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): April 14, 2006
Level 3 Communications, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 47-0210602
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1025 Eldorado Blvd., Broomfield, Colorado 80021
(Address of principal executive offices) (Zip code)
720-888-1000
(Registrant's telephone number including area code)
Not applicable
(Former name and former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
Item 3.02. Unregistered Sales of Equity Securities
On April 14, 2006, Level 3 Communications, LLC ("Level 3 Communications"),
entered into a purchase agreement (the "Purchase Agreement") with MCCC ICG
Holdings, LLC ("MCCC") and solely for purposes of certain portions of the
Purchase Agreement, Level 3 Communications, Inc. ("Level 3"), pursuant to which
Level 3 Communications would purchase from MCCC all of the stock of ICG
Communications, Inc., a privately held Colorado-based telecommunications company
("ICG").
Under the terms of the Purchase Agreement, Level 3 Communications expects to pay
total consideration of $163 million, consisting of $127 million in unregistered
shares of Level 3 common stock and $36 million in cash, subject to adjustments
based on working capital and other matters. The number of shares of Level 3
common stock to be delivered will be determined by the result of dividing $127
million by the average of the volume-weighted sales price per share of Level 3
common stock for the seven consecutive trading days on the Nasdaq National
Market ending the second business day immediately preceding the closing date.
The Purchase Agreement also gives Level 3 Communications a cash substitution
right that allows it to pay additional cash consideration instead of shares of
Level 3 common stock.
The transaction does not include ICG's investments in New Global Telecom or
Mpower Holding Corporation. Closing is expected to occur mid-year 2006 and is
subject to customary closing conditions, including receipt of applicable state
and federal regulatory approvals. The Purchase Agreement contains customary
representations, warranties, covenants and indemnities.
The shares of Level 3 common stock issued, if any, will be sold to MCCC pursuant
to the exemption from registration contained in Section 4(2) of the Securities
Act of 1933, as amended.
Level 3, MCCC, Columbia Capital Equity Partners III(QP), L.P., Columbia Capital
Equity Partners III (Cayman), L.P., Columbia Capital Equity Partners III (AI),
L.P., Columbia Capital Equity Investors III, L.L.C., Columbia Capital Employees
Investors III, L.L.C., M/C Venture Partners V, L.P., M/C Venture Investors,
L.L.C., Chestnut Venture Partners, L.P., and Bear Investments, LLLP (Columbia
Capital Equity Partners III(QP), L.P., Columbia Capital Equity Partners III
(Cayman), L.P., Columbia Capital Equity Partners III (AI), L.P., Columbia
Capital Equity Investors III, L.L.C., Columbia Capital Employees Investors III,
L.L.C., M/C Venture Partners V, L.P., M/C Venture Investors, LLC, Chestnut
Venture Partners, L.P., and Bear Investments, LLLP are collectively referred to
as the "Seller Owners") intend to enter into a registration rights agreement on
the closing of the transaction contemplated by the Purchase Agreement (the
"Registration Rights Agreement") with respect to any shares of Level 3 common
stock to be issued to MCCC. Pursuant to the Registration Rights Agreement and
within five business days following the consummation of the transaction
contemplated by the Purchase Agreement, Level 3 will be required to file a
registration statement covering the shares of Level 3 common stock issued to
MCCC under the Purchase Agreement. The Level 3 common stock will also be subject
to a transfer restriction that limits the number of shares MCCC and Seller
Owners can sell (with certain exceptions) on any given day. This transfer
restriction expires 180 days from the effective date of the registration
statement (the "Effective Date"). In addition, pursuant to the Registration
Rights Agreement (with certain exceptions), (i) at any time after the Effective
Date (with certain exceptions), MCCC and Seller Owners shall not, and shall not
permit any of their affiliates to knowingly make any direct transfer of the
Level 3 common stock in a negotiated transaction to one or more persons that
would result in the acquirer holding economic or voting ownership in excess of
five percent (5%) or more of the Level 3 common stock and (ii) at any time after
the Effective Date and prior to June 30, 2006, MCCC and the Seller Owners shall
not knowingly and shall not knowingly permit any of their affiliates to
knowingly make any direct transfer of the Level 3 common stock in a negotiated
transaction to one or more persons that would result in the acquirer holding
economic or voting ownership in excess of ten percent (10%) or more of the Level
3 common stock.
The form of Registration Rights Agreement is filed as Exhibit 10.1 to this Form
8-K and incorporated herein by reference. The descriptions of the material terms
of the Registration Rights Agreement are qualified in their entirety by
reference to such exhibit.
Item 8.01. Other Events
On April 17, 2006, Level 3 issued a press release announcing that it has signed
a definitive agreement to acquire all of the stock of ICG Communications, Inc.,
a privately held Colorado-based telecommunications company. The press release is
filed as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of business acquired
None
(b) Pro forma financial information
None
(c) Shell company transactions
None
(d) Exhibits
10.1 Form of Registration Rights and Transfer Restriction Agreement by and among
Level 3 Communications, Inc., MCCC ICG Holdings, LLC, Columbia Capital
Equity Partners III(QP), L.P., Columbia Capital Equity Partners III
(Cayman), L.P., Columbia Capital Equity Partners III (AI), L.P., Columbia
Capital Equity Investors III, L.L.C., Columbia Capital Employees Investors
III, L.L.C., M/C Venture Partners V, L.P., M/C Venture Investors, L.L.C.,
Chestnut Venture Partners, L.P., and Bear Investments, LLLP to be entered
into on the closing of the transaction contemplated by the Purchase
Agreement.
99.1 Press Release, dated April 17, 2006, of Level 3 Communications, Inc.
relating to the signing of a definitive agreement to acquire all of the
stock of ICG Communications, Inc.
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, thereunto duly authorized.
Level 3 Communications, Inc.
April 19, 2006 By: /s/ Neil J. Eckstein
Date Neil J. Eckstein, Senior Vice President