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EXHIBIT 1.1
EXECUTION COPY
WORLDCOM, INC.
$6,100,000,000
6.125% Notes due 2001
6.250% Notes due 2003
6.400% Notes due 2005
6.950% Notes due 2028
Underwriting Agreement
August 6, 1998
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
March 1, 1997, between the Company and The Chase Manhattan Bank, as successor
to Mellon Bank, N.A., 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 statements (File Nos. 333-45067 and
333-20911) 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
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Agreement, in such form as the Company and the Managers shall have agreed to at
such time. The Company has also filed or proposes to file with the Commission
a registration statement pursuant to Rule 462(b) (Registration No. 333-
) under the Act registering additional Securities (the "Rule 462(b)
Registration Statement"). The term Registration Statement collectively means
the registration statements as amended to the date of the Terms Agreement,
together with the Rule 462(b) Registration Statement. 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, and with
respect to the Rule 462(b) Registration Statement, the Company will use its best
efforts to cause it to become effective as soon as practicable; 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,
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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.
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(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) WorldCom Network Services, Inc., MFS Communications Company,
Inc., UUNET Technologies, Inc., MFS Telecom, Inc. and IDB WorldCom,
Inc.(individually a "Subsidiary" and collectively, the "Subsidiaries") are the
Significant Subsidiaries of the Company (within the meaning of Rule 405 under
the Act). Each of the Company and the Subsidiaries (x) has been duly organized
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of organization, (y) has the requisite corporate power and
authority to carry on its business as it is currently being conducted and as
described in the Prospectus, and to own, lease and operate its properties and
(z) is duly qualified and is authorized to do business and is in good standing
in each jurisdiction where the operation, ownership or leasing of property or
the conduct of its business requires such qualification, except where any
failure to be so qualified 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
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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 nonassessable. 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
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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 (x) conflict with or result in
a breach or violation of any of the respective charters or by-laws of the
Company or any of the Subsidiaries or (y) after giving effect to the waivers
and consents obtained on or prior to the date hereof, if any, conflict with or
result in a breach or violation of any term or provision of, constitute a
default or cause an acceleration of any obligation under, or result in the
imposition or creation of (or the obligation to create or impose) a Lien with
respect to, any bond, note, debenture or other evidence of indebtedness or any
indenture, mortgage, deed of trust or other agreement or instrument to which
the Company or any of the Subsidiaries is a party or by which it or any of them
is bound, or to which any properties of the Company or any of the Subsidiaries
is subject, or (z) contravene any order of any court or governmental agency or
body having jurisdiction over the Company or any of the Subsidiaries or any of
their properties, or violate or conflict with any statute, rule or regulation
or administrative or court decree applicable to the Company or any of the
Subsidiaries, or any of their respective properties. 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
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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.
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(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.
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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) 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
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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.
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(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 jurisdictions as the Managers may
designate, 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
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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 (i)
an opinion of Xxxxxxx X. Xxxxxxxx or another attorney competent to opine on
regulatory matters and authorized to act as legal representative of the
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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.
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(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 (h)(i) of this Section 5.
(j) That, at the date on which the Terms Agreement is executed and
delivered and at the Closing Date, each of (i) Xxxxxx Xxxxxxxx LLP, the
Company's independent public accountants and (ii) Price Waterhouse Coopers LLP,
MCI'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
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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
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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, in the legend in block capital
letters on page S-2 related to stabilization, syndicate covering transactions
and penalty bids 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 correct.
(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
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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 from the Company, 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
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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
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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.
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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 Xxxx Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxx 00000, to the attention of the Chief Financial Officer.
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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:
--------------------
Name:
Title:
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first specified above.
SALOMON BROTHERS INC
CREDIT SUISSE FIRST
BOSTON CORPORATION
XXXXXX BROTHERS, INC.
CHASE SECURITIES INC.
X.X. XXXXXX SECURITIES INC.
NATIONSBANC XXXXXXXXXX
SECURITIES LLC
XXXXXXXX CAPITAL PARTNERS, L.P.
By:
---------------------
SALOMON BROTHERS INC
Name:
Title:
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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.
