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EXHIBIT 4.11
EXPENSE AGREEMENT GUARANTEE (this "Agreement"), dated as of November
12, 1998, between MCI WORLDCOM, Inc., a Georgia corporation, formerly known as
WorldCom, Inc. ("MCI WorldCom" or the "Guarantor"), and MCI Capital I, a
Delaware business trust (the "Trust").
WHEREAS, MCI Communications Corporation (formerly known as TC
Investments Corp.), a Delaware corporation and a wholly owned subsidiary of MCI
WorldCom ("MCI" or the "Company"), and the Trust are parties to that certain
Agreement as to Expenses and Liabilities (the "Expense Agreement"), dated as of
May 29, 1996, pursuant to which MCI has irrevocably and unconditionally
guaranteed to each Beneficiary (as defined in the Expense Agreement) the full
payment when and as due of any and all Obligations (as defined in the Expense
Agreement) of the Trust; and
WHEREAS, pursuant to the terms of an Amended and Restated Trust
Agreement, dated as of May 29, 1996 (the "Trust Agreement"), the Trust has (i)
issued to the public $750,000,000 aggregate liquidation amount of its 8.00%
Cumulative Quarterly Income Preferred Securities, Series A (the "Preferred
Securities"), representing undivided beneficial interests in the assets of the
Trust, (ii) issued to MCI, in its capacity as depositor of the Trust,
$23,195,900 of its Common Securities (the "Common Securities"), and (iii) used
the proceeds of the issuance of the Preferred Securities and Common Securities
to purchase from MCI $773,195,900 in aggregate principal amount of MCI's 8.00%
Junior Subordinated Deferrable Interest Debentures, Series A (the "Debentures"),
issued pursuant to a Junior Subordinated Indenture (the "Indenture"), dated as
of May 29, 1996; and
WHEREAS, the Guarantor desires to unconditionally and irrevocably
guarantee, on a subordinated basis, the full and punctual payment and
performance (within applicable grace periods) of all the obligations of the
Company under the Expense Agreement;
NOW, THEREFORE, the Guarantor and the Trust hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used but not defined herein
have the meanings ascribed to them in the Expense Agreement. In addition, the
following terms shall have the following meanings:
"Company" shall have the meaning set forth in the Recitals.
"Debt" means, with respect to any Person, whether recourse is to all
or a portion of the assets of such Person and whether or not contingent, (i)
every obligation of such Person for money borrowed; (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
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for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
guarantee of or responsibility or liability for, direct or indirect, as obligor
or otherwise (a) any obligation of the types referred to in clauses (i) through
(v) of another Person or (b) the payment of any and all dividends of another
Person.
"Guarantee" shall have the meaning set forth in Section 2 hereof.
"Guarantor" shall have the meaning set forth in the Recitals.
"Guarantor Senior Debt" means the principal of (and premium, if any)
and interest, if any (including, without limitation, interest accruing on or
after the filing of any petition in bankruptcy or for reorganization relating to
the Guarantor whether or not such claim for post-petition interest is allowed in
such proceeding), on Debt of the Guarantor, whether incurred on or prior to the
date of this Agreement or thereafter incurred, unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is expressly provided that such obligations are not superior in right of payment
to the Guarantee or to other Debt of the Guarantor which is pari passu with, or
subordinated to, the Guarantee, provided, however, that Guarantor Senior Debt
shall not be deemed to include (a) any Debt of the Guarantor which, when
incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Reform Act of 1978, was without recourse to the Guarantor, (b) any
Debt of the Guarantor to any of its Subsidiaries, other than Debt to a
Subsidiary the proceeds of which the Guarantor used to pay Guarantor Senior Debt
(c) any Debt to any employee of the Guarantor, (d) any liability for taxes or
(e) any Debt or other monetary obligations to trade creditors created or assumed
by the Guarantor or any of its Subsidiaries in the ordinary course of business
in connection with the obtaining of goods, materials or services.
"Indenture" shall have the meaning ascribed to it in the Recitals.
"Preferred Securities" shall have the meaning ascribed thereto in the
Recitals.
"MCI WorldCom" shall have the meaning set forth in the Recitals.
"Subsidiary" of any Person means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by such
Person or one or more other Subsidiaries of such Person, or by such Person and
one or more other Subsidiaries of such Person. For purposes of this definition,
"voting stock" means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.
SECTION 2. The Guarantee. (a) Subject to the terms and conditions
hereof, the Guarantor hereby irrevocably and unconditionally guarantees, on a
subordinated basis as set forth herein (the "Guarantee"), to each Beneficiary
(without duplication of amounts theretofore paid by the Trust or the Company),
the full payment, when and as due, of any and
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all obligations of the Company under the Expense Agreement. This Guarantee is
intended to be for the benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries have received notice hereof.
(b) Except as provided herein, the obligations of the Company under
the Expense Agreement remain in full force and effect.
SECTION 3. Waiver of Notice. The Guarantor hereby waives notice of
acceptance of the Guarantee and of any liability to which it applies or may
apply, and the Guarantor hereby waives presentment, demand for payment, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 4. No Impairment. The obligations, covenants, agreements and
duties of the Guarantor under the Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the extension of time for the payment by the Company of all or any
portion of any monetary obligation of the Company under the Expense Agreement,
or for the performance of any other obligations of the Company under, arising
out of, or in connection with the Expense Agreement;
(b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries pursuant to the terms of the Expense
Agreement, or any action on the part of the Company or the Trust granting
indulgence or extension of any kind;
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Company or the Trust or any of the
assets of the Company or the Trust.
There shall be no obligation of the Beneficiaries to give notice to,
or obtain the consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 5. Subordination. (a) Guarantee Subordinate to Guarantor
Senior Debt. The Guarantee is hereby expressly subordinated in right of payment,
to the prior payment in full of all Guarantor Senior Debt, and such
subordination is for the benefit of the holders of such Guarantor Senior Debt.
(b) Payment Over of Proceeds Upon Dissolution, Etc. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Guarantor (each such event, if any, herein sometimes
referred to as a "Proceeding"), then the holders of Guarantor Senior Debt shall
be entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Guarantor Senior Debt, or provision shall be made for
such
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payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Guarantor Senior Debt, before any payment is made in respect of the
Guarantee.
In the event that, notwithstanding the foregoing provisions of this
Section, any Beneficiary shall have received any payment of the Guarantor in
respect of the Guarantee, before all Guarantor Senior Debt is paid in full or
payment thereof is provided for in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Guarantor Senior Debt, and if such fact
shall, at or prior to the time of such payment or distribution, have been made
known to such Beneficiary, then and in such event such payment or distribution
shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person making
payment or distribution of assets of the Guarantor for application to the
payment of all Guarantor Senior Debt remaining unpaid, to the extent necessary
to pay all Guarantor Senior Debt in full, after giving effect to any concurrent
payment or distribution to or for the holders of Guarantor Senior Debt.
(c) Prior Payment of Guarantor Senior Debt. In the event that any
payments are due pursuant to the Guarantee, then and in such event the holders
of the Guarantor Senior Debt shall be entitled to receive payment in full of all
amounts due on or in respect of such Guarantor Senior Debt (including any
amounts due upon acceleration or otherwise), or provision shall be made for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Guarantor Senior Debt, before any payments are made on account of the
Guarantee.
In the event that, notwithstanding the foregoing, the Guarantor shall
make any payment to any Beneficiary prohibited by the foregoing provisions of
this Section 5(c), and if such fact shall, at or prior to the time of such
payment, have been made known to such Beneficiary, then and in such event such
payment shall be paid over and delivered forthwith to the Guarantor.
The provisions of this Section 5(c) shall not apply to any payment
with respect to which Section 5(b) of this Agreement would be applicable.
(d) No Payment When Guarantor Senior Debt in Default. (i) In the
event and during the continuation of any default in the payment of principal of
(or premium, if any) or interest on any Guarantor Senior Debt, or in the event
that any event of default with respect to any Guarantor Senior Debt shall have
occurred and be continuing and shall have resulted in such Guarantor Senior Debt
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, unless and until such event of default
shall have been cured or waived or shall have ceased to exist and such
acceleration shall have been rescinded or annulled, or (ii) in the event any
judicial proceeding shall be pending with respect to any default in payment or
such event of default, then no payment shall be made by the Guarantor on account
of the Guarantee.
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In the event that, notwithstanding the foregoing, the Guarantor shall
make any payment to any Beneficiary, prohibited by the foregoing provisions of
this Section 5(d), and if such fact shall, at or prior to the time of such
payment, have been made known to such Beneficiary then and in such event such
payment shall be paid over and delivered forthwith to the Guarantor.
The provisions of this Section 5(d) shall not apply to any payment
with respect to which Section 5(b) of this Agreement would be applicable.
(e) Payment Permitted If No Default. Nothing contained in this
Section 5 or elsewhere in this Agreement or the Expense Agreement shall prevent
(i) the Guarantor, at any time except during the pendency of any proceeding
referred to in Section 5(b) of this Agreement or under the conditions described
in Sections 5(c) and 5(d) of this Agreement, from making payments at any time in
respect of this Guarantee.
(f) Subrogation to Rights of Holders of Guarantor Senior Debt.
Subject to the payment in full of all Guarantor Senior Debt, or the provision
for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Guarantor Senior Debt, the Beneficiaries shall be
subrogated to the extent of the payments or distributions made to the holders of
such Guarantor Senior Debt pursuant to the provisions of this Section 5 (equally
and ratably with the holders of all indebtedness of the Guarantor which by its
express terms is subordinated to Guarantor Senior Debt to substantially the same
extent as the Guarantee is subordinated to the Guarantor Senior Debt and is
entitled to like rights of subrogation by reason of any payments or
distributions made to holders of such Guarantor Senior Debt) to the rights of
the holders of such Guarantor Senior Debt to receive payments and distributions
of cash, property and securities applicable to the Guarantor Senior Debt until
the payments due under the Guarantee shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Guarantor Senior
Debt of any cash, property or securities to which the Beneficiaries would be
entitled except for the provisions of this Section 5, and no payments over
pursuant to the provisions of this Section 5 to the holders of Guarantor Senior
Debt by any Beneficiary, shall, as among the Guarantor, its creditors other than
holders of Guarantor Senior Debt, and the Beneficiaries, be deemed to be a
payment or distribution by the Guarantor to or on account of the Guarantor
Senior Debt.
(g) Provisions Solely to Define Relative Rights. The provisions of
this Section 5 are and are intended solely for the purpose of defining the
relative rights of the Beneficiaries on the one hand and the holders of
Guarantor Senior Debt on the other hand. Nothing contained in this Section 5 or
elsewhere in this Agreement or in the Expense Agreement is intended to or shall
(i) impair, as between the Guarantor and the Beneficiaries, the obligations of
the Guarantor, which are absolute and unconditional, to pay to the
Beneficiaries, all payments due on the Guarantee; or (ii) affect the relative
rights against the Guarantor of the Beneficiaries and creditors of the Guarantor
other than their rights in relation to the holders of Guarantor Senior Debt; or
(iii) prevent the Beneficiaries from exercising all remedies otherwise permitted
by applicable law upon default under this Agreement, including, without
limitation, filing and voting claims in any Proceeding, subject to the rights,
if any, under this Section 5 of the holders of Guarantor Senior Debt to receive
cash, property and securities otherwise payable or deliverable to the
Beneficiaries.
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(h) No Waiver of Subordination Provisions. No right of any present or
future holder of any Guarantor Senior Debt to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Guarantor or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Guarantor with
the terms, provisions and covenants of this Section 5, regardless of any
knowledge thereof that any such holder may have or be otherwise charged with.
SECTION 6. Enforcement. A Beneficiary may enforce this Agreement
directly against the Guarantor and the Guarantor waives any right or remedy to
require that any action be brought against the Trust, the Company or any other
person or entity before proceeding against the Guarantor.
SECTION 7. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Company and the Trust in respect of any amounts paid to the
Beneficiaries by the Guarantor under this Agreement; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Agreement.
SECTION 8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF.
SECTION 9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument.
SECTION 10. Headings. The headings of this Agreement are for
reference only and shall not limit or otherwise affect the meaning hereof.
SECTION 11. Separability. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid or illegal or unenforceable provision had never
been contained herein.
SECTION 12. Termination. This Agreement shall terminate automatically
upon the termination of the Expense Agreement; provided, however, that this
Agreement shall continue to be effective or shall be reinstated, as the case may
be, if and to the extent the Expense Agreement continues to be effective or is
reinstated for any reason whatsoever. This Agreement is continuing, irrevocable,
unconditional and absolute.
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SECTION 13. Successors and Assigns. All guarantees and agreements of
the Guarantor contained in this Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Beneficiaries. In the event that the Guarantor shall assign its
obligations contained in this Agreement, the Guarantor shall be discharged from
all obligations and covenants of the Guarantor under this Agreement to the
fullest extent permitted by law.
SECTION 14. Amendment. So long as there remains any Beneficiary or any
Preferred Securities of any series are outstanding, this Agreement shall not be
modified or amended in any manner adverse to such Beneficiary or to the holders
of the Preferred Securities.
SECTION 15. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be given in writing by
delivering the same against receipt therefor by facsimile transmission
(confirmed by mail), telex or by registered or certified mail, addressed as
follows (and if so given, shall be deemed given when mailed or upon receipt of
an answer-back, if sent by telex):
MCI Capital I
c/o Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890
Facsimile No.: (302) 651-8882
Attn: Corporate Trust Department
MCI WORLDCOM, Inc.
515 East Amite St.
Jackson, MS 39201
Facsimile No.: 601-360-8110
Attn: Treasurer
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
MCI WORLDCOM, INC.
By: /s/ SCOTT D. SULLIVAN
-----------------------------------------
Name: Scott D. Sullivan
Title: Chief Financial Officer
MCI CAPITAL I
By: /s/ SCOTT D. SULLIVAN
-----------------------------------------
Name: Scott D. Sullivan
Title: Administrative Trustee
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