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): May 31, 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 3.02. Unregistered Sales of Equity Securities
On May 31, 2006, the transaction contemplated by the stock purchase agreement
(the "Purchase Agreement") by and among MCCC ICG Holdings, LLC ("MCCC"), Level 3
Communications, LLC ("Level 3 Communications") and, solely for purposes of
certain portions of the Purchase Agreement, Level 3 Communications, Inc. ("Level
3"), was completed. Pursuant to the Purchase Agreement, Level 3 Communications
purchased from MCCC all of the issued and outstanding shares of common stock of
ICG Communications, Inc. a privately held Colorado-based telecommunications
company ("ICG"), excluding certain specified assets and liabilities of ICG. ICG
is a wholly-owned subsidiary of MCCC.
Under the terms of the Purchase Agreement, Level 3 Communications (i) issued
25,975,088 shares of unregistered Level 3 common stock, par value $0.01 per
share, to MCCC, of which 3,272,452 is being held in escrow and (ii) paid
$44,884,091 in cash, subject to post-closing adjustments based on working
capital and other matters, of which $8,000,000 is being held in escrow. The cash
consideration at closing was increased from the previously announced amount of
$36,000,000 to reflect an improvement in ICG's working capital, and is subject
to adjustment based on the subsequent calculation of actual closing date working
capital
As specified in the Purchase Agreement, MCCC transferred certain excluded assets
to VoicePipe Communications, Inc., a subsidiary of MCCC ("VoicePipe"), and
VoicePipe assumed certain excluded liabilities. The excluded assets include
customer contracts related to ICG's VoicePipe business, and ICG's investments in
New Global Telecom, Inc. and Mpower Holding Corporation.
The shares of Level 3 common stock issued to MCCC were issued pursuant to the
exemption from registration contained in Section 4(2) of the Securities Act of
1933, as amended.
Pursuant to a registration rights agreement, dated May 31, 2006, by and among
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 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 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") (the "Registration Rights Agreement"), Level 3 will file
a registration statement covering the shares issued to MCCC under the Purchase
Agreement within five business days of the closing, and this registration
statement will become automatically effective. Pursuant to the Registration
Rights 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 to the foregoing (with certain exceptions), (i) at any time
after the Effective Date and prior to June 30, 2006, MCCC and the 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, 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 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 May 31, 2006, Level 3 issued a press release announcing that it has completed
the acquisition of all of the stock of ICG. The press release is filed as
Exhibit 99.1 to this Form 8-K and incorporated herein by reference as if set
forth in full.
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 Registration Rights and Transfer Restriction Agreement, dated May 31, 2006,
by and among Level 3 Communications, Inc., MCCC ICG Holdings LLC, Columbia
Capital Equity Partners III(QP), L.P., Columbia Capital Partners III
(Cayman), L.P., Columbia Capital Equity Partners III (AI), L.P., Columbia
Capital 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.
99.1 Press Release, dated May 31, 2006, of Level 3 Communications, Inc. relating
to the completion of the acquisition of 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.
June 1, 2006 By: /s/ Neil J. Eckstein
Date Neil J. Eckstein, Senior Vice President