{"id":43809,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/investment-agreement-level-3-communications-inc-longleaf.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"investment-agreement-level-3-communications-inc-longleaf","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/securities\/investment-agreement-level-3-communications-inc-longleaf.html","title":{"rendered":"Investment Agreement &#8211; Level 3 Communications Inc., Longleaf Partners Fund, Longleaf Partners Small-Cap Fund, Legg Mason Special Investment Trust Inc., Legg Mason Investment Trust Inc. and National Indemnity Co."},"content":{"rendered":"<pre>                                    AGREEMENT\n\n         This Agreement (this \"Agreement\") is dated as of the 5th day of\n                               ---------\nJuly 2002 by and among Level 3 Communications, Inc., a Delaware corporation with\nits principal office at 1025 Eldorado Boulevard, Broomfield, Colorado 80021 (the\n\"Company\"), and each of the investors named in EXHIBIT A attached hereto (each,\n -------                                       ---------\nan \"Investor\" and collectively, the \"Investors\").\n    --------                         ---------\n\n         WHEREAS, the Company and the Investors have been discussing a potential\ninvestment by the Investors in the Company, the use of proceeds of that\ninvestment is intended for the Company's general corporate purposes, including\npotential acquisitions of complementary telecommunications businesses or assets\nas a means to act as a catalyst for consolidation in the telecommunications\nindustry; and\n\n         WHEREAS, it was the mutual desire of the Company and the Investors that\nthe Investors investment in the Company would take the form of a newly issued\nseries of the Company's preferred stock, which preferred stock would 1) be\nmandatorily redeemable on the tenth anniversary of issuance, 2) have a dividend\npayable in cash on a quarterly basis at the rate of 9% of the liquidation value\nof the preferred stock, 3) be convertible into shares of the Company's common\nstock at any time at the option of the holder at a rate that would be agreed to\nby the Company and the Investors but would represent an 11% premium to the\nclosing price of the Company's common stock, par value $.01 per share (the\n\"Common Stock\") on the Nasdaq National Market to be agreed by the parties, and\n4) be redeemable at the option of the Company after the fifth anniversary of\nissuance beginning at a rate of 104.5% of the liquidation value, declining\nratably to par after the ninth anniversary of issuance (the \"Proposed Preferred\nStock\"); and\n\n         WHEREAS, in connection with the finalization of the terms of the\ninvestment and the form of security that would be issued by the Company to the\nInvestors to represent that investment, the parties determined that for a\nvariety of reasons, including state corporate law limitations on the Company's\nability to pay cash dividends and limitations contained in certain of the\nCompany's existing debt agreements, it would not be possible at this time for\nthe Company to issue the Proposed Preferred Stock; and\n\n         WHEREAS, the Company and the Investors agreed that in order for the\nCompany to be in a position to pursue its plans for consolidation in the\ntelecommunications industry as soon as possible that the Company and the\nInvestors would restructure the nature of the Investors investment in the\nCompany from the Proposed Preferred Stock to a junior subordinated convertible\nnote that would have, as nearly as possible, the same economic terms as the\nProposed Preferred Stock (the \"New Junior Convertible Debt\"); and\n                               ---------------------------\n\n         WHEREAS, the Investors have agreed that the terms of the New Junior\nConvertible Debt will include a provision that will allow the Company, at its\noption, to mandate the conversion of the New Junior Debt to a newly issued\nseries of the Company's preferred stock that would have the same economic terms\nas the Proposed Preferred Stock (the \"Preferred Stock\") at such time as the\nBoard of Directors of the Company determines, in its good faith, that the\nCompany's ability to issue the Preferred Stock and to pay cash dividends for a\nreasonably foreseeable period into\n\nConfidential\n\n\n\nthe future would not be limited by applicable state corporate law or the terms\nand conditions of any the Company's then existing debt obligations; and\n\n         WHEREAS, the Investors have also agreed that the terms of the New\nJunior Convertible Debt will include a provision that states that upon any\nliquidation of the Company, the New Junior Convertible Debt will rank senior to\nthe Company's Common Stock and preferred stock, but will rank junior to all of\nthe Company's existing indebtedness; and\n\n         WHEREAS, the Investors and the Company desire to memorialize their\ncommitment to explore the issuance to the Investors of alternative non-debt\nsecurities, which securities would be issued in exchange for the New Junior\nConvertible Debt.\n\n         NOW THEREFORE, in consideration of the mutual agreements herein\ncontained, the parties hereto agree as follows.\n\n         1. Purchase of New Junior Convertible Debt. Pursuant to the Purchase\n            ---------------------------------------\nAgreement, dated the date hereof and attached as Exhibit B, the Company has\nissued and sold to the Investors the New Junior Convertible Debt, which includes\na provision that will allow the Company, at its option, to mandate the\nconversion of the New Junior Convertible Debt to a Preferred Stock at such time\nas the Board of Directors of the Company determines, in its good faith, among\nother things, that the Company's ability to issue the Preferred Stock and to pay\ncash dividends for a reasonably foreseeable period into the future is not\nprohibited by applicable provisions of law or the terms and provisions of any\nagreement of the Company, including any agreement or instrument relating to its\nindebtedness or the Company's Certificate of Incorporation or Bylaws, or if the\nconversion would constitute a breach thereof, or a default thereunder, or if the\nmaking of the conversion shall be restricted or prohibited by any applicable\nlaw, rule or regulation.\n\n         2. Continued Review of Alternative Securities. The Investors and the\n            ------------------------------------------\nCompany agree to continue to analyze, review and consider the issuance to the\nInvestors by the Company or one of its affiliates (including a wholly owned\nsubsidiary) of a security that is a preferred equity security and would provide\nto the Investors comparable economic terms and conditions. Any such issuance\nwould only take place if such alternate security would comply with the Company's\nexisting debt obligations and applicable provisions of law and if the all of the\nterms thereof are mutually agreeable to the Company and the Investors, in each\ncase in their sole discretion.\n\n         3. Further Investment. The Investors and the Company agree to discuss,\n            ------------------\nfrom time to time, possible future investments by the Investors in the\nsecurities of the Company in connection with future acquisition opportunities\nthat the Company may identify. The Company acknowledges that no Investor has\nmade any commitment to make any such future investment, and that the decision to\nmake any such future investment is in the sole discretion of each Investor. The\nInvestors acknowledge that the Company has made no commitment to offer any such\nfuture investment to any Investor, and that the decision to make any such offer\nof future investment is in the sole discretion of the Company.\n\nConfidential\n\n\n\n\n         4. Public Statements or Releases. Neither the Company nor any Investor\n            ----------------------------\nshall make any public announcement with respect to the existence or terms of\nthis Agreement or the transactions provided for herein without the prior\napproval of the other parties, which shall not be unreasonably withheld or\ndelayed. Notwithstanding the foregoing, nothing in this Section 4 shall prevent\nany party from making any public announcement it considers necessary in order to\nsatisfy its obligations under the law or the rules of any national securities\nexchange or market, provided such party, to the extent practicable, provides the\nother parties with an opportunity to review and comment on any proposed public\nannouncement before it is made.\n\n         5. Captions.  The captions and paragraph headings of this\n            --------\nAgreement are solely for the convenience of reference and shall not affect\nits interpretation.\n\n         6. Severability. Should any part or provision of this Agreement be held\n            ------------\nunenforceable or in conflict with the applicable laws or regulations of any\njurisdiction, the invalid or unenforceable part or provisions shall be replaced\nwith a provision which accomplishes, to the extent possible, the original\nbusiness purpose of such part or provision in a valid and enforceable manner,\nand the remainder of this Agreement shall remain binding upon the parties\nhereto.\n\n         7. Governing Law.  This Agreement shall be governed by, and\n            -------------\nconstrued in accordance with, the laws of the State of New York, without\ngiving effect to conflict of law principles thereof.\n\n         8. Counterparts.  This Agreement may be signed in one or more\n            ------------\ncounterparts, each of which shall be an original, but all of which together\nshall constitute one instrument.\n\n         9. Conflict With Other Agreements. Notwithstanding any other provision\n            ------------------------------\nof this Agreement to the contrary, to the extent that any provision of this\nAgreement conflicts with or contradicts any provision in any agreement, document\nor instrument that sets forth the terms and conditions, rights, privileges or\npreferences of either the 9% Junior Convertible Subordinated Notes due 2012 or\nthe Series B Convertible Preferred Stock (the \"Other Documents\") the terms of\nthe Other Documents shall govern and supersede the provisions of this Agreement.\n\n                            [Signature page follows]\n\n\n\nConfidential\n\n\n\n\n\n     IN WITNESS WHEREOF, the parties hereto have executed this Agreement under\nseal as of the day and year first above written.\n\n                              LEVEL 3 COMMUNICATIONS, INC.\n\n\n                              By:      \/s\/ Thomas C. Stortz\n                                   --------------------------------------------\n                                   Name:  Thomas C. Stortz\n                                   Title:    Group Vice President\n\n\n\n                              INVESTORS:\n\n                              LONGLEAF PARTNERS FUND,\n                                a series of Longleaf Partners Funds Trust,\n                                a Massachusetts business trust\n\n                              By:      \/s\/ O. Mason Hawkins\n                                   --------------------------------------------\n                                   Name:  O. Mason Hawkins\n                                   Title:    Chairman of the Board\n\n\n                              LONGLEAF PARTNERS SMALL-CAP FUND,\n                                a series of Longleaf Partners Funds Trust,\n                                a Massachusetts business trust\n\n\n                              By:      \/s\/ O. Mason Hawkins\n                                   --------------------------------------------\n                                   Name:  O. Mason Hawkins\n                                   Title:    Chairman of the Board\n\n\n                              LEGG MASON SPECIAL INVESTMENT TRUST, INC.\n\n                              By:  Legg Mason Funds Management, Inc.\n                                   Investment Manager\n\n                              By:      \/s\/ Mary Chris Gay\n                                   --------------------------------------------\n                                   Name: Mary Chris Gay\n                                   Title:    Senior Vice President\n\n\n\n\n\n                              LEGG MASON INVESTMENT TRUST, INC.\n\n                              By:  Legg Mason Funds Management, Inc.\n                                   Investment Manager\n\n                              By:      \/s\/ Mary Chris Gay\n                                   --------------------------------------------\n                                   Name: Mary Chris Gay\n                                   Title:    Senior Vice President\n\n                              NATIONAL INDEMNITY CO.\n\n\n\n                              By:      \/s\/ Marc B. Hamburg\n                                   --------------------------------------------\n                                   Name: Marc B. Hamburg\n                                   Title: Treasurer\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8040,8048],"corporate_contracts_industries":[9418,9519],"corporate_contracts_types":[9630,9629],"class_list":["post-43809","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-legg-mason-inc","corporate_contracts_companies-level-3-communications-inc","corporate_contracts_industries-financial__securities","corporate_contracts_industries-telecommunications__telephone","corporate_contracts_types-securities__invest","corporate_contracts_types-securities"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43809","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43809"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43809"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43809"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43809"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}