Execution Copy
[LOGO]
WorldCom, Inc.
$1,500,000,000 6.50% Notes due 2004
$4,000,000,000 7.50% Notes due 2011
$4,600,000,000 8.25% Notes due 2031
(euro)1,250,000,000 6.7 Notes due 2008
(pound)500,000,000 7.25% Notes due 2008
UNDERWRITING AGREEMENT
May 9, 2001
Ladies and Gentlemen:
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. Terms
used but not otherwise defined herein shall have the meanings assigned to them
in the 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, 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 and 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
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such time. The Company has also filed or proposes to file with the Commission a
registration statement pursuant to Rule 462(b) under the Act registering
additional Securities (the "Rule 462(b) Registration Statement"). The term
"Registration Statement" means the registration statement, including the
exhibits thereto, as amended to the date of the Terms Agreement together with
any Rule 462(b) Registration Statement. The term "Basic Prospectus" means the
prospectus included in the Registration Statement and filed with the Commission
pursuant to Rule 424(b) under the Act. 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, and, as
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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 amend ment 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 effective
ness 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(e) 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(f) 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
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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 nonassessable. All of
the
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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
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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.
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(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. Any 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.
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(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 transac
tions 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 U.S. Dollar Notes, the Euro Notes and the Sterling
Notes shall be made by the several Underwriters of the U.S. Dollar Notes, the
Euro Notes and the Sterling Notes through the Managers by a wire transfer in
Federal Funds or other same day funds in U.S. dollars in the case of the U.S.
Dollar Notes, in euros in the case of the Euro Notes and in pounds sterling in
the case of the Sterling Notes, in each case 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 U.S. Dollar Notes, the Euro Notes and the
Sterling Notes 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
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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, if not already 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.
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(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
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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
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from borrowings under new or existing revolving credit agreements and lines of
credit and issuances of commercial paper or interest rate swaps.
(j) The Company will use its good faith efforts to comply in all
material respects with the listing requirements of the Luxembourg Stock Exchange
and to complete the listing of the Offered Securities to be sold by the Company
on such exchange either prior to the Closing Date or within a reasonable time
following the Closing Date.
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 such
opinion and such statement of counsel for the Underwriters, addressed to the
Managers and dated the Closing Date, each 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.
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(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 results in a "negative watch" or "negative outlook" or 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 by 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
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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
15
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 and not jointly 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, under the heading "Offering
Restrictions" and under the heading "Underwriting" (other than paragraph 9 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
16
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 indem nifying party will be entitled to appoint
counsel satisfac tory 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 connec tion
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 appli-
17
cable, 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
18
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).
The remedies provided in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
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
19
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 per
share (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 (a) Federal or New York
State authorities or (b) any authority of any foreign jurisdiction that, in the
case of this clause (b), would, in the reasonable judgment of the Managers,
adversely affect the marketing of the Offered Securities, (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 or any
foreign jurisdiction is such as to make it, in the reasonable 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 results in a "negative watch" or
"negative outlook" or 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
20
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 with
copies to: P. Xxxxx Xxxxxxxxx, Esq., General Counsel - Corporate Development at
00000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xx. Xxxxx, XX 00000, and X. Xxxxxxx Xxxx,
Esq., Xxxxx Xxxx LLP at 000 Xxxxx Xxxxxxxx, Xx. Xxxxx, XX 00000.
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.
21
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.
X.X. XXXXXX SECURITIES INC.
XXXXXXX XXXXX XXXXXX INC.
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
X.X. XXXXXX SECURITIES INC.
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
By: /s/ Xxx Xxxxxx
---------------------------------
XXXXXXX XXXXX XXXXXX INC.
Name: Xxx Xxxxxx
Title: Managing Director
22
X.X. XXXXXX SECURITIES LTD.
SALOMON BROTHERS INTERNATIONAL LIMITED
By: /s/ Xxxxx Xxxx
---------------------------------
X.X. XXXXXX SECURITIES LTD.
Name: Xxxxx Xxxx
Title: Vice President
By: /s/ Xxxx Xxxxxx
---------------------------------
SALOMON BROTHERS INTERNATIONAL
LIMITED
Name: Xxxx Xxxxxx
Title: Attorney-in-Fact
Acting severally on behalf of
themselves as Managers and
Underwriters and on behalf
of the other several Underwriters,
if any, named in the Terms Agreement
relating to the foregoing Agreement.
