 days (whether or not
consecutive) in any 12-month period (the 61st day being referred to as the
"DEFAULT DAY"), then from the Default Day until the earlier of (i) the date that
the Shelf Registration Statement is again deemed effective or is usable, (ii)
the date that is the second anniversary of the Issue Date (or, if Rule 144(k) is
amended to provide a shorter restrictive period, such shorter period) or (iii)
the date as of which all of the Transfer Restricted Securities are sold pursuant
to the Shelf Registration Statement, liquidated damages in respect of the
Transfer Restricted Securities shall accrue at a rate equal to $.192 per week
per $1,000 principal amount of Transfer Restricted Securities. All references to
payments of interest are deemed to include the additional interest payable in
respect of a Registration Default or after a Default Day, as applicable.
MODIFICATION. The Indenture permits, with certain exceptions as
thereby provided, the Trustee to enter into one or more supplemental indentures
for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, the Indenture or of modifying in any
manner the rights of the Holders of Securities, in any such case, with the
consent of the Holders of not less than majority in aggregate principal amount
of all Outstanding Securities affected by such supplemental indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each of the Outstanding Securities affected thereby, affect certain
rights of such Holders as more fully described in the Indenture.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities then Outstanding, on
behalf of the Holders of all Securities affected thereby, to waive certain past
defaults of the Company under the Indenture and their consequences. In addition,
without the consent of any Holder of a Security, the Indenture and the
Securities may be amended and supplemented to cure any defect, ambiguity or
inconsistency, make other changes which will not adversely affect in any
material respect the rights of the Holders or certain other matters specified in
the Indenture. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
here for or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Note.
As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee, or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25 percent in principal amount of the Notes
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity and the Trustee shall not have received from the
Holders of
a majority in principal amount of the Notes Outstanding a direction inconsistent
with such request, and shall have failed to institute any such proceeding, for
60 days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to certain suits described in the Indenture, including
any suit instituted by the Holder of this Note for the enforcement of any
payment of principal hereof or any premium or interest hereon on or after the
respective due dates expressed herein (or, in the case of redemption, on or
after the Redemption Date).
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest, if any, on this Note at the times, place and rate, in the coin or
currency, and in the manner, herein prescribed.
The Notes are issuable only in registered forth, without coupons, in
denominations of $1,000 and any integral multiple of $1,000. The Notes may be
represented by one or more global Notes deposited with DTC and registered in the
name of the nominee of DTC, with certain limited exceptions. So long as DTC or
any successor depository or its nominee is the registered Holder of a global
Note, DTC, such depository or such nominee, as the case may be, will be
considered to be the sole Holder of the Notes for all purposes of the Indenture.
Except as provided below, an owner of a beneficial interest in a global Note
will not be entitled to have Notes represented by such global Note registered in
such owner's name, will not receive or be entitled to receive physical delivery
of the Notes in certificated form and will not be considered the owner or Holder
thereof under the Indenture. Each person owning a beneficial interest in a
global Note must rely on DTC's procedures and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest, to exercise any rights of a Holder under the Indenture. If the
Company requests any action of Holders or if an owner of a beneficial interest
in a global Note desires to take any action that a Holder is entitled to take
under the Indenture, DTC will authorize the participants holding the relevant
beneficial interests to give or take such action, and such participants will
otherwise act upon the instructions of beneficial owners holding through them.
If at any time DTC notifies the Company that it is unwilling or
unable to continue as depository for the global Note or Notes or if at any time
DTC ceases to be a clearing agency registered under the Securities Exchange Act
of 1934, as amended, if so required by applicable law or regulation, the Company
shall appoint a successor depository with respect to such global Note or Notes.
If (x) a successor depository for such global Note or Notes is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such unwillingness, inability or ineligibility, (y) an Event of Default
has occurred and is continuing and a beneficial owner representing a majority in
principal amount of the Notes represented by such global Note or Notes advise
DTC to cease acting as depository for such global Note or Notes or (z) the
Company, in its sole discretion, determines at any time that all Outstanding
Notes (but not less than all) issued or issuable in the form of one or more
global Notes shall no longer be represented by such global Notes, then the
Company shall execute, and the Trustee shall authenticate and deliver,
definitive Notes of like series, rank, tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such global Note or
Notes. If any beneficial owner of an interest in a permanent global Note is
otherwise entitled to exchange such interest for Notes of such series and of
like tenor and principal amount of
another authorized form and denomination, as contemplated by the Indenture and
provided that any applicable notice provided in the permanent global Note shall
have been given, then without unnecessary delay but in any event not later than
the earliest date on which such interest may be so exchanged, the Company shall
execute, and the Trustee shall authenticate and deliver, definitive Notes in
aggregate principal amount equal to the principal amount of such beneficial
owner's interest in such permanent global Note. On or after the earliest date on
which such interests may be so exchanged, such permanent global Note shall be
surrendered for exchange by DTC or such other depository as the Company shall
specify to the Trustee; PROVIDED, HOWEVER, that no such exchanges may occur
during a period beginning at the opening of business 15 days before any
selection of Notes to be redeemed and ending on the relevant Redemption Date if
the Note for which exchange is requested may be among those selected for
redemption.
Initially, the Trustee will be the Security Registrar and Paying
Agent for this Note. The Company reserves the rights at any time to remove any
Paying Agent, Transfer Agent or Security Registrar without notice, to appoint
additional or other Paying Agents, other Transfer Agents and other Security
Registrars without notice and to approve any change in the office through which
any Paying Agent, Transfer Agent or Security Registrar acts. None of the
Company, the Trustee, any Paying Agent or the Security Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Note in global
form or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee, or any agent of the Company or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depository, as a Holder, with respect to this
Note in global form or impair, as between such depository and owners of
beneficial interests in such global Note, the operation of customary practices
governing the exercise of the rights of such depository (or its nominee) as
Holder of such global Note.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES THEREOF.
As used herein, "Business Day," means each day other than a
Saturday, Sunday or a day on which commercial banking institutions are
authorized or required by law to close in New York City.
The Company may cause CUSIP or ISIN numbers to be printed on the
Notes as a convenience to Holders of Notes. No representation is made as to the
accuracy of such numbers as printed on the Notes, and reliance may be placed
only on the other identification numbers printed thereon.
This Note shall not be entitled to any benefit under the Indenture
or be valid or obligatory until the Trustee or authenticating agent signs the
certificate of authenticity on the Notes.
No recourse shall be had for the payment of the principal of (or
premium, if any) or interest, if any, or Additional Amounts, if any, on this
Note, or any part hereof, or for
any claim based hereon or otherwise in respect hereof, or of the indebtedness
represented hereby, or upon any obligation, covenant or agreement under the
Indenture, against, and no personal liability whatsoever shall attach to, or be
incurred by, any incorporator, shareholder, officer or director, as such, past,
present or future, of (i) the Company or (ii) any predecessor or successor
corporation (either directly or through the Company or a predecessor or
successor corporation), whether by virtue of any constitutional provision,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that the Indenture and all
of the Notes are solely corporate obligations and that any such personal
liability is hereby expressly waived and released as a condition of, and as part
of the consideration for, the execution of the Indenture and the issuance of the
Notes.
ANNEX B
TO WORLDCOM NOTE
WorldCom, Inc.
$[ ]
7.69% Notes Due 2009
REGISTRATION RIGHTS AGREEMENT
[MONTH DAY, YEAR]
[NAME]
[ADDRESS]
[CITY, STATE, ZIP CODE]
Ladies and Gentlemen:
WorldCom, Inc., a Georgia corporation (the "COMPANY"), proposes to
issue to [ ] (each a "HOLDER"), $[ ] aggregate principal amount of its 7.69%
Notes Due 2009 (the "SECURITIES") issued under the indenture dated as of May 15,
2000 (the "INDENTURE"), between the Company and Chase Manhattan Trust Company,
National Association (the "TRUSTEE"). In order to induce each Holder to acquire
the Securities, the Securities require that the Company enter into this
Agreement with each Holders. For good and valid consideration, the receipt and
sufficiency of which is acknowledged by the parties hereto, the parties agree as
follows:
1. REGISTERED EXCHANGE OFFER. The Company shall (i) use its reasonable best
efforts to prepare and, not later than 90 days following the date of
original issuance of the Securities (the "ISSUE DATE"), file with the
Securities and Exchange Commission (the "COMMISSION") a registration
statement (the "EXCHANGE OFFER REGISTRATION STATEMENT") on an appropriate
form under the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder (the "SECURITIES
ACT") with respect to a proposed offer to the Holders of the Securities
(the "REGISTERED EXCHANGE OFFER") to issue and deliver to such Holders, in
exchange for the Securities, a like aggregate principal amount of debt
securities of the Company (the "EXCHANGE SECURITIES") that are identical
in all material respects to the Securities, except for the transfer
restrictions relating to the Securities, (ii) use its reasonable best
efforts to cause the Exchange Offer Registration Statement to become
effective under the Securities Act no later than 180 days after the date
on which the Securities were issued (the "ISSUE DATE") and the Registered
2
Exchange Offer to be consummated no later than 210 days after the Issue
Date and (iii) keep the Exchange Offer Registration Statement effective
for not less than 20 business days (or longer, if required by applicable
law) after the date on which notice of the Registered Exchange Offer is
mailed to the Holders (such period being called the "EXCHANGE OFFER
REGISTRATION Period"). The Exchange Securities will be issued under the
Indenture.
Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Securities for Exchange Securities (assuming that such Holder (a) is
not an affiliate of the Company or an Exchanging Dealer (as defined herein) not
complying with the requirements of the next sentence, (b) is not holding
Securities that have, or that are reasonably likely to have, the status of an
unsold allotment in an initial distribution, (c) acquires the Exchange
Securities in the ordinary course of such Holder's business and (d) has no
arrangements or understandings with any person to participate in the
distribution of the Exchange Securities) and to trade such Exchange Securities
from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States. The Company, each Holder and each
Exchanging Dealer acknowledge that, pursuant to current interpretations by the
Commission's staff of Section 5 of the Securities Act, each Holder that is a
broker-dealer electing to exchange Securities, acquired for its own account as a
result of market-making activities or other trading activities, for Exchange
Securities (an "EXCHANGING DEALER"), is required to deliver a prospectus
containing substantially the information set forth in Annex A hereto on the
cover, in Annex B hereto in the "Exchange Offer Procedures" section and the
"Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any such
Exchange Securities received by such Exchanging Dealer pursuant to the
Registered Exchange Offer.
If, prior to the consummation of the Registered Exchange Offer, any
Holder holds any Securities acquired by it that have, or that are reasonably
likely to be determined to have, the status of an unsold allotment in an initial
distribution, or any Holder is not entitled to participate in the Registered
Exchange Offer, the Company shall, upon the request of any such Holder,
simultaneously with the delivery of the Exchange Securities in the Registered
Exchange Offer, issue and deliver to any such Holder, in exchange for the
Securities held by such Holder (the "PRIVATE EXCHANGE"), a like aggregate
principal amount of debt securities of the Company (the "PRIVATE EXCHANGE
SECURITIES") that are identical in all material respects to the Exchange
Securities, except for the transfer restrictions relating to such Private
Exchange Securities. The Private Exchange Securities will be issued under the
same indenture as the Exchange Securities, and the Company shall use its
reasonable best efforts to cause the Private Exchange Securities to bear the
same CUSIP number as any Exchange Securities.
In connection with the Registered Exchange Offer, the Company shall:
a. mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate
letter of
3
transmittal and related documents;
b. keep the Registered Exchange Offer open for not less than 20
business days (or longer, if required by applicable law) after the
date on which notice of the Registered Exchange Offer is mailed to
the Holders;
c. utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New
York;
d. permit Holders to withdraw tendered Securities at any time prior
to the close of business, New York City time, on the last business
day on which the Registered Exchange Offer shall remain open; and
e. otherwise comply in all respects with all laws that are
applicable to the Registered Exchange Offer.
As soon as practicable after the close of the Registered Exchange
Offer and any Private Exchange, as the case may be, the Company shall:
a. accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Registered Exchange Offer and the Private
Exchange;
b. deliver to the Trustee for cancellation all Securities so
accepted for exchange; and
c. cause the Trustee, promptly to authenticate and deliver to each
Holder, Exchange Securities or Private Exchange Securities, as the
case may be, equal in principal amount to the Securities of such
Holder so accepted for exchange.
The Company shall use its reasonable best efforts to keep the
Exchange Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; PROVIDED that (i) in the case where
such prospectus and any amendment or supplement thereto must be delivered by an
Exchanging Dealer, such period shall be the lesser of 180 days and the date on
which all Exchanging Dealers have sold all Exchange Securities held by them and
(ii) the Company shall make such prospectus and any amendment or supplement
thereto available to any broker-dealer for use in connection with any resale of
any Exchange Securities for a period of not less than 90 days after the
consummation of the Registered Exchange Offer.
The Indenture shall provide that the Securities, the Exchange
Securities and the Private Exchange Securities shall vote and consent together
on all matters as one class and that none of the Securities, the Exchange
Securities or the Private Exchange Securities will have the right to vote or
consent as a separate class on any matter.
4
Interest on each Exchange Security and Private Exchange Security
issued pursuant to the Registered Exchange Offer and in the Private Exchange
will accrue from the last interest payment date on which interest was paid on
the Securities surrendered in exchange therefor or, if no interest has been paid
on the Securities, from the Issue Date.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act and (iii) such Holder is not an affiliate of the Company or,
if it is such an affiliate, such Holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable.
Notwithstanding any other provisions hereof, the Company will ensure
that (i) any Exchange Offer Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of any Exchange Offer Registration Statement,
and any supplement to such prospectus, does not, as of the consummation of the
Registered Exchange Offer, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
2. SHELF REGISTRATION. If (i) because of any change in law or applicable
interpretations thereof by the Commission's staff the Company is not
permitted to effect the Registered Exchange Offer as contemplated by
Section 1 hereof, or (ii) any Securities validly tendered pursuant to the
Registered Exchange Offer are not exchanged for Exchange Securities within
210 days after the Issue Date, or (iii) any Holder so requests with
respect to Securities or Private Exchange Securities not eligible to be
exchanged for Exchange Securities in the Registered Exchange Offer and
held by it following the consummation of the Registered Exchange Offer, or
(iv) any applicable law or interpretations do not permit any Holder to
participate in the Registered Exchange Offer, or (v) any Holder that
participates in the Registered Exchange Offer does not receive freely
transferable Exchange Securities in exchange for tendered Securities, or
(vi) the Company so elects, then the following provisions shall apply:
a. The Company shall use its reasonable best efforts to file as
promptly as practicable (but in no event more than 60 days after so
required or requested pursuant to this Section 2) with the Commission, and
thereafter shall use its commercially reasonable efforts to cause to be
declared effective, a shelf registration statement on an appropriate form
under the Securities Act relating to the offer and sale of the Transfer
Restricted Securities (as defined below) by the
5
Holders thereof from time to time in accordance with the methods of
distribution set forth in such registration statement (hereafter, a "SHELF
REGISTRATION STATEMENT" and, together with any Exchange Offer Registration
Statement, a "REGISTRATION STATEMENT").
b. The Company shall use its reasonable best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the
prospectus forming part thereof to be used by Holders of Transfer
Restricted Securities for a period ending on the earlier of (i) two years
from the Issue Date or such shorter period that will terminate when all
the Transfer Restricted Securities covered by the Shelf Registration
Statement have been sold pursuant thereto and (ii) the date on which the
Securities become eligible for resale without volume restrictions pursuant
to Rule 144 under the Securities Act (in any such case, such period being
called the "SHELF REGISTRATION PERIOD"); PROVIDED, HOWEVER, that the
Company shall in no event be obligated to keep such Shelf Registration
Statement effective for a period of more than 270 days from the date the
Shelf Registration Statement is declared effective by the Commission if
the Shelf Registration Statement is required to be filed solely to permit
resales by a broker-dealer that holds Securities acquired directly from
the Company or one or more of its affiliates or such shorter period that
will terminate when all such Securities cease to be Transfer Restricted
Securities; PROVIDED, FURTHER, that, during any consecutive 365-day
period, the Company may suspend the effectiveness of the Shelf
Registration Statement for an aggregate period of not more than 60
consecutive days if there is a possible acquisition or business
combination or other transaction, business development or event involving
the Company that would require disclosure in the Shelf Registration
Statement and the Company determines in the exercise of its reasonable
judgment that such disclosure is not in the best interests of the Company
and its stockholders or obtaining any financial statements relating to an
acquisition or business combination required to be included in the Shelf
Registration Statement would be impracticable. In the event that the
Company suspends the effectiveness of the Shelf Registration Statement as
contemplated by the final proviso to the foregoing sentence, the Company
shall promptly notify the Holders of such suspension, PROVIDED that such
notice shall not require the Company to disclose the possible acquisition
or business combination or other transaction, business development or
event if the Company determines that such acquisition or business
combination or other transaction, business development or event should
remain confidential. Upon the abandonment, consummation, termination or
public announcement by or on behalf of the Company of the possible
acquisition or business combination or other transaction, business
development or event or the availability of the required financial
statements with respect to a possible acquisition or business combination,
the suspension of the use of the Shelf Registration Statement shall cease
and the Company shall promptly comply with Section 4(j) hereof and notify
the Holders that disposition of Transfer Restricted Securities may resume.
The Company shall be deemed not to have used its commercially reasonable
efforts to keep the Shelf Registration Statement effective during the
requisite period if it voluntarily takes any action that would result in
Holders of Transfer Restricted Securities covered thereby not being able
to offer and sell such Transfer Restricted Securities during that period,
6
unless such action is required by applicable law.
c. Notwithstanding any other provisions hereof, the Company will ensure
that (i) any Shelf Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in
all material respects with the Securities Act and the rules and
regulations of the Commission thereunder, (ii) any Shelf Registration
Statement and any amendment thereto (in either case, other than with
respect to information included therein in reliance upon or in conformity
with written information furnished to the Company by or on behalf of any
Holder specifically for use therein (the "HOLDERS' INFORMATION")) does not
contain an untrue statement of a material fact or --------------------
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (iii) any prospectus
forming part of any Shelf Registration Statement, and any supplement to
such prospectus (in either case, other than with respect to Holders'
Information), does not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
3. LIQUIDATED DAMAGES. (a) The parties hereto agree that the Holders of
Transfer Restricted Securities will suffer damages if the Company fails to
fulfill its obligations under Section 1 or Section 2, as applicable, and
that it would not be feasible to ascertain the extent of such damages.
Accordingly, if (i) the Exchange Offer Registration Statement is not filed
with the Commission on or prior to 90 days after the Issue Date, (ii) the
Exchange Offer Registration Statement is not declared effective within 180
days after the Issue Date, or (iii) the Registered Exchange Offer is not
consummated or the Shelf Registration Statement is not declared effective
on or prior to 210 days after the Issue Date (each such event referred to
in clauses (i) through (iii), a "REGISTRATION DEFAULT"), the Company will
be obligated to pay liquidated damages to each Holder of Transfer
Restricted Securities, during the period of one or more such Registration
Defaults, in an amount equal to $0.192 per week per $1,000 principal
amount of Transfer Restricted Securities held by such Holder until (i) the
Exchange Offer Registration Statement is filed, (ii) the Exchange
Offer-Registration Statement is declared effective or (iii) the Registered
Exchange Offer is consummated or the Shelf Registration Statement is
declared effective, as the case may be. Following the cure of all
Registration Defaults, the accrual of liquidated damages will cease. As
used herein, the term "TRANSFER RESTRICTED SECURITIES" means (i) each
Security until the date on which such Security has been exchanged for a
freely transferable Exchange Security in the Registered Exchange Offer,
(ii) each Security or Private Exchange Security until the date on which it
has been effectively registered under the Securities Act and disposed of
in accordance with the Shelf Registration Statement or (iii) each Security
or Private Exchange Security until the date on which it is distributed to
the public pursuant to Rule 144 under the Securities Act or is saleable
pursuant to Rule 144(k) under the Securities Act. Notwithstanding anything
to the contrary in this Section 3(a), the Company shall not be required to
pay liquidated damages to a Holder of Transfer Restricted Securities if
such Holder failed to comply with its obligations to make the
representations set forth in the second to last paragraph of Section 1 or
failed to
7
provide the information required to be provided by it, if any, pursuant to
Section 4(n).
In addition, if the Shelf Registration Statement is declared
effective pursuant to Section 2, and the Company fails to keep the Shelf
Registration Statement continuously (x) effective or (y) useable for resales of
the Transfer Restricted Securities for the period required by Section 2(b), and
such failure continues for more than 60 days (whether or not consecutive) in any
12-month period (the 61st day being referred to as the "DEFAULT DAY"), then from
the Default Day until the earlier of (i) the date that the Shelf Registration
Statement is again deemed effective or is usable, (ii) the date that is the
second anniversary of the Issue Date (or, if Rule 144(k) is amended to provide a
shorter restrictive period, such shorter period) or (iii) the date as of which
all of the Transfer Restricted Securities are sold pursuant to the Shelf
Registration Statement, liquidated damages in respect of the Transfer Restricted
Securities shall accrue at a rate equal to $.192 per week per $1,000 principal
amount of Transfer Restricted Securities.
(b) The Company shall notify the Trustee and the paying agent under
the Indenture immediately upon the happening of each and every Registration
Default. The Company shall pay the liquidated damages due on the Transfer
Restricted Securities by depositing with the Paying Agent (which may not be the
Company for these purposes), in trust, for the benefit of the Holders thereof,
prior to 10:00 a.m., New York City time, on the next interest payment date
specified by the Indenture and the Securities, sums sufficient to pay the
liquidated damages then due. The liquidated damages due shall be payable on each
interest payment date specified by the Securities to the record holder entitled
to receive the interest payment to be made on such date. Each obligation to pay
liquidated damages shall be deemed to accrue from and including the date of the
applicable Registration Default.
(c) The parties hereto agree that the liquidated damages provided
for in this Section 3 constitute a reasonable estimate of and are intended to
constitute the sole damages that will be suffered by Holders of Transfer
Restricted Securities by reason of the failure of (i) the Shelf Registration
Statement or the Exchange Offer Registration Statement to be filed, (ii) the
Shelf Registration Statement to remain effective or (iii) the Exchange Offer
Registration Statement to be declared effective and the Registered Exchange
Offer to be consummated, in each case to the extent required by this Agreement.
4. REGISTRATION PROCEDURES. In connection with any Registration Statement,
the following provisions shall apply:
a. The Company shall (i) furnish to each Holder, prior to the filing
thereof with the Commission, a copy of the Registration Statement
and each amendment thereof and each supplement, if any, to the
prospectus included therein and shall use its reasonable best
efforts to reflect in each such document, when so filed with the
Commission, such comments as any Holder may reasonably propose; (ii)
include the information set forth in Annex A hereto on the cover, in
Annex B hereto in the "Exchange Offer Procedures" section and the
"Purpose of the Exchange Offer" section and in Annex C hereto in the
"Plan of Distribution" section of the prospectus forming a part of
the Exchange Offer Registration Statement, and include
8
the information set forth in Annex D hereto in the Letter of
Transmittal delivered pursuant to the Registered Exchange Offer; and
(iii) if requested by any Holder, include the information required
by Items 507 or 508 of Regulation S-K, as applicable, in the
prospectus forming a part of the Exchange Offer Registration
Statement.
b. The Company shall advise each Holder and each Exchanging Dealer and,
if requested by any such person, confirm such advice in writing
(which advice pursuant to clauses (ii)-(v) hereof shall be
accompanied by an instruction to suspend the use of the prospectus
until the requisite changes have been made):
i. when any Registration Statement and any amendment thereto
has been filed with the Commission and when such Registration
Statement or any post-effective amendment thereto has become
effective;
ii. of any request by the Commission for amendments or
supplements to any Registration Statement or the prospectus
included therein or for additional information;
iii. of the issuance by the Commission of any stop order
suspending the effectiveness of any Registration Statement or
the initiation of any proceedings for that purpose;
iv. of the receipt by the Company of any notification with
respect to the suspension of the qualification of the
Securities, the Exchange Securities or the Private Exchange
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
v. of the happening of any event that requires the making of
any changes in any Registration Statement or the prospectus
included therein in order that the statements therein are not
misleading and do not omit to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading.
c. The Company will make every reasonable effort to obtain the
withdrawal at the earliest possible time of any order suspending the
effectiveness of any Registration Statement.
d. The Company will furnish to each Holder of Transfer Restricted
Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one conformed copy of such Shelf
Registration Statement and any post-effective amendment thereto,
including financial statements and schedules and, if any such Holder
so requests in writing, all exhibits thereto (including those, if
any, incorporated by reference).
e. The Company will, during the Shelf Registration Period, promptly
deliver to each Holder of Transfer Restricted Securities included
within the coverage of any Shelf Registration Statement, without
charge, as many copies of
9
the prospectus (including each preliminary prospectus) included in
such Shelf Registration Statement and any amendment or supplement
thereto as such Holder may reasonably request; and the Company
consents to the use of such prospectus or any amendment or
supplement thereto by each of the selling Holders of Transfer
Restricted Securities in connection with the offer and sale of the
Transfer Restricted Securities covered by such prospectus or any
amendment or supplement thereto.
f. The Company will furnish to each Holder and each Exchanging Dealer,
without charge, at least one conformed copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto,
including financial statements and schedules and, if any Holder or
Exchanging Dealer or any such Holder so requests in writing, all
exhibits thereto (including those, if any, incorporated by
reference).
g. The Company will, during the Exchange Offer Registration Period or
the Shelf Registration Period, as applicable, promptly deliver to
each Holder, each Exchanging Dealer and such other persons that are
required to deliver a prospectus following the Registered Exchange
Offer, without charge, as many copies of the final prospectus
included in the Exchange Offer Registration Statement or the Shelf
Registration Statement and any amendment or supplement thereto as
such Holder, Exchanging Dealer or other persons may reasonably
request; and the Company consents to the use of such prospectus or
any amendment or supplement thereto by any such Holder, Exchanging
Dealer or other persons, as applicable, as aforesaid.
h. Prior to the effective date of any Registration Statement, the
Company will use its reasonable best efforts to register or qualify,
or cooperate with the Holders of Securities, Exchange Securities or
Private Exchange Securities included therein and their respective
counsel in connection with the registration or qualification of,
such Securities, Exchange Securities or Private Exchange Securities
for offer and sale under the securities or blue sky laws of such
jurisdictions as any such Holder reasonably requests in writing and
do any and all other acts or things necessary or advisable to enable
the offer and sale in such jurisdictions of the Securities, Exchange
Securities or Private Exchange Securities covered by such
Registration Statement; PROVIDED that the Company will not be
required to qualify -------- generally to do business in any
jurisdiction where it is not then so qualified or to take any action
which would subject it to general service of process or to taxation
in any such jurisdiction where it is not then so subject.
i. The Company will cooperate with the Holders of Securities, Exchange
Securities or Private Exchange Securities to facilitate the timely
preparation and delivery of certificates representing Securities,
Exchange Securities or Private Exchange Securities to be sold
pursuant to any Registration Statement free of any restrictive
legends and in such denominations and registered in such names as
the Holders thereof may request in writing prior to sales of
Securities, Exchange Securities or Private Exchange Securities
pursuant to such Registration Statement.
10
j. If any event contemplated by Section 4(b)(ii) through (v) occurs
during the period for which the Company is required to maintain an
effective Registration Statement, the Company will promptly prepare
and file with the Commission a post-effective amendment to the
Registration Statement or a supplement to the related prospectus or
file any other required document so that, as thereafter delivered to
purchasers of the Securities, Exchange Securities or Private
Exchange Securities from a Holder, the prospectus will not include
an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
k. Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the
Securities, the Exchange Securities and the Private Exchange
Securities, as the case may be, and provide the applicable trustee
with printed certificates for the Securities, the Exchange
Securities or the Private Exchange Securities, as the case may be,
in a form eligible for deposit with The Depository Trust Company.
l. The Company will comply with all applicable rules and regulations of
the Commission and will make generally available to its security
holders as soon as practicable after the effective date of the
applicable Registration Statement an earning statement satisfying
the provisions of Section 11(a) of the Securities Act; PROVIDED that
in no event shall such earning statement be delivered later than 45
days after the end of a 12-month period (or 90 days, if such period
is a fiscal year) beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the
applicable Registration Statement, which statement shall cover such
12-month period.
m. The Company may require each Holder of Transfer Restricted
Securities to be registered pursuant to any Shelf Registration
Statement to furnish to the Company such information concerning the
Holder and the distribution of such Transfer Restricted Securities
as the Company may from time to time reasonably require for
inclusion in such Shelf Registration Statement, and the Company may
exclude from such registration the Transfer Restricted Securities of
any Holder that fails to furnish such information within a
reasonable time after receiving such request.
n. In the case of a Shelf Registration Statement, each Holder of
Transfer Restricted Securities to be registered pursuant thereto
agrees by acquisition of such Transfer Restricted Securities that,
upon receipt of any notice from the Company pursuant to Section
4(b)(ii) through (v), such Holder will discontinue disposition of
such Transfer Restricted Securities until such Holder's receipt of
copies of the supplemental or amended prospectus contemplated by
Section 4(j) or until advised in writing (the "ADVICE") by the
Company that the use of the applicable prospectus may be resumed. If
the Company shall give any notice under Section 4(b)(ii) through (v)
during the period that the Company is required to maintain an
effective Registration Statement (the "EFFECTIVENESS PERIOD"), such
Effectiveness Period shall be extended by the number of days during
such period from and
11
including the date of the giving of such notice to and including the
date when each seller of Transfer Restricted Securities covered by
such Registration Statement shall have received (x) the copies of
the supplemental or amended prospectus contemplated by Section 4(j)
(if an amended or supplemental prospectus is required) or (y) the
Advice (if no amended or supplemental prospectus is required).
o. In the case of a Shelf Registration Statement, the Company shall
enter into such customary agreements (including, if requested, an
underwriting agreement in customary form) and take all such other
action, if any, as Holders of a majority in aggregate principal
amount of the Securities, Exchange Securities and Private Exchange
Securities being sold or the managing underwriters (if any) shall
reasonably request in order to facilitate any disposition of
Securities, Exchange Securities or Private Exchange Securities
pursuant to such Shelf Registration Statement.
p. In the case of a Shelf Registration Statement, the Company shall (i)
make reasonably available for inspection by a representative of, and
Special Counsel (as defined below) acting for, Holders of a majority
in aggregate principal amount of the Securities, Exchange Securities
and Private Exchange Securities being sold and any underwriter
participating in any disposition of Securities, Exchange Securities
or Private Exchange Securities pursuant to such Shelf Registration
Statement, all relevant financial and other records, pertinent
corporate documents and properties of the Company and its
subsidiaries to the same extent that the Company would customarily
make such information available in the context of due diligence for
an underwritten public offering and (ii) use its reasonable best
efforts to have its officers, directors, employees, accountants and
counsel supply all relevant information reasonably requested by such
representative, Special Counsel or any such underwriter (an
"INSPECTOR") in connection with the preparation of such Shelf
Registration Statement.
q. In the case of a Shelf Registration Statement, the Company shall, if
requested by Holders of a majority in aggregate principal amount of
the Securities, Exchange Securities and Private Exchange Securities
being sold, their Special Counsel or the managing underwriters (if
any) in connection with such Shelf Registration Statement, use its
reasonable best efforts to cause (i) its counsel to deliver an
opinion relating to the Shelf Registration Statement and the
Securities, Exchange Securities or Private Exchange Securities, as
applicable, in customary form, (ii) its officers to execute and
deliver all customary documents and certificates requested by
Holders of a majority in aggregate principal amount of the
Securities, Exchange Securities and Private Exchange Securities
being sold, their Special Counsel or the managing underwriters (if
any) and (iii) its independent public accountants to provide a
comfort letter or letters in customary form, subject to receipt of
appropriate documentation as contemplated, and only if permitted, by
Statement of Auditing Standards No. 72.
5. REGISTRATION EXPENSES. The Company will bear all expenses incurred in
connection with the performance of its obligations under Sections 1, 2, 3
and 4 and the Company will reimburse the Holders for the reasonable fees
and disbursements of
12
one firm of attorneys (in addition to any local counsel) chosen by the
Holders of a majority in aggregate principal amount of the Securities, the
Exchange Securities and the Private Exchange Securities to be sold
pursuant to each Registration Statement (the "SPECIAL COUNSEL") acting for
the Holders in connection therewith.
6. INDEMNIFICATION. (a) In the event of a Shelf Registration Statement or in
connection with any prospectus delivery pursuant to an Exchange Offer
Registration Statement by an Holder or Exchanging Dealer, as applicable,
the Company shall indemnify and hold harmless each Holder (including,
without limitation, any such Exchanging Dealer), its affiliates, their
respective officers, directors, employees, representatives and agents, and
each person, if any, who controls such Holder within the meaning of the
Securities Act or the Exchange Act (collectively referred to for purposes
of this Section 6 and Section 7 as a Holder) from and against any loss,
claim, damage or liability, joint or several, or any action in respect
thereof (including, without limitation, any loss, claim, damage, liability
or action relating to purchases and sales of Securities, Exchange
Securities or Private Exchange Securities), to which that Holder may
become subject, whether commenced or threatened, under the Securities Act,
the Exchange Act, any other federal or state statutory law or regulation,
at common law or otherwise, insofar as such loss, claim, damage, liability
or action is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any such Registration Statement
or any prospectus forming part thereof or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, and shall reimburse each Holder promptly upon
demand for any legal or other expenses reasonably incurred by that Holder
in connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action as such expenses are incurred;
PROVIDED, HOWEVER, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with any Holders' Information; and
PROVIDED, FURTHER, that with respect to any such untrue statement in or
omission from any related preliminary prospectus, the indemnity agreement
contained in this Section 6(a) shall not inure to the benefit of any
Holder from whom the person asserting any such loss, claim, damage,
liability or action received Securities, Exchange Securities or Private
Exchange Securities to the extent that such loss, claim, damage, liability
or action of or with respect to such Holder results from the fact that
both (A) a copy of the final prospectus was not sent or given to such
person at or prior to the written confirmation of the sale of such
Securities, Exchange Securities or Private Exchange Securities to such
person and (B) the untrue statement in or omission from the related
preliminary prospectus was corrected in the final prospectus unless, in
either case, such failure to deliver the final prospectus was a result of
non-compliance by the Company with Section 4(d), 4(e), 4(f) or 4(g).
(b) In the event of a Shelf Registration Statement, each Holder
shall indemnify and hold harmless the Company, its affiliates, their respective
officers,
13
directors, employees, representatives and agents, and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act (collectively referred to for purposes of this Section 6(b) and Section 7 as
the Company), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company may become
subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any such Registration Statement or any prospectus
forming part thereof or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, but in
each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with any Holders' Information furnished to the Company by such
Holder, and shall reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
or preparing to defend against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action as such
expenses are incurred; PROVIDED, HOWEVER, that no such Holder shall be liable
for any indemnity claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Securities, Exchange Securities or
Private Exchange Securities pursuant to such Shelf Registration Statement.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 6(a) or 6(b), notify the indemnifying
party in writing of the claim or the commencement of that action; PROVIDED,
HOWEVER, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 6 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and PROVIDED, FURTHER, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 6. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than the reasonable costs of investigation; PROVIDED, HOWEVER,
that an indemnified party shall have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from
14
or in addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based upon advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (4) the indemnifying party has not
in fact employed counsel reasonably satisfactory to the indemnified party to
assume the defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases the reasonable
fees, disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all such indemnified party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 6(a) and 6(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
7. CONTRIBUTION. If the indemnification provided for in Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
Section 6(a) or 6(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage
or liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the
Company from the offering and sale of the Securities, on the one hand, and
a Holder with respect to the sale by such Holder of Securities, Exchange
Securities or Private Exchange Securities, on the other, 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 such Holder on the other with respect to
the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and a Holder on the other with respect to such offering and
such sale shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities (before deducting expenses)
received by or on behalf of the Company as set forth in the table on the
cover of the Offering Memorandum, on the one hand, bear to the total
proceeds received by such Holder with respect to its sale of Securities,
Exchange Securities or Private Exchange Securities, on the other. The
relative fault
15
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 the Company or
information supplied by the Company on the one hand or to any Holders'
Information supplied by such Holder on the other, the intent of the
parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 7 were to be determined by PRO RATA
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to herein. The amount paid
or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this
Section 7 shall be deemed to include, for purposes of this Section 7, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 7, an
indemnifying party that is a Holder of Securities, Exchange Securities or
Private Exchange Securities shall not be required to contribute any amount
in excess of the amount by which the total price at which the Securities,
Exchange Securities or Private Exchange Securities sold by such
indemnifying party to any purchaser exceeds the amount of any damages
which such indemnifying party has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
8. RULES 144 AND 144A. The Company shall use its reasonable best efforts to
file the reports required to be filed by it under the Securities Act and
the Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder (the "EXCHANGE ACT") in a timely manner
and, if at any time the Company is not required to file such reports, it
will, upon the written request of any Holder of Transfer Restricted
Securities, make publicly available other information so long as necessary
to permit sales of such Holder's securities pursuant to Rules 144 and
144A. The Company covenants that it will take such further action as any
Holder of Transfer Restricted Securities may reasonably request, all to
the extent required from time to time to enable such Holder to sell
Transfer Restricted Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rules 144 and 144A
(including, without limitation, the requirements of Rule 144A(d)(4)). Upon
the written request of any Holder of Transfer Restricted Securities, the
Company shall deliver to such Holder a written statement as to whether it
has complied with such requirements. Notwithstanding the foregoing,
nothing in this Section 8 shall be deemed to require the Company to
register any of its securities pursuant to the Exchange Act.
9. UNDERWRITTEN REGISTRATIONS. If any of the Transfer Restricted Securities
covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and
manager or managers that will administer the offering will be selected by
the Holders of a majority in aggregate principal amount of such Transfer
Restricted Securities included in such offering,
16
subject to the consent of the Company (which shall not be unreasonably
withheld or delayed), and such Holders shall be responsible for all
underwriting commissions and discounts in connection therewith.
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
10. MISCELLANEOUS. (a) AMENDMENTS AND WAIVERS. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless
the Company has obtained the written consent of Holders of a majority in
aggregate principal amount of the Securities, the Exchange Securities and
the Private Exchange Securities, taken as a single class. Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof
with respect to a matter that relates exclusively to the rights of Holders
whose Securities, Exchange Securities or Private Exchange Securities are
being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other Holders may be given by Holders
of a majority in aggregate principal amount of the Securities, the
Exchange Securities and the Private Exchange Securities being sold by such
Holders pursuant to such Registration Statement.
(b) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier or air courier guaranteeing next-day delivery:
(1) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 10(b); and
(2) if to the Company, initially at 0000 00xx Xxxxxx XX, Xxxxxxxxxx,
XX 00000, Attention of: Xxxx X. Xxxxxxx (telecopy (000) 000-0000)).
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; one business
day after being delivered to a next-day air courier; five business days after
being deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by telecopier) and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
17
(e) DEFINITION OF TERMS. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange, Inc.
is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
(f) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(h) REMEDIES. In the event of a breach by the Company or by any
Holder of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law, including recovery of damages (other than the recovery of
damages for a breach by the Company of its obligations under Sections 1 or 2
hereof for which liquidated damages have been paid pursuant to Section 3
hereof), will be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agree that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(i) NO INCONSISTENT AGREEMENTS. The Company represents,
warrants and agrees that (i) it has not entered into, shall not, on or after the
date of this Agreement, enter into any agreement that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof, (ii) it has not previously entered into any agreement which
remains in effect granting any registration rights with respect to any of its
debt securities to any person and (iii) without limiting the generality of the
foregoing, without the written consent of the Holders of a majority in aggregate
principal amount of the then outstanding Transfer Restricted Securities, it
shall not grant to any person the right to request the Company to register any
debt securities of the Company under the Securities Act unless the rights so
granted are not in conflict or inconsistent with the provisions of this
Agreement.
(j) SEVERABILITY. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their reasonable best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.
18
Please confirm that the foregoing correctly sets forth the
agreement among the Company and the Holder.
Very truly yours,
WorldCom, Inc.
By
-----------------------
Name:
Title:
Accepted: [MONTH DAY, YEAR]
[NAMES OF HOLDER]
By: [ ]
By:________________________________
Name:
Title:
19
ANNEX A
TO REGISTRATION RIGHTS AGREEMENT
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Securities received in exchange for
Securities where such Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has agreed
that, for a period of 90 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution"
ANNEX B
TO REGISTRATION RIGHTS AGREEMENT
Each broker-dealer that receives Exchange Securities for its
own account in exchange for Securities, where such Securities were acquired by
such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution".
ANNEX C
TO REGISTRATION RIGHTS AGREEMENT
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Securities
received in exchange for Securities where such Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 90 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until _______________,
200_, all dealers effecting transactions in the Exchange Securities may be
required to deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to the Registered Exchange Offer may be sold from
time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
ANNEX D
TO REGISTRATION RIGHTS AGREEMENT
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
Address:
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
EXHIBIT B
TO STOCK SUBSCRIPTION AGREEMENT
[The Form of Registration Rights Agreement is set forth on
Annex B to the WorldCom Note which is Exhibit A to the Stock
Subscription Agreement]
