Exhibit 10.2


 


EXHIBIT A


 


[Form Of]


 


REGISTRATION
RIGHTS AND TRANSFER RESTRICTION AGREEMENT


 


BY AND BETWEEN


 


LEVEL 3
COMMUNICATIONS, INC.


 


LEUCADIA NATIONAL
CORPORATION


 


AND


 


BALDWIN
ENTERPRISES, INC.


 










 


Dated as of
          
    ,      


 










 
















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
  EFFECTIVENESS; DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Effectiveness

  	
  1

  
	
  1.2

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  REGISTRATION

  	
  6

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Shelf Registration

  	
  6

  
	
  2.2

  	
  Certain Underwritten
  Offerings Pursuant to the Shelf Registration

  	
  7

  
	
  2.3

  	
  Piggyback Underwritten
  Offerings

  	
  10

  
	
  2.4

  	
  Registration Procedures

  	
  12

  
	
  2.5

  	
  Standstill Agreement;
  Restrictions on Transfer

  	
  15

  
	
  2.6

  	
  Blackout Periods;
  Suspension of Dispositions

  	
  16

  
	
  2.7

  	
  Indemnification

  	
  18

  
	
  2.8

  	
  Assignment of
  Registration Rights

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  RULE 144

  	
  21

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Current Public
  Information

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  MISCELLANEOUS

  	
  22

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Notices

  	
  22

  
	
  4.2

  	
  Governing Law

  	
  22

  
	
  4.3

  	
  Submission to
  Jurisdiction

  	
  23

  
	
  4.4

  	
  Successors and Assigns

  	
  23

  
	
  4.5

  	
  Counterparts

  	
  23

  
	
  4.6

  	
  Severability

  	
  23

  
	
  4.7

  	
  Entire Agreement

  	
  23

  
	
  4.8

  	
  No Waivers; Amendments

  	
  23

  
	
  4.9

  	
  Specific Enforcement;
  Cumulative Remedies

  	
  24

  
	
  4.10

  	
  Time of the Essence

  	
  24

  
	
  4.11

  	
  Construction

  	
  24

  
	
  4.12

  	
  Information

  	
  24

  



 


i





















 


[FORM OF]


REGISTRATION RIGHTS AND TRANSFER RESTRICTION AGREEMENT


 


This AGREEMENT (this “Agreement”), dated as of            
      ,          ,
is entered into by and among Level 3 Communications, Inc., a Delaware
corporation (the “Company”), Leucadia National Corporation, a New York
corporation (“Leucadia”), and Baldwin Enterprises, Inc. (“Baldwin”),
a Colorado corporation and wholly owned subsidiary of Leucadia.


 


RECITALS


 


WHEREAS, the Company, Leucadia and Baldwin are parties
to an Acquisition Agreement, dated as of October 30, 2005 (the “Acquisition
Agreement”); and


 


WHEREAS, pursuant to the Acquisition Agreement, Baldwin
will receive shares of common stock, par value $0.01 per share of the Company.


 


NOW, THEREFORE, in consideration of the promises,
mutual covenants and agreements hereinafter contained and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:


 


ARTICLE 1

EFFECTIVENESS; DEFINITIONS


 


1.1                                 Effectiveness.  This Agreement shall be effective as of the “Closing”
as defined in the Acquisition Agreement (hereinafter, the “Closing”).


 


1.2                                 Definitions.


 


“Acquisition Agreement” shall have the meaning
set forth in the Recitals hereto.


 


“Advice” shall have the meaning set forth in Section 2.6.2
hereof.


 


“Affiliate” means, with respect to any Person,
any Person who, directly or indirectly, controls, is controlled by or is under
common control with any Person; and the term “control” (including the terms “controlled
by” and “under common control with”) means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through ownership of voting securities, by
contract or otherwise.


 


“Agreement” shall have the meaning set forth in
the introductory paragraph hereof.


 


“Beneficially Ownership” or “Beneficially
Owning” shall have the meaning ascribed to such term under Rule 13d-3
of the Exchange Act.


 





















 


“Blackout Period” shall have the meaning set
forth in Section 2.6.1 hereof.


 


“Block” means one (1) single trade at one (1) single
price with one (1) or more counterparties of at least five million
(5,000,000) shares of Registrable Securities.


 


“Board” means the Board of Directors of the
Company.


 


“Business Day” means any day other than a
Saturday, Sunday or other day on which commercial banks are authorized or
required to close under the laws of the United States or the State of New York.


 


“Common Stock” means the common stock, par
value $0.01 per share of the Company.


 


“Common Stock Equivalents” means, without duplication
with any other Common Stock or Common Stock Equivalents, any rights, warrants,
options, convertible securities or indebtedness, exchangeable securities or
indebtedness, or other rights, exercisable for or convertible or exchangeable
into, directly or indirectly, Common Stock and securities convertible or
exchangeable into Common Stock, whether at the time of issuance or upon the
passage of time or the occurrence of any future event.


 


“Company” shall have the meaning set forth in
the introductory paragraph hereof.


 


“Company Notice” shall have the meaning set
forth in Section 2.3.1 hereof.


 


“Delay Fee” means a daily charge per share of
Registrable Securities, calculated at the rate of 6% per year (based on a 365
day year) on the aggregate Market Value, as of the first date of any period for
which the Delay Fee is applied, multiplied by the number of Registrable
Securities that each Investor holds on the relevant date (subject to equitable
adjustment in the case of securities other than Common Stock).


 


“Damages” shall have the meaning set forth in Section 2.7.1
hereof.


 


“Effective Date” shall mean the date the
Registration Statement becomes effective under the Securities Act.


 


“Exchange Act” means the Securities Exchange
Act of 1934, as amended, or any similar federal statute, and the rules and
regulations promulgated by the SEC thereunder.


 


“Holder” shall mean Baldwin, Leucadia and any
subsidiary of Leucadia.


 


“Investor” means
the Holder and any transferee of the Registrable Securities thereof to whom the
Holder assigns its rights under this Agreement, in whole or in part, and who
agrees to become bound by the provisions of this Agreement in accordance with Section 2.8
hereof.


 


2





















 


“Investor Affiliate”
or “Investor Affiliates” shall have the meaning set forth in Section 2.7.1
hereof.


 


“Investor Notice” shall have the meaning set
forth in Section 2.1.4 hereof.


 


“Market Value” means, as of any date, the
average per share closing price of the Common Stock on the NASDAQ National
Market over the 10-day trading period ending on the trading day immediately
prior to such date.


 


“Maximum Offering Size” shall have the meaning
set forth in Section 2.2.1 hereof.


 


“NASD” means the National Association of
Securities Dealers, Inc.


 


“Notifying Investor”
shall have the meaning set forth in Section 2.2.1.


 


“Person” or “person” means any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.


 


“Piggyback Notice”
shall have the meaning set forth in Section 2.2.1 hereof.


 


“Receiving Investor”
shall have the meaning set forth in Section 2.2.1.


 


“register,” “registered” and “registration”
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration or
ordering of the effectiveness of such registration statement.


 


“Registrable Securities” means the shares of
Common Stock to be acquired by the Holder pursuant to the transactions
contemplated by the Acquisition Agreement and any shares of capital stock or
other securities issued or issuable from time to time with respect to the
Common Stock as a result of a reclassification, share combination, share
subdivision, stock split, share dividend, merger, consolidation or similar
transaction or event or otherwise as a distribution on or in exchange for or
with respect to the Common Stock until (a) a registration statement
covering all such Registrable Securities has been declared effective by the SEC
and such Registrable Securities have been disposed of pursuant to an effective
registration statement, or (b) such Registrable Securities are sold
pursuant to Rule 144 (or any similar provision then in force).


 


“Registration Expenses” means any and all
expenses incident to the performance of or compliance with any registration or
marketing of securities, including all (i) registration and filing fees,
and all other fees and expenses payable in connection with the listing of
securities on any securities exchange or automated interdealer quotation
system, (ii) fees and expenses of compliance with any securities or “blue
sky” laws (including reasonable fees and disbursements of counsel in connection
with “blue


 


3





















 


sky” qualifications of the securities registered), (iii) expenses
in connection with the preparation, printing, mailing and delivery of any
registration statements, prospectuses and other documents in connection
therewith and any amendments or supplements thereto, (iv) security
engraving and printing expenses, (v) internal expenses of the Company
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (vi) fees and
disbursements of counsel for the Company and customary fees and expenses for
independent certified public accountants retained by the Company (including the
expenses relating to any comfort letters or costs associated with the delivery
by independent certified public accountants of any comfort letters), (vii) fees
and expenses of any special experts retained by the Company in connection with
such registration, (viii) reasonable fees and out-of-pocket expenses of
one counsel to the Investors in an aggregate amount not to exceed $35,000 in an
underwritten offering pursuant to Section 2.2, (ix) filing
fees and reasonable and customary attorneys’ fees in connection with filings
with the NASD in connection with any review by the NASD of the underwriting
arrangements for any underwritten offering pursuant to Section 2.2,
(x) costs of printing and producing any agreements among underwriters,
underwriting agreements, any “blue sky” or legal investment memoranda and any
selling agreements and other documents in connection with the offering, sale or
delivery of the Registrable Securities, (xi) transfer agents’ and registrars’
fees and expenses and the fees and expense of any other agent or trustee appointed
in connection with such offering, (xii) expenses of the Company relating to any
analyst or investor presentations or any “road shows” undertaken in connection
with an underwritten offering of the Registrable Securities pursuant to Section 2.2
 and
(xiii) any other fees and disbursements of underwriters customarily paid by
issuers or sellers of securities by excluding any underwriters discounts and
commissions attributable to the sale of Registrable Securities (other than fees
and expenses of any “qualified independent underwriter”, including fees and
expenses of counsel thereto, and fees and expenses payable in connection with
any ratings of the Registrable Securities, including expenses relating to any
presentations to rating agencies).


 


“Resale Prospectus” shall have the meaning set
forth in Section 2.1.4 hereof.


 


“Rule 144” means Rule 144 under the
Securities Act as in effect on the date hereof and such rule as from time
to time amended and any successor rule or regulation under the Securities
Act.


 


“Rule 144A” means Rule 144A under the
Securities Act as in effect on the date hereof and such rule as from time
to time amended and any successor rule or regulation under the Securities
Act.


 


“Rule 145” means Rule 145 under the
Securities Act as in effect on the date hereof and such rule as from time
to time amended and any successor rule or regulation under the Securities
Act.


 


4





















 


“Rule 415” means Rule 415 under the
Securities Act as in effect on the date hereof and such rule as from time
to time amended and nay successor rule or regulation under the Securities
Act.


 


“SEC” means the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.


 


“Securities Act” means the Securities Act of
1933, as amended, or any similar federal statute, and the rules and
regulations promulgated by the SEC thereunder.


 


“Shelf Registration Statement” shall have the
meaning provided in Section 2.1.1 hereof.


 


“Substitution Rights” shall have the meaning
provided in the Acquisition Agreement.


 


“Suspension Notice” shall have the meaning set
forth in Section 2.6.2 hereof.


 


“Suspension Period” shall have the meaning set
forth in Section 2.6.2 hereof.


 


“Takeover Proposal” means any bona fide offer
or proposal by a third party to acquire, directly or indirectly, more than 50%
of assets of the Company and its Subsidiaries, taken as a whole, or more than
50% of the Common Stock then outstanding pursuant to a merger, consolidation or
other business combination, sale of shares of capital stock or other equity
interests, sale of assets, tender offer, exchange offer or similar transaction.


 


“Transferee” shall have the meaning set forth
in Section 2.8 hereof.


 


“Transfer” shall mean to sell, contract to
sell, pledge, grant any option to purchase, acquire any option to sell,
hypothecate, loan, make a short sale or otherwise transfer or dispose of to any
Person, other than to a subsidiary of the Investor which subsidiary agrees in
writing to be bound by the terms of the Agreement.


 


“Transfer Date” shall have the meaning set
forth in Section 2.5.2 hereof.


 


“Transfer Period” shall have the meaning set
forth in Section 2.5.2 hereof.


 


“Underwriting Notice” shall have the meaning
set forth in Section 2.2.1 hereof.


 


5





















 


ARTICLE 2

REGISTRATION


 


2.1                                 Shelf Registration.


 


2.1.1                        Shelf Registration
Statement.  The Company shall
promptly upon the consummation of the Closing file with the SEC a shelf
registration statement relating to the offer and sale by the Holder at any time
and from time to time on a delayed or continuous basis in accordance with Rule 415,
through such method or methods of distribution as the Holder shall select, and
in accordance with this Agreement, of all the Registrable Securities (the “Shelf
Registration Statement”); provided that the Shelf Registration
Statement shall be filed no later than the second Business Days after the
Closing or the date on which the Holder provides all information requested by
the Company with respect to the Shelf Registration Statement, so long as the
Company has requested such information from the Holder in a timely manner.  The Company shall use its best efforts to have
the Shelf Registration Statement declared effective as expeditiously as
possible, but no later than thirty (30) days from the date of filing.  The Company shall use its reasonable best
efforts to keep the Shelf Registration Statement effective under the Securities
Act until the second anniversary of the Closing (or for such longer period if
extended pursuant to Section 2.6.3 hereof).  In the event the Shelf Registration Statement
cannot be kept effective for such period, the Company shall, subject to Section 2.6
hereof, use its reasonable best efforts to prepare and file with the SEC and
have declared effective as promptly as practicable another registration
statement on the same terms and conditions as the initial Shelf Registration
Statement and such registration statement shall be considered the Shelf Registration
Statement for purposes hereof.  The
Company shall supplement and amend the Shelf Registration Statement to reflect
changes in the manner of distribution reasonably requested by the Investors.


 


2.1.2                        Adjustment.  If at any time the outstanding shares of
Registrable Securities as a class shall have been increased, decreased, changed
into or exchanged for a different number or class of shares or securities as a
result of a reorganization, recapitalization, reclassification, stock dividend,
stock split, reverse stock split, combination or exchange of shares or other
similar change in capitalization, then an appropriate and proportionate
adjustment shall be made to the number of shares of such stock for all purposes
under this Agreement.


 


2.1.3                        Expenses.  The Company shall be liable for and pay all
Registration Expenses in connection with any registration pursuant Section 2.1.1
hereof.


 


2.1.4                        Notice of Intended Use
of Prospectus.  If, at any time
after the Closing, any Investor intends to use or deliver the prospectus
forming a part of the Shelf Registration Statement (or any prospectus
supplement or amendment thereto) in connection with any offer or sale of
Registrable Securities covered thereby (“Resale Prospectus”), such
Investor shall first give written notice thereof to the Company at least two (2) Business
Days prior to the first date such prospectus or prospectus supplement will be
used or delivered by such Investor in connection with such offer or sale (the “Investor
Notice”).  Notwithstanding anything
to the contrary contained in this


 


6





















 


Agreement,
in the event that an Investor provides the Company with the Investor Notice
that specifies that the Investor intends to use or deliver the Resale Prospectus
on a continuous basis for a period of time specified in such Investor Notice,
then the Investor Notice shall be deemed to have been provided each day during
the continuous period of time specified in the Investor Notice.


 


2.1.5                        Eligibility on Form S-3.  The Company represents and warrants that it
meets the requirements for the use of Form S-3 for registration of the
sale by the Investors of the Registrable Securities and covenants that on and
after the filing of the Registration Statement pursuant to Section 2.1.1
hereof it will meet the requirements for the use of Form S-3, and the
Company has filed all reports required to be filed by the Company with the SEC
in a timely manner and covenants that it will continue to do so to obtain and
maintain such eligibility for the use of Form S-3.  In the event that Form S-3 is not
available for sale by the Investors of the Registrable Securities, then (i) the
Company shall register the sale of the Registrable Securities on another
appropriate form as soon as practicable and (ii) the Company shall
undertake to register the Registrable Securities on Form S-3 as soon as
such form is available, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a
Registration Statement on Form S-3 covering the Registrable Securities has
been declared effective by the SEC.


 


2.1.6        Most
Favored Nation Clause. 
Notwithstanding anything to the contrary in this Agreement until the
earlier to occur of (A) the second anniversary of the date hereof and (B) the
date on which no Investor holds Registrable Securities, the Company hereby
covenants that the terms and conditions applicable to the length and frequency
of Blackout Periods shall be at least as favorable as those offered by the
Company to any other Person, and this Agreement shall be automatically amended,
without any affirmative action taken by the parties hereto, as may be necessary
to effect such covenant.


 


2.2                                 Certain Underwritten
Offerings Pursuant to the Shelf Registration.


 


2.2.1                        Underwriting Notice.  In the event that any Investor holding thirty
percent (30%) or more of the Registrable Securities then outstanding (and with
respect to the Holder, as otherwise permitted by the last sentence of this Section 2.2.1)
shall seek to undertake an underwritten offering of any Registrable Securities
(including, without limitation, in connection with any security issued by the
Holder that is convertible into or exchangeable for any Registrable Security)
pursuant to the Shelf Registration Statement, such Investors shall first give
written notice thereof to the Company (the “Underwriting Notice” and
each such party giving notice, a “Notifying Investor”) to the other
Investors (the “Receiving Investors”) at least ten (10) Business
Days prior to the anticipated initiation of such underwritten offering,
specifying the number of Registrable Securities sought to be offered.  The Company shall advise the Notifying
Investor and the Receiving Investors and each Receiving Investor shall advise
the Notifying Investor and the Company in writing within five (5) Business
Days after receipt of such Underwriting Notice (or if the Notifying Investors
intend to execute the underwriting agreement with respect to such underwritten
offering prior to such date, the Notifying Investors shall so


 


7





















 


notify
the Company and the Receiving Investors in the Underwriting Notice, and each
Receiving Investor shall advise the Notifying Investor and the Company in writing
on or before the date on which the underwriting agreement is executed but no
less than five (5) Business Days after receipt of such Underwriting
Notice), specifying the number, if any, of shares of Registrable Securities
that such Receiving Investors, as applicable, seek to include in such
underwritten offering (each a “Piggyback Notice”), and subject to the
next sentence, such shares of Registrable Securities shall be included in such
underwritten offering.  If the managing
underwriter of the underwritten offering pursuant to which Registrable
Securities are included pursuant to this Section 2.2 shall advise
the Company and the Investors in writing that, in its view, the number of
securities requested to be included in such underwritten offering exceeds the
largest number of securities which can be sold in such offering without
adversely affecting the offering, including with respect to the price at which
such shares can be sold (the “Maximum Offering Size”), the Company and
the Investors will include in such underwritten offering, to the extent of the
number which the Investors are so advised can be sold in such offering, a pro
rata amount, based upon the number of Registrable Securities sought to
be offered by each Investor as set forth in the Underwriting Notice and the
Piggyback Notice.  Notwithstanding
anything contained herein to the contrary, and whether or not the Holder owns 30%
(thirty percent) or more of the Registrable Securities outstanding at such
time, the Holder shall be entitled to be the sole Notifying Investor for at
least one of three underwritten offerings permitted herein, so long as the
Underwriting Notice given by the Holder covers not less than the minimum amount
specified in Section 2.2.4(C) hereof.


 


2.2.2        Expenses.  The Company shall be liable for and pay all
Registration Expenses in connection with any underwritten offering pursuant to Section
2.2.1 hereof; provided, however, that in any underwritten
offering pursuant to this Section 2.2 the Investors shall pay any
underwriting commissions and discounts incurred pursuant to and in connection
with any underwritten offering by the Investors and the other fees and expenses
in excess of the thresholds set forth in the definition of “Registration
Expenses.”


 


2.2.3                        No Piggyback Rights.  For the avoidance of doubt, only an Investor
is permitted to provide a Piggyback Notice and seek to include shares of Common
Stock or Registrable Securities of the Company in an underwritten offering made
pursuant to this Section 2.2.


 


2.2.4                        Procedures.  Subject to Section 2.6 hereof, the
Company shall (i) make reasonably available for inspection by the Investors,
any underwriter participating in any disposition pursuant to the Shelf
Registration Statement and any attorney, accountant or other agent retained by
the Investors or any such underwriter, all relevant financial and other
records, pertinent corporate documents and properties of the Company, (ii) cause
the Company’s officers, directors, employees, and use its reasonable best
efforts to cause the Company’s accountants and auditors, to supply all relevant
information reasonably requested by the Investors or any such underwriter,
attorney, accountant or agent in connection with the underwritten offering, (iii) as
may be reasonably requested, cause the Company’s officers and employees to
participate in investor presentations to prospective investors and analysts,
including via “road shows,”


 


8





















 


and (iv) generally
accommodate any participating underwriter’s reasonable requests relating to its
due diligence efforts; provided, however, that the Investors
shall only be entitled to effect up to a total of three (3) underwritten
offerings of Registrable Securities pursuant to the Shelf Registration
Statement; provided, further, however, that no such
offering pursuant to Section 2.2.1 hereof shall be made by the
Holder:


 


(A)                              on
more than one occasion during any period of sixty (60) consecutive days after
any other such offering of Registrable Securities in accordance with this Section 2.2
was consummated;


 


(B)                                within
sixty (60) days of the consummation of an offering of Registrable Securities in
which the Investors were offered the opportunity to participate pursuant to Section 2.3
hereof, provided that all the Registrable Securities requested by the Investors
to be so registered were registered for sale in such offering; and


 


(C)                                unless
the Investors will offer for sale at least thirty million (30,000,000) shares
of Common Stock or the equivalent number of shares of Registrable Securities or,
with respect to the third underwritten offering,  at least forty million (40,000,000) shares of
Common Stock or the equivalent number of shares of Registrable Securities.(1)


 


2.2.5                        Effective Registration
Statement.  For purposes of
determining an Investor’s right to sell Registrable Securities pursuant to the
Shelf Registration Statement in an underwritten offering referred to in Section 2.2.1
hereof, an offering of such nature shall not be deemed to have been effected
unless (A) a registration statement with respect thereto has become
effective and remained in effect for the relevant period set forth in Section 2.4.1(b) hereof
(provided, however, that a registration which does not become
effective solely by reason of the refusal of all of the Investors to proceed
with the offering or the refusal by the Company to proceed based upon the
written opinion of outside counsel to the lead underwriter delivered to and
reasonably acceptable to the Company to the effect that proceeding is inappropriate
as a legal matter for a reason relating to circumstances of all of the
Investors shall be deemed to have been effected), (B) after it has become
effective, such registration has not become subject to any stop order,
injunction or other order or requirement of the SEC or other governmental
agency or court for any reason, other than solely by reason of some act or
omission by the Investors with respect thereto, or such stop order, injunction
or other order has been lifted so as to permit such offering and sale of
Registrable Securities, and (C) the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection with
such registration are satisfied or any failure to satisfy such conditions was
solely by reason of some act or omission by the Investors.


 


2.2.6                        Underwriting
Agreements.  If requested by
the underwriters for any underwritten offering by the Investors to be conducted
pursuant to Section 2.2.1


 










(1)                                  To
the extent the Company exercises its Substitution Rights, these thresholds will
be reduced proportionately.


 


9





















 


hereof,
the Company will enter into an underwriting agreement with such underwriters
for such offering, such agreement to be in customary form for offerings of this
type and acceptable to the Investors (it being agreed that the Company’s prior
underwriting agreements to the extent applicable for offerings of this type
will be considered in determining what is customary), whose acceptance shall
not be unreasonably withheld, to contain such representations and warranties by
the Company and such other terms as are generally prevailing in agreements of
this type, including, without limitation, representations and indemnities by
the Company and other customary indemnifications.  The Investors will cooperate with the Company
in the negotiation of the underwriting agreement and will give consideration to
the reasonable suggestions of the Company regarding the form thereof.


 


2.2.7                        Holdback Agreement.  Unless the managing underwriter otherwise
agrees, each of the Company and the Investors agree (and the Company agrees, in
connection with any underwritten registration, to use its commercially
reasonable efforts to cause its Affiliates to agree) not to effect any public
sale or private offer or distribution of any Common Stock or Common Stock
Equivalents during such time period after the pricing of any underwritten
offering pursuant to this Section 2.2 as may reasonably be
requested by the managing underwriter (such period of time not to exceed ninety
(90) days); provided, however, that the foregoing restriction
shall not apply to (i) if applicable, any offering made as part of such
underwritten registration, (ii) up to $100 million of 3(a)(9) offerings
and (iii) other exceptions customary for offerings of this type (it being
agreed that the Company’s prior underwriting agreements to the extent
applicable for offerings of this type will be considered in determining what is
customary).


 


2.2.8                        Selection of Underwriters.  In an underwritten offering of Registrable
Securities effected pursuant to this Section 2.2, the Notifying
Investors shall select the investment banking firm or firms to manage the
underwritten offering; provided, however, that such selection
shall be subject to the consent of the Company; provided, further,
that the Company agrees that any selection of Jefferies & Company, Inc.
shall be acceptable.


 


2.2.9                        Participation in
Underwritten Offerings.  Neither an
Investor nor any other Person may participate in any underwritten offering in
which Registrable Securities are to be offered pursuant to this Section 2.2
unless such Person (i) agrees to sell such Person’s securities on the
basis provided in any underwriting arrangements approved, subject to the terms
and conditions hereof, by the Company and the Investors to be included in such
underwritten offering and (ii) completes and executes all questionnaires,
indemnities, underwriting agreements and other documents (other than powers of
attorney) reasonably required under the terms of such underwriting
arrangements.


 


2.3                                 Piggyback Underwritten
Offerings.


 


2.3.1                        Right to Piggyback.  In the event that the Company shall seek to
undertake an underwritten public offering of registered shares of Common Stock
for cash (whether for the account of the Company or the account of any
securityholder of the


 


10





















 


Company),
except in the case of an offering registered on Form S-4 or S-8 (or any
successor form) for the registration of securities to be offered in a
transaction of the type referred to in Rule 145 or to be offered to
employees of and/or consultants to the Company or subsidiaries thereof, the
Company shall first give written notice thereof (the “Company Notice”)
to each Investor, which Company Notice shall be given not less than ten (10) Business
Days prior to the anticipated initiation of such underwritten offering and
shall offer the Investors the opportunity to include any or all of its
Registrable Securities in such underwritten offering, subject to the
limitations contained in Section 2.3.3 hereof, unless the managing
underwriter for such underwritten public offering has advised the Company that
the shares to be offered by the Company in such offering constitute the Maximum
Offering Size, in which case, the Company shall give the Investors written
notice to this effect prior to the initiation of such offering in lieu of the
Company Notice and each Investor shall not have the right to include its
Registrable Securities in such offering.


 


2.3.2                        Notice of
Participation in Piggyback Offerings. 
Each Investor shall advise the Company in writing within five (5) Business
Days after the date of receipt of the Company Notice, specifying the number of
Registrable Securities, if any, the Investor seeks to include in such
underwritten offering.  The Company shall
thereupon include in such underwritten offering the number of Registrable
Securities so requested by such Investor to be included, subject to Section 2.3.3
hereof, and shall use reasonable best efforts to effect registration of such
Registrable Securities under the Securities Act; provided, however,
that the Company may at any time withdraw or cease proceeding with any such
underwritten offering of such Investor’s Registrable Securities if it shall at
the same time withdraw or cease proceeding with the underwritten offering of
all other shares of Common Stock originally proposed to be registered.


 


2.3.3                        Priority on Piggyback
Offerings.  If the managing
underwriter of the underwritten offering pursuant to which Registrable
Securities are included pursuant to this Section 2.3 shall advise
the Company and the Investors in writing that, in its view, the number of
securities requested to be included in such underwritten offering (including
securities to be sold by the Company or by other Persons not holding
Registrable Securities) exceeds the Maximum Offering Size, the Company will
include in such underwritten offering, to the extent of the number which the
Company is so advised can be sold in such underwritten offering, (i) first,
securities of the Company that the Company proposes to sell, (ii) second,
Registrable Securities held by the Investors, and (iii) third, securities
of the Company held by other Persons having registration rights proposed to be
included in such registration statement, allocated, if necessary, on a pro
rata basis in accordance with the number of shares proposed to be
included in such registration by such Investors and/or such other Persons, as
applicable.


 


2.3.4                        Expenses.  The Company shall be liable for and pay all
of Registration Expenses in connection with any underwritten offering in which
the Investors have the opportunity to participate pursuant to this Section 2.3;
provided, however, that in any underwritten offering pursuant to
this Section 2.3 the Investors shall pay any underwriting
commissions and discounts incurred pursuant to and in connection


 


11





















 


with any
underwritten offering by such Investor and the other fees and expenses in
excess of the thresholds set forth in the definition of “Registration Expenses.”


 


2.3.5                        Limitation on
Subsequent Registration Rights. 
The Company acknowledges and agrees that the Company will not grant to any
other Person or allow the exercise by any other Person rights to piggyback or
participate in registered underwritten offerings of shares of Common Stock for
cash in priority to the rights granted to the Investors in this Section 2.3
or that would impair the rights of the Investors under this Agreement
(including with respect to the timing of any underwritten offering initiated by
the Investors pursuant hereto).


 


2.4                                 Registration
Procedures.


 


2.4.1                        Actions to be taken by
the Company.  If and when the
Company is required to use its reasonable best efforts to effect the
registration of any Registrable Securities under the Securities Act as provided
herein, the Company shall, as expeditiously as possible, but subject to the
provisions of Section 2.6 hereof:


 


(a)                                  prepare and file with
the SEC a registration statement on any appropriate form under the Securities
Act with respect to such Registrable Securities and thereafter use its
reasonable best efforts to cause such registration statement to become
effective as promptly as practicable under the circumstances and to remain
effective for the period set forth in subparagraph (b) below;


 


(b)                                 prepare and file with
the SEC such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such registration statement until the earlier of such time as all of such
securities have been disposed of in accordance with the intended methods of
distribution thereof or, in the case of the Shelf Registration Statement, the
expiration of the period set forth in Section 2.1 hereof;


 


(c)                                  furnish to each seller
of Registrable Securities and the underwriters of the securities being
registered such number of copies of such registration statement, each amendment
and supplement thereto, the prospectus included in such registration statement
(including each preliminary prospectus), any documents incorporated by
reference therein and such other documents as such seller or underwriters may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such seller or the sale of such securities by such
underwriters (it being understood that, subject to Section 2.6
hereof and the requirements of the Securities Act and applicable state
securities laws, the Company consents to the use of the prospectus and any
amendment or supplement thereto by each seller and the underwriters in
connection with the offering


 


12





















 


and sale of the Registrable Securities covered by the
registration statement of which such prospectus, amendment or supplement is a
part);


 


(d)                                 use its reasonable
best efforts to register or qualify such Registrable Securities under such
other securities or blue sky laws of such jurisdictions as the managing
underwriter reasonably requests (or, in the event the registration statement
does not relate to an underwritten offering, as the holders of a majority of
such Registrable Securities may reasonably request); use its reasonable best
efforts to keep each such registration or qualification (or exemption
therefrom) effective during the period in which such registration statement is
required to be kept effective and take any other action which may be reasonably
necessary or advisable to enable the Investor and such underwriter to
consummate the disposition in such jurisdictions of the securities owned by the
Investor; and do any and all other acts and things which may be reasonably
necessary or advisable to enable the Investor to consummate the disposition of
the Registrable Securities owned by the Investor in such jurisdictions (provided,
however, that the Company will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph or (B) consent to general
service of process in any such jurisdiction);


 


(e)                                  promptly notify each
seller and each underwriter and (if requested by any such Person) confirm such
notice in writing (i) when the registration statement, a prospectus or any
prospectus supplement or post-effective amendment has been filed and, with
respect to a registration statement or any post-effective amendment, when the
same has become effective, (ii) of the issuance by any state securities or
other regulatory authority of any order suspending the qualification or
exemption from qualification of any of the Registrable Securities under state
securities or “blue sky” laws or the initiation of any proceedings for that
purpose and (iii) of the happening of any event which makes any statement
made in a registration statement or related prospectus untrue or which requires
the making of any changes in such registration statement, prospectus or
documents so that in either event they will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and, as
promptly as practicable thereafter, prepare and file with the SEC and furnish a
supplement or amendment to such prospectus so that, as thereafter deliverable
to the purchasers of such Registrable Securities, such prospectus will not
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;


 


(f)                                    if requested by the
managing underwriter or any seller promptly incorporate in a prospectus
supplement or post-effective amendment such information as the managing
underwriter or any seller


 


13





















 


reasonably requests to be included therein, including,
without limitation, with respect to the Registrable Securities being sold by such
seller, the purchase price being paid therefor by the underwriters and with
respect to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering, and promptly make all required filings
of such prospectus supplement or post-effective amendment;


 


(g)                                 as promptly as
practicable after filing with the SEC of any document which is incorporated by
reference into a registration statement (in the form in which it was
incorporated), make a copy of each such document available to each seller or,
at such seller’s request, deliver a copy of each such document to such seller;


 


(h)                                 cooperate with the sellers
and the managing underwriter to facilitate the timely preparation and delivery
of certificates (which shall not bear any restrictive legends unless required
under applicable law) representing securities sold under any registration
statement, and enable such securities to be in such denominations and
registered in such names as the managing underwriter or such sellers may
request and keep available and make available to the Company’s transfer agent
prior to the effectiveness of such registration statement a supply of such
certificates;


 


(i)                                     furnish to each seller
and underwriter a signed counterpart of (A) an opinion or opinions of
counsel to the Company, and (B) a comfort letter or comfort letters from
the Company’s independent public accountants, each in customary form and
covering such matters of the type customarily covered by opinions or comfort
letters, as the case may be, as the sellers or managing underwriter reasonably
requests;


 


(j)                                     cause the Registrable
Securities included in any registration statement to be listed on each securities
exchange, if any, on which similar securities issued by the Company are then
listed;


 


(k)                                  provide a transfer
agent and registrar for all Registrable Securities registered hereunder and
provide a CUSIP number for the Registrable Securities included in any
registration statement not later than the effective date of such registration
statement;


 


(l)                                     cooperate with each seller
and each underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD;


 


(m)                               during the period, if
any, when the prospectus is required to be delivered under the Securities Act,
promptly file all documents required to be filed with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act;


 


14





















 


(n)                                 notify each of the
sellers promptly of any request by the SEC for the amending or supplementing of
such registration statement or prospectus or for additional information;


 


(o)                                 prepare and file with
the SEC promptly any amendments or supplements to such registration statement
or prospectus which, in the opinion of counsel for the Company or the managing
underwriter, is required in connection with the distribution of the Registrable
Securities;


 


(p)                                 enter into such
agreements (including underwriting agreements in the managing underwriter’s
customary form) as are customary in connection with an underwritten
registration; and


 


(q)                                 advise each seller,
promptly after it shall receive notice or obtain knowledge thereof, of the
issuance of any stop order by the SEC suspending the effectiveness of such
registration statement or the initiation or threatening of any proceeding for
such purpose and promptly use its reasonable best efforts to prevent the
issuance of any stop order or to obtain its withdrawal at the earliest possible
moment if such stop order should be issued.


 


2.4.2                        Information to be
Provided by the Investors.  The Investors
shall furnish the Company such information regarding such Investor and the
distribution of such securities as the Company may from time to time reasonably
request in writing and as shall be required in connection with the Company’s
performance of its obligations hereunder.


 


2.5                                 Standstill Agreement;
Restrictions on Transfer.


 


2.5.1                        Standstill.  Notwithstanding anything to the contrary
contained in this Agreement, neither the Holder nor any of its Affiliates shall
(i) until June 22, 2006, increase its Beneficial Ownership of the
Common Stock and (ii) thereafter until the third anniversary of the date
hereof, increase its Beneficial Ownership above 15% (fifteen percent) of the
Company’s total outstanding Common Stock without the prior written consent of
the Board, provided, however, that the foregoing limitation set
forth in clause (ii) shall terminate and be of no further force and effect
from and after the time, if ever, that, the Holder’s and any of its Affiliates
Beneficial Ownership of the Common Stock falls below 5% (five percent) of the
Company’s total outstanding Common Stock.


 


2.5.2                        Prohibitions during
Transfer Period.  Prior to the
Effective Date, neither the Holder nor its Affiliates shall Transfer any shares
of Common Stock.  Other than as set forth
below, until the first to occur of (A) 150 days following the Effective
Date and (B) June 22, 2006 (the “Transfer Period”), the Holder
and its Affiliates shall not Transfer in the aggregate on any given day (a “Transfer
Date”) such number of shares of Common Stock that exceeds (i) the
product of (x) three million (3,000,000) shares of Common Stock and (y)
the number of trading days in the period from and including the Closing Date to
and including the Transfer Date less (ii) the aggregate number of shares


 


15





















 


of
Common Stock Transferred by the Holder and its Affiliates in accordance with
this Section 2.5.2 during the period from and including the Closing
Date to, but excluding, the Transfer Date; provided, however, that
in no event shall the Holder and its Affiliates be permitted to Transfer,
whether directly or indirectly, more than six million (6,000,000) shares of
Common Stock on such Transfer Date, and provided, further, that in
determining the maximum number of shares of Common Stock that may be sold in
any one day as provided above, any Transfers permitted by the succeeding
sentence shall not be included in such calculation.  Notwithstanding anything herein to the
contrary, the transfer restriction set forth in this Section 2.5.2
shall not apply to:  (1) any
Transfer of shares of Common Stock by the Holder or its Affiliate to any of the
Persons listed on Annex A hereto; (2) any Transfer of shares of Common
Stock after a Takeover Proposal has been made, provided that such
Takeover Proposal is approved by (A) a majority of the members of the
Board or (B) the holders of more than majority of the shares of Common
Stock issued and outstanding as of the date such Takeover Proposal is made; (3) underwritten
offerings permitted by Section 2.2 or Section 2.3
hereof; (4) sales negotiated between the Holder and a buyer in which such
buyer represents to the Holder that either (A) the buyer’s acquisition of Common
Stock will not result in the buyer Beneficially Owning (based upon the number
of shares of Common Stock reported as being outstanding in the Company’s most
recently filed report with the SEC) 5% or more of Common Stock outstanding
after giving effect to the consummation of such sale or (B) such buyer already
Beneficially Owns 5% or more of the Common Stock and, upon consummation of the
proposed sale, will continue to Beneficially Own more than 5% of the Common
Stock (in each case based upon the number of shares of Common Stock reported as
being outstanding in the Company’s most recently filed report with the SEC); (5) any
Block transaction; and (6) any dividend or other pro rata distribution of
the Common Stock made to record shareholders of Leucadia.


 


The Holder (and any subsequent transferee who agrees
to be bound by the terms of this Section 2.5.2) agrees that within
15 Business Days after the consummation of any Transfer referred to in (1) or
(4) above, the Holder (or any subsequent transferee who agrees to be bound
by this Section 2.5.2) shall deliver documentation to the Company
that identifies the buyer, the number of shares of Common Stock transferred and
the date of such Transfer.


 


2.6                                 Blackout Periods;
Suspension of Dispositions.


 


2.6.1                        Blackout Periods.  Notwithstanding anything to the contrary
contained herein (other than as set forth in Section 2.1 hereof),
for a period not to exceed twenty (20) consecutive calendar days and not to
exceed sixty (60) calendar days in any twelve-month period (each a “Black
Out Period”), provided that there must be an interim period of at least
sixty (60) consecutive days between the end of one Black Out Period and the
beginning of another Black Out Period, the Company will not be required to file
any registration statement pursuant to this Agreement, file any amendment
thereto, furnish any supplement to a prospectus included in a registration
statement pursuant to Section 2.4.1(e)(iii) hereof, make any
other filing with the SEC required pursuant to this Agreement, cause any
registration statement or other filing with the SEC to become effective, or
take any similar action, and any and all sales of Registrable Securities by the


 


16





















 


Investors
pursuant to an effective registration statement shall be suspended:  (i) if an event has occurred and is
continuing as a result of which any such registration statement or prospectus
would, in the Company’s reasonable judgment based on advice of outside counsel
to the Company, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) if the Company notifies the Investors that
such actions would, in the good faith judgment of outside counsel to the
Company, require the disclosure of material non-public information which the
Company has a bona fide business purpose for preserving as confidential and
which the Company would not otherwise be required to disclose or (iii) if
the Company notifies the Investors that, in the Company’s good faith judgment
(after consultation with the Company’s proposed managing underwriter, initial
purchaser or outside financial advisor), it is necessary to suspend sales of
Registrable Securities by the Investors, to facilitate a pending or proposed
public or Rule 144A offering by the Company or Common Stock or Common
Stock Equivalents, provided, however, that the Company (X) shall not be
able to exercise any rights under this clause (iii) during the first three
(3) months following the date hereof, and (Y) shall only be able to use
its blocking rights under this clause (iii) for a period not to exceed 15
consecutive days and not more than two times in any twelve month period.  Upon the termination of the condition
described in clauses (i), (ii)  or (iii) of above, the Company shall
promptly give written notice to the Investors and shall promptly file any
registration statement or amendment thereto required to be filed by it pursuant
to this Agreement, furnish any prospectus supplement or amendment required to
be furnished pursuant to Section 2.4.1(e)(iii) hereof, make
any other filing with the SEC required of it or terminate any suspension of
sales it has put into effect and shall take such other actions to permit
registered sales of Registrable Securities as contemplated by this Agreement.  If the Company does not take the foregoing
action as required to permit the Investors to sell the Registrable Securities
upon the end of the permitted relevant Black Out Period, the Company shall pay
to the Investors the Delay Fee for the number of days that the Investors are
unable to sell Registrable Securities.


 


2.6.2                        Suspension of
Dispositions.  Each Investor
agrees by acquisition of any Registrable Securities that, upon receipt of any
notice (a “Suspension Notice”) from the Company of the happening of any
event of the kind described in Section 2.4.1(e)(iii) hereof
such Investor will forthwith discontinue disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
(the “Suspension Period”) until such Investor’s receipt of the copies of
the supplemented or amended prospectus, or until it is advised in writing (the “Advice”)
by the Company that the use of the prospectus may be resumed, and has received
copies of any additional or supplemental filings which are incorporated by
reference in the prospectus, and, if so directed by the Company, such Investor
will deliver to the Company all copies, other than permanent file copies then
in such Investor’s possession, of the prospectus covering such Registrable
Securities current at the time of receipt of such notice.  The Company shall use its reasonable best
efforts and take such actions as are reasonably necessary to render the Advice
as promptly as practicable.


 


2.6.3                        Extensions.  For the purposes of Sections 2.1.1, 2.1.6,
2.3.1 and 4.1 hereof, the occurrence of any Blackout Period or
Suspension Period pursuant to this


 


17





















 


Section 2.6 shall cause the
second anniversary of the date hereof to be deemed extended by the number of
days equivalent to the duration of any periods during which the Holder may not
sell Registrable Securities pursuant to a registration statement required
hereunder.


 


2.7                                 Indemnification.


 


2.7.1                        Indemnification by the
Company.  The Company agrees to
indemnify and reimburse, to the fullest extent permitted by law, each
underwriter of Registrable Securities, each Investor and each of such Investor’s
directors, officers, employees and agents and each other Person who controls
the Investor Holder (within the meaning of the Securities Act or the Exchange
Act) (each an “Investor Affiliate” and collectively, the “Investor
Affiliates”) (i) against any and all losses, claims, damages,
liabilities, and expenses, joint or several (including, without limitation, reasonable
attorneys’ fees and disbursements except as limited by Section 2.7.3
hereof) (“Damages”) based upon, arising out of, related to or resulting
from any untrue or alleged untrue statement of a material fact contained in any
registration statement, prospectus, or preliminary prospectus relating to the
Registrable Securities any amendment thereof or supplement thereto, or any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances under
which they were made not misleading, (ii) against any and all loss,
liability, claim, damage, and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation or investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon, arising out of, related to or resulting from
any such untrue statement or omission or alleged untrue statement or omission
and (iii) against any and all costs and expenses (including reasonable
fees and disbursements of counsel) as may be reasonably incurred in
investigating, preparing, or defending against any litigation, or investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon, arising out of, related to or resulting from
any such untrue statement or omission or alleged untrue statement or omission,
or such violation of the Securities Act or Exchange Act, to the extent that any
such expense or cost is not paid under subparagraph (i) or (ii) above;
provided, however, that the Company shall not be liable in any
such case to the extent that such statements are made in reliance upon and in
strict conformity with information furnished in writing to the Company by an
Investor or any Investor Affiliate for use therein or arise from an Investor’s
or any Investor Affiliate’s failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished an Investor or any Investor Affiliate with a sufficient
number of copies of the same.  The
reimbursements required by this Section 2.7.1 will be made by
periodic payments during the course of the investigation or defense, as and
when bills are received or expenses incurred.


 


2.7.2                        Indemnification by the
Investor.  In connection with
any registration statement in which an Investor is participating, each such
Investor will, to the fullest extent permitted by law will indemnify the Company
and its directors and officers and each Person who controls the Company (within
the meaning of the Securities Act or the Exchange Act) against any and all
Damages resulting from any untrue statement or


 


18





















 


alleged
untrue statement of a material fact contained in the registration statement,
prospectus, or any preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein in
light of the circumstances under which they were made not misleading, but only
to the extent that such untrue statement or alleged untrue statement or
omission or alleged omission is contained in any information or affidavit so
furnished in writing by such Investor or any Investor Affiliate specifically
for inclusion in the registration statement; provided, however,
that the obligation to indemnify will be several, not joint and several, among
such Investors of Registrable Securities, and the liability of each such
Investor of Registrable Securities will be in proportion to, and provided,
further, that such liability will be limited to, the net amount received by
such seller from the sale of Registrable Securities pursuant to such
registration statement; provided, that such Investor shall not be liable
in any such case to the extent that prior to the filing of any such
registration statement or prospectus or amendment thereof or supplement
thereto, such Investor has furnished in writing to the Company information
expressly for use in such registration statement or prospectus or any amendment
thereof or supplement thereto which corrected or made not misleading
information previously furnished to the Company.


 


2.7.3                        Notice of Claims, etc.  Any Person entitled to indemnification
hereunder will (A) give prompt written notice to the indemnifying party of
any claim with respect to which it seeks indemnification (provided that the
failure to give such notice shall not limit the rights of such Person except to
the extent that the indemnifying party is actually prejudiced by such failure
to give notice) and (B) unless in such indemnified party’s reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with a single counsel reasonably satisfactory
to the indemnified party; provided, however, that any person
entitled to indemnification hereunder shall have the right to employ separate
counsel and to participate in the defense of such claim, but the fees and
expenses of such counsel shall be at the expense of such person unless (X) the
indemnifying party has agreed to pay such fees or expenses, or (Y) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such person.  In the event the indemnified party reasonably
believes such a conflict of interest exists, the indemnifying party shall
indemnify the indemnified party for all reasonable costs and expenses of one
separate counsel for the indemnified party in accordance with Sections 2.7.1
or 2.7.2 hereof) above, as applicable. 
If such defense is not assumed by the indemnifying party as permitted
hereunder, the indemnifying party will not be subject to any liability for any
settlement made by the indemnified party without its consent (but such consent
will not be unreasonably withheld).  If
such defense is assumed by the indemnifying party pursuant to the provisions
hereof, such indemnifying party shall not settle or otherwise compromise the
applicable claim unless (1) such settlement or compromise contains a full
and unconditional release of the indemnified party and the settlement or
compromise does not require any admission of wrongdoing on the part of the
indemnified party or (2) the indemnified party otherwise consents in
writing.  An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such


 


19





















 


indemnifying
party with respect to such claim, unless in the reasonable judgment of any
indemnified party, a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such claim, in
which event the indemnifying party shall be obligated to pay the reasonable
fees and disbursements of such additional counsel or counsels.


 


2.7.4                        Contribution.  Each party hereto agrees that, if for any
reason the indemnification provisions contemplated by Section 2.7.1
or 2.7.2 hereof are unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities, or
expenses (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, liabilities, or expenses
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the indemnifying party and the indemnified party in
connection with the actions which resulted in the losses, claims, damages,
liabilities or expenses as well as any other relevant equitable
considerations.  The relative fault of
such indemnifying party and indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or indemnified party, and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission; provided that in no
event shall the obligation of any indemnifying party to contribute under this Section 2.7.4
exceed the amount that such indemnifying party would have been obligated to pay
by way of indemnification if the indemnification provided for under Sections
2.7.1 or 2.7.2 hereof had been available under the
circumstances.  The parties hereto agree
that it would not be just and equitable if contribution pursuant to this Section 2.7.4
were determined by pro  rata allocation (even if the Investors or
any underwriters or all of them were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to in this Section 2.7.4.  The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities, or expenses (or
actions in respect thereof) referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such indemnified party
in connection with investigating or, except as provided in Section 2.7.3
hereof, defending any such action or claim. 
Notwithstanding the provisions of this Section 2.7.4, the
Investors shall not be required to contribute an amount greater than the dollar
amount by which the net proceeds received by the Investors with respect to the
sale of any Registrable Securities exceeds the amount of damages which such
Investor has otherwise been required to pay by reason of any and all untrue or
alleged untrue statements of material fact or omissions or alleged omissions of
material fact made in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto related to such sale
of Registrable Securities.  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.  The Investors’ obligations in this Section 2.7.4
to contribute shall be several in proportion to the amount of Registrable
Securities registered by them and not joint.


 


20





















 


If indemnification is available under this Section 2.7,
the indemnifying parties shall indemnify each indemnified party to the full
extent provided in Sections 2.7.1 and 2.7.2 hereof without
regard to the relative fault of said indemnifying party or indemnified party or
any other equitable consideration provided for in this Section 2.7.4
subject, in the case of the Investors, to the limited dollar amounts set forth
in Section 2.7.2 hereof.


 


2.7.5                        Effectiveness of
Indemnification.  The
indemnification and contribution provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf
of the indemnified party or any officer, director, or controlling Person of
such indemnified party and will survive the transfer of securities.


 


2.8                                 Assignment of
Registration Rights.  The rights to have
the Company register Registrable Securities pursuant to this Agreement shall be
assignable by the Holder and any subsequent Investor, in whole or in part,
including the Holder’s rights pursuant to Section 2.2 hereof to an
Investor (a “Transferee”), provided that: (i) the Holder agrees in
writing with the Transferee to transfer or assign such rights, and a copy of
such agreement is promptly furnished to the Company after such transfer or
assignment; (ii) the Company is, promptly after such transfer or
assignment, furnished with written notice of (a) the name and address of
such Transferee, and (b) the securities with respect to which such
registration rights are being transferred or assigned and the amount being
transferred or assigned; (iii) at or before the time the Company receives
the written notice contemplated by clause (ii) of this sentence the
Transferee agrees in writing with the Company to be bound by all of the
provisions contained herein (including with respect to Section 2.5.2);
(iv) such Transferee shall be an “accredited investor” as that term is
defined in Rule 501 of Regulation D promulgated under the 1933 Act; (v) in
the event the assignment occurs subsequent to the date of effectiveness of the
Registration Statement required to be filed pursuant to Section 2.1
hereof, the Transferee agrees to pay all reasonable expenses of amending or
supplementing such Registration Statement to reflect such assignment; provided,
however, that any assignment by the Holder of its rights hereunder to
any of its subsidiaries shall not be subject to this clause v; and (vi) after
giving effect to the Transfer, the Transferee will beneficially own not less
than 30% of the Common Stock issued under the Acquisition Agreement (or such
comparable amount of Registrable Securities).


 


ARTICLE 3

RULE 144


 


3.1                                 Current Public
Information.  With a view to
making available to the Investors the benefits of certain rules and
regulations of the SEC that may at any time permit the sale of securities to
the public without registration, the Company agrees to use its reasonable best
efforts to:


 


(i)                                     make and keep public
information available, as those terms are understood and defined in Rule 144,
at all times after the date hereof;


 


21





















 


(ii)                                  file with the SEC in a
timely manner all reports and other documents required to be filed by the
Company under the Securities Act and the Exchange Act; and


 


(iii)                               furnish to any
Investor, so long as such Investor owns any Registrable Securities, upon
request by such Investor, (a) a written statement by the Company that it
has complied with the reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, (b) a copy of the most recent annual
or quarterly report of the Company and (c) such other reports and
documents of the Company and other information in the possession of or
reasonably obtainable by the Company as the Investors may reasonably request in
availing itself of any rule or regulation of the SEC allowing the Investors
to sell any such securities without registration.


 


ARTICLE 4

MISCELLANEOUS


 


4.1                                 Notices.  All notices, requests and other
communications that are required or may be given under this Agreement shall,
unless otherwise provided for elsewhere in this Agreement, be in writing and
shall be deemed to have been duly given if and when delivered by commercial
courier or other hand delivery, as follows:


 


	
  For the Company:

   

  Level 3 Communications, Inc.

  1025 Eldorado Blvd.

  Building 2000

  Broomfield, CO 80021

  Attention: General Counsel

  	
   

  	
  For the Holder:

  
Leucadia National Corporation

  315 Park Avenue South

  New York, NY 10010

  Attention: Joseph S.
  Steinberg, President

  
	
   

  	
   

  	
   

  
	
  with a copy (which shall not constitute notice) to:

  	
   

  	
  with a copy (which shall not constitute notice) to:

  
	
   

  	
   

  	
   

  
	
  Willkie Farr &
  Gallagher LLP

  787 Seventh Avenue

  New York, New York 10019

  Attention: David K. Boston, Esq.

  	
   

  	
  Weil, Gotshal & Manges LLP

  767 Fifth Avenue

  New York, New York 10153

  Attention: Andrea A. Bernstein, Esq.

  



 


Any notice or communication hereunder shall be deemed
to have been given or made as of the date so delivered if personally delivered
and five (5) calendar days after mailing if sent by registered or
certified mail (except that a notice of change of address shall not be deemed
to have been given until actually received by the addressee).


 


If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.


 


22





















 


4.2                                 Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.


 


4.3                                 Submission to
Jurisdiction.  ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
COMPANY AND THE HOLDER EACH HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS AND
APPELLATE COURTS FROM ANY THEREOF.  EACH
OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY CONSENT TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF TO THE COMPANY OR THE HOLDER, AS THE CASE MAY BE,
BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO
SUCH PARTY AT ITS ADDRESS SPECIFIED IN SECTION 4.1.  THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE
ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS.


 


4.4                                 Successors and Assigns.  Except as otherwise expressly provided
herein, this Agreement shall be binding upon and benefit the Company, the
Holder, and their respective successors and permitted assigns.


 


4.5                                 Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, and all of which when
taken together shall constitute one and the same original document.


 


4.6                                 Severability.  In the event any provision in this Agreement
shall be held invalid, illegal or unenforceable in any respect for any reason,
the validity, legality and enforceability of any such provision in every other
respect and the remaining provisions shall not in any way be affected or
impaired thereby.


 


4.7                                 Entire Agreement.  This Agreement and any exhibits and other
documents referred to herein constitute the entire agreement and understanding
among the parties hereto in respect of the subject matter hereof and thereof
and supersede all prior and contemporaneous agreements and understandings, both
oral and written, among the parties hereto, or between any of them, with
respect to the subject matter hereof and thereof.


 


4.8                                 No Waivers; Amendments.  No failure or delay on the part of the
Company or any Investor in exercising any right, power or remedy hereunder
shall


 


23





















 


operate
as a waiver thereof, nor shall any single or partial exercise of any such
right, power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.  The
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Company or any Investor at law or in
equity or otherwise.  Any provision of
this Agreement may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Company and the Investors.


 


4.9                                 Specific Enforcement;
Cumulative Remedies.  The parties hereto
acknowledge that money damages may not be an adequate remedy for violations of
this Agreement and that any party, in addition to any other rights and remedies
which the parties may have hereunder or at law or in equity, may, in his or its
sole discretion, apply to a court of competent jurisdiction for specific performance
or injunction or such other relief as such court may deem just and proper in
order to enforce this Agreement or prevent any violation hereof and, to the
extent permitted by applicable law, each party waives any objection to the
imposition of such relief.  All rights,
powers and remedies provided under this Agreement or otherwise available in
respect hereof at law or in equity shall be cumulative and not alternative, and
the exercise or beginning of the exercise of any thereof by any party shall not
preclude the simultaneous or later exercise of any other such rights, powers or
remedies by such party.


 


4.10                           Time of the Essence.  Time shall be of the essence in this
Agreement.


 


4.11                           Construction.  In construing this Agreement, the following
principles shall be followed: (i) no consideration shall be given to the
captions of the articles, sections, subsections or clauses, which are inserted
for convenience in locating the provisions of this Agreement and not as an aid
in construction; (ii) no consideration shall be given to the fact or
presumption that any of the parties had a greater or lesser hand in drafting
this Agreement; (iii) examples shall not be construed to limit, expressly
or by implication, the matter they illustrate; (iv) the word “includes” and
its syntactic variants mean “includes, but is not limited to” and corresponding
syntactic variant expressions; (v) the plural shall be deemed to include
the singular, and vice versa; (vi) each gender shall be deemed to include
the other genders; and (vii) any exhibit, appendix, attachment and schedule to
this Agreement is a part of this Agreement.


 


4.12                           Information.  The parties acknowledge and agree that in the
course of discussions relating to this Agreement and the transaction
contemplated hereby, neither the Company nor the Holder believes that the
Company has conveyed to the Holder any material non-public information in
respect of the Company and/or its business, operations, pending transactions,
financial condition, results of operations, or prospects.


 


[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT
BLANK]


 


24





















 


IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the date first written above.


 


	
   

  	
   

  	
  LEVEL 3 COMMUNICATIONS, INC.,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LEUCADIA NATIONAL CORPORATION,

  
	
   

  	
   

  	
  a New York corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BALDWIN ENTERPRISES, INC.,

  
	
   

  	
   

  	
  a Colorado corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


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Registration Rights and Transfer Restriction Agreement