EXHIBIT 1.1
Xxxxx 0 Communications, Inc.
$325,000,000
2.875% Convertible Senior Notes/1/
Due 2010
Underwriting Agreement
New York, New York
July 1, 2003
Citigroup Global Markets Inc.
Credit Suisse First Boston LLC
X.X. Xxxxxx Securities Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Xxxxx 0 Xxxxxxxxxxxxxx, Xxx., 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, $325,000,000 aggregate principal amount of its
2.875% Convertible Senior Notes due 2010 (the "Underwritten Securities"). The
Company also proposes to grant to the Underwriters an option to purchase up to
$48,750,000 additional principal amount of such Convertible Senior Notes to
cover over-allotments (the "Option Securities"; and together with the
Underwritten Securities, the "Securities"). The Securities are convertible into
shares of Common Stock, par value $0.01 per share (the "Common Stock"), of the
Company at the conversion price set forth in the Final Prospectus. The
Securities are to be issued under an indenture (the "Base Indenture"), dated as
of September 20, 1999, between the Company and The Bank of New York, as trustee
(the "Trustee"), as supplemented by a supplemental indenture (the "Supplemental
Indenture", and together with the Base Indenture, the "Indenture"), to be dated
as of July 8, 2003. 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. The use of the neuter in
this Agreement shall include the feminine and masculine wherever appropriate.
Any reference herein to the Registration Statement, the Basic Prospectus, any
Preliminary Final 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
________________
/1/ Plus an option to purchase from the Company up to $48,750,000
additional principal amount to cover over-allotments.
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Exchange Act on or before the Effective Date of the Registration Statement or
the issue date of the Basic Prospectus, any Preliminary Final 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 Statement,
the Basic Prospectus, any Preliminary Final 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 Statement, or the
issue date of the Basic Prospectus, any Preliminary Final 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.
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 a
registration statement (file number 333-53914) 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 Final 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 statement, 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 statement, an amendment to such
registration statement (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
statement, 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 statement 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 Final
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 Statement 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 Statement 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
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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 Statement 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 Statement 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, 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 the Supplemental Indenture and to issue,
sell and deliver the Securities. As of the date of its execution, the
Company had the requisite corporate power and authority to execute, deliver
and perform the Base Indenture. 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
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nonassessable; the shares of Common Stock initially issuable upon
conversion of the Securities have been duly and validly authorized and,
when issued upon conversion of the Securities 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 of the Securities; 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 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 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 in accordance with the terms
of the Indenture and delivered to and duly 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 and will be convertible into Common Stock in
accordance with their terms. 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 Final Prospectus.
(g) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Final Prospectus,
or to be filed as an exhibit thereto, which is not described or filed as
required; and the statements incorporated by reference in the Final
Prospectus from the Company's Annual Report on Form 10-K/A for the year
ended December 31, 2002, as supplemented by the Current Report on Form 8-K
dated June 30, 2003 (the "2002 10-K/A") under the headings
"Business--Regulation" and "Legal Proceedings" fairly summarize the matters
therein described.
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(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 and the Indenture,
the issuance and sale of the Securities hereunder, the issuance of the
Common Stock upon conversion of the Securities, the performance by the
Company of this Agreement and the Indenture 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, (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, 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 or the Indenture 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, 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, the Indenture 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 Indenture or the transactions contemplated hereby or
thereby, and to the best of the Company's knowledge, no such proceedings
are contemplated or threatened.
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(l) None of the Company, any of the Subsidiaries or Level 3
Communications Limited 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 or Level 3
Communications Limited 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
or Level 3 Communications Limited is subject, other than such defaults that
could not, singularly or in the aggregate, have a Material Adverse Effect.
(m) KPMG LLP, who have certified certain of 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. To the Company's knowledge, Xxxxxx Xxxxxxxx LLP, who have
previously certified certain consolidated financial statements and
supporting schedules of the Company and previously delivered their report
with respect to certain audited consolidated financial statements and
supporting schedules included or incorporated by reference in the Final
Prospectus, were at all time during their engagement by the Company
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. 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
Statement, 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) The consolidated historical statements of Genuity Inc. and any
other businesses acquired by the Company (together, the "Acquired
Businesses"), 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. Such
historical financial statements fairly present in all material respects the
consolidated financial position of the Acquired Businesses 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.
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(o) 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.
(p) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to material assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
material assets is compared on a periodic basis, which the Company believes
are reasonable intervals, with the existing assets and appropriate action
is taken with respect to any material differences. The Company and its
executive officers have complied with Rule 13a-14 under the Exchange Act.
(q) 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.
(r) 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.
(s) 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, 2002, excluding inter-company balances.
(t) Prior to the date hereof, the Company has furnished to the
Representatives (i) a letter, substantially in the form of Exhibit E
hereto, duly executed by Xxxxx X. Xxxxx and addressed to the
Representatives and (ii) a letter, substantially in the form of Exhibit F
hereto, duly executed by Xxxxxx Xxxxx, Xx. and addressed to the
Representatives.
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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.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties set forth herein, 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 97.00% of the
principal amount thereof, plus accrued interest, if any, from July 8, 2003 to
the Closing Date, the principal amount of Underwritten Securities set forth
opposite such Underwriter's name on Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties set forth herein, the Company hereby grants an
option to the several Underwriters to purchase, severally and not jointly, the
Option Securities at the same purchase price as the Underwriters shall pay for
the Underwritten Securities, plus accrued interest, if any, from July 8, 2003 to
the settlement date for the Option Securities. Said option may be exercised only
to cover over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any time 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
principal amount of the Option Securities as to which the several Underwriters
are exercising the option and the settlement date. Delivery of the Option
Securities, and payment therefore, shall be made as provided in Section 3
hereof. 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 Underwritten Securities, subject to such adjustments as you in
your absolute discretion shall make to eliminate any fractional Securities.
3. Delivery and Payment. Delivery of and payment for the Underwritten
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 July 8,
2003, or at such time on such later date not more than three Business Days after
the foregoing date as the Representatives shall designate, which date and time
may be postponed by agreement among 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 of the Securities being sold by
the Company 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
Underwritten Securities and the Option Securities shall be made through the
facilities of The Depository Trust Company 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, at 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, xx the date specified by the
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Representatives (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,
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
Statement, 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
Statement or supplement (including the Final Prospectus or any Preliminary
Final 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 Statement has become or becomes 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 in a form reasonably approved by the
Representatives 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 Statement, 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 Statement shall have been filed or become
effective, (4) of any request by the Commission or its staff for any
amendment of the Registration Statement, 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 Statement 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.
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(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 Statement 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 any
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 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 Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (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 the Preliminary Final
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 (or in the case of
clause (F) below, 30 days) following the Execution Time, without the prior
written consent of Citigroup Global Markets Inc., offer, sell, contract to
sell, pledge, or otherwise dispose of, (or enter into any transaction which
is designed to result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the
Company or any affiliate of the Company or any person in privity with the
Company or any affiliate of the Company) directly or indirectly, including
the filing (or participation in the filing) of a registration statement
with the Commission in respect of,
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or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Exchange
Act, any shares of capital stock or securities convertible into, or
exchangeable for, shares of capital stock (other than the Securities) or
publicly announce an intention to effect any such transaction, except for:
(A) up to 10,000,000 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 10,000,000 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 at the Execution Time or options
granted pursuant to any such plan in effect at the Execution Time, provided
that such options cannot be exercised for any remaining portion of such
90-day period, (C) maintaining the effectiveness of any registration
statement in place at the Execution Time or otherwise permitted to be filed
under this paragraph, (D) Common Stock issued in connection with the
exercise of any warrants or convertible securities outstanding at the
Execution Time, (E) Common Stock issued to prospective employees in
connection with such employees being hired by the Company or any of its
subsidiaries, (F) Common Stock issued in connection with transactions
pursuant to Section 3(a)(9) of the Securities Act, provided that the
recipient of such shares issued within 30 days of the Execution Time agree
to be bound by the provisions of this paragraph for any remaining portion
of such 30-day period and after such 30-day period there shall be no
restrictions on such transactions and (G) the Securities and the Common
Stock issuable upon conversion of the Securities.
(g) The Company will comply with all applicable securities and other
applicable laws, rules and regulations, including, without limitation, the
Sarbanes Oxley Act.
(h) The Company will not take, directly or indirectly, any action
designed to or that would constitute or that 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.
(i) 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.
(j) The Company will reserve and keep available at all times, free of
preemptive rights, the full number of shares of Common Stock issuable upon
conversion of the Securities.
(k) Between the Execution Time and the Closing Date, the Company will
not do or authorize any act or thing that would result in an adjustment of
the conversion price.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may
12
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 Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement 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
Statement shall have been issued and no proceeding for that purpose shall
have been instituted or threatened.
(b) The Company shall have requested and caused Xxxxxxx Xxxx &
Xxxxxxxxx, 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 Xxxxxxx Berlin Shereff Xxxxxxxx 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 internal counsel for the Company to
have furnished to the Representatives its opinion as to Canadian regulatory
matters, 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 Xxxxxx X. Xxxxxx, Group Vice President, General Counsel and
Secretary of the Company, or any Assistant General Counsel 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 &
Xxxxx LLP, 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 Statement, 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.
13
(g) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the President and Chief Executive
Officer and the Group 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 Statement, 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 that are qualified as to materiality are true and correct
and all other 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 Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Final Prospectus
(exclusive of any supplements thereto), 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, 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).
(h) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Group Vice President and Chief
Financial Officer of the Company, dated the Closing Date, to the effect of
Exhibit G. The Representatives acknowledge and agree that the signer of
such certificate shall have no personal liability whatsoever with respect
to the contents thereof.
(i) At the Execution Time and at the Closing Date, the Company shall
have requested and caused KPMG LLP to furnish to the Representatives
letters, dated respectively as of the Execution Time and as of the Closing
Date, in form and substance 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 that they have
performed a review of the unaudited interim financial information of the
Company for the three-month period ended March 31, 2003, and as at March
31, 2003, in accordance with Statement on Auditing Standards No. 100, and
stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules and pro forma financial statements
included or incorporated by reference in the Registration Statement
and the Final Prospectus and reported
14
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) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their
limited review, in accordance with the standards established under
Statement on Auditing Standards No. 100, of the unaudited interim
financial information for the three-month period ended March 31, 2003,
and as at March 31, 2003; carrying out certain specified procedures
(but not an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of significance
with respect to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders, directors and audit
and compensation committees of the Company and the Subsidiaries; and
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to December 31,
2002, nothing came to their attention which caused them to believe
that:
(A) any unaudited financial statements included or
incorporated by reference in the Registration Statement
and the Final Prospectus do not comply as to form in
all material respects with applicable accounting
requirements of the Securities Act and with the related
rules and regulations adopted by the Commission with
respect to financial statements included or
incorporated by reference in quarterly reports on Form
10-Q under the Exchange Act; and said unaudited
financial statements are not in conformity with
generally accepted accounting principles applied on a
basis substantially consistent with that of the audited
financial statements included or incorporated by
reference in the Registration Statement and the Final
Prospectus; or
(B) with respect to the period subsequent to March 31,
2003, there were any changes, at a specified date not
more than five days prior to the date of the letter, in
the long-term debt of the Company and its subsidiaries
or capital stock of the Company or decreases in the
stockholders' equity of the Company as compared with
the amounts shown on the March 31, 2003 consolidated
balance sheet included or incorporated by reference in
the Registration Statement and the Final Prospectus, or
for the period from April 1, 2003 to such specified
date there were any increases, as compared with the
corresponding period in the preceding quarter, in net
loss or loss from continuing operations before income
taxes or in total or per share amounts of net
income/loss of the Company and its subsidiaries, except
in all instances for
15
changes or increases set forth in such letter, in which
case the letter shall be accompanied by an explanation
by the Company as to the significance thereof unless
said explanation is not deemed necessary by the
Representatives; or
(C) the information included or incorporated by reference
in the Registration Statement and Final Prospectus in
response to Regulation S-K, Item 301 (Selected
Financial Data), Item 302 (Supplementary Financial
Information), Item 402 (Executive Compensation) 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) set
forth in the Registration Statement and the Final Prospectus and in
Exhibit 12 to the Registration Statement, including the information
set forth under the captions "Summary", "Risk Factors", "Use of
Proceeds", "Capitalization" and "Description of Notes" in the Final
Prospectus, the information included or incorporated by reference in
Items 1, 2, 6, 7 and 11 of the 2002 10-K/A incorporated by reference
in the Registration Statement and the Final Prospectus, and the
information included in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included or
incorporated by reference in the Company's Quarterly Reports on Form
10-Q for the quarter ended March 31, 2003 incorporated by reference in
the Registration Statement and the Final Prospectus agrees with the
accounting records of the Company and its subsidiaries, excluding any
questions of legal interpretation; and
(iv) they have read the unaudited pro forma financial statements
included or incorporated by reference in the Registration Statement
and the Final Prospectus (the "pro forma financial statements");
carried out certain specified procedures; inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters; and proved the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the pro forma financial statements, and the officials of the Company
referred to above have stated, in response to such auditor's
inquiries, that all significant assumptions regarding the business
combinations have been reflected in the pro forma adjustments and that
the unaudited condensed consolidated financial statements referred to
herein comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X.
All references in this Section 6(i) to the Registration Statement and
the Final Prospectus shall be deemed to include any amendment or supplement
thereto at the date of the applicable letter.
16
(j) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (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 Registration Statement (exclusive of any
amendment thereof) and 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 of a possible
change in any such rating that does not indicate the direction of the
possible change.
(l) The shares of Common Stock initially 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 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
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 & Xxxxx LLP, counsel for the
Underwriters, at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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
17
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 Citigroup Global Markets 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 Statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in the Basic Prospectus, any Preliminary Final Prospectus or in 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 Final 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 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 Final 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.
18
(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 Statement, 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. 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 paragraphs related to stabilization, syndicate covering transactions and
penalty bids, and (iv) the representations relating to offerings in the United
Kingdom, under the heading "Underwriting" in the Preliminary Final Prospectus
and the Final Prospectus, constitute the only information furnished in writing
by or on behalf of the several Underwriters for inclusion in any Preliminary
Final Prospectus or the 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
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes
19
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 Underwriters and controlling persons, which
firm shall be designated in writing by Citigroup Global Markets 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 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
20
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 Statement 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
cancelation of this Agreement.
21
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 the Citigroup Global Markets Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel; or, if sent to the Company, will be mailed, delivered or
telefaxed to Level 3 Communications, Inc. (fax no.: (000) 000-0000) Attention:
General Counsel and confirmed to it at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, 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 Statement at the Effective Date
(including any documents incorporated by reference), 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
Statement, 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.
22
"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.
"Preliminary Final 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 Statement" shall mean the Registration Statement
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 become 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.
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,
Xxxxx 0 Communications, Inc.
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Citigroup Global Markets Inc.
Credit Suisse First Boston LLC
X.X. Xxxxxx Securities Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
By: Citigroup Global Markets Inc.
By: /s/ D. Xxxxx Xxxxxx
-----------------------------
Name: D. Xxxxx Xxxxxx
Title: Managing Director
For themselves and the other
several Underwriters named
in Schedule I to the foregoing
Agreement.
SCHEDULE I
Principal Amount of
Underwritten
Underwriters Securities to be Purchased
------------ --------------------------
Citigroup Global Markets Inc. ................................. $195,000,000
Credit Suisse First Boston LLC ................................ 32,500,000
X.X. Xxxxxx Securities Inc. ................................... 32,500,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ............ 32,500,000
Xxxxxx Xxxxxxx & Co. Incorporated ............................. 32,500,000
------------
Total ................................................ $325,000,000
============
SCHEDULE II
Subsidiaries
(i)Structure, Inc.
Level 3 Holdings, Inc.
KCP, Inc.
Xxxxx 0 International, Inc.
Xxxxx 0 Communications, LLC
Software Spectrum, Inc.
Level 3 Finance, LLC
BTE Equipment, LLC
EXHIBIT A
Opinion of
Xxxxxxx Xxxx & Xxxxxxxxx
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 (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 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
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 Statement 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 Statement 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 Statement has become effective under the Securities
Act; any required filing of the Basic Prospectus, any Preliminary Final
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 Statement has been issued, no proceedings for
that purpose have been instituted or threatened and the Registration Statement
and the Final
2
Prospectus (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.
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, the Indenture and the Securities or for the
consummation of the transactions contemplated hereby or 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 this Agreement or the Indenture,
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,
including the issuance of the Common Stock upon conversion of the Securities,
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 actual authorized equity capitalization as of March 31,
2003, 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
3
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.
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 this
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 the Supplemental Indenture and to perform its
obligations hereunder or thereunder, including the issuance of the Securities;
as of the date of its execution, the Company had full corporate right, power and
authority to execute and deliver the Base Indenture 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 this Agreement and the Indenture and
for the consummation of the transactions contemplated hereby or thereby 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 Statement 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--Level 3 is
subject to significant regulation that
4
could change in an adverse manner" and "-- Potential regulation of Internet
service providers could adversely affect Level 3's 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.
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.
ANNEX I
to Exhibit A
1. 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 Xxxxx 0 Communications, LLC.
2. Agreement, dated November 19, 1998, between Worldwide Fibre Inc. and Xxxxx
0 Communications, LLC for construction and right of way.
3. Agreement, dated November 19, 1998, between Mi-Link LLC and Level 3
Communications, LLC for construction and right of way.
4. Assignment, dated December 19, 1998, by Xxxxx 0 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.
5. Fiber Optic Survey Agreement between Level 3 Communications, LLC and Union
Pacific Rail Road Company, dated March 31, 1998.
6. Fiber Optic Agreement between Level 3 Communications, LLC and Union Pacific
Rail Road Company, dated 1998.
7. Agreement between Kiewit Coal Properties, Inc. and Xxxxxx Mining Group,
Inc., dated January 8, 1992.
8. Separation Agreement by and among Xxxxx Xxxxxx Sons', Inc., Kiewit
Diversified Group, Inc., PKS Holdings, Inc., and Xxxxxx Construction Group,
Inc., dated December 8, 1997.
9. Amendment to Separation Agreement by and among Xxxxx Xxxxxx Sons', Inc.,
Level 3 Communications, Inc., PKS Holdings, Inc. and Xxxxxx Construction
Group, Inc., dated March 18, 1998.
10. Tax Sharing Agreement by and between Xxxxx Xxxxxx Sons', Inc. and PKS
Holdings, Inc., dated March 26, 1998.
11. Promissory Note from Xxxxx Xxxxxx Sons' Co. to Metropolitan Life Insurance
Company, dated June 27, 1997.
12. Deed of Trust, Security Agreement and Fixture Filing by Xxxxx Xxxxxx Sons'
Co., to Metropolitan Life Insurance Company, dated June 27, 1997.
13. Master Right-of-Way Agreement among Level 3 Communications, LLC and The
Burlington Northern and Santa Fe Railway Company, dated June 23, 1998.
2
14. Intercity Network Infrastructure Contract between Level 3 Communications,
LLC and Kiewit Construction Company, dated June 15, 1998.
15. Modification Number One to Intercity Network Infrastructure Contract
between Level 3 Communications, LLC and Kiewit Construction Company, dated
June 25, 1999.
16. Global Master Procurement Agreement between BTE Equipment, LLC and Lucent
Technologies Inc., dated May 17, 1999.
17. 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.
18. Fiber Optic Cable System Contract between Xxxxx 0 Xxxxxxxxxxxxxx Xxxxxxx,
Xxxxx 0 Communications S.A. and Alcatel Submarine Networks S.A., dated May
14, 1999.
19. Engineer, Procure and Construct Contract between Level 3 Communications,
GmbH and Alcatel Contracting, GmbH dated March 30, 1999.
20. Engineer, Procure and Construct Contract between Level 3 Communications,
Ltd. and Fujitsu Telecommunications Europe, Ltd., dated March 19, 1999.
21. Engineer, Procure and Construct Contract between Level 3 Communications, SA
and Alcatel Contracting, SA dated April 9, 1999.
22. 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.
23. Supply Contract among Xxxxx 0 (Xxxxxxx) Xxx., Xxxxx 0 Xxxxxxxxxxxxxx
Xxxxxxx, Xxxxx 0 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.
24. 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 to the date hereof.
25. 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.
26. 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.
27. Indenture, dated as of April 28, 1998 between Level 3 Communications, Inc.
and IBJ Xxxxxxxx Bank & Trust Company, as trustee.
3
28. Indenture, dated as of December 2, 1998 between Level 3 Communications,
Inc. and IBJ Xxxxxxxx Bank & Trust Company, as trustee.
29. Indenture, dated as of September 20, 1999, between Level 3 Communications,
Inc. and IBJ Whitehall Bank & Trust Company, as trustee.
30. First Supplemental Indenture, dated as of September 20, 1999, between Level
3 Communications, Inc. and IBJ Whitehall Bank & Trust Company, as trustee.
31. Second Supplemental Indenture, dated as of February 29, 2000, between Level
3 Communications, Inc. and the Bank of New York (as successor to IBJ
Whitehall Bank & Trust Company), as trustee.
32. Third Supplemental Indenture, dated as of July 8, 2002, as amended, between
Xxxxx 0 Communications, Inc. and the Bank of New York (as successor to IBJ
Whitehall Bank & Trust Company), as trustee.
33. Asset Purchase Agreement by and among Xxxxx 0 Xxxxxxxxxxxxxx, Xxx., Xxxxx 0
Communications, LLC, Genuity Inc., and the subsidiaries of Genuity Inc.
listed on the signature page thereto, dated as of November 27, 2002.
34. 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
Company, the Purchasers and the Seller.
35. Second Amendment and Waiver to the Asset Purchase Agreement, dated as of
January 24, 2003, by and among the Company, the Purchasers and the Sellers.
36. Third Amendment and Waiver to the Asset Purchase Agreement, dated as of
January 31, 2003, by and among the Company, the Purchasers and the Sellers.
37. Transition Services Agreement, dated February 4, 2003, by and among the
Purchasers and the Sellers.
38. Agreement and Plan of Merger by and among Eldorado Marketing, Inc. Eldorado
Acquisition One, Inc., Eldorado Acquisition Two, Inc. CorpSoft, Inc., Rebar
LLC, the Parties submitting properly completed transmittal letters and,
solely for purposes of Article XIII, Level 3 Communications, Inc. dated as
of February 25, 2002.
39. Agreement and Plan of Merger dated as of May 1, 2002 by and among Xxxxx 0
Xxxxxxxxxxxxxx, Xxx., Xxxxxxxx Acquisition Three, Inc. and Software
Spectrum, Inc.
40. Network Services Agreement by and between American Online, Inc. and Genuity
Solutions, Inc. (f/k/a BBN Corporation), as amended by the First Amendment
dated as of January 8, 2002 and the Second Amendment, dated as of November
20, 2002.
41. Master Service Agreement, dated October 24, 2002, between Level 3
Communications, LLC and Verizon Global Solutions, Inc.
4
42. Trans-oceanic Capacity IRU Agreement, dated December 12, 2001, between
Level 3 Communications, LLC and America Online, Inc.
43. Metro IRU Agreement, dated February 5, 2003, between Level 3
Communications, LLC and America Online Inc.
EXHIBIT B
Opinion of
Xxxxxxx Berlin Shereff Xxxxxxxx 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 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", "Business--Regulation" and "Regulatory
Update", 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 Agreement.
5. Neither the execution and delivery of this Agreement or the
Indenture, nor the issue and sale of the Securities contemplated hereby or
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 Statement
2
and the Final Prospectus. 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 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 Statement 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--Level 3 is subject to significant
regulation that could change in an adverse manner," "--Canadian law currently
does not permit Xxxxx 0 to offer services in Canada" and "--Potential regulation
of Internet service providers could adversely affect Level 3's operations",
"Business--Regulation" and "Regulatory Update", 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 Statement 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.
EXHIBIT C
Opinion of
Internal Counsel for the Company Covering Canadian Regulatory Issues
1. The statements in the Final Prospectus under the captions "Canadian
Regulation" insofar as such statements describe or summarize matters of
law or constitute legal conclusions, fairly describe or summarize all
matters referred to therein.
EXHIBIT D
Opinion of
Xxxxxx X. Xxxxxx, Group 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 or the
Indenture, the issue and sale of the Securities, nor the consummation of any
other of the transactions herein or therein contemplated nor the fulfillment of
the terms thereof, including the issuance of the Common Stock upon conversion of
the Securities, 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 the Company's our historical
operations could be material" and "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 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.
EXHIBIT E
[Letterhead of Xxxxx Xxxxx]
July 1, 2003
Citigroup Global Markets Inc.
Credit Suisse First Boston LLC
X.X. Xxxxxx Securities Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
As Representatives of the several Underwriters
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with a proposed
Underwriting Agreement (the "Underwriting Agreement") between Level 3
Communications, Inc., a Delaware corporation (the "Company") and Representatives
of the several Underwriters named in Schedule I thereto, whereby the
Underwriters have agreed to purchase 2.875% Convertible Senior Notes Due 2010,
convertible into Shares of Common Stock, par value $0.01 per share (the
"Securities"), of the Company pursuant to the Underwriting Agreement.
In order to induce you to purchase the Securities pursuant to the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Citigroup Global Markets Inc., offer, sell, contract to sell, pledge
or otherwise dispose of, or file (or participate in the filing of) a
registration statement with the U.S. Securities and Exchange Commission in
respect of, or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the U.S. Securities and Exchange Commission promulgated thereunder with respect
to, any shares of capital stock of the Company or any securities convertible or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 90 days after the date
of the Purchase Agreement, other than shares of Common Stock disposed of as bona
fide gifts approved by Citigroup Global Markets Inc.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Very truly yours,
____________________________
Name: Xxxxx Xxxxx
Address:
EXHIBIT F
[Letterhead of Xxxxxx Xxxxx, Xx.]
July 1, 2003
Citigroup Global Markets Inc.
Credit Suisse First Boston LLC
X.X. Xxxxxx Securities Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
As Representatives of the several Underwriters
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with a proposed
Underwriting Agreement (the "Underwriting Agreement") between Level 3
Communications, Inc., a Delaware corporation (the "Company") and Representatives
of the several Underwriters named in Schedule I thereto, whereby the
Underwriters have agreed to purchase 2.875% Convertible Senior Notes Due 2010,
convertible into Shares of Common Stock, par value $0.01 per share (the
"Securities"), of the Company pursuant to the Underwriting Agreement.
In order to induce you to purchase the Securities pursuant to the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Citigroup Global Markets Inc., offer, sell, contract to sell, pledge
or otherwise dispose of, or file (or participate in the filing of) a
registration statement with the U.S. Securities and Exchange Commission in
respect of, or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the U.S. Securities and Exchange Commission promulgated thereunder with respect
to, any shares of capital stock of the Company or any securities convertible or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 90 days after the date
of the Purchase Agreement, other than (i) shares of Common Stock disposed of as
bona fide gifts approved by Citigroup Global Markets Inc. or (ii) shares of
Common Stock issued in connection with the exercise of any warrants owned by the
undersigned and outstanding at the Execution Time.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Very truly yours,
_________________________________
Name: Xxxxxx Xxxxx, Xx.
Address:
EXHIBIT G
CERTIFICATE
OF
LEVEL 3 COMMUNICATIONS, INC.
In connection with the offering of $325,000,000 of 2.875% Convertible
Senior Notes due 2010, I, Xxxxx Xxxxx, solely in my capacity as the Group Vice
President and Chief Financial Officer of Level 3 Communications, Inc. (the
"Company") and, pursuant to Section 6(h) of the Underwriting Agreement, dated
July 1, 2003, among the Company and the Underwriters listed in Schedule I
thereto (the "Underwriting Agreement"), do hereby certify, to the best of my
knowledge and belief, without any personal liability as to the contents hereof,
as follows:
1. The consolidated historical financial statements and schedules of
the Company and its consolidated subsidiaries for the fiscal years ended
December 31, 2001 and December 31, 2000 audited by Xxxxxx Xxxxxxxx LLP and
included or incorporated by reference in the Final Prospectus (the "Final
Prospectus") dated July 1, 2003, including any amendments or supplements
thereto, present fairly in all material respects the financial condition,
results of operations and cash flows of the Company as of the dates and for the
periods indicated, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act of 1933, as amended,
and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved (except
as otherwise noted therein).
2. The other information of an accounting or financial nature relating
to the fiscal years ended December 31, 2001 and December 31, 2000 included or
incorporated by reference in the Final Prospectus, has been derived from and
agrees with such financial statements or the accounting records of the Company
in all material respects.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
8th day of July, 2003.
XXXXX 0 COMMUNICATIONS, INC.
By_____________________________
Name: Xxxxx Xxxxx
Title: Group Vice President & Chief
Financial Officer
