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 4, 2003
LEVEL 3 COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-15658 47-0210602
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
1025 Eldorado Blvd., Broomfield, Colorado 80021
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (720)-888-1000
Item 2. Acquisition or Disposition of Assets.
On February 4, 2003, Level 3 Communications, LLC, a Delaware corporation
and indirect wholly-owned subsidiary of the Registrant, and Greenland Managed
Services, LLC, a Delaware limited liability company and indirect wholly-owned
subsidiary of the Registrant (together, the "Purchasers"), consummated the
purchase of substantially all of the assets, and the assumption of certain of
the liabilities, of Genuity Inc., a Delaware corporation, and certain
subsidiaries of Genuity Inc. (the "Sellers"), which operate a telecommunications
and internet services business. The transaction was consummated pursuant to the
terms of an Asset Purchase Agreement, dated as of November 27, 2002, as amended
(the "Asset Purchase Agreement"), among the Registrant, the Purchasers and the
Sellers.
Under the terms of the Asset Purchase Agreement, the purchase price paid by
the Purchasers was $137,262,412 (the "Purchase Price"), of which (a)
$117,262,412 was paid to the Sellers in cash, and (b) $20,000,000 was placed in
escrow to fund any indemnification claims pursuant to the terms of the Asset
Purchase Agreement.
The Purchase Price was calculated using an agreed base price of
$242,156,160, which was reduced by (a) $13,450,253 relating to the actual timing
of the closing, (b) $64,800,000, representing the maximum amount of payments the
Purchaser may later make to cover the rejection claims of creditors in the
Sellers' bankruptcy case, (c) $26,643,495, representing the estimated severance
amount payable to certain of Sellers' former employees whose employment could be
terminated, and (d) $20,000,000, the amount placed in escrow. Of the Purchase
Price, approximately $60 million represents cash consideration paid to Sellers,
and approximately $77 million represents cash for prepayments to vendors for
services to be used by the Purchasers during 2003. The Purchasers financed the
entire amount of the Purchase Price from cash on hand.
The Asset Purchase Agreement also provides for a post-closing Purchase
Price adjustments related to the amount of (a) various prepaid items and
deposits, (b) property taxes payable on purchased property, (c) severance
payments to certain of the Sellers' former employees and (d) an adjustment, not
to exceed $64,800,000, the final amount of which will be based on the aggregate
dollar value of rejection claims in the Sellers' bankruptcy estate.
Pursuant to the Asset Purchase Agreement, the Purchasers and the Sellers
entered into a Transition Services Agreement, dated as of February 4, 2003,
pursuant to which the Sellers have agreed to provide to the Purchasers certain
services obtained from third parties on a pass through basis and the Purchasers
have agreed to provide the Sellers with certain administrative services, in each
case until the latter of six months after the closing and the consummation of a
plan by the Sellers in their Chapter 11 bankruptcy cases.
The assets acquired under the Asset Purchase Agreement include real estate
and leases comprising office space, and space used for equipment related to the
telecommunications and internet services business of Sellers. Purchaser intends
to continue substantially the same uses of these assets going forward.
The foregoing descriptions of the Asset Purchase Agreement, as amended, and
the Transition Services Agreement are qualified in their entirety by reference
to such agreements, copies of which have been filed as Exhibits 10.1 though
10.4, and 10.5 to this Form 8-K, respectively, and such agreements are
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
As of the date of filing of this Current Report on Form 8-K, it is
impracticable for the Registrant to provide the financial statements
required by this Item 7(a). Such financial statements will be filed by
amendment to this Form 8-K no later than sixty (60) days from the date
of filing of this Current Report on Form 8-K.
(b) Pro-forma Financial Information.
As of the date of filing of this Current Report on Form 8-K, it
is impracticable for the Registrant to provide the pro forma
financial information required by this Item 7(b). Such financial
information will be filed by amendment to this Form 8-K no later
than sixty (60) days from the date of filing of this Current
Report on Form 8-K.
(c) Exhibits.
10.1. Asset Purchase Agreement, dated November 27, 2003, by and among
the Registrant, the Purchasers and the Sellers (Exhibit 10.1 to the
Registrant's current report on Form 8-K dated December 2, 2002).
10.2 Amendment, Consent and Waiver to the Asset Purchase Agreement,
dated as of December 30, 2002, effective as of November 27, 2002, by and
among the Registrant, the Purchasers and the Sellers (Exhibit 10.1 to the
Registrant's current report on Form 8-K dated January 3, 2003).
10.3 Second Amendment and Waiver to the Asset Purchase Agreement,
dated as of January 24, 2003, by and among the Registrant, the Purchasers
and the Sellers.
10.4 Third Amendment and Waiver to the Asset Purchase Agreement, dated
as of January 31, 2003, by and among the Registrant, the Purchasers and the
Sellers.
10.5 Transition Services Agreement, dated as of February 4, 2003, by
and among the Purchasers and the Sellers.
SIGNATURE
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 thereunto duly authorized.
Date: February 13, 2003 LEVEL 3 COMMUNICATIONS, INC. (Registrant)
By: /s/ Neil J. Eckstein
Neil J. Eckstein
Vice President
EXHIBIT INDEX
Exhibit No. Description
10.1.Asset Purchase Agreement, dated November 27, 2003, by and among the
Registrant, the Purchasers and the Sellers (Exhibit 10.1 to the
Registrant's current report on Form 8-K dated December 2, 2002).
10.2 Amendment, Consent and Waiver to the Asset Purchase Agreement, dated as of
December 30, 2002, effective as of November 27, 2002, by and among the
Registrant, the Purchasers and the Sellers (Exhibit 10.1 to the
Registrant's current report on Form 8-K dated January 3, 2003).
10.3 Second Amendment and Waiver to the Asset Purchase Agreement, dated as of
January 24, 2003, by and among the Registrant, the Purchasers and the
Sellers.
10.4 Third Amendment and Waiver to the Asset Purchase Agreement, dated as of
January 31, 2003, by and among the Registrant, the Purchasers and the
Sellers.
10.5 Transition Services Agreement, dated as of February 4, 2003, by and among
the Purchasers and the Sellers.