<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 23, 2000
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Level 3 Communications, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-15658 47-0210602
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(Commission File Number) (I.R.S. Employer Identification No.)
1025 Eldorado Boulevard
Broomfield, Colorado 80021
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(Address of principal executive offices)
Registrant's telephone number, including area code: (720) 888-1000
Not Applicable
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On February 23,2000, Level 3 Communications, Inc. (the "Company") entered into
a U.S. Underwriting Agreement and an International Underwriting Agreement
(collectively, the "Underwriting Agreements") with the representatives of the
underwriters named therein in connection with the offering (the "Equity
Offering") of 20,000,000 shares of the Company's common stock, par value $.01
per share (the "Common Stock"). An additional 3,000,000 shares of Common Stock
are subject to an over-allotment option granted to the underwriters in the
Underwriting Agreements. Copies of the Underwriting Agreements are attached
hereto as Exhibits 1.1 and 1.2 and are incorporated herein by reference. On
February 29, 2000 the Equity Offering was consummated, and the Company issued
23,000,000 shares of Common Stock, including 3,000,000 shares of Common Stock
pursuant to the underwriters' exercise of the over-allotment option.
On February 23, 2000, the Company also entered into an underwriting agreement
(the "Notes Underwriting Agreement") with the representatives of the
underwriters named therein in connection with the offering (the "Notes
Offering" and, together with the Equity Offering, the "Offerings") of
$750,000,000 aggregate principal amount of its 6% Convertible Subordinated Notes
due 2010 (the "Notes"), which are convertible into shares of Common Stock. An
additional $112,500,000 aggregate principal amount of the Notes is subject to an
over-allotment option granted to the underwriters in the Notes Underwriting
Agreement. A copy of the Notes Underwriting Agreement is attached hereto as
Exhibit 1.3 and is incorporated herein by reference. The Notes are being issued
pursuant to an Indenture, dated as of September 20, 1999 (a form of which was
filed as an exhibit to the Company's Registration Statement on Form S-3 (File
No. 333-68887) (the "Initial Registration Statement")), and a Second
Supplemental Indenture, dated as of February 29, 2000 (the "Second Supplemental
Indenture"). A copy of the Second Supplemental Indenture is attached hereto as
Exhibit 4.1 and is incorporated herein by reference. On February 29, 2000 the
Notes Offering was consummated, and the Company issued $862,500,000 aggregate
principal amount of the Notes, including $112,500,000 aggregate principal amount
pursuant to the underwriters' exercise of the over-allotment option.
The Offerings are made pursuant to the Company's Initial Registration Statement
and the Registration Statement on Form S-3 (File No. 333-91899) (the "Second
Registration Statement" and, together with the Initial Registration Statement,
the "Registration Statements") under the Securities Act of 1933, as amended. The
Registration Statements provide that the Company may from time to time offer its
debt and equity securities with an aggregate public offering price of up to $3.5
billion.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses being acquired:
Not Applicable.
(b) Pro forma financial information: Not Applicable.
(c) Exhibits:
1.1 U.S. Underwriting Agreement, dated February 23, 2000, among the
Company and the representatives of the underwriters named therein
1.2 International Underwriting Agreement, dated February 23, 2000,
among the Company and the representatives of the underwriters
named therein
1.3 Underwriting Agreement, dated February 23, 2000, among the
Company and the representatives of the underwriters named therein
4.1 Second Supplemental Indenture, dated as of February 29, 2000,
between the Company and The Bank of New York, as Trustee
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of PricewaterhouseCoopers LLP
23.3 Consent of Arthur Andersen LLP
-2-
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LEVEL 3 COMMUNICATIONS, INC.
Dated: February 29, 2000 By: /s/ Neil J. Eckstein
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Neil J. Eckstein
Vice President
-3-
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EXHIBIT 1.1
EXECUTION COPY
Level 3 Communications, Inc.
17,000,000 Shares 1/
-
Common Stock
($0.01 par value)
U.S. Underwriting Agreement
New York, New York
February 23, 2000
Salomon Smith Barney Inc.
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Chase Securities Inc.
Credit Suisse First Boston Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
As U.S. Representatives of the several
U.S. Underwriters,
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, NY 10013
Ladies and Gentlemen:
Level 3 Communications, Inc., a corporation organized under the laws
of Delaware (the "Company"), proposes to sell to the several U.S. Underwriters
named in Schedule I hereto, for whom the U.S. Representatives are acting as
representatives, 17,000,000 of shares of Common Stock, $0.01 par value ("Common
Stock") of the Company (said shares to be issued and sold by the Company being
hereinafter called the "U.S. Underwritten Securities"). The Company also
proposes to grant to the U.S. Underwriters an option to purchase up to 2,550,000
additional shares of Common Stock to cover over-allotments (the "U.S. Option
Securities"; and together with the U.S. Underwritten Securities, the "U.S.
Securities"). It is understood that the Company is concurrently entering into
an International Underwriting Agreement providing for the sale by the Company of
an aggregate of 3,000,000 shares of Common Stock (said shares to be sold by the
Company pursuant to the International Underwriting Agreement being hereinafter
called the "International Underwritten Securities") and providing for the grant
to the International Underwriters of an option to purchase from the Company up
to 450,000 additional shares of Common Stock (the "International Option
Securities"). It is further understood and agreed that the International
Underwriters and the U.S. Underwriters have entered into an Agreement Between
U.S. Underwriters and International Underwriters dated the date hereof (the
"Agreement Between U.S. Underwriters and International Underwriters"), pursuant
to which, among other things, the International Underwriters may purchase from
the U.S. Underwriters a portion of the U.S. Securities to be sold pursuant to
this U.S. Underwriting
_________________
1/ Plus an option to purchase from the Company up to 2,550,000 additional
-
Securities to cover over-allotments.
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2
Agreement and the U.S. Underwriters may purchase from the International
Underwriters a portion of the International Securities to be sold pursuant to
the International Underwriting Agreement. To the extent there are no additional
U.S. Underwriters listed on Schedule I other than you, the term U.S.
Representatives as used in this U.S. Underwriting Agreement shall mean you, as
U.S. Underwriters, and the terms U.S. Representatives and U.S. Underwriters
shall mean either the singular or plural as the context requires. The use of the
neuter in this U.S. Underwriting Agreement shall include the feminine and
masculine wherever appropriate. Any reference herein to the Registration
Statements, the Basic Prospectus, any Preliminary Prospectus or any Final
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under the
Exchange Act on or before the Effective Date of the Registration Statements or
the issue date of the Basic Prospectus, any Preliminary Prospectus or any Final
Prospectus, as the case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statements, the
Basic Prospectus, any Preliminary Prospectus or any Final Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statements, or the issue date of
the Basic Prospectus, any Preliminary Prospectus or any Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. Certain terms used
in this U.S. Underwriting Agreement are defined in Section 17 hereof.
1. Representations and Warranties. The Company represents and
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warrants to, and agrees with, each U.S. Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act and has prepared and filed with the Commission registration
statements (file numbers 333-91899 and 333-68887) on Form S-3, including a
related basic prospectus, for registration under the Securities Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including Preliminary Prospectuses, each of
which has previously been furnished to you. The Company will next file
with the Commission one of the following: (1) after the Effective Date of
such registration statements, final prospectus supplements relating to the
Securities in accordance with Rules 430A and 424(b), (2) prior to the
Effective Date of such registration statements, an amendment to such
registration statements (including the forms of final prospectus
supplements) or (3) final prospectuses in accordance with Rules 415 and
424(b). In the case of clause (1), the Company has included in such
registration statements, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Securities Act and the
rules thereunder to be included in such registration statements and the
Final Prospectuses. As filed, such final prospectus supplements or such
amendments and forms of final prospectus supplements shall contain all Rule
430A Information, together with all other such required information, and,
except to the extent the U.S. Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the Basic Prospectus and any
Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein.
It is understood that two forms of prospectuses are to be used in
connection with the offering and sale of the Securities: one form of
prospectus relating to the U.S. Securities, which are to be offered and
sold to United States and Canadian
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3
Persons, and one form of prospectus relating to the International
Securities, which are to be offered and sold to persons other than United
States and Canadian Persons. The latter form of prospectus is identical to
the former except for the outside front cover page, page (ii) and the
outside back cover page.
(b) On the Effective Date, the Registration Statements did or will,
and when the Final Prospectuses are first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined in this U.S.
Underwriting Agreement) and on any date on which Option Securities are
purchased, if such date is not the Closing Date (a "settlement date"), the
Final Prospectuses (and any supplement thereto) will, comply in all
material respects with the applicable requirements of the Securities Act
and the Exchange Act and the respective rules thereunder; on the Effective
Date and at the Execution Time, the Registration Statements did not or will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and, on the Effective Date (if the
Final Prospectuses are not filed pursuant to Rule 424(b)) or on the date of
any filing pursuant to Rule 424(b) (if the Final Prospectuses are filed
pursuant to Rule 424(b)) and, in either case, on the Closing Date and any
settlement date, the Final Prospectuses (together with any supplement
thereto) will not, include any untrue statement of a material fact or omit
to state a material fact necessary in order 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 the information contained in or omitted from the
Registration Statements or the Final Prospectuses (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
Representatives specifically for inclusion in the Registration Statements
or the Final Prospectuses (or any supplement thereto).
(c) Subsequent to the respective dates as of which information is
given in the Final Prospectuses, except as set forth or contemplated in the
Final Prospectuses, neither the Company nor any of its subsidiaries has
incurred any liabilities or obligations, direct or contingent, which are
material to the Company and its subsidiaries taken as a whole, nor entered
into any transaction not in the ordinary course of business that is
material to the Company and its subsidiaries taken as a whole, and there
has not been, singularly or in the aggregate, any material adverse effect,
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 Effect"). Without limiting the foregoing,
neither the Company nor any of its subsidiaries has sustained since the
respective dates as of which information is given in the Final Prospectuses
any 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 or regulatory action, order or decree,
constituting a Material Adverse Effect, otherwise than as set forth or
contemplated in the Final Prospectuses.
(d) Each of the Company and the Subsidiaries (x) has been duly
organized and is validly existing as a corporation under the laws of its
jurisdiction of organization and is in good standing under the laws of such
jurisdiction, (y) has the requisite corporate power and authority to carry
on its business as it is currently being conducted and as described in the
Final Prospectuses, and to own, lease and operate
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4
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. The Company has the requisite corporate power
and authority to execute, deliver and perform this Agreement and to issue,
sell and deliver the Securities. The term "Subsidiary" means each entity
listed on Schedule II hereto.
(e) The Company's authorized equity capitalization is as set forth in
the Final Prospectuses; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Final
Prospectuses; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities have been duly and validly authorized, and, when issued and
delivered to and paid for by the U.S. Underwriters pursuant to the U.S.
Underwriting Agreement and by the International Underwriters pursuant to
the International Underwriting Agreement, will be fully paid and
nonassessable; the Securities are duly listed, and admitted and authorized
for trading, subject to official notice of issuance, on the Nasdaq National
Market; the certificates for the Securities are in valid and sufficient
form; the holders of outstanding shares of capital stock of the Company are
not entitled to preemptive or other rights to subscribe for the Securities;
and, except as set forth in the Final Prospectuses and, except for
outstanding warrants and options to purchase shares of Common Stock that in
the aggregate represent less than 1% of the Common Stock outstanding on the
date hereof, no options, warrants or other rights to purchase, agreements
or other obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding. All the outstanding shares of
capital stock of each Subsidiary and of Level 3 Communications Limited and
Level 3 Bermuda, Ltd. have been duly and validly authorized and issued and
are fully paid and nonassessable, and, except as otherwise set forth in the
Final Prospectuses, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances (other than the
pledge of such shares or equity interests pursuant to the agreements the
Company and certain of its subsidiaries have entered into in connection
with the senior secured credit facility described in the Final
Prospectuses).
(f) There is no franchise, contract or other document of a character
required to be described in the Registration Statements or Final
Prospectuses, or to be filed as an exhibit thereto, which is not described
or filed as required; and the statements in the Final Prospectuses under
the headings "Business--Regulation" and "Business--Legal Proceedings"
fairly summarize the matters therein described.
(g) Each of this U.S. Underwriting Agreement and the International
Underwriting Agreement has been duly authorized, executed and delivered by
the Company.
(h) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final
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5
Prospectuses, will not be an "investment company" as defined in the
Investment Company Act of 1940, as amended.
(i) The execution and delivery of this U.S. Underwriting Agreement
and the International Underwriting Agreement, the issuance and sale of the
Securities hereunder and under the International Underwriting Agreement,
the performance by the Company of this U.S. Underwriting Agreement and the
International Underwriting Agreement and the consummation of the other
transactions herein and therein contemplated will not (x) conflict with or
result in a breach or violation of any of the respective charters, by-laws
or other organizational documents of the Company or any of the Subsidiaries
or Level 3 Communications Limited or Level 3 Bermuda, Ltd., (y) violate or
conflict with any material statute, rule or regulation applicable to the
Company or any Subsidiary or any order or decree of any governmental or
regulatory agency or body or any court having jurisdiction over the Company
or any Subsidiary or any of their respective properties or (z) 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 or other claim or encumbrance with
respect to, any bond, note, debenture or other evidence of indebtedness or
any indenture, mortgage or deed of trust or any other material agreement or
instrument to which the Company or any of the Subsidiaries or Level 3
Communications Limited or Level 3 Bermuda, Ltd., 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 or may be subject. No authorization, approval or
consent or order of, or filing, registration or qualification with, any
court or governmental or regulatory body or agency is required in
connection with the transactions contemplated by this Agreement and the
International Underwriting Agreement except as have been made or obtained
and except as may be required by and made with or obtained from state
securities laws or regulations, the National Association of Securities
Dealers, Inc. or, with respect to filing the Final Prospectuses with the
Commission in accordance with Rule 424(b) under the Securities Act.
(j) Except as described in the Final Prospectuses, there is no
action, suit or proceeding before or by any court, arbitrator or
governmental or regulatory official, agency or body, domestic or foreign,
pending against or affecting the Company or any of its subsidiaries, or any
of their respective properties, that, if determined adversely, is
reasonably expected to affect adversely the issuance of the Securities or
in any manner draw into question the validity of the U.S. Underwriting
Agreement or the International Underwriting Agreement or the Securities or
to result, singularly or when aggregated with other pending actions and
actions known to be threatened that are not described in the Final
Prospectuses, in a Material Adverse Effect, or that is reasonably expected
to materially and adversely affect the consummation of the U.S.
Underwriting Agreement or the International Underwriting Agreement or the
transactions contemplated hereby or thereby, and to the best of the
Company's knowledge, no such proceedings are contemplated or threatened.
(k) None of the Company, any of the Subsidiaries, Level 3
Communications Limited or Level 3 Bermuda, Ltd. is or after giving effect
to the issuance of the Securities will be (i) in violation of its
respective charter, bylaws or other organizational documents or (ii) in
default in the performance of any bond,
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6
debenture, note or any other evidence of indebtedness or any indenture,
mortgage, deed of trust or other contract, lease or other instrument to
which the Company, any of the Subsidiaries, Level 3 Communications Limited
or Level 3 Bermuda, Ltd. is a party or by which any of them is bound, or to
which any of the property or assets of the Company, any of the
Subsidiaries, Level 3 Communications Limited or Level 3 Bermuda, Ltd. is
subject, other than such defaults that could not, singularly or in the
aggregate, have a Material Adverse Effect.
(l) The firms of accountants that have certified the consolidated
financial statements and supporting schedules of the Company included or
incorporated by reference in the Final Prospectuses are independent public
accountants with respect to the Company and its subsidiaries, as required
by the Securities Act. The consolidated historical statements and any pro
forma information, together with related schedules and notes, if any,
included or incorporated by reference in the Final Prospectuses comply as
to form in all material respects with the requirements of the Securities
Act. Such historical financial statements fairly present in all material
respects 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, 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 in all material respects 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 Final Prospectuses and the Registration Statements,
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.
(m) 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 or regulatory bodies or agencies, and all courts and other
tribunals, necessary or required to own, lease, license and use its
properties and assets and to conduct its business as currently operated in
the manner described in the Final Prospectuses, 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 on such business taken as a whole. 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.
(n) Except as disclosed in the Final Prospectuses, 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 offering and sale of the
Securities under the U.S. Underwriting Agreement or the International
Underwriting Agreement other than any such right that has been expressly
waived in writing. No holder of any of the outstanding shares
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7
of capital stock of the Company or any other person is entitled to
preemptive or other rights to subscribe for the Securities.
(o) The Company has not taken nor will it take, directly or
indirectly, any action prohibited by Regulation M under the Exchange Act,
in connection with the offering of the Securities.
(p) Other than the Subsidiaries, there is no entity or other person
(i) of which a majority of the voting equity securities or other interests
is owned, directly or indirectly, by the Company and (ii) which held more
than 5% of the total assets of the Company on a consolidated basis as of
December 31, 1999, excluding inter-company balances.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by
the Company, as to matters covered thereby, to each U.S. Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and
------------------
in reliance upon the representations and warranties set forth in this U.S.
Underwriting Agreement, the Company agrees to sell to each U.S. Underwriter, and
each U.S. Underwriter agrees, severally and not jointly, to purchase from the
Company, at a purchase price of $104.695 per share, the amount of the U.S.
Underwritten Securities set forth opposite such U.S. Underwriter's name in
Schedule I to this U.S. Underwriting Agreement.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties set forth in this U.S. Underwriting Agreement,
the Company hereby grants an option to the several U.S. Underwriters to
purchase, severally and not jointly, up to 2,550,000 U.S. Option Securities at
the same purchase price per share as the U.S. Underwriters shall pay for the
U.S. Underwritten Securities. Said option may be exercised only to cover over-
allotments in the sale of the U.S. Underwritten Securities by the U.S.
Underwriters. Said option may be exercised in whole or in part at any time (but
not more than once) on or before the 30th day after the date of the Final U.S.
Prospectus upon written or telegraphic notice by the U.S. Representatives to the
Company setting forth the number of shares of the U.S. Option Securities as to
which the several U.S. Underwriters are exercising the option and the settlement
date. The number of U.S. Option Securities to be purchased by each U.S.
Underwriter shall be the same percentage of the total number of shares of the
U.S. Option Securities to be purchased by the several U.S. Underwriters as such
U.S. Underwriter is purchasing of the U.S. Underwritten Securities, subject to
such adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
3. Delivery and Payment. Delivery of and payment for the U.S.
---------------------
Underwritten Securities and the U.S. Option Securities (if the option provided
for in Section 2(b) hereof shall have been exercised on or before the third
Business Day prior to the Closing Date) shall be made at 10:00 AM, New York City
time, on February 29, 2000 or at such time on such later date not more than
three Business Days after the foregoing date as the U.S. Representatives and the
International Representatives shall designate, which date and time may be
postponed by agreement among the U.S. Representatives, the International
Representatives and the Company or as provided in Section 9 hereof (such date
and time of delivery and payment for the U.S. Securities being called in this
U.S. Underwriting Agreement the "Closing Date"). Delivery of the U.S.
Securities shall be made to the
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8
U.S. Representatives for the respective accounts of the several U.S.
Underwriters against payment by the several U.S. Underwriters through the U.S.
Representatives of the purchase price thereof of the U.S. Securities being sold
by the Company to or upon the order of the Company by wire transfer payable in
same-day funds to the accounts specified by the Company. Delivery of the U.S.
Underwritten Securities and the U.S. Option Securities shall be made through the
facilities of The Depository Trust Company unless the U.S. Representatives shall
otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
U.S. Option Securities (at the expense of the Company), to the U.S.
Representatives, at 388 Greenwich Street, New York, New York, on the date
specified by the U.S. Representatives (which shall be not more than ten nor
fewer than three Business Days after exercise of said option) certificates for
the U.S. Option Securities in such names and denominations as the U.S.
Representatives shall have required for the respective accounts of the several
U.S. Underwriters, against payment by the several U.S. Underwriters through the
U.S. Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. If settlement for the U.S. Option Securities occurs after the
Closing Date, the Company will deliver to the U.S. Representatives on the
settlement date for the U.S. Option Securities, and the obligation of the U.S.
Underwriters to purchase the U.S. Option Securities shall be conditioned upon
receipt of, supplemental opinions, certificates and letters confirming as of
such date the opinions, certificates and letters delivered on the Closing Date
pursuant to Section 6 hereof.
It is understood and agreed that the Closing Date shall occur
simultaneously with the "Closing Date" under the International Underwriting
Agreement, and that the settlement date, if any, under this U.S. Underwriting
Agreement shall occur simultaneously with the "settlement date" under the
International Underwriting Agreement.
4. Offering by Underwriters. It is understood that the several U.S.
-------------------------
Underwriters propose to offer the U.S. Securities for sale to the public as set
forth in the U.S. Final Prospectus.
5. Agreements. (i) The Company agrees with the several U.S.
-----------
Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statements, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statements or supplement to the Basic Prospectus or any Rule 462(b)
Registration Statements unless the Company has furnished you a copy for
your review prior to filing and will not file any such proposed amendment
or supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statements have become or become effective
pursuant to Rule 430A, or filing of the Final Prospectuses is otherwise
required under Rule 424(b), the Company will cause the Final Prospectuses,
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 U.S.
Representatives of such timely filing. The Company will promptly advise
the U.S. Representatives (1) when the Registration Statements, if not
effective at the Execution Time, shall
<PAGE>
9
have become effective, (2) when the Final Prospectuses, and any supplement
thereto, shall have been filed (if required) with the Commission pursuant
to Rule 424(b) or when any Rule 462(b) Registration Statements shall have
been filed with the Commission, (3) when, prior to termination of the
offering of the Securities, any amendment to the Registration Statements
shall have been filed or become effective, (4) of any request by the
Commission or its staff for any amendment of the Registration Statements,
or any Rule 462(b) Registration Statements, or for any supplement to the
Final Prospectuses or for any additional information, (5) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statements or the institution or threatening of any proceeding
for that purpose and (6) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Securities Act, any event occurs as a
result of which either of the Final Prospectuses 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 Statements or supplement either of the
Final Prospectuses to comply with the Securities Act or the Exchange Act or
the respective rules thereunder, the Company promptly will (1) notify the
U.S. Representatives of any such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (i)(a) of this
Section 5, an amendment or supplement which will correct such statement or
omission or effect such compliance and (3) supply any supplemented Final
Prospectuses to you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally available
to its security holders an earnings statement or statements of the Company
and its subsidiaries which will satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 under the Securities Act.
(d) The Company will furnish to the U.S. Representatives and counsel
for the U.S. Underwriters, without charge, a conformed copy of the
Registration Statements (including exhibits thereto) and to each other U.S.
Underwriter a copy of the Registration Statements (without exhibits
thereto) and, so long as delivery of a prospectus by U.S. Underwriter or
dealer may be required by the Securities Act, as many copies of the U.S.
Preliminary Prospectus and the U.S. Final Prospectus and any supplement
thereto as the U.S. Representatives may reasonably request. The Company
will pay the expenses of printing or other production of all such
documents.
(e) The Company will cooperate with the Representatives in arranging,
at the Company's cost, for the qualification of the Securities for sale
under the laws of such jurisdictions as the U.S. Representatives may
designate and will maintain such qualifications in effect so long as
required for the sale of the U.S. Securities; provided, however, that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to execute a general consent to service of
<PAGE>
10
process in any jurisdiction or subject itself to taxation in excess of a
nominal dollar amount in any such jurisdiction where it is not then
subject. The Company promptly will advise the U.S. Representatives of the
receipt by it of any notification with respect to the suspension of the
qualification of the U.S. Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(f) The Company will not, without the prior written consent of
Salomon Smith Barney Inc., offer, sell, contract to sell, issue, announce
the offering or issuance of or otherwise dispose of, directly or
indirectly, register, cause to be registered or announce the registration
or intended registration of, in any case for its own account, any shares of
Common Stock, including any such shares beneficially or indirectly owned or
controlled by the Company, or any securities convertible into or
exchangeable for Common Stock, for a period of 90 days from the date of the
International Final Prospectus, except for: (A) up to 3,000,000 shares of
Common Stock in the aggregate issued in connection with acquisitions
(including by consolidation, merger or similar transaction and including
acquisitions of shares of any of its subsidiaries held by minority
shareholders), provided that more than 3,000,000 such shares may be issued
to the extent the purchaser or purchasers of such excess shares agree to be
bound by the provisions of this paragraph for any remaining portion of such
90-day period, (B) Common Stock issued pursuant to any employee benefit
plan, stock ownership or stock option plan or dividend reinvestment plan in
effect on the Execution Date or options granted pursuant to any such plan
in effect on the Execution Date, provided that such options cannot be
exercised for any remaining portion of such 90-day period, (C) Common Stock
issued in connection with the inclusion of the Common Stock in any Major
Market Index, (D) maintaining the effectiveness of any registration
statement in place on the Execution Date or otherwise permitted to be filed
under this paragraph, (E) Common Stock issued in connection with the
exercise of any warrants outstanding on the Execution Date, (F) Common
Stock issued to prospective employees in connection with such employees
being hired by the Company, (G) the Securities, the Convertible Notes
issuable under the Underwriting Agreement, dated February 23, 2000, among
the Company and the representatives of the underwriters listed therein, the
Common Stock issuable upon conversion of such Convertible Notes and upon
conversion of the Company's existing 6% Convertible Subordinated Notes due
2009 and (H) the filing, announcing or amending of a shelf registration for
up to $5 billion of securities, provided, however, that this clause (H)
shall not permit the actual offering, or "take down" of any such securities
during such 90-day period.
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(h) The Company will apply the net proceeds from the sale of the
Securities sold by it substantially in accordance with its statements under
the caption "Use of Proceeds" in the Final Prospectuses.
(ii) Each U.S. Underwriter agrees that (i) it is not purchasing any
of the U.S. Securities for the account of anyone other than a United States or
Canadian Person, (ii) it has not offered or sold, and will not offer or sell,
directly or indirectly, any of the U.S. Securities or distribute any U.S. Final
Prospectus to any person outside the United States or Canada,
<PAGE>
11
or to anyone other than a United States or Canadian Person, and (iii) any dealer
to whom it may sell any of the U.S. Securities will represent that it is not
purchasing for the account of anyone other than a United States or Canadian
Person and agree that it will not offer or resell, directly or indirectly, any
of the U.S. Securities outside the United States or Canada, or to anyone other
than a United States or Canadian Person or to any other dealer who does not so
represent and agree; provided, however, that the foregoing shall not restrict
(A) purchases and sales between the International Underwriters on the one hand
and the U.S. Underwriters on the other hand pursuant to the Agreement Between
U.S. Underwriters and International Underwriters, (B) stabilization transactions
contemplated under the Agreement Between U.S. Underwriters and International
Underwriters, conducted through Salomon Smith Barney Inc. (or through the U.S.
Representatives and International Representatives) as part of the distribution
of the Securities, and (C) sales to or through (or distributions of U.S. Final
Prospectuses or U.S. Preliminary Prospectuses to) United States or Canadian
Persons who are investment advisors, or who otherwise exercise investment
discretion, and who are purchasing for the account of anyone other than a United
States or Canadian Person.
(iii) The agreements of the U.S. Underwriters set forth in paragraph
(ii) of this Section 5 shall terminate upon the earlier of the following events:
(a) a mutual agreement of the U.S. Representatives and the
International Representatives to terminate the selling restrictions set
forth in paragraph (ii) of this Section 5 and in Section 5(ii) of the
International Underwriting Agreement; or
(b) the expiration of a period of 30 days after the Closing Date,
unless (A) the U.S. Representatives shall have given notice to the Company
and the International Representatives that the distribution of the U.S.
Securities by the U.S. Underwriters has not yet been completed, or (B) the
International Representatives shall have given notice to the Company and
the U.S. Representatives that the distribution of the International
Securities by the International Underwriters has not yet been completed. If
such notice by the U.S. Representatives or the International
Representatives is given, the agreements set forth in such paragraph (ii)
shall survive until the earlier of (1) the event referred to in clause (a)
of this subsection (iii) or (2) the expiration of an additional period of
30 days from the date of any such notice.
6. Conditions to the Obligations of the Underwriters. The
--------------------------------------------------
obligations of the U.S. Underwriters to purchase the U.S. Underwritten
Securities and the U.S. Option Securities, as the case may be, shall be subject
to the accuracy of the representations and warranties on the part of the Company
contained in this U.S. Underwriting Agreement as of the Execution Time, the
Closing Date and any settlement date pursuant to Section 3 hereof, to the
accuracy of the statements of the Company made in any certificates pursuant to
the provisions hereof, to the performance by the Company of its obligations
under this U.S. Underwriting Agreement and to the following additional
conditions:
(a) If the Registration Statements have not become effective prior
to the Execution Time, unless the U.S. Representatives and the
International Representatives agree in writing to a later time, the
Registration Statements will become effective not later than (i) 6:00 PM
New York City time on the date of determination of the public offering
price, if such determination occurred at or prior to 3:00 PM New York City
time on such date or (ii) 9:30 AM on the Business Day following the day on
which the public offering price was determined, if such determination
occurred after 3:00 PM New York City time on such date; if filing of
<PAGE>
12
the Final Prospectuses, or any supplement thereto, is required pursuant to
Rule 424(b), the Final Prospectuses, and any such supplement, will be filed
in the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statements
shall have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have requested and caused Willkie Farr &
Gallagher, counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives on behalf of the Underwriters, to the effect of Exhibit A.
(c) The Company shall have caused Swidler Berlin Shereff Friedman
LLP, regulatory counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives on behalf of the Underwriters, to the effect of Exhibit B.
(d) The Company shall have caused Osler, Hoskin & Harcourt, Canadian
regulatory counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date, and addressed to the
Representatives on behalf of the Underwriters, to the effect of Exhibit C.
(e) The Company shall have furnished to the Representatives the
opinion of Thomas C. Stortz, Senior Vice President, General Counsel and
Secretary of the Company, dated the Closing Date and addressed to the
Representatives on behalf of the Underwriters, to the effect of Exhibit D.
(f) The Representatives shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives on behalf of the
Underwriters, with respect to the issuance and sale of the Securities, the
Registration Statements, the Final Prospectuses (together with any
supplement thereto) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(g) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the President and Chief Executive
Officer and the Executive Vice President and Chief Financial Officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statements, the Final
Prospectuses, any supplements to the Final Prospectuses and the
Underwriting Agreements and that:
(i) the representations and warranties of the Company in the
Underwriting Agreements are true and correct in all material
respects on and as of the Closing Date with the same effect
as if made on the Closing Date, and the Company has complied
with all the agreements and satisfied all the conditions on
its part to be performed or satisfied hereunder at or prior
to the Closing Date;
<PAGE>
13
(ii) no stop order suspending the effectiveness of the
Registration Statements have been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since December 31, 1999, the date of the most recent
financial statements included or incorporated by reference
in the Final Prospectuses (exclusive of any supplements
thereto), there has not been, singularly or in the
aggregate, any Material Adverse Effect, whether or not
arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Final Prospectuses (exclusive of any supplement thereto).
(h) The Company shall have requested and caused
PricewaterhouseCoopers LLP to have furnished to the Representatives, at the
Execution Time and at the Closing Date, letters, dated respectively as of
the Execution Time and as of the Closing Date, in form and substance
reasonably satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Securities Act and the
Exchange Act and the respective applicable rules and regulations adopted by
the Commission thereunder and Rule 101 of the Code of Professional Conduct
of the American Institute of Certified Public Accountants and stating in
effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by reference in
the Registration Statements and the Final Prospectuses and reported on
by them comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act and
the related rules and regulations adopted by the Commission;
(ii) nothing came to their attention which caused them to
believe that the information included or incorporated by reference in
the Registration Statements and the Final Prospectuses in response to
Regulation S-K, Item 301 (Selected Financial Data) and Item 503(d)
(Ratio of Earnings to Fixed Charges) is not in conformity with the
applicable disclosure requirements of Regulation S-K; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) in the
Final Prospectuses, agrees with the accounting records of the Company
and its subsidiaries, excluding any questions of legal interpretation.
All references in this Section 6(h) to the Registration Statements or
the Final Prospectuses shall be deemed to include any amendments or
supplements thereto at the date of the letter.
<PAGE>
14
(i) At the Execution Time and at the Closing Date, Arthur Andersen
LLP shall have furnished to the Representatives a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance reasonably satisfactory to the Representatives, confirming
that they are independent accountants within the meaning of the Securities
Act and the Exchange Act and the applicable rules and regulations
thereunder and Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by reference
in the Registration Statements and Final Prospectuses reported on by
them comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act and
the related rules and regulations adopted by the Commission; and
(ii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statements and the Final Prospectuses, and
the information included or incorporated by reference in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999,
incorporated by reference in the Registration Statements and the Final
Prospectuses, agrees with the accounting records of the Company and
its subsidiaries, excluding any questions of legal interpretation.
All references in this Section 6(i) to the Registration Statements or
the Final Prospectuses shall be deemed to include any amendment or
supplement thereto at the date of the letter.
(j) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statements (exclusive of any
amendment thereof) and the Final Prospectuses (exclusive of any supplement
thereto), there shall not have been (i) any increase, change or decrease
specified in the letter or letters referred to in paragraph (i) of this
Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the properties, business, results of operations,
financial condition, affairs or business prospects of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Final Prospectuses (exclusive of any supplement thereto) the effect of
which, in any case referred to in clause (i) or (ii) above, is, in the sole
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Final Prospectuses (exclusive of any
supplement thereto).
(k) Subsequent to the Execution Time, there shall not have been (i)
any decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) or (ii) any notice given
of any intended or potential decrease in any such rating or that such
organization has under surveillance or review (other
<PAGE>
15
than any such notice with positive implications of a possible upgrading)
its rating of the Company's debt securities.
(l) The Securities shall have been listed and admitted and authorized
for trading, subject to official notice of issuance, on the Nasdaq National
Market, and reasonably satisfactory evidence of such actions shall have
been provided to the Representatives.
(m) The closing of the purchase of the U.S. Underwritten Securities
to be issued and sold by the Company pursuant to the U.S. Underwriting
Agreement shall occur concurrently with the closing of the International
Underwritten Securities to be issued and sold by the Company pursuant to
the International Underwriting Agreement.
(n) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this U.S.
Underwriting Agreement and the International Underwriting Agreement, or if any
of the opinions and certificates mentioned above or elsewhere in this U.S.
Underwriting Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the U.S. Representatives and counsel for
the U.S. Underwriters, this U.S. Underwriting Agreement and all obligations of
the U.S. Underwriters hereunder may be canceled at, or at any time prior to, the
Closing Date by the U.S. Representatives. Notice of such cancelation shall be
given to the Company in writing or by telephone or facsimile confirmed in
writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cravath, Swaine & Moore, counsel for the
Underwriters, at 825 Eighth Avenue, New York, New York 10019, on the Closing
Date.
7. Reimbursement of U.S. Underwriters' Expenses. If the sale of the
---------------------------------------------
U.S. Securities provided for in this U.S. Underwriting Agreement is not
consummated because any condition to the obligations of the U.S. Underwriters
set forth in Section 6 hereof is not satisfied, because of any termination
pursuant to Section 10 hereof or because of any refusal, inability or failure on
the part of the Company to perform any agreement in this U.S. Underwriting
Agreement or comply with any provision hereof, other than by reason of a default
by any of the U.S. Underwriters, the Company will reimburse the U.S.
Underwriters severally through Salomon Smith Barney Inc. on 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 Securities. Except as provided in the
preceding sentence or elsewhere in this U.S. Underwriting Agreement, the U.S.
Underwriters shall be responsible for all costs and expenses incurred by them in
connection with their purchase of the U.S. Securities hereunder and the resale
of any of the U.S. Securities, including, without limitation, their own out-of-
pocket lodging, meal and other "roadshow" expenses and fees and disbursements of
counsel for the U.S. Underwriters and (ii) such other "roadshow" expenses as
shall be agreed upon by the Company and the U.S. Representatives.
<PAGE>
16
8. Indemnification and Contribution. (a) The Company agrees to
---------------------------------
indemnify and hold harmless each U.S. Underwriter, the directors, officers,
employees and agents of each U.S. Underwriter and each person who controls any
U.S. Underwriter within the meaning of either the Securities Act or the Exchange
Act against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, 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 Statements for the registration of the Securities as originally
filed or in any amendment thereof, or in any U.S. Preliminary Prospectus or in
the U.S. Final Prospectus, or in any amendment thereof or supplement thereto, 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 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, that 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 U.S. Underwriter through the U.S. Representatives specifically for inclusion
therein; provided further, that with respect to any untrue statement or omission
of material fact made in the Basic Prospectus or any U.S. Preliminary
Prospectus, the indemnity agreement contained in this Section 8(a) shall not
inure to the benefit of any U.S. Underwriter from whom the person asserting any
such loss, claim, damage or liability purchased the securities concerned, to the
extent that any such loss, claim, damage or liability of such U.S. Underwriter
occurs under the circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that such loss,
claim, damage or liability results from the fact that (i) the Company had
previously furnished copies of the U.S. Final Prospectus to the Representatives,
(ii) delivery of the U.S. Final Prospectus was required by the Securities Act to
be made to such person, (iii) the untrue statement or omission of a material
fact contained in the Basic Prospectus or the U.S. Preliminary Prospectus was
corrected in the U.S. Final Prospectus, (iv) there was not sent or given to such
person, at or prior to the written confirmation of the sale of such securities
to such person, a copy of the U.S. Final Prospectus and (v) such correction
would have cured the defect giving rise to such loss, claim, damage or
liability. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
(b) Each U.S. Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statements, and each person who controls the
Company within the meaning of either the Securities Act or the Exchange Act, to
the same extent as the foregoing indemnity to each U.S. Underwriter, but only
with reference to written information relating to such U.S. Underwriter
furnished to the Company by or on behalf of such U.S. Underwriter through the
U.S. Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any U.S. Underwriter may otherwise have. The Company
acknowledges that (i) the list of Underwriters and their respective
participation in the sale of the Securities, (ii) the sentences related to
concessions and reallowances and (iii) the paragraphs related to stabilization,
syndicate covering transactions and penalty bids, under the heading
"Underwriting" in the U.S. Preliminary Prospectus and U.S. Final Prospectus,
constitute the only information
<PAGE>
17
furnished in writing by or on behalf of the several U.S. Underwriters for
inclusion in any U.S. Preliminary Prospectus or the U.S. Final Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
8 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 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or
(b) above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (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 such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, 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, (iii) 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 the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
under this U.S. Underwriting Agreement (whether or not the indemnified parties
are actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
It is understood, however, that the Company shall, in connection with any one
such action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such U.S.
Underwriters and controlling persons, which firm shall be designated in writing
by Salomon Smith Barney. An indemnifying party shall not be liable under this
Section 8 to any indemnified party regarding any settlement or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent is consented to by such indemnifying party, which consent
shall not be unreasonably withheld.
<PAGE>
18
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the U.S. Underwriters
severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the
Company and one or more of the U.S. Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and by the U.S. Underwriters on the other from the
offering of the U.S. Securities; provided, however, that in no case shall any
U.S. Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the U.S. Securities) be responsible for any amount
in excess of the underwriting discount or commission applicable to the
Securities purchased by such U.S. Underwriter under this U.S. Underwriting
Agreement. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the U.S. Underwriters severally
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the U.S. Underwriters on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal
to the total net proceeds from the offering (before deducting expenses) received
by it, and benefits received by the U.S. Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set
forth on the cover page of the U.S. Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Company on the
one hand or the U.S. Underwriters on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the U.S.
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.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls an U.S. Underwriter within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of an U.S. Underwriter shall have the same rights to contribution as such
U.S. Underwriter, and each person who controls the Company within the meaning of
either the Securities Act or the Exchange Act, each officer of the Company who
shall have signed the Registration Statements 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).
9. Default by a U.S. Underwriter. If any one or more U.S.
------------------------------
Underwriters shall fail to purchase and pay for any of the U.S. Securities
agreed to be purchased by such U.S. Underwriter or U.S. Underwriters under this
U.S. Underwriting Agreement and such failure to purchase shall constitute a
default in the performance of its or their obligations under this U.S.
Underwriting Agreement, the remaining U.S. Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the amount
of U.S. Securities set forth opposite their names in Schedule I hereto bears to
the aggregate amount of U.S. Securities set forth opposite the names of all the
remaining U.S. Underwriters) the U.S. Securities which the defaulting U.S.
Underwriter or U.S. Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of U.S. Securities
<PAGE>
19
which the defaulting U.S. Underwriter or U.S. Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of U.S. Securities set forth
in Schedule I hereto, the remaining U.S. Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the U.S.
Securities, and if such nondefaulting U.S. Underwriters do not purchase all the
U.S. Securities, this U.S. Underwriting Agreement will terminate without
liability to any nondefaulting U.S. Underwriter or the Company, except as
provided in Section 11 hereof. In the event of a default by any U.S. Underwriter
as set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding five Business Days, as the U.S. Representatives shall
determine in order that the required changes in the Registration Statements and
the Final Prospectuses or in any other documents or arrangements may be
effected. Nothing contained in this U.S. Underwriting Agreement shall relieve
any defaulting U.S. Underwriter of its liability, if any, to the Company and any
nondefaulting U.S. Underwriter for damages occasioned by its default under this
U.S. Underwriting Agreement.
10. Termination. This U.S. Underwriting Agreement shall be subject
------------
to termination in the absolute discretion of the U.S. Representatives, by notice
given to the Company prior to delivery of and payment for the U.S. Securities,
if at any time prior to such time (i) trading in any of the Company's Securities
shall have been suspended by the Commission or the Nasdaq National Market or
trading in securities generally on the New York Stock Exchange or the Nasdaq
National Market shall have been suspended or limited or minimum prices shall
have been established on such Exchange or the Nasdaq National Market, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the U.S. Representatives, impractical or
inadvisable to proceed with the offering or delivery of the U.S. Securities as
contemplated by the U.S. Final Prospectus (exclusive of any supplement
thereto).
11. Representations and Indemnities to Survive. The respective
-------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the U.S. Underwriters set forth in or made
pursuant to this U.S. Underwriting Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any U.S.
Underwriter or the Company or any of the officers, directors, employees, agents
or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the U.S. Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancelation of the U.S.
Underwriting Agreement.
12. Notices. All communications under this U.S. Underwriting
--------
Agreement will be in writing and effective only on receipt, and, if sent to the
U.S. Representatives, will be mailed, delivered or telefaxed to the Salomon
Smith Barney Inc. General Counsel (fax no.: (212) 723-7887) and confirmed to the
General Counsel, Salomon Smith Barney Inc., at 388 Greenwich Street, New York,
New York, 10013, Attention: General Counsel; or, if sent to the Company, will be
mailed, delivered or telefaxed to Level 3 Communications, Inc. (fax no.: (303)
926-3467) Attention: General Counsel and confirmed to it at 1025 Eldorado
Boulevard, Broomfield, Colorado 80021, Attention: General Counsel.
13. Successors. This U.S. Underwriting Agreement will inure to the
-----------
benefit of and be binding upon the parties hereto and their respective
successors and the officers,
<PAGE>
20
directors, employees, agents and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation under this U.S.
Underwriting Agreement.
14. Applicable Law. This U.S. Underwriting Agreement will be
---------------
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
15. Counterparts. This U.S. Underwriting Agreement may be signed in
------------
one or more counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same agreement.
16. Headings. The section headings used in this U.S. Underwriting
---------
Agreement are for convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this U.S.
------------
Underwriting Agreement, shall have the meanings indicated.
"Basic Prospectus" shall mean the prospectus referred to in Section
1(a) above contained in the Registration Statements at the Effective Date,
including the Preliminary Prospectuses (if any).
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statements, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statements became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectuses" and "each Final Prospectus" and "the Final
Prospectus" shall mean the U.S. Final Prospectus and the International
Final Prospectus.
"International Preliminary Prospectus" shall have the meaning set
forth under "U.S. Preliminary Prospectus."
"International Final Prospectus" shall mean such form of final
prospectus supplement relating to the International Securities as first
filed pursuant to Rule 424(b) after the Execution Time, together with the
Basic Prospectus or, if no filing pursuant to Rule 424(b) is made, such
form of prospectus supplement relating to the International Securities
included in the Registration Statements at the Effective Date.
<PAGE>
21
"International Representative" shall mean the addressees of the
International Underwriting Agreement.
"International Securities" shall mean the International Underwritten
Securities and the International Option Securities.
"International Underwriters" shall mean the several underwriters named
in Schedule I to the International Underwriting Agreement.
"International Underwriting Agreement" shall mean the International
Underwriting Agreement dated the date hereof related to the sale of the
International Securities by the Company to the International Underwriters.
"Major Market Index" shall mean the Dow Jones Industrial Average or
Standard and Poor's 500 Stock Index.
"Preliminary Prospectus" shall have the meaning set forth under "U.S.
Preliminary Prospectus."
"Preliminary Prospectuses" shall have the meaning set forth under
"U.S. Preliminary Prospectus".
"Representatives" shall mean the U.S. Representatives and the
International Representatives.
"Registration Statements" shall mean the Registration Statements
referred to in Section 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statements become effective prior to the Closing Date, shall also mean such
Registration Statements as so amended or such Rule 462(b) Registration
Statements, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Securities Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statements when they become effective pursuant to Rule 430A.
"Rule 462(b) Registration Statements" shall mean Registration
Statements and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the Registration Statements referred to
in Section 1(a) hereof.
"Salomon Smith Barney" shall mean Salomon Smith Barney Inc. and
Salomon Brothers International Limited.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
<PAGE>
22
"Securities" shall mean the U.S. Securities and the International
Securities.
"Underwriter" and "Underwriters" shall mean the U.S. Underwriters and
the International Underwriters.
"Underwriting Agreements" still mean the U.S. Underwriting Agreement
and the International Underwriting Agreement.
"Underwritten Securities" shall mean the International Underwritten
Securities and the U.S. Underwritten Securities.
"U.S. Preliminary Prospectus" and the "International Preliminary
Prospectus", respectively, shall mean any preliminary prospectus supplement
to the Basic Prospectus with respect to the offering of the U.S. Securities
and the International Securities, as the case may be, referred to in
paragraph 1(i)(a) above and any preliminary prospectus supplement to the
Basic Prospectus with respect to the offering of the U.S. Securities and
the International Securities, as the case may be, included in the
Registration Statements at the Effective Date that omits Rule 430A
Information; the U.S. Preliminary Prospectus and the International
Preliminary Prospectus are hereinafter collectively called the "Preliminary
Prospectuses".
"U.S. Final Prospectus" shall mean the prospectus supplement relating
to the U.S. Securities that is first filed pursuant to Rule 424(b) after
the Execution Time, together with the Basic Prospectus or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final
prospectus supplement relating to the U.S. Securities included in the
Registration Statements at the Effective Date.
"U.S. Representatives" shall mean the addressees of the U.S.
Underwriting Agreement.
"U.S. Securities" shall mean the U.S. Underwritten Securities and the
U.S. Option Securities.
"U.S. Underwriting Agreement" shall mean this agreement relating to
the sale of the U.S. Securities by the Company to the U.S. Underwriters.
"U.S. Underwriters" shall mean the several underwriters named in
Schedule I to the U.S. Underwriting Agreement.
"United States or Canadian Person" shall mean any person who is a
national or resident of the United States or Canada, any corporation,
partnership, or other entity created or organized in or under the laws of
the United States or Canada or of any political subdivision thereof, or any
estate or trust the income of which is subject to United States or Canadian
Federal income taxation, regardless of its source (other than any non-
United States or non-Canadian branch of any United States or Canadian
Person), and shall include any United States or Canadian branch of a person
other than a United States or Canadian Person. "U.S." or "United States"
shall mean the United States of America (including the states thereof and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
<PAGE>
23
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,
Level 3 Communications, Inc.
By: /s/ Thomas C. Stortz
-------------------------
Name: Thomas C. Stortz
Title: Senior Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Smith Barney Inc.
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Chase Securities Inc.
Credit Suisse First Boston Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By: Salomon Smith Barney Inc.
By:/s/ D. Scott Miller
------------------------------
Name: D. Scott Miller
Title: Managing Director
For themselves and the other
several U.S. Underwriters named
in Schedule I to the foregoing
Agreement.
<PAGE>
24
SCHEDULE I
<TABLE>
<CAPTION>
Number of
U.S. Underwritten
Underwriters Securities to be Purchased
- ------------ --------------------------
<S> <C>
Salomon Smith Barney Inc............................ 5,142,500
Goldman, Sachs & Co................................. 5,142,500
J.P. Morgan Securities Inc.......................... 1,317,500
Morgan Stanley & Co. Incorporated................... 1,317,500
Chase Securities Inc................................ 510,000
Credit Suisse First Boston Corporation.............. 510,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.. 510,000
Banc of America Securities LLC...................... 425,000
Janco Partners, Inc................................. 425,000
Kirkpatrick, Pettis, Smith, Polian Inc.............. 425,000
Lazard Freres & Co. LLC............................. 425,000
U.S. Bancorp Piper Jaffray Inc...................... 425,000
Wasserstein Perella Securities, Inc................. 425,000
----------
Total............................................ 17,000,000
==========
</TABLE>
<PAGE>
SCHEDULE II
Subsidiaries
- ------------
PKS Information Services, Inc.
Level 3 Holdings, Inc.
KCP, Inc.
Level 3 International, Inc.
Level 3 Communications, LLC
<PAGE>
EXHIBIT A
Opinion of
----------
Willkie Farr & Gallagher
------------------------
Counsel for the Company
-----------------------
1. Each of the Company and Level 3 Communications, LLC has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or organized, with full power
and authority to own or lease, as the case may be, and to operate its properties
and conduct its business as described in the U.S. and International Final
Prospectuses (the "Final Prospectuses").
2. All the outstanding shares of capital stock or other equity
interests of the Company and Level 3 Communications, LLC have been duly and
validly authorized and are duly issued and are fully paid and nonassessable, and
have not been issued and are not owned or held in violation of any statutory
preemptive right of stockholders; to the knowledge of such counsel after due
inquiry, such shares or other equity interests are not held in violation of any
other preemptive right of stockholders or other equity interest holders, and
except as otherwise set forth in the Final Prospectuses, all outstanding equity
interests of Level 3 Communications, LLC are owned by the Company either
directly or through wholly owned subsidiaries, to the knowledge of such counsel,
after due inquiry, free and clear of any agreement providing for a security
interest in such equity interests to secure any obligation and any stockholders'
agreements, voting trusts, claims or other encumbrances (other than the pledge
of the equity interests of Level 3 Communications, LLC pursuant to the
agreements the Company and certain of its subsidiaries have entered into in
connection with the senior secured credit facility described in the Final
Prospectuses).
3. (i) To the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
Subsidiaries or its or their property of a character required to be disclosed in
the Registration Statements which is not adequately disclosed or incorporated by
reference in the Final Prospectuses, and (ii) to the best knowledge of such
counsel, there is no contract or other document of a character required to be
described in the Registration Statements or the Final Prospectuses, or to be
filed as an exhibit thereto, which is not described or filed as required; and
the statements included in the Final Prospectuses under the heading "Certain
United States Tax Consequences to Non-United States Holders," insofar as such
section summarizes matters of law, fairly summarize the matters therein
described.
4. The Registration Statements have become effective under the
Securities Act; any required filing of the Basic Prospectus, any Preliminary
Prospectus and the Final Prospectuses and any supplements thereto, pursuant to
Rule 424(b) has been made in the manner and within the time period required by
Rule 424(b); to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statements have been issued, no proceedings
for that purpose have been instituted or threatened and the Registration
Statements and the Final Prospectuses (other than the financial statements and
other financial information contained therein or omitted therefrom, as to which
such counsel need express no opinion) comply as to form in all material respects
with the applicable requirements of the Securities Act and the Exchange Act and
the respective rules thereunder.
<PAGE>
2
5. The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Final Prospectuses, will not be an "investment company" as defined in the
Investment Company Act of 1940, as amended.
6. To the best knowledge of such counsel, no consent, approval,
authorization, license, certificate, permit or order of any court or
governmental agency or body is required for the execution, delivery and
performance of the Underwriting Agreements and the Securities or for the
consummation of the transactions contemplated thereby, except such as may be
required by the Federal Communications Commission or similar state regulatory
authorities or under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters (as to which
such counsel need not opine) and such other approvals (to be specified in such
opinion) as have been obtained.
7. Neither the execution and delivery of the Underwriting Agreements,
nor the issue and sale of the Securities, nor the consummation of any other of
the transactions therein contemplated nor the fulfillment of the terms thereof
will conflict with, result in a breach of, or constitute a default under the
certificate of incorporation, by-laws or other organizational documents of the
Company or of any Subsidiary or the terms of any agreement or instrument listed
on Annex I hereto, or any judgment, order or regulation known to such counsel to
be applicable to the Company or any of its Subsidiaries of any court, regulatory
body, administrative agency, governmental agency, authority or body or
arbitrator having jurisdiction over the Company or any of its Subsidiaries,
except orders or regulations of the Federal Communications Commission or similar
state regulatory authorities or regulations of any state securities commission
(as to which such counsel need not opine).
8. To the knowledge of such counsel, no holders of securities of the
Company have rights to the registration of such securities in connection with or
as a result of the offering and sale of the Securities under the Underwriting
Agreements.
9. The Company's authorized equity capitalization as of December 31,
1999, is as set forth in the Final Prospectuses; the capital stock of the
Company conforms in all material respects to the description thereof contained
in the Final Prospectuses; the Securities have been duly and validly authorized,
and, when issued and delivered to and paid for by the Underwriters pursuant to
the Underwriting Agreements, will be fully paid and nonassessable; the
certificates for the Securities are in valid and sufficient form; and the
holders of outstanding shares of capital stock of the Company are not entitled
to preemptive or other rights to subscribe for the Securities; and, except as
set forth in the Final Prospectus and, except for outstanding warrants and
options to purchase shares of Common Stock that in the aggregate represent less
than 1% of the Common Stock outstanding on the date of the Underwriting
Agreements, to the knowledge of such counsel, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding.
10. The Company has full corporate right, power and authority to
execute and deliver the Underwriting Agreements and to perform its obligations
thereunder, including the issuance of the Securities; and all corporate action
required to be taken by the Company for the due and proper authorization,
execution and delivery of the Underwriting Agreements
<PAGE>
3
and for the consummation of the transactions contemplated thereby has been duly
and validly taken.
11. The Underwriting Agreements have been duly authorized, validly
executed and delivered by the Company.
In addition, such counsel shall state that they have participated in
conferences with representatives of the Company, the Underwriters and their
counsel, at which conferences the contents of the Final Prospectuses were
discussed, and, although, except as otherwise described above, such counsel has
not independently checked or verified and does not pass upon and assumes no
responsibility for the factual accuracy, completeness or fairness of the
statements contained in the Registration Statements or the Final Prospectuses,
such counsel has no reason to believe that on the Effective Date or at the
Execution Time the Registration Statements contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that
either Final Prospectus as of its date or on the Closing Date included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in each case, other
than the financial statements and other financial information contained therein
or omitted therefrom and other than the sections entitled "Risk Factors--We are
subject to significant regulation that could change in an adverse manner", "--
Canadian law currently does not permit us to offer services in Canada" and "--
Potential regulation of Internet service providers could adversely affect our
operations", "Business--Regulation" included in the Final Prospectuses and
comparable sections in the Company's Exchange Act reports incorporated in the
Final Prospectuses by reference, as to which such counsel need not express a
belief).
Such opinion may be limited to the laws of the State of New York, the
Federal laws of the United States of America and the General Corporation Law and
the Limited Liability Company Act of the State of Delaware.
All references in this Exhibit A to the Final Prospectuses shall be
deemed to include any supplements thereto at the Closing Date. The opinion of
such counsel shall be rendered to the Underwriters at the request of the Company
and shall so state.
<PAGE>
ANNEX I
to Exhibit A
1. Construction and Maintenance Agreement relating to Japan-US Cable Network
dated July 31, 1998.
2. Fibre Optic Cable License Agreement, dated December 23, 1998, between
Norfolk Southern Railway Company, Central of Georgia Railroad Company, and
Georgia Southern and Florida Railway Company and Level 3 Communications,
LLC, as modified by the Letter Agreement, dated July 26, 1999, by Level 3
Communications, LLC, and as further modified by the Letter Agreement, dated
September 8, 1999, by Level 3 Communications, LLC.
3. Agreement, dated November 19, 1998, between Worldwide Fibre Inc. and Level
3 Communications, LLC for construction and right of way.
4. Agreement, dated November 19, 1998, between Mi-Link LLC and Level 3
Communications, LLC for construction and right of way.
5. Assignment, dated December 19, 1998, by Level 3 Communications, LLC in
favor of Level 3 Communications Canada Co. of certain rights under the
Agreement, dated November 19, 1998 between Mi-Link LLC and Level 3
Communications, LLC.
6. Acquisition Agreement by and between CalEnergy Co., Inc. and Kiewit
Diversified Group, Inc., dated September 10, 1997.
7. Agreement and Plan of Merger among Level 3 Communications, Inc.,
CrimsonAcqCo, Inc., XCOM Technologies, Inc. and certain individuals,
partnerships and companies, dated April 3, 1998.
8. Telecommunications Services Agreement between Frontier Communications
International Inc. and Level 3 Communications, LLC, dated March 23, 1998,
as modified by Amendment Number One to Telecommunications Services
Agreement, dated June 3, 1998, as further modified by Amendment Number Two
to Telecommunications Services Agreement, dated March 11, 1999, and
Amendment Number Three to Telecommunications Services Agreement, dated
September 24, 1999.
9. Switched Services Supplement to Telecommunications Services Agreement
between Frontier Communications of the West, Inc. (an affiliate of Frontier
Communications International Inc.) and Level 3 Communications, LLC, dated
October 7, 1998.
10. Fiber Optic Survey Agreement between Level 3 Communications, LLC and Union
Pacific Rail Road Company, dated March 31, 1998.
11. Fiber Optic Agreement between Level 3 Communications, LLC and Union Pacific
Rail Road Company, dated 1998.
<PAGE>
2
12. Agreement between Kiewit Coal Properties, Inc. and Kiewit Mining Group,
Inc., dated January 8, 1992.
13. Separation Agreement by and among Peter Kiewit Sons', Inc., Kiewit
Diversified Group, Inc., PKS Holdings, Inc., and Kiewit Construction Group,
Inc., dated December 8, 1997.
14. Amendment to Separation Agreement by and among Peter Kiewit Sons', Inc.,
Level 3 Communications, Inc., PKS Holdings, Inc. and Kiewit Construction
Group, Inc., dated March 18, 1998.
15. Tax Sharing Agreement by and between Peter Kiewit Sons', Inc. and PKS
Holdings, Inc., dated March 26, 1998.
16. Promissory Note from Peter Kiewit Sons' Co. to Metropolitan Life Insurance
Company, dated June 27, 1997.
17. Deed of Trust, Security Agreement and Fixture Filing by Peter Kiewit Sons'
Co., to Metropolitan Life Insurance Company, dated June 27, 1997.
18. Cost Sharing and IRU Agreement among Level 3 Communications, LLC and
Internext LLC, dated July 18, 1998.
19. Master Right-of-Way Agreement among Level 3 Communications, LLC and The
Burlington Northern and Santa Fe Railway Company, dated June 23, 1998.
20. Intercity Network Infrastructure Contract between Level 3 Communications,
LLC and Kiewit Construction Company, dated June 15, 1998.
21. Modification Number One to Intercity Network Infrastructure Contract
between Level 3 Communications, LLC and Kiewit Construction Company, dated
June 25, 1999.
22. Global Master Procurement Agreement between BTE Equipment, LLC and Lucent
Technologies Inc., dated May 17, 1999.
23. Cross Channel Cables Agreement among France Manche S.A., The Channel Tunnel
Group Limited, Level 3 Communications Limited and Level 3 Communications
S.A., dated June 22, 1999.
24. Fiber Optic Cable System Contract between Level 3 Communications Limited,
Level 3 Communications S.A. and Alcatel Submarine Networks S.A., dated May
14, 1999.
25. Engineer, Procure and Construct Contract between Level 3 Communications,
GmbH and Alcatel Contracting, GmbH dated March 30, 1999.
26. Engineer, Procure and Construct Contract between Level 3 Communications,
Ltd. and Fujitsu Telecommunications Europe, Ltd., dated March 19, 1999.
<PAGE>
3
27. Engineer, Procure and Construct Contract between Level 3 Communications, SA
and Alcatel Contracting, SA dated April 9, 1999.
28. Joint Build Agreement among Colt Telecom Group plc and certain of its
subsidiaries and Level 3 International Inc. and certain of its
subsidiaries, dated May 4, 1999.
29. Supply Contract among Level 3 (Bermuda) Ltd., Level 3 Communications
Limited, Level 3 International, Inc. and Tyco Submarine Systems Ltd., dated
June 15, 1999, as modified by Contract Variation Number 1, dated as of
February 10, 1999, Yellow Cable System Written Order for Contract Variation
Number 3, dated as of February 14, 2000.
30. Credit Agreement, dated as of September 30, 1999, among Level 3
Communications, Inc., certain subsidiaries of Level 3 Communications, Inc.,
the lenders parties thereto and The Chase Manhattan Bank, as Administrative
Agent and Collateral Agent, as amended by the First Amendment, dated as of
November 24, 1999.
31. Shared Collateral Security Agreement, dated as of December 8, 1999, among
Level 3 Communications, Inc., certain subsidiaries of Level 3
Communications, Inc. and The Chase Manhattan Bank, as Collateral Agent.
32. Shared Collateral Pledge Agreement, dated as of December 8, 1999, among
Level 3 Communications, Inc., certain subsidiaries of Level 3
Communications, Inc. and The Chase Manhattan Bank, as Collateral Agent.
33. Indenture, dated as of April 28, 1998 between Level 3 Communications, Inc.
and IBJ Schroder Bank & Trust Company, as trustee.
34. Indenture, dated as of December 2, 1998 between Level 3 Communications,
Inc. and IBJ Schroder Bank & Trust Company, as trustee.
35. Indenture, dated as of September 20, 1999, between Level 3 Communications,
Inc. and IBJ Whitehall Bank & Trust Company, as trustee.
36. First Supplemental Indenture, dated as of September 20, 1999 between Level
3 Communications, Inc. and IBJ Whitehall Bank & Trust Company, as trustee.
<PAGE>
EXHIBIT B
Opinion of
----------
Swidler Berlin Shereff Friedman LLP
-----------------------------------
Regulatory Counsel for the Company
----------------------------------
1. The licenses, certificates, permits and authorizations set forth
in Attachment A to this opinion constitute all of the licenses, certificates,
permits and authorizations required by the Federal Communications Commission
("FCC") and the State Regulatory Agencies (as defined below) for the provision
of telecommunications services by the Company and the Subsidiaries as such
counsel understands those services currently to be provided based on the
declaration of an executive officer of the Company attached to such opinion,
where the failure to obtain or hold such license, certificate, permit or
authorization would materially adversely affect the ability of the Company or
the Subsidiaries to provide such services, and none of the Company or any
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such license, certificate, permit or authorization which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse affect on the Company or such Subsidiary,
in connection with the provision of such services.
2. To the best knowledge of such counsel, after reasonable inquiry,
neither the Company nor any of the Subsidiaries is subject to any pending or
threatened proceeding, complaint or investigation before the FCC or any State
Regulatory Agency based on any alleged violation by the Company or its
Subsidiaries in connection with the provision of or failure to provide
telecommunications services, of a character that would be required to be
disclosed or incorporated by reference in the Registration Statements and the
Final Prospectuses, which is not adequately disclosed in the Registration
Statements and the Final Prospectuses.
3. The statements included in the Final Prospectuses under the
headings "Risk Factors--We are subject to significant regulation that could
change in an adverse manner," "--Canadian law currently does not permit us to
offer services in Canada" and "--Potential regulation of Internet service
providers could adversely affect our operations" and "Business--Regulation",
fairly summarize the matters therein described.
4. No consent, approval, authorization, license, certificate, permit
or order of the FCC or any State Regulatory Agency is required for the
consummation of the transactions contemplated by the Underwriting Agreements.
5. Neither the execution and delivery of the Underwriting Agreements
nor the issue and sale of the Securities contemplated thereby will conflict with
or result in a breach or violation of the Communications Act of 1934, as
amended, any order or regulation of the FCC or any State Regulatory Agency
applicable to the Company or any of the Subsidiaries or cause the suspension,
revocation, impairment, forfeiture, nonrenewal or termination of any FCC license
or other authorization of the FCC.
Such counsel has not itself checked the accuracy or completeness of,
or otherwise verified, the information furnished with respect to other matters
in the Registration Statements and the Final Prospectuses. Such counsel has
generally reviewed
<PAGE>
2
and discussed with representatives of and counsel for the Underwriters and with
certain officers and employees of, and counsel for, the Company the information
furnished, whether or not subject to its check and verification. Although such
counsel has not independently checked or verified and is neither passing upon
nor assuming any responsibility for the factual accuracy, completeness or
fairness of the statements contained in the Registration Statements and the
Final Prospectuses or any amendment thereof or supplement thereto, nothing has
come to its attention which would cause it to believe that the statements
included in the Final Prospectuses under the headings "Risk Factors--We are
subject to significant regulation that could change in an adverse manner" and "-
- -Potential regulation of internet service providers could adversely affect our
operations" and "Business--Regulation", on the date thereof or on the Closing
Date contain an untrue statement of 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.
Such counsel's opinions may be based solely on the Communications Act
of 1934, as amended, decisions of the FCC and FCC rules and regulations,
comparable state statutes governing telecommunications, and the rules and
regulations of comparable state regulatory agencies with direct regulatory
jurisdiction over telecommunications matters in the states in which the Company
and the Subsidiaries provide intrastate services ("State Regulatory Agencies").
Such counsel's opinion may be limited solely to matters arising under these
authorities regarding federal common carrier telecommunications regulatory
requirements and comparable state regulatory requirements in states in which the
Company and the Subsidiaries provide intrastate services.
Such counsel is a member of the Bar of the District of Columbia. In
rendering this opinion, such counsel has relied as to certain matters of fact on
certificates of responsible officers of the Company and public officials.
All references in this Exhibit B to the Registration Statements or the
Final Prospectuses shall be deemed to include any amendment or supplement
thereto at the Closing Date. The opinion of such counsel shall be rendered to
the Underwriters at the request of the Company and shall so state.
<PAGE>
EXHIBIT C
Opinion of
----------
Osler, Hoskin & Harcourt
------------------------
Canadian Regulatory Counsel for the Company
-------------------------------------------
1. The statements in the Final Prospectus under the captions "Risk Factors --
Canadian law currently does not permit us to offer services in Canada" and
"Canadian Regulation", in each case insofar as such statements describe or
summarize matters of law or constitute legal conclusions, fairly describe
or summarize all matters referred to therein.
<PAGE>
EXHIBIT D
Opinion of
----------
Thomas C. Stortz, Senior Vice President,
----------------------------------------
General Counsel and Secretary of the Company
--------------------------------------------
1. Each of the Subsidiaries, other than Level 3 Communications, LLC,
as to which such counsel need not opine, has been duly incorporated or formed
and is validly existing and in good standing in the jurisdiction of its
incorporation or formation, and has the requisite corporate power and authority
to carry on its business and own its properties as currently being conducted and
as described in the Final Prospectuses.
2. All the outstanding shares of capital stock or other equity
interests of each Subsidiary, other than Level 3 Communications, LLC, as to
which such counsel need not opine, have been duly and validly authorized and are
duly issued and are fully paid and nonassessable, and have not been issued and
are not owned or held in violation of any statutory preemptive right of
stockholders; to the knowledge of such counsel after due inquiry, such shares or
other equity interests are not held in violation of any other preemptive right
of stockholders, and except as otherwise set forth in the Final Prospectuses,
all outstanding shares of capital stock or other equity interests of the
Subsidiaries are owned by the Company either directly or through wholly owned
Subsidiaries, to the knowledge of such counsel, after due inquiry, free and
clear of any agreement providing for a security interest in such shares or
equity interests to secure any obligation and any stockholders' agreements,
voting trusts, claims or other encumbrances (other than the pledge of such
shares or equity interests pursuant to the agreements the Company and certain of
its subsidiaries have entered into in connection with the senior secured credit
facility described in the Final Prospectuses).
3. Neither the execution and delivery of the Underwriting Agreements
nor the issue and sale of the Securities, nor the consummation of any other of
the transactions therein contemplated nor the fulfillment of the terms thereof
will conflict with, result in a breach of, or constitute a default under the
terms of any indenture or other agreement or instrument actually known to such
counsel, after due inquiry (which does not include (i) a review of all the
agreements or instruments in the Company's files or of agreements or instruments
such counsel has not been involved with or (ii) a canvasing of the Company's
employees), and to which the Company or any Subsidiary is a party or bound or
its property is subject.
4. The information included in the Final Prospectuses under the
headings "Risk Factors--Environmental liabilities from our historical operations
could be material" and "Business--Legal Proceedings", insofar as such headings
summarize matters of law, fairly summarize the matters therein described.
Such opinion may be limited to the laws of the State of Nebraska, the
Federal laws of the United States of America and the General Corporation Law and
the Limited Liability Company Act of the State of Delaware.
All references in this Exhibit D to the Final Prospectuses shall be
deemed to include any supplements thereto at the Closing Date. The opinion of
such counsel shall be rendered to the Underwriters at the request of the Company
and shall so state.
<PAGE>
EXHIBIT 1.2
EXECUTION COPY
Level 3 Communications, Inc.
3,000,000 Shares 1/
-
Common Stock
($0.01 par value)
International Underwriting Agreement
London, England
February 23, 2000
Salomon Brothers International Limited
Goldman Sachs International,
J.P. Morgan Securities Ltd.,
Morgan Stanley & Co. International Limited,
Credit Suisse First Boston (Europe) Limited,
Merrill Lynch International,
Chase Securities Inc.,
Credit Lyonnais Securities,
Kleinwort Benson Limited and
Societe Generale
As International Representatives of the several
International Underwriters,
c/o Salomon Brothers International Limited
Victoria Plaza
111 Buckingham Palace Road
London SW1W 0SB ENGLAND
Ladies and Gentlemen:
Level 3 Communications, Inc., a corporation organized under the laws
of Delaware (the "Company"), proposes to sell to the several International
Underwriters, for whom the International Representatives are acting as
representatives, 3,000,000 shares of Common Stock, $0.01 par value ("Common
Stock") of the Company (said shares to be issued and sold by the Company being
hereinafter called the "International Underwritten Securities"). The Company
also proposes to grant to the International Underwriters an option to purchase
up to 450,000 additional shares of Common Stock to cover over-allotments (the
"International Option Securities" and together with the International
Underwritten Securities, the "International Securities"). It is understood that
the Company is concurrently entering into the U.S. Underwriting Agreement
providing for the sale by the Company of an aggregate of 17,000,000 shares of
Common Stock (said shares to be sold by the Company pursuant to the U.S.
Underwriting Agreement being hereinafter called the "U.S. Underwritten
Securities") and providing for the grant to the U.S. Underwriters of an option
to purchase from the Company up to 2,550,000 additional shares of Common Stock
(the "U.S. Option Securities"). It is further understood and agreed that the
U.S. Underwriters and the
- ---------------------------------
1/ Plus an option to purchase from the Company up to 450,000 additional
-
Securities to cover over-allotments.
<PAGE>
2
International Underwriters have entered into an Agreement Between U.S.
Underwriters and International Underwriters dated the date hereof (the
"Agreement Between U.S. Underwriters and International Underwriters"), pursuant
to which, among other things, the International Underwriters may purchase from
the U.S. Underwriters a portion of the U.S. Securities to be sold pursuant to
the U.S. Underwriting Agreement and the U.S. Underwriters may purchase from the
International Underwriters a portion of the International Securities to be sold
pursuant to this International Underwriting Agreement. To the extent there are
no additional International Underwriters listed on Schedule I other than you,
the term International Representatives as used in this International
Underwriting Agreement shall mean you, as International Underwriters, and the
terms International Representatives and International Underwriters shall mean
either the singular or plural as the context requires. The use of the neuter in
this International Underwriting Agreement shall include the feminine and
masculine wherever appropriate. Any reference herein to the Registration
Statements, the Basic Prospectus, any Preliminary Prospectus or any Final
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under the
Exchange Act on or before the Effective Date of the Registration Statements or
the issue date of the Basic Prospectus, any Preliminary Prospectus or any Final
Prospectus, as the case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statements, the
Basic Prospectus, any Preliminary Prospectus or any Final Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statements, or the issue date of
the Basic Prospectus, any Preliminary Prospectus or any Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. Certain terms used
in this International Underwriting Agreement are defined in Section 17 hereof.
1. Representations and Warranties.
-------------------------------
(i) The Company represents and warrants to, and agrees with, each
International Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act and has prepared and filed with the Commission registration
statements (file numbers 333-91899 and 333-68887) on Form S-3, including a
related basic prospectus, for registration under the Securities Act of the
offering and sale of the Securities. The Company may have filed one or more
amendments thereto, including Preliminary Prospectuses, each of which has
previously been furnished to you. The Company will next file with the
Commission one of the following: (1) after the Effective Date of such
registration statements, final prospectus supplements relating to the
Securities in accordance with Rules 430A and 424(b), (2) prior to the
Effective Date of such registration statements, an amendment to such
registration statements (including the forms of final prospectus
supplements) or (3) final prospectuses in accordance with Rules 415 and
424(b). In the case of clause (1), the Company has included in such
registration statements, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Securities Act and the
rules thereunder to be included in such registration statements and the
Final Prospectuses. As filed, such final prospectus supplements or such
amendments and forms of final prospectus supplements shall contain all Rule
430A Information, together with all other such required information, and,
except to the extent the International Representatives shall agree in
writing to a modification, shall be in all substantive respects in the form
furnished to you prior
<PAGE>
3
to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other
changes (beyond that contained in the Basic Prospectus and any Preliminary
Prospectus) as the Company has advised you, prior to the Execution Time,
will be included or made therein.
It is understood that two forms of prospectuses are to be used in
connection with the offering and sale of the Securities: one form of
prospectus relating to the U.S. Securities, which are to be offered and
sold to United States and Canadian Persons, and one form of prospectus
relating to the International Securities, which are to be offered and sold
to persons other than United States and Canadian Persons. The latter form
of prospectus is identical to the former except for the outside front cover
page, page (ii) and the outside back cover page.
(b) On the Effective Date, the Registration Statements did or will,
and when the Final Prospectuses are first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined in this International
Underwriting Agreement) and on any date on which Option Securities are
purchased, if such date is not the Closing Date (a "settlement date"), the
Final Prospectuses (and any supplement thereto) will, comply in all
material respects with the applicable requirements of the Securities Act
and the Exchange Act and the respective rules thereunder; on the Effective
Date and at the Execution Time, the Registration Statements did not or will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and, on the Effective Date (if the
Final Prospectuses are not filed pursuant to Rule 424(b)) or on the date of
any filing pursuant to Rule 424(b) (if the Final Prospectuses are filed
pursuant to Rule 424(b)) and, in either case, on the Closing Date and any
settlement date, the Final Prospectuses (together with any supplement
thereto) will not, include any untrue statement of a material fact or omit
to state a material fact necessary in order 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 the information contained in or omitted from the
Registration Statements or the Final Prospectuses (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
Representatives specifically for inclusion in the Registration Statements
or the Final Prospectuses (or any supplement thereto).
(c) Subsequent to the respective dates as of which information is
given in the Final Prospectuses, except as set forth or contemplated in the
Final Prospectuses, neither the Company nor any of its subsidiaries has
incurred any liabilities or obligations, direct or contingent, which are
material to the Company and its subsidiaries taken as a whole, nor entered
into any transaction not in the ordinary course of business that is
material to the Company and its subsidiaries taken as a whole, and there
has not been, singularly or in the aggregate, any material adverse effect,
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 Effect"). Without limiting the foregoing,
neither the Company nor any of its subsidiaries has sustained since the
respective dates as of which information is given in the Final Prospectuses
any 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 or regulatory action,
<PAGE>
4
order or decree, constituting a Material Adverse Effect, otherwise than as
set forth or contemplated in the Final Prospectuses.
(d) Each of the Company and the Subsidiaries (x) has been duly
organized and is validly existing as a corporation under the laws of its
jurisdiction of organization and is in good standing under the laws of such
jurisdiction, (y) has the requisite corporate power and authority to carry
on its business as it is currently being conducted and as described in the
Final Prospectuses, 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. The
Company has the requisite corporate power and authority to execute, deliver
and perform this Agreement and to issue, sell and deliver the Securities.
The term "Subsidiary" means each entity listed on Schedule II hereto.
(e) The Company's authorized equity capitalization is as set forth in
the Final Prospectuses; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Final
Prospectuses; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities have been duly and validly authorized, and, when issued and
delivered to and paid for by the U.S. Underwriters pursuant to the U.S.
Underwriting Agreement and by the International Underwriters pursuant to
the International Underwriting Agreement, will be fully paid and
nonassessable; the Securities are duly listed, and admitted and authorized
for trading, subject to official notice of issuance, on the Nasdaq National
Market; the certificates for the Securities are in valid and sufficient
form; the holders of outstanding shares of capital stock of the Company are
not entitled to preemptive or other rights to subscribe for the Securities;
and, except as set forth in the Final Prospectuses and, except for
outstanding warrants and options to purchase shares of Common Stock that in
the aggregate represent less than 1% of the Common Stock outstanding on the
date hereof, no options, warrants or other rights to purchase, agreements
or other obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding. All the outstanding shares of
capital stock of each Subsidiary and of Level 3 Communications Limited and
Level 3 Bermuda, Ltd. have been duly and validly authorized and issued and
are fully paid and nonassessable, and, except as otherwise set forth in the
Final Prospectuses, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances (other than the
pledge of such shares or equity interests pursuant to the agreements the
Company and certain of its subsidiaries have entered into in connection
with the senior secured credit facility described in the Final
Prospectuses).
(f) There is no franchise, contract or other document of a character
required to be described in the Registration Statements or Final
Prospectuses, or to be filed as an exhibit thereto, which is not described
or filed as required; and the statements in the Final Prospectuses under
the headings "Business--Regulation" and "Business--Legal Proceedings"
fairly summarize the matters therein described.
<PAGE>
5
(g) Each of this International Underwriting Agreement and the U.S.
Underwriting Agreement has been duly authorized, executed and delivered by
the Company.
(h) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Prospectuses, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) The execution and delivery of this International Underwriting
Agreement and the U.S. Underwriting Agreement, the issuance and sale of the
Securities hereunder and under the U.S. Underwriting Agreement, the
performance by the Company of this International Underwriting Agreement and
the U.S. Underwriting Agreement and the consummation of the other
transactions herein and therein contemplated will not (x) conflict with or
result in a breach or violation of any of the respective charters, by-laws
or other organizational documents of the Company or any of the Subsidiaries
or Level 3 Communications Limited or Level 3 Bermuda Ltd., (y) violate or
conflict with any material statute, rule or regulation applicable to the
Company or any Subsidiary or any order or decree of any governmental or
regulatory agency or body or any court having jurisdiction over the Company
or any Subsidiary or any of their respective properties or (z) 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 or other claim or encumbrance with
respect to, any bond, note, debenture or other evidence of indebtedness or
any indenture, mortgage or deed of trust or any other material agreement or
instrument to which the Company or any of the Subsidiaries or Level 3
Communications Limited or Level 3 Bermuda Ltd. 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 or may be subject. No authorization, approval or
consent or order of, or filing, registration or qualification with, any
court or governmental or regulatory body or agency is required in
connection with the transactions contemplated by this Agreement and the
International Underwriting Agreement except as have been made or obtained
and except as may be required by and made with or obtained from state
securities laws or regulations, the National Association of Securities
Dealers, Inc. or, with respect to filing the Final Prospectuses with the
Commission in accordance with Rule 424(b) under the Securities Act.
(j) Except as described in the Final Prospectuses, there is no
action, suit or proceeding before or by any court, arbitrator or
governmental or regulatory official, agency or body, domestic or foreign,
pending against or affecting the Company or any of its subsidiaries, or any
of their respective properties, that, if determined adversely, is
reasonably expected to affect adversely the issuance of the Securities or
in any manner draw into question the validity of the U.S. Underwriting
Agreement or the International Underwriting Agreement or the Securities or
to result, singularly or when aggregated with other pending actions and
actions known to be threatened that are not described in the Final
Prospectuses, in a Material Adverse Effect, or that is reasonably expected
to materially and adversely affect the consummation of the U.S.
Underwriting Agreement or the International Underwriting Agreement or the
<PAGE>
6
transactions contemplated hereby or thereby, and to the best of the
Company's knowledge, no such proceedings are contemplated or threatened.
(k) None of the Company, any of the Subsidiaries, Level 3
Communications Limited or Level 3 Bermuda, Ltd. is or after giving effect
to the issuance of the Securities will be (i) in violation of its
respective charter, bylaws or other organizational documents or (ii) in
default in the performance of any bond, debenture, note or any other
evidence of indebtedness or any indenture, mortgage, deed of trust or other
contract, lease or other instrument to which the Company, any of the
Subsidiaries, Level 3 Communications Limited or Level 3 Bermuda, Ltd. is a
party or by which any of them is bound, or to which any of the property or
assets of the Company, any of the Subsidiaries, Level 3 Communications
Limited or Level 3 Bermuda, Ltd. is subject, other than such defaults that
could not, singularly or in the aggregate, have a Material Adverse Effect.
(l) The firms of accountants that have certified the consolidated
financial statements and supporting schedules of the Company included or
incorporated by reference in the Final Prospectuses are independent public
accountants with respect to the Company and its subsidiaries, as required
by the Securities Act. The consolidated historical statements and any pro
forma information, together with related schedules and notes, if any,
included or incorporated by reference in the Final Prospectuses comply as
to form in all material respects with the requirements of the Securities
Act. Such historical financial statements fairly present in all material
respects 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, 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 in all material respects 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 Final Prospectuses and the Registration Statements,
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.
(m) 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 or regulatory bodies or agencies, and all courts and other
tribunals, necessary or required to own, lease, license and use its
properties and assets and to conduct its business as currently operated in
the manner described in the Final Prospectuses, 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 on such business taken as a whole. 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.
<PAGE>
7
(n) Except as disclosed in the Final Prospectuses, 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 offering and sale of the
Securities under the U.S. Underwriting Agreement or the International
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 any other person is entitled to preemptive or other
rights to subscribe for the Securities.
(o) The Company has not taken nor will it take, directly or
indirectly, any action prohibited by Regulation M under the Exchange Act,
in connection with the offering of the Securities.
(p) Other than the Subsidiaries, there is no entity or other person
(i) of which a majority of the voting equity securities or other interests
is owned, directly or indirectly, by the Company and (ii) which held more
than 5% of the total assets of the Company on a consolidated basis as of
December 31, 1999, excluding inter-company balances.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each International Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and
------------------
in reliance upon the representations and warranties set forth in this
International Underwriting Agreement, the Company agrees to sell to each
International Underwriter, and each International Underwriter agrees, severally
and not jointly, to purchase from the Company, at a purchase price of $104.695
per share, the amount of the International Underwritten Securities set forth
opposite such International Underwriter's name in Schedule I to this
International Underwriting Agreement.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties set forth in this International Underwriting
Agreement, the Company hereby grants an option to the several International
Underwriters to purchase, severally and not jointly, up to 450,000 International
Option Securities at the same purchase price per share as the International
Underwriters shall pay for the International Underwritten Securities. Said
option may be exercised only to cover over-allotments in the sale of the
International Underwritten Securities by the International Underwriters. Said
option may be exercised in whole or in part at any time (but not more than once)
on or before the 30th day after the date of the International Final Prospectus
upon written or telegraphic notice by the International Representatives to the
Company setting forth the number of shares of the International Option
Securities as to which the several International Underwriters are exercising the
option and the settlement date. The number of International Option Securities to
be purchased by each International Underwriter shall be the same percentage of
the total number of shares of the International Option Securities to be
purchased by the several International Underwriters as such International
Underwriter is purchasing of the International Underwritten Securities, subject
to such adjustments as you in your absolute discretion shall make to eliminate
any fractional shares.
3. Delivery and Payment. Delivery of and payment for the
---------------------
International Underwritten Securities and the International Option Securities
(if the option provided for
<PAGE>
8
in Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
February 29, 2000 or at such time on such later date not more than three
Business Days after the foregoing date as the International Representatives and
the U.S. Representatives shall designate, which date and time may be postponed
by agreement among the International Representatives, the U.S. Representatives
and the Company or as provided in Section 9 hereof (such date and time of
delivery and payment for the International Securities being called in this
International Underwriting Agreement the "Closing Date"). Delivery of the
International Securities shall be made to the International Representatives for
the respective accounts of the several International Underwriters against
payment by the several International Underwriters through the International
Representatives of the purchase price thereof of the International Securities
being sold by the Company to or upon the order of the Company by wire transfer
payable in same-day funds to the accounts specified by the Company. Delivery of
the International Underwritten Securities and the International Option
Securities shall be made through the facilities of The Depository Trust Company
unless the International Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
International Option Securities (at the expense of the Company) to the
International Representatives, at 388 Greenwich Street, New York, New York, on
the date specified by the International Representatives (which shall be not more
than ten nor fewer than three Business Days after exercise of said option)
certificates for the International Option Securities in such names and
denominations as the International Representatives shall have requested for the
respective accounts of the several International Underwriters, against payment
by the several International Underwriters through the International
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. If settlement for the International Option Securities occurs after
the Closing Date, the Company will deliver to the International Representatives
on the settlement date for the International Option Securities, and the
obligation of the International Underwriters to purchase the International
Option Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
It is understood and agreed that the Closing Date shall occur
simultaneously with the "Closing Date" under the U.S. Underwriting Agreement,
and that the settlement date, if any, under this International Underwriting
Agreement shall occur simultaneously with the "settlement date" under the U.S.
Underwriting Agreement.
4. Offering by Underwriters. It is understood that the several
-------------------------
International Underwriters propose to offer the International Securities for
sale to the public as set forth in the International Final Prospectus.
5. Agreements. (i) The Company agrees with the several International
-----------
Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statements, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statements or supplement
<PAGE>
9
to the Basic Prospectus or any Rule 462(b) Registration Statements unless
the Company has furnished you a copy for your review prior to filing and
will not file any such proposed amendment or supplement to which you
reasonably object. Subject to the foregoing sentence, if the Registration
Statements have become or become effective pursuant to Rule 430A, or filing
of the Final Prospectuses is otherwise required under Rule 424(b), the
Company will cause the Final Prospectuses, 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 International Representatives of
such timely filing. The Company will promptly advise the International
Representatives (1) when the Registration Statements, if not effective at
the Execution Time, shall have become effective, (2) when the Final
Prospectuses, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statements shall have been filed with the Commission,
(3) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statements shall have been filed or become
effective, (4) of any request by the Commission or its staff for any
amendment of the Registration Statements, or any Rule 462(b) Registration
Statements, or for any supplement to the Final Prospectuses or for any
additional information, (5) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statements or the
institution or threatening of any proceeding for that purpose and (6) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Securities Act, any event occurs as a
result of which either of the Final Prospectuses 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 Statements or supplement either of the
Final Prospectuses to comply with the Securities Act or the Exchange Act or
the respective rules thereunder, the Company promptly will (1) notify the
International Representatives of any such event; (2) prepare and file with
the Commission, subject to the second sentence of paragraph (i)(a) of this
Section 5, an amendment or supplement which will correct such statement or
omission or effect such compliance; and (3) supply any supplemented Final
Prospectuses to you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally available
to its security holders an earnings statement or statements of the Company
and its subsidiaries which will satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 under the Securities Act.
(d) The Company will furnish to the International Representatives and
counsel for the International Underwriters, without charge, a conformed
copy of the Registration Statements (including exhibits thereto) and to
each other International Underwriter a copy of the Registration Statements
(without exhibits thereto) and, so
<PAGE>
10
long as delivery of a prospectus by an International Underwriter or dealer
may be required by the Securities Act, as many copies of the International
Preliminary Prospectus and the International Final Prospectus and any
supplement thereto as the International Representatives may reasonably
request. The Company will pay the expenses of printing or other production
of all such documents.
(e) The Company will cooperate with the Representatives in arranging,
at the Company's cost, for the qualification of the Securities for sale
under the laws of such jurisdictions as the International Representatives
may designate and will maintain such qualifications in effect so long as
required for the sale of the International Securities; provided, however,
that in connection therewith the Company shall not be required to qualify
as a foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation in excess of a
nominal dollar amount in any such jurisdiction where it is not then
subject. The Company promptly will advise the International Representatives
of the receipt by it of any notification with respect to the suspension of
the qualification of the International Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(f) The Company will not, without the prior written consent of Salomon
Smith Barney, offer, sell, contract to sell, issue, announce the offering
or issuance of or otherwise dispose of, directly or indirectly, register,
cause to be registered or announce the registration or intended
registration of, in any case for its own account, any shares of Common
Stock, including any such shares beneficially or indirectly owned or
controlled by the Company, or any securities convertible into or
exchangeable for Common Stock, for a period of 90 days from the date of the
International Final Prospectus, except for: (A) up to 3,000,000 shares of
Common Stock in the aggregate issued in connection with acquisitions
(including by consolidation, merger or similar transaction and including
acquisitions of shares of any of its subsidiaries held by minority
shareholders), provided that more than 3,000,000 such shares may be issued
to the extent the purchaser or purchasers of such excess shares agree to be
bound by the provisions of this paragraph for any remaining portion of such
90-day period, (B) Common Stock issued pursuant to any employee benefit
plan, stock ownership or stock option plan or dividend reinvestment plan in
effect on the Execution Date or options granted pursuant to any such plan
in effect on the Execution Date, provided that such options cannot be
exercised for any remaining portion of such 90-day period, (C) Common Stock
issued in connection with the inclusion of the Common Stock in any Major
Market Index, (D) maintaining the effectiveness of any registration
statement in place on the Execution Date or otherwise permitted to be filed
under this paragraph, (E) Common Stock issued in connection with the
exercise of any warrants outstanding on the Execution Date, (F) Common
Stock issued to prospective employees in connection with such employees
being hired by the Company, (G) the Securities, the Convertible Notes
issuable under the Underwriting Agreement, dated February 23, 2000, among
the Company and the representatives of the underwriters listed therein, the
Common Stock issuable upon conversion of such Convertible Notes and upon
conversion of the Company's existing 6% Convertible Subordinated Notes due
2009 and (H) the filing, announcing or amending of a shelf registration for
up to $5 billion of securities, provided, however, that this clause (H)
shall not permit the actual offering, or "take down" of any such securities
during such 90-day period.
<PAGE>
11
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(h) The Company will apply the net proceeds from the sale of the
Securities sold by it substantially in accordance with its statements under
the caption "Use of Proceeds" in the Final Prospectuses.
(ii) Each International Underwriter agrees that (i) it is not
purchasing any of the International Securities for the account of any United
States or Canadian Person, (ii) it has not offered or sold, and will not offer
or sell, directly or indirectly, any of the International Securities or
distribute any International Prospectus to any person in the United States or
Canada, or to any United States or Canadian Person, and (iii) any dealer to whom
it may sell any of the International Securities will represent that it is not
purchasing for the account of any United States or Canadian Person and agree
that it will not offer or resell, directly or indirectly, any of the
International Securities in the United States or Canada, or to any United States
or Canadian Person or to any other dealer who does not so represent and agree;
provided, however, that the foregoing shall not restrict (A) purchases and sales
between the U.S. Underwriters on the one hand and the International Underwriters
on the other hand pursuant to the Agreement Between U.S. Underwriters and
International Underwriters, (B) stabilization transactions contemplated under
the Agreement Between U.S. Underwriters and International Underwriters,
conducted through Salomon Smith Barney Inc. (or through the U.S. Representatives
and International Representatives) as part of the distribution of the
Securities, and (C) sales to or through (or distributions of International Final
Prospectuses or International Preliminary Prospectuses to) persons not United
States or Canadian Persons who are investment advisors, or who otherwise
exercise investment discretion, and who are purchasing for the account of any
United States or Canadian Person.
(iii) The agreements of the International Underwriters set forth in
paragraph (ii) of this Section 5 shall terminate upon the earlier of the
following events:
(a) a mutual agreement of the U.S. Representatives and the
International Representatives to terminate the selling restrictions set
forth in paragraph (ii) of this Section 5 and in Section 5(ii) of the U.S.
Underwriting Agreement; or
(b) the expiration of a period of 30 days after the Closing Date,
unless (A) the International Representatives shall have given notice to the
Company and the U.S. Representatives that the distribution of the
International Securities by the International Underwriters has not yet been
completed, or (B) the U.S. Representatives shall have given notice to the
Company and the International Underwriters that the distribution of the
U.S. Securities by the U.S. Underwriters has not yet been completed. If
such notice by the U.S. Representatives or the International
Representatives is given, the agreements set forth in such paragraph (ii)
shall survive until the earlier of (1) the event referred to in clause (a)
of this subsection (iii) or (2) the expiration of an additional period of
30 days from the date of any such notice.
(iv) Each International Underwriter severally represents and agrees
that:
<PAGE>
12
(a) it has not offered or sold and, prior to the expiry of six months
from the Closing Date, will not offer or sell any International Securities
to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (whether as principal or agent) for the purpose of their
businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995;
(b) it has complied and will comply with all applicable provisions of
the Financial Services Act 1986 with respect to anything done by it in
relation to the International Securities, in, from or otherwise involving
the United Kingdom; and
(c) it has only issued or passed on, and will only issue or pass on,
to any person in the United Kingdom any document received by it in
connection with the issue of the International Securities if that person is
of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 (as amended), or is a
person to whom the document may otherwise lawfully be issued or passed on.
6. Conditions to the Obligations of the International Underwriters.
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The obligations of the International Underwriters to purchase the International
Underwritten Securities and the International Option Securities, as the case may
be, shall be subject to the accuracy of the representations and warranties on
the part of the Company contained in this International Underwriting Agreement
as of the Execution Time, the Closing Date and any settlement date pursuant to
Section 3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations under this International Underwriting Agreement and
to the following additional conditions:
(a) If the Registration Statements have not become effective prior to
the Execution Time, unless the U.S. Representatives and the International
Representatives agree in writing to a later time, the Registration Statements
will become effective not later than (i) 6:00 PM New York City time on the date
of determination of the public offering price, if such determination occurred at
or prior to 3:00 PM New York City time on such date or (ii) 9:30 AM on the
Business Day following the day on which the public offering price was
determined, if such determination occurred after 3:00 PM New York City time on
such date; if filing of the Final Prospectuses, or any supplement thereto, is
required pursuant to Rule 424(b), the Final Prospectuses, and any such
supplement, will be filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the Registration
Statements shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have requested and caused Willkie Farr &
Gallagher, counsel for the Company, to have furnished to the Representatives
their opinion, dated the
<PAGE>
13
Closing Date and addressed to the Representatives on behalf of the Underwriters,
to the effect of Exhibit A.
(c) The Company shall have caused Swidler Berlin Shereff Friedman
LLP, regulatory counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives on behalf of the Underwriters, to the effect of Exhibit B.
(d) The Company shall have caused Osler, Hoskin & Harcourt, Canadian
Regulatory counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date, and addressed to the
Representatives on behalf of the Underwriters, to the effect of Exhibit C.
(e) The Company shall have furnished to the Representatives the
opinion of Thomas C. Stortz, Senior Vice President, General Counsel and
Secretary of the Company, dated the Closing Date and addressed to the
Representatives on behalf of the Underwriters, to the effect of Exhibit D.
(f) The Representatives shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives on behalf of the
Underwriters, with respect to the issuance and sale of the Securities, the
Registration Statements, the Final Prospectuses (together with any
supplement thereto) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(g) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the President and Chief Executive
Officer and the Executive Vice President and Chief Financial Officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statements, the Final
Prospectuses, any supplements to the Final Prospectuses and the
Underwriting Agreements and that:
(i) the representations and warranties of the Company in the
Underwriting Agreements are true and correct in all material
respects on and as of the Closing Date with the same effect as if
made on the Closing Date, and the Company has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statements have been issued and no proceedings for
that purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since December 31, 1999, the date of the most recent
financial statements included or incorporated by reference in the
Final Prospectuses (exclusive of any supplements thereto), there
has not been, singularly or in the aggregate, any Material
<PAGE>
14
Adverse Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Final Prospectuses (exclusive of any
supplement thereto).
(h) The Company shall have requested and caused
PricewaterhouseCoopers LLP to have furnished to the Representatives, at the
Execution Time and at the Closing Date, letters, dated respectively as of
the Execution Time and as of the Closing Date, in form and substance
reasonably satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Securities Act and the
Exchange Act and the respective applicable rules and regulations adopted by
the Commission thereunder and Rule 101 of the Code of Professional Conduct
of the American Institute of Certified Public Accountants and stating in
effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by reference in
the Registration Statements and the Final Prospectuses and reported on
by them comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act and
the related rules and regulations adopted by the Commission;
(ii) nothing came to their attention which caused them to
believe that the information included or incorporated by reference in
the Registration Statements and the Final Prospectuses in response to
Regulation S-K, Item 301 (Selected Financial Data) and Item 503(d)
(Ratio of Earnings to Fixed Charges) is not in conformity with the
applicable disclosure requirements of Regulation S-K; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) in the
Final Prospectuses, agrees with the accounting records of the Company
and its subsidiaries, excluding any questions of legal interpretation.
All references in this Section 6(h) to the Registration Statements or
the Final Prospectuses shall be deemed to include any amendments or
supplements thereto at the date of the letter.
(i) At the Execution Time and at the Closing Date, Arthur Andersen
LLP shall have furnished to the Representatives a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance reasonably satisfactory to the Representatives, confirming
that they are independent accountants within the meaning of the Securities
Act and the Exchange Act and the applicable rules and regulations
thereunder and Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants and stating in effect that:
<PAGE>
15
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by reference in
the Registration Statements and Final Prospectuses reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act and
the related rules and regulations adopted by the Commission; and
(ii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statements and the Final Prospectuses, and
the information included or incorporated by reference in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999,
incorporated by reference in the Registration Statements and the Final
Prospectuses, agrees with the accounting records of the Company and
its subsidiaries, excluding any questions of legal interpretation.
All references in this Section 6(i) to the Registration Statements or
the Final Prospectuses shall be deemed to include any amendment or
supplement thereto at the date of the letter.
(j) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statements (exclusive of any
amendment thereof) and the Final Prospectuses (exclusive of any supplement
thereto), there shall not have been (i) any increase, change or decrease
specified in the letter or letters referred to in paragraph (i) of this
Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the properties, business, results of operations,
financial condition, affairs or business prospects of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Final Prospectuses (exclusive of any supplement thereto) the effect of
which, in any case referred to in clause (i) or (ii) above, is, in the sole
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Final Prospectuses (exclusive of any
supplement thereto).
(k) Subsequent to the Execution Time, there shall not have been (i)
any decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) or (ii) any notice given
of any intended or potential decrease in any such rating or that such
organization has under surveillance or review (other than any such notice
with positive implications of a possible upgrading) its rating of the
Company's debt securities.
(l) The Securities shall have been listed and admitted and authorized
for trading, subject to official notice of issuance, on the Nasdaq National
Market, and reasonably satisfactory evidence of such actions shall have
been provided to the Representatives.
<PAGE>
16
(m) The closing of the purchase of the U.S. Underwritten Securities
to be issued and sold by the Company pursuant to the U.S. Underwriting
Agreement shall occur concurrently with the closing of the International
Underwritten Securities to be issued and sold by the Company pursuant to
the International Underwriting Agreement.
(n) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this
International Underwriting Agreement and the U.S. Underwriting Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
International Underwriting Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the International
Representatives and counsel for the International Underwriters, this
International Underwriting Agreement and all obligations of the International
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the U.S. Representatives. Notice of such cancellation shall be given to
the Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cravath, Swaine & Moore, counsel for the
Underwriters, at 825 Eighth Avenue, New York, New York 10019, on the Closing
Date.
7. Reimbursement of International Underwriters' Expenses. If the
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sale of the International Securities provided for in this International
Underwriting Agreement is not consummated because any condition to the
obligations of the International Underwriters set forth in Section 6 hereof is
not satisfied, because of any termination pursuant to Section 10 hereof or
because of any refusal, inability or failure on the part of the Company to
perform any agreement in this International Underwriting Agreement or comply
with any provision hereof other than by reason of a default by any of the
International Underwriters, the Company will reimburse the International
Underwriters severally through Salomon Smith Barney Inc. on 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 Securities. Except as provided in the
preceding sentence or elsewhere in this U.S. Underwriting Agreement, the U.S.
Underwriters shall be responsible for all costs and expenses incurred by them in
connection with their purchase of the U.S. Securities hereunder and the resale
of any of the U.S. Securities, including, without limitation, their own out-of-
pocket lodging, meal and other "roadshow" expenses and fees and disbursements of
counsel for the U.S. Underwriters and such other "roadshow" expenses as shall be
agreed upon by the Company and the U.S. Representatives.
8. Indemnification and Contribution. (a) The Company agrees to
---------------------------------
indemnify and hold harmless each International Underwriter, the directors,
officers, employees and agents of each International Underwriter and each person
who controls any International Underwriter within the meaning of either the
Securities Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, 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
<PAGE>
17
Statements for the registration of the Securities as originally filed or in any
amendment thereof, or in any International Preliminary Prospectus or in the
International Final Prospectus, or in any amendment thereof or supplement
thereto, 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 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, that 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 International Underwriter through the International
Representatives specifically for inclusion therein; provided further, that with
respect to any untrue statement or omission of material fact made in the Basic
Prospectus or any International Preliminary Prospectus, the indemnity agreement
contained in this Section 8(a) shall not inure to the benefit of any
International Underwriter from whom the person asserting any such loss, claim,
damage or liability purchased the securities concerned, to the extent that any
such loss, claim, damage or liability of such International Underwriter occurs
under the circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that such loss,
claim, damage or liability results from the fact that (i) the Company had
previously furnished copies of the International Final Prospectus to the
Representatives, (ii) delivery of the International Final Prospectus was
required by the Securities Act to be made to such person, (iii) the untrue
statement or omission of a material fact contained in the Basic Prospectus or
any International Preliminary Prospectus was corrected in the International
Final Prospectus, (iv) there was not sent or given to such person, at or prior
to the written confirmation of the sale of such securities to such person, a
copy of the International Final Prospectus and (v) such correction would have
cured the defect giving rise to such loss, claim, damage or liability. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each International Underwriter severally and not jointly agrees
to indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statements, and each person who controls the
Company within the meaning of either the Securities Act or the Exchange Act, to
the same extent as the foregoing indemnity to each International Underwriter,
but only with reference to written information relating to such International
Underwriter furnished to the Company by or on behalf of such International
Underwriter through the International Representatives specifically for inclusion
in the documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which any International
Underwriter may otherwise have. The Company acknowledges that (i) the list of
Underwriters and their respective participation in the sale of the Securities,
(ii) the sentences related to concessions and reallowances, (iii) the legend on
page (ii) of the International Final Prospectus relating to stabilization and
(iv) the paragraphs related to stabilization, syndicate covering transactions
and penalty bids, under the heading "Underwriting" in the International
Preliminary Prospectus and International Final Prospectus, constitute the only
information furnished in writing by or on behalf of the several International
Underwriters for inclusion in any International Preliminary Prospectus or the
International Final Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
8 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 8, notify the
<PAGE>
18
indemnifying party in writing of the commencement thereof; but the failure so to
notify the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise learn
of such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (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 such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, 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, (iii) 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 the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
under this International Underwriting Agreement (whether or not the indemnified
parties are actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action, suit or
proceeding. It is understood, however, that the Company shall, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all such International Underwriters and controlling persons, which firm shall be
designated in writing by Salomon Smith Barney. An indemnifying party shall not
be liable under this Section 8 to any indemnified party regarding any settlement
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent is consented to by such
indemnifying party, which consent shall not be unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the International
Underwriters severally agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively "Losses") to
which the Company and one or more of the International Underwriters may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the
<PAGE>
19
Company on the one hand and by the International Underwriters on the other from
the offering of the International Securities; provided, however, that in no case
shall any International Underwriter (except as may be provided in any agreement
among underwriters relating to the offering of the International Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such International Underwriter under
this International Underwriting Agreement. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the International Underwriters severally shall contribute in such proportion as
is appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and of the International Underwriters on
the other in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) received by it, and benefits received by
the International Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the International Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
the International Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the International
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.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls an International Underwriter within the meaning of
either the Securities Act or the Exchange Act and each director, officer,
employee and agent of an International Underwriter shall have the same rights to
contribution as such International Underwriter, and each person who controls the
Company within the meaning of either the Securities Act or the Exchange Act,
each officer of the Company who shall have signed the Registration Statements
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).
9. Default by an International Underwriter. If any one or more
----------------------------------------
International Underwriters shall fail to purchase and pay for any of the
International Securities agreed to be purchased by such International
Underwriter or International Underwriters under this International Underwriting
Agreement and such failure to purchase shall constitute a default in the
performance of its or their obligations under this International Underwriting
Agreement, the remaining International Underwriters shall be obligated severally
to take up and pay for (in the respective proportions which the amount of
International Securities set forth opposite their names in Schedule I hereto
bears to the aggregate amount of International Securities set forth opposite the
names of all the remaining International Underwriters) the International
Securities which the defaulting International Underwriter or International
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate amount of International Securities which the defaulting
International Underwriter or International Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of International Securities
set forth in Schedule I hereto, the remaining International Underwriters shall
have the right to purchase all, but shall not be under any obligation to
<PAGE>
20
purchase any, of the International Securities, and if such nondefaulting
International Underwriters do not purchase all the International Securities,
this International Underwriting Agreement will terminate without liability to
any nondefaulting International Underwriter or the Company, except as provided
in Section 11 hereof. In the event of a default by any International
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the International
Representatives shall determine in order that the required changes in the
Registration Statements and the Prospectuses or in any other documents or
arrangements may be effected. Nothing contained in this International
Underwriting Agreement shall relieve any defaulting International Underwriter of
its liability, if any, to the Company and any nondefaulting International
Underwriter for damages occasioned by its default under this International
Underwriting Agreement.
10. Termination. This International Underwriting Agreement shall be
------------
subject to termination in the absolute discretion of the International
Representatives, by notice given to the Company prior to delivery of and payment
for the International Securities, if at any time prior to such time (i) trading
in any of the Company's Securities shall have been suspended by the Commission
or the Nasdaq National Market or trading in securities generally on the New York
Stock Exchange or the Nasdaq National Market shall have been suspended or
limited or minimum prices shall have been established on such Exchange or the
Nasdaq National Market, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war, or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
International Representatives, impractical or inadvisable to proceed with the
offering or delivery of the International Securities as contemplated by the
International Final Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
-------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the International Underwriters set forth in or
made pursuant to this International Underwriting Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of any
International Underwriter or the Company or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the International Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this International Underwriting Agreement.
12. Notices. All communications under this International
--------
Underwriting Agreement will be in writing and effective only on receipt, and, if
sent to the International Representatives, will be mailed, delivered or
telefaxed to the Salomon Brothers International Limited General Counsel (fax
no.: 44-171-398-6046) and confirmed to such General Counsel Salomon Brothers
International Limited, Victoria Plaza, 111 Buckingham Palace Road, London SW1W
0SB ENGLAND, Attention: General Counsel; or, if sent to the Company, will be
mailed, delivered or telefaxed to Level 3 Communications, Inc. (fax no.: (303)
926-3467) and confirmed to it at 1025 Eldorado Boulevard, Broomfield, Colorado
80021, Attention: General Counsel.
13. Successors. This International Underwriting Agreement will inure
-----------
to the benefit of and be binding upon the parties hereto and their respective
successors and the officers, directors, employees, agents and controlling
persons referred to in Section 8 hereof,
<PAGE>
21
and no other person will have any right or obligation under this International
Underwriting Agreement.
14. Applicable Law. This International Underwriting Agreement will
---------------
be governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed within the State of New
York.
15. Counterparts. This International Underwriting Agreement may be
------------
signed in one or more counterparts, each of which shall constitute an original
and all of which together shall constitute one and the same agreement.
16. Headings. The section headings used in this International
---------
Underwriting Agreement are for convenience only and shall not affect the
construction hereof.
17. Definitions. The terms which follow, when used in this
------------
International Underwriting Agreement, shall have the meanings indicated.
"Basic Prospectus" shall mean the prospectus referred to in Section
1(a) above contained in the Registration Statements at the Effective Date,
including the Preliminary Prospectuses (if any).
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statements, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statements became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectuses" and "each Final Prospectus" and "the Final
Prospectus" shall mean the U.S. Final Prospectus and the International
Final Prospectus.
"International Preliminary Prospectus" shall have the meaning set
forth under "U.S. Preliminary Prospectus."
"International Final Prospectus" shall mean such form of final
prospectus relating to the International Securities as first filed pursuant
to Rule 424(b) after the Execution Time, together with the Basic Prospectus
or, if no filing pursuant to Rule 424(b) is made, such form of prospectus
supplement relating to the International Securities included in the
Registration Statements at the Effective Date.
"International Representative" shall mean the addressees of the
International Underwriting Agreement.
<PAGE>
22
"International Securities" shall mean the International Underwritten
Securities and the International Option Securities.
"International Underwriters" shall mean the several underwriters named
in Schedule I to the International Underwriting Agreement.
"International Underwriting Agreement" shall mean the International
Underwriting Agreement dated the date hereof related to the sale of the
International Securities by the Company to the International Underwriters.
"Major Market Index" shall mean the Dow Jones Industrial Average or
Standard and Poor's 500 Stock Index.
"Preliminary Prospectus" shall have the meaning set forth under "U.S.
Preliminary Prospectus."
"Preliminary Prospectuses" shall have the meaning set forth under
"U.S. Preliminary Prospectus.".
"Representatives" shall mean the U.S. Representatives and the
International Representatives.
"Registration Statements" shall mean the registration statements
referred to in Section 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statements become effective prior to the Closing Date, shall also mean such
registration statements as so amended or such Rule 462(b) Registration
Statements, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Securities Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statements when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statements" shall mean registration
statements and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statements referred to
in Section 1(a) hereof.
"Salomon Smith Barney" shall mean Salomon Smith Barney Inc. and
Salomon Brothers International Limited.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Securities" shall mean the U.S. Securities and the International
Securities.
<PAGE>
23
"Underwriter" and "Underwriters" shall mean the U.S. Underwriters and
the International Underwriters.
"Underwriting Agreements" still mean the U.S. Underwriting Agreement
and the International Underwriting Agreement.
"Underwritten Securities" shall mean the International Underwritten
Securities and the U.S. Underwritten Securities.
"U.S. Preliminary Prospectus" and the "International Preliminary
Prospectus", respectively, shall mean any preliminary prospectus supplement
to the Basic Prospectus with respect to the offering of the U.S. Securities
and the International Securities, as the case may be, referred to in
paragraph 1(i)(a) above and any preliminary prospectus supplement with
respect to the offering of the U.S. Securities and the International
Securities, as the case may be, included in the Registration Statements at
the Effective Date that omits Rule 430A Information; the U.S. Preliminary
Prospectus and the International Preliminary Prospectus are hereinafter
collectively called the "Preliminary Prospectuses".
"U.S. Final Prospectus" shall mean the prospectus supplement relating
to the U.S. Securities that is first filed pursuant to Rule 424(b) after
the Execution Time, together with the Basic Prospectus or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final
prospectus supplement relating to the U.S. Securities included in the
Registration Statements at the Effective Date.
"U.S. Representatives" shall mean the addressees of the U.S.
Underwriting Agreement.
"U.S. Securities" shall mean the U.S. Underwritten Securities and the
U.S. Option Securities.
"U.S. Underwriting Agreement" shall mean this agreement relating to
the sale of the U.S. Securities by the Company to the U.S. Underwriters.
"U.S. Underwriters" shall mean the several underwriters named in
Schedule I to the U.S. Underwriting Agreement.
"United States or Canadian Person" shall mean any person who is a
national or resident of the United States or Canada, any corporation,
partnership, or other entity created or organized in or under the laws of
the United States or Canada or of any political subdivision thereof, or any
estate or trust the income of which is subject to United States or Canadian
Federal income taxation, regardless of its source (other than any non-
United States or non-Canadian branch of any United States or Canadian
Person), and shall include any United States or Canadian branch of a person
other than a United States or Canadian Person. "U.S." or "United States"
shall mean the United States of America (including the states thereof and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
<PAGE>
24
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,
Level 3 Communications, Inc.
By: /s/ Thomas C. Stortz
------------------------
Name: Thomas C. Stortz
Title: Senior Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers International Limited
Goldman Sachs International
J.P. Morgan Securities Ltd.
Morgan Stanley & Co. International Limited
Credit Suisse First Boston (Europe) Limited
Merrill Lynch International
Chase Securities Inc.
Credit Lyonnais Securities
Kleinwort Benson Limited
Societe Generale
By: Salomon Brothers International Limited
By: /s/ Dominic Lepore
--------------------------
Name: Dominic Lepore
Title: Vice President
For themselves and the other
several International Underwriters
named in Schedule I to the foregoing
Agreement.
<PAGE>
SCHEDULE I
----------
<TABLE>
<CAPTION>
Number of Underwritten
----------------------
Securities to be
----------------
Underwriters Purchased
- ------------ ---------
<S> <C>
Salomon Brothers International Limited ................. 835,500
Goldman Sachs International ............................ 835,500
J.P. Morgan Securities Ltd. ............................ 210,000
Morgan Stanley & Co. International Limited ............. 210,000
Credit Suisse First Boston (Europe) Limited ............ 144,000
Merrill Lynch International ............................ 144,000
Chase Securities Inc. .................................. 144,000
Credit Lyonnais Securities ............................. 144,000
Kleinwort Benson Limited ............................... 144,000
Societe Generale ....................................... 144,000
Lazard Capital Markets ................................. 45,000
___________
Total ........................................ 3,000,000
===========
</TABLE>
<PAGE>
SCHEDULE II
Subsidiaries
- ------------
PKS Information Services, Inc.
Level 3 Holdings, Inc.
KCP, Inc.
Level 3 International, Inc.
Level 3 Communications, LLC
<PAGE>
EXHIBIT A
Opinion of
----------
Willkie Farr & Gallagher
------------------------
Counsel for the Company
-----------------------
1. Each of the Company and Level 3 Communications, LLC has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or organized, with full power
and authority to own or lease, as the case may be, and to operate its properties
and conduct its business as described in the U.S. and International Final
Prospectuses (the "Final Prospectuses").
2. All the outstanding shares of capital stock or other equity
interests of the Company and Level 3 Communications, LLC have been duly and
validly authorized and are duly issued and are fully paid and nonassessable, and
have not been issued and are not owned or held in violation of any statutory
preemptive right of stockholders; to the knowledge of such counsel after due
inquiry, such shares or other equity interests are not held in violation of any
other preemptive right of stockholders or other equity interest holders, and
except as otherwise set forth in the Final Prospectuses, all outstanding equity
interests of Level 3 Communications, LLC are owned by the Company either
directly or through wholly owned subsidiaries, to the knowledge of such counsel,
after due inquiry, free and clear of any agreement providing for a security
interest in such equity interests to secure any obligation and any stockholders'
agreements, voting trusts, claims or other encumbrances (other than the pledge
of the equity interests of Level 3 Communications, LLC pursuant to the
agreements the Company and certain of its subsidiaries have entered into in
connection with the senior secured credit facility described in the Final
Prospectuses).
3. (i) To the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
Subsidiaries or its or their property of a character required to be disclosed in
the Registration Statements which is not adequately disclosed or incorporated by
reference in the Final Prospectuses, and (ii) to the best knowledge of such
counsel, there is no contract or other document of a character required to be
described in the Registration Statements or the Final Prospectuses, or to be
filed as an exhibit thereto, which is not described or filed as required; and
the statements included in the Final Prospectuses under the heading "Certain
United States Tax Consequences to Non-United States Holders," insofar as such
section summarizes matters of law, fairly summarize the matters therein
described.
4. The Registration Statements have become effective under the
Securities Act; any required filing of the Basic Prospectus, any Preliminary
Prospectus and the Final Prospectuses and any supplements thereto, pursuant to
Rule 424(b) has been made in the manner and within the time period required by
Rule 424(b); to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statements have been issued, no proceedings
for that purpose have been instituted or threatened and the Registration
Statements and the Final Prospectuses (other than the financial statements and
other financial information contained therein or omitted therefrom, as to which
such counsel need express no opinion) comply as to form in all material respects
with the applicable requirements of the Securities Act and the Exchange Act and
the respective rules thereunder.
<PAGE>
28
5. The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Final Prospectuses, will not be an "investment company" as defined in the
Investment Company Act of 1940, as amended.
6. To the best knowledge of such counsel, no consent, approval,
authorization, license, certificate, permit or order of any court or
governmental agency or body is required for the execution, delivery and
performance of the Underwriting Agreements and the Securities or for the
consummation of the transactions contemplated thereby, except such as may be
required by the Federal Communications Commission or similar state regulatory
authorities or under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters (as to which
such counsel need not opine) and such other approvals (to be specified in such
opinion) as have been obtained.
7. Neither the execution and delivery of the Underwriting Agreements,
nor the issue and sale of the Securities, nor the consummation of any other of
the transactions therein contemplated nor the fulfillment of the terms thereof
will conflict with, result in a breach of, or constitute a default under the
certificate of incorporation, by-laws or other organizational documents of the
Company or of any Subsidiary or the terms of any agreement or instrument listed
on Annex I hereto, or any judgment, order or regulation known to such counsel to
be applicable to the Company or any of its Subsidiaries of any court, regulatory
body, administrative agency, governmental agency, authority or body or
arbitrator having jurisdiction over the Company or any of its Subsidiaries,
except orders or regulations of the Federal Communications Commission or similar
state regulatory authorities or regulations of any state securities commission
(as to which such counsel need not opine).
8. To the knowledge of such counsel, no holders of securities of the
Company have rights to the registration of such securities in connection with or
as a result of the offering and sale of the Securities under the Underwriting
Agreements.
9. The Company's authorized equity capitalization as of December 31,
1999, is as set forth in the Final Prospectuses; the capital stock of the
Company conforms in all material respects to the description thereof contained
in the Final Prospectuses; the Securities have been duly and validly authorized,
and, when issued and delivered to and paid for by the Underwriters pursuant to
the Underwriting Agreements, will be fully paid and nonassessable; the
certificates for the Securities are in valid and sufficient form; and the
holders of outstanding shares of capital stock of the Company are not entitled
to preemptive or other rights to subscribe for the Securities; and, except as
set forth in the Final Prospectus and, except for outstanding warrants and
options to purchase shares of Common Stock that in the aggregate represent less
than 1% of the Common Stock outstanding on the date of the Underwriting
Agreements, to the knowledge of such counsel, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding.
10. The Company has full corporate right, power and authority to
execute and deliver the Underwriting Agreements and to perform its obligations
thereunder, including the issuance of the Securities; and all corporate action
required to be taken by the Company for the due and proper authorization,
execution and delivery of the Underwriting Agreements
<PAGE>
29
and for the consummation of the transactions contemplated thereby has been duly
and validly taken.
11. The Underwriting Agreements have been duly authorized, validly
executed and delivered by the Company.
In addition, such counsel shall state that they have participated in
conferences with representatives of the Company, the Underwriters and their
counsel, at which conferences the contents of the Final Prospectuses were
discussed, and, although, except as otherwise described above, such counsel has
not independently checked or verified and does not pass upon and assumes no
responsibility for the factual accuracy, completeness or fairness of the
statements contained in the Registration Statements or the Final Prospectuses,
such counsel has no reason to believe that on the Effective Date or at the
Execution Time the Registration Statements contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that
either Final Prospectus as of its date or on the Closing Date included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in each case, other
than the financial statements and other financial information contained therein
or omitted therefrom and other than the sections entitled "Risk Factors--We are
subject to significant regulation that could change in an adverse manner", "--
Canadian law currently does not permit us to offer services in Canada", "--
Potential regulation of Internet service providers could adversely affect our
operations", "Business--Regulation" included in the Final Prospectuses and
comparable Sections in the Company's Exchange Act reports incorporated in the
Final Prospectuses by reference as to which such counsel need not express a
belief).
Such opinion may be limited to the laws of the State of New York, the
Federal laws of the United States of America and the General Corporation Law and
the Limited Liability Company Act of the State of Delaware.
All references in this Exhibit A to the Final Prospectuses shall be
deemed to include any supplements thereto at the Closing Date. The opinion of
such counsel shall be rendered to the Underwriters at the request of the Company
and shall so state.
<PAGE>
ANNEX I
to Exhibit A
1. Construction and Maintenance Agreement relating to Japan-US Cable Network
dated July 31, 1998.
2. Fibre Optic Cable License Agreement, dated December 23, 1998, between
Norfolk Southern Railway Company, Central of Georgia Railroad Company, and
Georgia Southern and Florida Railway Company and Level 3 Communications,
LLC, as modified by the Letter Agreement, dated July 26, 1999, by Level 3
Communications, LLC and as further modified by the Letter Agreement, dated
September 8, 1999, by Level 3 Communications, LLC.
3. Agreement, dated November 19, 1998, between Worldwide Fibre Inc. and Level
3 Communications, LLC for construction and right of way.
4. Agreement, dated November 19, 1998, between Mi-Link LLC and Level 3
Communications, LLC for construction and right of way.
5. Assignment, dated December 19, 1998, by Level 3 Communications, LLC in
favor of Level 3 Communications Canada Co. of certain rights under the
Agreement, dated November 19, 1998 between Mi-Link LLC and Level 3
Communications, LLC.
6. Acquisition Agreement by and between CalEnergy Co., Inc. and Kiewit
Diversified Group, Inc., dated September 10, 1997.
7. Agreement and Plan of Merger among Level 3 Communications, Inc.,
CrimsonAcqCo, Inc., XCOM Technologies, Inc. and certain individuals,
partnerships and companies, dated April 3, 1998.
8. Telecommunications Services Agreement between Frontier Communications
International Inc. and Level 3 Communications, LLC, dated March 23, 1998,
as modified by Amendment Number One to Telecommunications Services
Agreement, dated June 3, 1998, as further modified by Amendment Number Two
to Telecommunications Services Agreement, dated March 11, 1999, and
Amendment Number Three to Telecommunications Services Agreement, dated
September 24, 1999.
9. Switched Services Supplement to Telecommunications Services Agreement
between Frontier Communications of the West, Inc. (an affiliate of Frontier
Communications International Inc.) and Level 3 Communications, LLC, dated
October 7, 1998.
10. Fiber Optic Survey Agreement between Level 3 Communications, LLC and Union
Pacific Rail Road Company, dated March 31, 1998.
11. Fiber Optic Agreement between Level 3 Communications, LLC and Union Pacific
Rail Road Company, dated 1998.
<PAGE>
2
12. Agreement between Kiewit Coal Properties, Inc. and Kiewit Mining Group,
Inc., dated January 8, 1992.
13. Separation Agreement by and among Peter Kiewit Sons', Inc., Kiewit
Diversified Group, Inc., PKS Holdings, Inc., and Kiewit Construction Group,
Inc., dated December 8, 1997.
14. Amendment to Separation Agreement by and among Peter Kiewit Sons', Inc.,
Level 3 Communications, Inc., PKS Holdings, Inc. and Kiewit Construction
Group, Inc., dated March 18, 1998.
15. Tax Sharing Agreement by and between Peter Kiewit Sons', Inc. and PKS
Holdings, Inc., dated March 26, 1998.
16. Promissory Note from Peter Kiewit Sons' Co. to Metropolitan Life Insurance
Company, dated June 27, 1997.
17. Deed of Trust, Security Agreement and Fixture Filing by Peter Kiewit Sons'
Co., to Metropolitan Life Insurance Company, dated June 27, 1997.
18. Cost Sharing and IRU Agreement among Level 3 Communications, LLC and
Internext LLC, dated July 18, 1998.
19. Master Right-of-Way Agreement among Level 3 Communications, LLC and The
Burlington Northern and Santa Fe Railway Company, dated June 23, 1998.
20. Intercity Network Infrastructure Contract between Level 3 Communications,
LLC and Kiewit Construction Company, dated June 15, 1998.
21. Modification Number One to Intercity Network Infrastructure Contract
between Level 3 Communications, LLC and Kiewit Construction Company, dated
June 25, 1999.
22. Global Master Procurement Agreement between BTE Equipment, LLC and Lucent
Technologies Inc., dated May 17, 1999.
23. Cross Channel Cables Agreement among France Manche S.A., The Channel Tunnel
Group Limited, Level 3 Communications Limited and Level 3 Communications
S.A., dated June 22, 1999.
24. Fiber Optic Cable System Contract between Level 3 Communications Limited,
Level 3 Communications S.A. and Alcatel Submarine Networks S.A., dated May
14, 1999.
25. Engineer, Procure and Construct Contract between Level 3 Communications,
GmbH and Alcatel Contracting, GmbH dated March 30, 1999.
26. Engineer, Procure and Construct Contract between Level 3 Communications,
Ltd. and Fujitsu Telecommunications Europe, Ltd., dated March 19, 1999.
<PAGE>
3
27. Engineer, Procure and Construct Contract between Level 3 Communications, SA
and Alcatel Contracting, SA dated April 9, 1999.
28. Joint Build Agreement among Colt Telecom Group plc and certain of its
subsidiaries and Level 3 International Inc. and certain of its
subsidiaries, dated May 4, 1999.
29. Supply Contract among Level 3 (Bermuda) Ltd., Level 3 Communications
Limited, Level 3 International, Inc. and Tyco Submarine Systems Ltd., dated
June 15, 1999, as modified by Contract Variation Number 1, dated as of
February 10, 1999, Yellow Cable System Written Order for Contract Variation
Number 3, dated as of February 14, 2000.
30. Credit Agreement, dated as of September 30, 1999, among Level 3
Communications, Inc., certain subsidiaries of Level 3 Communications, Inc.,
the lenders parties thereto and The Chase Manhattan Bank, as Administrative
Agent and Collateral Agent, as amended by the First Amendment, dated as of
November 24, 1999.
31. Shared Collateral Security Agreement, dated as of December 8, 1999, among
Level 3 Communications, Inc., certain subsidiaries of Level 3
Communications, Inc. and The Chase Manhattan Bank, as Collateral Agent.
32. Shared Collateral Pledge Agreement, dated as of December 8, 1999, among
Level 3 Communications, Inc., certain subsidiaries of Level 3
Communications, Inc. and The Chase Manhattan Bank, as Collateral Agent.
33. Indenture, dated as of April 28, 1998 between Level 3 Communications, Inc.
and IBJ Schroder Bank & Trust Company, as trustee.
34. Indenture, dated as of December 2, 1998 between Level 3 Communications,
Inc. and IBJ Schroder Bank & Trust Company, as trustee.
35. Indenture, dated as of September 20, 1999, between Level 3 Communications,
Inc. and IBJ Whitehall Bank & Trust Company, as trustee.
36. First Supplemental Indenture, dated as of September 20, 1999 between Level
3 Communications, Inc. and IBJ Whitehall Bank & Trust Company, as trustee.
<PAGE>
EXHIBIT B
Opinion of
----------
Swidler Berlin Shereff Friedman LLP
-----------------------------------
Regulatory Counsel for the Company
----------------------------------
1. The licenses, certificates, permits and authorizations set forth
in Attachment A to this opinion constitute all of the licenses, certificates,
permits and authorizations required by the Federal Communications Commission
("FCC") and the State Regulatory Agencies (as defined below) for the provision
of telecommunications services by the Company and the Subsidiaries as such
counsel understands those services currently to be provided based on the
declaration of an executive officer of the Company attached to such opinion,
where the failure to obtain or hold such license, certificate, permit or
authorization would materially adversely affect the ability of the Company or
the Subsidiaries to provide such services, and none of the Company or any
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such license, certificate, permit or authorization which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse affect on the Company or such Subsidiary,
in connection with the provision of such services.
2. To the best knowledge of such counsel, after reasonable inquiry,
neither the Company nor any of the Subsidiaries is subject to any pending or
threatened proceeding, complaint or investigation before the FCC or any State
Regulatory Agency based on any alleged violation by the Company or its
Subsidiaries in connection with the provision of or failure to provide
telecommunications services, of a character that would be required to be
disclosed or incorporated by reference in the Registration Statements and the
Final Prospectuses, which is not adequately disclosed in the Registration
Statements and the Final Prospectuses.
3. The statements included in the Final Prospectuses under the
headings "Risk Factors--We are subject to significant regulation that could
change in an adverse manner" and "--Potential regulation of internet service
providers could adversely affect our operations" and "Business--Regulation",
fairly summarize the matters therein described.
4. No consent, approval, authorization, license, certificate, permit
or order of the FCC or any State Regulatory Agency is required for the
consummation of the transactions contemplated by the Underwriting Agreements.
5. Neither the execution and delivery of the Underwriting Agreements
nor the issue and sale of the Securities contemplated thereby will conflict with
or result in a breach or violation of the Communications Act of 1934, as
amended, any order or regulation of the FCC or any State Regulatory Agency
applicable to the Company or any of the Subsidiaries or cause the suspension,
revocation, impairment, forfeiture, nonrenewal or termination of any FCC license
or other authorization of the FCC.
Such counsel has not itself checked the accuracy or completeness of,
or otherwise verified, the information furnished with respect to other matters
in the Registration Statements and the Final Prospectuses. Such counsel has
generally reviewed and discussed with representatives of and counsel for the
Underwriters and with certain officers and employees of, and counsel for, the
Company the information furnished, whether or not
<PAGE>
2
subject to its check and verification. Although such counsel has not
independently checked or verified and is neither passing upon nor assuming any
responsibility for the factual accuracy, completeness or fairness of the
statements contained in the Registration Statements and the Final Prospectuses
or any amendment thereof or supplement thereto, nothing has come to its
attention which would cause it to believe that the statements included in the
Final Prospectuses under the headings "Risk Factors--We are subject to
significant regulation that could change in an adverse manner" and "--Potential
regulation of internet service providers could adversely affect our operations"
and "Business--Regulation", on the date thereof or on the Closing Date contain
an untrue statement of 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.
Such counsel's opinions may be based solely on the Communications Act
of 1934, as amended, decisions of the FCC and FCC rules and regulations,
comparable state statutes governing telecommunications, and the rules and
regulations of comparable state regulatory agencies with direct regulatory
jurisdiction over telecommunications matters in the states in which the Company
and the Subsidiaries provide intrastate services ("State Regulatory Agencies").
Such counsel's opinion may be limited solely to matters arising under these
authorities regarding federal common carrier telecommunications regulatory
requirements and comparable state regulatory requirements in states in which the
Company and the Subsidiaries provide intrastate services.
Such counsel is a member of the Bar of the District of Columbia. In
rendering this opinion, such counsel has relied as to certain matters of fact on
certificates of responsible officers of the Company and public officials.
All references in this Exhibit B to the Registration Statements or the
Final Prospectuses shall be deemed to include any amendment or supplement
thereto at the Closing Date. The opinion of such counsel shall be rendered to
the Underwriters at the request of the Company and shall so state.
<PAGE>
EXHIBIT C
Opinion of
----------
Osler, Hoskin & Harcourt
------------------------
Canadian Regulatory Counsel for the Company
-------------------------------------------
1. The statements in the Final Prospectus under the captions "Risk Factors --
Canadian law currently does not permit us to offer services in Canada" and
"Canadian Regulation", in each case insofar as such statements describe or
summarize matters of law or constitute legal conclusions, fairly describe
or summarize all matters referred to therein.
<PAGE>
4
EXHIBIT D
Opinion of
----------
Thomas C. Stortz, Senior Vice President,
----------------------------------------
General Counsel and Secretary of the Company
--------------------------------------------
1. Each of the Subsidiaries, other than Level 3 Communications, LLC,
as to which such counsel need not opine, has been duly incorporated or formed
and is validly existing and in good standing in the jurisdiction of its
incorporation or formation, and has the requisite corporate power and authority
to carry on its business and own its properties as currently being conducted and
as described in the Final Prospectuses.
2. All the outstanding shares of capital stock or other equity
interests of each Subsidiary, other than Level 3 Communications, LLC, as to
which such counsel need not opine, have been duly and validly authorized and are
duly issued and are fully paid and nonassessable, and have not been issued and
are not owned or held in violation of any statutory preemptive right of
stockholders; to the knowledge of such counsel after due inquiry, such shares or
other equity interests are not held in violation of any other preemptive right
of stockholders, and except as otherwise set forth in the Final Prospectuses,
all outstanding shares of capital stock or other equity interests of the
Subsidiaries are owned by the Company either directly or through wholly owned
Subsidiaries, to the knowledge of such counsel, after due inquiry, free and
clear of any agreement providing for a security interest in such shares or
equity interests to secure any obligation and any stockholders' agreements,
voting trusts, claims or other encumbrances (other than the pledge of such
shares or equity interests pursuant to the agreements the Company and certain of
its subsidiaries have entered into in connection with the senior secured credit
facility described in the Final Prospectuses).
3. Neither the execution and delivery of the Underwriting Agreements
nor the issue and sale of the Securities, nor the consummation of any other of
the transactions therein contemplated nor the fulfillment of the terms thereof
will conflict with, result in a breach of, or constitute a default under the
terms of any indenture or other agreement or instrument actually known to such
counsel, after due inquiry (which does not include (i) a review of all the
agreements or instruments in the Company's files or of agreements or instruments
such counsel has not been involved with or (ii) a canvasing of the Company's
employees), and to which the Company or any Subsidiary is a party or bound or
its property is subject.
4. The information included in the Final Prospectuses under the
headings "Risk Factors--Environmental liabilities from our historical operations
could be material" and "Business--Legal Proceedings", insofar as such headings
summarize matters of law, fairly summarize the matters therein described.
Such opinion may be limited to the laws of the State of Nebraska, the
Federal laws of the United States of America and the General Corporation Law and
the Limited Liability Company Act of the State of Delaware.
All references in this Exhibit D to the Final Prospectuses shall be
deemed to include any supplements thereto at the Closing Date. The opinion of
such counsel shall be rendered to the Underwriters at the request of the Company
and shall so state.
<PAGE>
EXHIBIT 1.3
EXECUTION COPY
Level 3 Communications, Inc.
Underwriting Agreement
New York, New York
February 23, 2000
Salomon Smith Barney Inc.
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Level 3 Communications, Inc., a corporation organized under the laws
of Delaware (the "Company"), proposes to sell to the several underwriters named
in Schedule I hereto (the "Underwriters"), for whom you (the "Representatives")
are acting as representatives, $750,000,000 aggregate principal amount of its 6%
Convertible Subordinated Notes due 2010 (the "Firm Securities") convertible into
shares of the Company's common stock, $0.01 par value (the "Common Stock"). The
Company also proposes to grant to the Underwriters an option to purchase up to
$112,500,000 additional aggregate principal amount of such notes (the "Option
Securities" and, together with the Firm Securities, the "Securities"). To the
extent there are no additional Underwriters listed on Schedule I other than you,
the term Representatives as used herein shall mean you, as Underwriters, and the
terms Representatives and Underwriters shall mean either the singular or plural
as the context requires. Any reference herein to the Registration Statements,
the Basic Prospectus, any Preliminary Prospectus or the Final Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act
on or before the Effective Date of the Registration Statements or the issue date
of the Basic Prospectus, any Preliminary Prospectus or the Final Prospectus, as
the case may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statements, the Basic Prospectus,
any Preliminary Prospectus or the Final Prospectus shall be deemed to refer to
and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statements, or the issue date of the Basic
Prospectus, any Preliminary Prospectus or the Final Prospectus, as the case may
be, deemed to be incorporated therein by reference. Certain terms used herein
are defined in Section 17 hereof.
<PAGE>
2
1. Representations and Warranties. The Company represents and
------------------------------
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act and has prepared and filed with the Commission registration
statements (file numbers 333-91899 and 333-68887) on Form S-3, including a
related basic prospectus, for registration under the Securities Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including a Preliminary Prospectus, each of which
has previously been furnished to you. The Company will next file with the
Commission one of the following: (1) after the Effective Date of such
registration statements, a final prospectus supplement relating to the
Securities in accordance with Rules 430A and 424(b), (2) prior to the
Effective Date of such registration statements, an amendment to such
registration statements (including the form of final prospectus supplement)
or (3) a final prospectus in accordance with Rules 415 and 424(b). In the
case of clause (1), the Company has included in such registration
statements, as amended at the Effective Date, all information (other than
Rule 430A Information) required by the Securities Act and the rules
thereunder to be included in such registration statements and the Final
Prospectus. As filed, such final prospectus supplement or such amendment
and form of final prospectus supplement shall contain all Rule 430A
Information, together with all other such required information, and, except
to the extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior to
the Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other changes
(beyond that contained in the Basic Prospectus and any Preliminary
Prospectus) as the Company has advised you, prior to the Execution Time,
will be included or made therein.
(b) On the Effective Date, the Registration Statements did or will,
and when the Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein) and on any
date on which Option Securities are purchased, if such date is not the
Closing Date (a "settlement date"), the Final Prospectus (and any
supplement thereto) will, comply in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and the
respective rules thereunder; on the Effective Date and at the Execution
Time, the Registration Statements did not or will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date (if the Final Prospectus is not
filed pursuant to Rule 424(b)) or on the date of any filing pursuant to
Rule 424(b) (if the Final Prospectus is filed pursuant to Rule 424(b)) and,
in either case, on the Closing Date and any settlement date, the Final
Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order 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 the
information contained in or omitted from the Registration Statements or the
Final 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 Representatives specifically for
inclusion in the Registration Statements or the Final Prospectus (or any
supplement thereto).
(c) Subsequent to the respective dates as of which information is
given in the Final Prospectus, except as set forth or contemplated in the
Final Prospectus, neither the Company nor any of its subsidiaries has
incurred any liabilities or obligations,
<PAGE>
3
direct or contingent, which are material to the Company and its
subsidiaries taken as a whole, nor entered into any transaction not in the
ordinary course of business that is material to the Company and its
subsidiaries taken as a whole, and there has not been, singularly or in the
aggregate, any material adverse effect, 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
Effect"). Without limiting the foregoing, neither the Company nor any of
its subsidiaries has sustained since the respective dates as of which
information is given in the Final Prospectus any 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 or
regulatory action, order or decree, constituting a Material Adverse Effect,
otherwise than as set forth or contemplated in the Final Prospectus.
(d) Each of the Company and the Subsidiaries (x) has been duly
organized and is validly existing as a corporation under the laws of its
jurisdiction of organization and is in good standing under the laws of such
jurisdiction, (y) has the requisite corporate power and authority to carry
on its business as it is currently being conducted and as described in the
Final 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. The
Company has the requisite corporate power and authority to execute, deliver
and perform this Agreement and to issue, sell and deliver the Securities.
The term "Subsidiary" means each entity listed on Schedule II hereto.
(e) The Company's authorized equity capitalization is as set forth in
the Final Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Final
Prospectus; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
shares of Common Stock initially issuable upon conversion of the Securities
have been duly and validly authorized and, when issued upon conversion
against payment of the conversion price and in accordance with the terms of
the Indenture (as defined below), will be validly issued, fully paid and
nonassessable; the Board of Directors of the Company or a duly constituted
committee thereof, has duly and validly adopted resolutions reserving such
shares of Common Stock for issuance upon conversion; the holders of
outstanding shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Securities or the shares of
Common Stock issuable upon conversion thereof; and, except as set forth in
the Final Prospectus, and, except for outstanding warrants and options to
purchase shares of Common Stock that in the aggregate represent less than
1% of the Common Stock outstanding on the date hereof, no options, warrants
or other rights to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any securities for,
shares of capital stock of or ownership interests in the Company are
outstanding. All the outstanding shares of capital stock of each Subsidiary
and of Level 3 Communications Limited and Level 3 Bermuda, Ltd. have been
duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final Prospectus,
all outstanding shares of capital stock of the Subsidiaries are owned by
the Company either directly or through wholly owned
<PAGE>
4
subsidiaries free and clear of any perfected security interest or any other
security interests, claims, liens or encumbrances (other than the pledge of
such shares or equity interests pursuant to the agreements the Company and
certain of its subsidiaries have entered into in connection with the senior
secured credit facility described in the Final Prospectus).
(f) The Securities have been duly authorized and, when executed by
the Company and authenticated by the Trustee (as defined below) in
accordance with the terms of the Indenture and delivered to and paid for by
the Underwriters in accordance with the terms of this Agreement, will
constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the indenture dated as of September 20, 1999 (the
"Base Indenture") between the Company and IBJ Whitehall Bank and Trust
Company, as Trustee, as supplemented by the First Supplemental Indenture,
dated as of September 20, 1999 (the "First Supplemental Indenture"),
between the Company and IBJ Whitehall Bank and Trust Company, as Trustee,
and as further supplemented by the Second Supplemental Indenture to be
dated as of the Closing Date (the "Second Supplemental Indenture" and,
together with the Base Indenture and the First Supplemental Indenture, the
"Indenture") between the Company and The Bank of New York (the successor
trustee to IBJ Whitehall Bank and Trust Company), as Trustee (the
"Trustee"), under which they are to be issued. The Base Indenture will be
substantially in the form filed as an exhibit to the Registration
Statements; the Indenture has been duly authorized and duly qualified under
the Trust Indenture Act and, when executed and delivered by the Company and
the Trustee, will constitute a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles; and the
Securities and the Indenture will conform to the descriptions thereof in
the Prospectus;
(g) There is no franchise, contract or other document of a character
required to be described in the Registration Statements or Final
Prospectus, or to be filed as an exhibit thereto, which is not described or
filed as required; and the statements in the Final Prospectus under the
headings "Business--Regulation" and "Business--Legal Proceedings" fairly
summarize the matters therein described.
(h) This Agreement has been duly authorized, executed and delivered
by the Company.
(i) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(j) The execution and delivery of this Agreement, the issuance and
sale of the Securities, the performance by the Company of this Agreement
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, by-laws or other organizational documents of the
Company or any of the Subsidiaries or Level 3 Communications Limited or
Level 3 Bermuda, Ltd., (y) violate or conflict with any material statute,
rule or regulation applicable to the Company or any Subsidiary or
<PAGE>
5
any order or decree of any governmental or regulatory agency or body or any
court having jurisdiction over the Company or any Subsidiary or any of
their respective properties or (z) 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 or
other claim or encumbrance with respect to, any bond, note, debenture or
other evidence of indebtedness or any indenture, mortgage or deed of trust
or any other material agreement or instrument to which the Company or any
of the Subsidiaries or Level 3 Communications Limited or Level 3 Bermuda,
Ltd. 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 or may be subject.
No authorization, approval or consent or order of, or filing, registration
or qualification with, any court or governmental or regulatory body or
agency is required in connection with the transactions contemplated by this
Agreement except as have been made or obtained and except as may be
required by and made with or obtained from state securities laws or
regulations, the National Association of Securities Dealers, Inc. or, with
respect to filing the Final Prospectus with the Commission in accordance
with Rule 424(b) under the Securities Act.
(k) Except as described in the Final Prospectus, there is no action,
suit or proceeding before or by any court, arbitrator or governmental or
regulatory official, agency or body, domestic or foreign, pending against
or affecting the Company or any of its subsidiaries, or any of their
respective properties, that, if determined adversely, is reasonably
expected to affect adversely the issuance of the Securities or in any
manner draw into question the validity of this Agreement or the Securities
or to result, singularly or when aggregated with other pending actions and
actions known to be threatened that are not described in the Final
Prospectus, in a Material Adverse Effect, or that is reasonably expected to
materially and adversely affect the consummation of this Agreement or the
transactions contemplated hereby, and to the best of the Company's
knowledge, no such proceedings are contemplated or threatened.
(l) None of the Company nor any of the Subsidiaries, Level 3
Communications Limited or Level 3 Bermuda, Ltd. is or after giving effect
to the issuance of the Securities will be (i) in violation of its
respective charter, bylaws or other organizational documents or (ii) in
default in the performance of any bond, debenture, note or any other
evidence of indebtedness or any indenture, mortgage, deed of trust or other
contract, lease or other instrument to which the Company or any of the
Subsidiaries or Level 3 Communications Limited or Level 3 Bermuda, Ltd. is
a party or by which any of them is bound, or to which any of the property
or assets of the Company or any of the Subsidiaries or Level 3
Communications Limited or Level 3 Bermuda, Ltd. is subject, other than
such defaults that could not, singularly or in the aggregate, have a
Material Adverse Effect.
(m) The firms of accountants that have certified the consolidated
financial statements and supporting schedules of the Company included or
incorporated by reference in the Final Prospectus are independent public
accountants with respect to the Company and its subsidiaries, as required
by the Securities Act. The consolidated historical statements and any pro
forma information, together with related schedules and notes, if any,
included or incorporated by reference in the Final Prospectus comply as to
form in all material respects with the requirements of the Securities Act.
<PAGE>
6
Such historical financial statements fairly present in all material
respects 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, 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 in all material respects 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 Final Prospectus and the Registration Statements,
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 or regulatory bodies or agencies, and all courts and other
tribunals, necessary or required to own, lease, license and use its
properties and assets and to conduct its business as currently operated in
the manner described in the Final 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
on such business taken as a whole. 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 Final 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 offering and sale of the
Securities under this 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 any other person is entitled to preemptive
or other rights to subscribe for the Securities.
(p) The Company has not taken nor will it take, directly or
indirectly, any action prohibited by Regulation M under the Exchange Act,
in connection with the offering of the Securities.
(q) Other than the Subsidiaries, there is no entity or other person
(i) of which a majority of the voting equity securities or other interests
is owned, directly or indirectly, by the Company and (ii) which held more
than 5% of the total assets of the Company on a consolidated basis as of
December 31, 1999, excluding inter-company balances.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
<PAGE>
7
2. Purchase and Sale. (a) Subject to the terms and conditions and
------------------
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
97.05% of the principal amount thereof, plus accrued interest, if any, from
February 29, 2000 to the Closing Date, the principal amount of Firm Securities
set forth opposite such Underwriters name on Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
$112,500,000 aggregate principal amount of Option Securities at a purchase price
of 97.05% of the principal amount thereof, plus accrued interest, if any, from
February 29, 2000 to the settlement date for the Option Securities. Said option
may be exercised for the sole purpose of covering sales of securities in excess
of the aggregate principal amount of Firm Securities by the Underwriters. Said
option may be exercised in whole or in part at any time (but not more than once)
on or before the 30th day after the date of the Final Prospectus upon written or
telegraphic notice by the Representatives to the Company setting forth the
aggregate principal amount of Option Securities as to which the several
Underwriters are exercising the option and the settlement date. The principal
amount of Option Securities to be purchased by each Underwriter shall be the
same percentage of the total principal amount of Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Firm Securities, subject to such adjustments as you in your absolute discretion
shall deem advisable.
3. Delivery and Payment. Delivery of and payment for the Firm
---------------------
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on February 29,
2000, which date and time may be post poned by agreement between the
Representatives and the Company or as provided in Section 9 hereof (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer payable in
same-day funds to an account specified by the Company. Delivery of the Firm
Securities and the Option Securities shall be made through the facilities of The
Depository Trust Company ("DTC") unless the Representatives shall otherwise
instruct.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company), through the facilities of DTC
unless the Representatives shall instruct otherwise, on the date specified by
the Representatives in the notice to the Company of their exercise of such
option (which shall be not more than ten nor fewer than three Business Days
after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. If settlement for the Option Securities occurs after the Closing
Date, the Company will deliver to the Representatives on the settlement date for
the Option Securities, and the obligation of the Underwriters to purchase the
Option Securities shall be conditioned upon receipt of, supplemental opinions,
<PAGE>
8
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
-------------------------
Underwriters are to offer the Securities for sale to the public as set forth in
the Final Prospectus.
5. Agreements. The Company agrees with the several Underwriters
-----------
that:
(a) The Company will use its best efforts to cause the Registration
Statements, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statements or supplement (including the Final Prospectus or any Preliminary
Prospectus) to the Basic Prospectus or any Rule 462(b) Registration
Statement unless the Company has furnished you a copy for your review prior
to filing and will not file any such proposed amendment or supplement to
which you reasonably object. Subject to the foregoing sentence, if the
Registration Statements have become or become effective pursuant to Rule
430A, or filing of the Final Prospectus is otherwise required under Rule
424(b), the Company will cause the Final 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 Representatives of such timely
filing. The Company will promptly advise the Representatives (1) when the
Registration Statements, if not effective at the Execution Time, shall have
become effective, (2) when the Final Prospectus, and any supplement
thereto, shall have been filed (if required) with the Commission pursuant
to Rule 424(b) or when any Rule 462(b) Registration Statement shall have
been filed with the Commission, (3) when, prior to termination of the
offering of the Securities, any amendment to the Registration Statements
shall have been filed or become effective, (4) of any request by the
Commission or its staff for any amendment of the Registration Statements,
or any Rule 462(b) Registration Statement, or for any supplement to the
Final Prospectus or for any additional information, (5) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statements or the institution or threatening of any proceeding
for that purpose and (6) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Securities Act, any event occurs as a
result of which the Final 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 Statements or supplement the Final Prospectus to
comply with the Securities Act or the Exchange Act or the respective rules
thereunder, the Company promptly will (1) notify the Representatives of
such event, (2) prepare and file with the Commission, subject to the second
sentence of paragraph (a) of this Section 5, an amendment or supplement
which will correct such
<PAGE>
9
statement or omission or effect such compliance and (3) supply any
supplemented Final Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make generally available
to its security holders an earnings statement or statements of the Company
and its subsidiaries which will satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 under the Securities Act.
(d) The Company will furnish to each of the Representatives and
counsel for the Underwriters, without charge, a conformed copy of the
Registration Statements (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statements (without exhibits
thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Securities Act, as many copies of each
Preliminary Prospectus and the Final Prospectus and any supplement thereto
as the Representatives may reasonably request. The Company will pay the
expenses of printing or other production of all such documents.
(e) The Company will cooperate with the Representatives in arranging,
at the Company's cost, for the qualification of the Securities for sale
under the laws of such jurisdictions as the Representatives may designate
and will maintain such qualifications in effect so long as required for the
sale of the Securities; provided however, that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction or
subject itself to taxation in excess of a nominal dollar amount in any such
jurisdiction where it is not then subject. The Company promptly will
advise the Representatives of the receipt by it of any notification with
respect to the suspension of the qualification of the Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose.
(f) The Company will not, for a period of 90 days following the
Execution Date, without the prior written consent of Salomon Smith Barney
Inc., offer, sell, contract to sell, issue, announce the offering or
issuance of or otherwise dispose of, directly or indirectly, register,
cause to be registered or announce the registration or intended
registration of, in any case for its own account, any securities of the
Company that are substantially similar to the Securities or any shares of
Common Stock, including any such shares beneficially or indirectly owned or
controlled by the Company, or any securities convertible into or
exchangeable for Common Stock, except for: (A) up to 3,000,000 shares of
Common Stock in the aggregate issued in connection with acquisitions
(including by consolidation, merger or similar transaction and including
acquisitions of shares of any of its subsidiaries held by minority
shareholders), provided that more than 3,000,000 such shares may be issued
to the extent the purchaser or purchasers of such excess shares agree to be
bound by the provisions of this paragraph until after the 90th day
following the Execution Date, (B) Common Stock issued pursuant to any
employee benefit plan, stock ownership or stock option plan or dividend
reinvestment plan in effect on the Execution Date, or options granted
pursuant to any such plan in effect on the Execution Date, provided that
such options cannot be exercised until after the 90th day following the
Execution Date, (C) Common Stock issued in connection with the inclusion of
the Common Stock in any Major Market Index, (D) maintaining the
effectiveness of any registration statement in place on the Execution Date
or otherwise permitted to be filed under this paragraph, (E) Common Stock
issued in connection with the exercise
<PAGE>
10
of any warrants outstanding on the Execution Date, (F) Common Stock issued
to prospective employees in connection with such employees being hired by
the Company, (G) the Securities, the Common Stock issuable upon conversion
of the Securities and upon conversion of the Company's existing 6%
Convertible Subordinated Notes due 2009 and the shares of Common Stock
issuable under the U.S. Underwriting Agreement, dated February 23, 2000,
among the Company and the representatives of the underwriters named therein
and the International Underwriting Agreement, dated February 23, 2000,
among the Company and the representatives of the underwriters named therein
and (H) the filing, announcing or amending of a shelf registration for up
to $5 billion of securities, provided that this clause (H) shall not permit
the actual offering, or "take down," of any such securities during such 90-
day period.
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(h) The Company will apply the net proceeds from the sale of the
Securities sold by it substantially in accordance with its statements under
the caption "Use of Proceeds" in the Final Prospectus.
6. Conditions to the Obligations of the Underwriters. The
--------------------------------------------------
obligations of the Underwriters to purchase the Firm Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If the Registration Statements have not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statements will become effective not later than (i)
6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date, if
filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
will be filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the Registration
Statements shall have been issued and no proceeding for that purpose shall
have been instituted or threatened.
(b) The Company shall have requested and caused Willkie Farr &
Gallagher, counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives on behalf of the Underwriters, to the effect of Exhibit A.
(c) The Company shall have caused Swidler Berlin Shereff Friedman
LLP, regulatory counsel for the Company, to have furnished to the
Representatives their
<PAGE>
11
opinion, dated the Closing Date and addressed to the Representatives on
behalf of the Underwriters, to the effect of Exhibit B.
(d) The Company shall have caused Osler, Hoskin & Harcourt, Canadian
regulatory counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date, and addressed to the
Representatives on behalf of the Underwriters, to the effect of Exhibit C.
(e) The Company shall have furnished to the Representatives the
opinion of Thomas C. Stortz, Senior Vice President, General Counsel and
Secretary of the Company, dated the Closing Date and addressed to the
Representatives on behalf of the Underwriters, to the effect of Exhibit D.
(f) The Representatives shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives on behalf of the
Underwriters, with respect to the issuance and sale of the Securities, the
Registration Statements, the Final Prospectus (together with any supplement
thereto) and other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(g) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the President and Chief Executive
Officer and the Executive Vice President and Chief Financial Officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statements, the Final
Prospectus, any supplements to the Final Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as if made
on the Closing Date, and the Company has complied with all
the agreements and satisfied all the conditions on its
part to be performed or satisfied hereunder at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statements has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since December 31, 1999, the date of the most recent
financial statements included or incorporated by reference
in the Final Prospectus (exclusive of any supplement
thereto), there has been no Material Adverse Effect,
whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated
in the Final Prospectus (exclusive of any supplement
thereto).
<PAGE>
12
(h) The Company shall have requested and caused PricewaterhouseCoopers
LLP to have furnished to the Representatives, at the Execution Time and at
the Closing Date, letters, dated respectively as of the Execution Time and
as of the Closing Date, in form and substance reasonably satisfactory to
the Representatives, confirming that they are independent accountants
within the meaning of the Securities Act and the Exchange Act and the
respective applicable rules and regulations adopted by the Commission
thereunder and Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by reference in
the Registration Statements and the Final Prospectus and reported on
by them comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act and
the related rules and regulations adopted by the Commission;
(ii) nothing came to their attention which caused them to
believe that the information included or incorporated by reference in
the Registration Statements and the Final Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data) and Item 503(d)
(Ratio of Earnings to Fixed Charges and Preferred Stock Dividends) is
not in conformity with the applicable disclosure requirements of
Regulation S-K; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) in the
Final Prospectus, agrees with the accounting records of the Company
and its subsidiaries, excluding any questions of legal interpretation.
All references in this Section 6(h) to the Registration Statements or
the Final Prospectus shall be deemed to include any amendment or supplement
thereto at the date of the letter.
(i) At the Execution Time and at the Closing Date, Arthur Andersen
LLP shall have furnished to the Representatives a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance reasonably satisfactory to the Representatives, confirming
that they are independent accountants within the meaning of the Securities
Act and the Exchange Act and the applicable rules and regulations
thereunder and Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by reference
in the Registration Statements and Final Prospectus reported on by
them comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act and
the related rules and regulations adopted by the Commission; and
<PAGE>
13
(ii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statements and the Final Prospectus, and the
information included or incorporated by reference in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999,
incorporated by reference in the Registration Statements and the Final
Prospectus, agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
All references in this Section 6(i) to the Registration Statements or
the Final Prospectus shall be deemed to include any amendment or supplement
thereto at the date of the letter.
(j) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statements (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any increase, change or decrease
specified in the letter or letters referred to in paragraph (i) of this
Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the properties, business, results of operations,
financial condition, affairs or business prospects of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto) the effect of
which, in any case referred to in clause (i) or (ii) above, is, in the sole
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Final Prospectus (exclusive of any
supplement thereto).
(k) Subsequent to the Execution Time, there shall not have been (i)
any decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) or (ii) any notice given
of any intended or potential decrease in any such rating or that such
organization has under surveillance or review (other than any such notice
with positive implications of a possible upgrading) its rating of the
Company's debt securities.
(l) The Common Stock issuable upon conversion of the Securities shall
have been listed and admitted and authorized for trading, subject to
official notice of issuance, on the Nasdaq National Market, and reasonably
satisfactory evidence of such actions shall have been provided to the
Representatives.
(m) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material
<PAGE>
14
respects reasonably satisfactory in form and substance to the Representatives
and counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cravath, Swaine & Moore, counsel for the
Underwriters, at 825 Eighth Avenue, New York, New York 10019, on the Closing
Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
---------------------------------------
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof, in each case, other than
by reason of a default by any of the Underwriters, the Company will reimburse
the Underwriters severally through Salomon Smith Barney Inc. on 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 Securities. Except as provided in the
preceding sentence or elsewhere in this Agreement, the Underwriters shall be
responsible for all costs and expenses incurred by them in connection with their
purchase of the Securities hereunder and the resale of any of the Securities,
including, without limitation, their own out-of-pocket lodging, meal and other
"roadshow" expenses and fees and disbursements of counsel for the Underwriters
and such other "roadshow" expenses as shall be agreed upon by the Company and
the Representatives.
8. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Securities Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Securities Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, 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 Statements as
originally filed or in any amendment thereof, or in the Basic Prospectus, any
Preliminary Prospectus or the Final Prospectus, or in any amendment thereof or
supplement thereto, 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 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, that 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 Representatives
specifically for inclusion therein; provided further, that with respect to any
untrue statement or omission of material fact made in the Basic Prospectus or
any Preliminary Prospectus, the indemnity agreement contained in this Section
8(a) shall not inure to the benefit of any Underwriter from whom the person
asserting any such loss, claim, damage or liability purchased the securities
concerned, to the extent that any such loss, claim, damage or liability of such
Underwriter occurs under the circumstance
<PAGE>
15
where it shall have been determined by a court of competent jurisdiction by
final and nonappealable judgment that such loss, claim, damage or liability
results from the fact that (i) the Company had previously furnished copies of
the Final Prospectus to the Representatives, (ii) delivery of the Final
Prospectus was required by the Securities Act to be made to such person, (iii)
the untrue statement or omission of a material fact contained in the Basic
Prospectus or the Preliminary Prospectus was corrected in the Final Prospectus,
(iv) there was not sent or given to such person, at or prior to the written
confirmation of the sale of such securities to such person, a copy of the Final
Prospectus and (v) such correction would have cured the defect giving rise to
such loss, claim, damage or liability. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statements, and each person who controls the Company
within the meaning of either the Securities Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
with reference to written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
8 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 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (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 such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, 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, (iii) 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 the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the
<PAGE>
16
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
(i) includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act, by or on behalf of any indemnified party. It is understood, however,
that the Company shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Underwriters and controlling persons, which
firm shall be designated in writing by Salomon Smith Barney Inc. An indemnifying
party shall not be liable under this Section 8 to any indemnified party
regarding any settlement or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent is consented to
by such indemnifying party, which consent shall not be unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Securities;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
it, and benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page of the Final Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
the Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. 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. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an
Underwriter within the meaning of
<PAGE>
17
either the Securities 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 Securities Act or the Exchange Act, each officer of the Company
who shall have signed the Registration Statements 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).
9. Default by an Underwriter. If any one or more Underwriters shall
--------------------------
fail to purchase and pay for any of the 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
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company, except as provided in Section 11 hereof. In the event of a default
by any Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statements and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
------------
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in any of the Company's securities shall have been
suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchange or the Nasdaq National Market, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Prospectus (exclusive of any supplement thereto).
11. 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 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, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
<PAGE>
18
12. Notices. All communications hereunder will be in writing and
--------
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to Salomon Smith Barney Inc. General Counsel (fax no.:
(212) 723-7887) and confirmed to the General Counsel, Salomon Smith Barney
Inc., at 388 Greenwich Street, New York, New York, 10013, Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
Level 3 Communications, Inc. (fax no.: (303) 926-3467) Attention: General
Counsel and confirmed to it at 1025 Eldorado Boulevard, Broomfield, Colorado
80021, Attention: General Counsel.
13. Successors. This Agreement will inure to the benefit of and be
-----------
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and construed
---------------
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
------------
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience
---------
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
------------
Agreement, shall have the meanings indicated.
"Basic Prospectus" shall mean the prospectus referred to in Section
1(a) above contained in the Registration Statements at the Effective Date,
including the Preliminary Prospectus (if any).
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
State ments, any post-effective amendment or amendments thereto and any
Rule 462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to
the Securities that was first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus.
<PAGE>
19
"Major Market Index" shall mean the Dow Jones Industrial Average or
Standard and Poor's 500 Stock Index.
"Preliminary Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus,
together with the Basic Prospectus.
"Registration Statements" shall mean the registration statements
referred to in Section 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Securities Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statements when they become effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a) hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
<PAGE>
20
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,
Level 3 Communications, Inc.
By: /s/ Thomas C. Stortz
---------------------------
Name: Thomas C. Stortz
Title: Senior Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date specified in Schedule I hereto
Salomon Smith Barney Inc.
Goldman, Sachs & Co.
J. P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
By: Salomon Smith Barney Inc.
By: /s/ D. Scott Miller
---------------------------------
Name: D. Scott Miller
Title: Managing Director
For themselves and the other
several Underwriters, if any, named
in Schedule I to the foregoing
Agreement.
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount of Firm
Underwriters Securities to be Purchased
- -------------- --------------------------
<S> <C>
Salomon Smith Barney Inc...................... 300,000,000
Goldman, Sachs & Co........................... 300,000,000
J. P. Morgan Securities Inc................... 60,000,000
Morgan Stanley & Co. Incorporated............. 60,000,000
Credit Suisse First Boston Corporation........ 30,000,000
------------
Total...................................... $750,000,000
============
</TABLE>
<PAGE>
SCHEDULE II
Subsidiaries
- ------------
PKS Information Services, Inc.
Level 3 Holdings, Inc.
KCP, Inc.
Level 3 International, Inc.
Level 3 Communications, LLC
<PAGE>
EXHIBIT A
Opinion of
----------
Willkie Farr & Gallagher
------------------------
Counsel for the Company
-----------------------
1. Each of the Company and Level 3 Communications, LLC has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or organized, with full power
and authority to own or lease, as the case may be, and to operate its properties
and conduct its business as described in the Final Prospectus.
2. All the outstanding shares of capital stock or other equity
interests of the Company and Level 3 Communications, LLC have been duly and
validly authorized and are duly issued and are fully paid and nonassessable, and
have not been issued and are not owned or held in violation of any statutory
preemptive right of stockholders; to the knowledge of such counsel after due
inquiry, such shares or other equity interests are not held in violation of any
other preemptive right of stockholders or other equity interest holders, and
except as otherwise set forth in the Final Prospectus, all outstanding equity
interests of Level 3 Communications, LLC are owned by the Company either
directly or through wholly owned subsidiaries, to the knowledge of such counsel,
after due inquiry, free and clear of any agreement providing for a security
interest in such equity interests to secure any obligation and any stockholders'
agreements, voting trusts, claims or other encumbrances (other than the pledge
of equity interests of Level 3 Communications, LLC pursuant to the agreements
the Company and certain of its subsidiaries have entered into in connection with
the senior secured credit facility described in the Final Prospectus).
3. (i) To the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
Subsidiaries or its or their property of a character required to be disclosed in
the Registration Statements which is not adequately disclosed or incorporated
by reference in the Final Prospectus, and (ii) to the best knowledge of such
counsel, there is no contract or other document of a character required to be
described in the Registration Statements or the Final Prospectus, or to be filed
as an exhibit thereto, which is not described or filed as required; and the
statements included in the Final Prospectus under the heading "Description of
Notes," "Description of Common Stock" and "Description of Outstanding Capital
Stock," insofar as such sections summarize the terms of the Securities, the
Common Stock and the Indenture, and under the heading "Certain United States Tax
Considerations," insofar as such section summarizes matters of law, fairly
summarize the matters therein described.
4. The Registration Statements have become effective under the
Securities Act; any required filing of the Basic Prospectus, any Preliminary
Prospectus and the Final Prospectus and any supplements thereto, pursuant to
Rule 424(b) has been made in the manner and within the time period required by
Rule 424(b); to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statements has been issued, no proceedings for
that purpose have been instituted or threatened and the Registration Statements
and the Final Prospectus (other than the financial statements and other
financial information contained therein or omitted therefrom, as to which such
counsel
<PAGE>
2
need express no opinion) comply as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and the
respective rules thereunder.
5. The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Final Prospectus, will not be an "investment company" as defined in the
Investment Company Act of 1940, as amended.
6. To the best knowledge of such counsel, no consent, approval,
authorization, license, certificate, permit or order of any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement and the Securities or for the consummation of the
transactions contemplated hereby, except such as may be required by the Federal
Communications Commission or similar state regulatory authorities or under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters (as to which such counsel
need not opine) and such other approvals (to be specified in such opinion) as
have been obtained.
7. Neither the execution and delivery of this Agreement, nor the
issue and sale of the Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms thereof will
conflict with, result in a breach of, or constitute a default under the
certificate of incorporation, by-laws or other organizational documents of the
Company or of any Subsidiary or the terms of any agreement or instrument listed
on Annex I hereto, or any judgment, order or regulation known to such counsel to
be applicable to the Company or any of its Subsidiaries of any court, regulatory
body, administrative agency, governmental agency, authority or body or
arbitrator having jurisdiction over the Company or any of its Subsidiaries,
except orders or regulations of the Federal Communications Commission or similar
state regulatory authorities or regulations of any state securities commission
(as to which such counsel need not opine).
8. To the knowledge of such counsel, no holders of securities of the
Company have rights to the registration of such securities in connection with or
as a result of the offering and sale of the Securities under this Agreement.
9. The Company's authorized equity capitalization as of December 31,
1999, is as set forth in the Final Prospectus; the capital stock of the Company
conforms in all material respects to the description thereof contained in the
Final Prospectus; the shares of Common Stock initially issuable upon conversion
of the Securities have been duly and validly authorized, and, when issued upon
conversion against payment of the conversion price and in accordance with the
terms of the Indenture, will be validly issued, fully paid and nonassessable;
the Board of Directors of the Company or a duly constituted committee thereof,
has duly and validly adopted resolutions reserving such shares of Common Stock
for issuance upon conversion; and the holders of outstanding shares of capital
stock of the Company are not entitled to preemptive or other rights to subscribe
for the Securities; and, except as set forth in the Final Prospectus and, except
for outstanding warrants and options to purchase shares of Common Stock that in
the aggregate represent less than 1% of the Common Stock outstanding on the date
of this Agreement, to the knowledge of such counsel, no options, warrants or
other rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding.
<PAGE>
3
10. The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters in accordance with the terms of the
Underwriting Agreement, will constitute valid and legally binding obligations of
the Company entitled to the benefits of the Indenture, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
11. The Indenture has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles; and the Indenture has been duly qualified
under the Trust Indenture Act.
12. The Company has full corporate right, power and authority to
execute and deliver this Agreement and to perform its obligations hereunder,
including the issuance of the Securities; and all corporate action required to
be taken by the Company for the due and proper authorization, execution and
delivery of this Agreement and for the consummation of the transactions
contemplated hereby has been duly and validly taken.
13. This Agreement has been duly authorized, validly executed and
delivered by the Company.
In addition, such counsel shall state that they have participated in
conferences with representatives of the Company, the Underwriters and their
counsel, at which conferences the contents of the Final Prospectus were
discussed, and, although, except as otherwise described above, such counsel has
not independently checked or verified and does not pass upon and assumes no
responsibility for the factual accuracy, completeness or fairness of the
statements contained in the Registration Statements or the Final Prospectus,
such counsel has no reason to believe that on the Effective Date or at the
Execution Time the Registration Statements contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Final Prospectus as of its date or on the Closing Date included or includes any
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (in each case, other than the
financial statements and other financial information contained therein or
omitted therefrom and other than the sections entitled "Risk Factors--We are
subject to significant regulation that could change in an adverse manner," "--
Canadian law currently does not permit us to offer services in Canada" and "--
Potential regulation of Internet service providers could adversely affect our
operations" and "Business--Regulation" included in the Final Prospectus and
comparable sections in the Company's Exchange Act reports incorporated in the
Final Prospectus by reference, as to which such counsel need not express a
belief).
Such opinion may be limited to the laws of the State of New York, the
Federal laws of the United States of America and the General Corporation Law and
the Limited Liability Company Act of the State of Delaware.
<PAGE>
4
All references in this Exhibit A to the Final Prospectus shall be
deemed to include any supplements thereto at the Closing Date. The opinion of
such counsel shall be rendered to the Underwriters at the request of the Company
and shall so state.
<PAGE>
ANNEX I
to Exhibit A
1. Construction and Maintenance Agreement relating to Japan-US Cable Network
dated July 31, 1998.
2. Fibre Optic Cable License Agreement, dated December 23, 1998, between
Norfolk Southern Railway Company, Central of Georgia Railroad Company, and
Georgia Southern and Florida Railway Company and Level 3 Communications,
LLC, as modified by the Letter Agreement, dated July 26, 1999, by Level 3
Communications, LLC and as further modified by the Letter Agreement, dated
September 8, 1999, by Level 3 Communications, LLC.
3. Agreement, dated November 19, 1998, between Worldwide Fibre Inc. and Level
3 Communications, LLC for construction and right of way.
4. Agreement, dated November 19, 1998, between Mi-Link LLC and Level 3
Communications, LLC for construction and right of way.
5. Assignment, dated December 19, 1998, by Level 3 Communications, LLC in
favor of Level 3 Communications Canada Co. of certain rights under the
Agreement, dated November 19, 1998 between Mi-Link LLC and Level 3
Communications, LLC.
6. Acquisition Agreement by and between CalEnergy Co., Inc. and Kiewit
Diversified Group, Inc., dated September 10, 1997.
7. Agreement and Plan of Merger among Level 3 Communications, Inc.,
CrimsonAcqCo, Inc., XCOM Technologies, Inc. and certain individuals,
partnerships and companies, dated April 3, 1998.
8. Telecommunications Services Agreement between Frontier Communications
International Inc. and Level 3 Communications, LLC, dated March 23, 1998,
as modified by Amendment Number One to Telecommunications Services
Agreement, dated June 3, 1998, as further modified by Amendment Number Two
to Telecommunications Services Agreement, dated March 11, 1999, and
Amendment Number Three to Telecommunications Services Agreement, dated
September 24, 1999.
9. Switched Services Supplement to Telecommunications Services Agreement
between Frontier Communications of the West, Inc. (an affiliate of Frontier
Communications International Inc.) and Level 3 Communications, LLC, dated
October 7, 1998.
10. Fiber Optic Survey Agreement between Level 3 Communications, LLC and Union
Pacific Rail Road Company, dated March 31, 1998.
11. Fiber Optic Agreement between Level 3 Communications, LLC and Union Pacific
Rail Road Company, dated 1998.
12. Agreement between Kiewit Coal Properties, Inc. and Kiewit Mining Group,
Inc., dated January 8, 1992.
<PAGE>
2
13. Separation Agreement by and among Peter Kiewit Sons', Inc., Kiewit
Diversified Group, Inc., PKS Holdings, Inc., and Kiewit Construction Group,
Inc., dated December 8, 1997.
14. Amendment to Separation Agreement by and among Peter Kiewit Sons', Inc.,
Level 3 Communications, Inc., PKS Holdings, Inc. and Kiewit Construction
Group, Inc., dated March 18, 1998.
15. Tax Sharing Agreement by and between Peter Kiewit Sons', Inc. and PKS
Holdings, Inc., dated March 26, 1998.
16. Promissory Note from Peter Kiewit Sons' Co. to Metropolitan Life Insurance
Company, dated June 27, 1997.
17. Deed of Trust, Security Agreement and Fixture Filing by Peter Kiewit Sons'
Co., to Metropolitan Life Insurance Company, dated June 27, 1997.
18. Cost Sharing and IRU Agreement among Level 3 Communications, LLC and
Internext LLC, dated July 18, 1998.
19. Master Right-of-Way Agreement among Level 3 Communications, LLC and The
Burlington Northern and Santa Fe Railway Company, dated June 23, 1998.
20. Intercity Network Infrastructure Contract between Level 3 Communications,
LLC and Kiewit Construction Company, dated June 15, 1998.
21. Modification Number One to Intercity Network Infrastructure Contract
between Level 3 Communications, LLC and Kiewit Construction Company, dated
June 25, 1999.
22. Global Master Procurement Agreement between BTE Equipment, LLC and Lucent
Technologies Inc., dated May 17, 1999.
23. Cross Channel Cables Agreement among France Manche S.A., The Channel Tunnel
Group Limited, Level 3 Communications Limited and Level 3 Communications
S.A., dated June 22, 1999.
24. Fiber Optic Cable System Contract between Level 3 Communications Limited,
Level 3 Communications S.A. and Alcatel Submarine Networks S.A., dated May
14, 1999.
25. Engineer, Procure and Construct Contract between Level 3 Communications,
GmbH and Alcatel Contracting, GmbH dated March 30, 1999.
26. Engineer, Procure and Construct Contract between Level 3 Communications,
Ltd. and Fujitsu Telecommunications Europe, Ltd., dated March 19, 1999.
27. Engineer, Procure and Construct Contract between Level 3 Communications, SA
and Alcatel Contracting, SA dated April 9, 1999.
<PAGE>
3
28. Joint Build Agreement among Colt Telecom Group plc and certain of its
subsidiaries and Level 3 International Inc. and certain of its
subsidiaries, dated May 4, 1999.
29. Supply Contract among Level 3 (Bermuda) Ltd., Level 3 Communications
Limited, Level 3 International, Inc. and Tyco Submarine Systems Ltd., dated
June 15, 1999, as modified by Contract Variation Number 1, dated as of
February 2000, Yellow Cable System Written Order for Contract Variation
Number 3, dated as of February 14, 2000.
30. Credit Agreement, dated as of September 30, 1999, among Level 3
Communications, Inc., certain subsidiaries of Level 3 Communications, Inc.,
the lenders parties thereto and The Chase Manhattan Bank, as Administrative
Agent and Collateral Agent, as amended by the First Amendment, dated as of
November 24, 1999.
31. Shared Collateral Security Agreement, dated as of December 8, 1999, among
Level 3 Communications, Inc., certain subsidiaries of Level 3
Communications, Inc. and The Chase Manhattan Bank, as Collateral Agent.
32. Shared Collateral Pledge Agreement, dated as of December 8, 1999, among
Level 3 Communications, Inc., certain subsidiaries of Level 3
Communications, Inc. and The Chase Manhattan Bank, as Collateral Agent.
33. Indenture, dated as of April 28, 1998 between Level 3 Communications, Inc.
and IBJ Schroder Bank & Trust Company, as trustee.
34. Indenture, dated as of December 2, 1998 between Level 3 Communications,
Inc. and IBJ Schroder Bank & Trust Company, as trustee.
35. Indenture, dated as of September 20, 1999, between Level 3 Communications,
Inc. and IBJ Whitehall Bank & Trust Company, as trustee.
36. First Supplemental Indenture, dated as of September 20, 1999 between Level
3 Communications, Inc. and IBJ Whitehall Bank & Trust Company, as trustee.
<PAGE>
EXHIBIT B
Opinion of
----------
Swidler Berlin Shereff Friedman LLP
-----------------------------------
Regulatory Counsel for the Company
----------------------------------
1. The licenses, certificates, permits and authorizations set forth
in Attachment A to this opinion constitute all of the licenses, certificates,
permits and authorizations required by the Federal Communications Commission
("FCC") and the State Regulatory Agencies (as defined below) for the provision
of telecommunications services by the Company and the Subsidiaries as such
counsel understands those services currently to be provided based on the
declaration of an executive officer of the Company attached to such opinion,
where the failure to obtain or hold such license, certificate, permit or
authorization would materially adversely affect the ability of the Company or
the Subsidiaries to provide such services, and none of the Company or any
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such license, certificate, permit or authorization which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse affect on the Company or such Subsidiary,
in connection with the provision of such services.
2. To the best knowledge of such counsel, after reasonable inquiry,
neither the Company nor any of the Subsidiaries is subject to any pending or
threatened proceeding, complaint or investigation before the FCC or any State
Regulatory Agency based on any alleged violation by the Company or its
Subsidiaries in connection with the provision of or failure to provide
telecommunications services, of a character that would be required to be
disclosed or incorporated by reference in the Registration Statements and the
Final Prospectus, which is not adequately disclosed in the Registration
Statements and the Final Prospectus.
3. The statements included in the Final Prospectus under the headings
"Risk Factors--We are subject to significant regulation that could change in an
adverse manner", "--Canadian law currently does not permit us to offer services
in Canada" and "--Potential regulation of Internet service providers could
adversely affect our operations" and "Business--Regulation", fairly summarize
the matters therein described.
4. No consent, approval, authorization, license, certificate, permit
or order of the FCC or any State Regulatory Agency is required for the
consummation of the transactions contemplated by this Agreement.
5. Neither the execution and delivery of this Agreement nor the issue
and sale of the Securities contemplated hereby will conflict with or result in a
breach or violation of the Communications Act of 1934, as amended, any order or
regulation of the FCC or any State Regulatory Agency applicable to the Company
or any of the Subsidiaries or cause the suspension, revocation, impairment,
forfeiture, nonrenewal or termination of any FCC license or other authorization
of the FCC.
Such counsel has not itself checked the accuracy or completeness of,
or otherwise verified, the information furnished with respect to other matters
in the Registration Statements and the Final Prospectus. Such counsel has
generally reviewed and discussed with representatives of and counsel for the
Underwriters and with certain officers and
<PAGE>
2
employees of, and counsel for, the Company the information furnished, whether or
not subject to its check and verification. Although such counsel has not
independently checked or verified and is neither passing upon nor assuming any
responsibility for the factual accuracy, completeness or fairness of the
statements contained in the Registration Statements and the Final Prospectus or
any amendment thereof or supplement thereto, nothing has come to its attention
which would cause it to believe that the statements included in the Final
Prospectus under the headings "Risk Factors--We are subject to significant
regulation that could change in an adverse manner", "--Canadian law currently
does not permit us to offer services in Canada" and "--Potential regulation of
Internet service providers could adversely affect our operations" and
"Business--Regulation", including the statements in respect to Canadian law or
regulation, on the date thereof or on the Closing Date contain an untrue
statement of 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.
Such counsel's opinions may be based solely on the Communications Act
of 1934, as amended, decisions of the FCC and FCC rules and regulations,
comparable state statutes governing telecommunications, and the rules and
regulations of comparable state regulatory agencies with direct regulatory
jurisdiction over telecommunications matters in the states in which the Company
and the Subsidiaries provide intrastate services ("State Regulatory Agencies").
Such counsel's opinion may be limited solely to matters arising under these
authorities regarding federal common carrier telecommunications regulatory
requirements and comparable state regulatory requirements in states in which the
Company and the Subsidiaries provide intrastate services.
Such counsel is a member of the Bar of the District of Columbia. In
rendering this opinion, such counsel has relied as to certain matters of fact on
certificates of responsible officers of the Company and public officials.
All references in this Exhibit B to the Registration Statements or the
Final Prospectus shall be deemed to include any amendment or supplement thereto
at the Closing Date. The opinion of such counsel shall be rendered to the
Underwriters at the request of the Company and shall so state.
<PAGE>
EXHIBIT C
Opinion of
----------
Osler, Hoskin & Harcourt
------------------------
Canadian Regulatory Counsel for the Company
-------------------------------------------
1. The statements in the Final Prospectus under the captions "Risk Factors --
Canadian law currently does not permit us to offer services in Canada" and
"Canadian Regulation", in each case insofar as such statements describe or
summarize matters of law or constitute legal conclusions, fairly describe
or summarize all matters referred to therein.
<PAGE>
EXHIBIT D
Opinion of
----------
Thomas C. Stortz, Senior Vice President,
----------------------------------------
General Counsel and Secretary of the Company
--------------------------------------------
1. Each of the Subsidiaries, other than Level 3 Communications, LLC,
as to which such counsel need not opine, has been duly incorporated or formed
and is validly existing and in good standing in the jurisdiction of its
incorporation or formation, and has the requisite corporate power and authority
to carry on its business and own its properties as currently being conducted and
as described in the Final Prospectus.
2. All the outstanding shares of capital stock or other equity
interests of each Subsidiary, other than Level 3 Communications, LLC, as to
which such counsel need not opine, have been duly and validly authorized and are
duly issued and are fully paid and nonassessable, and have not been issued and
are not owned or held in violation of any statutory preemptive right of
stockholders; to the knowledge of such counsel after due inquiry, such shares or
other equity interests are not held in violation of any other preemptive right
of stockholders, and except as otherwise set forth in the Final Prospectus, all
outstanding shares of capital stock or other equity interests of the
Subsidiaries are owned by the Company either directly or through wholly owned
Subsidiaries, to the knowledge of such counsel, after due inquiry, free and
clear of any agreement providing for a security interest in such shares or
equity interests to secure any obligation and any stockholders' agreements,
voting trusts, claims or other encumbrances (other than the pledge of such
shares or equity interests pursuant to the agreements the Company and certain
of its subsidiaries have entered into in connection with the senior secured
credit facility described in the Final Prospectus).
3. Neither the execution and delivery of this Agreement nor the issue
and sale of the Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms thereof will
conflict with, result in a breach of, or constitute a default under the terms of
any indenture or other agreement or instrument actually known to such counsel,
after due inquiry (which does not include (i) a review of all the agreements or
instruments in the Company's files or of agreements or instruments such counsel
has not been involved with or (ii) a canvasing of the Company's employees), and
to which the Company or any Subsidiary is a party or bound or its property is
subject.
4. The information included in the Final Prospectus under the
headings "Risk Factors--Environmental liabilities from our historical operations
could be material" and "Business--Legal Proceedings", insofar as such headings
summarize matters of law, fairly summarize the matters therein described.
Such opinion may be limited to the laws of the State of Nebraska, the
Federal laws of the United States of America and the General Corporation Law and
the Limited Liability Company Act of the State of Delaware.
All references in this Exhibit D to the Final Prospectus shall be
deemed to include any supplement thereto at the Closing Date. The opinion of
such counsel shall be rendered to the Underwriters at the request of the Company
and shall so state.
<PAGE>
EXHIBIT 4.1
================================================================================
LEVEL 3 COMMUNICATIONS, INC.
AND
THE BANK OF NEW YORK
as Trustee
-----------------------------
SECOND SUPPLEMENTAL INDENTURE
DATED AS OF FEBRUARY 29, 2000
-----------------------------
Supplement to Indenture dated as of September 20, 1999
(Subordinated Debt Securities)
6% Convertible Subordinated Notes due 2010
================================================================================
<PAGE>
1
SECOND SUPPLEMENTAL INDENTURE
SECOND SUPPLEMENTAL INDENTURE, dated as of February 29, 2000 by and
between LEVEL 3 COMMUNICATIONS, INC., a Delaware corporation (hereinafter called
the "Company"), and THE BANK OF NEW YORK as successor to IBJ WHITEHALL BANK &
TRUST COMPANY, a corporation duly organized and existing under the laws of the
State of New York (hereinafter called the "Trustee"), having a Corporate Trust
Office at 101 Barclay Street, Floor 21 West New York, New York 10286, as Trustee
under the Indenture (as hereinafter defined).
RECITALS
WHEREAS, the Company and the Trustee have as of September 20, 1999
entered into an Indenture (hereinafter called the "Indenture"), providing for
the issuance by the Company from time to time of its subordinated debt
securities;
WHEREAS, no Securities have been issued under the Indenture and there
do not currently exist any Holders;
WHEREAS, Section 901 of the Indenture provides, among other things,
that the Company, when authorized by or pursuant to a Board Resolution, and the
Trustee may without the consent of any Holders of Securities enter into one or
more indentures supplemental to the Indenture to establish the form or terms of
Securities of any series, including the provisions and procedures providing for
the adjustment of conversion rights with respect to Securities convertible into
Common Stock or to change or eliminate any of the provisions of the Indenture,
provided that any such change or elimination shall become effective only when
- --------
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
WHEREAS, the Company desires to issue one series of convertible
subordinated debt securities under the Indenture, and has duly authorized the
creation and issuance of such debt securities and the execution and delivery of
this Second Supplemental Indenture to modify the Indenture and provide certain
additional provisions as hereinafter described;
WHEREAS, the Company and the Trustee deem it advisable to enter into
this Second Supplemental Indenture for the purposes of establishing the terms of
such convertible subordinated debt securities and providing for the rights,
obligations and duties of the Trustee with respect to such debt securities;
WHEREAS, concurrent with the execution hereof, the Company has
delivered an Officers' Certificate and has caused its counsel to deliver to the
Trustee an Opinion of Counsel or a reliance letter upon an opinion of counsel;
and
WHEREAS, all conditions and requirements of the Indenture necessary to
make this Second Supplemental Indenture a valid, binding and legal instrument in
accordance with its terms have been performed and fulfilled by the parties
hereto and the
<PAGE>
2
execution and delivery thereof have been in all respects duly authorized by the
parties hereto.
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the mutual premises and agreements herein
contained, the Company and the Trustee covenant and agree, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
CREATION OF THE SECURITIES
SECTION 1.1. DESIGNATION OF SERIES. Pursuant to the terms hereof and
-----------------------
Sections 201 and 301 of the Indenture, the Company hereby creates a series of
its convertible subordinated debt securities designated as the "6% Convertible
Subordinated Notes due 2010" (the "Notes"), which Notes shall be deemed
"Securities" for all purposes under the Indenture.
SECTION 1.2. FORM OF SECURITIES. (a) The Securities will be issued
-------------------
in permanent global form without coupons and the definitive form of the
Securities shall be substantially in the form set forth in Exhibit A attached
hereto, which is incorporated herein and made part hereof. The Securities shall
bear interest, be payable and have such other terms as are stated in the form of
definitive Security or in the Indenture, as supplemented by this Second
Supplemental Indenture. The Stated Maturity of the Securities shall be March 15,
2010.
(b) The fifth paragraph of Section 305 of the Indenture is hereby
amended with respect to the Securities by replacing clause (y) in the fourth
sentence thereof with the following:
"(y) an Event of Default or an event which after notice or lapse of
time or both would be an Event of Default has occurred and is continuing
and the beneficial owners representing a majority in principal amount of
the Securities represented by such global Securities advise DTC to cease
acting as depositary for such global Securities or".
SECTION 1.3. LIMIT ON AMOUNT OF SERIES. The Securities shall not
--------------------------
exceed $862,500,000 in aggregate principal amount, and may, upon the execution
and delivery of this Second Supplemental Indenture or from time to time
thereafter, be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Securities to or upon the written order of the Company, signed by its Chairman
of the Board, President or one of its Vice Presidents and by its Treasurer, one
of its Assistant Treasurers, its Secretary or one of its Assistant Secretaries,
without further action by the Company.
<PAGE>
3
SECTION 1.4. CERTIFICATE OF AUTHENTICATION. The Trustee's
------------------------------
certificate of authentication to be borne on the Securities shall be
substantially as provided in the Form of Security attached hereto as Exhibit A.
SECTION 1.5. NO SINKING FUND. No sinking fund will be provided with
----------------
respect to the Securities.
SECTION 1.6. NO ADDITIONAL AMOUNTS. No Additional Amounts will be
----------------------
payable with respect to the Securities.
SECTION 1.7. DEFINITIONS.
------------
(a) Capitalized terms used herein and not otherwise defined shall
have the respective meanings assigned thereto in the Indenture.
(b) Solely for purposes of this Second Supplemental Indenture and the
Securities, the following definitions are hereby amended in their entirety to
read as follows:
"Person" means any individual, corporation, company, partnership,
------
joint venture, limited liability company, association, joint stock company,
trust, unincorporated organization, government or agency or political
subdivision thereof or any other entity.
"Senior Indebtedness" means the principal of, and premium, if any, and
-------------------
interest, including all interest accruing subsequent to the commencement of
any bankruptcy or similar proceeding, whether or not a claim for post-
petition interest is allowable as a claim in any such proceeding, on, and
all fees and other amounts payable in connection with, the following,
whether absolute or contingent, secured or unsecured, due or to become due,
outstanding on the date of the Indenture or thereafter created, incurred or
assumed:
(1) indebtedness of the Company evidenced by a credit or loan
agreement, note, bond, debenture or other written obligation,
(2) all obligations of the Company for money borrowed,
(3) all obligations of the Company evidenced by a note or similar
instrument given in connection with the acquisition of any businesses,
properties or assets of any kind,
(4) obligations of the Company (A) as lessee under leases
required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles and (B) as lessee under other
leases for facilities, capital equipment or related assets, whether or
not capitalized, entered into or leased for financing purposes,
(5) all obligations of the Company under interest rate and
currency swaps, caps, floors, collars, hedge agreements, forward
contracts or similar agreements or arrangements,
<PAGE>
4
(6) all obligations of the Company with respect to letters of
credit, bankers' acceptances and similar facilities, including
reimbursement obligations with respect to the foregoing,
(7) all obligations of the Company issued or assumed as the
deferred purchase price of property or services, but excluding trade
accounts payable and accrued liabilities arising in the ordinary
course of business,
(8) all obligations of the type referred to in clauses (1)
through (7) of another Person and all dividends of another person, the
payment of which, in either case, the Company has assumed or
guaranteed, or for which the Company is responsible or liable,
directly or indirectly, jointly or severally, as obligor, guarantor or
otherwise, or which is secured by a lien on the property of the
Company, and
(9) renewals, extensions, modifications, replacements,
restatements and refundings of, or any indebtedness or obligation
issued in exchange for, any such indebtedness or obligation described
in clauses (1) through (8) hereof;
provided, however, that Senior Indebtedness shall not include the
Securities or any such indebtedness or obligation if the terms of such
indebtedness or obligation, or the terms of the instrument under which, or
pursuant to which it is issued expressly provide that such indebtedness or
obligation is not superior in right of payment to the Securities.
"Subsidiary" of any Person means (i) a corporation more than 50% of
----------
the combined voting power of the outstanding Voting Stock of which is
owned, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person or by such Person and one or more Subsidiaries
thereof or (ii) any other Person (other than a corporation) in which such
Person, or one or more other Subsidiaries of such Person or such Person and
one or more other Subsidiaries thereof, directly or indirectly, has at
least a majority ownership and power to direct the policies, management and
affairs thereof.
(c) Solely for purposes of this Second Supplemental Indenture and the
Securities, the following terms shall have the indicated meanings:
"Capital Stock" of any Person means any and all shares, interest,
-------------
participations or other equivalents (however designated) of corporate stock
or equity participations, including partnership interests, whether general
or limited, of such Person and any rights (other than debt securities
convertible or exchangeable into any equity interest), warrants or options
to acquire an equity interest in such person.
"Change of Control" at such time after the original issuance of the
-----------------
Securities means the occurrence of the following events:
(1) if any "person" or group " (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act or any successor
provisions
<PAGE>
5
to either of the foregoing), including any group acting for the purpose of
acquiring, holding, voting or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act, other than any one or more of the
Permitted Holders, becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act, except that a person will be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of 35% or more of the total
voting power of the Voting Stock of the Company; provided, however, that
the Permitted Holders are the "beneficial owners" (as defined in Rule 13d-3
under the Exchange Act, except that a person will be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, in the aggregate of a lesser
percentage of the total voting power of the Voting Stock of the Company
than such other person or group (for purposes of this clause (1), such
person or group shall be deemed to beneficially own any voting stock of a
corporation (the "specified corporation") held by any other corporation
(the "parent corporation") so long as such person or group beneficially
owns, directly or indirectly, in the aggregate a majority of the total
voting power of the Voting Stock of such parent corporation); or
(2) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the assets
of the Company and its subsidiaries, considered as a whole (other than a
disposition of such assets as an entirety or virtually as an entirety to a
wholly owned subsidiary or one or more Permitted Holders) shall have
occurred; or
(3) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election or appointment by
such Board or whose nomination for election by the stockholders of the
Company was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors of the
Company then in office; or
(4) the stockholders of the Company shall have approved any plan
of liquidation or dissolution of the Company;
provided, however, that a Change of Control shall not be deemed to have occurred
- -------- -------
if the Current Market Price of the Common Stock of the Company for any five
Trading Days within the period of 10 consecutive Trading Days beginning
immediately after the later of the Change of Control or the public announcement
of the Change of Control shall equal or exceed 105% of the Conversion Price in
effect on each such Trading Day; provided further that if the Change of Control
-------- -------
results in the reclassification, conversion, exchange of outstanding shares of
<PAGE>
6
Common Stock of the Company, such 10 consecutive Trading Day period shall
be measured as ending immediately before the Change of Control.
"Conversion Price" shall equal $1,000 divided by the Conversion Rate
----------------
(rounded to the nearest cent, with one-half cent being rounded upward).
"Current Market Price" of Common Stock of the Company for any day
--------------------
means the last reported per share sale price, regular way on such day, or,
if no sale takes place on such day, the average of the reported closing per
share bid and asked prices on such day, regular way, in either case as
reported on the Nasdaq National Market or, if such Common Stock is not
quoted or admitted to trading on such quotation system, on the principal
national securities exchange or quotation system on which such Common Stock
may be listed or admitted to trading or quoted, or, if not listed or
admitted to trading or quoted on any national securities exchange or
quotation system, the average of the closing per share bid and asked prices
of such Common Stock on the over-the-counter market on the day in question
as reported by the National Quotation Bureau Incorporated, or similar
generally accepted reporting service, or, if not so available in such
manner, as furnished by any Nasdaq member firm selected from time to time
by the Board of Directors of the Company for that purpose, or, if not so
available in such manner, as otherwise determined in good faith by the
Board of Directors of the Company.
"Dollar Denominated Senior Notes Indenture" means the Indenture dated
-----------------------------------------
as of February 29, 2000, as amended, supplemented or modified from time to
time, between the Company and The Bank of New York, as trustee, relating to
the Company's 11% Senior Notes due 2008, 11-1/4% Senior Notes due 2010 and
12-7/8% Senior Discount Notes due 2010.
"Euro Denominated Senior Notes Indenture" means the Indenture dated as
---------------------------------------
of February 29, 2000, as amended, supplemented or modified from time to
time, between the Company and The Bank of New York, as trustee, relating to
the Company's 10-3/4% Senior Notes due 2008 and 11-1/4% Senior Notes due
2010.
"Exchange Act" means the Securities Exchange Act of 1934.
------------
"Expiration Date" has the meaning specified in "Offer to Purchase"
---------------
below.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the
-----------------------
United States Code, as amended from time to time.
"First Supplemental Indenture" means the Supplemental Indenture dated
----------------------------
as of September 20, 1999, together with the related Indenture dated as of
September 20, 1999, as amended, supplemented or modified from time to time,
between the Company and The Bank of New York as successor to IBJ Whitehall
Bank & Trust Company, as trustee, relating to the Company's 6% Convertible
Subordinated Notes due 2009.
"Indebtedness" means, with respect to a Person:
------------
(1) indebtedness of such Person evidenced by a credit or loan
agreement, note, bond, debenture or other written obligation,
<PAGE>
7
(2) all obligations of such Person for money borrowed,
(3) all obligations of such Person evidenced by a Security or
similar instrument given in connection with the acquisition of any
businesses, properties or assets of any kind,
(4) obligations of such Person (A) as lessee under leases
required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles and (B) as lessee under other
leases for facilities, capital equipment or related assets, whether or
not capitalized, entered into or leased for financing purposes,
(5) all obligations of such Person under interest rate and
currency swaps, caps, floors, collars, hedge agreements, forward
contracts or similar agreements or arrangements,
(6) all obligations of such Person with respect to letters of
credit, bankers' acceptances and similar facilities, including
reimbursement obligations with respect to the foregoing,
(7) all obligations of such Person issued or assumed as the
deferred purchase price of property or services, but excluding trade
accounts payable and accrued liabilities arising in the ordinary
course of business,
(8) all obligations of the type referred to in clauses (1)
through (7) of another Person and all dividends of another person, the
payment of which, in either case, such Person has assumed or
guaranteed, or for which such Person is responsible or liable,
directly or indirectly, jointly or severally, as obligor, guarantor or
otherwise, or which is secured by a lien on the property of such
Person, and
(9) renewals, extensions, modifications, replacements,
restatements and refundings of, or any indebtedness or obligation
issued in exchange for, any such indebtedness or obligation described
in clauses (1) through (8) hereof.
"9-1/8% Senior Notes Indenture" means the Indenture dated as of April
-----------------------------
28, 1998, as amended, supplemented or modified from time to time, between
the Company and The Bank of New York (as successor to IBJ Schroder Bank &
Trust Company), as trustee, relating to the Company's 9-1/8% Senior Notes
Due 2008.
"Offer" has the meaning specified in "Offer to Purchase" below.
-----
"Offer to Purchase" means a written offer (the "Offer") sent by the
-----------------
Company by first-class mail, postage prepaid, to each Holder of Securities
at its address appearing in the Security Register on the date of the Offer
offering to purchase up to the principal amount of Securities specified in
such Offer at the purchase price specified in such Offer (as determined
pursuant to this Indenture). Unless otherwise required by applicable law,
the Offer shall specify an expiration date (the "Expiration Date") of the
Offer to Purchase which shall be, subject to any contrary requirements of
applicable law, not less than 30 days or more than
<PAGE>
8
60 days after the date of such Offer and a settlement date (the "Purchase
Date") for purchase of Securities within five Business Days after the
Expiration Date. The Company shall notify the Trustee at least 15 Business
Days (or such shorter period as is acceptable to the Trustee) prior to the
mailing of the Offer of the Company's obligation to make an Offer to
Purchase, and the Offer shall be mailed by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company. The
Offer shall contain information concerning the business of the Company and
its Subsidiaries which the Company in good faith believes will enable such
Holders to make an informed decision with respect to the Offer to Purchase
(which at a minimum will include (i) the most recent annual and quarterly
financial statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in the documents required to
be filed under the Exchange Act (which requirements may be satisfied by
delivery of such documents together with the Offer), (ii) a description of
material developments in the Company's business subsequent to the date of
the latest of such financial statements referred to in clause (i)
(including a description of the events requiring the Company to make the
Offer to Purchase), (iii) if applicable, appropriate pro forma financial
information concerning the Offer to Purchase and the events requiring the
Company to make the Offer to Purchase and (iv) any other information
required by applicable law to be included therein). The Offer shall contain
all instructions and materials necessary to enable such Holders to tender
Securities pursuant to the Offer to Purchase. The Offer shall also state:
(1) the Section of the Indenture pursuant to which the Offer to
Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the Outstanding Securities
offered to be purchased by the Company pursuant to the Offer to Purchase
(the "Purchase Amount");
(4) the purchase price to be paid by the Company for $1,000
aggregate principal amount of Securities accepted for payment (as specified
pursuant to the Indenture) (the "Purchase Price") and whether the Purchase
Price shall be paid by the Company in cash or by delivery of shares of
Common Stock of the Company;
(5) that the Holder may tender all or any portion of the
Securities registered in the name of such Holder and that any portion of a
Security tendered must be tendered in a principal amount equal to $5,000 or
any integral multiple of $1,000 in excess thereof;
(6) the place or places where Securities are to be surrendered
for tender pursuant to the Offer to Purchase;
(7) that any Securities not tendered or tendered but not
purchased by the Company will continue to accrue interest;
(8) that on the Purchase Date the Purchase Price will become due
and payable upon each Security being accepted for payment pursuant to
<PAGE>
9
the Offer to Purchase and that interest thereon, if any, shall cease to
accrue on and after the Purchase Date;
(9) that each Holder electing to tender a Security pursuant to
the Offer to Purchase will be required to surrender such Security at the
place or places specified in the Offer prior to the close of business on
the Expiration Date (such Security being, if the Company or the Trustee so
requires, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his or her attorney duly authorized in writing);
(10) in the event that the Purchase Price shall be paid in shares
of Common Stock of the Company, that each Holder electing to tender a
Security pursuant to the Offer to Purchase will be required to provide
written notification of the name or names (with addresses) in which the
certificate or certificates for shares of such Common Stock shall be
issued;
(11) that Holders will be entitled to withdraw all or any portion
of Securities tendered if the Company (or the Paying Agent) receives, not
later than the close of business on the Expiration Date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security the Holder tendered, the certificate number of the
Security the Holder tendered and a statement that such Holder is
withdrawing all or a portion of his tender;
(12) that if Securities in an aggregate principal amount less
than or equal to the Purchase Amount are duly tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase all such
Securities;
(13) the Conversion Rate then in effect, the date on which the
right to convert the principal amount of the Securities to be repurchased
will terminate and the place or places where such Securities may be
surrendered for conversion; and
(14) that in the case of any Holder whose Security is purchased
only in part, the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder, in an aggregate principal amount equal to and in exchange for the
unpurchased portion of the Security so tendered.
Any Offer to Purchase shall be governed by and effected in accordance
with the Offer for such Offer to Purchase.
"Permitted Holders" means the members of the Company's Board of
-----------------
Directors on April 28, 1998 and their respective estates, spouses,
ancestors, and lineal descendants, the legal representatives of any of the
foregoing and the trustees of any bona fide trusts of which the foregoing
are the sole beneficiaries or the grantors, or any person of which the
foregoing "beneficially owns" (as defined
<PAGE>
10
in Rule 13d-3 under the Exchange Act) at least 66 2/3% of the total voting
power of the Voting Stock of such person.
"Property" means, with respect to any Person, any interest of such
--------
Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including Capital Stock in, and other securities
of, any other Person.
"Purchase Amount" has the meaning specified in "Offer to Purchase"
---------------
above.
"Purchase Date" has the meaning specified in "Offer to Purchase"
-------------
above.
"Purchase Price" has the meaning specified in "Offer to Purchase"
--------------
above.
"Restricted Subsidiary" means any Restricted Subsidiary under each of
---------------------
the 9-1/8% Senior Notes Indenture and the 10-1/2% Senior Discount Notes
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Significant Subsidiary" means any Subsidiary that would be a
----------------------
"Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the Commission.
"10-1/2% Senior Discount Notes Indenture" means the Indenture dated as
---------------------------------------
of December 2, 1998, as amended, supplemented or modified from time to
time, between the Company and IBJ Schroder Bank & Trust Company, as
trustee, relating to the Company's 10-1/2% Senior Discount Notes Due 2008.
"Trading Day" with respect to the Common Stock of the Company means
-----------
(x) if such Common Stock is listed or admitted for trading on the New York
Stock Exchange or another national securities exchange, a day on which the
New York Stock Exchange or such other national securities exchange is open
for business or (y) if such Common Stock is quoted on the National Market
System of the Nasdaq, a day on which trades may be made on such National
Market System or (z) otherwise, any day other than a Saturday or Sunday or
a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
"Voting Stock" of any Person means Capital Stock of such Person who
------------
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only
for so long as no senior class of securities has such voting power by
reason of any contingency.
<PAGE>
11
ARTICLE TWO
CONVERSION OF SECURITIES
SECTION 2.1. APPLICABILITY OF CONVERSION PROVISIONS. Pursuant to
---------------------------------------
Section 301(24) of the Indenture, the Securities will be convertible in
accordance with the provisions of, and pursuant to, Article Sixteen of the
Indenture, as amended hereby, and the definitive form of the Securities.
SECTION 2.2. CONVERSION RATE. The rate at which shares of Common
----------------
Stock of the Company shall be delivered upon conversion (the "Conversion Rate")
shall be initially 7.416 shares of Common Stock of the Company for each $1,000
principal amount of Securities. The Conversion Rate shall be adjusted in certain
instances as provided in Section 1605 of the Indenture, as amended hereby.
SECTION 2.3. AMENDMENTS TO ARTICLE SIXTEEN.
------------------------------
(a) Section 1605 is amended in its entirety with respect to the
Securities to read as follows:
SECTION 1605. Adjustment Of Conversion Rate.
(1) In case at any time after the date of the issuance of the
Securities, the Company shall pay or make a dividend or other distribution on
any class of Capital Stock of the Company payable in shares of Common Stock of
the Company, the Conversion Rate in effect at the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be increased by dividing such
Conversion Rate by a fraction of which the numerator shall be the number of
shares of Common Stock of the Company outstanding at the close of business on
the date fixed for such determination and the denominator shall be the sum of
such number of shares and the total number of shares constituting such dividend
or other distribution, such increase to become effective immediately after the
opening of business on the day following the date fixed for such determination.
For the purposes of this paragraph (1), the number of shares of Common Stock of
the Company at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock of the
Company. The Company will not pay any dividend or make any distribution on
shares of Common Stock of the Company held in the treasury of the Company.
(2) In case at any time after the date of the issuance of the
Securities, the Company shall issue rights, options or warrants to all holders
of its Common Stock (other than any rights, options or warrants that by their
terms will also be issued to any Holder upon conversion of a Security into
Common Stock of the Company without any action required by the Company or any
other person) entitling them to subscribe for or purchase shares of Common Stock
of the Company (or securities convertible into Common Stock of the Company) at a
price per share (or having a conversion price per share) less than the Average
Current Market Price per share (determined as provided in paragraph (8) of this
Section) on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than pursuant to a dividend
reinvestment plan), the Conversion Rate in effect at the opening of business on
the day following the date fixed
<PAGE>
12
for such determination shall be increased by dividing such Conversion Rate by a
fraction of which the numerator shall be the number of shares of Common Stock of
the Company outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock of the Company which the
aggregate of the offering price of the total number of shares of Common Stock of
the Company so offered (or the aggregate conversion price of the convertible
securities so offered) for subscription or purchase would purchase at such
Average Current Market Price and the denominator shall be the number of shares
of Common Stock of the Company outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common Stock of the
Company so offered for subscription or purchase (or into which the convertible
securities so offered are convertible), such increase to become effective
immediately after the opening of business on the day following the date fixed
for such determination. For the purposes of this paragraph (2), the number of
shares of Common Stock of the Company at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock of the Company. The Company will not issue any rights, options or warrants
in respect of shares of Common Stock of the Company held in the treasury of the
Company.
(3) In case at any time after the date of the issuance of the
Securities, outstanding shares of Common Stock of the Company shall be
subdivided into a greater number of shares of Common Stock of the Company, the
Conversion Rate in effect at the opening of business on the day following the
day upon which such subdivision becomes effective shall be proportionately
increased, and, conversely, in case outstanding shares of Common Stock of the
Company shall be combined into a smaller number of shares of Common Stock of the
Company, the Conversion Rate in effect at the opening of business on the day
following the day upon which such combination becomes effective shall be
proportionately reduced, such reduction or increase, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(4) In case at any time after the date of the issuance of the
Securities, the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock, shares of any class of its Capital Stock, evidences
of its indebtedness or other assets (including securities, but excluding any
rights, options or warrants referred to in paragraph (2) of this Section, any
dividend or distribution paid exclusively in cash and any dividend or
distribution referred to in paragraph (1) of this Section), the Conversion Rate
shall be adjusted so that the same shall equal the price determined by dividing
the Conversion Rate in effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the Average Current
Market Price per share (determined as provided in paragraph (8) of this Section)
on the date fixed for such determination less the then fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution filed with the Trustee) of the portion of
the assets, shares of capital stock or evidences of indebtedness so distributed
applicable to one share of Common Stock of the Company and the denominator shall
be such Average Current Market Price per share, such adjustment to become
effective immediately prior to the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
distribution.
<PAGE>
13
(5) In case at any time after the date of the issuance of the
Securities, the Company shall, by dividend or otherwise, make a distribution to
all holders of its Common Stock consisting exclusively of cash (excluding any
cash that is distributed upon a merger or consolidation to which Section 1607
applies or as part of a distribution referred to in paragraph (4) of this
Section) in an aggregate amount that, combined together with:
(A) the aggregate amount of any other distributions to all holders of its
Common Stock made exclusively in cash within the 12 months preceding
the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (5) has been made, and
(B) the aggregate of any cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) of consideration payable in respect
of any tender offer by the Company or any of its Subsidiaries for all
or any portion of the Common Stock of the Company concluded within the
12 months preceding the date of payment of such distribution and in
respect of which no adjustment pursuant to paragraph (6) of this
Section has been made,
(the amount of such cash distribution together with the amounts
described in clauses (A) and (B) above being referred to herein as the
"Aggregate Cash Distribution Amount") exceeds 10% of the product of (I) the
Average Current Market Price per share on the date for the determination of
holders of shares of Common Stock of the Company entitled to receive such cash
distribution, times (II) the number of shares of Common Stock of the Company
outstanding on such date (the amount by which the Aggregate Cash Distribution
Amount exceeds 10% of the product of the amounts described in clauses (I) and
(II) above being referred to herein as the "Excess Amount"), then, and in each
such case, immediately after the close of business on such date for
determination, the Conversion Rate shall be increased in accordance with the
following formula:
AC = CR / M - (EA/O)
----------
M
Where:
AC = the adjusted Conversion Rate.
CR = the Conversion Rate in effect immediately prior to the close of
business on the date fixed for determination of the stockholders
entitled to receive the distribution.
M = the Average Current Market Price per share (determined as provided
in paragraph (8) of this Section) on the date fixed for determination
of the stockholders entitled to receive the distribution.
EA = the Excess Amount.
O = the number of shares of Common Stock of the Company outstanding on
the date fixed for determination of the stockholders entitled to
receive the distribution.
<PAGE>
14
(6) In case at any time after the date of the issuance of the
Securities, a tender offer made by the Company or any Subsidiary for all or any
portion of the Common Stock of the Company shall expire and such tender offer
(as amended upon the expiration thereof) shall require the payment to
stockholders (based on the acceptance (up to any maximum specified in the terms
of the tender offer) of Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) that combined together with:
(A) the aggregate of the cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution), as of the expiration of such tender
offer, of consideration payable in respect of any other tender offer,
by the Company or any Subsidiary for all or any portion of the Common
Stock of the Company expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment
pursuant to this paragraph (6) has been made, and
(B) the aggregate amount of any distributions to all holders of the
Company's Common Stock made exclusively in cash within 12 months
preceding the expiration of such tender offer and in respect of which
no adjustment pursuant to paragraph (5) of this Section has been made,
exceeds 10% of the product of (I) the Average Current Market Price per share
(determined as provided in paragraph (8) of this Section) as of the last time
(the "Tender Expiration Time") tenders could have been made pursuant to such
tender offer (as it may be amended), times (II) the number of shares of Common
Stock of the Company outstanding (including any tendered shares) on the Tender
Expiration Time, then, and in each such case, immediately prior to the opening
of business on the day after the date of the Tender Expiration Time, the
Conversion Rate shall be increased in accordance with the following formula:
AC = CR / (M x O) - C
------------
M x (O - TS)
Where:
AC = the adjusted Conversion Rate.
CR = the Conversion Rate immediately prior to close of business on
the date of the Tender Expiration Time.
M = the Average Current Market Price per share (determined as provided
in paragraph (8) of this Section) on the date of the Tender Expiration
Time.
O = the number of shares of Common Stock of the Company outstanding
(including any tendered shares) on the Tender Expiration Time.
C = the amount of cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
<PAGE>
15
described in a Board Resolution) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of Purchased Shares (as
defined below).
TS = the number of all shares validly tendered and not withdrawn as of
the Tender Expiration Time (the shares deemed so accepted up to any
such maximum, being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock of the Company into
securities including securities other than Common Stock of the Company (other
than any reclassification upon a consolidation or merger to which Section 1607
applies) shall be deemed to involve (a) a distribution of such securities other
than Common Stock of the Company to all holders of Common Stock of the Company
(and the effective date of such reclassification shall be deemed to be "the date
fixed for the determination of stockholders entitled to receive such
distribution" and "the date fixed for such determination" within the meaning of
paragraph (4) of this Section), and (b) a subdivision or combination, as the
case may be, of the number of shares of Common Stock of the Company outstanding
immediately prior to such reclassification into the number of shares of Common
Stock of the Company outstanding immediately thereafter (and the effective date
of such reclassification shall be deemed to be "the day upon which such
subdivision becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such subdivision or
combination becomes effective" within the meaning of paragraph (3) of this
Section).
(8) For the purpose of any computation under paragraphs (2), (4), (5)
and (6) of this Section, the Average Current Market Price per share on any date
shall be deemed to be the average of the daily Current Market Prices for the
five consecutive Trading Days selected by the Company commencing not more than
ten Trading Days before, and ending not later than the earlier of, the day in
question and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph, the
term "ex" date, when used with respect to any issuance or distribution, means
the first date on which the Common Stock of the Company trades regular way in
the applicable securities market or on the applicable securities exchange
without the right to receive such issuance or distribution.
(9) No adjustment in the Conversion Rate shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this paragraph
-------- -------
(9) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this paragraph (9) shall be
made to the nearest cent.
(10) The Company may make such increases in the Conversion Rate, in
addition to those required by this Section, as it considers to be advisable in
order to avoid or diminish any income tax to any holders of shares of Common
Stock of the Company resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such (i) for federal income tax purposes or (ii) for any other
reasons relating to taxes.
(11) To the extent permitted by applicable law, the Company from time
to time may increase the Conversion Rate by any amount for any period of time if
the period
<PAGE>
16
is at least 20 days, the increase is irrevocable during such period, and the
Board of Directors shall have made a determination that such increase would be
in the best interests of the Company, which determination shall be conclusive;
provided, however, that no such increase shall be taken into account for
purposes of determining whether the Current Market Price for any five Trading
Days within the period of 10 Trading Days (as determined pursuant to the
definition of Change of Control) exceeds the Conversion Price by 105% in
connection with an event which would otherwise be a "Change of Control" or
whether the Current Market Price for 20 Trading Days during a period of 30
consecutive Trading Days (as determined pursuant to Section 6.1 or 7.1 hereof,
as applicable exceeds the Conversion Price by (a) the triggering percentages (as
specified in Section 6.1(a) hereof) in connection with a provisional redemption
or (b) 140% in connection with an event which would otherwise allow the Company
to cause the conversion rights of Holders of Securities to expire. Whenever the
Conversion Rate is increased pursuant to the preceding sentence, the Company
shall give notice of the increase to the Holders in the manner provided in
Section 106 at least 15 days prior to the date the increased Conversion Rate
takes effect, and such notice shall state the increased Conversion Rate and the
period during which it will be in effect.
(12) Whenever the Conversion Rate is adjusted, as herein provided,
the Company shall promptly file with the Trustee, at the Corporate Trust Office
of the Trustee, and with the office or agency maintained by the Company for the
conversion of Securities of such series pursuant to Section 1002, an Officers'
Certificate, setting forth the conversion price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment, which
certificate shall be conclusive evidence of the correctness of such adjustment.
Neither the Trustee nor any conversion agent shall be under any duty or
responsibility with respect to any such certificate or any facts or computations
set forth therein, except to exhibit said certificate from time to time to any
Holder of a Security desiring to inspect the same. The Company shall promptly
cause a notice setting forth the adjusted conversion price to be mailed to the
Holders of Securities, as their names and addresses appear upon the Security
Register of the Company.
(13) In any case in which this Section 1605 provides that an
adjustment shall become effective immediately after a record date for an event,
the Company may defer until the occurrence of such event (y) issuing to the
Holder of any Security converted after such record date and before the
occurrence of such event the additional shares of the Common Stock of the
Company issuable upon such conversion by reason of the adjustment required by
such event over and above the Common Stock of the Company issuable upon such
conversion before giving effect to such adjustment and (z) paying to such Holder
any amount in cash in lieu of any fractional share of Common Stock of the
Company pursuant to Section 1606 of the Indenture.
(b) Section 1606 is hereby amended with respect to the Securities by
deleting the last sentence thereof in its entirety and substituting the
following in its place:
"Instead of a fraction of a share of Common Stock of the Company which
would otherwise be issuable upon conversion of any Security or Securities
(or specified portions thereof), the Company shall pay a cash adjustment
(computed to the nearest cent, with one-half cent being rounded upward) in
respect of such fraction of a share in an amount equal to the same
fractional interest of the Current Market
<PAGE>
17
Price of the Common Stock of the Company on the Trading Day next preceding
the day of conversion."
(c) Section 1607 is amended by adding the following to the end of the
first sentence thereof:
", assuming (i) such holder of Common Stock of the Company failed to
exercise his or her rights of election, if any, as to the kind or amount of
shares of stock and other securities and property, including cash,
receivable upon such consolidation, merger, sale or transfer (provided that
if the kind or amount of shares of stock and other securities and property,
including cash, receivable upon such consolidation, merger, sale or
transfer is not the same for each share of Common Stock of the Company held
immediately prior to such consolidation, merger, sale or transfer and in
respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this Section the kind and
amount of shares of stock and other securities and property, including
cash, receivable upon such consolidation, merger, sale or transfer by each
non-electing share shall be deemed to be the kind and amount so receivable
per share by a plurality of non-electing shares), and (ii) the Securities
were convertible at the time of such consolidation, merger, sale or
transfer at the initial Conversion Rate specified in the supplemental
indenture establishing such Securities, as adjusted, if applicable, in
accordance with the terms of such supplemental indenture."
(d) Section 1608 is amended with respect to the Securities by
deleting the word "or" from the end of clause (c) thereof and adding the
following immediately after clause (d) thereof:
"(e) the Company or a Subsidiary shall take any other
action that would require an adjustment to the Conversion Rate
pursuant to Section 1605; or
(f) the Company shall take any action that would require a
supplemental indenture pursuant to Section 1607;"
<PAGE>
18
ARTICLE THREE
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 3.1. AMENDMENTS TO ARTICLE EIGHT. Section 801 of the
----------------------------
Indenture is amended in its entirety with respect to the Securities to read as
follows:
The Company may not consolidate with or merge into any other Person or
convey, transfer, sell or lease its properties and assets substantially as an
entirety to any
<PAGE>
19
Person, and the Company shall not permit any Person to consolidate with or merge
into the Company or convey, transfer, sell or lease such Person's properties and
assets substantially as an entirety to the Company, unless:
(a) the Person formed by such consolidation or into or with which the
Company is merged or the Person to which the properties and assets of the
Company are so conveyed, transferred, sold or leased, is a corporation,
limited liability company, partnership or trust organized and existing
under the laws of the United States, any State thereof or the District of
Columbia and, if other than the Company, shall expressly assume the due and
punctual payment of the principal of and, premium, if any, and interest on
the Securities and the performance of the other covenants of the Company
under the Indenture, and
(b) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing.
ARTICLE FOUR
DEFEASANCE
SECTION 4.1. DEFEASANCE APPLICABLE TO SECURITIES. Pursuant to Section
------------------------------------
301(19) and Section 1401 of the Indenture, the Company will have the option of
defeasance of the Securities under Section 1402 and 1403 of the Indenture upon
the terms and conditions contained in Article Fourteen of the Indenture, as
amended by this Second Supplemental Indenture; provided, however, that the
-------- -------
Company's option of covenant defeasance, as described in Section 1403 of the
Indenture, shall be limited to defeasance of its obligations under Article Eight
of this Second Supplemental Indenture.
SECTION 4.2. AMENDMENTS TO ARTICLE FOURTEEN.
-------------------------------
(a) Section 1404 is hereby amended with respect to the Securities by
deleting the period from the end of clause (b) thereof and adding the following
thereto:
", shall not be prohibited by Article Seventeen, and shall be permitted by
the terms of all Senior Indebtedness."
(b) Section 1404 is hereby further amended by deleting "91st" in
clause (c) thereof and substituting "123rd" in its place.
(c) Section 1405 is hereby amended by adding the following to the end
of the first paragraph thereof:
"Money and securities so held in trust are not subject to Article Seventeen
of the Indenture."
ARTICLE FIVE
EVENTS OF DEFAULT
<PAGE>
20
SECTION 5.1. AMENDMENTS TO SECTION 501.
--------------------------
(a) Clause 5 of Section 501 of the Indenture is amended in its
entirety with respect to the Securities to read as follows:
"(5) default under the terms of any instrument evidencing or securing
Indebtedness of the Company or any Restricted Subsidiary having an
outstanding principal amount of not less than $25,000,000 or its foreign
currency equivalent at the time which default results in the acceleration
of the payment of such Indebtedness or constitutes the failure to pay such
Indebtedness when due (after expiration of any applicable grace period);
or".
(b) Clause 6 of Section 501 of the Indenture is amended in its
entirety with respect to the Securities to read as follows:
"(6) the institution by the Company or any Significant Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by it
to the institution of bankruptcy or insolvency proceedings against it, or
the filing by it of a petition or answer or consent seeking reorganization
or relief under the Federal Bankruptcy Code or any other applicable
federal, state or foreign law, or the consent by it to the filing of any
such petition or to the appointment of a receiver, liquidator, assignee,
trustee, custodian or sequestrator (or other similar official) of the
Company or any Significant Subsidiary or of any substantial part of its
Property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due; or"
(c) Clause 7 of Section 501 of the Indenture is amended in its
entirety with respect to the Securities to read as follows:
"(7) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company or any Significant Subsidiary a bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Significant Subsidiary under the Federal Bankruptcy Code
or any other applicable federal, state or foreign law, or appointing a
receiver, liquidator, assignee, trustee, custodian or sequestrator (or
other similar official) of the Company or any Significant Subsidiary or of
any substantial part of its Property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days."
SECTION 5.2. ADDITIONAL EVENTS OF DEFAULT. Pursuant to Section
-----------------------------
301(15) of the Indenture, so long as any of the Securities are Outstanding, each
of the following events shall be an Event of Default with respect to the
Securities, in addition to the Events of Default contained in Section 501 of the
Indenture, as amended hereby:
(1) failure to pay when due the Purchase Price of any Securities
required to be repurchased pursuant to Article Eight of this Second Supplemental
Indenture whether or not an Offer to Purchase is prohibited by Article Seventeen
of the Indenture, as amended hereby; or
<PAGE>
21
(2) failure to perform or comply with Article Eight of the Indenture,
as amended hereby; or
(3) the rendering of any judgment or judgments for the payment of
money in an aggregate amount in excess of $25 million or its foreign currency
equivalent at the time that shall be rendered against the Company or any
Restricted Subsidiary and that shall not be waived, satisfied or discharged for
any period of 45 consecutive days during which a stay of enforcement shall not
be in effect.
SECTION 5.3. NOTICE OF DEFAULT OR EVENT OF DEFAULT. The Company shall
---------------------------------------
deliver to the Trustee, as soon as reasonably practicable and in any event
within 30 days after an executive officer of Company becomes aware of the
occurrence of any Event of Default or any event which, with notice or the lapse
of time or both, would constitute an Event of Default, an Officers' Certificate
setting forth the details of such Event of Default or Default and the action
which the Company proposes to take with respect thereto.
ARTICLE SIX
PROVISIONAL REDEMPTION
Pursuant to Section 301(6) of the Indenture, so long as any of the
Securities are Outstanding, the following provisions shall be applicable to the
Securities:
SECTION 6.1. PROVISIONAL REDEMPTION.
-----------------------
(a) At any time or from time to time prior to March 18, 2003, the
Company may, at its option, redeem the Securities (a "Provisional Redemption"),
in whole or in part, at the following Redemption Prices, in each case plus
accrued and unpaid interest, if any, to the date of such redemption (herein
called the "Provisional Redemption Date"), if the Current Market Price of Common
Stock of the Company equals or exceeds the following trigger percentages of the
prevailing Conversion Price then in effect for at least 20 Trading Days within
any period of 30 consecutive Trading Days, including the last day of such period
(herein called the"Redemption Condition"), if called for redemption during any
of the periods beginning and ending as set forth below.
<TABLE>
<CAPTION>
Trigger Redemption
Year Percentage Price
- ----- ------------ ------------
<S> <C> <C>
February 29, 2000 through March 14, 2001........... 170% 106.00%
March 15, 2001 through March 14, 2002.............. 160% 105.40%
March 15, 2002 through March 17, 2003.............. 150% 104.80%
</TABLE>
(b) Upon any Provisional Redemption, the Company will make an
additional payment in cash (herein called the "Make-Whole Payment") with respect
to the Securities converted into Common Stock of the Company between the date
notice of redemption was given (herein called the "Notice Date") and the
Provisional Redemption Date. The Make-Whole Payment will be equal to the
present value of the aggregate value
<PAGE>
of the interest payments that would thereafter have been payable on this
Security on each semi-annual interest payment date from the Provisional
Redemption Date through March 17, 2003. The present value will be calculated
using the bond equivalent yield on U.S. Treasury notes or bills having a term
nearest in length to that of the additional period as of the day immediately
preceding the Notice Date.
(c) If less than all of the Securities are to be redeemed at any
time, selection of Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are listed, or if the Securities are not so
listed, on a pro rata basis, by lot or by such method as the Trustee shall deem
fair and appropriate, provided that no Securities of $1,000 in principal amount
or less shall be redeemed in part. A new Security in principal amount equal to
the unredeemed portion thereof will be issued in the name of the Holder thereof
upon cancelation of the original Security. On and after the redemption date,
interest ceases to accrue on Securities or portions of Securities called for
redemption.
(d) In order to redeem any or all of the Securities, the Company must
issue a press release for publication on the Dow Jones News Service (or a
comparable news service) announcing the Provisional Redemption Date prior to the
opening of business on the second Trading Day after any period in which the
Redemption Condition has been met. The press release shall announce the
Provisional Redemption Date and provide the current Conversion Price of the
Securities and the Current Market Price of the Company Stock of the Company in
each case as of the close of business on the Trading Day next preceding the date
of the press release.
(e) Notice of the Provisional Redemption will be given by the Company
to the Holders of the Securities in accordance with Section 106 not more than
four Business Days after the Company issued the press release under paragraph
(d) hereof. Such notice shall be irrevocable and will specify the Provisional
Redemption Date.
(f) The Securities subject to the Provisional Redemption will be
redeemed at the close of business on the Provisional Redemption Date, which will
be a date selected by the Company not less than 30 nor more than 60 days after
the date on which the Company issues the press release under paragraph (d)
hereof. If any Security is to be redeemed in part only, the notice of
redemption pursuant to paragraph (e) hereof that relates to such Security shall
state the portion of the principal amount thereof to be redeemed.
ARTICLE SEVEN
EXPIRATION OF CONVERSION RIGHTS
Pursuant to Section 301(25) of the Indenture, so long as any of the
Securities are Outstanding, the following provisions shall be applicable to the
Securities:
SECTION 7.1. EXPIRATION OF CONVERSION RIGHTS.
--------------------------------
(a) On or after March 18, 2003, the Company may, at its option, cause
the conversion rights of Holders of Securities to expire. The Company may
exercise this option only if the Current Market Price of the Common Stock of the
Company exceeds
<PAGE>
23
140% of the Conversion Price for at least 20 Trading Days within any period of
30 consecutive Trading Days, including the last Trading Day of such period
(herein called the "Expiration Condition").
(b) In order to exercise its option to cause the conversion rights of
Holders of Securities to expire, the Company must issue a press release for
publication on the Dow Jones News Service (or a comparable news service)
announcing the conversion expiration date (the "Conversion Expiration Date")
prior to the opening of business on the second Trading Day after the Expiration
Condition has been met, but in no event prior to March 18, 2003. The press
release shall announce the Conversion Expiration Date and provide the current
Conversion Price of the Securities and the Current Market Price of the Common
Stock of the Company, in each case as of the close of business on the Trading
Day next preceding the date of the press release.
(c) Notice of the expiration of conversion rights will be given by
the Company to the Holders of the Securities in accordance with Section 106 not
more than four Business Days after the Company issued the press release under
paragraph (b) hereof. Such notice shall be irrevocable and shall specify the
Conversion Expiration Date.
(d) Conversion rights will terminate at the close of business on the
Conversion Expiration Date which will be a date selected by the Company not less
than 30 nor more than 60 days after the date on which the Company issues the
press release under paragraph (b) hereof announcing its intention to terminate
conversion rights of the Securities.
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
Pursuant to Section 301(25) of the Indenture, and in addition to the
other provisions contained in Article Seventeen of the Indenture (which shall be
applicable as amended hereby to the Securities in all respects), so long as any
of the Securities are Outstanding, the following provisions shall be applicable
to the Securities:
SECTION 8.1. AMENDMENT OF SECTION 1701. (a) Section 1701 is hereby
--------------------------
amended by relettering clause (c) in the second paragraph thereof to be clause
(b) and by deleting the following from the second paragraph thereof:
"(b) that a default shall have occurred and be continuing with respect
to the payment of principal of (or premium, if any) or interest on or any
Additional Amounts payable in respect of any Senior Indebtedness, or"
(b) Section 1701(1) is hereby amended by deleting the words "or (b)"
therefrom.
<PAGE>
24
SECTION 8.2. NO PAYMENT IN CERTAIN CIRCUMSTANCES. (a) No payment
------------------------------------
shall be made with respect to the principal of, or premium, if any, or interest
on the Securities (including, but not limited to, the Purchase Price with
respect to Securities submitted for repurchase in accordance with Article Eight
hereof), if:
(i) a default in the payment of principal, premium, if any, or
interest (including a default under any repurchase or redemption obligation) or
other amounts with respect to any Senior Indebtedness occurs and is continuing
unless and until such default shall have been cured or waived or shall have
ceased to exist; or
(ii) a default, other than a payment default, on any Senior
Indebtedness occurs and is continuing that then permits holders of such Senior
Indebtedness to accelerate (with notice, lapse of time or both) its maturity
unless and until such default shall have been cured or waived or shall have
ceased to exist if the maturity of such Senior Indebtedness has not been
accelerated.
ARTICLE NINE
REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER
UPON A CHANGE IN CONTROL
Pursuant to Section 301(7) of the Indenture and in substitution of the
terms of Article Thirteen of the Indenture, so long as any of the Securities are
Outstanding, the following provisions shall be applicable to the Securities:
SECTION 9.1. RIGHT TO REQUIRE REPURCHASE.
----------------------------
(a) Upon the occurrence of a Change in Control, each Holder shall
have the right, at the Holder's option, but subject to the provisions of Section
9.2. hereof, to require the Company to repurchase all of such Holder's
Securities or any portion of the principal amount thereof that is equal to
$5,000 or any integral multiple of $1,000 in excess thereof (provided that no
single Security may be repurchased in part unless the portion of the principal
amount of such Security to be Outstanding after such repurchase is equal to
$1,000 or integral multiples of $1,000 in excess thereof), in accordance with
the procedures set forth in this Section 9.1 and this Second Supplemental
Indenture. The First Supplemental Indenture, 9-1/8% Senior Notes Indenture, the
10-1/2% Senior Discount Notes Indenture, the Dollar Denominated Senior Notes
Indenture and the Euro Denominated Senior Notes Indenture each require that such
Indebtedness be repurchased upon the occurrence of certain of the events that
would constitute a Change of Control. Other future Indebtedness of the Company
may contain prohibitions of certain events which would constitute a Change of
Control or require such Indebtedness to be repurchased upon a Change of Control.
To the extent other Indebtedness of the Company is both subject to similar
repurchase obligations in the event of a Change of Control and ranks senior in
right of payment to the Securities, the Company will repurchase such
Indebtedness required to be repurchased pursuant to the terms thereof before
repurchasing any of the Securities.
(b) Within 30 days of the occurrence of a Change of Control, the
Company will be required to make an Offer to Purchase all Outstanding Securities
at a price, subject to next sentence, in cash equal to 100% of the principal
amount of the
<PAGE>
25
Securities on the Purchase Date, plus accrued and unpaid interest (if any) to
such Purchase Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant Interest Payment Date). At
the option of the Company, the Purchase Price may be paid in cash or, subject to
the fulfillment by the Company of the conditions set forth Section 9.2 hereof,
by delivery of shares of Common Stock of the Company having a fair market value
equal to the Purchase Price.
(c) The Company and the Trustee shall perform their respective
obligations for the Offer to Purchase as specified in the Offer. Prior to the
Purchase Date, the Company shall (i) accept for payment Securities or portions
thereof tendered pursuant to the Offer, (ii) irrevocably deposit with the Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) cash or shares of Common Stock of the
Company, as provided below, sufficient to pay the Purchase Price of all
Securities or portions thereof so accepted (provided that such deposit may be
made no later than 11:00 A.M. New York City time on the Purchase Date if the
Company elects) and (iii) deliver or cause to be delivered to the Trustee all
Securities so accepted together with an Officers' Certificate stating the
Securities or portions thereof accepted for payment by the Company. The Paying
Agent shall promptly mail or deliver to Holders of Securities so accepted
payment or shares of Common Stock of the Company in an amount equal to the
Purchase Price, and the Trustee shall promptly authenticate and mail or deliver
to such Holders a new Security or Securities equal in principal amount to any
unpurchased portion of the principal amount of the Security surrendered as
requested by the Holder. Any Security not accepted for payment shall be promptly
mailed or delivered by the Company to the Holder thereof. In the event that the
aggregate Purchase Price is less than the amount delivered by the Company to the
Trustee or the Paying Agent, the Trustee or the Paying Agent, as the case may
be, shall deliver the excess to the Company immediately after the Purchase Date.
(d) Any issuance of shares of Common Stock of the Company in respect
of the Purchase Price shall be deemed to have been effected immediately prior to
the close of business on the Purchase Date and the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock of the
Company shall be issuable upon such repurchase shall be deemed to have become on
the Purchase Date the holder or holders of record of the shares represented
thereby; provided, however, that any surrender for repurchase on a date when the
stock transfer books of the Company shall be closed shall constitute the Person
or Persons in whose name or names the certificate or certificates for such
shares are to be issued as the record holder or holders thereof for all purposes
at the opening of business on the next succeeding day on which such stock
transfer books are open. No payment or adjustment shall be made for dividends or
distributions on any Common Stock of the Company issued upon repurchase of any
Security declared prior to the Purchase Date.
(e) No fractions of shares shall be issued upon repurchase of
Securities. If more than one Security shall be repurchased from the same Holder
and the Purchase Price shall be payable in shares of Common Stock of the
Company, the number of full shares which shall be issuable upon such repurchase
shall be computed on the basis of the aggregate principal amount of the
Securities so repurchased. Instead of any fractional share of Common Stock of
the Company which would otherwise be issuable on the repurchase of any Security
or Securities, the Company will deliver to the applicable Holder its check for
the current market value of such fractional share. The current market value of a
fraction of a share is determined by multiplying the Current Market Price of a
<PAGE>
26
full share on the Trading Day immediately preceding the Purchase Date by the
fraction, and rounding the result to the nearest cent.
(f) Any issuance and delivery of certificates for shares of Common
Stock of the Company on repurchase of Securities shall be made without charge to
the Holder of Securities being repurchased for such certificates or for any tax
or duty in respect of the issuance or delivery of such certificates or the
Securities represented thereby; provided, however, that the Company shall not be
required to pay any tax or duty which may be payable in respect of (i) income of
the Holder or (ii) any transfer involved in the issuance or delivery of
certificates for shares of Common Stock of the Company in a name other than that
of the Holder of the Securities being repurchased, and no such issuance or
delivery shall be made unless and until the Person requesting such issuance or
delivery has paid to the Company the amount of any such tax or duty or has
established, to the satisfaction of the Company, that such tax or duty has been
paid.
(g) Whenever in this Second Supplemental Indenture, Exhibit A hereto
of the Indenture (including Article One hereof and Sections 201, 501(1) and 508
of the Indenture) there is a reference, in any context, to the principal of any
Security as of any time, such reference shall be deemed to include reference to
the Purchase Price payable in respect of such Security to the extent that such
Purchase Price is, was or would be so payable at such time, and express mention
of the Purchase Price in any provision of this Second Supplemental Indenture
shall not be construed as excluding the Purchase Price in those provisions of
this Second Supplemental Indenture when such express mention is not made;
provided, however, that for the purposes of Article Eight such reference shall
- -------- -------
be deemed to include reference to the Purchase Price only to the extent the
Purchase Price is payable in cash.
(h) The Company shall not be required to make an Offer to Purchase
upon a Change of Control if a third party makes the Offer to Purchase in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to an Offer to Purchase made by the Company and
purchases all Securities validly tendered and not withdrawn under such Offer to
Purchase.
(i) In the event that the Company makes an Offer to Purchase, the
Company shall comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1 under,
the Exchange Act. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
SECTION 9.2. CONDITIONS TO THE COMPANY'S ELECTION TO PAY THE
-----------------------------------------------
REPURCHASE PRICE IN COMMON STOCK OF THE COMPANY. The Company may elect to pay
- ------------------------------------------------
the Purchase Price by delivery of shares of Common Stock of the Company pursuant
to Section 9.1 if:
(1) The shares of Common Stock of the Company deliverable in payment
of the Purchase Price shall have a fair market value as of the Purchase Date of
not less than the Purchase Price. For purposes of Section 9.1 and this Section
9.2, the fair market value of shares of Common Stock of the Company shall be
determined by the Company and shall be equal to 95% of the average of the
Current Market Price of the Common
<PAGE>
27
Stock of the Company for the five consecutive Trading Days immediately preceding
and including the third Trading Day prior to the Purchase Date;
(2) The shares of Common Stock of the Company to be issued upon
repurchase of Securities hereunder (i) shall not require registration under any
federal securities law before such shares may be freely transferable without
being subject to any transfer restrictions under the Securities Act upon
repurchase or, if such registration is required, such registration shall be
completed and shall become effective prior to the Purchase Date, and (ii) shall
not require registration with or approval of any governmental authority under
any state law or any other federal law before such shares may be validly issued
or delivered upon repurchase or if such registration is required or such
approval must be obtained, such registration shall be completed or such approval
shall be obtained prior to the Purchase Date;
(3) The shares of Common Stock of the Company to be issued upon
repurchase of Securities hereunder are, or shall have been, approved for listing
on the Nasdaq National Market or the New York Stock Exchange or listed on
another national securities exchange, in any case, prior to the Purchase Date;
and
(4) All shares of Common Stock of the Company which may be issued
upon repurchase of Securities will be issued out of the Company's authorized but
unissued Common Stock and, will upon issue, be duly and validly issued and fully
paid and non-assessable and free of any preemptive or similar rights.
If all of the conditions set forth in this Section 9.2 are not
satisfied in accordance with the terms hereof, the Purchase Price shall be paid
by the Company only in cash.
SECTION 9.3. CONSOLIDATION, MERGER, ETC. In the case of any
---------------------------
consolidation, conveyance, sale, transfer or lease of all or substantially all
of the assets of the Company to which Section 1607 of the Indenture applies, in
which the Common Stock of the Company is changed or exchanged as a result into
the right to receive shares of stock and other securities or property or assets
(including cash) which includes shares of Common Stock of the Company or common
stock of another Person that are, or upon issuance will be, traded on a United
States national securities exchange or approved for trading on an established
automated over-the-counter trading market in the United States and such shares
constitute at the time such change or exchange becomes effective in excess of
50% of the aggregate fair market value of such shares of stock and other
securities, property and assets (including cash) (as determined by the Company,
which determination shall be conclusive and binding), then the Person formed by
such consolidation or resulting from such merger or combination or which
acquires the properties or assets (including cash) of the Company, as the case
may be, shall execute and deliver to the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) modifying the provisions of this Second
Supplemental Indenture relating to the right of Holders to cause the Company to
repurchase the Securities following a Change in Control, including without
limitation the applicable provisions of this Article Eight and the definitions
of the Common Stock and Change in Control, as appropriate, and such other
related definitions set forth herein and in the Indenture as determined in good
faith by the Company (which determination shall be conclusive and binding), to
make such provisions apply in the event of a subsequent Change of Control to the
common stock and
<PAGE>
28
the issuer thereof if different from the Company and Common Stock of the Company
(in lieu of the Company and the Common Stock of the Company).
ARTICLE TEN
SUPPLEMENTAL INDENTURES
SECTION 10.1. AMENDMENTS TO ARTICLE TEN. (a) Section 901 is hereby
--------------------------
amended with respect to the Securities by deleting the word "or" from the end of
clause (9) thereof, deleting the "." from the end of clause (10) thereof and
substituting a ";" in its place and by adding the following to the end thereof:
(11) to add guarantees with respect to the Securities; or
(12) to comply with any requirements of the Commission in connection
with qualifying, or maintaining the qualification of, the Indenture under
the Securities Act or the TIA.
(b) Section 902 is hereby amended by inserting "at any time after a
Change of Control has occurred" after the words "Section 504, or" in clause (1)
thereof and by adding the following to the end of the first paragraph of Section
902:
(6) modify Article Sixteen or Article Seventeen of the Indenture, as
amended, or Article Six or Article Seven of this Second Supplemental
Indenture in a manner adverse to the Holders; and
(7) reduce the premium payable upon the redemption of any Security or
change the time at which any Security may be redeemed pursuant to Section
6.1 hereof.
ARTICLE ELEVEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 11.1. AMENDMENTS TO ARTICLE FIFTEEN. Section 1504 of the
------------------------------
Indenture is amended with respect to the Securities by adding the following to
the end of the first paragraph thereof:
"Subject to the proviso in the first sentence of this paragraph, the
Persons entitled to vote 25% of the principal amount of the Outstanding
Securities shall constitute a quorum for a reconvened meeting previously
adjourned for lack of a quorum.
<PAGE>
29
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.1. APPLICATION OF SECOND SUPPLEMENTAL INDENTURE. Each and
---------------------------------------------
every term and condition contained in this Second Supplemental Indenture that
modifies, amends or supplements the terms and conditions of the Indenture shall
apply only to the Securities created hereby and not to any future series of
Securities established under the Indenture.
SECTION 12.2. BENEFITS OF SECOND SUPPLEMENTAL INDENTURE. Nothing
------------------------------------------
contained in this Second Supplemental Indenture shall or shall be construed to
confer upon any person other than a Holder of the Securities, the Company and
the Trustee any right or interest to avail itself or himself, as the case may
be, of any benefit under any provision of the Indenture or this Second
Supplemental Indenture, except for Holders of Senior Indebtedness as provided in
Article Seven hereof.
SECTION 12.3. EFFECTIVE DATE. This Second Supplemental Indenture
---------------
shall be effective as of the date first above written and upon the execution and
delivery hereof by each of the parties hereto.
SECTION 12.4. GOVERNING LAW. This Second Supplemental Indenture
--------------
shall be governed by, and construed in accordance with, the laws of the State of
New York.
<PAGE>
30
SECTION 12.5. COUNTERPARTS. This Second Supplemental Indenture may
-------------
be executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed by their respective officers hereunto
duly authorized, all as of the day and year first above written.
LEVEL 3 COMMUNICATIONS, INC.
By: /s/ Thomas C. Stortz
___________________________
Name: Thomas C. Stortz
Title: Senior Vice President
THE BANK OF NEW YORK, as Trustee
By: /s/ Van K. Brown
____________________________
Name: Van K. Brown
Title: Assistant Vice President
<PAGE>
EXHIBIT A
Form of Face of Security
------------------------
[If a Global Security, then insert:] THIS SECURITY IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.
THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
[If a Global Security, then insert:] UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
<PAGE>
LEVEL 3 COMMUNICATIONS, INC.
6% Convertible Subordinated Note Due 2010
CUSIP No. 52729NAS9
---------
No. [if a Global security, insert: up to] $
Level 3 Communications, Inc., a Delaware corporation (herein called the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_____________, or registered assigns, the principal sum of [if a Global
Security, then insert: up to] _________ Dollars [if a Global Security, then
insert: (the outstanding principal amount of which shall be reflected in the
attached Schedule of Increases or Decreases in Global Security and the records
of the Trustee which, taken together with the outstanding principal amounts of
all other Outstanding Securities, shall not exceed $862,500,000 in the aggregate
at any time)] on March 15, 2010, at the office or agency of the Company referred
to below, and to pay interest thereon, in cash in arrears semiannually on March
15 and September 15 in each year, with payment commencing on September 15, 2000,
and interest accruing from February 29, 2000, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the rate
of 6 % per annum, until the principal amount hereof is paid or duly provided
for. The Company shall pay interest on overdue principal at the rate borne by
this Security, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be March 1 or September 1 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for shall forthwith cease to be payable
to the Holder on such Regular Record Date, and such defaulted interest, and (to
the extent lawful) interest on such defaulted interest at the rate borne by the
Securities, may be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities not less than 10
days prior to such Special Record Date, or may be paid at any time in any other
lawful manner, all as more fully provided in said Indenture. Payment of the
principal of (and premium, if any) and interest on this Security will be made at
the office or agency of the Company maintained for that purpose in The City of
New York, or at such other office or agency of the Company as may be maintained
for such purpose, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
- -------- -------
Company by check mailed to the address of the Person entitled thereto as such
address shall appear on the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
A-2
<PAGE>
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
A-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:_______________ LEVEL 3 COMMUNICATIONS, INC.
By:
________________________
Authorized Signatory
Attest:
___________________
A-4
<PAGE>
Form of Reverse of Security
This Security is one of a duly authorized issue of securities of the
Company designated as its 6 % Convertible Subordinated Notes Due 2010 (herein
called the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $862,500,000, which may be
issued under an indenture (herein called the "Base Indenture") dated as of
September 20, 1999, as supplemented by the Second Supplemental Indenture (the
"Second Supplemental Indenture" and, together with the Base Indenture, the
"Indenture") dated as of February 29, 2000, in each case between the Company and
The Bank of New York, as trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered.
Provisional Redemption
- ----------------------
At any time or from time to time prior to March 18, 2003, the Company
may, at its option, redeem this Security, in whole or in part, at the following
Redemption Prices, in each case plus accrued and unpaid interest, if any, to the
date of such redemption (herein called the "Provisional Redemption Date"), if
the Current Market Price of Common Stock of the Company equals or exceeds the
following trigger percentages of the prevailing Conversion Price then in effect
for at least 20 Trading Days within any period of 30 consecutive Trading Days,
including the last day of such period, if called for redemption during any of
the periods beginning and ending as set forth below.
Trigger Redemption
Year Percentage Price
- ---- ---------- -----------
February 29, 2000 through March 14, 2001 170% 106.00%
March 15, 2001 through March 14, 2002 160% 105.40%
March 15, 2002 through March 17, 2003 150% 104.80%
Upon any provisional redemption, the Company will make an additional
payment in cash (herein called the "Make-Whole Payment") with respect to the
Securities converted into Common Stock of the Company between the date notice of
redemption was given (herein called the "Notice Date") and the Provisional
Redemption Date. The Make-Whole Payment will be equal to the present value of
the aggregate value of the interest payments that would thereafter have been
payable on this Security on each semi-annual interest payment date from the
Provisional Redemption Date through March 17, 2003. The present value will be
calculated using the bond equivalent yield on U.S. Treasury notes or bills
having a term nearest in length to that of the additional period as of the day
immediately preceding the Notice Date.
A-5
<PAGE>
If less than all of the Securities are to be redeemed at any time,
selection of Securities for redemption will be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which the Securities are listed, or if the Securities are not so listed, on a
pro rata basis, by lot or by such method as the Trustee shall deem fair and
appropriate, provided that no Securities of $1,000 in principal amount or less
shall be redeemed in part. A new Security in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancelation of the original Security. On and after the redemption date, interest
ceases to accrue on Securities or portions of Securities called for redemption.
In order to redeem any or all of the Securities, the Company must
issue a press release for publication on the Dow Jones News Service (or a
comparable news service) announcing the Provisional Redemption Date prior to the
opening of business on the second Trading Day after any period in which the
condition described above has been met. The press release shall announce the
Provisional Redemption Date and provide the current Conversion Price of the
Securities and the Current Market Price of the Common Stock of the Company in
each case as of the close of business on the Trading Day next preceding the date
of the press release.
Notice of the provisional redemption will be given by the Company by
first class mail to the Holders of the Securities not more than four business
days after the Company issued the press release. Such notice shall be
irrevocable and will specify the Provisional Redemption Date. The Securities
subject to the provisional redemption will be redeemed at the close of business
on the Provisional Redemption Date, which will be a date selected by the Company
not less than 30 nor more than 60 days after the date on which the Company
issues the press release announcing the provisional redemption. If any Security
is to be redeemed in part only, the notice of redemption that relates to such
Security shall state the portion of the principal amount thereof to be redeemed.
Expiration of Conversion Rights
- -------------------------------
On or after March 18, 2003, the Company may, at its option, cause the
conversion rights of Holders of Securities to expire. The Company may exercise
this option only if the Current Market Price of Common Stock of the Company
exceeds 140% of the prevailing Conversion Price then in effect for at least 20
Trading Days within any period of 30 consecutive Trading Days, including the
last Trading Day of such period. In order to exercise its option to cause the
conversion rights of Holders of Securities to expire, the Company must issue a
press release for publication on the Dow Jones News Service (or a comparable
news service) announcing the Conversion Expiration Date prior to the opening of
business on the second Trading Day after any period in which the Expiration
Condition has been met, but in no event prior to March 18, 2003. The press
release shall announce the Conversion Expiration Date and provide the current
Conversion Price of the Securities and the Current Market Price of the Common
Stock of the Company, in each case as of the close of business on the Trading
Day next preceding the date of the press release.
Notice of the expiration of conversion rights will be given by the Company
by first class mail to the Holders of the Securities not more than four business
days after the Company issued the press release. Conversion rights will
terminate at the close of business on the Conversion Expiration Date which will
be a date selected by the Company not less than 30 nor more than 60 days after
the date on which the Company
A-6
<PAGE>
issues the press release announcing its intention to terminate conversion rights
of the Securities.
Repurchase at the Option of Holders upon a Change of Control
- ------------------------------------------------------------
Upon the occurrence of a Change of Control, the Holder of this Security may
require the Company, subject to certain limitations provided in the Indenture,
to repurchase this Security at a purchase price in cash in an amount equal to
100% of the principal amount thereof, plus accrued and unpaid interest (if any)
to the Purchase Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
At the option of the Company, the Purchase Price may be paid in cash or,
subject to the conditions provided in the Indenture, by delivery of shares of
Common Stock of the Company having a fair market value equal to the Purchase
Price. For purposes of this paragraph, the fair market value of shares of Common
Stock of the Company shall be determined by the Company and shall be equal to
95% of the average of the Current Market Price for the five consecutive Trading
Days immediately preceding and including the third Trading Day prior to the
Purchase Date. Whenever in this Security there is a reference, in any context,
to the principal of any Security as of any time, such reference shall be deemed
to include reference to the Purchase Price payable in respect of such Security
to the extent that such Purchase Price is, was or would be so payable at such
time, and express mention of the Purchase Price in any provision of this
Security shall not be construed as excluding the Purchase Price so payable in
those provisions of this Security when such express mention is not made.
In the event of repurchase of this Security in part only, a new Security or
Securities for the unrepurchased portion hereof shall be issued in the name of
the Holder hereof upon the cancellation hereof.
Conversion Rights
- -----------------
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Security is entitled, at his or her option, at any time following
the original issue date of the Securities and on or before the close of business
on the Business Day immediately preceding March 15, 2010, or in case the Company
has caused the conversion rights of the Holder hereof to expire or the Holder
hereof has exercised his right to require the Company to repurchase this
Security or such portion hereof, then in respect of this Security until but
(unless the Company defaults in making the payment due upon redemption or
repurchase, as the case may be) not after, the close of business on the
Conversion Expiration Date or the Business Day immediately preceding the
Purchase Date, as the case may be, to convert this Security (or any portion of
the principal amount hereof that is an integral multiple of $1,000, provided
that the unconverted portion of such principal amount is $1,000 or any integral
multiple of $1,000 in excess thereof) into fully paid and nonassessable shares
of Common Stock of the Company at an initial Conversion Rate of 7.416 shares of
Common Stock of the Company for each $1,000 principal amount of Security (or at
the current adjusted Conversion Rate if an adjustment has been made as provided
in the Indenture) by surrender of this Security, duly endorsed or assigned to
the Company or in blank and, in case such surrender shall be made during the
period from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business on such Interest Payment Date
(except if
A-7
<PAGE>
this Security or portion thereof repurchasable on a Purchase Date or redeemable
on a Provisional Redemption Date and the conversion rights of this Security, or
such portion thereof, would terminate during the period between such Regular
Record Date and the close of business on such Interest Payment Date), also
accompanied by payment in New York Clearing House or other funds acceptable to
the Company of an amount equal to the interest payable on such Interest Payment
Date on the principal amount of this Security then being converted, and also the
conversion notice hereon duly executed, to the Company at the Corporate Trust
Office of the Trustee, or at such other office or agency of the Company, subject
to any laws or regulations applicable thereto and subject to the right of the
Company to terminate the appointment of any Conversion Agent (as defined below)
as may be designated by it for such purpose in the Borough of Manhattan, The
City of New York, or at such other offices or agencies as the Company may
designate (each a "Conversion Agent"), provided, however, that if this Security
or portion hereof is repurchasable on a Purchase Date or redeemable on a
Provisional Redemption Date and the conversion rights of this Security, or such
portion thereof, would terminate during the period between such Regular Record
Date and the close of business on such Interest Payment Date, then the Holder of
this Security on such Regular Record Date will be entitled to receive the
interest accruing on this Security or a portion hereof from the Interest Payment
Date next preceding the date of such conversion to such succeeding Interest
Payment Date and the Holder of this Security who converts this Security or a
portion hereof during such period shall not be required to pay such interest
upon surrender of this Security for conversion. Subject to the provisions of the
preceding sentence and, in the case of a conversion after the close of business
on the Regular Record Date next preceding any Interest Payment Date and on or
before the close of business on such Interest Payment Date, to the right of the
Holder of this Security (or any Predecessor Security of record as of such
Regular Record Date) to receive the related installment of interest to the
extent and under the circumstances provided in the Indenture, no cash payment or
adjustment is to be made on conversion for interest accrued hereon from the
Interest Payment Date next preceding the day of conversion, or for dividends on
the Common Stock of the Company issued on conversion hereof. The Company shall
thereafter deliver to the Holder the fixed number of shares of Common Stock of
the Company (together with any cash adjustment, as provided in the Indenture)
into which this Security is convertible and such delivery will be deemed to
satisfy the Company's obligation to pay the principal amount of this Security.
No fractions of shares or scrip representing fractions of shares will be issued
on conversion, but instead of any fractional interest the Company shall pay a
cash adjustment as provided in the Indenture. The Conversion Rate is subject to
adjustment as provided in the Indenture. In addition, the Indenture provides
that in case of certain consolidations or mergers to which the Company is a
party (other than a consolidation or merger that does not result in any
reclassification, conversion, exchange or cancellation of the Common Stock of
the Company) or the conveyance, transfer, sale or lease of all or substantially
all of the property and assets of the Company, the Indenture shall be amended,
without the consent of any Holders of Securities, so that this Security, if then
Outstanding, will be convertible thereafter, during the period this Security
shall be convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, transfer, sale or lease by a holder of the number of shares of
Common Stock of the Company into which this Security could have been converted
immediately prior to such consolidation, merger, conveyance, transfer, sale or
lease. No adjustment in the Conversion Rate will be made until such adjustment
would require an increase or decrease of at least one percent of such price,
provided that any
A-8
<PAGE>
adjustment that would otherwise be made will be carried forward and taken into
account in the computation of any subsequent adjustment.
Subordination
- -------------
The indebtedness evidenced by this Security is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full in cash of all Senior Indebtedness of the Company, and
this Security is issued subject to such provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes.
Events of Default
- -----------------
If an Event of Default shall occur and be continuing, the principal amount
of all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
Defeasance
- ----------
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) its obligation to
repurchase Securities upon the occurrence of a Change of Control and related
Defaults and Events of Default, upon compliance by the Company with certain
conditions set forth therein, which provisions apply to this Security.
Modification and Amendment
- --------------------------
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Without the consent of any
Holder of Securities, the Company and the Trustee may amend or modify the
Indenture for certain purposes specified therein. Any such consent or waiver by
or on behalf of the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Security.
Miscellaneous
- -------------
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and
A-9
<PAGE>
unconditional, to pay the principal of (and premium, if any) and interest on
this Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registerable on the Security Register of
the Company, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained for such purpose in The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 principal amount and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Securities are exchangeable for a like aggregate principal amount of
Securities of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of the Securities, but the Company may require payment of a sum
sufficient to cover any transfer tax or other similar governmental charge
payable in connection therewith.
Prior to the time of due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any agent shall be affected by notice to the
contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
A-10
<PAGE>
Form of Trustee's Certificate of Authentication
-----------------------------------------------
The Trustee's certificate of authentication shall be in substantially the
following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: _____________
This is one of the Securities referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK, as Trustee
By:
---------------------------------
Authorized Signatory
A-11
<PAGE>
CONVERSION NOTICE
The undersigned Holder of this Security hereby irrevocably exercises
the option to convert this Security, or any portion of the principal amount
hereof (which is $1,000 or an integral multiple of $1,000 in excess thereof,
PROVIDED that the unconverted portion of such principal amount is $1,000 or any
integral multiple of $1,000 in excess thereof) below designated, into shares of
Common Stock of the Company in accordance with the terms of the Indenture
referred to in this Security, and directs that such shares, together with a
check in payment for any fractional share and any Securities representing any
unconverted principal amount hereof, be delivered to and be registered in the
name of the undersigned unless a different name has been indicated below. If
shares of Common Stock of the Company or Securities are to be registered in the
name of a Person other than the undersigned, (a) the undersigned will pay all
transfer taxes payable with respect thereto and (b) signature(s) must be
guaranteed by an Eligible Guarantor Institution with membership in an approved
signature guarantee program pursuant to Rule 17Ad-15 under the Securities
Exchange Act of 1934. Any amount required to be paid by the undersigned on
account of interest accompanies this Security.
Dated:__________
Signature(s)
If shares or Securities are to be registered in the name of a Person other than
the Holder, please print such Person's name and address:
Name
Address
Social Security or other Identification
Number, if any
Signature Guaranteed
A-12
<PAGE>
If only a portion of the Securities is to be converted, please indicate:
1. Principal amount to be converted:
$
2. Principal amount and denomination of Securities representing unconverted
principal amount to be issued:
Amount $
($1,000 or any integral multiple of $1,000 in excess thereof,
provided that the unconverted portion of such principal amount is $1,000 or any
integral multiple of $1,000 in excess thereof)
A-13
<PAGE>
Assignment Form
---------------
If you, the Holder, want to assign this Security, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Security to___________________________________
(Insert assignee's social security or tax ID number)
___________________
(Print or type assignee's name, address and zip code)
____________________________________________________________________
___________________
____________________________________________________________________
and irrevocably appoint_________________________________
of _______________________________________
____________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for such agent.
Dated: _________ Your signature: _________________________________________
(Sign exactly as your name appears on the
other side of this Security)
By:
_________________________________
NOTICE: To be executed by an executive
officer
Signature Guarantee: _________________________
A-14
<PAGE>
Option of Holder to Elect Purchase
If you wish to have this Security purchased by the Company pursuant to
Section 9.1 of the Second Supplemental Indenture, check the box: [_]
If you wish to have a portion of this Security purchased by the Company
pursuant to Section 9.1 of the Second Supplemental Indenture, state the amount:
$______________.
In the event that the Purchase Price shall be paid in shares of Common
Stock of the Company, provide the name in which the certificate(s) for shares of
Common Stock of the Company are to be issued, together with the address of such
person:
If shares or Securities are to be registered in the name of a Person other than
the Holder, please print such Person's name and address:
(Print or type name, address and zip code)
Name
Address
Dated: __________ Your Signature: _____________________________
(Sign exactly as your name appears on the other
side of this Security)
A-15
<PAGE>
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].
The following increases or decreases in this Global Security have been made:
<TABLE>
<CAPTION>
Date of Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Transfer Principal Amount of this Principal Amount of this Global Security following signatory of Trustee or
Global Security Global Security such decrease or increase Security Registrar
<S> <C> <C> <C> <C>
</TABLE>
A-16
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion in and incorporation by reference of our
report dated March 30, 1998 on our audit of the consolidated financial
statements of operations, cash flows, changes in stockholder's equity and
comprehensive income (loss) of Level 3 Communications, Inc. (formerly Peter
Kiewit Sons', Inc.) for the year ended December 27, 1997 into the Prospectus
Supplements dated February 23, 2000 to the Registration Statements on Form S-3
(File Nos. 333-68887 and 333-91899 of Level 3 Communications, Inc. We also
consent to the reference to our firm in the Prospectus Supplements under the
caption "Experts."
PricewaterhouseCoopers LLP
/s/ PricewaterhouseCoopers LLP
Omaha, Nebraska
February 23, 2000
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference of our report dated
March 8, 1999, except for Note 20 as to which the date is March 18, 1999, on our
audits of the consolidated financial statements and financial statement
schedules of RCN Corporation and Subsidiaries as of December 31, 1998 and 1997,
and for the years ended December 31, 1998, 1997 and 1996, into the Prospectus
Supplements dated February 23, 2000 to the Registration Statements on Form S-3
(File Nos. 333-68887 and 333-91899) of Level 3 Communications, Inc. We also
consent to the reference to our firm in the Prospectus Supplements under the
caption "Experts."
PricewaterhouseCoopers LLP
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 23, 2000
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the inclusion in and
incorporation by reference into the Prospectus Supplements dated February
23, 2000 to the Registration Statements on Form S-3 of Level 3 Communications,
Inc. (Nos. 333-68887 and 333-91899) of our report dated February 2, 2000, on our
audits of the consolidated financial statements of Level 3 Communications, Inc.
as of December 31, 1999 and 1998 and for the years then ended and to all
references to our Firm included in the Prospectus Supplements dated February 23,
2000.
/s/ Arthur Andersen LLP
Denver, Colorado
February 23, 2000
