{"id":40054,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/letter-agreement-re-guaranties-and-promissory-notes-worldcom.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"letter-agreement-re-guaranties-and-promissory-notes-worldcom","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/letter-agreement-re-guaranties-and-promissory-notes-worldcom.html","title":{"rendered":"Letter Agreement re: Guaranties and Promissory Notes &#8211; WorldCom Inc. and Bernard J. Ebbers"},"content":{"rendered":"<pre>[WORLDCOM LOGO]\n\n\n                                  April 2, 2002\n\n\nBernard J. Ebbers\n500 Clinton Center Drive\nClinton, MS  39056\n\nDear Bernie:\n\n         This letter (the \"Agreement\") shall serve to amend, restate and confirm\nthe understandings contained in our November 1, 2000 letter agreement. WorldCom,\nInc. (the \"Company\") and you have entered into various contractual arrangements\nrespecting certain of your obligations that are, or have been, secured by shares\nof the Company, to wit:\n\n                  (i) Limited Guaranty dated as of November 14, 2000 executed by\nthe Company for the benefit of Bank of America, N.A. (the \"Prior Guaranty\");\n\n                  (ii) Limited Guaranty dated as of February 12, 2001 executed\nby the Company for the benefit of Bank of America, N.A., as modified by that\ncertain First Modification and Reaffirmation of Limited Guaranty, dated as of\nJanuary 25, 2002, replacing the Prior Guaranty (items (i) and (ii), together\nwith any amendments, modifications, supplements or replacements thereof, are\nsometimes collectively referred to herein as the \"Guaranty\");\n\n                  (iii) Promissory Note dated as of September 8, 2000 in the\nmaximum principal amount of $25 million made by you payable to the order of the\nCompany;\n\n                  (iv) Promissory Note dated as of November 1, 2000 in the\nmaximum principal amount of $25 million made by you payable to the order of the\nCompany;\n\n                  (v) Promissory Note dated as of December 29, 2000 in the\nmaximum principal amount of $50 million made by you payable to the order of the\nCompany;\n\n                  (vi) Promissory Note dated as of September 10, 2001 made by\nyou payable to the order of the Company relating to the Guaranty; and\n\n                  (vii) Promissory Note dated as of January 30, 2002 in the\nmaximum principal amount of $65 million made by you payable to the order of the\nCompany (items (iii) through (vii), together with any amendments, modifications,\nsupplements, or replacements thereof, are sometimes hereinafter collectively\nreferred to as the \"Promissory Notes\").\n\n         1. INDEMNITY. You shall indemnify, reimburse and hold harmless the\nCompany for any amounts expended, losses, damages, costs, claims or expenses\n(including, but not limited to, court costs and attorneys' fees) under or\narising out of the Guaranty, this Agreement or the Promissory Notes.\n\n         2. PLEDGE. (a) To secure the prompt payment and full performance of all\nobligations owing by you to the Company (the \"Liabilities\"), whether direct,\ncontingent, fixed or otherwise, now or from time to time hereafter arising, with\nrespect to this Agreement, the Promissory Notes and the\n\n\n\n\nBernard J. Ebbers\nApril 2, 2002\nPage 2\n\n\nGuaranty, you have granted and\/or hereby grant to the Company a security\ninterest in and to, and pledge and assign to the Company, under Articles 8 and 9\nof the Uniform Commercial Code as currently effective in the State of\nMississippi, all of your right, title, share and interest in the shares of stock\nof the Company now owned by you (except for the stock of the Company currently\nthe subject of pledges for the benefit of Citibank, N.A. and Bank of America,\nN.A., respectively, pursuant to agreements in effect on November 1, 2000, or any\nrenewals, replacements, amendments, modifications, or extensions thereof,\nhereinafter, the \"Existing Pledges\"), or hereafter acquired by you pursuant to\nthe exercise of stock options, together with all proceeds thereof and amounts or\nother securities or property derived therefrom, and, upon the release of the\nExisting Pledges, you shall be deemed to have granted to the Company a security\ninterest under Articles 8 and 9 of the Uniform Commercial Code as currently\neffective in the State of Mississippi in such additional shares of stock in the\nCompany as were the subject of the Existing Pledges (all of the shares\nreferenced above are sometimes hereinafter collectively referred to as the\n\"Collateral\"). You agree to keep the Collateral free from any lien, security\ninterest or encumbrance other than those in favor of the Company, or arising out\nof the Existing Pledges, or as to which the Company consents in writing.\n\n                  (b) Upon demand by the Company pursuant to any one or more of\nthe Promissory Notes (which shall be subject to a majority vote of the Board of\nDirectors of the Company) or upon the breach by you of any of the terms of this\nAgreement or any of the Promissory Notes, the Company may exercise the rights\nand pursue the remedies provided under Article 9 of the Uniform Commercial Code\nas currently effective in, or as hereafter amended by, the State of Mississippi,\nincluding but not limited to exercising all voting rights with respect to the\nCollateral, collecting all dividends and other distributions with respect to the\nCollateral, and selling the Collateral at any public or private sale, at the\nCompany's option, without advertisement; provided, however, that upon any such\ndemand, you shall have 90 days from the date thereof to make payment; provided,\nfurther, that if such demand is made subsequent to your death or incapacity,\nyour estate shall have 180 days from the date thereof to make payment; in either\nsuch case, interest shall continue to accrue at the \"Normal Rate\" as provided in\nthe Promissory Notes until such payment is due and, until such payment is due,\nthe Company shall refrain from exercising the aforementioned rights and\nremedies. The Company may bid and become a purchaser at any such sale, and upon\nany such sale the Company shall collect, receive, and hold and apply the\nproceeds as provided herein. If notice of intended disposition is required by\nlaw, such notice, if mailed, shall be deemed reasonably and properly given if\nmailed to your address appearing on the records of the Company at least five\ndays before the time of such disposition. The proceeds from any such sale or\naction shall be applied first to the payment of all legal and other costs and\nexpenses incurred in connection with the sale or action and next to the payment\nof the Liabilities, as determined by the Company. The balance, if any, of such\nproceeds remaining after such application shall be paid to you. If the proceeds\nof any such sale or action are insufficient to pay in full the amounts specified\nabove, you shall remain liable for such deficiency.\n\n         3. PERFECTION. To perfect the Company's security interest in the\nCollateral, (a) you hereby irrevocably authorize the Company at any time and\nfrom time to time to file in any appropriate jurisdiction any UCC financing\nstatements or amendments thereto, and (b) you are delivering to the Company\ncertain of the Collateral, together with irrevocable stock powers endorsed in\nblank. You, from time to time hereafter, shall deliver to the Company any\nadditional Collateral that comes within your possession or control, together\nwith irrevocable stock powers endorsed in blank.\n\n         4. ADDITIONAL SECURITY. You represent and warrant to the Company that\nyour personal financial statement dated December 31, 2001 (the \"Statement\")\nprovided to the Company is complete and\n\n\n\nBernard J. Ebbers\nApril 2, 2002\nPage 3\n\n\naccurate in all material respects and, except as noted on the Statement, all of\nthe assets listed thereon are owned by you individually, free and clear of any\nliens, security interests or other encumbrances, except for statutory liens\nsecuring immaterial amounts arising in the ordinary course of business. On or\nwithin 10 days of the date hereof, you agree to provide such information with\nrespect to your interests in Joshua Holdings LLC, BC Yacht Sales Inc., Savannah\nYacht &amp; Ship LLC, BCT Real Estate LLC, Douglas Lake Land &amp; Timber Company LLP\nand Douglas Lake Properties, Inc., together with any related or subsidiary\nentities (the \"Additional Assets\"), and as the Company reasonably may request\nfrom time to time, including without limitation:\n\n                  (i) Outstanding debt and liability information with respect to\n     each Additional Asset;\n\n                  (ii) Existing appraisal information, evaluations and title\n     reports with respect to each Additional Asset; and\n\n                  (iii) Historical operating statements for each Additional\n     Asset.\n\nExcept for liens in existence as of the date hereof, until the Liabilities have\nbeen paid in full, you will not sell, assign, transfer, pledge or encumber in\nany other matter any of the Additional Assets without the prior written consent\nof the Company. On or within 10 days of the date hereof, you shall pledge to the\nCompany (and shall cause the pledge by related minority investors) of a security\nor mortgage interest in each of the Additional Assets. In the event that the\nvalue of the Collateral or the Additional Assets should materially increase in\nthe aggregate during the term of this Agreement, the Company will take\nreasonable steps to release that portion of the Collateral and\/or Additional\nAssets that is no longer necessary to sufficiently collateralize the\nLiabilities.\n\n         5. FURTHER ASSURANCES. You agree to perform all acts and do all things\nwhich the Company may request, now or hereafter, in order to evidence, preserve\nor protect its rights and the creation, attachment or perfection of the security\ninterests granted or to be granted hereunder including, without limitation,\nexecution and delivery of one or more promissory notes evidencing your\nobligations arising out of any advance under the Guaranty and delivery of stock\ncertificate(s) with appropriate stock powers in order to perfect the Company's\nsecurity interest in the Collateral or the Additional Assets.\n\n         6. MISCELLANEOUS. This Agreement shall be interpreted and the rights\nand liabilities of the parties hereto shall be determined in accordance with the\ninternal laws (as opposed to the conflicts of law provisions) and decisions of\nthe State of Mississippi and you hereby consent to the jurisdiction of the\ncourts of or in the State of Mississippi in connection with any dispute,\ncontroversy, action or other matter relating to or arising out of this\nAgreement. Whenever possible each provision of this Agreement shall be\ninterpreted in such manner as to be effective and valid under applicable law,\nbut if any provision of this Agreement shall be prohibited by or invalid under\napplicable law, such provision shall be ineffective to the extent of such\nprohibition or invalidity, without invalidating the remainder of such provision\nor the remaining provisions of this Agreement. This Agreement shall be binding\nupon you and your heirs and legal representatives and shall inure to the benefit\nof the Company and its successors and assigns. The powers, rights, and remedies\nof the Company under this Agreement are cumulative and are not exclusive of any\nother power, right or remedy that the Company otherwise may have. Any single or\npartial exercise or pursuit of any power, right or remedy under this Agreement\nby the Company shall not preclude other or further exercise or pursuit thereof\nor the exercise or pursuit of any other power, right or remedy. The Company's\nrights and remedies under this Agreement shall be unaffected by any change in\nthe provisions of\n\n\n\nBernard J. Ebbers\nApril 2, 2002\nPage 4\n\n\nany agreement, instrument, or document evidencing or affecting any of the\nLiabilities, by any extension of time for payment or performance of any of the\nLiabilities or by any partial or full release of any security for payment or\nperformance of any of the Liabilities. No delay by the Company in exercising or\npursuing any power, right or remedy under this Agreement shall operate as a\nwaiver thereof, and no failure by the Company to exercise or pursue any power,\nright or remedy shall prevent the Company from exercising the same in the\nfuture.\n\n\n                                       WorldCom, Inc.\n\n                                       By: WorldCom, Inc. Compensation and Stock\n                                       Option Committee\n\n\n                                       By: \/s\/ Stiles A. Kellett, Jr.\n                                          ------------------------------------\n                                          Stiles A. Kellett, Jr., Chairman\n\n\n         Acknowledged and agreed as of the date first above written.\n\n\n\n                                       \/s\/ Bernard J. Ebbers\n                                       ---------------------------------------\n                                       Bernard J. Ebbers\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9361],"corporate_contracts_industries":[9519],"corporate_contracts_types":[9539,9544],"class_list":["post-40054","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-worldcom-inc","corporate_contracts_industries-telecommunications__telephone","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40054","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40054"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40054"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40054"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40054"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}