Exhibit 1.1
WORLDCOM, INC.
$ 5,000,000,000
Floating Rate Notes due 2001
7.875% Notes due 2003
8.000% Notes due 2006
8.250% Notes due 2010
UNDERWRITING AGREEMENT
May 19, 2000
WorldCom, Inc., a Georgia corporation (the "Company"),
proposes to sell to the several underwriters named in the Terms Agreement dated
the date hereof and relating hereto (the "Underwriters"), for whom you (the
"Managers") are acting as representatives, the principal amount of its
securities identified in such Terms Agreement (the "Securities" or the "Offered
Securities"), to be issued under an indenture (the "Indenture") dated as of May
15, 2000 between the Company and Chase Manhattan Trust Company, National
Association, as trustee (the "Trustee"). To the extent there are no additional
Underwriters listed in the Terms Agreement other than you, the term Managers as
used herein shall mean you, as Underwriters, and the terms Managers and
Underwriters shall mean either the singular or plural as the context requires.
The term "you" or "your" as used herein, unless the context
otherwise requires, shall mean such of the parties to whom this Underwriting
Agreement is addressed as are named in the applicable Terms Agreement.
The Company has filed with the Securities and Exchange
Commission (the "Commission"), in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(herein referred to collectively as the "Act"), registration statement (File No.
333-34578) on Form S-3, including a prospectus relating to the Securities, and
has filed or proposes to file with the Commission a prospectus supplement or
supplements specifically relating to the Offered Securities pursuant to Rule 424
under the Act in the form furnished by the Company to the Managers or, to the
extent not completed at the time of execution of the Terms Agreement, in such
form as the Company and the Managers shall have agreed to at such time. The term
"Registration Statement" means the registration statement, as amended to the
date of the Terms Agreement. The term "Basic Prospectus" means the prospectus
included in the Registration
Statement. The term "Prospectus" means the Basic Prospectus together with the
prospectus supplement (other than a preliminary prospectus supplement)
specifically relating to the Offered Securities in the form first used to
confirm sales of the Offered Securities. The term preliminary prospectus means a
preliminary prospectus supplement specifically relating to the Offered
Securities, together with the Basic Prospectus. As used herein, the terms
"Registration Statement", "Basic Prospectus", "Prospectus" and "preliminary
prospectus" shall include, in each case, the material, if any, incorporated by
reference therein.
The Company and the Underwriters agree as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company
represents and warrants to each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in the Prospectus complied or will comply when so
filed in all material respects with the Exchange Act and the applicable rules
and regulations of the Commission thereunder, (ii) each part of the Registration
Statement, when such part became effective, did not contain, and each such part,
as amended or supplemented, if applicable, will not contain any 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, (iii) the
Registration Statement and the Prospectus comply, and, as amended or
supplemented, if applicable, will comply in all material respects with the Act
and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and
the applicable rules and regulations of the Commission thereunder and (iv) the
Prospectus does not contain and, as amended or supplemented, if applicable, will
not, as of the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; PROVIDED, HOWEVER,
that the Company makes no representations or warranties as to (A) the
information contained in or omitted from the Registration Statement, or the
Prospectus (or any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Managers specifically for use in connection with the
preparation of the Registration Statement or
the Prospectus (or any supplement thereto) or (B) to that part of the
Registration Statement that constitutes the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act.
(c) No action has been taken and no statute, rule, regulation
or order has been enacted, adopted or issued by any governmental agency or body
that prevents the issuance of the Offered Securities, suspends the
effectiveness of the Registration Statement, prevents or suspends the use of
any preliminary prospectus, or suspends the sale of the Offered Securities in
any jurisdiction referred to in Section 4(f) below; PROVIDED, HOWEVER, that to
the extent this representation relates to state securities or "blue sky" laws
and laws of jurisdictions other than the United States and its political
subdivisions, it shall be limited to the knowledge of the Company. No
injunction, restraining order or order of any nature by a Federal or state court
of competent jurisdiction has been issued and served on the Company or any of
the Subsidiaries (as defined in Section l(e) below) with respect to the Company
or any of the Subsidiaries that would prevent or suspend the issuance or sale of
the Offered Securities, the effectiveness of the Registration Statement, or the
use of any preliminary prospectus in any jurisdiction referred to in Section
4(f) below.
(d) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as set forth
in the Prospectus, neither the Company nor any of the Subsidiaries has incurred
any liabilities or obligations, direct or contingent, which are material to the
Company and the Subsidiaries taken as a whole, nor entered into any material
transaction not in the ordinary course of business, and there has not been,
singularly or in the aggregate, any material adverse change, in the properties,
business, results of operations, financial condition, affairs or business
prospects of the Company and its Subsidiaries taken as a whole (a "Material
Adverse Change"). Without limiting the foregoing, neither the Company nor any of
its Subsidiaries has sustained since the date of the latest audited financial
statements included, or incorporated by reference, in the Prospectus any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as
set forth in the Prospectus, there has not been any material change in the
capital stock or long-term debt of the Company or any of the Subsidiaries.
(e) The Company and each of its Significant Subsidiaries (as
defined in Rule 1-02(a) of Regulation S-X promulgated under the Act)
(individually a "Subsidiary" and collectively, the "Subsidiaries")(i) has been
duly organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of organization, (ii) has the requisite corporate
power and authority to carry on its business as it is currently being conducted
and as described in the Prospectus, and to own, lease and operate its properties
and (iii) is duly qualified and is authorized to do business and is in good
standing in each jurisdiction where the operation, ownership or leasing of
property or the conduct of its business requires such qualification, except
where any failure to be so qualified would not, singularly or when aggregated
with failures to be qualified elsewhere, have a material adverse effect on the
properties, business, results of operations, financial condition, affairs or
business prospects of the Company and its Subsidiaries taken as a whole (a
"Material Adverse Effect"). The Company has the requisite power and authority to
authorize the offering of the Offered Securities to be sold by it, to execute,
deliver and perform this Underwriting Agreement and to issue, sell and deliver
the Offered Securities to be sold by it.
(f) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and are fully paid and non-assessable. All
of the issued and outstanding shares of capital stock of each Subsidiary have
been duly and validly authorized and issued, are fully paid and non-assessable
and (except as set forth or contemplated in the Prospectus) are owned, directly
or through subsidiaries, by the Company, free and clear of any liens, claims or
encumbrances ("Liens"). There are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of sale or Liens
related to or entitling any person to purchase or otherwise to acquire any
shares of the capital stock of any Subsidiary, except as set forth or
contemplated in the Prospectus.
(g) The Company has all requisite corporate power and
authority to execute, issue and deliver the Offered Securities and to execute
and deliver the Indenture and to incur and perform its obligations provided for
therein.
(h) This Underwriting Agreement has been duly authorized and
validly executed and delivered by the Company.
(i) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company, and constitutes the valid and legally
binding obligation of the Company enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general principles of equity.
(j) The Offered Securities have been duly authorized, and,
when executed by the Company and authenticated by the Trustee in accordance
with the terms of the Indenture, and delivered to and duly paid for by the
Underwriters in accordance with the terms of this Underwriting Agreement and
the Terms Agreement, will be entitled to the benefits of the Indenture and will
conform in all material respects to the description thereof in the Prospectus
and will constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with the terms hereof, subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general principles of equity.
(k) The execution and delivery of this Underwriting Agreement,
the issuance and sale of the Offered Securities, the performance by the Company
of this Underwriting Agreement and the Indenture, and the consummation of the
other transactions herein contemplated will not (i) conflict with or result in a
breach or violation of any of the respective charters or by-laws of the Company
or any of the Subsidiaries or (ii) after giving effect to the waivers and
consents obtained on or prior to the date hereof, if any, conflict with or
result in a breach or violation of any term or provision of, constitute a
default or cause an acceleration of any obligation under, or result in the
imposition or creation of (or the obligation to create or impose) a Lien with
respect to, any bond, note, debenture or other evidence of indebtedness or any
indenture, mortgage, deed of trust or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which it or any of them is
bound, or to which any properties of the Company or any of the Subsidiaries is
subject, or (iii) contravene any order of any court or governmental agency or
body having jurisdiction over the Company or any of the Subsidiaries or any of
their properties, or violate or conflict with any statute, rule or regulation
or administrative or court decree applicable to the Company or any of the
Subsidiaries, or any of their respective properties. No authorization, approval
or consent or order of, or filing, registration or qualification with, any
court or governmental body or agency is required in connection with the
transactions contemplated by this Underwriting Agreement, except as may be
required by and made with or obtained from the National Association of
Securities Dealers, Inc. (the "NASD") or state
securities or "blue sky" laws or regulations or have been obtained and made
under the Act.
(l) There is no action, suit or proceeding before or by any
court, arbitrator or governmental official, agency or body, domestic or foreign,
pending against or affecting the Company or any of the Subsidiaries, or any of
their respective properties, that is required to be disclosed in the Prospectus
and is not so disclosed, or that, if determined adversely, is reasonably
expected to affect adversely the issuance of the Offered Securities or in any
manner draw into question the validity of this Underwriting Agreement or the
Offered Securities or to result, singularly or when aggregated with other
pending actions and actions known to be threatened, in a Material Adverse
Effect, or that is reasonably expected to materially and adversely affect the
consummation of the transactions contemplated hereby, and to the best of the
Company's knowledge, no such proceedings are contemplated or threatened. No
contract or document of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement is not so described or filed.
(m) The firm of accountants that has certified or shall
certify the applicable consolidated financial statements and supporting
schedules of the Company filed or to be filed as part of the Registration
Statement or the Prospectus are independent public accountants with respect to
the Company and its subsidiaries, as required by the Act. The consolidated
historical statements and any pro forma information, together with related
schedules and notes, if any, included in the Registration Statement or the
Prospectus comply as to form in all material respects with the requirements of
the Act. Such historical financial statements fairly present the consolidated
financial position of the Company and its Subsidiaries at the respective dates
indicated and the results of their operations and their cash flows for the
respective periods indicated, in accordance with generally accepted accounting
principles ("GAAP"), except as otherwise expressly stated therein, as
consistently applied throughout such periods. Such pro forma information has
been prepared on a basis consistent with such historical financial statements,
except for the pro forma adjustments specified therein, and gives effect to
assumptions made on a reasonable basis and fairly presents and gives effect to
the transactions described therein pertaining to such pro forma information. The
other financial and statistical information and data included in the Prospectus
and in the Registration Statement, historical and pro forma, are, in all
material respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and records of the
Company.
(n) Each of the Company and the Subsidiaries has all
certificates, consents, exemptions, orders, permits, licenses, authorizations,
or other approvals (each, an "Authorization") of and from, and has made all
declarations and filings with, all Federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, necessary or required to own, lease, license and use its properties
and assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain or file any such
Authorizations would not, singularly or in the aggregate, reasonably be expected
to have a Material Adverse Effect. All such Authorizations are in full force and
effect with respect to the Company and the Subsidiaries, and the Company and the
Subsidiaries are in compliance in all material respects with the terms and
conditions of all such Authorizations and with the rules and regulations of the
regulatory authorities and governing bodies having jurisdiction with respect
thereto.
(o) Except as disclosed in the Prospectus, no holder of any
security of the Company has or will have any right to require the registration
of such security by virtue of the filing of the Registration Statement or any
transactions contemplated by this Underwriting Agreement other than any such
right that has been expressly waived in writing. No holder of any of the
outstanding shares of capital stock of the Company or other person is entitled
to preemptive or other rights to subscribe for the Offered Securities.
(p) The Company has not (i) taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Offered Securities or (ii) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Offered Securities, or (iii) paid
or agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
SECTION 2. DELIVERY AND PAYMENT. The several commitments of
the Underwriters to purchase, and the obligation of the Company to sell,
Securities pursuant to any Terms Agreement shall be deemed to have been made on
the basis of the representations and warranties herein contained and shall be
subject to the terms and conditions herein set forth.
Payment for the Offered Securities shall be made by the
several Underwriters of the Offered Securities through the Managers by a wire
transfer in Federal Funds or other same day funds at the time and place set
forth in the Terms Agreement, upon delivery to the Managers for the respective
accounts of the several Underwriters of the Offered Securities registered in
such names and in such denominations as the Managers shall request not less than
two full business days prior to the date of delivery. The time and date of such
payment and delivery with respect to the Offered Securities are herein referred
to as the Closing Date.
SECTION 3. OFFERING BY UNDERWRITERS. The Company is advised by
the Managers that the Underwriters propose to make a public offering of their
respective portions of the Offered Securities as soon after this Underwriting
Agreement and the related Terms Agreement are entered into as in the Managers'
judgment is advisable. The terms of the public offering of the Offered
Securities are set forth in the Prospectus.
SECTION 4. AGREEMENTS. The Company agrees with the several
Underwriters, and in the case of paragraphs (g) and (h) of this Section 4, the
Underwriters agree with the Company:
(a) If not already effective, the Company will use its best
efforts to cause the Registration Statement, and any amendment thereof, to be
declared effective by the Commission. Prior to the termination of the offering
of the Offered Securities, the Company will not file any amendment of the
Registration Statement or supplement to the Prospectus without the prior consent
of the Managers, which consent shall not be unreasonably withheld. Subject to
the foregoing sentence, if filing of the Prospectus is required under Rule
424(b), the Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to the Managers of such timely filing. The Company will
promptly advise the Managers (i) when the Registration Statement, and any
amendment thereto shall have become effective, (ii) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b), (iii) when, prior to termination of the offering of the
Offered Securities, any amendment to the Registration Statement shall have been
filed or become effective, (iv) of any request by the Commission for any
amendment of the Registration Statement or supplement to the Prospectus or for
any additional information, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the Company
becoming aware of the institution or threatening of any proceeding for that
purpose
and (vi) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Offered Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of any
such stop order and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) As soon as practicable, the Company will make generally
available to its security holders and to the Managers, an earnings statement or
statements of the Company and its Subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(c) To furnish the Managers, without charge, two manually or
facsimile signed copies of the Registration Statement (including exhibits
thereto and documents incorporated therein by reference) and, during the period
mentioned in paragraph (e) below, as many copies of the Prospectus, any
documents incorporated therein by reference, and any supplements and amendments
thereto as the Managers may reasonably request. The Company agrees to timely
file the Prospectus pursuant to Rule 424 and to provide the Managers with
evidence of such filing. The terms "supplement" and "amendment" or "amend" as
used in this Underwriting Agreement shall include all documents subsequently
filed by the Company with the Commission pursuant to the Exchange Act that are
deemed to be incorporated by reference in the Prospectus.
(d) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish the Managers a copy of each such
proposed amendment or supplement and to file no such proposed amendment or
supplement to which the Managers reasonably objects in writing; PROVIDED that
the foregoing shall not apply to amendments or supplements that relate to
securities registered under the Registration Statement that are not Offered
Securities.
(e) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Prospectus to comply with the Act or the rules
thereunder, the Company will promptly prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this Section 4, an amendment
or supplement which will correct such statement or omission or effect such
compliance.
(f) The Company will cooperate with the Managers and counsel
for the Managers in connection with endeavoring to obtain qualification of the
Offered Securities for sale under the laws of such United States jurisdictions
as the Managers may designate and such foreign jurisdictions as to which the
Company and the Managers mutually agree, will maintain such qualifications in
effect so long as required for the distribution of the Offered Securities, and
will pay the fee of the NASD, if any, in connection with its review of the
offering; PROVIDED, HOWEVER, that the Company shall not be required to file any
GENERAL consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so qualified or
to subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject.
(g) Each Underwriter agrees with the Company that it has not
offered or sold, and agrees not to offer or sell, any of the Securities,
directly or indirectly, in Canada or any other foreign jurisdiction in
contravention of the securities laws of Canada or any province or territory
thereof or such foreign jurisdiction, as the case may be, and, without limiting
the generality of the foregoing, represents that any offer of the Securities in
Canada will be made only pursuant to an exemption from the requirement to file a
prospectus in the province or territory of Canada in which such offer is made.
Each Underwriter further agrees to send to any dealer who purchases from it any
of the Securities a notice stating in substance that, by purchasing such
Securities, such dealer represents and agrees that it has not offered or sold,
and will not offer or sell, directly or indirectly, any of such Securities in
Canada or to, or for the benefit of, any resident of Canada in contravention of
the securities laws of Canada or any province or territory thereof and that any
offer of Securities in Canada will be made only pursuant to an exemption from
the requirement to file a prospectus in the province or territory of Canada in
which such offer is made, and that such dealer will deliver to any other dealer
to whom it sells any of the Securities a notice containing substantially the
same statement as is contained in this sentence.
(h) Whether or not the transactions contemplated herein are
consummated, the Underwriters agree with the Company that they will pay the
reasonable fees incurred in connection with (i) the printing and distribution of
the preliminary prospectus and any Prospectus and (ii) the production and
delivery of the letters referred to in Paragraph 5(j) hereof.
(i) During the period beginning on the date of this
Underwriting Agreement and continuing to and including the
Closing Date or such other date as may be specified in the Terms Agreement, not
to offer, sell, contract to sell or otherwise dispose of any securities of the
Company that are similar to the Offered Securities as to maturity (other than
the Offered Securities) without the prior written consent of the Managers. The
foregoing shall not restrict the Company from borrowings under new or existing
revolving credit agreements and lines of credit and issuances of commercial
paper or interest rate swaps.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The
several obligations of the Underwriters to purchase and pay for the Offered
Securities hereunder are subject to the following conditions:
(a) That, at the Closing Date, the Company shall have
furnished to the Managers (i) an opinion of counsel of X. Xxxxx Xxxxxxxxx or
another attorney authorized as legal representative of the Company, addressed to
the Managers and dated the Closing Date, in substantially the form previously
approved by the Managers and (ii) an opinion of Xxxxx Xxxx LLP or other special
counsel addressed to the Managers and dated the Closing Date, in substantially
the form previously approved by the Managers.
(b) That, at the Closing Date, the Company shall have
furnished an opinion of XXXXXXX X. XXXXXXXX or another attorney competent to
opine on regulatory matters and authorized to act as legal representative of the
Company, addressed to the Managers and dated the Closing Date, in substantially
the form previously approved by the Managers.
(c) That, at the Closing Date, the Managers shall have
received an opinion of counsel for the Underwriters, addressed to the Managers
and dated the Closing Date, in a form reasonably acceptable to them.
(d) That the representations and warranties of the Company in
this Underwriting Agreement are true and correct in all material respects on the
Closing Date with the same effect as if made on the Closing Date and the Company
shall have complied in all material respects with all the agreements and
satisfied in all material respects all the conditions on its part to be
performed or satisfied at or prior to the Closing Date.
(e) That no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or, to the Company's knowledge, threatened.
(f) That subsequent to the execution and delivery of this
Underwriting Agreement and prior to the Closing Date, there
shall not have occurred any downgrading, nor shall any notice have been given to
the Company of (A) any intended or potential downgrading or (B) any review or
possible change that does not indicate the direction of a possible change, in
the rating accorded any of the Company's securities by either of Standard &
Poor's Ratings Group or Xxxxx'x Investors Service, Inc.
(g) Since the date of the most recent financial statements
included in the Prospectus, there has been no Material Adverse Change, whether
or not arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus.
(h) That, at the Closing Date, there shall not have been (i)
any change or decrease specified in the letter or letters referred to in
paragraph (j) of this Section 5 or (ii) any change, or any development involving
a prospective change, in or affecting the business or properties of the Company
and the Subsidiaries the effect of which, in any case referred to in clause (i)
or (ii) above, is, in the judgment of the Managers, so material and adverse as
to make it impractical or inadvisable to proceed with the public offering or the
delivery of the Securities as contemplated by the Registration Statement and the
Prospectus.
(i) That, at the Closing Date, the Company shall have
furnished to the Managers a certificate of the Company, signed by the Chairman
of the Board or the President and the principal financial or accounting officer
of the Company, each in his official capacity as an officer of the Company and
not as an individual, dated the Closing Date, to the effect of subparagraphs (d)
through (g) of this Section 5.
(j) That, at the date on which the Terms Agreement is
executed and delivered and at the Closing Date, Xxxxxx Xxxxxxxx LLP, the
Company's independent public accountants shall have furnished to the Managers a
letter or letters, dated respectively as of the date of the applicable Terms
Agreement (unless otherwise specified therein) and the Closing Date, in
substantially the form previously approved the Managers and the Company.
(k) That the Company shall have delivered to the Managers and
its counsel such documents as they may reasonably request relating to the
issuance and sale of the Offered Securities or otherwise related to the matters
contemplated hereby.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and
as provided in this Underwriting Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Underwriting Agreement shall
not be in all material respects reasonably satisfactory in form and substance
to the Managers and its counsel, this Underwriting Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, each Closing Date by the Managers. Notice of such cancelation shall be
given to the Company in writing or by telephone or telegraph confirmed in
writing.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the
sale of the Offered Securities provided for herein is not consummated for any
reason (other than a breach by any Underwriter of its obligations hereunder or a
termination pursuant to Section 9 hereof), the Company will reimburse the
Underwriters severally, upon demand, for all reasonable out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Offered Securities. If the sale of the Offered Securities provided for herein
is consummated or such sale is not consummated due to a breach by any
Underwriter of its obligations hereunder or because of a termination pursuant to
Section 9 hereof, the Underwriters will be responsible for all out-of-pocket
expenses that shall have been incurred by them in connection with the purchase
and sale of the Offered Securities.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company
agrees to indemnify and hold harmless each Underwriter and each person who
controls any Underwriter within the meaning of the Act against any and all
losses, claims, expenses, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, expenses, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any Basic Prospectus or any preliminary
prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances in which they
were made, not misleading, and agrees to reimburse each such indemnified party,
as incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage
liability or action; PROVIDED, HOWEVER, (i) the Company will not be liable in
any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Managers specifically for use in
connection with the preparation thereof, and (ii) such indemnity with respect to
any Basic Prospectus or preliminary prospectus shall not inure to the benefit of
any Underwriter (or any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage or liability purchased the Offered
Securities which are the subject thereof if such person did not receive a copy
of the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) at or prior to the confirmation
of the sale of such Offered Securities to such person in any case where such
delivery is required by the Act and the untrue statement or omission of a
material fact contained in such Basic Prospectus or preliminary prospectus was
corrected in the Prospectus (as so amended or supplemented). This indemnity
agreement is in addition to any liability which the Company may otherwise have.
(b) Each of the Underwriters severally agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within the
meaning of the Act, to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only with reference to written information
furnished to the Company by or on behalf of such Underwriter through the
Managers specifically for use in the preparation of the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company acknowledges
that the statements set forth in the last paragraph of the cover page regarding
delivery of the Securities and under the heading "Underwriting" in any
Preliminary Prospectus and the Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in any Preliminary Prospectus or the Prospectus, and the Managers confirm that
such statements are accurate and complete.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 7. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the
indemnifying party will be entitled to appoint counsel satisfactory to such
indemnified party to represent the indemnified party in such action (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); PROVIDED, HOWEVER, that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
defend such action on behalf of such indemnified party or parties. Upon receipt
of notice from the indemnifying party to such indemnified party of its election
so to appoint counsel to defend such action and approval by the indemnified
party of such counsel, the indemnifying party will not be liable to such
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (plus any local counsel), approved by the
Managers in the case of paragraph (a) of this Section 7, representing the
indemnified parties under such paragraph (a) who are parties to such action),
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) or (b)
of this Section 7 is due in accordance with its terms but is for any reason held
by a court to be unavailable, the Company and the Underwriters severally agree
to contribute to the aggregate losses, claims, expenses, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively, the "Losses") to which the
Company and one or more of the Underwriters may be subject (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the offering of
the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, demands or liabilities as
well as any other relevant equitable considerations. For the purposes of this
Paragraph 7(d), the relative benefits received by the Company on the one hand
and each Underwriter on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by such Underwriter, in each case as set forth on the cover page of the final
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Company and
the Underwriters agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above. For
purposes of this Section 7, each person who controls an Underwriter within the
meaning of either the Act or the Exchange Act and each director, officer,
employee and agent of an Underwriter shall have the same rights to contribution
as such Underwriter, and each person who controls the Company within the meaning
of either the Act or the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company shall
have the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d). The Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this paragraph
(d),
notify such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this paragraph (d).
SECTION 8. DEFAULT BY AN UNDERWRITER. If any one or more
Underwriters shall fail to purchase and pay for any of the Offered Securities
agreed to be purchased by such Underwriter or Underwriters hereunder, and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Underwriting Agreement, the remaining Underwriters
shall be obligated severally to take up and pay for (in the respective
proportions which the amount of Offered Securities each remaining Underwriter
has agreed to purchase bears to the aggregate amount of Offered Securities all
the remaining Underwriters have agreed to purchase) the Offered Securities which
the defaulting Underwriter or Underwriters agreed but failed to purchase;
PROVIDED, HOWEVER, that in the event that the aggregate amount of Offered
Securities which the defaulting Underwriter or Underwriters agreed but failed
to purchase shall exceed 10% of the aggregate amount of Offered Securities the
Underwriters agreed to purchase, the remaining underwriters shall have the right
to purchase all, but shall not be under any obligation to purchase any, of the
Offered Securities, and if such non-defaulting Underwriters do not purchase all
the Offered Securities, this Underwriting Agreement will terminate without
liability to any non-defaulting Underwriter or the Company. In the event of a
default by any Underwriter as set forth in this Section 8, the Closing Date
shall be postponed for such period, not exceeding seven days, as the Managers
shall determine. Nothing contained in this Underwriting Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company and any
non-defaulting Underwriter for damages occasioned by its default hereunder.
SECTION 9. TERMINATION. This Underwriting Agreement shall be
subject to termination in the absolute discretion of the Managers, by notice
given to the Company prior to a Closing Date if prior to such time (i) trading
in the Offered Securities or in the Common Stock of the Company, par value $.01
(the "Common Stock"), shall have been suspended by the Commission or the
National Association of Securities Dealers Automated Quotation National Market
System or trading in securities generally on the New York Stock Exchange shall
have been suspended or limited or minimum prices shall have been established on
such Exchange (other than minimum prices in effect on the date hereof), (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities, (iii) there shall have occurred any outbreak or material escalation
of hostilities or other calamity
or crisis the effect of which on the financial markets of the United States is
such as to make it, in the judgment of the Managers, impracticable to market the
Offered Securities, or (iv) there shall have been any decrease in the rating of
any of the Company's debt securities or preferred stock by any "Nationally
Recognized Statistical Rating Organization" (as defined for purposes of Rule
436(g) under the Act) or any written or public notice given of any intended or
potential decrease in any such rating or of a possible change in any such rating
that does not indicate the direction of the possible change.
SECTION 10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Underwriters set forth in
or made pursuant to this Underwriting Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of the officers, directors or controlling persons referred
to in Section 7 hereof, and will survive delivery of and payment for the Offered
Securities. The provisions of Sections 6 and 7 hereof shall survive the
termination or cancelation of this Underwriting Agreement.
SECTION 11. NOTICES. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the Managers, will be
mailed, delivered or sent by facsimile and confirmed to them, at the address
indicated in the Terms Agreement; or, if sent to the Company, will be mailed,
delivered or sent by facsimile and confirmed to it at 000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000, to the attention of the Chief Financial Officer.
SECTION 12. SUCCESSORS. This Underwriting Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and controlling persons
referred to in Section 7 hereof, and no other person will have any right or
obligation hereunder.
SECTION 13. APPLICABLE LAW. This Underwriting Agreement will
be governed by and construed in accordance with the substantive laws of the
State of New York.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
WORLDCOM, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chief Financial Officer
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first specified above.
XXXXXXX XXXXX XXXXXX INC.
X.X. XXXXXX SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
XXXXXX BROTHERS INC.
XXXXXXXX & PARTNERS, L.P.
CREDIT SUISSE FIRST BOSTON CORPORATION
DEUTSCHE BANK SECURITIES INC.
XXXXXXX, XXXXX & CO.
UBS WARBURG LLC
By: /s/ Xxx Xxxxxx
----------------------------
XXXXXXX XXXXX XXXXXX INC.
Name: Xxx Xxxxxx
Title: Managing Director
Acting severally on
behalf of themselves as
Managers and Underwriters
and on behalf of the other
several Underwriters,
if any, named in the Terms
Agreement relating to the
foregoing Agreement.
