Exhibit 10.1

 

This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of October 1,
2009, by and among Level 3 Communications, Inc., a Delaware corporation (the
“Company”), and each of the investors named in Exhibit A attached hereto (each,
an “Investor” and collectively, the “Investors”).

 

W I T N E S S E T H:

 

WHEREAS, the Company desires to issue and sell to each Investor pursuant to this
Agreement and the Registration Statement (as defined below), and each Investor,
severally, desires to purchase from the Company the aggregate principal amount
of the Company’s 7% Convertible Senior Notes due 2015, Series B as is set forth
opposite its respective name in Exhibit A attached hereto, which Notes will be
convertible into authorized but unissued shares of the Company’s common stock,
par value $0.01 per share (the “Common Stock”).

 

NOW THEREFORE, in consideration of the mutual agreements, representations,
warranties and covenants herein contained, the parties hereto agree as follows:

 

1.             DEFINITIONS.  AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS
SHALL HAVE THE FOLLOWING RESPECTIVE MEANINGS:

 

(A)           “ADVISORY CLIENTS” SHALL MEAN THOSE INSTITUTIONAL INVESTMENT
CLIENTS OF LOOMIS AND ZAZOVE ON WHOSE BEHALF LOOMIS AND ZAZOVE, RESPECTIVELY,
ARE PURCHASING THE NOTES.

 

(B)           “AFFILIATE” SHALL MEAN, WITH RESPECT TO ANY PERSON, ANY OTHER
PERSON CONTROLLING, CONTROLLED BY OR UNDER DIRECT OR INDIRECT COMMON CONTROL
WITH SUCH PERSON.  FOR THE PURPOSES OF THIS DEFINITION “CONTROL,” WHEN USED WITH
RESPECT TO ANY SPECIFIED PERSON, SHALL MEAN THE POWER TO DIRECT THE MANAGEMENT
AND POLICIES OF SUCH PERSON, DIRECTLY OR INDIRECTLY, WHETHER THROUGH OWNERSHIP
OF VOTING SECURITIES, BY CONTRACT OR OTHERWISE; AND THE TERMS “CONTROLLING” AND
“CONTROLLED” SHALL HAVE MEANINGS CORRELATIVE TO THE FOREGOING.

 

(C)           “BENEFICIALLY OWN” WITH RESPECT TO ANY SECURITIES MEANS HAVING
“BENEFICIAL OWNERSHIP” OF SUCH SECURITIES (AS DETERMINED PURSUANT TO RULE 13D-3
UNDER THE EXCHANGE ACT, AS IN EFFECT ON THE DATE HEREOF); PROVIDED, HOWEVER,
THAT A PERSON WILL BE DEEMED TO BENEFICIALLY OWN (AND HAVE BENEFICIAL OWNERSHIP
OF) ALL SECURITIES THAT SUCH PERSON HAS THE RIGHT TO ACQUIRE, WHETHER SUCH RIGHT
IS EXERCISABLE IMMEDIATELY OR WITH THE PASSAGE OF TIME OR THE SATISFACTION OF
CONDITIONS.  THE TERMS “BENEFICIAL OWNERSHIP” AND “BENEFICIAL OWNER” HAVE
CORRELATIVE MEANINGS.

 

(D)           “BOARD OF DIRECTORS” SHALL MEAN THE BOARD OF DIRECTORS OF THE
COMPANY.

 

(E)           “DISCLOSURE DOCUMENTS” SHALL MEAN THE COMPANY’S ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2008, THE COMPANY’S QUARTERLY REPORTS
ON FORM 10-Q FOR THE QUARTERS ENDED MARCH 31, 2009 AND JUNE 30, 2009, ANY
CURRENT REPORTS ON FORM 8-K FILED AND NOT FURNISHED BY THE COMPANY TO THE SEC ON
OR AFTER DECEMBER 31, 2008, THE COMPANY’S SCHEDULE 14A PROXY STATEMENT FOR ITS
ANNUAL MEETING OF STOCKHOLDERS, DATED APRIL 3, 2009, THE REGISTRATION STATEMENT
AND THE PROSPECTUS, TOGETHER IN EACH CASE WITH ANY DOCUMENTS INCORPORATED BY
REFERENCE THEREIN OR EXHIBITS THERETO.

 

--------------------------------------------------------------------------------

 

(F)            “EXCHANGE ACT” SHALL MEAN THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, AND ALL OF THE RULES AND REGULATIONS PROMULGATED THEREUNDER.

 

(G)           “FAIRFAX” SHALL MEAN FAIRFAX FINANCIAL HOLDINGS LIMITED, A
CORPORATION INCORPORATED UNDER THE LAWS OF CANADA.

 

(H)           “GROUP” SHALL MEAN ANY GROUP OF PERSONS WHO, WITH RESPECT TO THOSE
ACQUIRING, HOLDING, VOTING OR DISPOSING OF VOTING SECURITIES WOULD, ASSUMING
OWNERSHIP OF THE REQUISITE PERCENTAGE THEREOF, BE REQUIRED UNDER
SECTION 13(D) OF THE EXCHANGE ACT TO FILE A STATEMENT ON SCHEDULE 13D WITH THE
SEC AS A “PERSON” WITHIN THE MEANING OF SECTION 13(D)(3) OF THE EXCHANGE ACT, OR
WHO WOULD BE CONSIDERED A “PERSON” FOR PURPOSES OF SECTION 13(G)(3) OF THE
EXCHANGE ACT.

 

(I)            “LOOMIS” SHALL MEAN LOOMIS, SAYLES & COMPANY, L.P., A DELAWARE
LIMITED PARTNERSHIP.

 

(J)            “MATERIAL ADVERSE EFFECT” SHALL MEAN ANY CHANGE, EVENT OR
OCCURRENCE WHICH, INDIVIDUALLY OR IN THE AGGREGATE, HAS HAD, OR IS REASONABLY
EXPECTED TO HAVE, A MATERIAL ADVERSE EFFECT ON, OR A MATERIAL ADVERSE CHANGE IN,
(I) THE BUSINESS, OPERATIONS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS OF
THE COMPANY AND ITS SUBSIDIARIES, TAKEN AS A WHOLE, OR (II) THE ABILITY OF THE
COMPANY TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT, IN EACH CASE OTHER THAN
ANY CHANGE, EVENT OR OCCURRENCE (A) RESULTING FROM CONDITIONS IN THE UNITED
STATES OR FOREIGN ECONOMIES OR SECURITIES OR FINANCIAL MARKETS IN GENERAL,
INCLUDING, WITHOUT LIMITATION, DEBT MARKETS, (B) RESULTING FROM ANY CHANGE IN
THE COMPANY’S STOCK PRICE OR THE COMPANY’S FAILURE TO MEET REVENUE OR EARNINGS
PROJECTIONS IN AND OF ITSELF (PROVIDED THAT THE UNDERLYING CAUSES OF SUCH
CHANGES OR FAILURES SHALL NOT BE EXCLUDED), (C) RESULTING FROM CONDITIONS IN THE
TELECOMMUNICATIONS INDUSTRY IN GENERAL, EXCEPT TO THE EXTENT THAT THE COMPANY IS
DISPROPORTIONATELY AFFECTED THEREBY, (D) RESULTING FROM THE PUBLIC ANNOUNCEMENT
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (E) ARISING OUT OF OR
RESULTING FROM ACTIONS OF THE INVESTORS IN CONNECTION WITH THIS AGREEMENT,
(F) ARISING OUT OF OR RESULTING FROM ACTS OR WAR, TERRORISM OR MILITARY ACTIONS,
OR THE ESCALATION THEREOF, OR (G) ARISING OUT OF OR RESULTING FROM ANY CHANGES
IN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES OR LAWS OR REGULATIONS APPLICABLE TO
THE COMPANY.

 

(K)           “NOTES” SHALL MEAN ONE OR MORE OF THE COMPANY’S 7% CONVERTIBLE
SENIOR NOTES DUE 2015, SERIES B CONTAINING THE SAME TERMS AND CONDITIONS AND
WITH THE SAME CONVERSION FEATURES AS SET FORTH IN THE FORM OF NOTE ATTACHED
HERETO AS EXHIBIT B.

 

(L)            “PERSON” SHALL MEAN AN INDIVIDUAL, PARTNERSHIP, CORPORATION,
LIMITED LIABILITY COMPANY, BUSINESS TRUST, JOINT STOCK COMPANY, TRUST,
UNINCORPORATED ASSOCIATION OR JOINT VENTURE.

 

(M)          “PROSPECTUS” SHALL MEAN THE BASE PROSPECTUS INCLUDED IN THE
REGISTRATION STATEMENT TOGETHER WITH THE PROSPECTUS SUPPLEMENT RELATING TO THE
SECURITIES FIRST FILED WITH THE SEC PURSUANT TO RULE 424(B) UNDER THE SECURITIES
ACT.

 

(N)           “SEC” SHALL MEAN THE SECURITIES AND EXCHANGE COMMISSION.

 

2

--------------------------------------------------------------------------------

 

(O)           “SECURITIES” SHALL MEAN THE NOTES AND THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF THE NOTES.

 

(P)           “SECURITIES ACT” SHALL MEAN THE SECURITIES ACT OF 1933, AS
AMENDED, AND ALL OF THE RULES AND REGULATIONS PROMULGATED THEREUNDER.

 

(Q)           “TRUST INDENTURE ACT” SHALL MEAN THE TRUST INDENTURE ACT OF 1939,
AS AMENDED AND AS IN FORCE AS THE DATE HEREOF.

 

(R)            “VOTING SECURITIES” SHALL MEAN THE SHARES OF THE COMMON STOCK AND
ANY OTHER CAPITAL STOCK OR EQUITY SECURITIES OF THE COMPANY HAVING THE GENERAL
VOTING POWER UNDER ORDINARY CIRCUMSTANCES TO ELECT MEMBERS OF THE BOARD OF
DIRECTORS, AND ANY OTHER SECURITIES WHICH ARE CONVERTIBLE INTO, OR EXCHANGEABLE
FOR, VOTING SECURITIES.

 

(S)           “ZAZOVE” SHALL MEAN ZAZOVE ASSOCIATES, LLC, A DELAWARE LIMITED
LIABILITY COMPANY.

 

2.             PURCHASE AND SALE OF THE NOTES.

 

2.1.          Purchase and Sale of the Notes.  Subject to and upon the terms and
conditions set forth in this Agreement, at the Closing (as defined below), the
Company shall issue and sell to each Investor (in the case of each of Loomis and
Zazove, on behalf of its respective Advisory Clients), and each Investor (in the
case of each of Loomis and Zazove, on behalf of its respective Advisory
Clients), severally, shall purchase from the Company the aggregate principal
amount of Notes set forth opposite the name of such Investor under the heading
“Principal Amount of Notes to be Purchased” on Exhibit A attached hereto, at a
purchase price equal to 100% of the principal amount of Notes purchased.

 

2.2.          Closing.

 

(A)           THE CLOSING (THE “CLOSING”) SHALL TAKE PLACE AT THE OFFICES OF
WILLKIE FARR & GALLAGHER LLP, 787 SEVENTH AVENUE, NEW YORK, NEW YORK ON
OCTOBER 15, 2009 (SUBJECT TO THE SATISFACTION OR WAIVER OF THE CONDITIONS SET
FORTH IN SECTIONS 6.1 AND 6.2), OR SUCH OTHER DATE MUTUALLY AGREED TO BY THE
COMPANY AND THE INVESTORS (THE “CLOSING DATE”).  AT THE CLOSING, EACH INVESTOR
(IN THE CASE OF EACH OF LOOMIS AND ZAZOVE, ON BEHALF OF ITS RESPECTIVE ADVISORY
CLIENTS) SHALL PAY TO THE COMPANY THE PURCHASE PRICE SET FORTH OPPOSITE SUCH
INVESTOR’S NAME ON EXHIBIT A ATTACHED HERETO UNDER THE HEADING “PURCHASE PRICE”
BY WIRE TRANSFER TO THE COMPANY OF IMMEDIATELY AVAILABLE FUNDS, AGAINST DELIVERY
BY THE COMPANY TO EACH INVESTOR OF NOTES (IN THE CASE OF EACH OF LOOMIS AND
ZAZOVE, ON BEHALF OF ITS RESPECTIVE ADVISORY CLIENTS) IN THE PRINCIPAL AMOUNT
SET FORTH OPPOSITE SUCH INVESTOR’S NAME ON EXHIBIT A ATTACHED HERETO.

 

3.             REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  EXCEPT AS SET
FORTH IN THE DISCLOSURE DOCUMENTS FILED WITH THE SEC NOT LESS THAN ONE DAY PRIOR
TO THE DATE OF THIS AGREEMENT, THE COMPANY HEREBY REPRESENTS AND WARRANTS TO
EACH OF THE INVESTORS AS FOLLOWS:

 

3.1.          Incorporation.  The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is qualified to do business in each jurisdiction in which the character of
its properties or the nature of its business

 

3

--------------------------------------------------------------------------------

 

REQUIRES SUCH QUALIFICATION, EXCEPT WHERE THE FAILURE TO SO QUALIFY WOULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  THE COMPANY HAS ALL
REQUISITE CORPORATE POWER AND AUTHORITY TO CARRY ON ITS BUSINESS AS NOW
CONDUCTED.

 

3.2.          Subsidiaries.  Each subsidiary of the Company that is a
corporation has been duly incorporated, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its properties and to conduct its business
and is duly registered, qualified and authorized to transact business and is in
good standing in each jurisdiction in which the conduct of its business or the
nature of its properties requires such registration, qualification or
authorization, except where such failure to so qualify or register would not be
reasonably be expected to have a Material Adverse Effect.

 

3.3.          Capitalization.  As of the date of this Agreement, the authorized
capital stock of the Company consists of 2,500,000,000 shares of Common Stock
and 10,000,000 shares of undesignated preferred stock, par value $0.01 per
share.  As of September 24, 2009, there were 1,639,196,488 shares of Common
Stock outstanding.  All outstanding shares of Common Stock have been duly
authorized, and have been validly issued, are fully paid and nonassessable, and
have been approved for quotation on the Nasdaq Global Select Market.  Since
June 30, 2009, (i) the Company has only issued options or other rights to
acquire Common Stock in the normal course of business consistent with past
practice pursuant to the Company’s equity incentive and employee benefit plans,
and (ii) the only shares of capital stock issued by the Company were pursuant to
the exercise or conversion of outstanding awards under the Company’s equity
incentive and employee benefit plans or pursuant to those certain exchanges of
Common Stock for outstanding debt described in the Disclosure Documents.

 

3.4.          Authorization.  All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization of the
issuance of the Notes, the authorization, execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein has
been taken.  When executed and delivered by the Company, this Agreement shall
constitute the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights
generally and by general equitable principles.  The Company has all requisite
corporate power to enter into this Agreement and to carry out and perform its
obligations under the terms of this Agreement.  At or prior to the Closing, the
Company will have reserved for issuance the shares of Common Stock issuable upon
conversion of the Notes.

 

3.5.          Valid Issuance.

 

(A)           THE NOTES HAVE BEEN DULY AUTHORIZED AND, WHEN EXECUTED BY THE
COMPANY AND AUTHENTICATED BY THE TRUSTEE (AS DEFINED BELOW) IN ACCORDANCE WITH
THE TERMS OF THE INDENTURE (AS DEFINED BELOW) AND DELIVERED TO AND PAID FOR BY
THE INVESTORS (IN THE CASE OF EACH OF LOOMIS AND ZAZOVE, ON BEHALF OF ITS
RESPECTIVE ADVISORY CLIENTS) IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT,
WILL CONSTITUTE THE VALID AND LEGALLY BINDING OBLIGATIONS OF THE COMPANY
ENTITLED TO THE BENEFITS PROVIDED BY THE INDENTURE DATED AS OF DECEMBER 24, 2008
(THE “BASE INDENTURE”) BETWEEN THE COMPANY AND THE BANK OF NEW YORK MELLON, AS
TRUSTEE (THE “TRUSTEE”), AS SUPPLEMENTED BY THE SECOND SUPPLEMENTAL INDENTURE,
TO BE DATED AS OF THE CLOSING DATE (THE

 

4

--------------------------------------------------------------------------------

 

“SECOND SUPPLEMENTAL INDENTURE” AND TOGETHER WITH THE BASE INDENTURE, THE
“INDENTURE”) BETWEEN THE COMPANY AND THE TRUSTEE, UNDER WHICH SUCH NOTES ARE TO
BE ISSUED.  THE BASE INDENTURE WILL BE SUBSTANTIALLY IN THE FORM INCORPORATED BY
REFERENCE AS AN EXHIBIT TO THE REGISTRATION STATEMENT; THE INDENTURE HAS BEEN
DULY AUTHORIZED AND DULY QUALIFIED UNDER THE TRUST INDENTURE ACT AND, WHEN
EXECUTED AND DELIVERED BY THE COMPANY AND THE TRUSTEE, WILL CONSTITUTE A VALID
AND LEGALLY BINDING OBLIGATION OF THE COMPANY, ENFORCEABLE AGAINST THE COMPANY
IN ACCORDANCE WITH ITS TERMS, EXCEPT AS MAY BE LIMITED BY BANKRUPTCY,
INSOLVENCY, REORGANIZATION OR OTHER LAWS AFFECTING CREDITORS’ RIGHTS GENERALLY
AND BY GENERAL EQUITABLE PRINCIPLES; AND THE SECURITIES AND THE INDENTURE WILL
CONFORM TO THE DESCRIPTIONS THEREOF IN THE PROSPECTUS.

 

(B)           UPON THEIR ISSUANCE IN ACCORDANCE WITH THE TERMS OF THE NOTES, THE
SHARES OF COMMON STOCK ISSUED UPON CONVERSION OF THE NOTES WILL BE DULY
AUTHORIZED, VALIDLY ISSUED, FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK
FREE OF ALL PREEMPTIVE OR SIMILAR RIGHTS.

 

(C)           THE COMPANY’S REGISTRATION STATEMENT ON FORM S-3 (FILE
NO. 333-154976) (THE “REGISTRATION STATEMENT”), INCLUDING THE BASE PROSPECTUS
RELATING TO CERTAIN DEBT AND EQUITY SECURITIES TO BE OFFERED FROM TIME TO TIME
BY THE COMPANY: (I) WAS PREPARED BY THE COMPANY IN CONFORMITY WITH THE
REQUIREMENTS OF THE SECURITIES ACT AND (II) AUTOMATICALLY BECAME EFFECTIVE UPON
THE FILING THEREOF WITH THE SEC.  THE SEC HAS NOT ISSUED A STOP ORDER SUSPENDING
THE EFFECTIVENESS OF THE REGISTRATION STATEMENT.  THE COMPANY HAS AT ALL TIMES
RELEVANT TO THE OFFERING OF THE NOTES CONTEMPLATED HEREBY COMPLIED WITH THE
CONDITIONS FOR THE USE OF FORM S-3 AND IS ELIGIBLE TO USE FORM S-3.  COPIES OF
THE REGISTRATION STATEMENT, INCLUDING ANY AMENDMENTS THERETO AND THE PROSPECTUS
CONTAINED THEREIN HAVE HERETOFORE BEEN DELIVERED BY THE COMPANY TO THE
INVESTORS.  THE REGISTRATION STATEMENT IS EFFECTIVE UNDER THE SECURITIES ACT AND
NO POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT HAS BEEN FILED AS OF
THE DATE OF THIS AGREEMENT.  THE COMPANY HAS PREPARED AND DELIVERED TO THE
INVESTORS AND WILL FILE WITH THE SEC PURSUANT TO RULE 424(B), NO LATER THAN TWO
BUSINESS DAYS AFTER THE DATE HEREOF, A SUPPLEMENT TO THE BASE PROSPECTUS
INCLUDED IN THE REGISTRATION STATEMENT RELATING TO THE SECURITIES AND THE
OFFERING THEREOF IN CONFORMITY WITH THE REQUIREMENTS OF THE SECURITIES ACT.

 

3.6.          Absence of Certain Changes.  Since June 30, 2009, there has not
been any Material Adverse Effect.

 

3.7.          Disclosure Documents.  The information contained or incorporated
by reference in the Disclosure Documents was true and correct in all material
respects as of the respective dates of the filing thereof with the SEC (or if
amended prior to the date hereof, as of the date of such amendment); and, as of
such respective dates, the Disclosure Documents did not 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, in light of the
circumstances under which they were made, not misleading.  The Prospectus does
not as of the date hereof 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, in light of the circumstances under which they were made,
not misleading.

 

3.8.          Consents.  All consents, approvals, orders and authorizations
required on the part of the Company in connection with the execution, delivery
or performance of this

 

5

--------------------------------------------------------------------------------

 

AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREIN HAVE BEEN
OBTAINED AND WILL BE EFFECTIVE AS OF THE CLOSING DATE, OTHER THAN (I) SUCH
FILINGS REQUIRED TO BE MADE AFTER THE CLOSING UNDER APPLICABLE FEDERAL AND STATE
SECURITIES LAWS AND (II) WITH RESPECT TO ANY OF THE FOREGOING, WHERE THE FAILURE
TO MAKE OR OBTAIN WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.

 

3.9.          No Conflict.  The execution and delivery of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to a loss of a material
benefit under (i) any provision of the Certificate of Incorporation or By-laws
of the Company or (ii) any agreement or instrument, permit, franchise, license,
judgment, order, statute, law, ordinance, rule or regulations, applicable to the
Company or its properties or assets, except, in the case of clause (ii), as
would not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect.

 

3.10.        No Manipulation of Stock.  The Company has not taken, in violation
of applicable law, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the transactions contemplated hereby or the sale or resale
of the shares of Common Stock.

 

3.11.        Company Not an “Investment Company”.  The Company is not, and
immediately after receipt of payment for the Notes will not be, an “investment
company” or an entity “controlled” by an “investment company” within the meaning
of the Investment Company Act of 1940, as amended.

 

4.             Representations and Warranties of Each Investor.  Each Investor,
severally for itself and not jointly with the other Investors (in the case of
each of Loomis and Zazove, for itself (unless otherwise indicated)), represents
and warrants to the Company as follows:

 

4.1.          Organization.  Such Investor, if it is a legal entity, is duly and
validly existing under the jurisdiction of its organization.

 

4.2.          Authorization.  All action on the part of such Investor (in the
case of each of Loomis and Zazove, on its part and on the part of its respective
Advisory Clients) necessary for the authorization, execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein has been taken.  This Agreement constitutes the legal, valid
and binding obligation of such Investor, enforceable against such Investor in
accordance with its terms, except as such may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors’ rights generally
and by general equitable principles.  Such Investor has all requisite power to
enter into this Agreement and to carry out and perform its obligations under the
terms of this Agreement.

 

4.3.          No Conflict.  The execution and delivery of this Agreement by such
Investor and the consummation of the transactions contemplated hereby will not
conflict with or result in any violation of or default by such Investor (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation

 

6

--------------------------------------------------------------------------------

 

OR TO A LOSS OF A MATERIAL BENEFIT UNDER (I) ANY PROVISION OF THE ORGANIZATIONAL
DOCUMENTS OF SUCH INVESTOR OR (II) ANY AGREEMENT OR INSTRUMENT, PERMIT,
FRANCHISE, LICENSE, JUDGMENT, ORDER, STATUTE, LAW, ORDINANCE, RULE OR
REGULATIONS, APPLICABLE TO SUCH INVESTOR OR ITS RESPECTIVE PROPERTIES OR ASSETS,
EXCEPT AS WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, BE REASONABLY EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT ON THE ABILITY OF SUCH INVESTOR TO PERFORM ITS
OBLIGATIONS UNDER THIS AGREEMENT.

 

4.4.          Consents.  All consents, approvals, orders and authorizations
required on the part of such Investor (in the case of each of Loomis and Zazove,
on its part, and to its knowledge, on the part of its respective Advisory
Clients) in connection with the execution, delivery or performance of this
Agreement and the consummation of the transactions contemplated herein have been
obtained and will be effective as of the Closing Date.

 

4.5.          No Manipulation of Stock.  Such Investor (in the case of each of
Loomis and Zazove, it and, to its knowledge, its respective Advisory Clients)
has not taken, in violation of applicable law, any action designed to or that
might reasonably be expected to cause or result in stabilization or manipulation
of the price of the Common Stock to facilitate the transactions contemplated
hereby or the sale or resale of the shares of Common Stock.

 

4.6.          Group; Affiliate.

 

(A)           FAIRFAX HAS ON THE DATE HEREOF DELIVERED TO THE COMPANY A
CERTIFICATE SETTING FORTH A TRUE AND CORRECT LIST OF THE COMMON STOCK
BENEFICIALLY OWNED BY IT AND ITS RESPECTIVE AFFILIATES AS OF SUCH DATE.

 

(B)           SUCH INVESTOR TOGETHER WITH THE OTHER INVESTORS DO NOT CONSTITUTE
A GROUP.  SUCH INVESTOR HEREBY AGREES THAT IT SHALL NOT TAKE ANY ACTIONS SUCH
THAT THE INVESTORS MAY BE DEEMED TO BE A GROUP.

 

(C)           AFTER GIVING EFFECT TO THE SALE AND PURCHASE OF THE NOTES
CONTEMPLATED UNDER THIS AGREEMENT, EACH INVESTOR (OTHER THAN FAIRFAX) TOGETHER
WITH ITS AFFILIATES WILL BENEFICIALLY OWN LESS THAN FIFTEEN PERCENT (15%) OF THE
COMPANY’S OUTSTANDING COMMON STOCK.

 

4.7.          Purchase Entirely for Own Account.  Such Investor is acquiring the
Notes for its own account (in the case of each of Loomis and Zazove, on behalf
of its respective Advisory Clients) and not with a view to, or for sale in
connection with any distribution of the Notes, but subject, nevertheless, to any
requirement of law that the disposition of such Investor’s property shall at all
times be within such Investor’s control.  Such Investor has no present
agreement, undertaking, arrangement, obligation or commitment providing for the
disposition of the Notes.

 

4.8.          Investor Status. In the case of each of Loomis and Zazove, each of
its respective Advisory Clients is an institutional “accredited investor” as
defined in Rule 501 under the Securities Act.

 

4.9.          Accuracy of Information Supplied for Registration Statement.  In
the case of Fairfax (the “Holder”), the information regarding such Investor and
its Affiliates supplied or to be supplied by it in writing specifically for
inclusion or incorporation by reference into that

 

7

--------------------------------------------------------------------------------

 

CERTAIN REGISTRATION STATEMENT REFERRED TO IN SECTION 5.5 HEREIN WILL NOT, AS OF
THE DATE OF SUCH REGISTRATION STATEMENT, CONTAIN ANY UNTRUE STATEMENT OF A
MATERIAL FACT OR OMIT TO STATE ANY MATERIAL FACT REQUIRED TO BE STATED THEREIN
OR NECESSARY IN ORDER TO MAKE THE STATEMENTS THEREIN NOT MISLEADING.

 

5.             COVENANTS.

 

5.1.          Governmental Approvals.

 

(A)           AS SOON AS PRACTICABLE AFTER THE EXECUTION OF THIS AGREEMENT, THE
COMPANY AND EACH INVESTOR SHALL FILE ALL APPLICATIONS AND REPORTS AND TAKE SUCH
OTHER ACTION WHICH IS REASONABLY REQUIRED TO BE TAKEN OR FILED WITH ANY
GOVERNMENTAL AUTHORITY IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.  THE COMPANY AND EACH INVESTOR SHALL GIVE ALL ADDITIONAL NOTICES TO
THIRD PARTIES AND TAKE OTHER ACTION REASONABLY REQUIRED TO BE OR TAKEN BY IT
UNDER ANY AUTHORIZATION, LEASE, NOTE, MORTGAGE, INDENTURE, AGREEMENT OR OTHER
INSTRUMENT OR ANY LAW, RULE, REGULATION, DEMAND OR COURT OR ADMINISTRATIVE ORDER
IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

(B)           FOLLOWING THE CLOSING, IN CONNECTION WITH THE CONVERSION OF THE
NOTES TO THE EXTENT REQUIRED BY APPLICABLE LAW, THE COMPANY AND EACH INVESTOR
SHALL (I) MAKE ANY REQUIRED FILING WITH THE U.S. FEDERAL TRADE COMMISSION
(“FTC”), DEPARTMENT OF JUSTICE (“DOJ”) AND ANY OTHER GOVERNMENTAL AUTHORITY
REQUIRED UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED (THE “HSR ACT”) OR ANY OTHER APPLICABLE LAW WITH RESPECT TO SUCH
CONVERSION OF THE NOTES, (II) AS PROMPTLY AS PRACTICABLE MAKE OR CAUSE THEIR
AFFILIATES TO MAKE ANY FILING OR NOTICE REQUIRED UNDER ANY OTHER ANTITRUST OR
COMPETITION LAW OR OTHER LAW OR REGULATION AGREED BY THE PARTIES TO BE
APPLICABLE TO SUCH CONVERSION OF THE NOTES AND (C) PROVIDE ANY SUPPLEMENTAL
INFORMATION REQUESTED IN CONNECTION WITH THE HSR ACT OR SUCH OTHER ANTITRUST,
COMPETITION OR OTHER LAWS OR REGULATIONS AS PROMPTLY AS PRACTICABLE AFTER SUCH
REQUEST IS MADE.  EACH OF THE COMPANY AND THE INVESTORS SHALL, AND SHALL CAUSE
ITS AFFILIATES TO, FURNISH TO THE OTHER SUCH INFORMATION AND ASSISTANCE AS THE
OTHER MAY REASONABLY REQUEST IN CONNECTION WITH ITS PREPARATION OF ANY FILING OR
SUBMISSION WHICH IS NECESSARY UNDER THE HSR ACT OR SUCH OTHER APPLICABLE LAW OR
WHICH IS OTHERWISE REQUESTED BY THE FTC OR DOJ OR OTHER GOVERNMENTAL AUTHORITY
AND SHALL KEEP EACH OTHER APPRISED OF THE STATUS OF ANY COMMUNICATIONS WITH, AND
INQUIRIES OR REQUESTS FOR ADDITIONAL INFORMATION FROM, THE FTC AND DOJ OR OTHER
GOVERNMENTAL AUTHORITY.

 

5.2.          Further Assurances.  Each party agrees to cooperate with each
other and their respective officers, employees, attorneys, accountants and other
agents, and, generally, do such other acts and things in good faith as may be
reasonable or appropriate to timely effectuate the intents and purposes of this
Agreement and the consummation of the transactions contemplated hereby,
including, but not limited to, taking any action to facilitate the filing any
document or the taking of any action to assist the other parties hereto in
complying with the terms of Section 5.1 hereof.

 

5.3.          Nasdaq.  Within ten business days following the Closing Date, the
Company shall cause the shares of Common Stock initially issuable upon
conversion of the

 

8

--------------------------------------------------------------------------------

 

NOTES TO BE LISTED AND ADMITTED AND AUTHORIZED FOR TRADING, SUBJECT TO OFFICIAL
NOTICE OF ISSUANCE, ON THE NASDAQ GLOBAL SELECT MARKET.

 

5.4.          Shares Issuable upon Conversion.  The Company will at all times
have and keep available for issuance such number of shares of Common Stock as
shall be sufficient to permit the conversion of the Notes into Common Stock as
provided for in the Indenture, including as may be adjusted in accordance with
the Notes.

 

5.5.          Registration.

 

(A)           THE COMPANY SHALL USE REASONABLE BEST EFFORTS TO PREPARE AND FILE
WITH THE SEC WITHIN 20 DAYS FOLLOWING THE CLOSING A REGISTRATION STATEMENT ON
FORM S-3 UNDER RULE 415 OF THE SECURITIES ACT TO ENABLE THE RESALE OF THE
REGISTRABLE SECURITIES (AS DEFINED BELOW) BY THE HOLDER, FROM TIME TO TIME, IN
COMPLIANCE WITH THE SECURITIES ACT (THE “RESALE REGISTRATION STATEMENT”).  THE
COMPANY SHALL USE REASONABLE BEST EFFORTS TO PREPARE AND FILE WITH THE SEC SUCH
AMENDMENTS AND SUPPLEMENTS TO THE RESALE REGISTRATION STATEMENT AND THE
PROSPECTUS USED IN CONNECTION THEREWITH (THE “RESALE PROSPECTUS”) AS MAY BE
NECESSARY TO KEEP THE RESALE REGISTRATION STATEMENT EFFECTIVE AND FREE FROM ANY
MATERIAL MISSTATEMENT OR OMISSION TO STATE A MATERIAL FACT.  NOTWITHSTANDING THE
FOREGOING, THE COMPANY SHALL NOT BE REQUIRED TO KEEP THE RESALE REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE REGISTRABLE SECURITIES OF THE HOLDER IF
THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY AND THE HOLDER, THAT THE HOLDER IS NOT AN AFFILIATE OF THE COMPANY. 
“REGISTRABLE SECURITIES” SHALL MEAN ANY SECURITIES OF THE COMPANY BENEFICIALLY
OWNED BY FAIRFAX AT THE TIME OF THE COMPANY’S FILING OF THE RESALE REGISTRATION
STATEMENT, OTHER THAN THOSE SECURITIES BENEFICIALLY OWNED BY FAIRFAX THAT ARE
COVERED BY THE COMPANY’S REGISTRATION STATEMENT ON FORM S-3ASR (FILE
NO. 333-156709) FILED ON JANUARY 13, 2009 .  THE COMPANY SHALL BEAR ALL EXPENSES
IN CONNECTION WITH THE COMPANY’S REGISTRATION OF THE REGISTRABLE SECURITIES
PURSUANT TO THIS SECTION 5.5, PROVIDED, HOWEVER, THAT THE HOLDER SHALL BEAR THE
COST OF ALL UNDERWRITING DISCOUNTS AND SELLING COMMISSIONS AND SIMILAR FEES
APPLICABLE TO THE SALE OF THE SECURITIES AND FEES AND EXPENSES OF ITS LEGAL
COUNSEL AND ALL TRANSFER TAXES.

 

(B)           IN THE EVENT (I) OF ANY REQUEST BY THE SEC OR ANY OTHER FEDERAL OR
STATE GOVERNMENTAL AUTHORITY DURING THE PERIOD OF EFFECTIVENESS OF THE RESALE
REGISTRATION STATEMENT FOR AMENDMENTS OR SUPPLEMENTS TO A RESALE REGISTRATION
STATEMENT OR RELATED PROSPECTUS OR FOR ADDITIONAL INFORMATION; (II) OF THE
ISSUANCE BY THE SEC OR ANY OTHER FEDERAL OR STATE GOVERNMENTAL AUTHORITY OF ANY
STOP ORDER SUSPENDING THE EFFECTIVENESS OF A RESALE REGISTRATION STATEMENT OR
THE INITIATION OF ANY PROCEEDINGS FOR THAT PURPOSE; (III) OF ANY EVENT OR
CIRCUMSTANCE NOT OTHERWISE COVERED BY CLAUSE (IV) BELOW WHICH, UPON THE ADVICE
OF ITS COUNSEL, NECESSITATES THE MAKING OF ANY CHANGES IN THE RESALE
REGISTRATION STATEMENT OR RESALE PROSPECTUS, OR ANY DOCUMENT INCORPORATED OR
DEEMED TO BE INCORPORATED THEREIN BY REFERENCE, SO THAT, IN THE CASE OF THE
RESALE REGISTRATION STATEMENT, IT WILL NOT CONTAIN ANY UNTRUE STATEMENT OF A
MATERIAL FACT OR ANY OMISSION TO STATE A MATERIAL FACT REQUIRED TO BE STATED
THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING, AND THAT IN
THE CASE OF THE RESALE PROSPECTUS, IT WILL NOT CONTAIN ANY UNTRUE STATEMENT OF A
MATERIAL FACT OR ANY OMISSION TO STATE A MATERIAL FACT REQUIRED TO BE STATED
THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN, IN THE LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING; OR (IV) THE COMPANY
DETERMINES IN GOOD FAITH THAT OFFERS AND SALES PURSUANT TO THE RESALE
REGISTRATION STATEMENT SHOULD NOT BE MADE BY REASON OF THE PRESENCE OF

 

9

--------------------------------------------------------------------------------

 

MATERIAL UNDISCLOSED CIRCUMSTANCES OR DEVELOPMENTS WITH RESPECT TO WHICH THE
DISCLOSURE THAT WOULD BE REQUIRED IN SUCH A RESALE REGISTRATION STATEMENT OR
RELATED RESALE PROSPECTUS, IS REASONABLY LIKELY TO HAVE A SERIOUSLY DETRIMENTAL
EFFECT ON THE COMPANY, THEN THE COMPANY SHALL DELIVER A CERTIFICATE IN WRITING
TO THE HOLDER (THE “SUSPENSION NOTICE”) TO THE EFFECT OF THE FOREGOING AND, UPON
RECEIPT OF SUCH SUSPENSION NOTICE, THE HOLDER WILL REFRAIN FROM SELLING ANY
REGISTRABLE SECURITIES PURSUANT TO THE RESALE REGISTRATION STATEMENT (A
“SUSPENSION”) UNTIL IT RECEIVES COPIES OF A SUPPLEMENTED OR AMENDED RESALE
PROSPECTUS PREPARED AND FILED BY THE COMPANY, OR UNTIL IT IS ADVISED IN WRITING
BY THE COMPANY THAT THE CURRENT RESALE PROSPECTUS MAY BE USED, AND HAS RECEIVED
COPIES OF ANY ADDITIONAL OR SUPPLEMENTAL FILINGS THAT ARE INCORPORATED OR DEEMED
INCORPORATED BY REFERENCE IN ANY SUCH RESALE PROSPECTUS.  IN THE EVENT OF ANY
SUSPENSION, THE COMPANY WILL USE REASONABLE BEST EFFORTS TO CAUSE THE USE OF THE
RESALE PROSPECTUS SO SUSPENDED TO BE RESUMED AS SOON AS REASONABLY PRACTICABLE
AFTER THE DELIVERY OF A SUSPENSION NOTICE TO THE HOLDER.

 

(C)           NOTWITHSTANDING THE FOREGOING PARAGRAPHS OF THIS SECTION 5.5, NO
SUSPENSION UNDER CLAUSE (IV) OF SECTION 5.5(B) SHALL CONTINUE FOR MORE THAN
FORTY-FIVE (45) DAYS AND THE COMPANY SHALL NOT DELIVER MORE THAN ONE SUSPENSION
NOTICE UNDER SUCH CLAUSE IN ANY TWELVE-MONTH PERIOD.

 

(D)           PROVIDED THAT A SUSPENSION IS NOT THEN IN EFFECT, THE HOLDER MAY
SELL REGISTRABLE SECURITIES UNDER THE RESALE REGISTRATION STATEMENT, PROVIDED,
TO THE EXTENT REQUIRED BY APPLICABLE LAW, THAT IT ARRANGES FOR DELIVERY OF A
CURRENT RESALE PROSPECTUS TO THE TRANSFEREE OF SUCH SECURITIES.  UPON RECEIPT OF
A REQUEST THEREFOR, THE COMPANY WILL PROVIDE AN ADEQUATE NUMBER OF CURRENT
RESALE PROSPECTUSES TO THE HOLDER.

 

6.             CONDITIONS PRECEDENT.

 

6.1.          Conditions to the Obligation of the Investors to Consummate the
Closing.  The several obligations of each Investor to consummate the
transactions to be consummated at the Closing, and to purchase the Notes being
purchased by it at the Closing pursuant to this Agreement, are subject to the
satisfaction of the following conditions precedent:

 

(A)           THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY CONTAINED IN
SECTION 3 OF THIS AGREEMENT SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS
ON THE DATE HEREOF AND ON THE CLOSING DATE AS THOUGH MADE ON THE CLOSING DATE
(EXCEPT THAT THOSE REPRESENTATIONS AND WARRANTIES THAT ADDRESS MATTERS ONLY AS
OF A PARTICULAR DATE SHALL HAVE BEEN TRUE AND CORRECT ONLY ON SUCH DATE).

 

(B)           THE PURCHASE OF, AND PAYMENT FOR, THE NOTES BY EACH INVESTOR (IN
THE CASE OF EACH OF LOOMIS AND ZAZOVE, ON BEHALF OF ITS RESPECTIVE ADVISORY
CLIENTS) SHALL NOT BE PROHIBITED OR ENJOINED BY ANY LAW OR GOVERNMENTAL OR COURT
ORDER OR REGULATION.

 

(C)           NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF THE REGISTRATION
STATEMENT SHALL HAVE BEEN ISSUED AND NO PROCEEDINGS FOR THAT PURPOSE SHALL HAVE
BEEN INSTITUTED OR THREATENED.

 

(D)           THE COMPANY AND THE TRUSTEE SHALL HAVE EXECUTED AND DELIVERED THE
SECOND SUPPLEMENTAL INDENTURE IN THE FORM ATTACHED HERETO AS EXHIBIT C AND THE
TRUSTEE SHALL

 

10

--------------------------------------------------------------------------------

 

HAVE EXECUTED AND DELIVERED A CERTIFICATE OF AUTHENTICATION WITH RESPECT TO THE
NOTES.  THE COMPANY SHALL HAVE PERFORMED AND COMPLIED IN ALL MATERIAL RESPECTS
WITH ALL OBLIGATIONS, COVENANTS AND CONDITIONS TO BE PERFORMED AND COMPLIED WITH
BY THE COMPANY UNDER THIS AGREEMENT ON OR PRIOR TO THE CLOSING DATE.

 

(E)           EACH INVESTOR SHALL HAVE RECEIVED FROM THE COMPANY’S COUNSEL,
WILLKIE FARR & GALLAGHER LLP, AN OPINION SUBSTANTIALLY IN THE FORM ATTACHED
HERETO AS EXHIBIT D.

 

Notwithstanding anything in this Agreement to the contrary, no Investor shall be
obligated to consummate the transactions contemplated by this Agreement unless
the conditions set forth in Section 6.2 herein have been satisfied with respect
to other Investors purchasing in the aggregate such principal amount of the
Notes that, when taken together with the principal amount of Notes to be
purchased by such Investor, equals at least $175,000,000.

 

6.2.          Conditions to the Obligation of the Company to Consummate the
Closing.  The obligation of the Company to consummate the transactions to be
consummated at the Closing, and to issue and sell to each Investor (in the case
of each of Loomis and Zazove, on behalf of its respective Advisory Clients) the
Notes to be purchased by it at the Closing pursuant to this Agreement, is
subject to the satisfaction of the following conditions precedent:

 

(A)           THE REPRESENTATIONS AND WARRANTIES OF SUCH INVESTOR CONTAINED IN
SECTION 4 OF THIS AGREEMENT SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS
ON THE DATE HEREOF AND ON THE CLOSING DATE AS THOUGH MADE ON THE CLOSING DATE
(EXCEPT THAT THOSE REPRESENTATIONS AND WARRANTIES THAT ADDRESS MATTERS ONLY AS
OF A PARTICULAR DATE SHALL HAVE BEEN TRUE AND CORRECT ONLY ON SUCH DATE).  SUCH
INVESTOR SHALL HAVE PERFORMED AND COMPLIED IN ALL MATERIAL RESPECTS WITH ALL
OBLIGATIONS, COVENANTS AND CONDITIONS TO BE PERFORMED AND COMPLIED WITH BY SUCH
INVESTOR UNDER THIS AGREEMENT ON OR PRIOR TO THE CLOSING DATE.

 

(B)           EACH INVESTOR (IN THE CASE OF EACH OF LOOMIS AND ZAZOVE, ON BEHALF
OF ITS RESPECTIVE ADVISORY CLIENTS) SHALL HAVE DELIVERED TO THE COMPANY AN
AMOUNT EQUAL TO THE PURCHASE PRICE SET FORTH OPPOSITE SUCH INVESTOR’S NAME ON
EXHIBIT A ATTACHED HERETO UNDER THE HEADING “PURCHASE PRICE.”

 

(C)           THE SALE OF THE NOTES BY THE COMPANY SHALL NOT BE PROHIBITED OR
ENJOINED BY ANY LAW OR GOVERNMENTAL OR COURT ORDER OR REGULATION.

 

(D)           NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF THE REGISTRATION
STATEMENT SHALL HAVE BEEN ISSUED AND NO PROCEEDINGS FOR THAT PURPOSE SHALL HAVE
BEEN INSTITUTED OR THREATENED.

 

(E)           THE TRUSTEE SHALL HAVE EXECUTED AND DELIVERED THE SECOND
SUPPLEMENTAL INDENTURE IN THE FORM ATTACHED HERETO AS EXHIBIT C AND THE TRUSTEE
SHALL HAVE EXECUTED AND DELIVERED A CERTIFICATE OF AUTHENTICATION WITH RESPECT
TO THE NOTES.

 

Each Investor’s obligations under this Agreement shall be several and
independent from the obligations of each other Investor; provided, however,
that, notwithstanding anything in this Agreement to the contrary, the Company
shall not be obligated

 

11

--------------------------------------------------------------------------------

 

to consummate the transactions contemplated by this Agreement unless the
conditions set forth in this Section 6.2 have been satisfied with respect to all
of the Investors.

 

7.             [INTENTIONALLY OMITTED]

 

8.             MISCELLANEOUS PROVISIONS.

 

8.1.          Public Statements or Releases.  Neither the Company nor any
Investor shall make any public announcement with respect to the existence or
terms of this Agreement or the transactions provided for herein without the
prior approval of the other parties, which shall not be unreasonably withheld or
delayed.  Notwithstanding the foregoing, nothing in this Section 8.1 shall
prevent any party from making any public announcement it considers necessary in
order to satisfy its obligations under the law or the rules of any national
securities exchange or market, provided such party, to the extent practicable,
provides the other parties with an opportunity to review and comment on any
proposed public announcement before it is made.

 

8.2.          Pronouns.  All pronouns or any variation thereof shall be deemed
to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person, persons, entity or entities may require.

 

8.3.          Notices.

 

(A)           ANY NOTICES, REPORTS OR OTHER CORRESPONDENCE (HEREINAFTER
COLLECTIVELY REFERRED TO AS “CORRESPONDENCE”) REQUIRED OR PERMITTED TO BE GIVEN
HEREUNDER SHALL BE IN WRITING AND SHALL BE DEEMED TO HAVE BEEN DULY GIVEN (I) ON
THE DATE OF SERVICE IF SERVED PERSONALLY; (II) ON THE BUSINESS DAY AFTER
DELIVERY TO FEDERAL EXPRESS OR SIMILAR OVERNIGHT COURIER; OR (III) ON THE THIRD
BUSINESS DAY AFTER MAILING, IF MAILED TO THE PARTY TO WHOM NOTICE IS TO BE GIVEN
BY FIRST CLASS MAIL, REGISTERED OR CERTIFIED, POSTAGE PREPAID AND PROPERLY
ADDRESSED, TO THE PARTY AS SET FORTH IN (B) AND (C) BELOW.

 

(B)           ALL CORRESPONDENCE TO THE COMPANY SHALL BE ADDRESSED AS FOLLOWS:

 

Level 3 Communications, Inc.

1025 Eldorado Boulevard

Broomfield, CO 80021

Attention:  Thomas C. Stortz

with a copy to:

 

Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Attention:  David K. Boston
                     Laura L. Delanoy

 

(C)           ALL CORRESPONDENCE TO ANY INVESTOR SHALL BE SENT TO SUCH INVESTOR
AT THE ADDRESS SET FORTH IN EXHIBIT A ATTACHED HERETO.

 

12

--------------------------------------------------------------------------------

 

(D)           ANY PERSON MAY CHANGE THE ADDRESS TO WHICH CORRESPONDENCE TO IT IS
TO BE ADDRESSED BY NOTIFICATION AS PROVIDED FOR HEREIN.

 

8.4.          Captions.  The captions and paragraph headings of this Agreement
are solely for the convenience of reference and shall not affect its
interpretation.

 

8.5.          Severability.  Should any part or provision of this Agreement be
held unenforceable or in conflict with the applicable laws or regulations of any
jurisdiction, the invalid or unenforceable part or provisions shall be replaced
with a provision which accomplishes, to the extent possible, the original
business purpose of such part or provision in a valid and enforceable manner,
and the remainder of this Agreement shall remain binding upon the parties
hereto.

 

8.6.          Governing Law.  This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without giving effect to
conflict of law principles thereof.

 

8.7.          Waiver.  No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or be construed as, a further or continuing waiver of any such
term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.

 

8.8.          Expenses.  Each party shall bear the cost of any and all fees and
expenses incurred in connection with the transactions contemplated hereby
including, without limitation, legal, consulting and accounting fees; provided,
however, that the Company shall pay the fees of one counsel to the Investors not
in excess of $40,000.  Each Investor shall bear all expenses in connection with
any filings under the HSR Act in connection with its purchase of Notes and
acquisition of Common Stock upon conversion of such Notes.

 

8.9.          Assignment.  The rights and obligations of the parties hereto
shall inure to the benefit of and shall be binding upon the authorized
successors and permitted assigns of each party.  None of the parties may assign
its rights or obligations under this Agreement or designate another person (i)
to perform all or part of its obligations under this Agreement or (ii) to have
all or part of its rights and benefits under this Agreement, in each case
without the prior written consent of the other parties.  In the event of any
assignment in accordance with the terms of this Agreement, the assignee shall
specifically assume and be bound by the provisions of the Agreement by executing
and agreeing to an assumption agreement reasonably acceptable to the Company.
Notwithstanding the foregoing, Fairfax may assign its rights and obligations
under this Agreement to one or more its respective subsidiaries, provided that
any such subsidiary assignee specifically assumes and agrees to be bound by the
provisions of the Agreement by executing an assumption agreement reasonably
acceptable to the Company, and provided further that, in the event of any such
assignment by Fairfax, Fairfax shall remain liable for the performance of all
such assigned obligations under this Agreement.

 

8.10.        Counterparts.  This Agreement may be signed in one or more
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

 

13

--------------------------------------------------------------------------------

 

8.11.        Entire Agreement; Amendment.  This Agreement (including the
exhibits hereto) constitutes the entire agreement between the parties hereto
respecting the subject matter hereof and supersedes all prior agreements,
negotiations, understandings, representations and statements respecting the
subject matter hereof, whether written or oral.  No modification, alteration,
waiver or change in any of the terms of this Agreement (other than Section 5.5)
shall be valid or binding upon the parties hereto unless made in writing and
duly executed by the Company and the Investors.  No modification, alteration,
waiver or change in any of the terms of Section 5.5 shall be valid or binding
upon the Company or the Holder unless made in writing and duly executed by the
Company and the Holder.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

14

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal
as of the day and year first above written.

 

 

LEVEL 3 COMMUNICATIONS, INC.

 

 

 

 

 

 

By:

/s/ Sunit S. Patel

 

 

Name: Sunit S. Patel

 

 

Title: Executive Vice President, Chief Financial Officer

 

--------------------------------------------------------------------------------

 

 

INVESTORS:

 

 

 

 

 

STEELHEAD NAVIGATOR MASTER, L.P.

 

 

 

By its General Partner, Steelhead Offshore Partners, LLC

 

 

 

By its Sole Member, Steelhead Partners, LLC

 

 

 

By:

/s/ J. Michael Johnston

 

 

Name: J. Michael Johnston

 

 

Title: Managing Member, Steelhead Partners, LLC

 

--------------------------------------------------------------------------------

 

 

FAIRFAX FINANCIAL HOLDINGS LIMITED,

 

By its Investment Manager, Hamblin Watsa Investment Counsel Ltd.

 

 

 

By:

/s/ Paul Rivett

 

 

Name: Paul Rivett

 

 

Title: Vice President and Chief Operating Officer

 

--------------------------------------------------------------------------------

 

 

ZAZOVE ASSOCIATES, LLC,

 

as Investment Adviser with Power of Attorney

 

on behalf of its Advisory Clients

 

 

 

By:

/s/ Steven M. Kleiman

 

 

Name:

Steven M. Kleiman

 

 

Title:

Chief Operating Officer

 

--------------------------------------------------------------------------------

 

 

LOOMIS, SAYLES & COMPANY, L.P.,

 

as Investment Adviser with Power of Attorney

 

on behalf of its Advisory Clients

 

 

 

 

 

 

By:

/s/ Donald P. Ryan

 

 

Name: Donald P. Ryan

 

 

Title: Vice President, Chief Compliance Officer
and Counsel

 

--------------------------------------------------------------------------------

 

 

FIDELITY MAGELLAN FUND: FIDELITY MAGELLAN FUND

 

 

 

 

 

 

By:

/s/ Gary Ryan

 

 

Name: Gary Ryan

 

 

Title: Assistant Treasurer

 

--------------------------------------------------------------------------------

 

 

FIDELITY FINANCIAL TRUST: FIDELITY CONVERTIBLE SECURITIES

 

 

 

 

 

 

By:

/s/ Gary Ryan

 

 

Name: Gary Ryan

 

 

Title: Assistant Treasurer

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Investor
Name and Address

 

Principal Amount of Notes
to be Purchased

 

Purchase Price

 

Fairfax Financial Holdings Limited

 

$

75,000,000

 

$

75,000,000

 

95 Wellington Street West, Suite 800

Toronto Ontario MSJ 2N7, Canada

 

 

 

 

 

 

 

 

 

 

 

 

 

Steelhead Navigator Master, L.P.

 

$

25,000,000

 

$

25,000,000

 

PO Box 21749

Seattle, WA 98111

 

 

 

 

 

 

 

 

 

 

 

 

 

Zazove Associates, LLC

 

$

50,000,000

 

$

50,000,000

 

1001 Tahoe Blvd.

Incline Village, NV 89451

 

 

 

 

 

 

 

 

 

 

 

 

 

Loomis, Sayles & Company, L.P.

 

$

90,000,000

 

$

90,000,000

 

One Financial Center

Boston, MA 02111

 

 

 

 

 

 

 

 

 

 

 

 

 

Fidelity Financial Trust: Fidelity Convertible Securities

 

$

10,000,000

 

$

10,000,000

 

245 Summer Street

Boston, MA 02210

 

 

 

 

 

 

 

 

 

 

 

 

 

Fidelity Magellan Fund: Fidelity Magellan Fund

 

$

25,000,000

 

$

25,000,000

 

245 Summer Street

Boston, MA 02210

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

$

275,000,000

 

$

275,000,000

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

FORM OF NOTE

 

See Exhibit A to Exhibit C hereto.

 

--------------------------------------------------------------------------------

 

EXHIBIT C

 

FORM OF SECOND SUPPLEMENTAL INDENTURE

 

--------------------------------------------------------------------------------

 

EXHIBIT D

 

FORM OF OPINION OF WILLKIE FARR & GALLAGHER LLP

 

--------------------------------------------------------------------------------