Exhibit 10.1

 

EXECUTION COPY

 

AMENDMENT AGREEMENT dated as of April 16, 2009 (this “Agreement”), to the Credit
Agreement dated as of March 13, 2007 (the “Original Credit Agreement”), among
LEVEL 3 COMMUNICATIONS, INC. (“Level 3”), LEVEL 3 FINANCING, INC., as Borrower
(the “Borrower”), the LENDERS party thereto, MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED, as Joint Lead Arranger and Joint Bookrunner, MORGAN
STANLEY & CO. INCORPORATED, as Joint Lead Arranger, Joint Bookrunner and
Syndication Agent, CITIGROUP GLOBAL MARKETS, INC., CREDIT SUISSE SECURITIES
(USA) LLC and WACHOVIA BANK, N.A., as Co-Documentation Agents, and MERRILL LYNCH
CAPITAL CORPORATION, as Administrative Agent and Collateral Agent.

 

CAPITALIZED TERMS USED BUT NOT OTHERWISE DEFINED HEREIN HAVE THE MEANINGS
ASSIGNED TO THEM IN THE ORIGINAL CREDIT AGREEMENT OR THE RESTATED CREDIT
AGREEMENT (AS DEFINED BELOW), AS THE CONTEXT MAY REQUIRE.

 

PURSUANT TO SECTION 9.02(D) OF THE ORIGINAL CREDIT AGREEMENT, (A) THE ORIGINAL
CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE AMENDED TO ESTABLISH, AMONG
OTHER THINGS, ONE OR MORE ADDITIONAL CLASSES OF TERM LOANS BY AN AGREEMENT IN
WRITING ENTERED INTO BY LEVEL 3, THE BORROWER, THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT AND EACH PERSON (INCLUDING ANY LENDER) AGREEING TO MAKE SUCH
ADDITIONAL TERM LOANS, BUT WITHOUT THE CONSENT OF ANY OTHER LENDER, (B) THE
BORROWER HAS REQUESTED THAT THE TRANCHE B TERM LENDERS MAKE TRANCHE B TERM LOANS
TO THE BORROWER IN AN AGGREGATE PRINCIPAL AMOUNT OF $220,0000,000, THE NET
PROCEEDS OF WHICH, AS WELL AS ADDITIONAL FUNDS OF THE BORROWER, WILL BE ADVANCED
BY THE BORROWER TO LEVEL 3 LLC ON THE RESTATEMENT EFFECTIVE DATE (AS DEFINED
BELOW) IN AN AMOUNT EQUAL TO THE AGGREGATE PRINCIPAL AMOUNT OF THE TRANCHE B
TERM LOANS ISSUED, AGAINST DELIVERY OF THE LOAN PROCEEDS NOTE (AS INCREASED BY
THE AMOUNT OF $220,000,000 TO EVIDENCE SUCH LOAN MADE BY THE BORROWER TO LEVEL 3
LLC ON THE RESTATEMENT EFFECTIVE DATE), AND (C) THE TRANCHE B TERM LENDERS ARE
WILLING TO BECOME PARTIES HERETO AND TO THE RESTATED CREDIT AGREEMENT, AND TO
EXTEND TRANCHE B TERM LOANS HAVING THE TERMS AND CONDITIONS PROVIDED FOR HEREIN
AND IN THE RESTATED CREDIT AGREEMENT.

 

Accordingly, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1.  AMENDMENT AND RESTATEMENT OF THE ORIGINAL CREDIT AGREEMENT.  (A) 
EFFECTIVE AS OF THE RESTATEMENT EFFECTIVE DATE, THE ORIGINAL CREDIT AGREEMENT
(EXCLUDING, EXCEPT AS EXPRESSLY SET FORTH HEREIN, ANY SCHEDULE OR EXHIBIT
THERETO, EACH OF WHICH SHALL REMAIN AS IN EFFECT IMMEDIATELY PRIOR TO THE
RESTATEMENT EFFECTIVE DATE) IS HEREBY AMENDED AND RESTATED TO BE IN THE FORM
ATTACHED AS ANNEX I

 

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HERETO (THE ORIGINAL CREDIT AGREEMENT, AS SO AMENDED AND RESTATED, BEING
REFERRED TO AS THE “RESTATED CREDIT AGREEMENT”).

 

(B)  EFFECTIVE AS OF THE RESTATEMENT EFFECTIVE DATE, SCHEDULE 2.01 TO THE
ORIGINAL CREDIT AGREEMENT IS HEREBY AMENDED TO INCLUDE THE INFORMATION ON
SCHEDULE 2.01(A) ATTACHED HERETO.

 

(C)  EFFECTIVE AS OF THE RESTATEMENT EFFECTIVE DATE, EXHIBITS A, D, G-1 AND H TO
THE ORIGINAL CREDIT AGREEMENT ARE HEREBY AMENDED AND RESTATED TO BE IN THE FORM
OF EXHIBITS A, D, G-1 AND H, RESPECTIVELY, ATTACHED HERETO.

 

(D)  EFFECTIVE AS OF THE RESTATEMENT EFFECTIVE DATE, THE LOAN PROCEEDS NOTE
COLLATERAL AGREEMENT IS HEREBY AMENDED AND RESTATED TO BE IN THE FORM ATTACHED
HERETO AS EXHIBIT G-1, AND THE LOAN PROCEEDS NOTE IS HEREBY AMENDED AND RESTATED
TO BE IN THE FORM ATTACHED HERETO AS EXHIBIT H.

 

SECTION 2.  COLLATERAL AND GUARANTEES.  (A)  NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THE RESTATED CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT, SOLELY
WITH RESPECT TO ANY REGULATED GUARANTOR SUBSIDIARY OR ANY REGULATED GRANTOR
SUBSIDIARY, (I) ANY GUARANTEE PROVIDED BY ANY REGULATED GUARANTOR SUBSIDIARY
UNDER ANY SECURITY DOCUMENT SHALL INITIALLY BE DEEMED NOT TO GUARANTEE THE
TRANCHE B TERM OBLIGATIONS, (II) ANY LIENS ON, OR OTHER SECURITY INTERESTS IN OR
PLEDGES OF, ASSETS GRANTED BY SUCH REGULATED GRANTOR SUBSIDIARY UNDER ANY
SECURITY DOCUMENT SHALL INITIALLY BE DEEMED NOT TO SECURE THE TRANCHE B TERM
OBLIGATIONS AND (III) THE GUARANTEE AND COLLATERAL REQUIREMENT, INSOFAR AS IT
RELATES TO THE TRANCHE B TERM OBLIGATIONS, SHALL INITIALLY NOT BE REQUIRED TO BE
SATISFIED IN RESPECT OF SUCH REGULATED GUARANTOR SUBSIDIARY OR REGULATED GRANTOR
SUBSIDIARY, AS THE CASE MAY BE.  AT SUCH TIME AS THE GENERAL COUNSEL, THE CHIEF
LEGAL OFFICER, ANY ASSISTANT CHIEF LEGAL OFFICER OR ANY ASSISTANT GENERAL
COUNSEL OF LEVEL 3 SHALL HAVE DELIVERED TO THE ADMINISTRATIVE AGENT WRITTEN
NOTICE THAT THE TRANCHE B GUARANTEE PERMIT CONDITION SHALL HAVE BEEN SATISFIED
WITH RESPECT TO ANY REGULATED GUARANTOR SUBSIDIARY, (X) CLAUSE (I) OF THE
IMMEDIATELY PRECEDING SENTENCE SHALL BECOME INOPERATIVE WITH RESPECT TO SUCH
REGULATED GUARANTOR SUBSIDIARY AND SUCH REGULATED GUARANTOR SUBSIDIARY SHALL
AUTOMATICALLY BE DEEMED TO GUARANTEE THE TRANCHE B TERM OBLIGATIONS AS PROVIDED
IN THE SECURITY DOCUMENTS, AND (Y) THE GUARANTEE AND COLLATERAL REQUIREMENT,
INSOFAR AS IT RELATES TO GUARANTEES BY SUCH REGULATED GUARANTOR SUBSIDIARY OF
THE TRANCHE B TERM OBLIGATIONS, SHALL BE REQUIRED TO BE SATISFIED IN RESPECT OF
SUCH REGULATED GUARANTOR SUBSIDIARY.  AT SUCH TIME AS THE GENERAL COUNSEL, THE
CHIEF LEGAL OFFICER, ANY ASSISTANT CHIEF LEGAL OFFICER OR ANY ASSISTANT GENERAL
COUNSEL OF LEVEL 3 SHALL HAVE DELIVERED TO THE ADMINISTRATIVE AGENT WRITTEN
NOTICE THAT THE TRANCHE B COLLATERAL PERMIT CONDITION SHALL HAVE BEEN SATISFIED
WITH RESPECT TO ANY REGULATED GRANTOR SUBSIDIARY, (X) CLAUSE (II) OF THE
IMMEDIATELY PRECEDING SENTENCE SHALL BECOME INOPERATIVE WITH RESPECT TO SUCH
REGULATED GRANTOR SUBSIDIARY AND SUCH REGULATED GRANTOR SUBSIDIARY SHALL
AUTOMATICALLY BE DEEMED TO GRANT LIENS ON, SECURITY INTERESTS IN AND PLEDGES OF
ITS ASSETS TO SECURE THE TRANCHE B TERM OBLIGATIONS AS PROVIDED IN THE SECURITY
DOCUMENTS AND (Y) THE GUARANTEE AND COLLATERAL REQUIREMENT, INSOFAR AS IT
RELATES TO THE GRANTING OF LIENS, SECURITY INTERESTS AND PLEDGES TO SECURE THE
TRANCHE B

 

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TERM OBLIGATIONS SHALL BE REQUIRED TO BE SATISFIED IN RESPECT OF SUCH REGULATED
GRANTOR SUBSIDIARY.

 

(B)  EACH OF LEVEL 3 AND THE BORROWER (I) WILL ENDEAVOR, AND CAUSE EACH
REGULATED GUARANTOR SUBSIDIARY AND REGULATED GRANTOR SUBSIDIARY TO ENDEAVOR, IN
GOOD FAITH USING COMMERCIALLY REASONABLE EFFORTS, TO (A) CAUSE THE TRANCHE B
GUARANTEE PERMIT CONDITION AND THE TRANCHE B COLLATERAL PERMIT CONDITION TO BE
SATISFIED WITH RESPECT TO EACH REGULATED GUARANTOR SUBSIDIARY AND REGULATED
GRANTOR SUBSIDIARY AT THE EARLIEST PRACTICABLE DATE AND (II) WILL CAUSE THE
GENERAL COUNSEL, THE CHIEF LEGAL OFFICER, ANY ASSISTANT CHIEF LEGAL OFFICER OR
ANY ASSISTANT GENERAL COUNSEL OF LEVEL 3 TO DELIVER TO THE ADMINISTRATIVE AGENT
THE APPLICABLE NOTICE REFERRED TO IN PARAGRAPH (A) OF THIS SECTION PROMPTLY (AND
IN ANY EVENT WITHIN 5 BUSINESS DAYS) FOLLOWING SATISFACTION OF THE TRANCHE B
GUARANTEE PERMIT CONDITION OR THE TRANCHE B COLLATERAL PERMIT CONDITION IN
RESPECT OF ANY REGULATED GUARANTOR SUBSIDIARY OR REGULATED GRANTOR SUBSIDIARY,
EACH OF WHICH IS A GUARANTOR AND/OR GRANTOR WITH RESPECT TO THE TRANCHE A TERM
LOANS.  FOR PURPOSES OF THIS SECTION, THE REQUIREMENT THAT LEVEL 3, THE BORROWER
OR ANY SUBSIDIARY OF LEVEL 3 USE “COMMERCIALLY REASONABLE EFFORTS” SHALL NOT BE
DEEMED TO REQUIRE IT TO MAKE MATERIAL PAYMENTS IN EXCESS OF NORMAL FEES AND
COSTS TO OR AT THE DIRECTION OF GOVERNMENTAL AUTHORITIES OR TO CHANGE THE MANNER
IN WHICH IT CONDUCTS ITS BUSINESS IN ANY RESPECT THAT THE MANAGEMENT OF LEVEL 3
SHALL DETERMINE IN GOOD FAITH TO BE ADVERSE OR MATERIALLY BURDENSOME.  UPON THE
REASONABLE REQUEST OF LEVEL 3 OR THE BORROWER, THE ADMINISTRATIVE AGENT AND THE
TRANCHE B TERM LENDERS WILL COOPERATE WITH LEVEL 3 AND THE BORROWER AS NECESSARY
TO ENABLE THEM TO COMPLY WITH THEIR OBLIGATIONS UNDER THIS SECTION.

 

(C)  FOR PURPOSES OF THIS SECTION, THE FOLLOWING TERMS HAVE THE MEANINGS
SPECIFIED BELOW:

 

“REGULATED GRANTOR SUBSIDIARY” MEANS LEVEL 3 COMMUNICATIONS, LLC, WILTEL
COMMUNICATIONS GROUP, LLC, WILTEL COMMUNICATIONS, LLC, C III COMMUNICATIONS,
LLC, BROADWING COMMUNICATIONS, LLC AND TELCOVE OPERATIONS, LLC.

 

“REGULATED GUARANTOR SUBSIDIARY” MEANS LEVEL 3 COMMUNICATIONS, LLC, WILTEL
COMMUNICATIONS, LLC, BROADWING COMMUNICATIONS, LLC AND TELCOVE OPERATIONS, LLC.

 

“TRANCHE B COLLATERAL PERMIT CONDITION” MEANS, WITH RESPECT TO ANY REGULATED
GRANTOR SUBSIDIARY, THAT SUCH REGULATED GRANTOR SUBSIDIARY HAS OBTAINED ALL
MATERIAL (AS DETERMINED IN GOOD FAITH BY THE GENERAL COUNSEL OF LEVEL 3)
AUTHORIZATIONS AND CONSENTS OF FEDERAL AND STATE GOVERNMENTAL AUTHORITIES, IF
ANY, REQUIRED IN ORDER FOR IT TO BECOME A GRANTOR IN RESPECT OF THE TRANCHE B
TERM OBLIGATIONS UNDER THE COLLATERAL AGREEMENT AND TO SATISFY THE GUARANTEE AND
COLLATERAL REQUIREMENT WITH RESPECT TO THE TRANCHE B TERM OBLIGATIONS, INSOFAR
AS THE AUTHORIZATIONS AND CONSENTS SO PERMIT.

 

“TRANCHE B GUARANTEE PERMIT CONDITION” MEANS, WITH RESPECT TO ANY REGULATED
GUARANTOR SUBSIDIARY, THAT SUCH REGULATED GUARANTOR SUBSIDIARY HAS OBTAINED ALL
MATERIAL (AS DETERMINED IN GOOD FAITH BY THE GENERAL COUNSEL OF LEVEL 3)

 

3

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AUTHORIZATIONS AND CONSENTS OF FEDERAL AND STATE GOVERNMENTAL AUTHORITIES, IF
ANY,  REQUIRED, IN ORDER FOR IT TO BECOME A GUARANTOR IN RESPECT OF THE TRANCHE
B TERM OBLIGATIONS UNDER THE GUARANTEE AGREEMENT AND TO SATISFY THE GUARANTEE
AND COLLATERAL REQUIREMENT WITH RESPECT TO THE TRANCHE B TERM OBLIGATIONS,
INSOFAR AS THE AUTHORIZATIONS AND CONSENTS SO PERMIT.

 

SECTION 3.  BENEFITS OF LOAN DOCUMENTS.  THE TRANCHE B TERM LOANS SHALL BE
ENTITLED TO ALL THE BENEFITS AFFORDED BY THE RESTATED CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS AND SHALL BENEFIT EQUALLY AND RATABLY (EXCEPT AS PROVIDED
IN SECTION 2 ABOVE) FROM THE GUARANTEES CREATED BY THE GUARANTEE AGREEMENT AND
THE SECURITY INTERESTS CREATED BY THE COLLATERAL AGREEMENT AND THE OTHER
SECURITY DOCUMENTS.

 

SECTION 4.  REPRESENTATIONS AND WARRANTIES.  EACH OF LEVEL 3 AND THE BORROWER
REPRESENTS AND WARRANTS TO THE LENDERS THAT:

 

(A)  THE EXECUTION, DELIVERY, AND PERFORMANCE BY EACH OF LEVEL 3, THE BORROWER
AND THE OTHER LOAN PARTIES OF THIS AGREEMENT, AND THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY BY EACH LOAN PARTY ON THE RESTATEMENT EFFECTIVE
DATE, ARE WITHIN THE POWERS OF LEVEL 3, THE BORROWER OR SUCH OTHER LOAN PARTY,
AS APPLICABLE, AND HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE OR OTHER
ACTION AND, IF REQUIRED, STOCKHOLDER OR MEMBER ACTION;

 

(B)  THIS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY LEVEL 3, THE
BORROWER AND EACH OTHER LOAN PARTY AND CONSTITUTES, AND EACH OTHER LOAN DOCUMENT
TO WHICH ANY LOAN PARTY IS A PARTY CONSTITUTES, A LEGAL, VALID AND BINDING
OBLIGATION OF SUCH LOAN PARTY, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS, SUBJECT
TO APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER LAWS
AFFECTING CREDITORS’ RIGHTS GENERALLY AND SUBJECT TO GENERAL PRINCIPLES OF
EQUITY, REGARDLESS OF WHETHER CONSIDERED IN A PROCEEDING IN EQUITY OR AT LAW;

 

(C)  THE REPRESENTATIONS AND WARRANTIES OF (I) LEVEL 3 AND THE BORROWER
CONTAINED IN ARTICLE III OF THE ORIGINAL CREDIT AGREEMENT AND (II) EACH LOAN
PARTY CONTAINED IN ANY OTHER LOAN DOCUMENT ARE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS ON AND AS OF THE DATE HEREOF, EXCEPT TO THE EXTENT THAT SUCH
REPRESENTATIONS AND WARRANTIES SPECIFICALLY REFER TO AN EARLIER DATE, IN WHICH
CASE THEY SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF SUCH EARLIER
DATE, AND EXCEPT THAT (A) THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
SECTION 3.04(A) OF THE ORIGINAL CREDIT AGREEMENT SHALL BE DEEMED TO REFER TO THE
MOST RECENT FINANCIAL STATEMENTS FURNISHED PURSUANT TO SECTION 5.01(A) OF THE
ORIGINAL CREDIT AGREEMENT, (B) REFERENCES IN SUCH REPRESENTATIONS AND WARRANTIES
AND THE DEFINITION OF “DISCLOSED MATTERS” TO THE “EFFECTIVE DATE” SHALL BE
DEEMED TO BE REFERENCES TO THE “RESTATEMENT EFFECTIVE DATE”, (C) REFERENCES TO
“JANUARY 1, 2007” AND “MARCH 12, 2007” IN THE DEFINITION OF “DISCLOSED MATTERS”
AND SECTION 3.04(C) SHALL BE DEEMED TO BE REFERENCES TO “JANUARY 1, 2009” AND
“APRIL 16, 2009”, RESPECTIVELY, (D) SECTION 3.06(A) SHALL BE DEEMED TO INCLUDE
THE FOLLOWING PHRASE IN THE PARENTHETICAL AFTER THE WORDS “DISCLOSED MATTERS”:
“AND AS DISCLOSED ON SCHEDULE 3.06 ATTACHED TO THE AMENDMENT AGREEMENT”, AND
(E) REFERENCES IN

 

4

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SUCH REPRESENTATIONS AND WARRANTIES TO “SCHEDULE 3.12” AND “SCHEDULE 3.13” SHALL
BE DEEMED TO BE REFERENCES TO SCHEDULE 3.12 AND SCHEDULE 3.13, RESPECTIVELY,
ATTACHED HERETO; AND

 

(D)  NO DEFAULT HAS OCCURRED AND IS CONTINUING ON THE DATE HEREOF.

 

SECTION 5.  EFFECTIVENESS.  THE AMENDMENT AND RESTATEMENT OF THE ORIGINAL CREDIT
AGREEMENT AND CERTAIN SCHEDULES AND EXHIBITS THERETO AS SET FORTH IN SECTION 1
HEREOF, AND THE OBLIGATIONS OF THE TRANCHE B TERM LENDERS TO MAKE THE TRANCHE B
TERM LOANS HEREUNDER, SHALL BECOME EFFECTIVE ON THE FIRST DATE (THE “RESTATEMENT
EFFECTIVE DATE”) ON WHICH EACH THE FOLLOWING CONDITIONS SHALL HAVE BEEN
SATISFIED (OR WAIVED IN ACCORDANCE WITH SECTION 9.02 OF THE RESTATED CREDIT
AGREEMENT):

 

(A)  THE ADMINISTRATIVE AGENT (OR ITS COUNSEL) SHALL HAVE RECEIVED FROM LEVEL 3,
THE BORROWER, EACH OTHER LOAN PARTY, THE ADMINISTRATIVE AGENT AND EACH TRANCHE B
TERM LENDER EITHER (I) COUNTERPARTS OF THIS AGREEMENT SIGNED ON BEHALF OF EACH
SUCH PARTY OR (II) WRITTEN EVIDENCE SATISFACTORY TO THE ADMINISTRATIVE AGENT
(WHICH MAY INCLUDE A TELECOPY TRANSMISSION OF A SIGNED SIGNATURE PAGE OF THIS
AGREEMENT) THAT EACH SUCH PARTY HAS SIGNED A COUNTERPART OF THIS AGREEMENT.

 

(B)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED FAVORABLE WRITTEN OPINIONS
(ADDRESSED TO THE ADMINISTRATIVE AGENT AND THE TRANCHE B TERM LENDERS AND DATED
THE RESTATEMENT EFFECTIVE DATE) OF (I) WILLKIE FARR & GALLAGHER LLP, COUNSEL FOR
THE BORROWER, (II) THE CHIEF LEGAL OFFICER OR AN ASSISTANT GENERAL COUNSEL OF
LEVEL 3, (III) POTTER ANDERSON & CORROON LLP, DELAWARE LOCAL COUNSEL, AND
(IV) BINGHAM MCCUTCHEN LLP, REGULATORY COUNSEL FOR THE BORROWER, COVERING SUCH
MATTERS RELATING TO THE LOAN PARTIES, THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT AS THE ADMINISTRATIVE AGENT SHALL REASONABLY
REQUEST.

 

(C)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED SUCH DOCUMENTS AND
CERTIFICATES AS THE ADMINISTRATIVE AGENT OR ITS COUNSEL MAY REASONABLY REQUEST
RELATING TO THE ORGANIZATION, EXISTENCE AND GOOD STANDING OF EACH LOAN PARTY,
THE AUTHORIZATION BY THE LOAN PARTIES OF THE TRANSACTIONS CONTEMPLATED HEREBY
AND ANY OTHER LEGAL MATTERS RELATING TO THE LOAN PARTIES, THE LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY, ALL IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT AND ITS COUNSEL.

 

(D)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A CERTIFICATE SIGNED BY A
FINANCIAL OFFICER OF LEVEL 3, DATED THE RESTATEMENT EFFECTIVE DATE, CERTIFYING
THAT THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 4 HEREOF (IN EACH
CASE, SUBSTITUTING ALL REFERENCES IN SECTION 4 TO THE “ORIGINAL CREDIT
AGREEMENT” (OTHER THAN THE SECOND REFERENCE TO THE “ORIGINAL CREDIT AGREEMENT”
IN CLAUSE (A) OF SECTION 4(C)) WITH REFERENCES TO THE “RESTATED CREDIT
AGREEMENT” AND ALL REFERENCES IN SECTION 4 TO THE “DATE HEREOF” WITH REFERENCES
TO THE “RESTATEMENT EFFECTIVE DATE”) ARE TRUE AND CORRECT AS OF THE RESTATEMENT
EFFECTIVE DATE.

 

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(E)  THE GUARANTEE AND COLLATERAL REQUIREMENT SHALL HAVE BEEN SATISFIED.

 

(F)  THE ADMINISTRATIVE AGENT, BANC OF AMERICA SECURITIES LLC, AS SOLE LEAD
ARRANGER AND SOLE BOOKRUNNER, AND THE TRANCHE B TERM LENDERS SHALL HAVE RECEIVED
ALL FEES AND OTHER AMOUNTS DUE AND PAYABLE TO THEM ON OR PRIOR TO THE
RESTATEMENT EFFECTIVE DATE, INCLUDING THE REIMBURSEMENT OR PAYMENT OF ALL
REASONABLE OUT-OF-POCKET EXPENSES FOR WHICH REASONABLY DETAILED INVOICES HAVE
BEEN PRESENTED (INCLUDING THE REASONABLE FEES, CHARGES AND DISBURSEMENTS OF
CRAVATH, SWAINE & MOORE LLP, COUNSEL FOR THE ADMINISTRATIVE AGENT) INCURRED IN
CONNECTION WITH THIS AGREEMENT.

 

(G)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED (I) A COMPLETED (A) PERFECTION
CERTIFICATE IN THE FORM OF ANNEX II HERETO (THE “RESTATEMENT EFFECTIVE DATE
PERFECTION CERTIFICATE”) AND (B) PERFECTION CERTIFICATE IN THE FORM OF ANNEX III
HERETO (THE “RESTATEMENT EFFECTIVE DATE LOAN PROCEEDS NOTE PERFECTION
CERTIFICATE”), EACH DATED THE RESTATEMENT EFFECTIVE DATE AND SIGNED BY A
FINANCIAL OFFICER, IN EACH CASE, TOGETHER WITH ALL ATTACHMENTS CONTEMPLATED
THEREBY, AND (II) THE RESULTS OF A SEARCH OF THE UNIFORM COMMERCIAL CODE (OR
EQUIVALENT) FILINGS MADE WITH RESPECT TO THE LOAN PARTIES IN THE JURISDICTIONS
CONTEMPLATED BY THE RESTATEMENT EFFECTIVE DATE PERFECTION CERTIFICATE AND COPIES
OF THE FINANCING STATEMENTS (OR SIMILAR DOCUMENTS) DISCLOSED BY SUCH SEARCH AND
EVIDENCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT THAT THE LIENS
INDICATED BY SUCH FINANCING STATEMENTS (OR SIMILAR DOCUMENTS) ARE PERMITTED BY
SECTION 6.05 OR HAVE BEEN RELEASED.

 

THE ADMINISTRATIVE AGENT SHALL NOTIFY LEVEL 3, THE BORROWER AND THE LENDERS OF
THE RESTATEMENT EFFECTIVE DATE, AND SUCH NOTICE SHALL BE CONCLUSIVE AND BINDING.

 

SECTION 6.  EFFECT OF AMENDMENT AND RESTATEMENT; NO NOVATION.  (A)  EXCEPT AS
EXPRESSLY SET FORTH HEREIN AND IN THE RESTATED CREDIT AGREEMENT, THIS AGREEMENT
SHALL NOT BY IMPLICATION OR OTHERWISE LIMIT, IMPAIR, CONSTITUTE A WAIVER OF, OR
OTHERWISE AFFECT THE RIGHTS AND REMEDIES OF THE AGENT OR THE LENDERS UNDER ANY
LOAN DOCUMENT, AND SHALL NOT ALTER, MODIFY, AMEND OR IN ANY WAY AFFECT ANY OF
THE TERMS, CONDITIONS, OBLIGATIONS (INCLUDING, FOR THE AVOIDANCE OF DOUBT, ANY
GUARANTEE OBLIGATIONS AND INDEMNITY OBLIGATIONS OF THE GUARANTORS), COVENANTS OR
AGREEMENTS CONTAINED IN ANY LOAN DOCUMENT, ALL OF WHICH ARE RATIFIED AND
AFFIRMED IN ALL RESPECTS AND SHALL CONTINUE IN FULL FORCE AND EFFECT.  NOTHING
HEREIN SHALL BE DEEMED TO ENTITLE ANY LOAN PARTY TO A CONSENT TO, OR A WAIVER,
AMENDMENT, MODIFICATION OR OTHER CHANGE OF, ANY OF THE TERMS, CONDITIONS,
OBLIGATIONS, COVENANTS OR AGREEMENTS CONTAINED IN ANY LOAN DOCUMENT IN SIMILAR
OR DIFFERENT CIRCUMSTANCES.

 

(B)  FROM AND AFTER THE RESTATEMENT EFFECTIVE DATE, THE TERMS “AGREEMENT”, “THIS
AGREEMENT”, “HEREIN”, “HEREINAFTER”, “HERETO”, “HEREOF” AND WORDS OF SIMILAR
IMPORT, AS USED IN THE RESTATED CREDIT AGREEMENT, SHALL REFER TO THE ORIGINAL
CREDIT AGREEMENT AS AMENDED AND RESTATED IN THE FORM OF THE RESTATED CREDIT
AGREEMENT, AND THE TERM “CREDIT AGREEMENT”, AS USED IN ANY LOAN DOCUMENT, SHALL
MEAN THE

 

6

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RESTATED CREDIT AGREEMENT.  THIS AGREEMENT SHALL CONSTITUTE A “LOAN DOCUMENT”
FOR ALL PURPOSES OF THE RESTATED CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

(C)  NEITHER THIS AGREEMENT NOR THE EFFECTIVENESS OF THE RESTATED CREDIT
AGREEMENT SHALL EXTINGUISH THE OBLIGATIONS FOR THE PAYMENT OF MONEY OUTSTANDING
UNDER THE ORIGINAL CREDIT AGREEMENT OR DISCHARGE OR RELEASE ANY GUARANTEE
THEREOF.  NOTHING HEREIN CONTAINED SHALL BE CONSTRUED AS A SUBSTITUTION OR
NOVATION OF THE OBLIGATIONS OUTSTANDING UNDER THE ORIGINAL CREDIT AGREEMENT OR
THE GUARANTEE AGREEMENT, WHICH SHALL REMAIN IN FULL FORCE AND EFFECT, EXCEPT AS
MODIFIED HEREBY AND BY THE RESTATED CREDIT AGREEMENT.  NOTHING EXPRESSED OR
IMPLIED IN THIS AGREEMENT, THE RESTATED CREDIT AGREEMENT OR ANY OTHER DOCUMENT
CONTEMPLATED HEREBY OR THEREBY SHALL BE CONSTRUED AS A RELEASE OR OTHER
DISCHARGE OF THE BORROWER UNDER THE ORIGINAL CREDIT AGREEMENT OR ANY LOAN PARTY
UNDER ANY LOAN DOCUMENT (AS DEFINED IN THE ORIGINAL CREDIT AGREEMENT) FROM ANY
OF ITS OBLIGATIONS AND LIABILITIES THEREUNDER.

 

SECTION 7.  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW.

 

SECTION 8.  COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS (AND
BY DIFFERENT PARTIES HERETO ON DIFFERENT COUNTERPARTS), EACH OF WHICH SHALL
CONSTITUTE AN ORIGINAL, BUT ALL OF WHICH WHEN TAKEN TOGETHER SHALL CONSTITUTE A
SINGLE CONTRACT.  DELIVERY OF AN EXECUTED COUNTERPART OF A SIGNATURE PAGE OF
THIS AGREEMENT BY FACSIMILE OR OTHER ELECTRONIC MEANS SHALL BE EFFECTIVE AS
DELIVERY OF A MANUALLY EXECUTED COUNTERPART OF THIS AGREEMENT.

 

SECTION 9.  HEADINGS. THE HEADINGS OF THIS AGREEMENT ARE FOR PURPOSES OF
REFERENCE ONLY AND SHALL NOT LIMIT OR OTHERWISE AFFECT THE MEANING HEREOF.

 

[SIGNATURE PAGES FOLLOW.]

 

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

 

 

 

LEVEL 3 COMMUNICATIONS, INC.,

 

 

 

by

 

 

 /s/ Robin Grey

 

 

 Name:

Robin Grey

 

 

 Title:

Senior Vice President & Treasurer

 

 

 

 

 

 

 

LEVEL 3 FINANCING, INC.,

 

 

 

 

by

 

 

 

 /s/ Robin Grey

 

 

 Name:

Robin Grey

 

 

 Title:

Senior Vice President & Treasurer

 

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BROADWING, LLC,

 

BROADWING COMMUNICATIONS, LLC,

 

BROADWING FINANCIAL SERVICES, INC.,

 

BTE EQUIPMENT, LLC,

 

C III COMMUNICATIONS, LLC,

 

ELDORADO EQUIPMENT, INC.,

 

ICG COMMUNICATIONS, INC.,

 

LEVEL 3 COMMUNICATIONS, LLC,

 

LEVEL 3 ENHANCED SERVICES, LLC,

 

LEVEL 3 INTERNATIONAL, INC.,

 

TELCOVE OPERATIONS, LLC,

 

WILTEL COMMUNICATIONS GROUP, LLC,

 

WILTEL COMMUNICATIONS, LLC,

 

 

 

 

by

 

 

 

 /s/ Robin Grey

 

 

 Name:

Robin Grey

 

 

 Title:

Senior Vice President & Treasurer

 

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MERRILL LYNCH CAPITAL CORPORATION,

 

Individually, and as Administrative Agent and Collateral Agent,

 

 

 

by:

 /s/ Scott Tolchin

 

 

Name:

Scott Tolchin

 

 

Title:

Vice President

 

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SIGNATURE PAGE TO AMENDMENT AGREEMENT

AMENDING AND RESTATING

THE CREDIT AGREEMENT OF LEVEL 3 COMMUNICATIONS, INC.

 

 

 

TRANCHE B TERM LENDER:

Bank of America, N.A.

 

 

 

 

 

 

 

 

by:

/s/ John M. Rote

 

 

 

Name:

John M. Rote

 

 

 

Title:

Managing Director

 

 

 

 

 

 

 

 

 

 

by:

 

*

 

 

 

Name:

 

 

 

Title:

 

 

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* For Lenders requiring a second signature line.

 

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ANNEX I

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of

 

April 16, 2009

 

among

 

LEVEL 3 COMMUNICATIONS, INC.

 

LEVEL 3 FINANCING, INC.

 

The Lenders Party hereto

 

and

 

MERRILL LYNCH CAPITAL CORPORATION

as Administrative Agent and Collateral Agent

 

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MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
as Joint Lead Arranger and Joint Bookrunner

 

MORGAN STANLEY & CO. INCORPORATED

Joint Lead Arranger, Joint Bookrunner and Syndication Agent

 

and

CITIGROUP GLOBAL MARKETS, INC.,

 

CREDIT SUISSE SECURITIES (USA) LLC

 

and

 

WACHOVIA BANK, NATIONAL ASSOCIATION

as Co-Documentation Agents

 

[CS&M Ref. No. 4408-174]

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I

 

Definitions

 

 

 

SECTION 1.01.

Defined Terms

2

SECTION 1.02.

Terms Generally

45

SECTION 1.03.

Accounting Terms; GAAP

45

 

 

 

ARTICLE II

 

The Credits

 

 

 

SECTION 2.01.

Commitments; Loans and Borrowings

46

SECTION 2.02.

Funding of Loans

46

SECTION 2.03.

Interest Elections

47

SECTION 2.04.

Repayment of Loans; Evidence of Debt

48

SECTION 2.05.

Prepayments

49

SECTION 2.06.

Fees

51

SECTION 2.07.

Interest

51

SECTION 2.08.

Alternate Rate of Interest

52

SECTION 2.09.

Increased Costs

52

SECTION 2.10.

Break Funding Payments

53

SECTION 2.11.

Taxes

54

SECTION 2.12.

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

55

SECTION 2.13.

Mitigation Obligations; Replacement of Lenders

56

 

 

 

ARTICLE III

 

Representations and Warranties

 

 

 

SECTION 3.01.

Organization; Powers

57

SECTION 3.02.

Authorization; Enforceability

57

SECTION 3.03.

Governmental Approvals; No Conflicts

58

SECTION 3.04.

Financial Condition; No Material Adverse Change

58

SECTION 3.05.

Properties

58

SECTION 3.06.

Litigation and Environmental Matters

59

SECTION 3.07.

Compliance with Laws and Agreements

59

SECTION 3.08.

Investment Company Status

59

SECTION 3.09.

Taxes

59

SECTION 3.10.

ERISA

59

SECTION 3.11.

Disclosure

60

SECTION 3.12.

Subsidiaries

60

SECTION 3.13.

Insurance

60

 

i

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SECTION 3.14.

Labor Matters

60

SECTION 3.15.

Intellectual Property

60

SECTION 3.16.

Security Interests

60

SECTION 3.17.

FCC Compliance

61

SECTION 3.18.

Qualified Credit Facility; Senior Indebtedness

62

SECTION 3.19.

Solvency

62

 

 

 

ARTICLE IV

 

Conditions

 

SECTION 4.01.

Effective Date

62

 

 

 

ARTICLE V

 

Affirmative Covenants

 

SECTION 5.01.

Financial Statements and Other Information

64

SECTION 5.02.

Notices of Material Events

66

SECTION 5.03.

Information Regarding Collateral

66

SECTION 5.04.

Existence; Conduct of Business

67

SECTION 5.05.

Payment of Taxes

67

SECTION 5.06.

Maintenance of Properties

67

SECTION 5.07.

Insurance

67

SECTION 5.08.

Casualty and Condemnation

67

SECTION 5.09.

Annual Information Meeting

68

SECTION 5.10.

Compliance with Laws

68

SECTION 5.11.

Use of Proceeds

68

SECTION 5.12.

Guarantee and Collateral Requirement; Further Assurances

68

SECTION 5.13.

Guarantee Permit Condition and Collateral Permit Condition

68

 

 

 

ARTICLE VI

 

Negative Covenants

 

 

 

SECTION 6.01.

Limitation on Consolidated Debt

69

SECTION 6.02.

Limitation on Indebtedness of the Borrower and Borrower Restricted Subsidiaries

74

SECTION 6.03.

Limitation on Restricted Payments

78

SECTION 6.04.

Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries

82

SECTION 6.05.

Limitation on Liens

84

SECTION 6.06.

Limitation on Sale and Leaseback Transactions

86

SECTION 6.07.

Limitation on Asset Dispositions

86

 

ii

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SECTION 6.08.

Limitation on Issuance and Sales of Capital Stock of Restricted Subsidiaries

90

SECTION 6.09.

Transactions with Affiliates

91

SECTION 6.10.

Limitation on Designations of Unrestricted Subsidiaries

92

SECTION 6.11.

Limitation on Actions with respect to Existing Intercompany Obligations

93

SECTION 6.12.

Covenant Suspension

95

SECTION 6.13.

Consolidation, Merger, Conveyance, Transfer or Lease

96

 

ARTICLE VII

Events of Default

 

ARTICLE VIII

The Agent

 

ARTICLE IX

Miscellaneous

 

SECTION 9.01.

Notices

106

SECTION 9.02.

Waivers; Amendments; Addition of Term or Revolving Tranches

107

SECTION 9.03.

Expenses; Indemnity; Damage Waiver

110

SECTION 9.04.

Successors and Assigns

111

SECTION 9.05.

Survival

115

SECTION 9.06.

Counterparts; Integration; Effectiveness

115

SECTION 9.07.

Severability

115

SECTION 9.08.

Right of Setoff

115

SECTION 9.09.

Governing Law; Jurisdiction; Consent to Service of Process

116

SECTION 9.10.

WAIVER OF JURY TRIAL

116

SECTION 9.11.

Headings

117

SECTION 9.12.

Confidentiality

117

SECTION 9.13.

Interest Rate Limitation

117

SECTION 9.14.

Release of Subsidiary Loan Parties and Collateral

118

SECTION 9.15.

Senior Debt Status

119

SECTION 9.16.

No Fiduciary Relationship

119

 

 

SCHEDULES:

 

Schedule 2.01

— Commitments

Schedule 3.12

— Subsidiaries

Schedule 3.13

— Insurance

Schedule 4.01(i)

— Lien Searches

 

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EXHIBITS:

 

Exhibit A

— Form of Assignment and Assumption

Exhibit B-1

— Form of Effective Date Perfection Certificate

Exhibit B-2

— Form of Effective Date Loan Proceeds Note Perfection Certificate

Exhibit C-1

— Form of Guarantee Agreement

Exhibit C-2

— Form of Collateral Agreement

Exhibit C-3

— Form of Indemnity, Subrogation and Contribution Agreement

Exhibit D

— Form of Promissory Note

Exhibit E-1

— Form of Opinion of Willkie Farr & Gallagher LLP, counsel for the Borrower

Exhibit E-2

— Form of Opinion of the Chief Legal Officer or an Assistant General Counsel of
the Borrower

Exhibit E-3

— Form of Opinion of Potter Anderson & Corroon LLP, local counsel for the
Borrower

Exhibit E-4

— Form of Opinion of Bingham McCutchen LLP, regulatory counsel for the Borrower

Exhibit F

— Omnibus Offering Proceeds Note Subordination Agreement

Exhibit G-1

— Form of Loan Proceeds Note Collateral Agreement

Exhibit G-2

— Form of Loan Proceeds Note Guarantee Agreement

Exhibit H

— Form of Loan Proceeds Note

 

iv

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AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 16, 2009 (this
“Agreement”) among LEVEL 3 COMMUNICATIONS, INC., LEVEL 3 FINANCING, INC., as
Borrower, the LENDERS party hereto, MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, as Joint Lead Arranger and Joint Bookrunner, MORGAN STANLEY & CO.
INCORPORATED, as Joint Lead Arranger, Joint Bookrunner and Syndication Agent,
BANC OF AMERICA SECURITIES LLC, as Sole Lead Arranger and Sole Bookrunner for
the Tranche B Term Loans (as defined below), CITIGROUP GLOBAL MARKETS, INC.,
CREDIT SUISSE SECURITIES (USA) LLC and WACHOVIA BANK, N.A., as Co-Documentation
Agents, and MERRILL LYNCH CAPITAL CORPORATION, as Administrative Agent and
Collateral Agent.

 

WHEREAS, the Borrower is party to that certain Credit Agreement dated as of
March 13, 2007 (the “Original Credit Agreement”), among Level 3 (such term and
each other capitalized term used but not otherwise defined herein having the
meaning given it in Article I), the Borrower, the lenders party thereto, Merrill
Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arranger and joint
bookrunner, Morgan Stanley & Co. Incorporated, as joint lead arranger, joint
bookrunner and syndication agent, Citigroup Global Markets, Inc., Credit Suisse
Securities (USA) LLC and Wachovia Bank, N.A., as co-documentation agents, and
Merrill Lynch Capital Corporation, as administrative agent and collateral agent.

 

WHEREAS, under the Original Credit Agreement, the Borrower requested that the
Tranche A Term Lenders make Tranche A Term Loans to the Borrower in an aggregate
principal amount of $1,400,000,000, the proceeds of which were (a) used to
refinance the Existing Term Loans and (b) to the extent of the remaining
proceeds, advanced by the Borrower to Level 3 LLC against delivery of the Loan
Proceeds Note.

 

WHEREAS, pursuant to Section 9.02(d) of the Original Credit Agreement, (a) the
Original Credit Agreement and the other Loan Documents may be amended to
establish one or more additional classes of term loans by an agreement in
writing entered into by Level 3, the Borrower, the Administrative Agent, the
Collateral Agent and each person (including any Lender) agreeing to make such
additional term loans, but without the consent of any other Lender and (b) the
Borrower has requested that the Tranche B Term Lenders make Tranche B Term Loans
to the Borrower in an aggregate principal amount of $220,000,000, the net
proceeds of which, as well as additional funds of the Borrower, will be advanced
by the Borrower to Level 3 LLC on the Restatement Effective Date in an amount
equal to the aggregate principal amount of the Tranche B Term Loans issued,
against delivery of the Loan Proceeds Note (as increased by the amount of
$220,000,000 to evidence such loan made by the Borrower to Level 3 LLC on the
Restatement Effective Date).

 

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WHEREAS, (a) Level 3, the Borrower, the Agent and the Tranche B Term Lenders
have entered into an Amendment Agreement dated as of April 16, 2009 (the
“Amendment Agreement”), pursuant to which the Original Credit Agreement has been
amended and restated to be in the form hereof, and (b) the Tranche B Term
Lenders are willing to extend Tranche B Term Loans having the terms and
conditions provided for herein and in the Amendment Agreement.

 

Accordingly, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01.  DEFINED TERMS.  AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS
HAVE THE MEANINGS SPECIFIED BELOW:

 

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

 

“Accreted Value” of any Indebtedness issued at a price less than the principal
amount at stated maturity, means, as of any date of determination, an amount
equal to the sum of (a) the issue price of such Indebtedness as determined in
accordance with Section 1273 of the Code or any successor provisions plus
(b) the aggregate of the portions of the original issue discount (the excess of
the amounts considered as part of the “stated redemption price at maturity” of
such Indebtedness within the meaning of Section 1273(a)(2) of the Code or any
successor provisions, whether denominated as principal or interest, over the
issue price of such Indebtedness) that shall theretofore have accrued pursuant
to Section 1272 of the Code (without regard to Section 1272(a)(7) of the Code)
from the date of issue of such Indebtedness to the date of determination, minus
all amounts theretofore paid in respect of such Indebtedness, which amounts are
considered as part of the “stated redemption price at maturity” of such
Indebtedness within the meaning of Section 1273(a)(2) of the Code or any
successor provisions (whether such amounts paid were denominated principal or
interest).

 

“Acquired Debt” means, with respect to any specified Person, (i) Indebtedness of
any other Person existing at the time such Person merges with or into or
consolidates with or becomes a Subsidiary of such specified Person and
(ii) Indebtedness secured by a Lien encumbering any Property acquired by such
specified Person, which Indebtedness was not incurred in anticipation of, and
was outstanding prior to, such merger, consolidation or acquisition.

 

“Additional Tranche” means any tranche of commitments established or loans made
under this Agreement pursuant to Section 9.02(d).

 

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“Administrative Agent” means Merrill Lynch Capital Corporation, in its capacity
as administrative agent for the Lenders hereunder.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate” of any Person means any other Person directly or indirectly
controlling or 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 Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.  For purposes of
Sections 6.07 and 6.09 and the definition of “Telecommunications/IS Assets”
only, “Affiliate” shall also mean any beneficial owner of shares representing
10% or more of the total voting power of the Voting Stock (on a fully diluted
basis) of Level 3 or of rights or warrants to purchase such Voting Stock
(whether or not currently exercisable) and any Person who would be an Affiliate
of any such beneficial owner pursuant to the first sentence hereof.

 

“Affiliate Transaction” has the meaning specified in Section 6.09.

 

“Agent” means Merrill Lynch Capital Corporation, in its capacities as
Administrative Agent and Collateral Agent.

 

“Agreement” has the meaning specified in the preliminary statement hereto.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to:

 

(a) in the case of a Tranche A Term Loan, the greater of (i) the Prime Rate in
effect on such day and (ii) the Federal Funds Effective Rate in effect on such
day plus ½ of 1%; and

 

 (b) in the case of a Tranche B Term Loan, the greater of (i) the Prime Rate in
effect on such day, (ii) the Federal Funds Effective Rate in effect on such day
plus ½ of 1% and (iii) the sum of (A) the higher of (x) the LIBO Rate for a one
month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1% and (y) 3.00%, plus (B) 1.00%;
provided that, for the avoidance of doubt, the LIBO Rate for any day shall be
based on the rate appearing on Bloomberg’s British Banker’s Association rate
page (or on any successor or substitute page) at approximately 11:00 a.m.,
London time, on such day; and provided further that if the Administrative Agent
shall have given notice to Level 3 pursuant to Section 2.08 that adequate and
reasonable means do not exist for ascertaining such LIBO Rate,
clause (iii) shall be deemed to read “4.00%” until the Administrative Agent
notifies Level 3 and the Lenders that the circumstances giving rise to such
notice under Section 2.08 no longer exist.

 

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Any change in the Alternate Base Rate due to a change in the Prime Rate, the
Federal Funds Effective Rate or the LIBO Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Federal Funds
Effective Rate or the LIBO Rate, respectively.

 

“Amendment Agreement” has the meaning specified in the recitals hereto.

 

“Annual Loan Proceeds Note Perfection Certificate” has the meaning specified in
the Loan Proceeds Note Collateral Agreement.

 

“Annual Perfection Certificate” has the meaning specified in the Collateral
Agreement.

 

“Applicable Margin” means (a) in respect of any Tranche A Term Loan, (i) 1.25%
per annum in the case of any Tranche A ABR Loan and (ii) 2.25% per annum in the
case of any Tranche A Eurodollar Loan and (b) in respect of any Tranche B Term
Loan, (i) 7.50% per annum in the case of any Tranche B ABR Loan and (ii) 8.50%
per annum in the case of any Tranche B Eurodollar Loan.

 

“Approved Fund” means (a) with respect to any Lender, a CLO managed by such
Lender or by an Affiliate of such Lender and (b) with respect to any Lender that
is a fund which invests in bank loans and similar extensions of credit, any
other fund that invests in bank loans and similar extensions of credit and is
managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

 

“Asset Disposition” means any transfer, conveyance, sale, lease, issuance or
other disposition by Level 3 or any Restricted Subsidiary in one or more related
transactions (including a consolidation or merger or other sale of any such
Restricted Subsidiary with, into or to another Person in a transaction in which
such Restricted Subsidiary ceases to be a Restricted Subsidiary, but excluding a
disposition by a Restricted Subsidiary to Level 3 or a Restricted Subsidiary or
by Level 3 to a Restricted Subsidiary) of (i) shares of Capital Stock or other
ownership interests of a Restricted Subsidiary (other than as permitted by
clause (v), (vi), (vii) or (ix) of Section 6.08), (ii) substantially all of the
assets of Level 3 or any Restricted Subsidiary representing a division or line
of business or (iii) other Property of Level 3 or any Restricted Subsidiary
outside of the ordinary course of business (excluding any transfer, conveyance,
sale, lease or other disposition of equipment or real estate (including fixtures
appurtenant thereto) that is obsolete or no longer used by or useful to
Level 3); provided in each case that the aggregate consideration for such
transfer, conveyance, sale, lease or other disposition is equal to $5,000,000 or
more in any 12-month period.  The following shall not be Asset Dispositions:
(i) Permitted Telecommunications Capital Asset Dispositions that comply with
clause (i) of the first paragraph of Section 6.07, (ii) when used with respect
to Level 3, any Asset Disposition permitted pursuant to Section 6.13 which
constitutes a disposition of all or substantially all of the assets of Level 3
and the Restricted Subsidiaries taken as a whole, (iii) Receivables sales
constituting Indebtedness under Qualified Receivables Facilities permitted to be
Incurred pursuant to Section 6.01 or

 

4

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Section 6.02 and (iv) any disposition that constitutes a Permitted Investment or
a Restricted Payment permitted by Section 6.03.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee in the form of Exhibit A or any other form approved by
the Administrative Agent.

 

“Attributable Value” means, as to any particular lease under which any Person is
at the time liable other than a Capital Lease Obligation, and at any date as of
which the amount thereof is to be determined, the total net amount of rent
required to be paid by such Person under such lease during the remaining term
thereof (including any period for which such lease has been extended) as
determined in accordance with GAAP, discounted from the last date of such
remaining term to the date of determination at a rate per annum equal to the
discount rate which would be applicable to a Capital Lease Obligation with like
term in accordance with GAAP.  The net amount of rent required to be paid under
any such lease for any such period shall be the aggregate amount of rent payable
by the lessee with respect to such period after excluding amounts required to be
paid on account of insurance, taxes, assessments, utility, operating and labor
costs and similar charges.  In the case of any lease which is terminable by the
lessee upon the payment of penalty, such net amount shall also include the
lesser of the amount of such penalty (in which case no rent shall be considered
as required to be paid under such lease subsequent to the first date upon which
it may be so terminated) or the rent which would otherwise be required to be
paid if such lease is not so terminated.  “Attributable Value” means, as to a
Capital Lease Obligation, the principal amount thereof.

 

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

 

“Board of Directors” of any Person means the board of directors of such Person
or the executive committee or similar body of such Person.

 

“Board Resolution” of any Person means a copy of a resolution certified by the
Secretary or an Assistant Secretary of such Person to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Administrative Agent.

 

“Borrower” means Level 3 Financing, Inc., a Delaware corporation.

 

“Borrower Debt Ratio” means the ratio of (a) the aggregate consolidated
principal amount (or, in the case of Indebtedness issued at a discount, the
then-Accreted Value) of Indebtedness of the Borrower and the Borrower Restricted
Subsidiaries (other than Indebtedness owed to Level 3 or a Sister Restricted
Subsidiary that is subordinated to the Loan Proceeds Note (if Level 3 LLC is the
obligor of such Indebtedness) or the Loan Proceeds Note Guarantee or the
Guarantee of the Obligations by the obligor on such Indebtedness), on a
consolidated basis, outstanding as of the most recent available quarterly or
annual balance sheet, after giving pro forma effect to the proposed Incurrence
of Indebtedness giving rise to such calculation and any other Indebtedness

 

5

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Incurred or repaid since such balance sheet date and the receipt and application
of the net proceeds thereof, to (b) the sum of, without duplication,
(x) Consolidated Cash Flow Available for Fixed Charges of the Borrower and the
Borrower Restricted Subsidiaries for the four full fiscal quarters next
preceding such proposed Incurrence of Indebtedness for which consolidated
financial statements are available and (y) Consolidated Cash Flow Available for
Fixed Charges of Level 3 and the Sister Restricted Subsidiaries to the extent
such Consolidated Cash Flow Available for Fixed Charges is attributable to
Sister Restricted Subsidiaries that are Guarantors for such four full fiscal
quarters; provided, however, that if (A) since the beginning of such four full
fiscal quarter period the Borrower, any Borrower Restricted Subsidiary, Level 3
or any Sister Restricted Subsidiary shall have made one or more Asset
Dispositions or an Investment (by merger or otherwise) in any Borrower
Restricted Subsidiary or Sister Restricted Subsidiary (or any Person which
becomes a Borrower Restricted Subsidiary or a Sister Restricted Subsidiary) or
an acquisition, merger or consolidation of Property which constitutes all or
substantially all of an operating unit of a business or a line of business, or
(B) since the beginning of such period any Person (that subsequently became a
Borrower Restricted Subsidiary or a Sister Restricted Subsidiary or was merged
with or into the Borrower, any Borrower Restricted Subsidiary or any Sister
Restricted Subsidiary since the beginning of such period) shall have made such
an Asset Disposition, Investment, acquisition, merger or consolidation, then
Consolidated Cash Flow Available for Fixed Charges for such four full fiscal
quarter period shall be calculated after giving pro forma effect to such Asset
Dispositions, Investments, acquisitions, mergers or consolidations as if such
Asset Dispositions, Investments, acquisitions, mergers or consolidations
occurred on the first day of such period.  For purposes of this definition,
whenever “pro forma” effect is to be given to any Asset Disposition, Investment,
acquisition, merger or consolidation, the calculations shall be performed in
accordance with Article 11 of Regulation S-X promulgated under the Securities
Act, as interpreted in good faith by the chief financial officer of Level 3,
except that any such pro forma calculation may include operating expense
reductions for such period attributable to the transaction to which pro forma
effect is being given (including, without limitation, operating expense
reductions attributable to execution or termination of any contract, reduction
of costs related to administrative functions, the termination of any employees
or the closing (or the approval by the Board of Directors of Level 3 of the
closing) of any facility) that have been realized or for which all steps
necessary for the realization of which have been taken or are reasonably
expected to be taken within twelve months following such transaction, provided,
that such adjustments are set forth in an Officer’s Certificate which states
(i) the amount of such adjustment or adjustments and (ii) that such adjustment
or adjustments are based on the reasonable good faith beliefs of the officers
executing such Officers’ Certificate.

 

“Borrower Restricted Subsidiary Supplemental Indenture” means any supplemental
indenture to the 10.75% Notes Indenture, the 2011 Floating Rate Notes Indenture,
the 12.25% Notes Indenture, the 9.25% Notes Indenture, the 2015 Floating Rate
Notes Indenture or the 8.75% Notes Indenture in substantially the form of the
Level 3 LLC 10.75% Notes Supplemental Indenture, the Level 3 LLC 2011 Floating
Rate Notes Supplemental Indenture, the Level 3 LLC 12.25% Notes Supplemental
Indenture, the Level 3 LLC 9.25% Notes Supplemental Indenture, the Level 3 LLC
2015 Floating

 

6

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Rate Notes Supplemental Indenture or the Level 3 LLC 8.75% Notes Supplemental
Indenture, as the case may be, among the Borrower, Level 3, any Borrower
Restricted Subsidiary (other than Level 3 LLC) and the Trustee under the 10.75%
Notes Indenture, the 2011 Floating Rate Notes Indenture, the 12.25% Notes
Indenture, the 9.25% Notes Indenture, the 2015 Floating Rate Notes Indenture or
the 8.75% Notes Indenture, as the case may be.

 

“Borrower Restricted Subsidiaries” means the Subsidiaries of the Borrower that
are Restricted Subsidiaries.

 

“Borrowing” means Loans of the same Class made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

 

“Capital Lease Obligation” of any Person means the obligation of such Person to
pay rent or other payment amount under any lease of (or other Indebtedness
arrangement conveying the right to use) Property of such Person which obligation
is required to be classified and accounted for as a capital lease or a liability
on a balance sheet of such Person under GAAP (a “Capital Lease”).  The stated
maturity of such obligation shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.  The principal
amount of such obligation shall be the capitalized amount thereof that would
appear on the face of a balance sheet of such Person in accordance with GAAP.

 

“Capital Stock” of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of such Person and any rights (other than debt securities convertible
or exchangeable into an equity interest), warrants or options to acquire an
equity interest in such Person.

 

“Cash Equivalents” means (i) Government Securities maturing, or subject to
tender at the option of the holder thereof, within two years after the date of
acquisition thereof, (ii) time deposits and certificates of deposit of any
commercial bank organized in the United States having capital and surplus in
excess of $500,000,000 or a commercial bank organized under the law of any other
country that is a member of the OECD having total assets in excess of
$500,000,000 (or its foreign currency equivalent at the time) with a maturity
date not more than one year from the date of acquisition, (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (i) above entered into with (x) any bank meeting
the qualifications specified in clause (ii) above or (y) any primary government
securities dealer reporting to

 

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the Market Reports Division of the Federal Reserve Bank of New York, (iv) direct
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing, or
subject to tender at the option of the holder thereof, within 180 days after the
date of acquisition thereof; provided, however, that at the time of acquisition,
the long-term debt of such state, political subdivision or public
instrumentality has a rating of A- (or higher) from S&P or A-3 (or higher) from
Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such
obligations, then an equivalent rating from such other nationally recognized
rating service acceptable to the Administrative Agent), (v) commercial paper
issued by the parent corporation of any commercial bank organized in the United
States having capital and surplus in excess of $500,000,000 or a commercial bank
organized under the laws of any other country that is a member of the OECD
having total assets in excess of $500,000,000 (or its foreign currency
equivalent at the time), and commercial paper issued by others having one of the
two highest ratings obtainable from either S&P or Moody’s (or, if at any time
neither S&P nor Moody’s shall be rating such obligations, then from such other
nationally recognized rating service acceptable to the Administrative Agent) and
in each case maturing within one year after the date of acquisition,
(vi) overnight bank deposits and bankers’ acceptances at any commercial bank
organized in the United States having capital and surplus in excess of
$500,000,000 or a commercial bank organized under the laws of any other country
that is a member of the OECD having total assets in excess of $500,000,000 (or
its foreign currency equivalent at the time), (vii) deposits available for
withdrawal on demand with a commercial bank organized in the United States
having capital and surplus in excess of $500,000,000 or a commercial bank
organized under the laws of any other country that is a member of the OECD
having total assets in excess of $500,000,000 (or its foreign currency
equivalent at the time), (viii) debt obligations issued by any Person; provided,
however, that at the time of acquisition, any such debt obligation has a rating
of A (or higher) from S&P or A-2 (or higher) from Moody’s (or, if at any time
neither S&P nor Moody’s shall be rating such debt organizations, then an
equivalent rating from such other nationally recognized rating service
acceptable to the Administrative Agent) and in each case maturing within one
year after the date of acquisition, and (ix) investments in money market funds
substantially all of whose assets comprise securities of the types described in
clauses (i) through (viii).

 

“Change of Control” means the occurrence of any of the following events:

 

(a) if any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act or any successor provisions to either of the
foregoing), including any group acting for the purpose of acquiring, holding,
voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act, other than any one or more of the Permitted Holders, becomes
the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act, except
that a person will be deemed to have “beneficial ownership” of all shares that
any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 35%
or more of the total voting power of the Voting Stock of Level 3; provided,
however, that the Permitted Holders are the “beneficial owners” (as defined in
Rule 13d-3 under the

 

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Exchange Act, except that a person will be deemed to have “beneficial ownership”
of all shares that any such person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, in the aggregate of a lesser percentage of the total voting power of
the Voting Stock of Level 3 than such other person or group (for purposes of
this clause (a), such person or group shall be deemed to beneficially own any
Voting Stock of a corporation (the “specified corporation”) held by any other
corporation (the “parent corporation”) so long as such person or group
beneficially owns, directly or indirectly, in the aggregate a majority of the
total voting power of the Voting Stock of such parent corporation); or

 

(b) the sale, transfer, assignment, lease, conveyance or other disposition,
directly or indirectly, of all or substantially all the assets of (i) Level 3
and the Restricted Subsidiaries or (ii) the Borrower and the Borrower Restricted
Subsidiaries, in each case considered as a whole (other than a disposition of
such assets as an entirety or virtually as an entirety to a Wholly Owned
Restricted Subsidiary or Level 3 or the Borrower, respectively, or one or more
Permitted Holders) shall have occurred; or

 

(c) during any period of two consecutive years, individuals who at the beginning
of such period constituted the Board of Directors of Level 3 (together with any
new directors whose election or appointment by such board or whose nomination
for election by the shareholders of Level 3 was approved by a vote of a majority
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of Level 3 then in office; or

 

(d) the shareholders of Level 3 or the Borrower shall have approved any plan of
liquidation or dissolution of Level 3 or the Borrower, respectively.

 

“Change of Control Triggering Event” means the occurrence of both a Change of
Control and a Rating Decline with respect to the Loans within 30 days of each
other.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the
Effective Date, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
Effective Date or (c) compliance by any Lender (or, for purposes of
Section 2.09(c), by any lending office of such Lender or by such Lender’s
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the Effective Date.

 

“Class”, when used in reference to (a) any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Tranche A Term Loans or
Tranche B Term Loans and (b) any Commitment, refers to whether such Commitment
is a Tranche A Term Commitment or a Tranche B Term Commitment.

 

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“CLO” means any entity (whether a corporation, partnership, trust or otherwise)
that is engaged in making, purchasing, holding or otherwise investing in bank
loans and similar extensions of credit in the ordinary course of its business
and is administered or managed by a Lender or an Affiliate of such Lender.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Co-Documentation Agents” means, collectively, Citigroup Global Markets, Inc.,
Credit Suisse Securities (USA) LLC and Wachovia Bank, N.A., or any one of them.

 

“Collateral” means any and all “Collateral”, as defined in any applicable
Security Document. It is understood that the Collateral shall not include
Excluded Collateral (as defined in the Collateral Agreement).

 

“Collateral Agent” means Merrill Lynch Capital Corporation in its capacity as
collateral agent for the Secured Parties hereunder.

 

“Collateral Agreement” means the Collateral Agreement substantially in the form
of Exhibit C-2.

 

“Collateral Permit Condition” means, with respect to any Regulated Grantor
Subsidiary , that such Regulated Grantor Subsidiary has obtained all material
(as determined in good faith by the General Counsel of Level 3) authorizations
and consents of Federal and State Governmental Authorities required, if any, in
order for it to become a Grantor under the Collateral Agreement and to satisfy
the Guarantee and Collateral Requirement insofar as the authorizations and
consents so permit.

 

“Collateral Release Amount” has the meaning specified in Section 6.07(d).

 

“Commitment” means a Tranche A Term Commitment or a Tranche B Term Commitment
and, with respect to any Additional Tranche, the commitments of the Lenders
providing such Additional Tranche.

 

“Common Stock” of any Person means Capital Stock of such Person that does not
rank prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of such Person.

 

“Communications Act” means the Communications Act of 1934 and any similar or
successor Federal statute and the rules, regulations and published policies of
the FCC thereunder, all as amended and as the same may be in effect from time to
time.

 

“Consolidated Capital Ratio” means as of the date of determination the ratio of
(i) the aggregate amount of Indebtedness of Level 3 and its Restricted
Subsidiaries on a consolidated basis as at the date of determination to (ii) the
sum of

 

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(a) $2,024,000,000, (b) the aggregate net proceeds to Level 3 from the issuance
or sale of any Capital Stock (including Preferred Stock) of Level 3 other than
Disqualified Stock subsequent to the Measurement Date, (c) the aggregate net
proceeds from the issuance or sale of Indebtedness of Level 3 or any Restricted
Subsidiary subsequent to the Measurement Date convertible or exchangeable into
Capital Stock of Level 3 other than Disqualified Stock, in each case upon
conversion or exchange thereof into Capital Stock of Level 3 subsequent to the
Measurement Date and (d) the after-tax gain on the sale, subsequent to the
Measurement Date, of Special Assets to the extent such Special Assets have been
sold for cash, Cash Equivalents, Telecommunications/IS Assets or the assumption
of Indebtedness of Level 3 or any Restricted Subsidiary (other than Indebtedness
that is subordinated to the Loans or any applicable Loan Proceeds Note Guarantee
or any Guarantee of the Obligations) and release of Level 3 and all Restricted
Subsidiaries from all liability on the Indebtedness assumed; provided, however,
that, for purposes of calculation of the Consolidated Capital Ratio, the net
proceeds from the issuance or sale of Capital Stock or Indebtedness described in
clause (b) or (c) above shall not be included to the extent (x) such proceeds
have been utilized to make a Permitted Investment under clause (i) of the
definition thereof or a Restricted Payment or (y) such Capital Stock or
Indebtedness shall have been issued or sold to Level 3, a Subsidiary of Level 3
or an employee stock ownership plan or trust established by Level 3 or any such
Subsidiary for the benefit of their employees.

 

“Consolidated Cash Flow Available for Fixed Charges” for Level 3 and its
Restricted Subsidiaries or for the Borrower and the Borrower Restricted
Subsidiaries for any period means the Consolidated Net Income of Level 3 and its
Restricted Subsidiaries or the Borrower and the Borrower Restricted
Subsidiaries, as applicable, for such period increased by the sum of, to the
extent reducing such Consolidated Net Income for such period, (i) Consolidated
Interest Expense of Level 3 and its Restricted Subsidiaries or the Borrower and
the Borrower Restricted Subsidiaries, as applicable, for such period, plus
(ii) Consolidated Income Tax Expense of Level 3 and its Restricted Subsidiaries
or the Borrower and the Borrower Restricted Subsidiaries, as applicable, for
such period, plus (iii) consolidated depreciation and amortization expense and
any other non-cash items (other than any such non-cash item to the extent that
it represents an accrual of or reserve for cash expenditures in any future
period) for Level 3 and its Restricted Subsidiaries or for the Borrower and the
Borrower Restricted Subsidiaries, as applicable; provided, however, that there
shall be excluded therefrom the Consolidated Cash Flow Available for Fixed
Charges (if positive) of any Restricted Subsidiary or Borrower Restricted
Subsidiary, as applicable (calculated separately for such Restricted Subsidiary
or Borrower Restricted Subsidiary in the same manner as provided above for
Level 3 or the Borrower, as applicable) that is subject to a restriction which
prevents the payment of dividends or the making of distributions to Level 3 or
another Restricted Subsidiary or to the Borrower or another Borrower Restricted
Subsidiary, as applicable, to the extent of such restrictions.

 

“Consolidated Income Tax Expense” for Level 3 and its Restricted Subsidiaries or
for the Borrower and the Borrower Restricted Subsidiaries for any period means
the aggregate amounts of the provisions for income taxes of Level 3 and its

 

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Restricted Subsidiaries or the Borrower and the Borrower Restricted
Subsidiaries, as applicable, for such period calculated on a consolidated basis
in accordance with GAAP.

 

“Consolidated Interest Expense” for Level 3 and its Restricted Subsidiaries or
the Borrower and the Borrower Restricted Subsidiaries for any period means the
interest expense included in a consolidated income statement (excluding interest
income) of Level 3 and its Restricted Subsidiaries or the Borrower and the
Borrower Restricted Subsidiaries, as applicable, for such period in accordance
with GAAP, including without limitation or duplication (or, to the extent not so
included, with the addition of), (i) the amortization of Indebtedness discounts
and issuance costs, including commitment fees; (ii) any payments or fees with
respect to letters of credit, bankers’ acceptances or similar facilities;
(iii) net costs with respect to interest rate swap or similar agreements or
foreign currency hedge, exchange or similar agreements (including fees);
(iv) Preferred Stock Dividends (other than dividends paid in shares of Preferred
Stock that is not Disqualified Stock) declared and paid or payable; (v) accrued
Disqualified Stock Dividends, whether or not declared or paid; (vi) interest on
Indebtedness guaranteed by Level 3 and its Restricted Subsidiaries or the
Borrower and the Borrower Restricted Subsidiaries, as applicable; (vii) the
portion of any Capital Lease Obligation or Sale and Leaseback Transaction paid
during such period that is allocable to interest expense; (viii) interest
Incurred in connection with investments in discontinued operations; and (ix) the
cash contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any Person (other than Level 3 or a Restricted Subsidiary or the Borrower or
a Borrower Restricted Subsidiary, as applicable) in connection with Indebtedness
Incurred by such plan or trust.

 

“Consolidated Net Income” for Level 3 and its Restricted Subsidiaries or the
Borrower and the Borrower Restricted Subsidiaries for any period means the net
income (or loss) of Level 3 and its Restricted Subsidiaries or the Borrower and
the Borrower Restricted Subsidiaries, as applicable, for such period determined
on a consolidated basis in accordance with GAAP; provided, however, that there
shall be excluded therefrom (a) for purposes of Section 6.03 only, the net
income (or loss) of any Person acquired by Level 3 or a Restricted Subsidiary or
the Borrower or a Borrower Restricted Subsidiary, as applicable, in a
pooling-of-interests transaction for any period prior to the date of such
transaction, (b) the net income (or loss) of any Person that is not a Restricted
Subsidiary or a Borrower Restricted Subsidiary, as applicable, except to the
extent of the amount of dividends or other distributions actually paid to
Level 3 or a Restricted Subsidiary or to the Borrower or a Borrower Restricted
Subsidiary, as applicable, by such Person during such period (except, for
purposes of Section 6.03 only, to the extent such dividends or distributions
have been subtracted from the calculation of the amount of Investments to
support the actual making of Investments), (c) gains or losses realized upon the
sale or other disposition of any Property of Level 3 or its Restricted
Subsidiaries or the Borrower or the Borrower Restricted Subsidiaries, as
applicable, that is not sold or disposed of in the ordinary course of business
(it being understood that Permitted Telecommunications Capital Asset
Dispositions shall be considered to be in the ordinary course of business),
(d) gains or losses realized upon the sale or other disposition of any Special
Assets, (e) all extraordinary gains and

 

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extraordinary losses, determined in accordance with GAAP, (f) the cumulative
effect of changes in accounting principles, (g) non-cash gains or losses
resulting from fluctuations in currency exchange rates, (h) any non-cash expense
related to the issuance to employees or directors of Level 3 or any Restricted
Subsidiary or the Borrower or any Borrower Restricted Subsidiary, as applicable,
of (1) options to purchase Capital Stock of Level 3 or such Restricted
Subsidiary or the Borrower or such Borrower Restricted Subsidiary, as
applicable, or (2) other compensatory rights; provided, in either case, that
such options or rights, by their terms can be redeemed at the option of the
holder of such option or right only for Capital Stock, (i) with respect to a
Restricted Subsidiary or a Borrower Restricted Subsidiary, as applicable, that
is not a Wholly Owned Subsidiary any aggregate net income (or loss) in excess of
Level 3’s or any Restricted Subsidiary’s or the Borrower’s or any Borrower
Restricted Subsidiary’s, as applicable, pro rata share of the net income (or
loss) of such Restricted Subsidiary or Borrower Restricted Subsidiary, as
applicable, that is not a Wholly Owned Subsidiary and (j) for purposes of
calculating Pro Forma Consolidated Cash Flow Available for Fixed Charges in
Section 6.01(a), Section 6.01(b), Section 6.02(a) and Section 6.02(b) only,
ordinary losses or gains (including related fees and expenses) on early
extinguishment of Indebtedness and Permitted Hedging Agreements; provided
further that there shall further be excluded therefrom the net income (but not
net loss) of any Restricted Subsidiary or any Borrower Restricted Subsidiary, as
applicable, that is subject to a restriction which prevents the payment of
dividends or the making of distributions to Level 3 or another Restricted
Subsidiary or to the Borrower or another Borrower Restricted Subsidiary, as
applicable, to the extent of such restriction.

 

“Consolidated Net Worth” of any Person means the stockholders’ equity of such
Person, determined on a consolidated basis in accordance with GAAP, less amounts
attributable to Disqualified Stock of such Person.

 

“Consolidated Tangible Assets” of any Person means the total amount of assets
(less applicable reserves and other properly deductible items) which under GAAP
would be included on a consolidated balance sheet of such Person and its
Subsidiaries after deducting therefrom all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like intangibles, which
in each case under GAAP would be included on such consolidated balance sheet.

 

“Credit Facilities” means one or more credit agreements, loan agreements or
similar facilities (including any Additional Tranche), secured or unsecured,
providing for revolving credit loans, term loans and/or letters of credit,
including any Qualified Receivable Facility, entered into from time to time by
Level 3 and its Restricted Subsidiaries, or Purchase Money Debt, or Indebtedness
Incurred pursuant to Capital Lease Obligations, Sale and Leaseback Transactions,
or senior secured note issuances, and including any related notes, Guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as the same may be amended, supplemented, modified, restated or
replaced from time to time.

 

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“Default” means any event, act or condition which constitutes an Event of
Default or which upon the notice specified in Article VII, the lapse of time
specified in Article VII or both would, unless cured or waived, become an Event
of Default.

 

“Designated Grantor Subsidiary” means (a) any Unregulated Grantor Subsidiary and
(b) at such time as it shall have satisfied the Collateral Permit Condition, any
Regulated Grantor Subsidiary; provided, however, that, with respect to the
Tranche B Term Loans, this definition shall be subject to Section 2 of the
Amendment Agreement.  No Foreign Subsidiary shall at any time constitute a
Designated Grantor Subsidiary.

 

“Designated Guarantor Subsidiary” means (a) any Unregulated Guarantor Subsidiary
and (b) at such time as it shall have satisfied the Guarantee Permit Condition,
any Regulated Guarantor Subsidiary; provided, however, that, with respect to the
Tranche B Term Loans, this definition shall be subject to Section 2 of the
Amendment Agreement.  No Foreign Subsidiary shall at any time constitute a
Designated Guarantor Subsidiary.

 

“Designation” and “Designation Amount” have the respective meanings specified in
Section 6.10.

 

“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Level 3’s reports and filings under the
Exchange Act filed or furnished since January 1, 2007 and prior to March 12,
2007 and available on the Securities and Exchange Commission’s website on the
internet at www.sec.gov prior to the Effective Date.

 

“Disqualified Stock” of any Person means any Capital Stock of such Person which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the Maturity Date; provided, however, that any Preferred Stock which
would not constitute Disqualified Stock but for provisions thereof giving
holders thereof the right to require Level 3 or the Borrower, respectively, to
repurchase or redeem such Preferred Stock upon the occurrence of (i) a change of
control occurring prior to the Maturity Date shall not constitute Disqualified
Stock if the change of control provisions applicable to such Preferred Stock are
no more favorable to the holders of such Preferred Stock than the provisions
applicable to the Loans as provided for in the definition of “Change of Control
Triggering Event” or (ii) an asset sale occurring prior to the Maturity Date
shall not constitute Disqualified Stock if the asset sale provisions applicable
to such Preferred Stock are no more favorable to the holders of such Preferred
Stock than the provisions applicable to the Loans contained in Section 6.07 and,
in each case, such Preferred Stock specifically provides that Level 3 or the
Borrower, respectively, will not repurchase or redeem any such stock pursuant to
such provisions prior to the Borrower’s repayment of the Loans as required by
Sections 2.05 and 6.07(c).

 

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“Disqualified Stock Dividends” means all dividends with respect to Disqualified
Stock of Level 3 held by Persons other than a Wholly Owned Restricted
Subsidiary.  The amount of any such dividend shall be equal to the quotient of
such dividend divided by the difference between one and the maximum statutory
federal income tax rate (expressed as a decimal number between 1 and
0) applicable to Level 3 for the period during which such dividends were paid.

 

“dollars” or “$” refers to lawful money of the United States of America.

 

“Domestic Subsidiary” shall mean any Subsidiary that is not a Foreign
Subsidiary.

 

“Domestic Restricted Subsidiary” means any Restricted Subsidiary other than
(a) a Foreign Restricted Subsidiary or (b) a Subsidiary of a Foreign Restricted
Subsidiary.

 

“Effective Date” means the date on which the conditions specified in
Section 4.01 of the Original Credit Agreement were satisfied (or waived in
accordance with Section 9.02).

 

“Effective Date Perfection Certificate” means a certificate in the form of
Exhibit B-1 or any other form approved by the Administrative Agent.

 

“Effective Date Loan Proceeds Note Perfection Certificate” means a certificate
in the form of Exhibit B-2 or any other form approved by the Administrative
Agent.

 

“Effective Date Purchase Money Debt” means Purchase Money Debt outstanding on
the Effective Date; provided, however, that the amount of such Purchase Money
Debt when Incurred did not exceed 100% of the cost of the construction,
installation, acquisition, lease, development or improvement of the applicable
Telecommunications/IS Assets.

 

“Effective Date Rating” means B1 in the case of Moody’s and B- in the case of
S&P, which were the respective ratings assigned to the Tranche A Term Loans by
the Rating Agencies on the Effective Date.

 

“8.75% Notes” means the Borrower’s 8.75% Senior Notes due 2017 in an aggregate
principal amount outstanding on Effective Date of $700,000,000.

 

“8.75% Notes Indenture” means the Indenture dated as of February 14, 2007 among
Level 3, the Borrower and The Bank of New York, as trustee, governing the 8.75%
Notes.

 

“8.75% Notes Supplemental Indentures” means the Borrower Restricted Subsidiary
Supplemental Indentures relating to the 8.75% Notes and the Level 3 LLC 8.75%
Notes Supplemental Indenture.

 

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“8.75% Offering Proceeds Note” means the intercompany demand note dated
February 14, 2007, in an initial principal amount equal to $700,000,000, issued
by Level 3 LLC to the Borrower.

 

“Eligible Transferee” shall mean and include (i) a commercial bank, (ii) an
insurance company, a finance company, a financial institution or any fund that
invests in loans in the ordinary course of business and has total assets in
excess of $5,000,000 and (iii) any other financial institution reasonably
satisfactory to Level 3 and the Administrative Agent.

 

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of Level 3 or any Subsidiary of Level 3 directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

 

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
together with Level 3 is treated as a single employer under Section 414(b) or
(c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of the Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by Level 3 or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by Level 3 or any ERISA Affiliate from the

 

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PBGC or a plan administrator of any notice relating to an intention to terminate
any Plan or Plans or to appoint a trustee to administer any Plan; (f) the
incurrence by Level 3 or any of its ERISA Affiliates of any Withdrawal
Liability; or (g) the receipt by Level 3 or any ERISA Affiliate of any notice,
or the receipt by any Multiemployer Plan from Level 3 or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.

 

“Eurocurrency Reserve Requirements” means the aggregate of the maximum reserve
percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board and any other banking
authority to which United States commercial banks are subject and applicable to
“Eurocurrency Liabilities”, as such term is defined in Regulation D of the
Board, or any similar category of assets or liabilities relating to eurocurrency
fundings.  Eurocurrency Reserve Requirements shall be adjusted automatically on
and as of the effective date of any change in any reserve percentage.

 

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the LIBO Rate.

 

“Event of Default” has the meaning specified in Article VII.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended (or any
successor act), and the rules and regulations thereunder (or respective
successors thereto).

 

“Excess Proceeds” has the meaning specified in Section 6.07(c).

 

“Excluded Taxes” means, with respect to the Agent, any Lender or any other
recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, (a) income or franchise Taxes imposed on (or measured by)
its net income by the United States of America, or by the jurisdiction under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits Taxes imposed by the United States of America or
any similar Tax imposed by any other jurisdiction described in clause (a) above
and (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by Level 3 under Section 2.13(b)), any withholding Tax that (i) is in
effect and would apply to amounts payable to such Foreign Lender at the time
such Foreign Lender becomes a party to this Agreement (or designates a new
lending office), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding Tax pursuant to Section 2.11(a) or (ii) is attributable to such
Foreign Lender’s failure to comply with Section 2.11(e).

 

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“Executive Officer” means the chief executive officer, the president, the chief
financial officer, the secretary or the treasurer of Level 3.

 

“Existing Amended and Restated Credit Agreement” means the Amended and Restated
Credit Agreement dated as of June 27, 2006 among the Borrower, Level 3, the
lenders from time to time party thereto and the Administrative Agent and the
Collateral Agent.

 

“Existing Notes” means (a) Level 3’s (i) 2.875% Convertible Senior Notes due
2010 in an aggregate principal amount not to exceed $374,000,000, (ii) 11%
Senior Notes due 2008 in an aggregate principal amount not to exceed
$21,000,000, (iii) 11.25% Senior Notes due 2010 in an aggregate principal amount
not to exceed $96,000,000, (iv) 12.875% Senior Discount Notes due 2010 in an
aggregate principal amount at maturity not to exceed $488,000,000, (v) 10.75 %
Senior Notes due 2008 in an aggregate principal amount not to exceed €5,000,000,
(vi) 11.25% Senior Notes due 2010 in an aggregate principal amount not to exceed
€105,000,000,(vii) 6% Convertible Subordinated Notes due 2009 in an aggregate
principal amount not to exceed $362,000,000, (viii) 6% Convertible Subordinated
Notes due 2010 in an aggregate principal amount not to exceed $514,000,000,
(ix) 9% Convertible Senior Discount Notes due 2013 in an aggregate principal
amount at maturity not to exceed $295,000,000, (x) 5.25% Convertible Senior
Notes due 2011 in an aggregate principal amount not to exceed $345,000,000, (xi)
10% Convertible Senior Notes due 2011 in an aggregate principal amount not to
exceed $275,000,000, (xii) 11.50% Senior Notes due 2010 in an aggregate
principal amount not to exceed $18,000,000 and (xiii) 3.50% Convertible Senior
Notes due 2012 in an aggregate principal amount not to exceed $335,000,000 and
(b) the Borrower’s (i) 10.75% Senior Notes due 2011 in an aggregate principal
amount not to exceed $3,284,000, (ii) Floating Rate Senior Notes due 2011 in an
aggregate principal amount not to exceed $6,000,000, (iii) 12.25% Senior Notes
due 2013 in an aggregate principal amount not to exceed $550,000,000, (iv) 9.25%
Senior Notes due 2014 in an aggregate principal amount not to exceed
$1,250,000,000, (v) Floating Rate Senior Notes due 2015 in an aggregate
principal amount not to exceed $300,000,000 and (vi) 8.75% Senior Notes due 2017
in an aggregate principal amount not to exceed $700,000,000.

 

“Existing Term Loans” means the term loans in an aggregate principal amount of
$730,000,000 outstanding under the Existing Amended and Restated Credit
Agreement.

 

“Fair Market Value” means, with respect to any Property, the price that could be
negotiated in an arm’s-length free market transaction, for cash, between a
willing seller and a willing buyer, neither of whom is under pressure or
compulsion to complete the transaction.  Unless otherwise specified herein, Fair
Market Value shall be determined by the Board of Directors of Level 3 acting in
good faith and shall be evidenced by a Board Resolution of Level 3 (except in
the case of the last paragraph under Section 6.07) delivered to the
Administrative Agent.

 

“FCC” means the United States Federal Communications Commission.

 

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“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

 

“Financial Officer” means the chief financial officer, principal accounting
officer, vice president-finance, assistant treasurer, treasurer or controller of
Level 3 or other specified Person.

 

“Financing Inc. Indentures” means the 10.75% Notes Indenture, the 2011 Floating
Rate Notes Indenture, the 12.25% Notes Indenture, the 9.25% Notes Indenture, the
2015 Floating Rate Notes Indenture and the 8.75% Notes Indenture.

 

“Financing Inc. Notes” means the 10.75% Notes, the 2011 Floating Rate Notes, the
12.25% Notes, the 9.25% Notes, the 2015 Floating Rate Notes and the 8.75% Notes.

 

“Financing Inc. Notes Supplemental Indentures” means the Borrower Restricted
Subsidiary Supplemental Indentures and the Level 3 LLC Notes Supplemental
Indentures.

 

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than the United States of America.  For purposes of this
definition, the United States of America, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.

 

“Foreign Restricted Subsidiary” means any Restricted Subsidiary that is not
organized under the laws of the United States of America or any State thereof or
the District of Columbia.

 

“Foreign Subsidiary” means any Subsidiary that is organized under the laws of a
jurisdiction other than the United States of America or any State thereof or the
District of Columbia.

 

“GAAP” generally accepted accounting principals in the United States of America.

 

“Government Securities” means direct obligations of, or obligations fully and
unconditionally guaranteed or insured by, the United States of America or any
agency or instrumentality thereof for the payment of which obligations or
guarantee the full faith and credit of the United States is pledged and which
are not callable or redeemable at the issuer’s option (unless, for purposes of
the definition of “Cash Equivalents” only, the obligations are redeemable or
callable at a price not less than the

 

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purchase price paid by Level 3 or the applicable Restricted Subsidiary, together
with all accrued and unpaid interest (if any) on such Government Securities).

 

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

 

“Grantor” means (1) Level 3 and (2) any other Person that becomes a Grantor
pursuant to the terms of the Collateral Agreement.  For the avoidance of doubt,
any Person who is a Grantor with respect to one Class of Loans shall be a
Grantor for purposes of this Agreement.

 

“Guarantee” by any Person means any obligation, direct or indirect, contingent
or otherwise, of such Person guaranteeing, or having the economic effect of
guaranteeing, any Indebtedness of any other Person (the “primary obligor”) in
any manner, whether directly or indirectly, and any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, including any such obligations arising by
virtue of partnership arrangements or by agreements to keep-well, (ii) to
purchase Property or services or to take-or-pay for the purpose of assuring the
holder of such Indebtedness of the payment of such Indebtedness, (iii) to
maintain working capital, equity capital or other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness or (iv) entered into for the purpose of assuring in any other
manner the obligee against loss in respect thereof, in whole or in part (and
“Guaranteed”, “Guaranteeing” and “Guarantor” shall have meanings correlative to
the foregoing); provided, however, that the Guarantee by any Person shall not
include endorsements by such Person for collection or deposit, in either case,
in the ordinary course of business.

 

“Guarantee Agreement” means the Guarantee Agreement dated the Effective Date
among Level 3, the Subsidiary Loan Parties identified therein and the Collateral
Agent substantially in the form of Exhibit C-1.

 

“Guarantee and Collateral Requirement” means, subject to Section 2 of the
Amendment Agreement as to the Tranche B Term Loans, at any time, the requirement
that:

 

(a) the Administrative Agent shall have received from Level 3 and each
Designated Guarantor Subsidiary either (i) a counterpart of the Guarantee
Agreement duly executed and delivered on behalf of such Person or (ii) in the
case of any Person that becomes a Designated Guarantor Subsidiary after the
Effective Date, a supplement to the Guarantee Agreement in the form specified
therein or other form acceptable to the Administrative Agent, duly executed and
delivered on behalf of such Designated Guarantor Subsidiary;

 

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(b) the Administrative Agent shall have received from Level 3, the Borrower and
each Designated Grantor Subsidiary either (i) a counterpart of the Collateral
Agreement duly executed and delivered on behalf of such Person or (ii) in the
case of any Person that becomes a Designated Grantor Subsidiary after the
Effective Date, a supplement to the Collateral Agreement in the form specified
therein or other form acceptable to the Administrative Agent, duly executed and
delivered on behalf of such Designated Grantor Subsidiary;

 

(c) the Administrative Agent shall have received from Level 3, the Borrower,
each Designated Guarantor Subsidiary and each Designated Grantor Subsidiary
either (i) a counterpart of the Indemnity, Subrogation and Contribution
Agreement duly executed and delivered on behalf of such Person or (ii) in the
case of any Person that becomes a Designated Grantor Subsidiary or a Designated
Guarantor Subsidiary after the Effective Date, a supplement to the Indemnity,
Subrogation and Contribution Agreement in the form specified therein or other
form acceptable to the Administrative Agent, duly executed and delivered on
behalf of such Designated Guarantor Subsidiary or such Designated Grantor
Subsidiary, as applicable, unless such Person has previously duly executed and
delivered such supplement to the Collateral Agent;

 

(d) all Equity Interests of Material Subsidiaries directly owned by or on behalf
of Level 3, the Borrower or any Designated Grantor Subsidiary (other than Equity
Interests released from the Lien of the Collateral Agreement as provided in
Section 6.07, 6.08, 6.10 or 9.14) shall have been pledged pursuant to the
Collateral Agreement and, if such pledged Equity Interests are in certificated
form, the Collateral Agent shall have received the certificates representing
such pledged Equity Interests, together with undated stock powers or other
instruments of transfer with respect thereto endorsed in blank (provided that
none of the outstanding Equity Interests of any Foreign Subsidiary will be
required to be pledged other than 65% of the outstanding voting Equity Interests
of Level 3 Communications Canada Co.);

 

(e) the Loan Proceeds Note, each Offering Proceeds Note and the Parent
Intercompany Note shall have been pledged by the Borrower and Level 3, as
applicable, pursuant to the Collateral Agreement, and the Collateral Agent shall
have received such promissory notes together with undated instruments of
transfer with respect thereto endorsed in blank; and

 

(f) all documents and instruments, including Uniform Commercial Code financing
statements, required by law or reasonably requested by the Collateral Agent to
be filed, registered or recorded to create the Liens intended to be created by
the Collateral Agreement or to perfect such Liens to the extent and with the
priority required by the Collateral Agreement shall have been filed, registered
or recorded or delivered to the Collateral Agent for filing, registration or
recording or arrangements therefor satisfactory to the Administrative Agent
shall have been made; provided, however, that it is understood that no Grantor
shall have any obligation to (i) provide a real property description for central
fixture filings or

 

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local fixture filings or (ii) other than upon request by the Collateral Agent,
file central or local fixture filings in the state of Tennessee or any other
state that implements a substantial recordation tax for such filings.

 

The foregoing provisions shall not require the creation or perfection of pledges
of or security interests in particular assets if and for so long as, in the good
faith judgment of the Collateral Agent, the cost of creating or perfecting such
pledges or security interests in such assets shall be excessive in view of the
benefits to be obtained by the Lenders therefrom.  Without limiting the
foregoing, the Collateral Agent may agree to forego making any filing in the
United States Patent and Trademark Office with respect to any Intellectual
Property of any Grantor if the Collateral Agent determines in good faith that
such Intellectual Property, taken together with all other Intellectual Property
as to which such filings are not made pursuant to this sentence, (a) is not
material to the operations of Level 3 and its Subsidiaries, taken as a whole,
and (b) is not a material portion of all of the Collateral based on value.  The
Collateral Agent may grant extensions of time for the perfection of security
interests in particular assets (including extensions beyond the Effective Date
for the perfection of security interests in the assets of the Loan Parties on
such date) where it determines that perfection cannot be accomplished without
undue effort or expense by the time or times at which it would otherwise be
required by this Agreement or the Security Documents.  The Guarantee and
Collateral Requirement shall be satisfied with respect to any Initial Guarantor
Subsidiary and any Initial Grantor Subsidiary on the Effective Date.  The
Guarantee and Collateral Requirement shall be satisfied with respect to
(A)(i) any Unregulated Guarantor Subsidiary other than an Initial Guarantor
Subsidiary and (ii) any Regulated Guarantor Subsidiary and (B)(i) any
Unregulated Grantor Subsidiary other than an Initial Grantor Subsidiary and
(ii) any Regulated Grantor Subsidiary, within 45 days after the date on which it
becomes a Designated Guarantor Subsidiary or Designated Grantor Subsidiary (or
in the case of a Material Subsidiary, 45 days from the date on which financial
statements are available that enable Level 3 to make the determination that such
Person has become a Material Subsidiary), as the case may be, but will not be
required to be satisfied prior to such time.  Notwithstanding any provision of
this definition, (i) no Foreign Subsidiary shall be required to become a party
to the Guarantee Agreement, the Collateral Agreement or any other Security
Document or to Guarantee or create Liens on its assets to secure the
Obligations, and (ii)(1) no Unregulated Guarantor Subsidiary that is not an
Initial Guarantor Subsidiary and no Regulated Guarantor Subsidiary and (2) no
Unregulated Grantor Subsidiary that is not an Initial Grantor Subsidiary and no
Regulated Grantor Subsidiary, in each case, that is not a Designated Guarantor
Subsidiary or Designated Grantor Subsidiary, as the case may be, shall be
required to become a party to the Collateral Agreement or any other Security
Document or to Guarantee or create Liens on its assets to secure the Obligations
if Level 3 shall deliver to the Administrative Agent a certificate of a legal
officer of Level 3 stating that such actions would in the good faith belief of
such officer violate any applicable law or regulation; provided, that the
Borrower covenants and agrees that if it shall deliver a certificate pursuant to
the foregoing clause (ii) with respect to any Designated Guarantor Subsidiary or
Designated Grantor Subsidiary, it will promptly notify the Collateral Agent in
the event that at any time thereafter the circumstances preventing such
Designated Guarantor Subsidiary or Designated Grantor Subsidiary from becoming a
party to the Collateral Agreement or any

 

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other Security Document or Guaranteeing or creating Liens on its assets to
secure the Obligations shall no longer exist, and following the delivery of such
notice the provisions of this definition will at all times apply as if no such
certificate had been delivered with respect to such Designated Guarantor
Subsidiary or Designated Grantor Subsidiary.  No Loan Party shall be obligated
to provide a lien on real property or interests in real property, other than
fixtures.

 

“Guarantee Permit Condition” means, with respect to any Regulated Guarantor
Subsidiary, that such Regulated Guarantor Subsidiary has obtained all material
(as determined in good faith by the General Counsel of Level 3) authorizations
and consents of Federal and State Governmental Authorities required, if any, in
order for it to become a Guarantor under the Guarantee Agreement and to satisfy
the Guarantee and Collateral Requirement insofar as the authorizations and
consents so permit.

 

“Guarantor” means (1) Level 3 and (2) any Subsidiary of Level 3 that becomes a
party to the Guarantee Agreement or a Guarantor pursuant to Section 5.12,
Section 6.01, Section 6.02, Section 6.13 or any other provisions of this
Agreement.  For the avoidance of doubt, any Person who is a Guarantor with
respect to one Class of Loans shall be a Guarantor for purposes of this
Agreement.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

 

“Incur” means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Indebtedness or other
obligation including the recording, as required pursuant to GAAP or otherwise,
of any such Indebtedness or other obligation on the balance sheet of such Person
(and “Incurrence”, “Incurred” and “Incurring” shall have meanings correlative to
the foregoing); provided, however, that a change in GAAP that results in an
obligation of such Person that exists at such time becoming Indebtedness shall
not be deemed an Incurrence of such Indebtedness and that neither the accrual of
interest nor the accretion of original issue discount shall be deemed an
Incurrence of Indebtedness.  Indebtedness otherwise incurred by a Person before
it becomes a Subsidiary of Level 3 shall be deemed to have been Incurred at the
time at which it becomes a Subsidiary.

 

“Indebtedness” means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments,

 

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including obligations incurred in connection with the acquisition of Property,
(iii) every reimbursement obligation of such Person with respect to letters of
credit, bankers’ acceptances or similar facilities issued for the account of
such Person, (iv) every obligation of such Person issued or assumed as the
deferred purchase price of Property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business), (v) every Capital Lease Obligation of such
Person and all Attributable Value in respect of Sale and Leaseback Transactions
entered into by such Person, (vi) all obligations to redeem or repurchase
Disqualified Stock issued by such Person, (vii) the liquidation preference of
any Preferred Stock (other than Disqualified Stock, which is covered by the
preceding clause (vi)) issued by any Restricted Subsidiary of such Person,
(viii) every obligation under Hedging Agreements of such Person, and (ix) every
obligation of the type referred to in clauses (i) through (viii) of another
Person and all dividends of another Person the payment of which, in either case,
such Person has Guaranteed.  The “amount” or “principal amount” of Indebtedness
at any time of determination as used herein represented by (a) any Indebtedness
issued at a price that is less than the principal amount at maturity thereof,
shall be, except as otherwise set forth herein, the Accreted Value of such
Indebtedness at such time or (b) in the case of any Receivables sale
constituting Indebtedness, the amount of the unrecovered purchase price (that
is, the amount paid for Receivables that has not been actually recovered from
the collection of such Receivables) paid by the purchaser (other than Level 3 or
a Wholly Owned Restricted Subsidiary of Level 3) thereof.  The amount of
Indebtedness represented by an obligation under a Hedging Agreement shall be
equal to (x) zero if such obligation has been Incurred pursuant to clause (x) of
paragraph (b) of Section 6.01 or clause (viii) of paragraph (b) of Section 6.02
or (y) the notional amount of such obligation if not Incurred pursuant to such
clause.  A Qualified Receivable Facility in the form of a Receivables purchase
facility will be deemed to constitute Indebtedness.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnity, Subrogation and Contribution Agreement” means the Indemnity,
Subrogation and Contribution Agreement among Level 3, the Borrower, the
Subsidiary Loan Parties and the Collateral Agent, substantially in the form of
Exhibit C-3.

 

“Initial Grantor Subsidiary” means (a) BTE Equipment, LLC, (b) Level 3
International, Inc., (c) Level 3 Enhanced Services, LLC and (d) each Subsidiary
of Level 3 that directly or indirectly owns any Equity Interest in any Initial
Grantor Subsidiary.

 

“Initial Guarantor Subsidiary” means (a) WilTel Communications Group, LLC,
(b) Broadwing Corporation, (c) BTE Equipment, LLC, (d) Level 3
International, Inc. (e) Level 3 Enhanced Services, LLC and (f) Broadwing
Financial Services, Inc.

 

“Intellectual Property” has the meaning specified in the Collateral Agreement.

 

“Interest Election Request” has the meaning specified in Section 2.03.

 

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“Interest Payment Date” means (a) with respect to any Eurodollar Loan, the last
day of each Interest Period applicable to such Eurodollar Loan and, in the case
of a Eurodollar Loan with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period
and (b) in the case of any ABR Loan, March 31, June 30, September 30 and
December 31 in each year.

 

“Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing or the last day of the immediately
preceding Interest Period applicable to such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; provided, that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period.  For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

 

“Invested Capital” means the sum of (a) $500,000,000, (b) the aggregate net
proceeds received by Level 3 from the issuance or sale of any Capital Stock,
including Preferred Stock, of Level 3 but excluding Disqualified Stock,
subsequent to the Measurement Date, and (c) the aggregate net proceeds from the
issuance or sale of Indebtedness of Level 3 or any Restricted Subsidiary
subsequent to the Measurement Date convertible or exchangeable into Capital
Stock of Level 3 other than Disqualified Stock, in each case upon conversion or
exchange thereof into Capital Stock of Level 3 subsequent to the Measurement
Date; provided, however, that the net proceeds from the issuance or sale of
Capital Stock or Indebtedness described in clause (b) or (c) shall be excluded
from any computation of Invested Capital to the extent (i) utilized to make a
Restricted Payment or (ii) such Capital Stock or Indebtedness shall have been
issued or sold to Level 3, a Subsidiary of Level 3 or an employee stock
ownership plan or trust established by Level 3 or any such Subsidiary for the
benefit of their employees.

 

“Investment” by any Person means any direct or indirect loan, advance or other
extension of credit or capital contribution (by means of transfers of cash or
other Property to others or payments for Property or services for the account or
use of others, or otherwise) to, purchase, redemption, retirement or acquisition
of Capital Stock, bonds, notes, debentures or other securities or evidence of
Indebtedness issued by, or Incurrence of, or payment on, a Guarantee of any
obligation of, any other Person; provided, however, that Investments shall
exclude commercially reasonable extensions of trade credit.  The amount, as of
any date of determination, of any Investment shall be the original cost of such
Investment, plus the cost of all additions, as of such date, thereto and minus
the amount, as of such date, of any portion of such Investment repaid to such
Person in cash as a repayment of principal or a return of capital, as the case
may be

 

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(except to the extent such repaid amount has been included in Consolidated Net
Income of Level 3 and its Restricted Subsidiaries to support the actual making
of Restricted Payments), but without any other adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment.  In determining the amount of any Investment involving a transfer of
any Property other than cash, such Property shall be valued at its Fair Market
Value at the time of such transfer.

 

“Investment Grade Rating” means a rating equal to or higher that Baa3 (or the
equivalent) by Moody’s and BBB- (or the equivalent) by S&P.

 

“Joint Lead Arrangers” means, collectively, Merrill Lynch, Pierce Fenner & Smith
Incorporated and Morgan Stanley & Co. Incorporated, or any one of them.

 

“Joint Venture” means a Person in which Level 3 or a Restricted Subsidiary holds
not more than 50% of the shares of Voting Stock.

 

“knowledge” means, when used in reference to Level 3 or any of its Subsidiaries,
the actual knowledge of any Executive Officer or any Financial Officer.

 

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption or
Section 9.02(d), other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Assumption.

 

“Level 3” means Level 3 Communications, Inc., a Delaware corporation.

 

“Level 3 LLC” means Level 3 Communications, LLC, a Delaware limited liability
company.

 

“Level 3 LLC 8.75% Notes Supplemental Indenture” means a supplemental indenture
substantially in the form of Exhibit G to the 8.75% Notes Indenture among the
Borrower, Level 3, Level 3 LLC and the Trustee under the 8.75% Notes Indenture.

 

“Level 3 LLC 9.25% Notes Supplemental Indenture” means a supplemental indenture
substantially in the form of Exhibit G to the 9.25% Notes Indenture among the
Borrower, Level 3, Level 3 LLC and the Trustee under the 9.25% Notes Indenture.

 

“Level 3 LLC Notes Supplemental Indentures” means the Level 3 LLC 10.75% Notes
Supplemental Indenture, the Level 3 LLC 2011 Floating Rate Notes Supplemental
Indenture, the Level 3 LLC 12.25% Notes Supplemental Indenture, the Level 3 LLC
9.25% Notes Supplemental Indenture, the Level 3 LLC 2015 Floating Rate Notes
Supplemental Indenture and the Level 3 LLC 8.75% Notes Supplemental Indenture.

 

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“Level 3 LLC 10.75% Notes Supplemental Indenture” means the Supplemental
Indenture dated as of December 1, 2004 among the Borrower, Level 3, Level 3 LLC
and the Trustee under the 10.75% Notes Indenture.

 

“Level 3 LLC 12.25% Notes Supplemental Indenture” means a supplemental indenture
substantially in the form of Exhibit G to the 12.25% Notes Indenture among the
Borrower, Level 3, Level 3 LLC and the Trustee under the 12.25% Notes Indenture.

 

“Level 3 LLC 2011 Floating Rate Notes Supplemental Indenture” means a
supplemental indenture substantially in the form of Exhibit G to the 2011
Floating Rate Notes Indenture among the Borrower, Level 3, Level 3 LLC and the
Trustee under the 2011 Floating Rate Notes Indenture.

 

“Level 3 LLC 2015 Floating Rate Notes Supplemental Indenture” means a
supplemental indenture substantially in the form of Exhibit G to the 2015
Floating Rate Notes Indenture among the Borrower, Level 3, Level 3 LLC and the
Trustee under the 2015 Floating Rate Notes Indenture.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Bloomberg’s British Banker’s Association rate
page (or on any successor or substitute page) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period.  In the event that such rate is not available on such page at
such time for any reason, then the “LIBO Rate” with respect to such Eurodollar
Borrowing for such Interest Period shall be determined by reference to any
analogous page of another quotation service providing quotations comparable to
those currently provided on such page for interest rates applicable to dollar
deposits in the London interbank market, as determined by the Administrative
Agent.  Notwithstanding the foregoing, solely for purposes of calculating
interest in respect of any Tranche B Term Loan that is a Eurodollar Loan, the
“LIBO Rate” in respect of any applicable Interest Period will be deemed to be
3.00% per annum if the LIBO Rate for such Interest Period calculated pursuant to
the foregoing provisions would otherwise be less than 3.00% per annum.

 

“License” means any license granted by the FCC or any foreign telecommunications
regulatory body.

 

“Lien” means, with respect to any Property, any mortgage or deed of trust,
pledge, hypothecation, assignment, deposit arrangement, security interest, lien,
charge, easement (other than any easement not materially impairing usefulness),
encumbrance, preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever on or with respect to such Property
(including any Capital Lease Obligation, conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing and any Sale and Leaseback Transaction).  For purposes of this
definition the sale, lease, conveyance or other transfer by Level 3 or any of
its Subsidiaries of, including the grant of indefeasible rights of use or
equivalent

 

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arrangements with respect to, dark or lit communications fiber capacity or
communications conduit shall not constitute a Lien.  For the sake of clarity,
subordination and setoff rights do not constitute Liens and the filing of a
financing statement under the Uniform Commercial Code, without more, does not
constitute a Lien.

 

“Loan Documents” means this Agreement, any promissory notes issued hereunder and
the Security Documents.

 

“Loan Parties” means Level 3, the Borrower and the Subsidiary Loan Parties.

 

“Loan Proceeds Note” means the amended and restated intercompany demand note
dated the Effective Date, as further amended and restated as of the Restatement
Effective Date, in a principal amount of $1,620,000,000 issued by Level 3 LLC to
the Borrower to evidence (a) the Indebtedness of Level 3 LLC to the Borrower
under the “Loan Proceeds Note”, as defined in the Existing Amended and Restated
Credit Agreement, (b) the loan made by the Borrower to Level 3 LLC with the
proceeds of the Tranche A Term Loans made on the Effective Date remaining after
the discharge of the principal amount of the loans outstanding under the
Existing Amended and Restated Credit Agreement and (c) the loan made by the
Borrower to Level 3 LLC with the proceeds of the Tranche B Term Loans, as well
as additional funds of the Borrower, on the Restatement Effective Date in an
amount equal to the aggregate principal amount of the Tranche B Term Loans made
on the Restatement Effective Date.

 

“Loan Proceeds Note Collateral Agreement” means the Amended and Restated Loan
Proceeds Note Collateral Agreement, substantially in the form of Exhibit G-1.

 

“Loan Proceeds Note Guarantee” means an unconditional Guarantee of the due and
punctual payment of the principal of and premium, if any, and interest on the
Loan Proceeds Note, when and as due, whether on demand, at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, and all
other monetary obligations of Level 3 LLC under the Loan Proceeds Note, in
substantially the form set forth in Exhibit G-2.

 

“Loan Proceeds Note Guarantor” means any Restricted Subsidiary that provides a
Loan Proceeds Note Guarantee pursuant to Section 6.01, Section 6.02 or any other
provision of this Agreement.

 

“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.

 

“Make-Whole Amount” means, with respect to any principal amount of Tranche B
Term Loans that is prepaid pursuant to Section 2.05(a)(i), as of the date of
such prepayment, an amount equal to the sum of the present value as of such date
of (a) the prepayment fee with respect to such principal amount of Tranche B
Term Loans that would have been payable pursuant to Section 2.05(a) if such
principal amount of Tranche B Term Loans had been prepaid on the day following
the No-Call Date plus

 

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(b) the amount of interest that would have been payable in respect of such
principal amount of Tranche B Term Loans from the date of such prepayment
through the No-Call Date if such prepayment had not been made, computed using a
discount rate equal to the Treasury Rate as of such date of prepayment plus
0.50% and discounting in accordance with accepted financial practice applying
the discount rate on a quarterly basis.  For purposes of clause (b) of this
definition, the amount of interest shall be calculated using the interest rate
in effect as of the date of such prepayment for the Tranche B Term Loans so
prepaid.

 

“Material Adverse Effect” means (a) a material adverse effect on the business,
assets, operations or condition, financial or otherwise, of Level 3 and the
Restricted Subsidiaries taken as a whole that materially increases the
likelihood of a default in the payment of the Obligations when due or (b) a
material adverse effect on the rights of or benefits available to the Lenders
under any Loan Document.

 

“Material Indebtedness” means Indebtedness of any one or more of Level 3, the
Borrower or any other Restricted Subsidiary having an outstanding principal
amount of no less than $25,000,000 or its foreign currency equivalency at the
time individually or in the aggregate.

 

“Material Subsidiary” means, at any time, any Restricted Subsidiary engaged in
the Telecommunications/IS Business (other than a Subsidiary (including, on the
Effective Date, Eldorado Marketing, Inc. (now known as Technology
Spectrum, Inc.)) engaged primarily in the business of (i) constructing,
creating, developing or marketing software or (ii) computer outsourcing, data
center management, computer systems integration, or reengineering of software
for any purpose, as determined in good faith by the Board of Directors of Level
3) accounting, or holding assets that accounted, for more than 5% of Pro Forma
Consolidated Cash Flow Available for Fixed Charges for Level 3 and its
Restricted Subsidiaries for the period of four fiscal quarters most recently
ended or more than 5% of Consolidated Tangible Assets at the end of such period;
provided that if at any time all Restricted Subsidiaries that are not Material
Subsidiaries shall account for more than 10% of Pro Forma Consolidated Cash Flow
Available for Fixed Charges for Level 3 and its Restricted Subsidiaries for the
period of four fiscal quarters most recently ended or more than 10% of
Consolidated Tangible Assets at the end of such period, Level 3 shall designate
sufficient Restricted Subsidiaries as “Material Subsidiaries” to eliminate such
excess (or, if Level 3 shall have failed to designate such Restricted
Subsidiaries within 10 Business Days, Restricted Subsidiaries shall
automatically be deemed designated as Material Subsidiaries in descending order
based on the amounts of their contributions to Consolidated Tangible Assets
until such excess shall have been eliminated), and the Restricted Subsidiaries
so designated or deemed designated shall for all purposes of this Agreement
constitute Material Subsidiaries.  Notwithstanding the foregoing, Level 3
Holdings, Inc. and its Subsidiaries shall not constitute Material Subsidiaries
unless they would otherwise satisfy the foregoing test and they are engaged to
any material extent in the Telecommunications/IS Business, as determined in good
faith by the Board of Directors of Level 3.

 

“Maturity Date” means March 13, 2014.

 

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“Measurement Date” means April 28, 1998.

 

“Moody’s” means Moody’s Investors Service, Inc. or, if Moody’s Investors
Service, Inc. shall cease rating debt securities having a maturity at original
issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
that if Moody’s Investors Service Inc. ceases rating debt securities having a
maturity at original issuance of at least one year and its ratings business with
respect thereto shall not have been transferred to any successor Person, then
“Moody’s” shall mean any other nationally recognized rating agency (other than
S&P) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the Administrative Agent
by a written notice given to the Borrower.

 

“Multiemployer Plan” means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

 

“Net Available Proceeds” from any Asset Disposition by any Person means cash or
cash equivalents received (including amounts received by way of sale or
discounting of any note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquirer of Indebtedness or other obligations relating to such Property)
therefrom by such Person, net of (i) all legal, title and recording taxes,
expenses and commissions and other fees and expenses (including appraisals,
brokerage commissions and investment banking fees) Incurred and all federal,
state, provincial, foreign and local taxes required to be accrued as a liability
as a consequence of such Asset Disposition, (ii) all payments made by such
Person or its Subsidiaries on any Indebtedness which is secured by such Property
in accordance with the terms of any Lien upon or with respect to such Property
or which must by the terms of such Lien, or in order to obtain a necessary
consent to such Asset Disposition or by applicable law, be repaid out of the
proceeds from such Asset Disposition, (iii) all distributions and other payments
required to be made to minority interest holders in Subsidiaries or Joint
Ventures of such Person as a result of such Asset Disposition and
(iv) appropriate amounts to be provided by such Person or any Subsidiary
thereof, as the case may be, as a reserve in accordance with GAAP against any
liabilities associated with such Property and retained by such Person or any
Subsidiary thereof, as the case may be, after such Asset Disposition, including
liabilities under any indemnification obligations and severance and other
employee termination costs associated with such Asset Disposition, in each case
as determined by the Board of Directors of such Person, in its reasonable good
faith judgment evidenced by a Board Resolution delivered to the Administrative
Agent; provided, however, that any reduction in such reserve within
twelve months following the consummation of such Asset Disposition will be, for
all purposes of this Agreement, treated as a new Asset Disposition at the time
of such reduction with Net Available Proceeds equal to the amount of such
reduction; provided further, however, that, in the event that any consideration
for a transaction (which would otherwise constitute Net Available Proceeds) is
required to be held in escrow pending determination of whether a purchase price
adjustment will be made, at such time as such portion of the consideration is
released to such Person or its Restricted Subsidiary from escrow, such portion
shall be treated for all purposes of this Agreement as a new Asset

 

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Disposition at the time of such release from escrow with Net Available Proceeds
equal to the amount of such portion of consideration released from escrow.

 

“9.25% Notes” means the Borrower’s 9.25% Senior Notes due 2014 in an aggregate
principal amount outstanding on the Effective Date of $1,250,000,000.

 

“9.25% Notes Indenture” means the Indenture dated as of October 30, 2006 among
Level 3, the Borrower and The Bank of New York, as trustee, governing the 9.25%
Notes.

 

“9.25% Notes Supplemental Indentures” means the Borrower Restricted Subsidiary
Supplemental Indentures relating to the 9.25% Notes and the Level 3 LLC 9.25%
Notes Supplemental Indenture.

 

“9.25% Offering Proceeds Note” means the amended and restated intercompany
demand note dated December 28, 2006, in an initial principal amount equal to
$1,250,000,000, issued by Level 3 LLC to the Borrower.

 

“No-Call Date” means October 16, 2011.

 

“Non-Telecommunications Subsidiary” means any Borrower Restricted Subsidiary not
engaged in any material respect in the Telecommunications/IS Business.

 

“Obligations” means (a) the due and punctual payment by the Borrower of (i) the
principal of and interest (including interest accruing during the pendency of
any bankruptcy, insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding) on the Loans (including
Loans pursuant to Additional Tranches), when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise and
(ii) all other monetary obligations of the Borrower under the Credit Agreement
and each of the other Loan Documents, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), (b) the due and punctual performance
of all obligations of any Loan Party, monetary or otherwise, under each
Specified Hedging Agreement, (c) the due and punctual performance of all other
obligations of the Borrower under or pursuant to the Credit Agreement and each
of the other Loan Documents, and (d) the due and punctual payment and
performance of all the obligations of each other Loan Party under or pursuant to
this Agreement and each of the other Loan Documents.

 

“OECD” means the Organization for Economic Cooperation and Development.

 

“Offering Proceeds Notes” means the 10.75% Offering Proceeds Note, the 2011
Floating Rate Offering Proceeds Note, the 12.25% Offering Proceeds Note, the
9.25% Offering Proceeds Note, the 8.75% Offering Proceeds Note and the 2015
Floating Rate Offering Proceeds Note.

 

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“Offering Proceeds Note Guarantee” means an unconditional Guarantee of the due
and punctual payment of the principal of and premium, if any, and interest on
any Offering Proceeds Note, when and as due, whether on demand, at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, and all
other monetary obligations of Level 3 LLC under any Offering Proceeds Note.

 

“Officers’ Certificate” of any Person means a certificate signed by the Chairman
of the Board of Directors of such Person, a Vice Chairman of the Board of
Directors of such Person, the President or a Vice President, and by the Chief
Financial Officer, the Chief Accounting Officer, the Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of such
Person and delivered to the Administrative Agent, which shall comply with this
Agreement.

 

“Omnibus Offering Proceeds Note Subordination Agreement” means the Omnibus
Offering Proceeds Note Subordination Agreement dated the Effective substantially
in the form of Exhibit F, among the Borrower, Level 3, Level 3 LLC and the
Administrative Agent, as amended, restated, supplemented or otherwise modified
from time to time.

 

“Opinion of Counsel” means an opinion of counsel reasonably acceptable to the
Administrative Agent (who may be counsel to Level 3 or the Borrower, including
an employee of Level 3 or the Borrower).

 

“Original Credit Agreement” has the meaning specified in the recitals hereto.

 

“Other Taxes” means any and all present or future recording, stamp, documentary,
excise, transfer, sales, property or similar Taxes, charges or levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.

 

“Parent Intercompany Note” means the intercompany demand note dated December 8,
1999, as amended and restated on October 1, 2003, in a principal amount as of
January 31, 2007, equal to $16,004,954,537, issued by Level 3 LLC to Level 3.

 

“Parent’s Indentures” means (a) the indenture dated as of February 29, 2000
between Level 3 and The Bank of New York, as trustee, as amended or supplemented
from time to time in accordance therewith relating to Level 3’s 11% Senior Notes
due 2008, (b) the Euro Securities indenture dated as of February 29, 2000
between Level 3 and The Bank of New York, as trustee, as amended or supplemented
from time to time in accordance therewith relating to Level 3’s 10.75% Senior
Euro Notes due 2008, (c) the indenture dated as of February 29, 2000 between
Level 3 and The Bank of New York, as trustee, as amended or supplemented from
time to time in accordance therewith relating to Level 3’s 12.875% Senior
Discount Notes due 2010, (d) the indenture dated as of February 29, 2000 between
Level 3 and The Bank of New York, as trustee, as amended or supplemented from
time to time in accordance therewith relating to Level 3’s 11.25% Senior Notes
due 2010, (e) the Euro Securities indenture dated as of February 29,

 

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2000 between Level 3 and The Bank of New York, as trustee, as amended or
supplemented from time to time in accordance therewith relating to Level 3’s
11.25% Senior Euro Notes due 2010 and (f) the indenture dated as of January 13,
2006 between Level 3 and The Bank of New York, as trustee, as amended or
supplemented from time to time in accordance therewith relating to Level 3’s
11.50% Senior Notes due 2010.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

 

“Permitted Holders” means the members of Level 3’s board of directors on the
Measurement Date and their respective estates, spouses, ancestors, and lineal
descendants, the legal representatives of any of the foregoing and the trustees
of any bona fide trusts of which the foregoing are the sole beneficiaries or the
grantors, or any Person of which the foregoing “beneficially owns” (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934) at least 662/3% of the
total voting power of the Voting Stock of such Person.

 

“Permitted Hedging Agreement” of any Person means any Hedging Agreement entered
into with one or more financial institutions in the ordinary course of business
that is designed to protect such Person against fluctuations in interest rates
or currency exchange rates with respect to Indebtedness Incurred and not for
purposes of speculation and which, in the case of an interest rate agreement,
shall have a notional amount no greater than the principal amount at maturity
due with respect to the Indebtedness being hedged thereby.

 

“Permitted Investments” means (a) Cash Equivalents; (b) investments in prepaid
expenses; (c) negotiable instruments held for collection and lease, utility and
workers’ compensation, performance and other similar deposits; (d) loans,
advances or extensions of credit to employees and directors made in the ordinary
course of business and consistent with past practice; (e) obligations under
Permitted Hedging Agreements; (f) bonds, notes, debentures and other securities
received as a result of Asset Dispositions pursuant to and in compliance with
Section 6.07; (g) Investments in any Person as a result of which such Person
becomes a Restricted Subsidiary; (h) Investments made prior to the Measurement
Date; (i) Investments made after the Measurement Date in Persons engaged in the
Telecommunications/IS Business in an aggregate amount not to exceed Invested
Capital; and (j) additional Investments made after the Effective Date in an
aggregate amount not to exceed $200,000,000.

 

“Permitted Liens” means (a) Liens for taxes, assessments, governmental charges,
levies or claims which are not yet delinquent or which are being contested in
good faith by appropriate proceedings, if a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor; (b) other Liens incidental to the conduct of Level 3’s and its
Restricted Subsidiaries’ businesses or the ownership of its Property not
securing any Indebtedness of Level 3 or a Subsidiary of Level 3, and which do
not in the aggregate materially detract from the value of Level 3’s and its
Restricted Subsidiaries’ Property when taken as a whole, or materially impair
the use thereof in the operation of its business; (c) Liens, pledges and
deposits made in the

 

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ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of statutory obligations; (d) Liens,
pledges or deposits made to secure the performance of tenders, bids, leases,
public or statutory obligations, sureties, stays, appeals, indemnities,
performance or other similar bonds and other obligations of like nature incurred
in the ordinary course of business (exclusive of obligations for the payment of
borrowed money, the obtaining of advances or credit or the payment of the
deferred purchase price of Property and which do not in the aggregate materially
impair the use of Property in the operation of the business of Level 3 and the
Restricted Subsidiaries taken as a whole); (e) zoning restrictions, servitudes,
easements, rights-of-way, restrictions and other similar charges or encumbrances
incurred in the ordinary course of business which, in the aggregate, do not
materially detract from the value of the Property subject thereto or materially
interfere with the ordinary conduct of the business of Level 3 or its Restricted
Subsidiaries; and (f) any interest or title of a lessor in the Property subject
to any lease other than a Capital Lease.

 

“Permitted Telecommunications Capital Asset Disposition” means the transfer,
conveyance, sale, lease or other disposition of optical fiber and/or conduit and
any related equipment used in a Segment (as defined) of Level 3’s communications
network that (i) constitute capital assets in accordance with GAAP and
(ii) after giving effect to such disposition, would result in Level 3 retaining
at least either (A) 24 optical fibers per route mile on such Segment as deployed
at the time of such disposition or (B) 12 optical fibers and one empty conduit
per route mile on such Segment as deployed at such time.  “Segment” means
(x) with respect to Level 3’s intercity network, the through-portion of such
network between two local networks (i.e., Omaha to Denver) and (y) with respect
to a local network of Level 3 (i.e., Dallas), the entire through-portion of such
network, excluding the spurs which branch off the through-portion.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which Level 3 or any ERISA Affiliate is
(or, if such plan were terminated, would under Section 4069 of ERISA be deemed
to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pledged Equity Interests” has the meaning specified in the Collateral
Agreement.

 

“Preferred Stock” of any Person means Capital Stock of such Person of any class
or classes (however designated) that ranks prior, as to the payment of dividends
or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding-up of such Person, to shares of Capital
Stock of any other class of such Person.

 

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“Preferred Stock Dividends” means all dividends with respect to Preferred Stock
of Restricted Subsidiaries held by Persons other than Level 3 or the Borrower or
a Wholly Owned Restricted Subsidiary or the Borrower, respectively.  The amount
of any such dividend shall be equal to the quotient of such dividend divided by
the difference between one and the maximum statutory federal income rate
(expressed as a decimal number between 1 and 0) applicable to the borrower of
such Preferred Stock for the period during which such dividends were paid.

 

“Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money
Rates Section as the Prime Rate (currently defined as the base rate on corporate
loans posted by at least 75% of the nation’s thirty (30) largest banks), as in
effect from time to time.  The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer. 
The Administrative Agent or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.

 

“Pro Forma Consolidated Cash Flow Available for Fixed Charges” for Level 3 and
its Restricted Subsidiaries or for the Borrower and the Borrower Restricted
Subsidiaries for any period means Consolidated Cash Flow Available for Fixed
Charges of Level 3 and its Restricted Subsidiaries or the Borrower and the
Borrower Restricted Subsidiaries, as applicable, for such period, calculated in
accordance with the definition thereof; provided, however, that if (A) since the
beginning of the applicable period Level 3 or one of its Restricted Subsidiaries
or the Borrower or one of the Borrower Restricted Subsidiaries, as applicable,
shall have made one or more Asset Dispositions or an Investment (by merger or
otherwise) in any Restricted Subsidiary or Borrower Restricted Subsidiary, as
applicable (or any Person which becomes a Restricted Subsidiary or Borrower
Restricted Subsidiary, as applicable) or an acquisition, merger or consolidation
of Property which constitutes all or substantially all of an operating unit of a
business or a line of business, or (B) since the beginning of such period any
Person (that subsequently became a Restricted Subsidiary or Borrower Restricted
Subsidiary, as applicable, or was merged with or into Level 3 or any Restricted
Subsidiary or the Borrower or any Borrower Restricted Subsidiary, as applicable,
since the beginning of such period) shall have made such an Asset Disposition,
Investment, acquisition, merger or consolidation, then Consolidated Cash Flow
Available for Fixed Charges for such four full fiscal quarter period shall be
calculated after giving pro forma effect to such Asset Dispositions,
Investments, acquisitions, mergers or consolidations as if such Asset
Dispositions, Investments, acquisitions, mergers or consolidations occurred on
the first day of such period.  For purposes of this definition, whenever “pro
forma” effect is to be given to any Asset Disposition, Investment, acquisition,
merger or consolidation, the calculations shall be performed in accordance with
Article 11 of Regulation S-X promulgated under the Securities Act, as
interpreted in good faith by the chief financial officer of Level 3, except that
any such pro forma calculation may include operating expense reductions for such
period attributable to the transaction to which pro forma effect is being given
(including, without limitation, operating expense reductions attributable to
execution or termination of any contract, reduction of costs related to
administrative functions, the termination of any employees or the closing (or
the approval by the Board of Directors of Level 3 of the closing) of any
facility) that have been realized or for which all steps

 

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necessary for the realization of which have been taken or are reasonably
expected to be taken within twelve months following such transaction, provided
that such adjustments are set forth in an Officers’ Certificate which states
(i) the amount of such adjustment or adjustments and (ii) that such adjustment
or adjustments are based on the reasonable good faith beliefs of the Officers
executing such Officers’ Certificate.

 

“Property” means, with respect to any Person, any interest of such Person in any
kind of property or asset, whether real, personal or mixed, or tangible or
intangible, including Capital Stock in, and other securities of, any other
Person.  For purposes of any calculation required pursuant to this Agreement,
the value of any Property shall be its Fair Market Value.

 

“Proportionate Interest” in any issuance of Capital Stock of a Restricted
Subsidiary means a ratio (i) the numerator of which is the aggregate amount of
all Capital Stock of such Restricted Subsidiary beneficially owned by Level 3
and the Restricted Subsidiaries and (ii) the denominator of which is the
aggregate amount of Capital Stock of such Restricted Subsidiary beneficially
owned by all Persons (excluding, in the case of this clause (ii), any Investment
made in connection with such issuance).

 

“Purchase Money Debt” means Indebtedness (including Acquired Debt and Capital
Lease Obligations, mortgage financings and purchase money obligations) incurred
for the purpose of financing all or any part of the cost of construction,
installation, acquisition, lease, development or improvement by Level 3 or any
Restricted Subsidiary of any Telecommunications/IS Assets of Level 3 or any
Restricted Subsidiary and including any related notes, Guarantees, collateral
documents, instruments and agreements executed in connection therewith, as the
same may be amended, supplemented, modified, restated or replaced from time to
time (it being understood that Indebtedness meeting the foregoing requirements
and Incurred within 90 days after the construction, installation, acquisition,
lease, development or improvement of such Telecommunications/IS Assets by
Level 3 or such Restricted Subsidiary shall constitute Purchase Money Debt).

 

“Qualified Counterparty” means, with respect to any Specified Hedging Agreement,
any counterparty thereto that is a Lender, the Administrative Agent, a
Co-Documentation Agent, or a Joint Lead Arranger, or an Affiliate of a Lender,
the Administrative Agent, a Co-Documentation Agent or a Joint Lead Arranger.

 

“Qualified Receivable Facility” means Indebtedness of Level 3 or any Subsidiary
of Level 3 Incurred from time to time on customary terms (as determined by
Level 3 in good faith) pursuant to either (x) credit facilities secured only by
Receivables, collections thereof and accounts established solely for the
collection of such Receivables or (y) Receivables purchase facilities, and
including any related notes, Guarantees, collateral documents, instruments and
agreements executed in connection therewith, as the same may be amended,
supplemented, modified or restated from time to time.

 

“Rating Agencies” mean Moody’s and S&P.

 

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“Rating Date” means the earlier of the date of public notice of the occurrence
of a Change of Control or of the intention of Level 3 to effect a Change of
Control.

 

“Rating Decline” shall be deemed to have occurred if, no later than 90 days
after the Rating Date (which period shall be extended so long as the rating of
the Loans is under publicly announced consideration for possible downgrade by
any of the Rating Agencies), either of the Rating Agencies assigns or reaffirms
a rating to the Loans that is lower than the applicable Effective Date Rating
(or the equivalent thereof).  If, prior to the Rating Date, either of the
ratings assigned to the Loans by the Rating Agencies is lower than the
applicable Effective Date Rating, then a Rating Decline will be deemed to have
occurred if such rating is not changed by the 90th day following the Rating
Date.  A downgrade within rating categories, as well as between rating
categories, will be considered a Rating Decline.  A “Rating Decline” also shall
be deemed to have occurred if a Rating Decline (as defined in any indenture
governing any of the Existing Notes) shall have occurred in respect of any of
the Existing Notes.

 

“Receivables” means receivables, chattel paper, instruments, documents or
intangibles evidencing or relating to the right to payment of money and proceeds
and products thereof in each case generated in the ordinary course of business.

 

“refinancing” has the meaning specified in Sections 6.01(b)(viii) and
6.02(b)(vi).

 

“Register” has the meaning specified in Section 9.04.

 

“Regulated Grantor Subsidiary” means (a) Level 3 LLC, (b) ICG
Communications, Inc., (c) WilTel Communications Group, LLC, (d) WilTel
Communications, LLC, (e) Eldorado Acquisition Three, LLC, (f) Broadwing
Corporation and (g) each Material Subsidiary requiring material authorizations
and consents of Federal and State Governmental Authorities in order for it to
become a Grantor under the Collateral Agreement and to satisfy the Guarantee and
Collateral Requirement.

 

“Regulated Guarantor Subsidiary” means (a) Level 3 LLC, (b) ICG
Communications, Inc., (c) WilTel Communications, LLC, (d) Eldorado Acquisition
Three, LLC and (e) each Material Subsidiary requiring material authorizations
and consents of Federal and State Governmental Authorities in order for it to
become a Guarantor under the Guarantee Agreement and to satisfy the Guarantee
and Collateral Requirement.

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the directors, officers, employees, agents, trustees, partners,
members and advisors of such Person and such Person’s Affiliates.

 

“Required Lenders” means, at any time, Lenders having Loans and unused
Commitments representing at least a majority in aggregate principal amount of
the total Loans and unused Commitments outstanding at such time.

 

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“Restatement Effective Date” has the meaning specified in the Amendment
Agreement.

 

“Restricted Payment” has the meaning specified in Section 6.03.

 

“Restricted Subsidiary” means (a) a Subsidiary of Level 3 or a Restricted
Subsidiary, including the Borrower, that has not been designated or classified
as an Unrestricted Subsidiary pursuant to and in compliance with Section 6.10
and (b) an Unrestricted Subsidiary that has been redesignated as a Restricted
Subsidiary pursuant to such Section.  Notwithstanding any other provision of
this Agreement, the Restricted Subsidiaries shall at all times include the
Borrower and Level 3 LLC.

 

“Reversion Date” has the meaning specified in Section 6.12.

 

“Revocation” has the meaning specified in Section 6.10.

 

“S&P” means Standard & Poor’s Ratings Service or, if Standard & Poor’s Rating
Service shall cease rating debt securities having a maturity at original
issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
that if Standard & Poor’s Ratings Service ceases rating debt securities having a
maturity at original issuance of at least one year and its ratings business with
respect thereto shall not have been transferred to any successor Person, then
“S&P” shall mean any other nationally recognized rating agency (other than
Moody’s) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the Administrative Agent
by a written notice given to the Borrower.

 

“Sale and Leaseback Transaction” of any Person means any direct or indirect
arrangement pursuant to which any Property is sold or transferred by such Person
or a Restricted Subsidiary of such person and is thereafter leased back from the
purchaser or transferee thereof by such Person or one of its Restricted
Subsidiaries.  The stated maturity of such arrangement shall be the date of the
last payment of rent or any other amount due under such arrangement prior to the
first date on which such arrangement may be terminated by the lessee without
payment of a penalty.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Security Documents” means the Guarantee Agreement, the Collateral Agreement,
the Indemnity, Subrogation and Contribution Agreement, the Loan Proceeds Note
Collateral Agreement, any Loan Proceeds Note Guarantee and each other security
agreement or other instrument or document executed and delivered pursuant to
Section 5.12 to secure any of the Obligations.

 

“Security Interest” has the meaning specified in the Collateral Agreement.

 

“Sister Restricted Subsidiary” means a Restricted Subsidiary that is not the
Borrower or a Borrower Restricted Subsidiary.

 

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“Significant Subsidiary” means any Subsidiary that would be a “Significant
Subsidiary” of Level 3 within the meaning of Rule 1-02 under Regulation S-X
promulgated by the Securities and Exchange Commission.

 

“Special Assets” means (a) the Capital Stock or assets of RCN Corporation (and
any intermediate holding companies or other entities formed solely for the
purpose of owning such Capital Stock or assets) owned, directly or indirectly,
by Level 3 or any Restricted Subsidiary on the Measurement Date, and (b) any
Property, other than cash, Cash Equivalents and Telecommunications/IS Assets,
received as consideration for the disposition after the Measurement Date of
Special Assets (as contemplated by the first proviso in Section 6.07).

 

“Specified Hedging Agreement” means (a) any Permitted Hedging Agreement (i) that
is in effect on the Effective Date between any Loan Party and a Qualified
Counterparty, or (ii) that is entered into after the Effective Date between any
Loan Party and a Qualified Counterparty and (b) which has been designated by
such Loan Party and such Qualified Counterparty by written notice to the
Administrative Agent not later than 90 days after (i) the Effective Date, in the
case of any agreement referred to in clause (a)(i) or (ii) the date of the
execution and delivery thereof, in the case of any agreement referred to in
clause (a)(ii), as a Specified Hedging Agreement hereunder; provided that the
designation of any Permitted Hedging Agreement as a Specified Hedging Agreement
shall not create in favor of any Qualified Counterparty any rights in connection
with the management or release of any Collateral or of the obligations of any
Loan Party under this Agreement.

 

“Subordinated Debt” means Indebtedness of Level 3 (a) that is not secured by any
Lien on or with respect to any Property now owned or acquired after the
Measurement Date and (b) as to which the payment of principal of (and premium,
if any) and interest and other payment obligations in respect of such
Indebtedness shall be subordinate to the prior payment in full in cash of the
Guarantee of the Obligations by Level 3 to at least the following extent: (i) no
payments of principal of (or premium, if any) or interest on or otherwise due
(including by acceleration or for additional amounts) in respect of, or
repurchases, redemptions or other retirements of, such Indebtedness
(collectively, “payments of such Indebtedness”) may be permitted for so long as
any default (after giving effect to any applicable grace periods) in the payment
of principal (or premium, if any) or interest on the Loans exists, including as
a result of acceleration; (ii) in the event that any other Default exists with
respect to the Loans, upon notice by Lenders holding 25% or more in aggregate
outstanding principal amount of the Loans to the Administrative Agent, the
Administrative Agent shall have the right to give notice to Level 3 and the
holders of such Indebtedness (or trustees or agents therefor) of a payment
blockage, and thereafter no payments of such Indebtedness may be made for a
period of 179 days from the date of such notice; provided, however, that not
more than one such payment blockage notice may be given in any consecutive
360-day period, irrespective of the number of defaults with respect to the Loans
during such period; (iii) if payment of such Indebtedness is accelerated when
any principal amount of the Loans is outstanding, no payments of such
Indebtedness may be made until three Business Days after the Administrative
Agent receives notice of such acceleration and, thereafter, such payments

 

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may only be made to the extent the terms of such Indebtedness permit payment at
that time; and (iv) such Indebtedness may not (x) provide for payments of
principal of such Indebtedness at the stated maturity thereof or by way of a
sinking fund applicable thereto or by way of any mandatory redemption,
defeasance, retirement or repurchase thereof by Level 3 (including any
redemption, retirement or repurchase which is contingent upon events or
circumstances but excluding any retirement required by virtue of acceleration of
such Indebtedness upon an event of default thereunder), in each case prior to
the Maturity Date or (y) permit redemption or other retirement (including
pursuant to an offer to purchase made by Level 3) of such Indebtedness at the
option of the holder thereof prior to the Maturity Date, other than, in the case
of clause (x) or (y), any such payment, redemption or other retirement
(including pursuant to an offer to purchase made by Level 3) which is
conditioned upon (A) a change of control of Level 3 pursuant to provisions
substantially similar to those described in the definition of “Change of Control
Triggering Event” (and which shall provide that such Indebtedness will not be
repurchased pursuant to such provisions prior to the Borrower’s repayment of the
Loans required to be repaid by the Borrower pursuant to the provisions described
in the definition of “Change of Control Triggering Event”) or (B) a sale or
other disposition of assets pursuant to provisions substantially similar to
those described in Section 6.07 (and which shall provide that such Indebtedness
will not be repurchased pursuant to such provisions prior to the Borrower’s
repayment of the Loans required to be repaid by the Borrower pursuant to
Section 6.07).

 

“Subordinated Indentures” means (a) the indenture dated as of September 20, 1999
between Level 3 and IBJ Whitehall Bank & Trust Company, as trustee, as
supplemented by the Supplement dated September 20, 1999 and as amended or
supplemented from time to time in accordance therewith relating to Level 3’s
6.0% Convertible Subordinated Notes due 2009 and (b) the indenture dated as of
September 20, 1999 between Level 3 and IBJ Whitehall Bank & Trust Company, as
trustee, as supplemented by the Second Supplement dated February 29, 1999 and as
amended or supplemented from time to time in accordance therewith relating to
Level 3’s 6.0% Convertible Subordinated Notes due 2010.

 

“Subsidiary” of any Person means (i) a corporation more than 50% of the combined
voting power of the outstanding Voting Stock of which is owned, directly or
indirectly, by such Person or by one or more other Subsidiaries of such Person
or by such Person and one or more Subsidiaries thereof or (ii) any other Person
(other than a corporation) in which such Person, or one or more other
Subsidiaries of such Person or such Person and one or more other Subsidiaries
thereof, directly or indirectly, has at least a majority ownership and power to
direct the policies, management and affairs thereof.

 

“Subsidiary Loan Party” means, as applicable, any Subsidiary of Level 3 that has
guaranteed the Obligations or has assigned and pledged any of its assets to
secure the Obligations pursuant to any Security Document.

 

“Suspended Covenants” has the meaning specified in Section 6.12.

 

“Suspension Period” has the meaning specified in Section 6.12.

 

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“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

 

“Telecommunications/IS Assets” means (a) any Property (other than cash, cash
equivalents and securities) to be owned by Level 3 or any Restricted Subsidiary
and used in the Telecommunications/IS Business; (b) for purposes of
Sections 6.01, 6.02 and 6.05 only, Capital Stock of any Person; or (c) for all
other purposes of this Agreement, Capital Stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such Capital Stock by
Level 3 or another Restricted Subsidiary from any Person other than an Affiliate
of Level 3; provided, however, that, in the case of clause (b) or (c), such
Person is primarily engaged in the Telecommunications/IS Business.

 

“Telecommunications/IS Business” means the business of (i) transmitting, or
providing (or arranging for the providing of) services relating to the
transmission of, voice, video or data through owned or leased transmission
facilities, (ii) constructing, creating, developing or marketing communications
networks, related network transmission equipment, software and other devices for
use in a communications business, (iii) computer outsourcing, data center
management, computer systems integration, reengineering of computer software for
any purpose (including, without limitation, for the purposes of porting computer
software from one operating environment or computer platform to another or to
address issues commonly referred to as “Year 2000 issues”) or (iv) evaluating,
participating or pursuing any other activity or opportunity that is primarily
related to those identified in (i), (ii) or (iii) above; provided, that the
determination of what constitutes a Telecommunications/IS Business shall be made
in good faith by the Board of Directors of Level 3.

 

“10.75% Notes” means the Borrower’s 10.75% Senior Notes due 2011 in an aggregate
principal amount outstanding on the Effective Date of $3,000,000.

 

“10.75% Notes Indenture” means the Indenture dated as of October 1, 2003 among
Level 3, the Borrower and The Bank of New York, as trustee, governing the 10.75%
Notes.

 

“10.75% Notes Supplemental Indentures” means the Borrower Restricted Subsidiary
Supplemental Indentures relating to the 10.75% Notes and the Level 3 LLC 10.75%
Notes Supplemental Indenture.

 

“10.75% Offering Proceeds Note” means the intercompany demand note dated
October 1, 2003, in an initial principal amount equal to $500,000,000, issued by
Level 3 LLC to the Borrower.

 

“Tranche A Term Commitment” means, with respect to each Tranche A Term Lender,
the commitment of such Tranche A Term Lender to make Tranche A Term Loans on the
Effective Date, expressed as an amount representing the maximum principal amount
of the Tranche A Term Loans to be made by such Tranche A Term Lender hereunder. 
The amount of each Tranche A Term Lender’s Tranche A Term Commitment

 

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is set forth on Schedule 2.01, as it may be modified under Section 9.02.  The
aggregate amount of the Tranche A Term Lenders’ Tranche A Term Commitments is
$1,400,000,000, subject to any increase under Section 9.02.

 

“Tranche A Term Lender” means a Lender with a Tranche A Term Commitment or a
Tranche A Term Loan.

 

“Tranche A Term Loans” means Loans made by the Tranche A Term Lenders pursuant
to Section 2.01(a).

 

“Tranche B Term Commitment” means, with respect to each Tranche B Term Lender,
the commitment of such Tranche B Term Lender to make Tranche B Term Loans on the
Restatement Effective Date, expressed as an amount representing the maximum
principal amount of the Tranche B Term Loans to be made by such Tranche B Term
Lender hereunder.  The amount of each Tranche B Term Lender’s Tranche B Term
Commitment is set forth on Schedule 2.01, as it may be modified under
Section 9.02.  The aggregate amount of the Tranche B Term Lenders’ Tranche B
Term Commitments is $220,000,000, subject to any increase under Section 9.02.

 

“Tranche B Term Lender” means a Lender with a Tranche B Term Commitment or a
Tranche B Term Loan.

 

“Tranche B Term Loans” means Loans made or deemed made by the Tranche B Term
Loans pursuant to Section 2.01(b).

 

“Tranche B Term Obligations” means (a) the due and punctual payment by the
Borrower of (i) the principal of and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Tranche B Term Loans, when and as due, whether at maturity, by acceleration,
upon one or more dates set for prepayment or otherwise and (ii) all other
monetary obligations of the Borrower in respect of Tranche B Term Loans under
the Credit Agreement and each of the other Loan Documents, including fees,
costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), (b) the due and
punctual performance of all other obligations of the Borrower in respect of
Tranche B Term Loans under or pursuant to the Credit Agreement and each of the
other Loan Documents, and (d) the due and punctual payment and performance of
all the obligations of each other Loan Party in respect of Tranche B Term Loans
under or pursuant to this Agreement and each of the other Loan Documents.

 

“Transactions” means the execution, delivery and performance by each Loan Party
of the Loan Documents to which it is to be a party, the borrowing of the Loans
and the use of the proceeds thereof.

 

“Treasury Rate” means, as of any prepayment date, the yield to maturity at the
time of computation of United States Treasury securities with a constant
maturity (as

 

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compiled and published in the most recent Federal Reserve Statistical Release
H.15 (519) that has become publicly available at least two Business Days prior
to such prepayment date (or, if such Statistical Release is no longer published,
any publicly available source for similar market data)) most nearly equal to the
then remaining term of the Tranche B Term Loans to the No-Call Date; provided,
however, that if the then remaining term of the Tranche B Term Loans to the
No-Call Date is not equal to the constant maturity of a United States Treasury
security for which a weekly average yield is given, the weekly average yield on
actually traded United States Treasury securities adjusted to a constant
maturity of one year will be used.

 

“12.25% Notes” means the Borrower’s 12.25% Senior Notes due 2013 in an aggregate
principal amount outstanding on the Effective Date of $550,000,000.

 

“12.25% Notes Indenture” means the Indenture dated as of March 14, 2006 among
Level 3, the Borrower and The Bank of New York, as trustee, governing the 12.25%
Notes.

 

“12.25% Notes Supplemental Indentures” means the Borrower Restricted Subsidiary
Supplemental Indentures relating to the 12.25% Notes and the Level 3 LLC 12.25%
Notes Supplemental Indenture.

 

“12.25% Offering Proceeds Note” means the intercompany demand note dated
April 6, 2006, in an initial principal amount equal to $550,000,000, issued by
Level 3 LLC to the Borrower.

 

“2011 Floating Rate Notes” means the Borrower’s 2011 Floating Rate Notes due
2011 in an aggregate principal amount outstanding on the Effective Date of
$150,000,000.

 

“2011 Floating Rate Notes Indenture” means the Indenture dated as of March 14,
2006 among Level 3, the Borrower and The Bank of New York, as trustee, governing
the 2011 Floating Rate Notes.

 

“2011 Floating Rate Notes Supplemental Indentures” means the Borrower Restricted
Subsidiary Supplemental Indentures relating to the 2011 Floating Rate Notes and
the Level 3 LLC 2011 Floating Rate Notes Supplemental Indenture.

 

“2011 Floating Rate Offering Proceeds Note” means the intercompany demand note
dated March 14, 2006, in an initial principal amount equal to $150,000,000,
issued by Level 3 LLC to the Borrower.

 

“2015 Floating Rate Notes” means the Borrower’s Floating Rate Notes due 2015 in
an aggregate principal amount outstanding on the Effective Date of $300,000,000.

 

“2015 Floating Rate Notes Indenture” means the Indenture dated as of
February 14, 2007 among Level 3, the Borrower and The Bank of New York, as
trustee, governing the 2015 Floating Rate Notes.

 

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“2015 Floating Rate Notes Supplemental Indentures” means the Borrower Restricted
Subsidiary Supplemental Indentures relating to the 2015 Floating Rate Notes and
the Level 3 LLC 2015 Floating Rate Notes Supplemental Indenture.

 

“2015 Floating Rate Offering Proceeds Note” means the intercompany demand note
dated February 14, 2007, in an initial principal amount equal to $300,000,000,
issued by Level 3 LLC to the Borrower.

 

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by LIBO Rate or ABR.

 

“Unregulated Grantor Subsidiary” means (a) each Initial Grantor Subsidiary,
(b) each Material Subsidiary (other than the Borrower or any Material Subsidiary
that is a Regulated Grantor Subsidiary) and (c) each Subsidiary of Level 3 that
directly or indirectly owns any Equity Interest in any Designated Grantor
Subsidiary.

 

“Unregulated Guarantor Subsidiary” means (a) each Initial Guarantor Subsidiary,
(b) each Material Subsidiary (other than the Borrower or any Material Subsidiary
that is a Regulated Guarantor Subsidiary) and (c) each Subsidiary of Level 3
that directly or indirectly owns any Equity Interest in any Designated Guarantor
Subsidiary.

 

“Unrestricted Subsidiary” means (a) 91 Holding Corp., SR 91 Holding LLC, SR91
Corp., SR LP, Express Lanes, Inc., California Private Transportation Company LP,
CPTC LLC and 85 Tenth Avenue LLC; (b) any Subsidiary of an Unrestricted
Subsidiary; and (c) any Subsidiary designated as such pursuant to and in
compliance with Section 6.10 and not thereafter redesignated as a Restricted
Subsidiary as permitted pursuant thereto.  For the sake of clarity, actions
taken by an Unrestricted Subsidiary will not be deemed to have been taken,
directly or indirectly, by Level 3 or any Restricted Subsidiary.  No
Unrestricted Subsidiary may own any Capital Stock of a Restricted Subsidiary.

 

“Vice President”, when used with respect to any Person, means any vice
president, whether or not designated by a number or a word or words added before
or after the title “vice president”.

 

“Voting Stock” of any Person means Capital Stock of such Person which ordinarily
has voting power for the election of directors (or persons performing similar
functions) of such Person, whether at all times or only for so long as no senior
class of securities has such voting power by reason of any contingency.

 

“Wholly Owned Restricted Subsidiary” means a Restricted Subsidiary that is a
Wholly Owned Subsidiary.

 

“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person all of
the outstanding Voting Stock or other ownership interests (other than directors’
qualifying shares) of which shall at the time be owned by such Person or by

 

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one or more Wholly Owned Subsidiaries of such Person or by such Person and one
or more Wholly Owned Subsidiaries such Person.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

SECTION 1.02.  TERMS GENERALLY.  THE DEFINITIONS OF TERMS HEREIN SHALL APPLY
EQUALLY TO THE SINGULAR AND PLURAL FORMS OF THE TERMS DEFINED.  WHENEVER THE
CONTEXT MAY REQUIRE, ANY PRONOUN SHALL INCLUDE THE CORRESPONDING MASCULINE,
FEMININE AND NEUTER FORMS.  THE WORDS “INCLUDE”, “INCLUDES” AND “INCLUDING”
SHALL BE DEEMED TO BE FOLLOWED BY THE PHRASE “WITHOUT LIMITATION”.  THE WORD
“WILL” SHALL BE CONSTRUED TO HAVE THE SAME MEANING AND EFFECT AS THE WORD
“SHALL”.  UNLESS THE CONTEXT REQUIRES OTHERWISE (A) ANY DEFINITION OF OR
REFERENCE TO ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT HEREIN SHALL BE
CONSTRUED AS REFERRING TO SUCH AGREEMENT, INSTRUMENT OR OTHER DOCUMENT AS FROM
TIME TO TIME AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED (SUBJECT TO ANY
RESTRICTIONS ON SUCH AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS SET FORTH HEREIN),
(B) ANY REFERENCE HEREIN TO ANY PERSON SHALL BE CONSTRUED TO INCLUDE SUCH
PERSON’S SUCCESSORS AND ASSIGNS, (C) THE WORDS “HEREIN”, “HEREOF” AND
“HEREUNDER”, AND WORDS OF SIMILAR IMPORT, SHALL BE CONSTRUED TO REFER TO THIS
AGREEMENT IN ITS ENTIRETY AND NOT TO ANY PARTICULAR PROVISION HEREOF, (D) ALL
REFERENCES HEREIN TO ARTICLES, SECTIONS, EXHIBITS AND SCHEDULES SHALL BE
CONSTRUED TO REFER TO ARTICLES AND SECTIONS OF, AND EXHIBITS AND SCHEDULES TO,
THIS AGREEMENT AND (E) THE WORDS “ASSET” AND “PROPERTY” SHALL BE CONSTRUED TO
HAVE THE SAME MEANING AND EFFECT AND TO REFER TO ANY AND ALL TANGIBLE AND
INTANGIBLE ASSETS AND PROPERTIES, INCLUDING CASH, SECURITIES, ACCOUNTS AND
CONTRACT RIGHTS.

 

SECTION 1.03.  ACCOUNTING TERMS; GAAP.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, ALL TERMS OF AN ACCOUNTING OR FINANCIAL NATURE SHALL BE CONSTRUED IN
ACCORDANCE WITH GAAP, AS IN EFFECT FROM TIME TO TIME; PROVIDED THAT, IF THE
BORROWER NOTIFIES THE ADMINISTRATIVE AGENT THAT THE BORROWER REQUESTS AN
AMENDMENT TO ANY PROVISION HEREOF TO ELIMINATE THE EFFECT OF ANY CHANGE
OCCURRING AFTER THE EFFECTIVE DATE IN GAAP OR IN THE APPLICATION THEREOF ON THE
OPERATION OF SUCH PROVISION (OR IF THE ADMINISTRATIVE AGENT NOTIFIES THE
BORROWER THAT THE REQUIRED LENDERS REQUEST AN AMENDMENT TO ANY PROVISION HEREOF
FOR SUCH PURPOSE), REGARDLESS OF WHETHER ANY SUCH NOTICE IS GIVEN BEFORE OR
AFTER SUCH CHANGE IN GAAP OR IN THE APPLICATION THEREOF, THEN SUCH PROVISION
SHALL BE INTERPRETED ON THE BASIS OF GAAP AS IN EFFECT AND APPLIED IMMEDIATELY
BEFORE SUCH CHANGE SHALL HAVE BECOME EFFECTIVE UNTIL SUCH NOTICE SHALL HAVE BEEN
WITHDRAWN OR SUCH PROVISION AMENDED IN ACCORDANCE HEREWITH.

 

SECTION 1.04.  CLASSIFICATION OF LOANS AND BORROWINGS.  FOR PURPOSES OF THIS
AGREEMENT, LOANS MAY BE CLASSIFIED AND REFERRED TO BY CLASS (E.G., A “TRANCHE A
TERM LOAN”) OR BY TYPE (E.G., A “EURODOLLAR LOAN”) OR BY CLASS AND TYPE (E.G., A
“TRANCHE A EURODOLLAR LOAN”).  BORROWINGS MAY ALSO BE CLASSIFIED AND REFERRED TO
BY CLASS (E.G., A “TRANCHE A BORROWING”) OR BY TYPE (E.G., A “EURODOLLAR
BORROWING”) OR BY CLASS AND TYPE (E.G., A “TRANCHE A EURODOLLAR BORROWING”).

 

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ARTICLE II

 

THE CREDITS

 

SECTION 2.01.  COMMITMENTS; LOANS AND BORROWINGS.  (A)  SUBJECT TO THE TERMS AND
CONDITIONS SET FORTH HEREIN, EACH TRANCHE A TERM LENDER MADE A TRANCHE A TERM
LOAN TO THE BORROWER ON THE EFFECTIVE DATE IN A PRINCIPAL AMOUNT EQUAL TO ITS
TRANCHE A TERM COMMITMENT.  THE TRANCHE A TERM LOANS MADE ON THE EFFECTIVE DATE
WERE ABR LOANS OR EURODOLLAR LOANS AS THE BORROWER SHALL HAVE ELECTED IN A
NOTICE DELIVERED TO THE ADMINISTRATIVE AGENT NOT LATER THAN 11:00 A.M. NEW YORK
CITY TIME, THREE BUSINESS DAYS PRIOR TO THE EFFECTIVE DATE.  THE TRANCHE A TERM
COMMITMENTS EXPIRED AT 5:00 P.M. NEW YORK CITY TIME ON THE EFFECTIVE DATE, AND
AMOUNTS PAID OR PREPAID IN RESPECT OF TRANCHE A TERM LOANS MAY NOT BE
REBORROWED.

 

(B)  SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN, EACH TRANCHE B TERM
LENDER AGREES TO MAKE A TRANCHE B TERM LOAN TO THE BORROWER ON THE RESTATEMENT
EFFECTIVE DATE IN A PRINCIPAL AMOUNT EQUAL TO ITS TRANCHE B TERM COMMITMENT. 
THE TRANCHE B TERM LOANS MADE ON THE RESTATEMENT EFFECTIVE DATE SHALL BE ABR
LOANS OR EURODOLLAR LOANS AS THE BORROWER SHALL HAVE ELECTED IN A NOTICE
DELIVERED TO THE ADMINISTRATIVE AGENT NOT LATER THAN 11:00 A.M. NEW YORK CITY
TIME, THREE BUSINESS DAYS PRIOR TO THE RESTATEMENT EFFECTIVE DATE.  THE TRANCHE
B TERM COMMITMENTS SHALL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME ON THE
RESTATEMENT EFFECTIVE DATE, AND AMOUNTS PAID OR PREPAID IN RESPECT OF TRANCHE B
TERM LOANS MAY NOT BE REBORROWED.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN (AND WITHOUT AFFECTING ANY OTHER PROVISIONS HEREOF), THE FUNDED
PORTION OF EACH TRANCHE B TERM LOAN TO BE MADE ON THE RESTATEMENT EFFECTIVE DATE
(I.E., THE AMOUNT ADVANCED TO THE BORROWER ON THE RESTATEMENT EFFECTIVE DATE)
SHALL BE EQUAL TO 99.00% OF THE PRINCIPAL AMOUNT OF SUCH TRANCHE B TERM LOAN (IT
BEING AGREED THAT THE FULL PRINCIPAL AMOUNT OF EACH SUCH TRANCHE B TERM LOAN
WILL BE DEEMED OUTSTANDING ON THE RESTATEMENT EFFECTIVE DATE AND THE BORROWER
SHALL BE OBLIGATED TO REPAY 100% OF THE PRINCIPAL AMOUNT OF EACH SUCH TRANCHE B
TERM LOAN AS PROVIDED HEREUNDER).

 

(C)  AT THE COMMENCEMENT OF EACH INTEREST PERIOD FOR ANY EURODOLLAR BORROWING,
SUCH BORROWING SHALL BE IN AN AGGREGATE AMOUNT THAT IS AN INTEGRAL MULTIPLE OF
$1,000,000 AND NOT LESS THAN $5,000,000.  AT THE TIME OF THE MAKING OF OR
CONVERSION OF A BORROWING TO AN ABR BORROWING, SUCH BORROWING SHALL BE IN AN
AGGREGATE AMOUNT THAT IS AN INTEGRAL MULTIPLE OF $1,000,000 AND NOT LESS THAN
$5,000,000.  BORROWINGS OF MORE THAN ONE TYPE MAY BE OUTSTANDING AT ONE TIME;
PROVIDED THAT THERE SHALL NOT AT ANY TIME BE MORE THAN A TOTAL OF TEN
(10) EURODOLLAR BORROWINGS OUTSTANDING AT ANY ONE TIME.

 

SECTION 2.02.  FUNDING OF LOANS.  (A)  EACH LENDER SHALL MAKE EACH LOAN TO BE
MADE BY IT HEREUNDER ON THE PROPOSED DATE OF THE APPLICABLE BORROWING BY WIRE
TRANSFER OF IMMEDIATELY AVAILABLE FUNDS BY 12:00 NOON, NEW YORK CITY TIME, TO
THE ACCOUNT DESIGNATED BY THE ADMINISTRATIVE AGENT FOR SUCH PURPOSE BY NOTICE TO
THE APPLICABLE LENDERS.  THE ADMINISTRATIVE AGENT MADE THE TRANCHE A TERM LOANS
AVAILABLE TO THE BORROWER (I) BY APPLYING THE AMOUNTS SO RECEIVED TO THE PAYMENT
OF THE EXISTING TERM LOANS AND ALL INTEREST, FEES AND OTHER AMOUNTS ACCRUED OR
OWING AND NOT

 

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YET PAID UNDER THE EXISTING AMENDED AND RESTATED CREDIT AGREEMENT AND (II) AFTER
SUCH APPLICATION, BY CREDITING THE REMAINDER OF THE AMOUNTS SO RECEIVED, IN
IMMEDIATELY AVAILABLE FUNDS, TO THE ACCOUNT OF THE BORROWER DESIGNATED BY IT FOR
SUCH PURPOSE AND PREVIOUSLY COMMUNICATED TO THE ADMINISTRATIVE AGENT. THE
ADMINISTRATIVE AGENT WILL MAKE THE TRANCHE B TERM LOANS AVAILABLE TO THE
BORROWER BY CREDITING THE AMOUNTS SO RECEIVED, IN IMMEDIATELY AVAILABLE FUNDS,
TO THE ACCOUNT OF THE BORROWER DESIGNATED BY IT FOR SUCH PURPOSE AND PREVIOUSLY
COMMUNICATED TO THE ADMINISTRATIVE AGENT.

 

(B)  UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED NOTICE FROM A LENDER
PRIOR TO THE PROPOSED DATE OF THE APPLICABLE BORROWING THAT SUCH LENDER WILL NOT
MAKE THE LOAN TO BE MADE BY IT, THE ADMINISTRATIVE AGENT MAY ASSUME THAT SUCH
LENDER HAS MADE SUCH LOAN ON SUCH DATE IN ACCORDANCE WITH PARAGRAPH (A) OF THIS
SECTION AND MAY, IN RELIANCE UPON SUCH ASSUMPTION, MAKE AVAILABLE TO THE
BORROWER A CORRESPONDING AMOUNT.  IN SUCH EVENT, IF A LENDER HAS NOT IN FACT
MADE THE AMOUNT OF ITS LOAN AVAILABLE TO THE ADMINISTRATIVE AGENT, THEN THE
APPLICABLE LENDER AND THE BORROWER SEVERALLY AGREE TO PAY TO THE ADMINISTRATIVE
AGENT FORTHWITH ON DEMAND SUCH CORRESPONDING AMOUNT WITH INTEREST THEREON, FOR
EACH DAY FROM AND INCLUDING THE DATE SUCH AMOUNT IS MADE AVAILABLE TO THE
BORROWER TO BUT EXCLUDING THE DATE OF PAYMENT TO THE ADMINISTRATIVE AGENT, AT
(I) IN THE CASE OF SUCH LENDER, THE GREATER OF THE FEDERAL FUNDS EFFECTIVE RATE
AND A RATE DETERMINED BY THE ADMINISTRATIVE AGENT IN ACCORDANCE WITH BANKING
INDUSTRY RULES ON INTERBANK COMPENSATION OR (II) IN THE CASE OF THE BORROWER,
THE INTEREST RATE APPLICABLE TO THE APPLICABLE CLASS OF LOANS.  IF SUCH LENDER
PAYS SUCH AMOUNT TO THE ADMINISTRATIVE AGENT, THEN SUCH AMOUNT SHALL CONSTITUTE
SUCH LENDER’S LOAN.

 

(C)  THE FAILURE OF ANY LENDER TO MAKE ANY LOAN REQUIRED TO BE MADE BY IT SHALL
NOT RELIEVE ANY OTHER LENDER OF ITS OBLIGATIONS HEREUNDER; PROVIDED THAT THE
COMMITMENTS OF THE LENDERS ARE SEVERAL AND NO LENDER SHALL BE RESPONSIBLE FOR
ANY OTHER LENDER’S FAILURE TO MAKE A LOAN AS REQUIRED.

 

SECTION 2.03.  INTEREST ELECTIONS.  (A)  THE BORROWER MAY ELECT TO CONVERT A
BORROWING TO A DIFFERENT TYPE OR TO CONTINUE A BORROWING AND, IN THE CASE OF A
EURODOLLAR BORROWING, MAY ELECT INTEREST PERIODS THEREFOR, ALL AS PROVIDED IN
THIS SECTION.  THE BORROWER MAY ELECT DIFFERENT OPTIONS WITH RESPECT TO
DIFFERENT PORTIONS OF THE AFFECTED BORROWING, IN WHICH CASE EACH SUCH PORTION
SHALL BE ALLOCATED RATABLY AMONG THE LENDERS HOLDING THE LOANS COMPRISING SUCH
BORROWING, AND THE LOANS COMPRISING EACH SUCH PORTION SHALL BE CONSIDERED A
SEPARATE BORROWING.

 

(B)  TO MAKE AN ELECTION PURSUANT TO THIS SECTION, THE BORROWER SHALL NOTIFY THE
ADMINISTRATIVE AGENT OF SUCH ELECTION BY TELEPHONE (A) IN THE CASE OF A REQUEST
TO CONVERT OR CONTINUE A BORROWING AS A EURODOLLAR BORROWING, NOT LATER THAN
11:00 A.M., NEW YORK CITY TIME, THREE BUSINESS DAYS BEFORE THE DATE OF THE
PROPOSED CONVERSION OR CONTINUATION OR (B) IN THE CASE OF A REQUEST TO CONVERT
OR CONTINUE A BORROWING AS AN ABR BORROWING, NOT LATER THAN 11:00 A.M., NEW YORK
CITY TIME, ONE BUSINESS DAY BEFORE THE DATE OF THE PROPOSED CONVERSION OR
CONTINUATION (EACH SUCH NOTICE BEING CALLED AN “INTEREST ELECTION REQUEST”). 
EACH SUCH TELEPHONIC INTEREST ELECTION REQUEST SHALL BE IRREVOCABLE AND SHALL BE
CONFIRMED PROMPTLY BY HAND DELIVERY OR TELECOPY TO THE

 

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ADMINISTRATIVE AGENT OF A WRITTEN INTEREST ELECTION REQUEST IN A FORM APPROVED
BY THE ADMINISTRATIVE AGENT AND SIGNED BY THE BORROWER.

 

(C)  EACH TELEPHONIC AND WRITTEN INTEREST ELECTION REQUEST SHALL SPECIFY THE
FOLLOWING INFORMATION IN COMPLIANCE WITH SECTION 2.01:

 

(I) THE BORROWING, INCLUDING THE CLASS OF BORROWING, TO WHICH SUCH INTEREST
ELECTION REQUEST APPLIES AND, IF DIFFERENT OPTIONS ARE BEING ELECTED WITH
RESPECT TO DIFFERENT PORTIONS THEREOF, THE PORTIONS THEREOF TO BE ALLOCATED TO
EACH RESULTING BORROWING (IN WHICH CASE THE INFORMATION TO BE SPECIFIED PURSUANT
TO CLAUSES (III) AND (IV) BELOW SHALL BE SPECIFIED FOR EACH RESULTING
BORROWING);

 

(II) THE EFFECTIVE DATE OF THE ELECTION MADE PURSUANT TO SUCH INTEREST ELECTION
REQUEST, WHICH SHALL BE A BUSINESS DAY;

 

(III) WHETHER THE RESULTING BORROWING IS TO BE AN ABR BORROWING OR A EURODOLLAR
BORROWING; AND

 

(IV) IF THE RESULTING BORROWING IS A EURODOLLAR BORROWING, THE INTEREST PERIOD
TO BE APPLICABLE THERETO AFTER GIVING EFFECT TO SUCH ELECTION, WHICH SHALL BE A
PERIOD CONTEMPLATED BY THE DEFINITION OF THE TERM “INTEREST PERIOD”.

 

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

 

(D)  PROMPTLY FOLLOWING RECEIPT OF AN INTEREST ELECTION REQUEST, THE
ADMINISTRATIVE AGENT SHALL ADVISE EACH AFFECTED LENDER OF THE DETAILS THEREOF
AND OF SUCH LENDER’S PORTION OF EACH RESULTING BORROWING.

 

(E)  IF THE BORROWER FAILS TO DELIVER A TIMELY INTEREST ELECTION REQUEST WITH
RESPECT TO A EURODOLLAR BORROWING PRIOR TO THE END OF THE INTEREST PERIOD
APPLICABLE THERETO, THEN AT THE END OF SUCH INTEREST PERIOD SUCH BORROWING SHALL
BE CONVERTED TO AN ABR BORROWING.

 

(F)  NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE BORROWER SHALL
NOT BE ENTITLED TO ELECT TO CONVERT OR CONTINUE ANY BORROWING IF THE INTEREST
PERIOD REQUESTED WITH RESPECT THERETO WOULD END AFTER THE MATURITY DATE.

 

SECTION 2.04.  REPAYMENT OF LOANS; EVIDENCE OF DEBT.  (A)  THE BORROWER HEREBY
UNCONDITIONALLY PROMISES TO PAY TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF
EACH LENDER THE THEN UNPAID PRINCIPAL AMOUNT OF EACH LOAN ON THE MATURITY DATE.

 

(B)  EACH LENDER SHALL MAINTAIN IN ACCORDANCE WITH ITS USUAL PRACTICE AN ACCOUNT
OR ACCOUNTS EVIDENCING THE INDEBTEDNESS OF THE BORROWER TO SUCH LENDER RESULTING
FROM THE LOANS MADE BY SUCH LENDER, INCLUDING THE AMOUNTS OF PRINCIPAL AND
INTEREST PAYABLE AND PAID TO SUCH LENDER FROM TIME TO TIME HEREUNDER.

 

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(C)  THE ADMINISTRATIVE AGENT SHALL MAINTAIN ACCOUNTS IN WHICH IT SHALL RECORD
(I) THE AMOUNT OF EACH LOAN MADE HEREUNDER, THE CLASS AND TYPE THEREOF AND THE
INTEREST PERIOD APPLICABLE THERETO, (II) THE AMOUNT OF ANY PRINCIPAL OR INTEREST
DUE AND PAYABLE OR TO BECOME DUE AND PAYABLE FROM THE BORROWER TO EACH LENDER
HEREUNDER AND (III) THE AMOUNT OF ANY SUM RECEIVED BY THE ADMINISTRATIVE AGENT
HEREUNDER FOR THE ACCOUNT OF THE LENDERS AND EACH LENDER’S SHARE THEREOF.

 

(D)  THE ENTRIES MADE IN THE ACCOUNTS MAINTAINED PURSUANT TO PARAGRAPH (B) OR
(C) OF THIS SECTION SHALL BE PRIMA FACIE EVIDENCE OF THE EXISTENCE AND AMOUNTS
OF THE OBLIGATIONS RECORDED THEREIN; PROVIDED THAT THE FAILURE OF ANY LENDER OR
THE ADMINISTRATIVE AGENT TO MAINTAIN SUCH ACCOUNTS OR ANY ERROR THEREIN
(INCLUDING ANY FAILURE TO RECORD THE MAKING OR REPAYMENT OF ANY LOAN) SHALL NOT
IN ANY MANNER AFFECT THE OBLIGATION OF THE BORROWER TO REPAY THE LOANS IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

 

(E)  ANY LENDER MAY REQUEST THAT LOANS OF ANY CLASS MADE BY IT BE EVIDENCED BY A
PROMISSORY NOTE.  IN SUCH EVENT, THE BORROWER SHALL PREPARE, EXECUTE AND DELIVER
TO SUCH LENDER A PROMISSORY NOTE PAYABLE TO THE ORDER OF SUCH LENDER (OR, IF
REQUESTED BY SUCH LENDER, TO SUCH LENDER AND ITS REGISTERED ASSIGNS) IN
SUBSTANTIALLY THE FORM SET FORTH IN EXHIBIT D.  THEREAFTER, THE LOANS EVIDENCED
BY SUCH PROMISSORY NOTE AND INTEREST THEREON SHALL AT ALL TIMES (INCLUDING AFTER
ASSIGNMENT PURSUANT TO SECTION 9.04) BE REPRESENTED BY ONE OR MORE PROMISSORY
NOTES IN SUCH FORM PAYABLE TO THE ORDER OF THE PAYEE NAMED THEREIN (OR, IF SUCH
PROMISSORY NOTE IS A REGISTERED NOTE, TO SUCH PAYEE AND ITS REGISTERED ASSIGNS).

 

SECTION 2.05.  PREPAYMENTS.  (A)    THE BORROWER SHALL HAVE THE RIGHT AT ANY
TIME AND FROM TIME TO TIME TO PREPAY ANY BORROWING IN WHOLE OR IN PART WITHOUT
PREMIUM (BUT SUBJECT TO SECTION 2.10 AND EXCEPT AS PROVIDED IN THIS SECTION). 
ALL VOLUNTARY PREPAYMENTS OF TRANCHE B TERM LOANS PURSUANT TO THIS
PARAGRAPH (A) (I) ON OR PRIOR TO THE NO-CALL DATE SHALL BE ACCOMPANIED BY A
PREPAYMENT FEE EQUAL TO THE MAKE-WHOLE AMOUNT, (II) AFTER THE NO-CALL DATE AND
ON OR PRIOR TO THE 12-MONTH ANNIVERSARY OF THE NO-CALL DATE SHALL BE ACCOMPANIED
BY A PREPAYMENT FEE EQUAL TO 4.00% OF THE AGGREGATE PRINCIPAL AMOUNT OF SUCH
PREPAYMENTS AND (III) AFTER THE 12-MONTH ANNIVERSARY OF THE NO-CALL DATE AND ON
OR PRIOR TO THE 18-MONTH ANNIVERSARY OF THE NO-CALL DATE SHALL BE ACCOMPANIED BY
A PREPAYMENT FEE EQUAL TO 2.00% OF THE AGGREGATE PRINCIPAL AMOUNT OF SUCH
PREPAYMENTS.

 

(B)  WHEN THE AGGREGATE AMOUNT OF EXCESS PROCEEDS EXCEEDS $10,000,000, THE
BORROWER SHALL WITHIN 15 DAYS NOTIFY THE ADMINISTRATIVE AGENT THEREOF AND PREPAY
THE LOANS IN THE AMOUNT OF SUCH EXCESS PROCEEDS WITHOUT PREMIUM (BUT SUBJECT TO
SECTION 2.10) (AS REDUCED BY ANY PORTION THEREOF WHICH HAS BEEN REJECTED BY
DECLINING LENDERS PURSUANT TO CLAUSE (E) BELOW AND SPECIFIED IN A NOTICE
DELIVERED BY THE ADMINISTRATIVE AGENT TO THE BORROWER).  TO THE EXTENT THERE ARE
ANY REMAINING EXCESS PROCEEDS FOLLOWING THE COMPLETION OF THE PREPAYMENT
REQUIRED HEREUNDER AS A RESULT OF LENDER ELECTIONS NOT TO ACCEPT SUCH
PREPAYMENT, THE BORROWER SHALL APPLY SUCH EXCESS PROCEEDS TO THE REPAYMENT OF
OTHER INDEBTEDNESS OF THE BORROWER OR ANY RESTRICTED SUBSIDIARY THAT IS A
SUBSIDIARY OF THE BORROWER, TO THE EXTENT PERMITTED OR REQUIRED UNDER THE TERMS

 

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THEREOF.  ANY OTHER REMAINING EXCESS PROCEEDS MAY BE APPLIED TO ANY USE AS
DETERMINED BY LEVEL 3 WHICH IS NOT OTHERWISE PROHIBITED BY THIS AGREEMENT, AND
THE AMOUNT OF EXCESS PROCEEDS SHALL BE RESET TO ZERO.

 

(C)  NOT FEWER THAN 30 DAYS PRIOR TO ANY PAYMENT OR PREPAYMENT OF ANY PRINCIPAL
AMOUNT OF THE LOAN PROCEEDS NOTE, THE BORROWER SHALL NOTIFY THE ADMINISTRATIVE
AGENT THEREOF AND SHALL, ON THE DATE OF SUCH PAYMENT OR PREPAYMENT, SUBJECT TO
PARAGRAPH (E) BELOW, PREPAY THE LOANS AT A PRICE EQUAL TO THE PRINCIPAL AMOUNT
OF THE LOANS WITHOUT PREMIUM (BUT SUBJECT TO SECTION 2.10); PROVIDED, HOWEVER
THAT (I) ON THE DATE OF SUCH PAYMENT OR PREPAYMENT OF THE LOAN PROCEEDS NOTE,
THE ADMINISTRATIVE AGENT SHALL NOTIFY THE BORROWER OF THE REQUIRED AMOUNT OF
SUCH PREPAYMENT (AS REDUCED BY ANY PORTION THEREOF WHICH HAS BEEN REJECTED BY
DECLINING LENDERS PURSUANT TO CLAUSE (E) BELOW) AND (II) THE BORROWER SHALL
IMMEDIATELY PREPAY THE LOANS IN SUCH AMOUNT IN ACCORDANCE WITH CLAUSE (E) BELOW.

 

(D)  UPON THE OCCURRENCE OF A CHANGE OF CONTROL TRIGGERING EVENT, THE BORROWER
SHALL WITHIN 30 DAYS OF SUCH OCCURRENCE NOTIFY THE ADMINISTRATIVE AGENT THEREOF
AND PREPAY THE LOANS NOT LATER THAN 30 BUSINESS DAYS FOLLOWING SUCH
NOTIFICATION; PROVIDED, HOWEVER THAT (I) AT THE EXPIRATION OF SUCH 30 BUSINESS
DAY PERIOD, THE ADMINISTRATIVE AGENT SHALL NOTIFY THE BORROWER OF THE REQUIRED
AMOUNT OF SUCH PREPAYMENT (AS REDUCED BY ANY PORTION THEREOF WHICH HAS BEEN
REJECTED BY DECLINING LENDERS PURSUANT TO CLAUSE (E) BELOW) AND THE BORROWER
SHALL IMMEDIATELY PREPAY THE LOANS IN SUCH AMOUNT IN ACCORDANCE WITH CLAUSE
(E) BELOW AND (II) THE BORROWER SHALL ALSO PAY, ON THE DATE OF SUCH PREPAYMENT,
TO EACH LENDER RECEIVING SUCH PREPAYMENT A FEE EQUAL TO 1.00% OF THE PRINCIPAL
AMOUNT OF THE LOANS PREPAID TO SUCH LENDER.

 

(E)  WITH RESPECT TO ANY PROPOSED MANDATORY PREPAYMENT OF THE LOANS PURSUANT TO
CLAUSE (B), (C) OR (D) ABOVE, ANY LENDER MAY, AT ITS OPTION, ELECT NOT TO ACCEPT
SUCH PREPAYMENT (ANY LENDER MAKING SUCH ELECTION BEING A “DECLINING LENDER”) AS
FOLLOWS: EACH DECLINING LENDER SHALL GIVE WRITTEN NOTICE THEREOF TO THE
ADMINISTRATIVE AGENT NOT LATER THAN 10:00 A.M. NEW YORK CITY TIME ON THE DATE
WHICH IS TWO BUSINESS DAYS PRIOR TO THE DATE ON WHICH THE ADMINISTRATIVE AGENT
IS REQUIRED TO NOTIFY THE BORROWER OF THE AMOUNT OF THE APPLICABLE PREPAYMENT
PURSUANT TO CLAUSE (B), (C) OR (D) ABOVE.  ON THE DATE OF PREPAYMENT, AN AMOUNT
EQUAL TO THAT PORTION OF THE LOAN THEN TO BE PREPAID (LESS THE AMOUNT THEREOF
THAT WOULD OTHERWISE BE PAYABLE TO DECLINING LENDERS) SHALL BE PAID TO THE
LENDERS THAT ARE NOT DECLINING LENDERS IN ACCORDANCE WITH SUBSECTION (F) BELOW. 
IN THE EVENT THAT THE ADMINISTRATIVE AGENT HAS NOT, WITH RESPECT TO ANY
MANDATORY PREPAYMENT, RECEIVED A NOTICE FROM A LENDER IN ACCORDANCE WITH THIS
CLAUSE (E), SUCH LENDER SHALL BE DEEMED TO HAVE WAIVED ITS RIGHTS UNDER THIS
CLAUSE (E) TO DECLINE RECEIPT THEREOF.

 

(F)  THE BORROWER (OR LEVEL 3 ON ITS BEHALF) SHALL NOTIFY THE ADMINISTRATIVE
AGENT BY TELEPHONE (CONFIRMED BY TELECOPY) OF ANY PREPAYMENT HEREUNDER NOT LATER
THAN 1:00 P.M., NEW YORK CITY TIME, TWO BUSINESS DAYS BEFORE THE DATE OF
PREPAYMENT OR SUCH LESSER PERIOD AS MAY BE ACCEPTABLE TO THE ADMINISTRATIVE
AGENT.  EACH SUCH NOTICE SHALL BE IRREVOCABLE AND SHALL SPECIFY THE PREPAYMENT
DATE, THE PRINCIPAL AMOUNT TO BE PREPAID AND, IN THE CASE OF A MANDATORY
PREPAYMENT, A REASONABLY DETAILED CALCULATION OF

 

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THE AMOUNT OF SUCH PREPAYMENT AND, IN THE CASE OF A PREPAYMENT PURSUANT TO
CLAUSE (A) OF THIS SECTION, THE CLASS OR CLASSES TO WHICH SUCH PREPAYMENT SHALL
BE APPLIED.  PROMPTLY FOLLOWING RECEIPT OF ANY SUCH NOTICE, THE ADMINISTRATIVE
AGENT SHALL ADVISE THE LENDERS OF THE CONTENTS THEREOF.  PREPAYMENTS SHALL BE
ACCOMPANIED BY ACCRUED INTEREST TO THE EXTENT REQUIRED BY SECTION 2.07.  IF ANY
PREPAYMENT PURSUANT TO THIS SECTION IS MADE BY THE BORROWER OTHER THAN ON THE
LAST DAY OF THE INTEREST PERIOD APPLICABLE TO ANY PREPAID EURODOLLAR LOANS, THE
BORROWER SHALL ALSO PAY TO EACH LENDER (OTHER THAN ANY DECLINING LENDER) ON THE
DATE OF SUCH PREPAYMENT ANY AMOUNT OWING TO SUCH LENDER PURSUANT TO
SECTION 2.10.  PREPAYMENTS OF LOANS (X) PURSUANT TO PARAGRAPH (A) OF THIS
SECTION SHALL BE APPLIED BETWEEN THE CLASSES OF LOANS AS DIRECTED BY THE
BORROWER AND (Y) PURSUANT TO PARAGRAPH (B), (C) OR (D) OF THIS SECTION SHALL BE
APPLIED RATABLY BETWEEN THE CLASSES OF LOANS (IT BEING UNDERSTOOD THAT, WITH
RESPECT TO ANY SUBSIDIARY LOAN PARTY THAT HAS NOT GUARANTEED OR GRANTED LIENS
ON, SECURITY INTERESTS IN OR PLEDGES OF ITS ASSETS TO SECURE THE TRANCHE B TERM
OBLIGATIONS, NOTHING HEREIN SHALL PROHIBIT OR LIMIT THE APPLICATION OF PROCEEDS
REALIZED FROM THE EXERCISE OF REMEDIES UNDER ANY SECURITY DOCUMENT IN RESPECT OF
SUCH SUBSIDIARY LOAN PARTY SOLELY TO THE OBLIGATIONS IN RESPECT OF THE TRANCHE A
TERM LOANS OWED TO THE TRANCHE A TERM LENDERS).

 

SECTION 2.06.  FEES.  (A)  LEVEL 3 AND THE BORROWER AGREE TO PAY TO THE
ADMINISTRATIVE AGENT, FOR ITS OWN ACCOUNT, FEES PAYABLE IN THE AMOUNTS AND AT
THE TIMES SEPARATELY AGREED UPON BY THE BORROWER AND THE ADMINISTRATIVE AGENT.

 

SECTION 2.07.  INTEREST.  (A)  THE LOANS COMPRISING EACH ABR BORROWING SHALL
BEAR INTEREST AT THE ALTERNATE BASE RATE PLUS THE APPLICABLE MARGIN.  THE LOANS
COMPRISING EACH EURODOLLAR BORROWING SHALL BEAR INTEREST AT THE LIBO RATE FOR
THE INTEREST PERIOD FOR SUCH BORROWING PLUS THE APPLICABLE MARGIN.

 

(B)  NOTWITHSTANDING THE FOREGOING, IF ANY PRINCIPAL OF OR INTEREST ON ANY LOAN
OR ANY FEE OR OTHER AMOUNT PAYABLE BY THE BORROWER HEREUNDER IS NOT PAID WHEN
DUE, WHETHER AT STATED MATURITY, UPON ACCELERATION OR OTHERWISE, SUCH OVERDUE
AMOUNT SHALL BEAR INTEREST, AFTER AS WELL AS BEFORE JUDGMENT, AT A RATE PER
ANNUM EQUAL TO (I) IN THE CASE OF OVERDUE PRINCIPAL OF ANY LOAN, 2.00% PER ANNUM
PLUS THE RATE OTHERWISE APPLICABLE TO SUCH LOAN AS PROVIDED IN PARAGRAPH (A) OF
THIS SECTION OR (II) IN THE CASE OF ANY OTHER AMOUNT, 2.00% PER ANNUM PLUS THE
RATE THAT WOULD AT THE TIME BE APPLICABLE TO AN ABR LOAN AS PROVIDED IN
PARAGRAPH (A) OF THIS SECTION.

 

(C)  ACCRUED INTEREST ON THE LOANS SHALL BE PAYABLE IN ARREARS ON EACH INTEREST
PAYMENT DATE; PROVIDED THAT (I) INTEREST ACCRUED PURSUANT TO PARAGRAPH (B) OF
THIS SECTION SHALL BE PAYABLE ON DEMAND AND (II) IN THE EVENT OF ANY REPAYMENT
OR PREPAYMENT OF THE LOANS, ACCRUED INTEREST ON THE PRINCIPAL AMOUNT REPAID OR
PREPAID SHALL BE PAYABLE ON THE DATE OF SUCH REPAYMENT OR PREPAYMENT.

 

(D)  ALL INTEREST HEREUNDER SHALL BE COMPUTED ON THE BASIS OF THE ACTUAL NUMBER
OF DAYS ELAPSED IN A YEAR OF 365 DAYS (OR 366 DAYS IN A LEAP YEAR), AND IN EACH
CASE SHALL BE PAYABLE FOR THE ACTUAL NUMBER OF DAYS ELAPSED (INCLUDING THE FIRST
DAY BUT EXCLUDING THE LAST DAY).  THE APPLICABLE LIBO RATE OR ALTERNATE BASE
RATE SHALL BE

 

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DETERMINED BY THE ADMINISTRATIVE AGENT, AND SUCH DETERMINATION SHALL BE
CONCLUSIVE ABSENT MANIFEST ERROR.

 

SECTION 2.08.  ALTERNATE RATE OF INTEREST.  IF, PRIOR TO THE COMMENCEMENT OF ANY
INTEREST PERIOD FOR A EURODOLLAR BORROWING, THE ADMINISTRATIVE AGENT DETERMINES
(WHICH DETERMINATION SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR) THAT ADEQUATE
AND REASONABLE MEANS DO NOT EXIST FOR ASCERTAINING THE LIBO RATE FOR SUCH
INTEREST PERIOD, THEN THE ADMINISTRATIVE AGENT SHALL GIVE NOTICE THEREOF TO
LEVEL 3 AND THE LENDERS BY TELEPHONE OR TELECOPY AS PROMPTLY AS PRACTICABLE
THEREAFTER, WHEREUPON EACH EURODOLLAR LOAN SHALL AUTOMATICALLY, ON THE LAST DAY
OF THE CURRENT INTEREST PERIOD FOR SUCH EURODOLLAR LOAN, CONVERT INTO AN ABR
LOAN AND THE OBLIGATIONS OF THE LENDERS TO MAKE EURODOLLAR LOANS SHALL BE
SUSPENDED UNTIL THE ADMINISTRATIVE AGENT NOTIFIES LEVEL 3 AND THE LENDERS THAT
THE CIRCUMSTANCES GIVING RISE TO SUCH NOTICE NO LONGER EXIST.

 

SECTION 2.09.  INCREASED COSTS.  (A)  IF ANY LENDER SHALL NOTIFY THE
ADMINISTRATIVE AGENT AND LEVEL 3 AT ANY TIME THAT EUROCURRENCY RESERVE
REQUIREMENTS ARE, OR ARE SCHEDULED TO BECOME, EFFECTIVE AND THAT SUCH LENDER IS
OR WILL BE GENERALLY SUBJECT TO SUCH EUROCURRENCY RESERVE REQUIREMENTS AND WILL,
AS A RESULT, INCUR ADDITIONAL COSTS, THEN SUCH LENDER SHALL, FOR EACH DAY FROM
THE LATER OF THE DATE OF SUCH NOTICE AND THE DATE ON WHICH SUCH EUROCURRENCY
RESERVE REQUIREMENTS BECOME EFFECTIVE, BE ENTITLED TO ADDITIONAL INTEREST ON
EACH EURODOLLAR LOAN MADE BY IT AT A RATE PER ANNUM DETERMINED FOR SUCH DAY
(ROUNDED UPWARD TO THE NEAREST 100TH OF 1%) EQUAL TO THE REMAINDER OBTAINED BY
SUBTRACTING (I) THE LIBO RATE FOR SUCH EURODOLLAR LOAN FROM (II) THE RATE
OBTAINED BY DIVIDING SUCH LIBO RATE BY A PERCENTAGE EQUAL TO 100% MINUS THE
EUROCURRENCY RESERVE REQUIREMENTS THEN-APPLICABLE TO SUCH LENDER.  SUCH
ADDITIONAL INTEREST WILL BE PAYABLE IN ARREARS TO THE ADMINISTRATIVE AGENT, FOR
THE ACCOUNT OF SUCH LENDER, ON EACH INTEREST PAYMENT DATE RELATING TO SUCH
EURODOLLAR LOAN AND ON ANY OTHER DATE WHEN INTEREST IS REQUIRED TO BE PAID
HEREUNDER WITH RESPECT TO SUCH LOAN.  ANY LENDER GIVING A NOTICE UNDER THIS
PARAGRAPH (A) SHALL PROMPTLY WITHDRAW SUCH NOTICE (BY WRITTEN NOTICE OF
WITHDRAWAL GIVEN TO THE ADMINISTRATIVE AGENT AND LEVEL 3) IN THE EVENT
EUROCURRENCY RESERVE REQUIREMENTS CEASE TO APPLY TO IT OR THE CIRCUMSTANCES
GIVING RISE TO SUCH NOTICE OTHERWISE CEASE TO EXIST.

 

(B)  IF ANY CHANGE IN LAW SHALL:

 

(I) IMPOSE, MODIFY OR DEEM APPLICABLE ANY RESERVE, SPECIAL DEPOSIT OR SIMILAR
REQUIREMENT AGAINST ASSETS OF, DEPOSITS WITH OR FOR THE ACCOUNT OF OR CREDIT
EXTENDED BY ANY LENDER (EXCEPT ANY EUROCURRENCY RESERVE REQUIREMENT); OR

 

(II) IMPOSE ON ANY LENDER OR THE LONDON INTERBANK MARKET ANY OTHER CONDITION
AFFECTING THIS AGREEMENT OR EURODOLLAR LOANS OF SUCH LENDER;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or to reduce the amount of
any sum received by such Lender, then Level 3 and the Borrower will pay to such
Lender such additional amount or amounts as will compensate such Lender for such
additional costs incurred or

 

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reduction suffered.  This Section shall not apply to any additional costs or
reductions relating to Taxes, which are governed by Section 2.11.

 

(C)  IF ANY LENDER DETERMINES THAT ANY CHANGE IN LAW REGARDING CAPITAL
REQUIREMENTS HAS OR WOULD HAVE THE EFFECT OF REDUCING THE RATE OF RETURN ON SUCH
LENDER’S CAPITAL OR ON THE CAPITAL OF SUCH LENDER’S HOLDING COMPANY, IF ANY, AS
A CONSEQUENCE OF THIS AGREEMENT OR THE LOANS MADE BY SUCH LENDER TO A LEVEL
BELOW THAT WHICH SUCH LENDER OR SUCH LENDER’S HOLDING COMPANY COULD HAVE
ACHIEVED BUT FOR SUCH CHANGE IN LAW (TAKING INTO CONSIDERATION SUCH LENDER’S
POLICIES AND THE POLICIES OF SUCH LENDER’S HOLDING COMPANY WITH RESPECT TO
CAPITAL ADEQUACY), THEN FROM TIME TO TIME LEVEL 3 AND THE BORROWER WILL PAY TO
SUCH LENDER SUCH ADDITIONAL AMOUNT OR AMOUNTS AS WILL COMPENSATE SUCH LENDER OR
SUCH LENDER’S HOLDING COMPANY FOR ANY SUCH REDUCTION SUFFERED.

 

(D)  A CERTIFICATE OF A LENDER SETTING FORTH THE AMOUNT OR AMOUNTS NECESSARY TO
COMPENSATE SUCH LENDER OR ITS HOLDING COMPANY, AS THE CASE MAY BE, AS SPECIFIED
IN PARAGRAPH (B) OR (C) OF THIS SECTION SHALL BE DELIVERED TO LEVEL 3 AND SHALL
BE CONCLUSIVE ABSENT MANIFEST ERROR.  LEVEL 3 AND THE BORROWER, AS THE CASE MAY
BE, SHALL PAY SUCH LENDER THE AMOUNT SHOWN AS DUE ON ANY SUCH CERTIFICATE WITHIN
10 DAYS AFTER RECEIPT THEREOF.

 

(E)  FAILURE OR DELAY ON THE PART OF ANY LENDER TO DEMAND COMPENSATION PURSUANT
TO THIS SECTION SHALL NOT CONSTITUTE A WAIVER OF SUCH LENDER’S RIGHT TO DEMAND
SUCH COMPENSATION; PROVIDED THAT LEVEL 3 AND THE BORROWER SHALL NOT BE REQUIRED
TO COMPENSATE A LENDER PURSUANT TO THIS SECTION FOR ANY INCREASED COSTS OR
REDUCTIONS INCURRED MORE THAN 180 DAYS PRIOR TO THE DATE THAT SUCH LENDER
NOTIFIES LEVEL 3 OF THE CHANGE IN LAW GIVING RISE TO SUCH INCREASED COSTS OR
REDUCTIONS AND OF SUCH LENDER’S INTENTION TO CLAIM COMPENSATION THEREFOR;
PROVIDED FURTHER THAT, IF THE CHANGE IN LAW GIVING RISE TO SUCH INCREASED COSTS
OR REDUCTIONS IS RETROACTIVE, THEN THE 180-DAY PERIOD REFERRED TO ABOVE SHALL BE
EXTENDED TO INCLUDE THE PERIOD OF RETROACTIVE EFFECT THEREOF.

 

(F)  THE PROVISIONS OF SECTION 2.09(A) AND (C) SHALL ONLY BE AVAILABLE TO
LENDERS REGULATED BY FEDERAL BANKING AUTHORITIES.

 

SECTION 2.10.  BREAK FUNDING PAYMENTS.  IN THE EVENT OF (A) ANY PAYMENT OF ANY
PRINCIPAL OF ANY EURODOLLAR LOAN OTHER THAN ON THE LAST DAY OF AN INTEREST
PERIOD APPLICABLE THERETO (INCLUDING AS A RESULT OF AN EVENT OF DEFAULT),
(B) THE FAILURE TO BORROW OR PREPAY ANY EURODOLLAR LOAN ON THE DATE SPECIFIED IN
ANY NOTICE DELIVERED PURSUANT HERETO, OR (C) THE ASSIGNMENT OF ANY EURODOLLAR
LOAN OTHER THAN ON THE LAST DAY OF THE INTEREST PERIOD APPLICABLE THERETO AS A
RESULT OF A REQUEST BY LEVEL 3 PURSUANT TO SECTION 2.13, THEN, IN ANY SUCH
EVENT, LEVEL 3 AND THE BORROWER, AS APPLICABLE, SHALL COMPENSATE EACH LENDER FOR
THE LOSS, COST AND EXPENSE ATTRIBUTABLE TO SUCH EVENT.  IN THE CASE OF A
EURODOLLAR LOAN, SUCH LOSS, COST OR EXPENSE TO ANY LENDER SHALL BE DEEMED NOT TO
INCLUDE ANY LOST PROFIT (INCLUDING LOSS OF APPLICABLE MARGIN) AND SHALL BE
DEEMED TO INCLUDE AN AMOUNT DETERMINED BY SUCH LENDER TO BE THE EXCESS, IF ANY,
OF (I) THE AMOUNT OF INTEREST THAT WOULD HAVE ACCRUED ON THE PRINCIPAL AMOUNT OF
SUCH LOAN HAD SUCH EVENT NOT OCCURRED AT THE LIBO RATE THAT IS OR WOULD HAVE
BEEN APPLICABLE TO SUCH LOAN, FOR THE

 

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PERIOD FROM THE DATE OF SUCH EVENT TO THE LAST DAY OF THE THEN CURRENT INTEREST
PERIOD THEREFOR (OR, IN THE CASE OF A FAILURE TO BORROW, CONVERT OR CONTINUE,
FOR THE PERIOD THAT WOULD HAVE BEEN THE INTEREST PERIOD FOR SUCH LOAN), OVER
(II) THE AMOUNT OF INTEREST WHICH WOULD ACCRUE ON SUCH PRINCIPAL AMOUNT FOR SUCH
PERIOD AT THE INTEREST RATE WHICH SUCH LENDER WOULD BID WERE IT TO BID, AT THE
COMMENCEMENT OF SUCH PERIOD, FOR DOLLAR DEPOSITS OF A COMPARABLE AMOUNT AND
PERIOD FROM OTHER BANKS IN THE EURODOLLAR MARKET.  A CERTIFICATE OF ANY LENDER
SETTING FORTH ANY AMOUNT OR AMOUNTS THAT SUCH LENDER IS ENTITLED TO RECEIVE
PURSUANT TO THIS SECTION SHALL BE DELIVERED TO LEVEL 3 AND SHALL BE CONCLUSIVE
ABSENT MANIFEST ERROR.  LEVEL 3 OR THE BORROWER, AS APPLICABLE, SHALL PAY SUCH
LENDER THE AMOUNT SHOWN AS DUE ON ANY SUCH CERTIFICATE WITHIN 10 DAYS AFTER
RECEIPT THEREOF.

 

SECTION 2.11.  TAXES.  (A)  ANY AND ALL PAYMENTS BY OR ON ACCOUNT OF THE
OBLIGATIONS OF THE BORROWER HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT SHALL BE
MADE FREE AND CLEAR OF AND WITHOUT DEDUCTION FOR ANY INDEMNIFIED TAXES OR OTHER
TAXES; PROVIDED THAT IF THE BORROWER SHALL BE REQUIRED TO DEDUCT ANY INDEMNIFIED
TAXES OR OTHER TAXES FROM SUCH PAYMENTS, THEN (I) THE SUM PAYABLE SHALL BE
INCREASED AS NECESSARY SO THAT AFTER MAKING ALL REQUIRED DEDUCTIONS (INCLUDING
DEDUCTIONS APPLICABLE TO ADDITIONAL SUMS PAYABLE UNDER THIS SECTION) THE
ADMINISTRATIVE AGENT OR LENDER (AS THE CASE MAY BE) RECEIVES AN AMOUNT EQUAL TO
THE SUM IT WOULD HAVE RECEIVED HAD NO SUCH DEDUCTIONS BEEN MADE, (II) THE
BORROWER SHALL MAKE SUCH DEDUCTIONS AND (III) THE BORROWER SHALL PAY THE FULL
AMOUNT DEDUCTED TO THE RELEVANT GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH
APPLICABLE LAW.

 

(B)  IN ADDITION, THE BORROWER SHALL PAY ANY OTHER TAXES TO THE RELEVANT
GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.

 

(C)  LEVEL 3 AND THE BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE AGENT AND EACH
LENDER, WITHIN 10 DAYS AFTER WRITTEN DEMAND THEREFOR, FOR THE FULL AMOUNT OF ANY
INDEMNIFIED TAXES OR OTHER TAXES PAID BY THE ADMINISTRATIVE AGENT OR SUCH
LENDER, AS THE CASE MAY BE, ON OR WITH RESPECT TO ANY PAYMENT BY OR ON ACCOUNT
OF ANY OBLIGATION OF THE BORROWER HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT
(INCLUDING INDEMNIFIED TAXES OR OTHER TAXES IMPOSED OR ASSERTED ON OR
ATTRIBUTABLE TO AMOUNTS PAYABLE UNDER THIS SECTION) AND ANY PENALTIES, INTEREST
AND REASONABLE EXPENSES ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR
NOT SUCH INDEMNIFIED TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY IMPOSED OR
ASSERTED BY THE RELEVANT GOVERNMENTAL AUTHORITY.  A CERTIFICATE AS TO THE AMOUNT
OF SUCH PAYMENT OR LIABILITY DELIVERED TO LEVEL 3 OR THE BORROWER BY A LENDER,
OR BY THE ADMINISTRATIVE AGENT ON ITS OWN BEHALF OR ON BEHALF OF A LENDER, SHALL
BE CONCLUSIVE ABSENT MANIFEST ERROR.

 

(D)  AS SOON AS PRACTICABLE AFTER ANY PAYMENT OF INDEMNIFIED TAXES OR OTHER
TAXES BY THE BORROWER TO A GOVERNMENTAL AUTHORITY, THE BORROWER SHALL DELIVER TO
THE ADMINISTRATIVE AGENT REASONABLY SATISFACTORY EVIDENCE OF SUCH PAYMENT AND
THE ORIGINAL OR A CERTIFIED COPY OF A RECEIPT ISSUED BY SUCH GOVERNMENTAL
AUTHORITY EVIDENCING SUCH PAYMENT; PROVIDED HOWEVER IN NO CASE SHALL THE
BORROWER BE REQUIRED TO DELIVER DOCUMENTATION NOT NORMALLY ISSUED BY SUCH
GOVERNMENTAL AUTHORITY.

 

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(E)  ANY FOREIGN LENDER THAT IS ENTITLED TO AN EXEMPTION FROM OR REDUCTION OF
WITHHOLDING TAX UNDER THE LAW OF THE JURISDICTION IN WHICH THE BORROWER IS
LOCATED, OR ANY TREATY TO WHICH SUCH JURISDICTION IS A PARTY, WITH RESPECT TO
PAYMENTS UNDER THIS AGREEMENT SHALL DELIVER TO THE BORROWER AND LEVEL 3 (WITH A
COPY TO THE ADMINISTRATIVE AGENT), AT THE TIME OR TIMES PRESCRIBED BY APPLICABLE
LAW, SUCH PROPERLY COMPLETED AND EXECUTED DOCUMENTATION PRESCRIBED BY APPLICABLE
LAW OR REASONABLY REQUESTED BY THE BORROWER AND LEVEL 3 AS WILL PERMIT SUCH
PAYMENTS TO BE MADE WITHOUT WITHHOLDING OR AT A REDUCED RATE.

 

SECTION 2.12.  PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS. 
(A)  THE BORROWER SHALL MAKE EACH PAYMENT REQUIRED TO BE MADE BY IT HEREUNDER OR
UNDER ANY OTHER LOAN DOCUMENT (WHETHER OF PRINCIPAL, INTEREST OR FEES, OR OF
AMOUNTS PAYABLE UNDER SECTION 2.09, 2.10 OR 2.11, OR OTHERWISE) PRIOR TO
1:00 P.M., NEW YORK CITY TIME, ON THE DATE WHEN DUE, IN IMMEDIATELY AVAILABLE
FUNDS, WITHOUT SET-OFF OR COUNTERCLAIM.  ANY AMOUNTS RECEIVED AFTER SUCH TIME ON
ANY DATE MAY, IN THE DISCRETION OF THE ADMINISTRATIVE AGENT, BE DEEMED TO HAVE
BEEN RECEIVED ON THE NEXT SUCCEEDING BUSINESS DAY FOR PURPOSES OF CALCULATING
INTEREST THEREON.  ALL SUCH PAYMENTS SHALL BE MADE TO THE ADMINISTRATIVE AGENT
AT ITS OFFICES AT MERRILL LYNCH WORLD HEADQUARTERS, NORTH TOWER, WORLD FINANCIAL
CENTER, NEW YORK, NEW YORK  10281-1201, EXCEPT THAT PAYMENTS PURSUANT TO
SECTIONS 2.09, 2.10, 2.11 AND 9.03 SHALL BE MADE DIRECTLY TO THE PERSONS
ENTITLED THERETO AND PAYMENTS PURSUANT TO OTHER LOAN DOCUMENTS SHALL BE MADE TO
THE PERSONS SPECIFIED THEREIN.  THE ADMINISTRATIVE AGENT SHALL DISTRIBUTE ANY
SUCH PAYMENTS RECEIVED BY IT FOR THE ACCOUNT OF ANY OTHER PERSON TO THE
APPROPRIATE RECIPIENT PROMPTLY FOLLOWING RECEIPT THEREOF.  IF ANY PAYMENT UNDER
ANY LOAN DOCUMENT SHALL BE DUE ON A DAY THAT IS NOT A BUSINESS DAY, THE DATE FOR
PAYMENT SHALL BE EXTENDED TO THE NEXT SUCCEEDING BUSINESS DAY AND, IN THE CASE
OF ANY PAYMENT ACCRUING INTEREST, INTEREST THEREON SHALL BE PAYABLE FOR THE
PERIOD OF SUCH EXTENSION.  ALL PAYMENTS UNDER EACH LOAN DOCUMENT SHALL BE MADE
IN DOLLARS.

 

(B)  IF AT ANY TIME INSUFFICIENT FUNDS ARE RECEIVED BY AND AVAILABLE TO THE
ADMINISTRATIVE AGENT TO PAY FULLY ALL AMOUNTS OF PRINCIPAL, INTEREST AND FEES
THEN DUE HEREUNDER, SUCH FUNDS SHALL BE APPLIED (I) FIRST, TOWARDS PAYMENT OF
INTEREST AND FEES THEN DUE HEREUNDER, RATABLY AMONG THE PARTIES ENTITLED THERETO
IN ACCORDANCE WITH THE AMOUNTS OF INTEREST AND FEES THEN DUE TO SUCH PARTIES,
AND (II) SECOND, TOWARDS PAYMENT OF PRINCIPAL THEN DUE HEREUNDER, RATABLY AMONG
THE PARTIES ENTITLED THERETO IN ACCORDANCE WITH THE AMOUNTS OF PRINCIPAL THEN
DUE TO SUCH PARTIES.

 

(C)  IF ANY LENDER SHALL, BY EXERCISING ANY RIGHT OF SET-OFF OR COUNTERCLAIM OR
OTHERWISE, OBTAIN PAYMENT IN RESPECT OF ANY PRINCIPAL OF OR INTEREST ON ANY OF
ITS LOANS RESULTING IN SUCH LENDER RECEIVING PAYMENT OF A GREATER PROPORTION OF
THE AGGREGATE AMOUNT OF ITS LOANS AND ACCRUED INTEREST THEREON THAN THE
PROPORTION RECEIVED BY ANY OTHER LENDER, THEN THE LENDER RECEIVING SUCH GREATER
PROPORTION SHALL PURCHASE (FOR CASH AT FACE VALUE) PARTICIPATIONS IN THE LOANS
OF THE OTHER LENDERS TO THE EXTENT NECESSARY SO THAT THE BENEFIT OF ALL SUCH
PAYMENTS SHALL BE SHARED BY THE LENDERS RATABLY IN ACCORDANCE WITH THE AGGREGATE
AMOUNT OF PRINCIPAL OF AND ACCRUED INTEREST ON THEIR RESPECTIVE LOANS (IT BEING
UNDERSTOOD THAT, WITH RESPECT TO ANY SUBSIDIARY LOAN PARTY THAT HAS NOT
GUARANTEED OR GRANTED LIENS ON, SECURITY INTERESTS IN OR PLEDGES OF ITS ASSETS
TO SECURE THE

 

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TRANCHE B TERM OBLIGATIONS, NOTHING HEREIN SHALL PROHIBIT OR LIMIT, OR REQUIRE
THE PURCHASE OF PARTICIPATIONS UNDER THIS PARAGRAPH AS A RESULT OF, THE
APPLICATION OF PROCEEDS REALIZED FROM THE EXERCISE OF REMEDIES UNDER ANY
SECURITY DOCUMENT IN RESPECT OF SUCH SUBSIDIARY LOAN PARTY SOLELY TO THE
OBLIGATIONS IN RESPECT OF THE TRANCHE A TERM LOANS OWED TO THE TRANCHE A TERM
LENDERS); PROVIDED THAT (I) IF ANY SUCH PARTICIPATIONS ARE PURCHASED AND ALL OR
ANY PORTION OF THE PAYMENT GIVING RISE THERETO IS RECOVERED, SUCH PARTICIPATIONS
SHALL BE RESCINDED AND THE PURCHASE PRICE RESTORED TO THE EXTENT OF SUCH
RECOVERY, WITHOUT INTEREST, AND (II) THE PROVISIONS OF THIS PARAGRAPH SHALL NOT
BE CONSTRUED TO APPLY TO ANY PAYMENT MADE BY THE BORROWER PURSUANT TO AND IN
ACCORDANCE WITH THE EXPRESS TERMS OF THIS AGREEMENT OR ANY PAYMENT OBTAINED BY A
LENDER AS CONSIDERATION FOR THE ASSIGNMENT OF OR SALE OF A PARTICIPATION IN ANY
OF ITS LOANS TO ANY ASSIGNEE OR PARTICIPANT, OTHER THAN TO LEVEL 3 OR ANY
SUBSIDIARY OR AFFILIATE THEREOF (AS TO WHICH THE PROVISIONS OF THIS PARAGRAPH
SHALL APPLY).  THE BORROWER CONSENTS TO THE FOREGOING AND AGREES, TO THE EXTENT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THAT ANY LENDER ACQUIRING A
PARTICIPATION IN AN OBLIGATION OWED BY IT PURSUANT TO THE FOREGOING ARRANGEMENTS
MAY EXERCISE AGAINST THE BORROWER RIGHTS OF SET-OFF AND COUNTERCLAIM WITH
RESPECT TO SUCH PARTICIPATION AS FULLY AS IF SUCH LENDER WERE A DIRECT CREDITOR
OF THE BORROWER IN THE AMOUNT OF SUCH PARTICIPATION.

 

(D)  UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED NOTICE FROM THE
BORROWER PRIOR TO THE DATE ON WHICH ANY PAYMENT IS DUE TO THE ADMINISTRATIVE
AGENT FOR THE ACCOUNT OF THE LENDERS THAT THE BORROWER WILL NOT MAKE SUCH
PAYMENT, THE ADMINISTRATIVE AGENT MAY ASSUME THAT THE BORROWER HAS MADE SUCH
PAYMENT ON SUCH DATE IN ACCORDANCE HEREWITH AND MAY, IN RELIANCE UPON SUCH
ASSUMPTION, DISTRIBUTE TO THE LENDERS THE AMOUNT DUE.  IN SUCH EVENT, IF THE
BORROWER HAS NOT IN FACT MADE SUCH PAYMENT, THEN EACH OF THE LENDERS SEVERALLY
AGREES TO REPAY TO THE ADMINISTRATIVE AGENT FORTHWITH ON DEMAND THE AMOUNT SO
DISTRIBUTED TO SUCH LENDER WITH INTEREST THEREON, FOR EACH DAY FROM AND
INCLUDING THE DATE SUCH AMOUNT IS DISTRIBUTED TO IT TO BUT EXCLUDING THE DATE OF
PAYMENT TO THE ADMINISTRATIVE AGENT, AT THE GREATER OF THE FEDERAL FUNDS
EFFECTIVE RATE AND A RATE DETERMINED BY THE ADMINISTRATIVE AGENT IN ACCORDANCE
WITH BANKING INDUSTRY RULES ON INTERBANK COMPENSATION.

 

(E)  IF ANY LENDER SHALL FAIL TO MAKE ANY PAYMENT REQUIRED TO BE MADE BY IT
HEREUNDER, THEN THE ADMINISTRATIVE AGENT MAY, IN ITS DISCRETION (NOTWITHSTANDING
ANY CONTRARY PROVISION HEREOF), APPLY ANY AMOUNTS THEREAFTER RECEIVED BY THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF SUCH LENDER TO SATISFY SUCH LENDER’S
OBLIGATIONS UNTIL ALL SUCH UNSATISFIED OBLIGATIONS ARE FULLY PAID.

 

SECTION 2.13.  MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.  (A)  IF ANY
LENDER REQUESTS COMPENSATION UNDER SECTION 2.09, OR IF THE BORROWER IS REQUIRED
TO PAY ANY ADDITIONAL AMOUNT TO ANY LENDER OR ANY GOVERNMENTAL AUTHORITY FOR THE
ACCOUNT OF ANY LENDER PURSUANT TO SECTION 2.11, THEN SUCH LENDER SHALL USE
REASONABLE EFFORTS TO DESIGNATE A DIFFERENT LENDING OFFICE FOR FUNDING OR
BOOKING ITS LOANS HEREUNDER OR TO ASSIGN ITS RIGHTS AND OBLIGATIONS HEREUNDER TO
ANOTHER OF ITS OFFICES, BRANCHES OR AFFILIATES IF, IN THE JUDGMENT OF SUCH
LENDER, SUCH DESIGNATION OR ASSIGNMENT (I) WOULD ELIMINATE OR REDUCE AMOUNTS
PAYABLE PURSUANT TO SECTION 2.09 OR 2.11, AS THE CASE MAY BE, IN THE FUTURE AND
(II) WOULD NOT SUBJECT SUCH LENDER TO ANY UNREIMBURSED COST OR EXPENSE AND

 

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WOULD NOT OTHERWISE BE DISADVANTAGEOUS TO SUCH LENDER.  LEVEL 3 AND THE BORROWER
HEREBY AGREE TO PAY ALL REASONABLE COSTS AND EXPENSES INCURRED BY ANY LENDER IN
CONNECTION WITH ANY SUCH DESIGNATION OR ASSIGNMENT.

 

(B)  IF ANY LENDER REQUESTS COMPENSATION UNDER SECTION 2.09 (OTHER THAN
PARAGRAPH (A) OF SUCH SECTION), OR IF THE BORROWER IS REQUIRED TO PAY ANY
ADDITIONAL AMOUNT TO ANY LENDER OR ANY GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF
ANY LENDER PURSUANT TO SECTION 2.11, IF ANY LENDER DEFAULTS IN ITS OBLIGATION TO
FUND LOANS HEREUNDER OR UNDER THE CIRCUMSTANCES CONTEMPLATED BY SECTION 9.02(D),
LEVEL 3 MAY, AT ITS SOLE EXPENSE AND EFFORT, UPON NOTICE TO SUCH LENDER AND THE
ADMINISTRATIVE AGENT, REQUIRE SUCH LENDER TO ASSIGN AND DELEGATE, WITHOUT
RECOURSE (IN ACCORDANCE WITH AND SUBJECT TO THE RESTRICTIONS CONTAINED IN
SECTION 9.04), ALL ITS INTERESTS, RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT TO
AN ASSIGNEE THAT SHALL ASSUME SUCH OBLIGATIONS (WHICH ASSIGNEE MAY BE ANOTHER
LENDER, IF A LENDER ACCEPTS SUCH ASSIGNMENT); PROVIDED THAT (I) LEVEL 3 SHALL
HAVE RECEIVED THE PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT, WHICH
CONSENT SHALL NOT UNREASONABLY BE WITHHELD, (II) SUCH LENDER SHALL HAVE RECEIVED
PAYMENT OF AN AMOUNT EQUAL TO THE OUTSTANDING PRINCIPAL OF ITS LOANS, ACCRUED
INTEREST THEREON, ACCRUED FEES AND ALL OTHER AMOUNTS PAYABLE TO IT HEREUNDER,
FROM THE ASSIGNEE (TO THE EXTENT OF SUCH OUTSTANDING PRINCIPAL AND ACCRUED
INTEREST AND FEES) OR LEVEL 3 OR THE BORROWER (IN THE CASE OF ALL OTHER AMOUNTS)
AND (III) IN THE CASE OF ANY SUCH ASSIGNMENT RESULTING FROM A CLAIM FOR
COMPENSATION UNDER SECTION 2.09 OR PAYMENTS REQUIRED TO BE MADE PURSUANT TO
SECTION 2.11, SUCH ASSIGNMENT WILL RESULT IN A REDUCTION IN SUCH COMPENSATION OR
PAYMENTS.  A LENDER SHALL NOT BE REQUIRED TO MAKE ANY SUCH ASSIGNMENT AND
DELEGATION IF, PRIOR THERETO, AS A RESULT OF A WAIVER BY SUCH LENDER OR
OTHERWISE, THE CIRCUMSTANCES ENTITLING LEVEL 3 TO REQUIRE SUCH ASSIGNMENT AND
DELEGATION CEASE TO APPLY.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

On and as of the Effective Date, each of Level 3 and the Borrower represents and
warrants to the Lenders that:

 

SECTION 3.01.  ORGANIZATION; POWERS.  EACH OF LEVEL 3, THE BORROWER AND EACH
MATERIAL SUBSIDIARY OF LEVEL 3 IS DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS ORGANIZATION, HAS ALL
REQUISITE POWER AND AUTHORITY TO CARRY ON ITS BUSINESS AS NOW CONDUCTED AND,
EXCEPT WHERE THE FAILURE TO DO SO, INDIVIDUALLY OR IN THE AGGREGATE, WOULD NOT
CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT, IS QUALIFIED TO DO BUSINESS
IN, AND IS IN GOOD STANDING IN, EVERY JURISDICTION WHERE SUCH QUALIFICATION IS
REQUIRED.

 

SECTION 3.02.  AUTHORIZATION; ENFORCEABILITY.  THE TRANSACTIONS TO BE ENTERED
INTO BY EACH LOAN PARTY ON THE EFFECTIVE DATE ARE WITHIN SUCH LOAN PARTY’S
POWERS AND HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE OR OTHER ACTION
AND, IF REQUIRED, STOCKHOLDER OR MEMBER ACTION.  THIS AGREEMENT HAS BEEN DULY
EXECUTED AND

 

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DELIVERED BY LEVEL 3 AND THE BORROWER AND CONSTITUTES, AND EACH OTHER LOAN
DOCUMENT TO WHICH ANY LOAN PARTY IS TO BE A PARTY, WHEN EXECUTED BY AND
DELIVERED BY SUCH LOAN PARTY, WILL CONSTITUTE, A LEGAL, VALID AND BINDING
OBLIGATION OF SUCH LOAN PARTY, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS, SUBJECT
TO APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER LAWS
AFFECTING CREDITORS’ RIGHTS GENERALLY AND SUBJECT TO GENERAL PRINCIPLES OF
EQUITY, REGARDLESS OF WHETHER CONSIDERED IN A PROCEEDING IN EQUITY OR AT LAW.

 

SECTION 3.03.  GOVERNMENTAL APPROVALS; NO CONFLICTS.  THE TRANSACTIONS (A) DO
NOT REQUIRE ANY CONSENT OR APPROVAL OF, REGISTRATION OR FILING WITH, OR ANY
OTHER ACTION BY, ANY GOVERNMENTAL AUTHORITY, EXCEPT SUCH AS ARE CONTEMPLATED TO
BE TAKEN TO SATISFY THE GUARANTEE PERMIT CONDITION AND THE COLLATERAL PERMIT
CONDITION AND SUCH AS HAVE BEEN OBTAINED OR MADE AND ARE IN FULL FORCE AND
EFFECT AND FILINGS NECESSARY TO PERFECT LIENS CREATED UNDER THE LOAN DOCUMENTS,
(B) WILL NOT VIOLATE THE CHARTER, BY-LAWS OR OTHER ORGANIZATIONAL DOCUMENTS OF
LEVEL 3 OR ANY OF THE LOAN PARTIES AND WILL NOT VIOLATE, EXCEPT FOR ANY
VIOLATION WHICH WOULD NOT CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT,
(I) ANY APPLICABLE LAW OR REGULATION OF A TYPE TYPICALLY APPLICABLE TO
TRANSACTIONS OF THE TYPE CONTEMPLATED BY THE TRANSACTIONS, (II) ANY MATERIAL
ORDER OF ANY GOVERNMENTAL AUTHORITY, (C) WILL NOT VIOLATE THE PARENT’S
INDENTURES, THE SUBORDINATED INDENTURES OR THE FINANCING INC. INDENTURES AND
(D) WILL NOT RESULT IN THE CREATION OR IMPOSITION OF ANY LIEN ON ANY MATERIAL
ASSETS OF LEVEL 3, THE BORROWER OR ANY SUBSIDIARY OF LEVEL 3, EXCEPT LIENS
CREATED UNDER THE LOAN DOCUMENTS.

 

SECTION 3.04.  FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.  (A)  THE
LENDERS HAVE BEEN GIVEN ACCESS TO LEVEL 3’S CONSOLIDATED BALANCE SHEET AND
STATEMENTS OF INCOME, STOCKHOLDERS EQUITY AND CASH FLOWS AS OF AND FOR THE
FISCAL YEAR ENDED DECEMBER 31, 2006, REPORTED ON BY KPMG LLP, AN INDEPENDENT
PUBLIC ACCOUNTING FIRM.  SUCH FINANCIAL STATEMENTS PRESENT FAIRLY IN ALL
MATERIAL RESPECTS THE FINANCIAL POSITION AND RESULTS OF OPERATIONS AND CASH
FLOWS OF LEVEL 3 AND ITS CONSOLIDATED SUBSIDIARIES AS OF SUCH DATE AND FOR SUCH
PERIOD IN ACCORDANCE WITH GAAP.

 

(B)  EXCEPT FOR THE DISCLOSED MATTERS, AFTER GIVING EFFECT TO THE TRANSACTIONS,
NONE OF LEVEL 3 OR ITS SUBSIDIARIES WILL HAVE, AS OF THE EFFECTIVE DATE, ANY
CONTINGENT LIABILITIES, UNUSUAL LONG-TERM COMMITMENTS OR UNREALIZED LOSSES WHICH
WOULD CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT.

 

(C)  EXCEPT AS MAY BE DISCLOSED IN LEVEL 3’S REPORTS AND FILINGS UNDER THE
EXCHANGE ACT FILED OR FURNISHED SINCE JANUARY 1, 2007 AND PRIOR TO MARCH 12,
2007 AND AVAILABLE ON THE SECURITIES AND EXCHANGE COMMISSION’S WEBSITE ON THE
INTERNET AT WWW.SEC.GOV PRIOR TO THE EFFECTIVE DATE, SINCE DECEMBER 31, 2006,
THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN THE BUSINESS, ASSETS, OPERATIONS OR
CONDITION, FINANCIAL OR OTHERWISE, OF LEVEL 3 AND ITS SUBSIDIARIES, TAKEN AS A
WHOLE WHICH WOULD CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 3.05.  PROPERTIES.  EACH OF LEVEL 3, THE BORROWER AND EACH SUBSIDIARY OF
LEVEL 3 HAS GOOD TITLE TO, OR VALID LEASEHOLD INTERESTS IN, ALL ITS REAL AND
PERSONAL PROPERTY MATERIAL TO ITS BUSINESS, EXCEPT FOR MINOR DEFECTS IN TITLE
THAT DO NOT

 

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INTERFERE WITH ITS ABILITY TO CONDUCT ITS BUSINESS AS CURRENTLY CONDUCTED OR TO
UTILIZE SUCH PROPERTIES FOR THEIR INTENDED PURPOSES AND SUCH DEFECTS AS WOULD
NOT CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 3.06.  LITIGATION AND ENVIRONMENTAL MATTERS.  (A)  THERE ARE NO ACTIONS,
SUITS OR PROCEEDINGS BY OR BEFORE ANY ARBITRATOR OR GOVERNMENTAL AUTHORITY
PENDING AGAINST OR, TO THE KNOWLEDGE OF LEVEL 3 OR THE BORROWER, THREATENED
AGAINST OR AFFECTING LEVEL 3, THE BORROWER OR ANY MATERIAL SUBSIDIARY OF LEVEL 3
(I) AS TO WHICH THERE IS A REASONABLE POSSIBILITY OF AN ADVERSE DETERMINATION
AND THAT, IF ADVERSELY DETERMINED, WOULD, INDIVIDUALLY OR IN THE AGGREGATE,
CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT (OTHER THAN THE DISCLOSED
MATTERS) OR (II) THAT INVOLVE ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS.

 

(B)  EXCEPT FOR THE DISCLOSED MATTERS AND EXCEPT WITH RESPECT TO ANY OTHER
MATTERS THAT, INDIVIDUALLY OR IN THE AGGREGATE, WOULD NOT CONSTITUTE OR RESULT
IN A MATERIAL ADVERSE EFFECT, NONE OF LEVEL 3, THE BORROWER OR ANY OF THE
SUBSIDIARIES OF LEVEL 3 (I) HAS FAILED TO COMPLY WITH ANY ENVIRONMENTAL LAW OR
TO OBTAIN, MAINTAIN OR COMPLY WITH ANY PERMIT, LICENSE OR OTHER APPROVAL
REQUIRED UNDER ANY ENVIRONMENTAL LAW, (II) HAS BECOME SUBJECT TO ANY
ENVIRONMENTAL LIABILITY, (III) HAS RECEIVED NOTICE OF ANY CLAIM WITH RESPECT TO
ANY ENVIRONMENTAL LIABILITY OR (IV) KNOWS OF ANY BASIS FOR ANY ENVIRONMENTAL
LIABILITY.

 

SECTION 3.07.  COMPLIANCE WITH LAWS AND AGREEMENTS.  LEVEL 3, THE BORROWER AND
EACH OF THE SUBSIDIARIES OF LEVEL 3 IS IN COMPLIANCE WITH ALL LAWS, REGULATIONS
AND ORDERS OF ANY GOVERNMENTAL AUTHORITY APPLICABLE TO IT OR ITS PROPERTY AND
ALL INDENTURES, AGREEMENTS AND OTHER INSTRUMENTS BINDING UPON IT OR ITS
PROPERTY, EXCEPT WHERE THE FAILURE TO DO SO, INDIVIDUALLY OR IN THE AGGREGATE,
WOULD NOT CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT.  NO DEFAULT HAS
OCCURRED AND IS CONTINUING.

 

SECTION 3.08.  INVESTMENT COMPANY STATUS.  NEITHER LEVEL 3 NOR ANY OF THE LOAN
PARTIES IS AN “INVESTMENT COMPANY” OR IS CONTROLLED BY AN ENTITY THAT IS AN
“INVESTMENT COMPANY” AS DEFINED IN, OR SUBJECT TO REGULATION UNDER, THE
INVESTMENT COMPANY ACT OF 1940.

 

SECTION 3.09.  TAXES.  LEVEL 3, THE BORROWER AND EACH OF THE MATERIAL
SUBSIDIARIES OF LEVEL 3 HAS TIMELY FILED OR CAUSED TO BE FILED ALL TAX RETURNS
AND REPORTS REQUIRED TO HAVE BEEN FILED AND HAS PAID OR CAUSED TO BE PAID ALL
TAXES REQUIRED TO HAVE BEEN PAID BY IT, EXCEPT (A) TAXES THAT ARE BEING
CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS AND FOR WHICH LEVEL 3, THE
BORROWER OR SUCH SUBSIDIARY, AS APPLICABLE, HAS SET ASIDE ON ITS BOOKS ADEQUATE
RESERVES OR (B) TO THE EXTENT THAT THE FAILURE TO DO SO WOULD NOT CONSTITUTE OR
RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 3.10.  ERISA.  NO ERISA EVENT HAS OCCURRED OR IS REASONABLY EXPECTED TO
OCCUR THAT, WHEN TAKEN TOGETHER WITH ALL OTHER SUCH ERISA EVENTS FOR WHICH
LIABILITY IS REASONABLY EXPECTED TO OCCUR, WOULD CONSTITUTE OR RESULT IN A
MATERIAL ADVERSE EFFECT.  THE PRESENT VALUE OF ALL ACCUMULATED BENEFIT
OBLIGATIONS UNDER EACH PLAN (BASED ON THE ASSUMPTIONS USED FOR PURPOSES OF
STATEMENT OF FINANCIAL ACCOUNTING STANDARDS

 

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NO. 87) DID NOT, AS OF THE DATE OF THE MOST RECENT FINANCIAL STATEMENTS
REFLECTING SUCH AMOUNTS, EXCEED THE FAIR MARKET VALUE OF THE ASSETS OF SUCH PLAN
BY AN AMOUNT THAT WOULD CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT, AND
THE PRESENT VALUE OF ALL ACCUMULATED BENEFIT OBLIGATIONS OF ALL UNDERFUNDED
PLANS (BASED ON THE ASSUMPTIONS USED FOR PURPOSES OF STATEMENT OF FINANCIAL
ACCOUNTING STANDARDS NO. 87) DID NOT, AS OF THE DATE OF THE MOST RECENT
FINANCIAL STATEMENTS REFLECTING SUCH AMOUNTS, EXCEED THE FAIR MARKET VALUE OF
THE ASSETS OF ALL SUCH UNDERFUNDED PLANS BY AN AMOUNT THAT WOULD CONSTITUTE OR
RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 3.11.  DISCLOSURE.  NONE OF THE REPORTS, FINANCIAL STATEMENTS,
CERTIFICATES OR INFORMATION FURNISHED BY OR ON BEHALF OF ANY LOAN PARTY TO THE
ADMINISTRATIVE AGENT OR ANY LENDER IN CONNECTION WITH THE NEGOTIATION OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR DELIVERED HEREUNDER OR THEREUNDER (AS
MODIFIED OR SUPPLEMENTED BY OTHER INFORMATION SO FURNISHED), CONTAINS ANY
MATERIAL MISSTATEMENT OF FACT OR OMITS TO STATE ANY MATERIAL FACT NECESSARY TO
MAKE THE STATEMENTS THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY
WERE MADE, NOT MISLEADING.

 

SECTION 3.12.  SUBSIDIARIES.  SCHEDULE 3.12 SETS FORTH THE NAME OF, AND THE
OWNERSHIP INTEREST OF LEVEL 3 IN, EACH DOMESTIC MATERIAL SUBSIDIARY.

 

SECTION 3.13.  INSURANCE.  SCHEDULE 3.13 SETS FORTH A DESCRIPTION OF ALL
INSURANCE MAINTAINED BY OR ON BEHALF OF LEVEL 3, THE BORROWER AND THE MATERIAL
SUBSIDIARIES OF LEVEL 3 AS OF THE EFFECTIVE DATE.  TO THE KNOWLEDGE OF LEVEL 3,
SUCH INSURANCE COMPLIES WITH THE REQUIREMENTS OF SECTION 5.07.

 

SECTION 3.14.  LABOR MATTERS.  AS OF THE EFFECTIVE DATE, THERE ARE NO MATERIAL
STRIKES, LOCKOUTS OR SLOWDOWNS AGAINST LEVEL 3, THE BORROWER OR ANY SUBSIDIARY
OF LEVEL 3 PENDING OR, TO THE KNOWLEDGE OF LEVEL 3 OR THE BORROWER, THREATENED
WHICH WOULD CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT.  THE CONSUMMATION
OF THE TRANSACTIONS WILL NOT GIVE RISE TO ANY RIGHT OF TERMINATION OR RIGHT OF
RENEGOTIATION ON THE PART OF ANY UNION UNDER ANY COLLECTIVE BARGAINING AGREEMENT
TO WHICH LEVEL 3, THE BORROWER OR ANY SUBSIDIARY OF LEVEL 3 IS BOUND OTHER THAN
ANY RIGHT WHICH WOULD NOT CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 3.15.  INTELLECTUAL PROPERTY.  EACH OF LEVEL 3, THE BORROWER AND THE
MATERIAL SUBSIDIARIES OF LEVEL 3 OWNS, OR IS LICENSED TO USE, ALL TRADEMARKS,
TRADENAMES, COPYRIGHTS, PATENTS AND OTHER INTELLECTUAL PROPERTY MATERIAL TO ITS
BUSINESS, AND THE USE THEREOF BY LEVEL 3, THE BORROWER AND EACH MATERIAL
SUBSIDIARY OF LEVEL 3, TO THE KNOWLEDGE OF LEVEL 3 OR THE BORROWER, DOES NOT
INFRINGE UPON THE RIGHTS OF ANY OTHER PERSON EXCEPT FOR ANY SUCH INFRINGEMENTS
THAT, INDIVIDUALLY OR IN THE AGGREGATE, WOULD NOT CONSTITUTE OR RESULT IN A
MATERIAL ADVERSE EFFECT.

 

SECTION 3.16.  SECURITY INTERESTS.  (A)  WHEN EXECUTED AND DELIVERED, (I)(A) THE
COLLATERAL AGREEMENT WILL BE EFFECTIVE TO CREATE IN FAVOR OF THE COLLATERAL
AGENT FOR THE BENEFIT OF THE SECURED PARTIES A VALID AND ENFORCEABLE SECURITY
INTEREST IN THE COLLATERAL (AS DEFINED IN THE COLLATERAL AGREEMENT) AND (B) THE
LOAN PROCEEDS NOTE COLLATERAL AGREEMENT WILL BE EFFECTIVE TO CREATE IN FAVOR OF
THE SECURED PARTY (AS DEFINED

 

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IN THE LOAN PROCEEDS NOTE COLLATERAL AGREEMENT) A VALID AND ENFORCEABLE SECURITY
INTEREST IN THE COLLATERAL (AS DEFINED IN THE LOAN PROCEEDS NOTE COLLATERAL
AGREEMENT), (II) WHEN THE PORTION OF THE COLLATERAL (AS DEFINED IN THE
COLLATERAL AGREEMENT) CONSTITUTING CERTIFICATED SECURITIES (AS DEFINED IN THE
UNIFORM COMMERCIAL CODE), IS DELIVERED TO THE COLLATERAL AGENT, TOGETHER WITH
INSTRUMENTS OF TRANSFER DULY ENDORSED IN BLANK, THE COLLATERAL AGREEMENT WILL
CONSTITUTE, UNDER APPLICABLE FEDERAL AND STATE LAW, A FULLY PERFECTED FIRST
PRIORITY LIEN ON, AND SECURITY INTEREST IN ALL RIGHT, TITLE AND INTEREST OF THE
PLEDGORS THEREUNDER IN SUCH COLLATERAL, PRIOR AND SUPERIOR IN RIGHT TO ANY OTHER
PERSON AND (III) WHEN FINANCING STATEMENTS IN SUFFICIENT FORM ARE FILED IN THE
OFFICES SPECIFIED IN THE EFFECTIVE DATE PERFECTION CERTIFICATE OR IN THE
EFFECTIVE DATE LOAN PROCEEDS NOTE PERFECTION CERTIFICATE, AS THE CASE MAY BE,
EACH OF THE COLLATERAL AGREEMENT AND THE LOAN PROCEEDS NOTE COLLATERAL AGREEMENT
WILL CONSTITUTE, UNDER APPLICABLE FEDERAL AND STATE LAW, A FULLY PERFECTED
(EXCEPT WITH RESPECT TO UNDISCLOSED COMMERCIAL TORT CLAIMS (AS DEFINED IN THE
COLLATERAL AGREEMENT)) LIEN ON, AND SECURITY INTEREST IN ALL RIGHT, TITLE AND
INTEREST OF THE GRANTORS THEREUNDER IN SUCH COLLATERAL, TO THE EXTENT PERFECTION
CAN BE OBTAINED BY FILING UNIFORM COMMERCIAL CODE FINANCING STATEMENTS, OTHER
THAN THE INTELLECTUAL PROPERTY (AS DEFINED IN THE SECURITY AGREEMENTS) IN WHICH
A SECURITY INTEREST MAY BE PERFECTED BY FILING, RECORDING OR REGISTERING A
SECURITY AGREEMENT, FINANCING STATEMENT OR ANALOGOUS DOCUMENT IN THE UNITED
STATES PATENT AND TRADEMARK OFFICE OR THE UNITED STATES COPYRIGHT OFFICE, AS
APPLICABLE, IN EACH CASE (OTHER THAN WITH RESPECT TO UNDISCLOSED COMMERCIAL TORT
CLAIMS (AS DEFINED IN THE COLLATERAL AGREEMENT)) PRIOR AND SUPERIOR IN RIGHT TO
ANY OTHER PERSON TO THE EXTENT PERFECTION CAN BE OBTAINED BY FILING UNIFORM
COMMERCIAL CODE FINANCING STATEMENTS, OTHER THAN WITH RESPECT TO THE RIGHTS OF
PERSONS PURSUANT TO LIENS EXPRESSLY PERMITTED BY SECTION 6.05.

 

(B)  WHEN THE COLLATERAL AGREEMENT OR MEMORANDUM THEREOF IS FILED IN THE UNITED
STATES PATENT AND TRADEMARK OFFICE AND THE UNITED STATES COPYRIGHT OFFICE, THE
SECURITY INTEREST CREATED THEREUNDER SHALL CONSTITUTE A FULLY PERFECTED LIEN ON,
AND SECURITY INTEREST IN, ALL RIGHT, TITLE AND INTEREST OF THE LOAN PARTIES IN
THE INTELLECTUAL PROPERTY (AS DEFINED IN THE COLLATERAL AGREEMENT) IN WHICH A
SECURITY INTEREST MAY BE PERFECTED BY FILING, RECORDING OR REGISTERING A
SECURITY AGREEMENT, FINANCING STATEMENT OR ANALOGOUS DOCUMENT IN THE UNITED
STATES PATENT AND TRADEMARK OFFICE OR THE UNITED STATES COPYRIGHT OFFICE, AS
APPLICABLE, IN EACH CASE PRIOR AND SUPERIOR IN RIGHT TO ANY OTHER PERSON, OTHER
THAN WITH RESPECT TO THE RIGHTS OF PERSONS PURSUANT TO LIENS EXPRESSLY PERMITTED
BY SECTION 6.05 (IT BEING UNDERSTOOD THAT SUBSEQUENT RECORDINGS IN THE UNITED
STATES PATENT AND TRADEMARK OFFICE AND THE UNITED STATES COPYRIGHT OFFICE MAY BE
NECESSARY TO PERFECT A LIEN ON REGISTERED TRADEMARKS, TRADEMARK APPLICATIONS AND
COPYRIGHTS ACQUIRED BY THE LOAN PARTIES AFTER THE EFFECTIVE DATE).

 

SECTION 3.17.  FCC COMPLIANCE.  (A)  LEVEL 3, THE BORROWER AND EACH SUBSIDIARY
OF LEVEL 3 ARE IN COMPLIANCE WITH THE COMMUNICATIONS ACT EXCEPT WHERE THE
FAILURE TO BE IN COMPLIANCE WOULD NOT CONSTITUTE OR RESULT IN A MATERIAL ADVERSE
EFFECT.

 

(B)  TO THE KNOWLEDGE OF LEVEL 3, THERE IS NO INVESTIGATION, NOTICE OF APPARENT
LIABILITY, VIOLATION, FORFEITURE OR OTHER ORDER OR COMPLAINT ISSUED BY OR BEFORE
THE FCC, OR ANY OTHER PROCEEDINGS OF OR BEFORE THE FCC, AFFECTING IT, THE
BORROWER OR ANY SUBSIDIARY OF LEVEL 3 WHICH WOULD CONSTITUTE OR RESULT IN A
MATERIAL ADVERSE EFFECT.

 

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(C)  NO EVENT HAS OCCURRED WHICH (I) RESULTS IN, OR AFTER NOTICE OR LAPSE OF
TIME OR BOTH WOULD RESULT IN, REVOCATION, SUSPENSION, ADVERSE MODIFICATIONS,
NON-RENEWAL, IMPAIRMENT, RESTRICTION OR TERMINATION OF, OR ORDER OF FORFEITURE
WITH RESPECT TO, ANY LICENSE IN ANY RESPECT WHICH WOULD CONSTITUTE OR RESULT IN
A MATERIAL ADVERSE EFFECT OR (II) AFFECTS OR WOULD REASONABLY BE EXPECTED IN THE
FUTURE TO AFFECT ANY OF THE RIGHTS OF LEVEL 3, THE BORROWER OR ANY SUBSIDIARY OF
LEVEL 3 UNDER ANY LICENSE HELD BY LEVEL 3, THE BORROWER OR SUCH SUBSIDIARY IN
ANY RESPECT WHICH WOULD CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT.

 

(D)  LEVEL 3, THE BORROWER AND EACH SUBSIDIARY OF LEVEL 3 HAVE DULY FILED IN A
TIMELY MANNER ALL MATERIAL FILINGS, REPORTS, APPLICATIONS, DOCUMENTS,
INSTRUMENTS AND INFORMATION REQUIRED TO BE FILED BY IT UNDER THE COMMUNICATIONS
ACT, AND ALL SUCH FILINGS WERE WHEN MADE TRUE, CORRECT AND COMPLETE IN ALL
RESPECTS EXCEPT WHERE THE FAILURE TO DO SO WOULD NOT CONSTITUTE OR RESULT IN A
MATERIAL ADVERSE EFFECT.

 

SECTION 3.18.  QUALIFIED CREDIT FACILITY; SENIOR INDEBTEDNESS.  THE LOANS AND
THE OTHER OBLIGATIONS CONSTITUTE A “QUALIFIED CREDIT FACILITY” AS DEFINED IN THE
FINANCING INC. INDENTURES.  THE LOANS AND THE OTHER OBLIGATIONS CONSTITUTE
“SENIOR INDEBTEDNESS” OF THE PARENT, THE BORROWER AND EACH OTHER LOAN PARTY FOR
PURPOSES OF ANY INDEBTEDNESS OF THE PARENT, THE BORROWER OR SUCH OTHER LOAN
PARTY THAT BY ITS TERMS IS SUBORDINATED TO ANY OTHER INDEBTEDNESS OF SUCH
PERSON.

 

SECTION 3.19.  SOLVENCY.  IMMEDIATELY FOLLOWING THE MAKING OF THE LOANS ON THE
EFFECTIVE DATE AND AFTER GIVING EFFECT TO THE APPLICATION OF THE PROCEEDS OF THE
LOANS, (A) THE FAIR VALUE OF THE ASSETS OF LEVEL 3 AND ITS SUBSIDIARIES ON A
CONSOLIDATED BASIS, AT A FAIR VALUATION, WILL EXCEED THEIR DEBTS AND
LIABILITIES, SUBORDINATED, CONTINGENT OR OTHERWISE; (B) THE PRESENT FAIR
SALEABLE VALUE OF THE PROPERTY OF LEVEL 3 AND ITS SUBSIDIARIES, ON A
CONSOLIDATED BASIS, WILL BE GREATER THAN THE AMOUNT THAT WILL BE REQUIRED TO PAY
THE PROBABLE LIABILITY OF THEIR DEBTS AND OTHER LIABILITIES, SUBORDINATED,
CONTINGENT OR OTHERWISE, AS SUCH DEBTS AND OTHER LIABILITIES BECOME ABSOLUTE AND
MATURED; (C) LEVEL 3 AND ITS SUBSIDIARIES ON A CONSOLIDATED BASIS, WILL BE ABLE
TO PAY THEIR DEBTS AND LIABILITIES, SUBORDINATED, CONTINGENT OR OTHERWISE, AS
SUCH DEBTS AND LIABILITIES BECOME ABSOLUTE AND MATURED; AND (D) LEVEL 3 AND ITS
SUBSIDIARIES, ON A CONSOLIDATED BASIS, WILL NOT HAVE UNREASONABLY SMALL CAPITAL
WITH WHICH TO CONDUCT THE BUSINESS IN WHICH THEY ARE ENGAGED AS SUCH BUSINESS IS
NOW CONDUCTED AND IS PROPOSED TO BE CONDUCTED FOLLOWING THE EFFECTIVE DATE.

 

ARTICLE IV

 

CONDITIONS

 

SECTION 4.01.  EFFECTIVE DATE.  THE OBLIGATIONS OF THE TRANCHE A TERM LENDERS TO
MAKE TRANCHE A TERM LOANS HEREUNDER BECAME EFFECTIVE ON THE DATE ON WHICH EACH
OF THE FOLLOWING CONDITIONS WAS SATISFIED (OR WAIVED IN ACCORDANCE WITH
SECTION 9.02):

 

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(A)  THE ADMINISTRATIVE AGENT (OR ITS COUNSEL) SHALL HAVE RECEIVED FROM LEVEL 3,
THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER EITHER (I) COUNTERPARTS
OF THIS AGREEMENT SIGNED ON BEHALF OF EACH SUCH PARTY OR (II) WRITTEN EVIDENCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT (WHICH MAY INCLUDE A TELECOPY
TRANSMISSION OF A SIGNED SIGNATURE PAGE OF THIS AGREEMENT) THAT EACH SUCH PARTY
HAS SIGNED A COUNTERPART OF THIS AGREEMENT.

 

(B)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED FAVORABLE WRITTEN OPINIONS
(ADDRESSED TO THE ADMINISTRATIVE AGENT AND THE LENDERS AND DATED THE EFFECTIVE
DATE) OF (I) WILLKIE FARR & GALLAGHER LLP, COUNSEL FOR THE BORROWER,
SUBSTANTIALLY IN THE FORM OF EXHIBIT E-1, (II) THE CHIEF LEGAL OFFICER OR AN
ASSISTANT GENERAL COUNSEL OF LEVEL 3, SUBSTANTIALLY IN THE FORM OF EXHIBIT E-2,
(III) POTTER ANDERSON & CORROON LLP, DELAWARE LOCAL COUNSEL, SUBSTANTIALLY IN
THE FORM OF EXHIBIT E-3 AND (IV) BINGHAM MCCUTCHEN LLP, REGULATORY COUNSEL FOR
THE BORROWER, SUBSTANTIALLY IN THE FORM OF EXHIBIT E-4, AND COVERING SUCH OTHER
MATTERS RELATING TO THE LOAN PARTIES, THE LOAN DOCUMENTS OR THE TRANSACTIONS AS
THE ADMINISTRATIVE AGENT OR THE REQUIRED LENDERS SHALL REASONABLY REQUEST.

 

(C)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED SUCH DOCUMENTS AND
CERTIFICATES AS THE ADMINISTRATIVE AGENT OR ITS COUNSEL MAY REASONABLY REQUEST
RELATING TO THE ORGANIZATION, EXISTENCE AND GOOD STANDING OF EACH LOAN PARTY,
THE AUTHORIZATION BY THE LOAN PARTIES OF THE TRANSACTIONS AND ANY OTHER LEGAL
MATTERS RELATING TO THE LOAN PARTIES, THE LOAN DOCUMENTS OR THE TRANSACTIONS,
ALL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT
AND ITS COUNSEL.

 

(D)  THE REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE III SHALL BE TRUE
AND CORRECT IN ALL MATERIAL RESPECTS ON AND AS OF THE EFFECTIVE DATE.

 

(E)  THE BORROWER AND THE OTHER LOAN PARTIES SHALL BE IN COMPLIANCE WITH ALL THE
TERMS AND PROVISIONS SET FORTH HEREIN AND IN THE OTHER LOAN DOCUMENTS ON THEIR
PART TO BE OBSERVED OR PERFORMED, AND AT THE TIME OF AND IMMEDIATELY AFTER THE
MAKING OF THE LOANS ON THE EFFECTIVE DATE, NO DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING.

 

(F)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A CERTIFICATE SIGNED BY A
FINANCIAL OFFICER OF LEVEL 3 CONFIRMING THE SATISFACTION OF THE CONDITIONS SET
FORTH IN PARAGRAPHS (D) AND (E) ABOVE AND IN PARAGRAPHS (G) AND (M) BELOW.

 

(G)  THE GUARANTEE AND COLLATERAL REQUIREMENT SHALL BE SATISFIED.

 

(H)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED ALL FEES AND OTHER AMOUNTS DUE
AND PAYABLE ON OR PRIOR TO THE EFFECTIVE DATE, INCLUDING, TO THE EXTENT
INVOICED, REIMBURSEMENT OR PAYMENT OF ALL OUT OF POCKET EXPENSES REQUIRED TO BE
REIMBURSED OR PAID BY THE BORROWER HEREUNDER.

 

(I)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED (I) A COMPLETED (A) EFFECTIVE
DATE PERFECTION CERTIFICATE AND (B) EFFECTIVE DATE LOAN PROCEEDS NOTE PERFECTION
CERTIFICATE, EACH DATED THE EFFECTIVE DATE AND SIGNED BY A FINANCIAL OFFICER, IN
EACH CASE, TOGETHER WITH ALL ATTACHMENTS CONTEMPLATED THEREBY, AND (II) THE
RESULTS OF A

 

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SEARCH OF THE UNIFORM COMMERCIAL CODE (OR EQUIVALENT) FILINGS MADE WITH RESPECT
TO THE LOAN PARTIES IN THE JURISDICTIONS REFERRED TO IN SCHEDULE 4.01(I) HERETO
AND COPIES OF THE FINANCING STATEMENTS (OR SIMILAR DOCUMENTS) DISCLOSED BY SUCH
SEARCH AND EVIDENCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT THAT THE
LIENS INDICATED BY SUCH FINANCING STATEMENTS (OR SIMILAR DOCUMENTS) ARE
PERMITTED BY SECTION 6.05 OR HAVE BEEN RELEASED.

 

(J)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED EXECUTED COPIES OF EACH OF THE
LEVEL 3 LLC NOTES SUPPLEMENTAL INDENTURES,

 

(K)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED AN EXECUTED COPY OF THE
OMNIBUS OFFERING PROCEEDS NOTE SUBORDINATION AGREEMENT.

 

(L)  THE BORROWER SHALL HAVE OBTAINED RATINGS ON THE LOANS FROM EACH OF THE
RATING AGENCIES.

 

(M)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED SATISFACTORY EVIDENCE THAT,
AFTER GIVING EFFECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, THE BORROWER SHALL
HAVE REPAID THE EXISTING TERM LOANS, TOGETHER WITH ALL INTEREST ACCRUED THEREON
AND ALL OTHER AMOUNTS ACCRUED OR OWING UNDER THE EXISTING AMENDED AND RESTATED
CREDIT AGREEMENT, AND THAT ALL LIENS SECURING THE OBLIGATIONS UNDER THE EXISTING
AMENDED AND RESTATED CREDIT AGREEMENT SHALL HAVE BEEN RELEASED.

 

(N)  LEVEL 3 LLC SHALL HAVE EXECUTED AND DELIVERED TO THE AGENT THE LOAN
PROCEEDS NOTE COLLATERAL AGREEMENT AND SUCH OTHER DOCUMENTATION REASONABLY
SATISFACTORY TO LEVEL 3 AND THE COLLATERAL AGENT NECESSARY TO EVIDENCE THE
CREATION AND PERFECTION OF LIENS TO SECURE THE LOAN PROCEEDS NOTE TO THE EXTENT
REQUIRED BY SECTION 5.13(B).

 

The Administrative Agent notified Level 3, the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full, each of Level 3 and the Borrower covenants and agrees with the Lenders
that:

 

SECTION 5.01.  FINANCIAL STATEMENTS AND OTHER INFORMATION.  LEVEL 3 WILL FURNISH
TO THE ADMINISTRATIVE AGENT ON BEHALF OF THE LENDERS:

 

(A) WITHIN 120 DAYS AFTER THE END OF EACH FISCAL YEAR OF LEVEL 3, AN AUDITED
CONSOLIDATED BALANCE SHEET OF LEVEL 3 AND ITS SUBSIDIARIES AND RELATED
STATEMENTS OF OPERATIONS AND CASH FLOWS OF LEVEL 3 AND ITS SUBSIDIARIES AS OF
THE END OF AND

 

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FOR SUCH YEAR, SETTING FORTH IN EACH CASE IN COMPARATIVE FORM THE FIGURES FOR
THE PREVIOUS FISCAL YEAR, ALL REPORTED ON BY KPMG LLP OR ANOTHER INDEPENDENT
PUBLIC ACCOUNTING FIRM OF RECOGNIZED NATIONAL STANDING (WITHOUT A “GOING
CONCERN” OR LIKE QUALIFICATION OR EXCEPTION AND WITHOUT ANY QUALIFICATION OR
EXCEPTION AS TO THE SCOPE OF SUCH AUDIT) TO THE EFFECT THAT SUCH CONSOLIDATED
FINANCIAL STATEMENTS PRESENT FAIRLY IN ALL MATERIAL RESPECTS THE FINANCIAL
CONDITION AND RESULTS OF OPERATIONS OF LEVEL 3 AND ITS SUBSIDIARIES ON A
CONSOLIDATED BASIS IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED;

 

(B) WITHIN 60 DAYS AFTER THE END OF EACH FISCAL QUARTER OF LEVEL 3, AN UNAUDITED
CONSOLIDATED BALANCE SHEET OF LEVEL 3 AND ITS SUBSIDIARIES AND RELATED
STATEMENTS OF OPERATIONS AND CASH FLOWS OF LEVEL 3 AND ITS SUBSIDIARIES AS OF
THE END OF AND FOR SUCH QUARTER, SETTING FORTH IN EACH CASE IN COMPARATIVE FORM
THE FIGURES FOR THE CORRESPONDING QUARTER OF THE PREVIOUS FISCAL YEAR, ALL
CERTIFIED BY A FINANCIAL OFFICER TO THE EFFECT THAT SUCH CONSOLIDATED FINANCIAL
STATEMENTS PRESENT FAIRLY IN ALL MATERIAL RESPECTS THE FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF LEVEL 3 AND ITS SUBSIDIARIES ON A CONSOLIDATED BASIS IN
ACCORDANCE WITH GAAP CONSISTENTLY APPLIED; AND

 

(C) WITHIN 120 DAYS AFTER THE END OF EACH FISCAL YEAR OF LEVEL 3, A CERTIFICATE
OF A FINANCIAL OFFICER STATING THAT A REVIEW OF THE ACTIVITIES OF LEVEL 3 AND
ITS SUBSIDIARIES DURING THE PRECEDING FISCAL YEAR HAS BEEN MADE UNDER THE
SUPERVISION OF SUCH FINANCIAL OFFICER WITH A VIEW TO DETERMINING WHETHER THE
BORROWER AND THE OTHER LOAN PARTIES HAVE KEPT, OBSERVED, PERFORMED AND FULFILLED
THEIR OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND FURTHER
STATING, AS TO THE KNOWLEDGE OF THE OFFICER SIGNING SUCH CERTIFICATE, LEVEL 3,
THE BORROWER AND EACH OTHER LOAN PARTY HAS KEPT, OBSERVED, PERFORMED AND
FULFILLED EACH AND EVERY COVENANT CONTAINED IN THIS AGREEMENT AND IS NOT IN
DEFAULT IN THE PERFORMANCE OR OBSERVANCE OF ANY OF THE TERMS, PROVISIONS AND
CONDITIONS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OR, IF A DEFAULT OR
EVENT OF DEFAULT SHALL HAVE OCCURRED, DESCRIBING ALL SUCH DEFAULTS OR EVENTS OF
DEFAULT OF WHICH HE OR SHE MAY HAVE KNOWLEDGE AND WHAT ACTION THE BORROWER OR
SUCH LOAN PARTY IS TAKING OR PROPOSES TO TAKE WITH RESPECT THERETO).

 

Whether or not required by the rules and regulations of the Securities and
Exchange Commission, the Borrower shall file with the Securities and Exchange
Commission, if permitted, all the periodic and other reports, proxy statements
and other materials it would be required to file with the Securities and
Exchange Commission by Section 13(a) or 15(d) under the Securities Exchange Act
of 1934, as amended, or any successor provision thereto if it were subject
thereto.  The financial statements required to be delivered by Level 3 pursuant
to paragraphs (a) and (b) of this Section and the reports and statements
required to be delivered by the Borrower pursuant to paragraph (c) of this
Section shall be deemed to have been delivered (i) when reports containing such
financial statements, or such other materials, are posted on Level 3’s website
on the Internet at www.level3.com (or any successor page identified in a notice
given to the Administrative Agent and the Lenders) or on the Securities and
Exchange Commission’s website on the

 

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internet at www.sec.gov or (ii) when such financial statements, reports or
statements are delivered in accordance with Section 9.01(a).

 

SECTION 5.02.  NOTICES OF MATERIAL EVENTS.  LEVEL 3 AND THE BORROWER WILL
FURNISH TO THE ADMINISTRATIVE AGENT, WITHIN 30 DAYS, WRITTEN NOTICE OF THE
FOLLOWING:

 

(A) THE OCCURRENCE OF ANY DEFAULT; AND

 

(B) IF THE TRUSTEE FOR OR THE HOLDER OF ANY MATERIAL INDEBTEDNESS OF LEVEL 3 OR
ANY RESTRICTED SUBSIDIARY GIVES ANY NOTICE OR TAKES ANY OTHER ACTION WITH
RESPECT TO A CLAIMED DEFAULT.

 

Each notice delivered under this Section shall be accompanied by a statement of
an authorized officer of Level 3 setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

 

SECTION 5.03.  INFORMATION REGARDING COLLATERAL.  (A)  LEVEL 3 AND THE BORROWER
WILL FURNISH TO THE COLLATERAL AGENT PROMPT WRITTEN NOTICE OF ANY CHANGE (I) IN
ANY LOAN PARTY’S CORPORATE NAME OR IN ANY TRADE NAME USED TO IDENTIFY IT IN THE
CONDUCT OF ITS BUSINESS OR IN THE OWNERSHIP OF ITS PROPERTIES, (II) IN ANY LOAN
PARTY’S IDENTITY OR CORPORATE STRUCTURE OR (III) IN ANY LOAN PARTY’S FEDERAL
TAXPAYER IDENTIFICATION NUMBER.  EACH OF LEVEL 3 AND THE BORROWER AGREES NOT TO
EFFECT OR PERMIT ANY CHANGE REFERRED TO IN THE PRECEDING SENTENCE UNLESS ALL
FILINGS (OR ARRANGEMENTS THEREFOR SATISFACTORY TO THE COLLATERAL AGENT) HAVE
BEEN MADE UNDER THE UNIFORM COMMERCIAL CODE OR OTHERWISE THAT ARE REQUIRED IN
ORDER FOR THE COLLATERAL AGENT TO CONTINUE AT ALL TIMES FOLLOWING SUCH CHANGE TO
HAVE A VALID, LEGAL AND PERFECTED SECURITY INTEREST IN ALL THE COLLATERAL.  EACH
OF LEVEL 3 AND THE BORROWER ALSO AGREES PROMPTLY TO NOTIFY THE COLLATERAL AGENT
IF ANY MATERIAL PORTION OF THE COLLATERAL IS DAMAGED OR DESTROYED.

 

(B)  EACH YEAR, AT THE TIME OF DELIVERY OF THE CERTIFICATE PURSUANT TO PARAGRAPH
(C) OF SECTION 5.01, LEVEL 3 SHALL DELIVER TO THE COLLATERAL AGENT CERTIFICATES
OF AN AUTHORIZED OFFICER OF LEVEL 3 (I) SETTING FORTH THE INFORMATION REQUIRED
PURSUANT TO (A) THE ANNUAL PERFECTION CERTIFICATE AND (B) UNTIL SUCH TIME AS THE
COLLATERAL PERMIT CONDITION IS SATISFIED WITH RESPECT TO LEVEL 3 LLC, THE ANNUAL
LOAN PROCEEDS NOTE PERFECTION CERTIFICATE, OR CONFIRMING THAT THERE HAS BEEN NO
CHANGE IN SUCH INFORMATION SINCE THE DATES OF THE EFFECTIVE DATE PERFECTION
CERTIFICATE OR THE EFFECTIVE DATE LOAN PROCEEDS NOTE PERFECTION CERTIFICATE, AS
THE CASE MAY BE, OR THE DATE OF THE MOST RECENT CERTIFICATES DELIVERED PURSUANT
TO THIS SECTION AND (II) CERTIFYING THAT ALL UNIFORM COMMERCIAL CODE FINANCING
STATEMENTS (EXCLUDING FIXTURE FILINGS) OR OTHER APPROPRIATE FILINGS, RECORDINGS
OR REGISTRATIONS, INCLUDING ALL REFILINGS, RERECORDINGS AND REREGISTRATIONS,
CONTAINING A DESCRIPTION OF THE COLLATERAL REQUIRED TO BE SET FORTH THEREIN HAVE
BEEN FILED OF RECORD IN EACH UNITED STATES GOVERNMENTAL, MUNICIPAL OR OTHER
APPROPRIATE OFFICE IN EACH JURISDICTION IDENTIFIED PURSUANT TO CLAUSE (I) ABOVE
TO THE EXTENT NECESSARY TO PERFECT AND CONTINUE THE PERFECTION OF THE SECURITY
INTERESTS UNDER THE APPLICABLE SECURITY DOCUMENTS FOR A PERIOD OF NOT LESS THAN
18 MONTHS AFTER THE DATE OF SUCH CERTIFICATE (EXCEPT AS NOTED THEREIN WITH
RESPECT TO ANY CONTINUATION STATEMENTS TO BE FILED WITHIN SUCH PERIOD).

 

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SECTION 5.04.  EXISTENCE; CONDUCT OF BUSINESS.  EACH OF LEVEL 3 AND THE BORROWER
WILL, AND WILL CAUSE EACH MATERIAL SUBSIDIARY OF LEVEL 3 TO, DO OR CAUSE TO BE
DONE ALL THINGS NECESSARY TO PRESERVE, RENEW AND KEEP IN FULL FORCE AND EFFECT
ITS LEGAL EXISTENCE AND ITS RIGHTS, CHARTER AND STATUTORY, EXCEPT WHERE THE
FAILURE TO DO SO WOULD NOT CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT;
PROVIDED THAT THE FOREGOING SHALL NOT PROHIBIT ANY MERGER, CONSOLIDATION,
LIQUIDATION OR DISSOLUTION PERMITTED UNDER SECTION 6.13.

 

SECTION 5.05.  PAYMENT OF TAXES.  EACH OF LEVEL 3 AND THE BORROWER WILL, AND
WILL CAUSE EACH SUBSIDIARY OF LEVEL 3 TO, PAY ITS MATERIAL TAX OBLIGATIONS,
BEFORE THE SAME SHALL BECOME DELINQUENT OR IN DEFAULT, EXCEPT WHERE THE FAILURE
TO PAY SUCH TAX WOULD NOT CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 5.06.  MAINTENANCE OF PROPERTIES.  EACH OF LEVEL 3 AND THE BORROWER
SHALL CAUSE ALL PROPERTIES OWNED BY LEVEL 3, THE BORROWER OR ANY RESTRICTED
SUBSIDIARY OR USED OR HELD FOR USE IN THE CONDUCT OF ITS BUSINESS OR THE
BUSINESS OF ANY RESTRICTED SUBSIDIARY TO BE MAINTAINED AND KEPT IN GOOD
CONDITION, REPAIR AND WORKING ORDER AND SUPPLIED WITH ALL NECESSARY EQUIPMENT
AND SHALL CAUSE TO BE MADE ALL NECESSARY REPAIRS, RENEWALS, REPLACEMENTS,
BETTERMENTS AND IMPROVEMENTS THEREOF, ALL AS IN THE JUDGMENT OF LEVEL 3 MAY BE
NECESSARY SO THAT THE BUSINESS CARRIED ON IN CONNECTION THEREWITH MAY BE
PROPERLY AND ADVANTAGEOUSLY CONDUCTED AT ALL TIMES; PROVIDED, HOWEVER, THAT
NOTHING IN THIS SECTION SHALL PREVENT LEVEL 3 FROM DISCONTINUING THE MAINTENANCE
OF ANY OF SUCH PROPERTIES IF SUCH DISCONTINUANCE IS, IN THE JUDGMENT OF LEVEL 3,
DESIRABLE IN THE CONDUCT OF ITS BUSINESS OR THE BUSINESS OF ANY SUBSIDIARY OF
LEVEL 3 AND NOT DISADVANTAGEOUS IN ANY MATERIAL RESPECT TO THE LENDERS.

 

SECTION 5.07.  INSURANCE.  EACH OF LEVEL 3 AND THE BORROWER WILL, AND WILL CAUSE
EACH OF THE RESTRICTED SUBSIDIARIES TO, KEEP ALL OF THEIR RESPECTIVE PROPERTIES
WHICH ARE OF AN INSURABLE NATURE INSURED WITH INSURERS, BELIEVED BY THE BORROWER
TO BE RESPONSIBLE, AGAINST LOSS OR DAMAGE TO THE EXTENT THAT PROPERTY OF A
SIMILAR CHARACTER IS USUALLY INSURED BY COMPANIES SIMILARLY SITUATED AND OWNING
LIKE PROPERTIES.  LEVEL 3 WILL FURNISH TO THE LENDERS, UPON THE REASONABLE
REQUEST OF THE ADMINISTRATIVE AGENT, BUT NOT MORE THAN ONCE DURING ANY CALENDAR
YEAR UNLESS A DEFAULT OR AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING,
INFORMATION IN REASONABLE DETAIL AS TO THE INSURANCE SO MAINTAINED.

 

SECTION 5.08.  CASUALTY AND CONDEMNATION.  LEVEL 3 (A) WILL FURNISH TO THE
ADMINISTRATIVE AGENT PROMPT WRITTEN NOTICE OF ANY CASUALTY OR OTHER INSURED
DAMAGE TO ANY PORTION OF ANY COLLATERAL OR THE COMMENCEMENT OF ANY ACTION OR
PROCEEDING FOR THE TAKING OF ANY COLLATERAL OR ANY PART THEREOF OR INTEREST
THEREIN UNDER POWER OF EMINENT DOMAIN OR BY CONDEMNATION OR SIMILAR PROCEEDING
IN EACH CASE ONLY WHERE LEVEL 3 ESTIMATES IN GOOD FAITH THAT THE EXPECTED
PROCEEDS FROM INSURANCE, CONDEMNATION AWARDS OR OTHERWISE WILL EXCEED
$25,000,000 AND (B) WILL ENSURE THAT THE NET AVAILABLE PROCEEDS OF ANY SUCH
EVENT (WHETHER IN THE FORM OF INSURANCE PROCEEDS, CONDEMNATION AWARDS OR
OTHERWISE) ARE COLLECTED AND APPLIED IN ACCORDANCE WITH THE APPLICABLE
PROVISIONS OF THIS AGREEMENT AND THE SECURITY DOCUMENTS.  LEVEL 3 WILL ACT IN
GOOD FAITH TO COLLECT OR COMPROMISE ALL SUCH AMOUNTS.

 

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SECTION 5.09.  ANNUAL INFORMATION MEETING.  THE BORROWER SHALL, AT THE REQUEST
OF THE REQUIRED LENDERS, HOLD AN ANNUAL MEETING (TELEPHONIC OR OTHERWISE) AT
WHICH THE BORROWER WILL ADDRESS ANY QUESTIONS FROM THE LENDERS RELATING TO ITS
AFFAIRS, FINANCES, CONDITION OR OTHERWISE TO THE EXTENT THAT THE RELEVANT
INFORMATION IS PUBLIC.

 

SECTION 5.10.  COMPLIANCE WITH LAWS.  EACH OF LEVEL 3 AND THE BORROWER WILL, AND
WILL CAUSE EACH OF THE RESTRICTED SUBSIDIARIES OF LEVEL 3 TO, COMPLY WITH ALL
LAWS (INCLUDING THE COMMUNICATIONS ACT), RULES, REGULATIONS AND ORDERS OF ANY
GOVERNMENTAL AUTHORITY APPLICABLE TO IT OR ITS PROPERTY (INCLUDING OBLIGATIONS
UNDER LICENSES), EXCEPT WHERE THE FAILURE TO DO SO, INDIVIDUALLY OR IN THE
AGGREGATE, WOULD NOT CONSTITUTE OR RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 5.11.  USE OF PROCEEDS.  THE PROCEEDS OF THE LOANS WILL BE (A) USED TO
REFINANCE THE EXISTING TERM LOANS AND (B) TO THE EXTENT OF THE REMAINING
PROCEEDS, ADVANCED BY THE BORROWER TO LEVEL 3 LLC AGAINST DELIVERY OF THE LOAN
PROCEEDS NOTE.  NO PART OF THE PROCEEDS OF THE LOANS WILL BE USED, WHETHER
DIRECTLY OR INDIRECTLY, FOR ANY PURPOSE THAT ENTAILS A VIOLATION OF ANY OF THE
REGULATIONS OF THE BOARD, INCLUDING REGULATIONS T, U AND X.

 

SECTION 5.12.  GUARANTEE AND COLLATERAL REQUIREMENT; FURTHER ASSURANCES.  LEVEL
3 AND THE BORROWER WILL CAUSE THE GUARANTEE AND COLLATERAL REQUIREMENT TO BE AND
REMAIN SATISFIED AT ALL TIMES, PROVIDED, HOWEVER, THAT SOLELY WITH RESPECT TO
THE TRANCHE B TERM LOANS THIS OBLIGATION SHALL BE SUBJECT TO SECTION 2 OF THE
AMENDMENT AGREEMENT.  WITHOUT LIMITING THE FOREGOING, LEVEL 3 AND THE BORROWER
WILL, AND WILL CAUSE EACH SUBSIDIARY OF LEVEL 3 TO, EXECUTE ANY AND ALL
DOCUMENTS, FINANCING STATEMENTS, AGREEMENTS AND INSTRUMENTS, AND TAKE ALL OTHER
ACTIONS (INCLUDING THE FILING OF FINANCING STATEMENTS AND OTHER DOCUMENTS),
WHICH SHALL BE REQUIRED UNDER ANY APPLICABLE UNITED STATES LAW, OR WHICH THE
COLLATERAL AGENT MAY REASONABLY REQUEST, TO EFFECTUATE THE TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS OR TO GRANT, PRESERVE, PROTECT OR PERFECT THE
LIENS CREATED OR INTENDED TO BE CREATED BY THE LOAN DOCUMENTS OR THE VALIDITY OR
PRIORITY OF ANY SUCH LIEN, ALL AT THE EXPENSE OF THE LOAN PARTIES.  LEVEL 3 AND
THE BORROWER ALSO AGREE TO PROVIDE TO THE COLLATERAL AGENT, FROM TIME TO TIME
UPON REQUEST, EVIDENCE REASONABLY SATISFACTORY TO THE COLLATERAL AGENT AS TO THE
PERFECTION OF THE LIENS CREATED OR INTENDED TO BE CREATED BY THE LOAN DOCUMENTS.

 

SECTION 5.13.  GUARANTEE PERMIT CONDITION AND COLLATERAL PERMIT CONDITION.  (A) 
EACH OF LEVEL 3 AND THE BORROWER WILL ENDEAVOR, AND CAUSE EACH REGULATED GRANTOR
AND EACH REGULATED GUARANTOR TO ENDEAVOR, IN GOOD FAITH USING COMMERCIALLY
REASONABLE EFFORTS TO (I) (A) CAUSE THE COLLATERAL PERMIT CONDITION TO BE
SATISFIED WITH RESPECT TO SUCH REGULATED GRANTOR AND (B) CAUSE THE GUARANTEE
PERMIT CONDITION TO BE SATISFIED WITH RESPECT TO SUCH REGULATED GUARANTOR, IN
EACH CASE AT THE EARLIEST PRACTICABLE DATE AND (II) OBTAIN THE MATERIAL (AS
DETERMINED IN GOOD FAITH BY THE GENERAL COUNSEL OF LEVEL 3) AUTHORIZATIONS AND
CONSENTS OF FEDERAL AND STATE AUTHORITIES REQUIRED TO CAUSE ANY RESTRICTED
SUBSIDIARY TO BECOME A GUARANTOR AS REQUIRED BY SECTIONS 6.01(D) AND 6.02(D). 
FOR PURPOSES OF THIS SECTION, THE REQUIREMENT THAT LEVEL 3, THE BORROWER OR ANY
SUBSIDIARY OF LEVEL 3 USE “COMMERCIALLY REASONABLE EFFORTS” SHALL NOT BE DEEMED
TO REQUIRE IT TO MAKE MATERIAL PAYMENTS IN EXCESS OF NORMAL FEES AND COSTS

 

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TO OR AT THE DIRECTION OF GOVERNMENTAL AUTHORITIES OR TO CHANGE THE MANNER IN
WHICH IT CONDUCTS ITS BUSINESS IN ANY RESPECT THAT THE MANAGEMENT OF LEVEL 3
SHALL DETERMINE IN GOOD FAITH TO BE ADVERSE OR MATERIALLY BURDENSOME.  UPON THE
REASONABLE REQUEST OF LEVEL 3 OR THE BORROWER, THE ADMINISTRATIVE AGENT AND THE
LENDERS WILL COOPERATE WITH LEVEL 3 AND THE BORROWER AS NECESSARY TO ENABLE THEM
TO COMPLY WITH THEIR OBLIGATIONS UNDER THIS SECTION.  SOLELY WITH RESPECT TO THE
TRANCHE B TERM LOANS, THE OBLIGATIONS SET FORTH IN THIS SECTION SHALL BE SUBJECT
TO SECTION 2 OF THE AMENDMENT AGREEMENT.

 

(B)  IF LEVEL 3 SHALL DETERMINE THAT LEVEL 3 LLC IS ABLE, CONSISTENT WITH
APPLICABLE LAW, TO CREATE LIENS ON ANY COLLATERAL OWNED BY IT AND LOCATED IN ANY
JURISDICTION LOCATED IN THE UNITED STATES TO SECURE THE LOAN PROCEEDS NOTE PRIOR
TO THE SATISFACTION BY IT OF THE COLLATERAL PERMIT CONDITION, IT WILL CAUSE
LEVEL 3 LLC PROMPTLY TO CREATE AND PERFECT SUCH LIENS ON TERMS AND UNDER
DOCUMENTATION REASONABLY SATISFACTORY TO LEVEL 3 AND THE COLLATERAL AGENT.

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full,
each of Level 3, the Borrower and each Guarantor covenants and agrees with the
Lenders that:

 

SECTION 6.01.  LIMITATION ON CONSOLIDATED DEBT.  (A)  LEVEL 3 SHALL NOT, AND
SHALL NOT PERMIT ANY RESTRICTED SUBSIDIARY (OTHER THAN TO THE EXTENT PERMITTED
BY PARAGRAPH (B) OF SECTION 6.02) TO, DIRECTLY OR INDIRECTLY, INCUR ANY
INDEBTEDNESS; PROVIDED, HOWEVER, THAT LEVEL 3 OR ANY RESTRICTED SUBSIDIARY
(SUBJECT, IN THE CASE OF THE BORROWER AND ANY BORROWER RESTRICTED SUBSIDIARY, TO
SECTION 6.02) MAY INCUR ANY INDEBTEDNESS IF, AFTER GIVING PRO FORMA EFFECT TO
SUCH INCURRENCE AND THE RECEIPT AND APPLICATION OF THE NET PROCEEDS THEREOF, NO
DEFAULT OR EVENT OF DEFAULT WOULD OCCUR AS A CONSEQUENCE OF SUCH INCURRENCE OR
BE CONTINUING FOLLOWING SUCH INCURRENCE AND EITHER (I) THE RATIO OF (A) THE
AGGREGATE CONSOLIDATED PRINCIPAL AMOUNT (OR, IN THE CASE OF INDEBTEDNESS ISSUED
AT A DISCOUNT, THE THEN-ACCRETED VALUE) OF INDEBTEDNESS OF LEVEL 3 AND ITS
RESTRICTED SUBSIDIARIES OUTSTANDING AS OF THE MOST RECENT AVAILABLE QUARTERLY OR
ANNUAL BALANCE SHEET, AFTER GIVING PRO FORMA EFFECT TO THE INCURRENCE OF SUCH
INDEBTEDNESS AND ANY OTHER INDEBTEDNESS INCURRED OR REPAID SINCE SUCH BALANCE
SHEET DATE AND THE RECEIPT AND APPLICATION OF THE NET PROCEEDS THEREOF, TO
(B) PRO FORMA CONSOLIDATED CASH FLOW AVAILABLE FOR FIXED CHARGES FOR LEVEL 3 AND
ITS RESTRICTED SUBSIDIARIES FOR THE FOUR FULL FISCAL QUARTERS NEXT PRECEDING THE
INCURRENCE OF SUCH INDEBTEDNESS FOR WHICH CONSOLIDATED FINANCIAL STATEMENTS ARE
AVAILABLE, WOULD BE LESS THAN 5.0 TO 1.0, OR (II) LEVEL 3’S CONSOLIDATED CAPITAL
RATIO AS OF THE MOST RECENT AVAILABLE QUARTERLY OR ANNUAL BALANCE SHEET, AFTER
GIVING PRO FORMA EFFECT TO (X) THE INCURRENCE OF SUCH INDEBTEDNESS AND ANY OTHER
INDEBTEDNESS INCURRED OR REPAID SINCE SUCH BALANCE SHEET DATE, (Y) THE ISSUANCE
OF ANY CAPITAL STOCK (OTHER THAN DISQUALIFIED STOCK) OF LEVEL 3 SINCE SUCH
BALANCE SHEET DATE, INCLUDING THE ISSUANCE OF ANY CAPITAL STOCK TO BE ISSUED
CONCURRENTLY WITH THE

 

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INCURRENCE OF SUCH INDEBTEDNESS, AND (Z) THE RECEIPT AND APPLICATION OF THE NET
PROCEEDS OF SUCH INDEBTEDNESS OR CAPITAL STOCK, AS THE CASE MAY BE, IS LESS THAN
2.25 TO 1.0.

 

(B)  NOTWITHSTANDING THE FOREGOING LIMITATION, LEVEL 3 OR ANY RESTRICTED
SUBSIDIARY (OTHER THAN THE BORROWER OR ANY BORROWER RESTRICTED SUBSIDIARY,
EXCEPT TO THE EXTENT PERMITTED BY SECTION 6.02) MAY INCUR ANY AND ALL OF THE
FOLLOWING (EACH OF WHICH SHALL BE GIVEN INDEPENDENT EFFECT):

 

(I) INDEBTEDNESS CREATED UNDER THE LOAN DOCUMENTS (OTHER THAN INDEBTEDNESS
INCURRED PURSUANT TO AN ADDITIONAL TRANCHE);

 

(II) INDEBTEDNESS UNDER CREDIT FACILITIES IN AN AGGREGATE PRINCIPAL AMOUNT
OUTSTANDING OR AVAILABLE, WHEN TAKEN TOGETHER WITH THE SUM OF (A) THE AMOUNT OF
ANY INDEBTEDNESS OUTSTANDING OR AVAILABLE UNDER THE LOAN DOCUMENTS, PLUS (B) THE
AMOUNT OF ANY OUTSTANDING INDEBTEDNESS INCURRED PURSUANT TO CLAUSE (II) OF
PARAGRAPH (B) OF SECTION 6.02, PLUS (C) THE AMOUNT OF ALL REFINANCING
INDEBTEDNESS OUTSTANDING OR AVAILABLE PURSUANT TO CLAUSE (VI) OF PARAGRAPH (B)
OF SECTION 6.02 IN RESPECT OF INDEBTEDNESS PREVIOUSLY INCURRED PURSUANT TO
CLAUSE (II) OF PARAGRAPH (B) OF SECTION 6.02, PLUS (D) THE AMOUNT OF ALL
REFINANCING INDEBTEDNESS OUTSTANDING OR AVAILABLE PURSUANT TO CLAUSE (VIII)
BELOW IN RESPECT OF INDEBTEDNESS PREVIOUSLY INCURRED PURSUANT TO THIS CLAUSE
(II) AT ANY ONE TIME NOT TO EXCEED THE GREATER OF (X) $1,400,000,000 AND (Y) 1.5
TIMES PRO FORMA CONSOLIDATED CASH FLOW AVAILABLE FOR FIXED CHARGES OF LEVEL 3
AND ITS RESTRICTED SUBSIDIARIES FOR THE FOUR FULL QUARTERS NEXT PRECEDING THE
INCURRENCE OF SUCH INDEBTEDNESS FOR WHICH FINANCIAL STATEMENTS HAVE BEEN
DELIVERED PURSUANT TO SECTION 5.01 OR 5.02, AS APPLICABLE, WHICH AMOUNT SHALL BE
PERMANENTLY REDUCED BY THE AMOUNT OF NET AVAILABLE PROCEEDS USED AFTER THE
EFFECTIVE DATE TO REPAY INDEBTEDNESS UNDER ANY CREDIT FACILITIES (INCLUDING THE
LOAN DOCUMENTS) OR ANY REFINANCING INDEBTEDNESS IN RESPECT OF ANY CREDIT
FACILITIES (INCLUDING THE LOAN DOCUMENTS) INCURRED PURSUANT TO CLAUSE (VI) OF
PARAGRAPH (B) OF SECTION 6.02 OR CLAUSE (VIII) BELOW), AND NOT REINVESTED IN
TELECOMMUNICATIONS/IS ASSETS OR USED TO REPAY INDEBTEDNESS CREATED UNDER THE
LOAN DOCUMENTS OR REPAY OTHER INDEBTEDNESS, PURSUANT TO AND AS PERMITTED BY
SECTION 6.07;

 

(III) PURCHASE MONEY DEBT; PROVIDED, HOWEVER, THAT THE AMOUNT OF SUCH PURCHASE
MONEY DEBT DOES NOT EXCEED 100% OF THE COST OF CONSTRUCTION, INSTALLATION,
ACQUISITION, LEASE, DEVELOPMENT OR IMPROVEMENT OF THE APPLICABLE
TELECOMMUNICATIONS/IS ASSETS;

 

(IV) SUBORDINATED DEBT OF LEVEL 3; PROVIDED, HOWEVER, THAT THE AGGREGATE
PRINCIPAL AMOUNT (OR, IN THE CASE OF INDEBTEDNESS ISSUED AT A DISCOUNT, THE
ACCRETED VALUE) OF SUCH INDEBTEDNESS, TOGETHER WITH ANY OTHER OUTSTANDING
INDEBTEDNESS INCURRED PURSUANT TO THIS CLAUSE (IV), SHALL NOT EXCEED
$500,000,000 AT ANY ONE TIME (WHICH AMOUNT SHALL BE PERMANENTLY REDUCED BY THE
AMOUNT OF NET AVAILABLE PROCEEDS USED TO REPAY SUBORDINATED DEBT OF LEVEL 3, AND
NOT REINVESTED IN TELECOMMUNICATIONS/IS ASSETS OR USED TO REPAY THE LOAN OR
REPAY OTHER INDEBTEDNESS, PURSUANT TO AND AS PERMITTED BY SECTION 6.07), EXCEPT
TO THE

 

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EXTENT SUCH INDEBTEDNESS IN EXCESS OF $500,000,000 (A) IS SUBORDINATED TO ALL
OTHER INDEBTEDNESS OF LEVEL 3 OTHER THAN INDEBTEDNESS INCURRED PURSUANT TO THIS
CLAUSE (IV) IN EXCESS OF SUCH $500,000,000 LIMITATION, (B) DOES NOT PROVIDE FOR
THE PAYMENT OF CASH INTEREST ON SUCH INDEBTEDNESS PRIOR TO THE MATURITY DATE AND
(C) (1) DOES NOT PROVIDE FOR PAYMENTS OF PRINCIPAL OF SUCH INDEBTEDNESS AT
STATED MATURITY OR BY WAY OF A SINKING FUND APPLICABLE THERETO OR BY WAY OF ANY
MANDATORY REDEMPTION, DEFEASANCE, RETIREMENT OR REPURCHASE THEREOF BY LEVEL 3
(INCLUDING ANY REDEMPTION, RETIREMENT OR REPURCHASE WHICH IS CONTINGENT UPON
EVENTS OR CIRCUMSTANCES, BUT EXCLUDING ANY RETIREMENT REQUIRED BY VIRTUE OF THE
ACCELERATION OF ANY PAYMENT WITH RESPECT TO SUCH INDEBTEDNESS UPON ANY EVENT OF
DEFAULT THEREUNDER), IN EACH CASE ON OR PRIOR TO THE MATURITY DATE, AND (2) DOES
NOT PERMIT REDEMPTION OR OTHER RETIREMENT (INCLUDING PURSUANT TO AN OFFER TO
PURCHASE MADE BY LEVEL 3 BUT EXCLUDING THROUGH CONVERSION INTO CAPITAL STOCK OF
LEVEL 3, OTHER THAN DISQUALIFIED STOCK, WITHOUT ANY PAYMENT BY LEVEL 3 OR ITS
RESTRICTED SUBSIDIARIES TO THE HOLDERS THEREOF) OF SUCH INDEBTEDNESS AT THE
OPTION OF THE HOLDER THEREOF ON OR PRIOR TO THE MATURITY DATE OR THE STATED
MATURITY OF ANY ADDITIONAL TRANCHE THEN OUTSTANDING;

 

(V) INDEBTEDNESS OUTSTANDING ON THE MEASUREMENT DATE;

 

(VI) INDEBTEDNESS OWED BY LEVEL 3 TO ANY RESTRICTED SUBSIDIARY OR INDEBTEDNESS
OWED BY A RESTRICTED SUBSIDIARY TO LEVEL 3 OR A RESTRICTED SUBSIDIARY; PROVIDED,
HOWEVER, THAT (A) ANY PERSON THAT INCURS INDEBTEDNESS OWED TO LEVEL 3 OR A
SISTER RESTRICTED SUBSIDIARY PURSUANT TO THIS CLAUSE (VI) IS A GUARANTOR AND A
LOAN PROCEEDS NOTE GUARANTOR, (B) (X) UPON THE TRANSFER, CONVEYANCE OR OTHER
DISPOSITION BY SUCH RESTRICTED SUBSIDIARY OR LEVEL 3 OF ANY INDEBTEDNESS SO
PERMITTED TO A PERSON OTHER THAN LEVEL 3 OR ANOTHER RESTRICTED SUBSIDIARY OR
(Y) IF FOR ANY REASON SUCH RESTRICTED SUBSIDIARY CEASES TO BE A RESTRICTED
SUBSIDIARY, THE PROVISIONS OF THIS CLAUSE (VI) SHALL NO LONGER BE APPLICABLE TO
SUCH INDEBTEDNESS AND SUCH INDEBTEDNESS SHALL BE DEEMED TO HAVE BEEN INCURRED BY
THE ISSUER THEREOF AT THE TIME OF SUCH TRANSFER, CONVEYANCE OR OTHER DISPOSITION
OR WHEN SUCH RESTRICTED SUBSIDIARY CEASES TO BE A RESTRICTED SUBSIDIARY; AND
(C) THE PAYMENT OBLIGATION OF (I) SUCH INDEBTEDNESS (IF CLAUSE (A) ABOVE
APPLIES) AND (II) ALL OBLIGATIONS (IF CLAUSE (A) ABOVE APPLIES) WITH RESPECT TO
ANY OFFERING PROCEEDS NOTE GUARANTEE OF SUCH OBLIGOR IS EXPRESSLY SUBORDINATED
IN ANY BANKRUPTCY, LIQUIDATION OR WINDING UP PROCEEDING OF THE OBLIGOR TO THE
PRIOR PAYMENT IN FULL IN CASH OF ALL OBLIGATIONS WITH RESPECT TO THE LOAN
PROCEEDS NOTE GUARANTEE OF SUCH LOAN PROCEEDS NOTE GUARANTOR; AND PROVIDED
FURTHER, HOWEVER, THAT A FOREIGN RESTRICTED SUBSIDIARY NEED NOT BECOME A
GUARANTOR OR A LOAN PROCEEDS NOTE GUARANTOR PURSUANT TO CLAUSE (A) ABOVE UNTIL
SUCH TIME AND ONLY SO LONG AS SUCH FOREIGN RESTRICTED SUBSIDIARY GUARANTEES ANY
OTHER INDEBTEDNESS OF LEVEL 3 OR ANY DOMESTIC RESTRICTED SUBSIDIARY;

 

(VII) INDEBTEDNESS INCURRED BY A PERSON PRIOR TO THE TIME (A) SUCH PERSON BECAME
A RESTRICTED SUBSIDIARY, (B) SUCH PERSON MERGES INTO OR CONSOLIDATES WITH A
RESTRICTED SUBSIDIARY OR (C) ANOTHER RESTRICTED SUBSIDIARY MERGES INTO OR
CONSOLIDATES WITH SUCH PERSON (IN A TRANSACTION IN WHICH SUCH PERSON BECOMES A

 

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RESTRICTED SUBSIDIARY), WHICH INDEBTEDNESS WAS NOT INCURRED IN ANTICIPATION OF
SUCH TRANSACTION AND WAS OUTSTANDING PRIOR TO SUCH TRANSACTION;

 

(VIII) INDEBTEDNESS INCURRED TO RENEW, EXTEND, REFINANCE, DEFEASE, REPAY,
PREPAY, REPURCHASE, REDEEM, RETIRE, EXCHANGE OR REFUND (EACH, A “REFINANCING”)
INDEBTEDNESS INCURRED PURSUANT TO PARAGRAPH (A) ABOVE OR CLAUSE (I), (II),
(III), (V), (VII) OR (XII) OF THIS PARAGRAPH (B) OR THIS CLAUSE (VIII), IN AN
AGGREGATE PRINCIPAL AMOUNT (OR IF ISSUED AT A DISCOUNT, THE THEN-ACCRETED VALUE)
NOT TO EXCEED THE AGGREGATE PRINCIPAL AMOUNT (OR IF ISSUED AT A DISCOUNT, THE
THEN-ACCRETED VALUE) OF AND ACCRUED INTEREST ON THE INDEBTEDNESS SO REFINANCED
PLUS THE AMOUNT OF ANY PREMIUM REQUIRED TO BE PAID IN CONNECTION WITH SUCH
REFINANCING PURSUANT TO THE TERMS OF THE INDEBTEDNESS SO REFINANCED OR THE
AMOUNT OF ANY PREMIUM REASONABLY DETERMINED BY THE BOARD OF DIRECTORS OF LEVEL 3
AS NECESSARY TO ACCOMPLISH SUCH REFINANCING BY MEANS OF A TENDER OFFER OR
PRIVATELY NEGOTIATED REPURCHASE, PLUS THE EXPENSES OF LEVEL 3 INCURRED IN
CONNECTION WITH SUCH REFINANCING; PROVIDED, HOWEVER, THAT (A) IF THE PERSON THAT
ORIGINALLY INCURRED THE INDEBTEDNESS TO BE REFINANCED BECAME, OR WOULD HAVE BEEN
REQUIRED TO BECOME IF NOT ALREADY, A GUARANTOR OR A LOAN PROCEEDS NOTE GUARANTOR
AS A RESULT OF THE INCURRENCE OF THE INDEBTEDNESS BEING REFINANCED IN ACCORDANCE
WITH THIS COVENANT, (1) THE PERSON THAT INCURS THE REFINANCING INDEBTEDNESS
PURSUANT TO THIS CLAUSE (VIII) SHALL BE A GUARANTOR AND A LOAN PROCEEDS NOTE
GUARANTOR AND (2) IF THE INDEBTEDNESS TO BE REFINANCED IS SUBORDINATED TO THE
LOAN PROCEEDS NOTE GUARANTEE OF SUCH LOAN PROCEEDS NOTE GUARANTOR OR THE
GUARANTEE OF THE OBLIGATIONS OF SUCH GUARANTOR, THE REFINANCING INDEBTEDNESS
SHALL BE SUBORDINATED TO THE SAME EXTENT TO THE LOAN PROCEEDS NOTE GUARANTEE OF
THE LOAN PROCEEDS NOTE GUARANTOR OR THE GUARANTEE OF THE OBLIGATIONS OF SUCH
GUARANTOR, AS THE CASE MAY BE, INCURRING SUCH REFINANCING INDEBTEDNESS, (B) THE
REFINANCING INDEBTEDNESS SHALL NOT BE SENIOR IN RIGHT OF PAYMENT TO THE
INDEBTEDNESS THAT IS BEING REFINANCED AND (C) IN THE CASE OF ANY REFINANCING OF
INDEBTEDNESS INCURRED PURSUANT TO PARAGRAPH (A) ABOVE OR CLAUSE (I), (V), (VII)
OR (XII) OR, IF SUCH INDEBTEDNESS PREVIOUSLY REFINANCED INDEBTEDNESS INCURRED
PURSUANT TO ANY SUCH CLAUSE, THIS CLAUSE (VIII), THE REFINANCING INDEBTEDNESS BY
ITS TERMS, OR BY THE TERMS OF ANY AGREEMENT OR INSTRUMENT PURSUANT TO WHICH SUCH
INDEBTEDNESS IS ISSUED, (X) DOES NOT PROVIDE FOR PAYMENTS OF PRINCIPAL OF SUCH
INDEBTEDNESS AT STATED MATURITY OR BY WAY OF A SINKING FUND APPLICABLE THERETO
OR BY WAY OF ANY MANDATORY REDEMPTION, DEFEASANCE, RETIREMENT OR REPURCHASE
THEREOF BY LEVEL 3 OR ANY RESTRICTED SUBSIDIARY (INCLUDING ANY REDEMPTION,
RETIREMENT OR REPURCHASE WHICH IS CONTINGENT UPON EVENTS OR CIRCUMSTANCES, BUT
EXCLUDING ANY RETIREMENT REQUIRED BY VIRTUE OF THE ACCELERATION OF ANY PAYMENT
WITH RESPECT TO SUCH INDEBTEDNESS UPON ANY EVENT OF DEFAULT THEREUNDER), IN EACH
CASE PRIOR TO THE TIME THE SAME ARE REQUIRED BY THE TERMS OF THE INDEBTEDNESS
BEING REFINANCED AND (Y) DOES NOT PERMIT REDEMPTION OR OTHER RETIREMENT
(INCLUDING PURSUANT TO AN OFFER TO PURCHASE MADE BY LEVEL 3 OR ANY RESTRICTED
SUBSIDIARY) OF SUCH INDEBTEDNESS AT THE OPTION OF THE HOLDER THEREOF PRIOR TO
THE TIME THE SAME ARE REQUIRED BY THE TERMS OF THE INDEBTEDNESS BEING
REFINANCED, OTHER THAN, IN THE CASE OF CLAUSE (X) OR (Y), ANY SUCH PAYMENT,
REDEMPTION OR OTHER RETIREMENT (INCLUDING PURSUANT TO AN OFFER TO PURCHASE MADE
BY LEVEL 3) WHICH IS CONDITIONED UPON A CHANGE OF CONTROL

 

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PURSUANT TO PROVISIONS SUBSTANTIALLY SIMILAR TO THOSE DESCRIBED UNDER
SECTION 2.05(D) OR UPON AN ASSET SALE PURSUANT TO PROVISIONS SUBSTANTIALLY
SIMILAR TO THOSE DESCRIBED UNDER SECTION 6.07(C);

 

(IX) INDEBTEDNESS (A) IN RESPECT OF PERFORMANCE, SURETY OR APPEAL BONDS,
GUARANTEES, LETTERS OF CREDIT OR REIMBURSEMENT OBLIGATIONS INCURRED OR PROVIDED
IN THE ORDINARY COURSE OF BUSINESS SECURING THE PERFORMANCE OF CONTRACTUAL,
FRANCHISE, LEASE, SELF-INSURANCE OR LICENSE OBLIGATIONS AND NOT IN CONNECTION
WITH THE INCURRENCE OF INDEBTEDNESS OR (B) IN RESPECT OF CUSTOMARY AGREEMENTS
PROVIDING FOR INDEMNIFICATION, ADJUSTMENT OF PURCHASE PRICE AFTER CLOSING, OR
SIMILAR OBLIGATIONS, OR FROM GUARANTEES OR LETTERS OF CREDIT, SURETY BONDS OR
PERFORMANCE BONDS SECURING ANY SUCH OBLIGATIONS OF LEVEL 3 OR ANY OF ITS
RESTRICTED SUBSIDIARIES PURSUANT TO SUCH AGREEMENTS, INCURRED IN CONNECTION WITH
THE DISPOSITION OF ANY BUSINESS, ASSETS OR RESTRICTED SUBSIDIARY (OTHER THAN
GUARANTEES OF INDEBTEDNESS INCURRED BY ANY PERSON ACQUIRING ALL OR ANY PORTION
OF SUCH BUSINESS, ASSETS OR RESTRICTED SUBSIDIARY FOR THE PURPOSE OF FINANCING
SUCH ACQUISITION) AND IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED THE GROSS
PROCEEDS ACTUALLY RECEIVED BY LEVEL 3 OR ANY RESTRICTED SUBSIDIARY IN CONNECTION
WITH SUCH DISPOSITION;

 

(X) INDEBTEDNESS CONSISTING OF PERMITTED HEDGING AGREEMENTS;

 

(XI) INDEBTEDNESS NOT OTHERWISE PERMITTED TO BE INCURRED PURSUANT TO CLAUSES
(I) THROUGH (X) ABOVE OR CLAUSE (XII) BELOW, WHICH, TOGETHER WITH ANY OTHER
OUTSTANDING INDEBTEDNESS INCURRED PURSUANT TO THIS CLAUSE (XI), HAS AN AGGREGATE
PRINCIPAL AMOUNT NOT IN EXCESS OF $50,000,000 AT ANY TIME OUTSTANDING; AND

 

(XII) (A) EFFECTIVE DATE PURCHASE MONEY DEBT AND (B) INDEBTEDNESS OUTSTANDING ON
THE EFFECTIVE DATE UNDER THE EXISTING NOTES AND THE RELATED INDENTURES, ANY
RESTRICTED SUBSIDIARY GUARANTEES OR LEVEL 3 GUARANTEES ISSUED PRIOR TO THE
EFFECTIVE DATE IN ACCORDANCE WITH SUCH RELATED INDENTURES AND ANY GUARANTEE OF
THE FINANCING INC. NOTES ISSUED AFTER THE EFFECTIVE DATE; PROVIDED, HOWEVER,
THAT IN THE CASE OF ANY SUCH GUARANTEE OF THE FINANCING INC. NOTES ENTERED INTO
AFTER THE EFFECTIVE DATE, SUCH GUARANTEE IS INCURRED IN ACCORDANCE WITH (I) THE
LAST SENTENCE OF PARAGRAPH (D) OF THIS SECTION 6.01 AND (II) SECTION 6.02.

 

(C)  NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION 6.01, THE MAXIMUM
AMOUNT OF INDEBTEDNESS THAT LEVEL 3 OR ANY RESTRICTED SUBSIDIARY MAY INCUR
PURSUANT TO THIS SECTION 6.01 SHALL NOT BE DEEMED TO BE EXCEEDED DUE SOLELY TO
THE RESULT OF FLUCTUATIONS IN THE EXCHANGE RATES OF CURRENCIES.

 

(D)  FOR PURPOSES OF DETERMINING ANY PARTICULAR AMOUNT OF INDEBTEDNESS UNDER
THIS SECTION 6.01, GUARANTEES, LIENS OR OBLIGATIONS WITH RESPECT TO LETTERS OF
CREDIT SUPPORTING INDEBTEDNESS OTHERWISE INCLUDED IN THE DETERMINATION OF SUCH
PARTICULAR AMOUNT SHALL NOT BE INCLUDED AND SHALL NOT BE TREATED AS
INDEBTEDNESS.  FOR PURPOSES OF DETERMINING COMPLIANCE WITH THIS SECTION 6.01, IN
THE EVENT THAT AN ITEM OF INDEBTEDNESS

 

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MEETS THE CRITERIA OF MORE THAN ONE OF THE TYPES OF INDEBTEDNESS DESCRIBED IN
THE ABOVE CLAUSES, LEVEL 3, IN ITS SOLE DISCRETION, SHALL CLASSIFY, AND MAY
LATER RECLASSIFY, SUCH ITEM OF INDEBTEDNESS IN ANY MANNER THAT COMPLIES WITH
THIS SECTION.  TO THE EXTENT PERMITTED UNDER APPLICABLE LAWS AND REGULATIONS, IN
THE EVENT THAT ANY RESTRICTED SUBSIDIARY OF LEVEL 3 GUARANTEES ANY OF THE
FINANCING INC. NOTES, THEN LEVEL 3 SHALL CAUSE SUCH RESTRICTED SUBSIDIARY TO
(I) BECOME A GUARANTOR AND A LOAN PROCEEDS NOTE GUARANTOR, (II) IF SUCH
RESTRICTED SUBSIDIARY IS A BORROWER RESTRICTED SUBSIDIARY, SUBORDINATE, IN ANY
BANKRUPTCY, LIQUIDATION OR WINDING UP PROCEEDING OF SUCH BORROWER RESTRICTED
SUBSIDIARY, SUCH BORROWER RESTRICTED SUBSIDIARY’S GUARANTEE OF SUCH FINANCING
INC. NOTES TO THE GUARANTEE OF THE OBLIGATIONS AND THE LOAN PROCEEDS NOTE
GUARANTEE OF SUCH BORROWER RESTRICTED SUBSIDIARY (OR, IN THE CASE OF LEVEL 3
LLC, TO THE LOAN PROCEEDS NOTE) AND (III) IN THE CASE OF A LEVEL 3 LLC GUARANTEE
OF THE 2011 FLOATING RATE NOTES, THE 12.25% NOTES, THE 9.25% NOTES, THE 8.75%
NOTES OR THE 2015 FLOATING RATE NOTES, CAUSE LEVEL 3 LLC TO ENTER INTO THE LEVEL
3 LLC 2011 FLOATING RATE NOTES SUPPLEMENTAL INDENTURE, THE LEVEL 3 LLC 12.25%
NOTES SUPPLEMENTAL INDENTURE, THE LEVEL 3 LLC 9.25% NOTES SUPPLEMENTAL
INDENTURE, THE LEVEL 3 LLC 8.75% NOTES SUPPLEMENTAL INDENTURE OR THE LEVEL 3 LLC
2015 FLOATING RATE NOTES SUPPLEMENTAL INDENTURE, AS THE CASE MAY BE.

 

SECTION 6.02.  LIMITATION ON INDEBTEDNESS OF THE BORROWER AND BORROWER
RESTRICTED SUBSIDIARIES.  (A)  THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY
BORROWER RESTRICTED SUBSIDIARY TO, DIRECTLY OR INDIRECTLY, INCUR ANY
INDEBTEDNESS; PROVIDED, HOWEVER, THAT (I) THE BORROWER OR (II) ANY BORROWER
RESTRICTED SUBSIDIARY MAY INCUR ANY INDEBTEDNESS IF, AFTER GIVING PRO FORMA
EFFECT TO SUCH INCURRENCE AND THE RECEIPT AND APPLICATION OF THE NET PROCEEDS
THEREOF, NO DEFAULT OR EVENT OF DEFAULT WOULD OCCUR AS A CONSEQUENCE OF SUCH
INCURRENCE OR BE CONTINUING FOLLOWING SUCH INCURRENCE AND THE BORROWER DEBT
RATIO WOULD BE LESS THAN (1) 4.0 TO 1.0 IF SUCH INDEBTEDNESS IS INCURRED ON OR
PRIOR TO MARCH 15, 2008 AND (2) 3.75 TO 1.0 IF SUCH INDEBTEDNESS IS INCURRED
AFTER MARCH 15, 2008; PROVIDED, HOWEVER, THAT ANY BORROWER RESTRICTED SUBSIDIARY
THAT INCURS INDEBTEDNESS PURSUANT TO THIS PARAGRAPH (A) IS A GUARANTOR AND A
LOAN PROCEEDS NOTE GUARANTOR.

 

(B)  NOTWITHSTANDING THE FOREGOING LIMITATION, THE BORROWER OR ANY BORROWER
RESTRICTED SUBSIDIARY MAY INCUR ANY AND ALL OF THE FOLLOWING (EACH OF WHICH
SHALL BE GIVEN INDEPENDENT EFFECT):

 

(I) INDEBTEDNESS CREATED UNDER THE LOAN DOCUMENTS (OTHER THAN INDEBTEDNESS
INCURRED PURSUANT TO AN ADDITIONAL TRANCHE);

 

(II) INDEBTEDNESS UNDER CREDIT FACILITIES IN AN AGGREGATE PRINCIPAL AMOUNT
OUTSTANDING OR AVAILABLE, WHEN TAKEN TOGETHER WITH THE SUM OF (A) THE AMOUNT OF
ANY INDEBTEDNESS OUTSTANDING OR AVAILABLE UNDER THE LOAN DOCUMENTS, PLUS (B) THE
AMOUNT OF ANY OUTSTANDING INDEBTEDNESS INCURRED PURSUANT TO CLAUSE (II) OF
PARAGRAPH (B) OF SECTION 6.01, PLUS (C) THE AMOUNT OF ALL REFINANCING
INDEBTEDNESS OUTSTANDING OR AVAILABLE PURSUANT TO CLAUSE (VIII) OF PARAGRAPH (B)
OF SECTION 6.01 IN RESPECT OF INDEBTEDNESS PREVIOUSLY INCURRED PURSUANT TO
CLAUSE (II) OF PARAGRAPH (B) OF SECTION 6.01, PLUS (D) THE AMOUNT OF ALL
REFINANCING INDEBTEDNESS

 

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OUTSTANDING OR AVAILABLE PURSUANT TO CLAUSE (VI) BELOW IN RESPECT OF
INDEBTEDNESS PREVIOUSLY INCURRED PURSUANT TO THIS CLAUSE (II), AT ANY ONE TIME
NOT TO EXCEED THE GREATER OF (X) $1,400,000,000 AND (Y) 1.5 TIMES PRO FORMA
CONSOLIDATED CASH FLOW AVAILABLE FOR FIXED CHARGES OF THE BORROWER AND THE
BORROWER RESTRICTED SUBSIDIARIES FOR THE FOUR FULL FISCAL QUARTERS NEXT
PRECEDING THE INCURRENCE OF SUCH INDEBTEDNESS FOR WHICH FINANCIAL STATEMENTS
HAVE BEEN DELIVERED PURSUANT TO SECTION 5.01 OR 5.02, AS APPLICABLE, WHICH
AMOUNT SHALL BE PERMANENTLY REDUCED BY THE AMOUNT OF NET AVAILABLE PROCEEDS USED
AFTER THE EFFECTIVE DATE TO REPAY INDEBTEDNESS UNDER ANY CREDIT FACILITIES
(INCLUDING THE LOAN DOCUMENTS) OR ANY REFINANCING INDEBTEDNESS IN RESPECT OF ANY
CREDIT FACILITIES (INCLUDING THE LOAN DOCUMENTS) INCURRED PURSUANT TO
CLAUSE (VIII) OF PARAGRAPH (B) OF SECTION 6.01 OR CLAUSE (VI) BELOW), AND NOT
REINVESTED IN TELECOMMUNICATIONS/IS ASSETS OR USED TO REPAY INDEBTEDNESS CREATED
UNDER THE LOAN DOCUMENTS OR REPAY OTHER INDEBTEDNESS, PURSUANT TO AND AS
PERMITTED BY SECTION 6.07;

 

(III) INDEBTEDNESS OF THE BORROWER OR ANY BORROWER RESTRICTED SUBSIDIARY
OUTSTANDING ON THE MEASUREMENT DATE;

 

(IV) INDEBTEDNESS OWED BY THE BORROWER TO A RESTRICTED SUBSIDIARY, INDEBTEDNESS
OWED BY A BORROWER RESTRICTED SUBSIDIARY TO LEVEL 3 OR A RESTRICTED SUBSIDIARY
(INCLUDING INDEBTEDNESS OWED BY A BORROWER RESTRICTED SUBSIDIARY TO ANOTHER
BORROWER RESTRICTED SUBSIDIARY), AND INDEBTEDNESS WITH AN AGGREGATE PRINCIPAL
AMOUNT NOT IN EXCESS OF $10,000,000 AT ANY TIME OUTSTANDING OWED BY THE BORROWER
TO LEVEL 3 OR ANY SISTER RESTRICTED SUBSIDIARY; PROVIDED, HOWEVER, THAT (A) ANY
BORROWER RESTRICTED SUBSIDIARY THAT INCURS INDEBTEDNESS OWED TO LEVEL 3 OR A
SISTER RESTRICTED SUBSIDIARY PURSUANT TO THIS CLAUSE (IV) IS A GUARANTOR AND A
LOAN PROCEEDS NOTE GUARANTOR, (B)(X) UPON THE TRANSFER, CONVEYANCE OR OTHER
DISPOSITION BY SUCH BORROWER RESTRICTED SUBSIDIARY OR THE BORROWER OF ANY
INDEBTEDNESS SO PERMITTED TO A PERSON OTHER THAN THE BORROWER OR ANOTHER
BORROWER RESTRICTED SUBSIDIARY OR (Y) IF FOR ANY REASON SUCH BORROWER RESTRICTED
SUBSIDIARY CEASES TO BE A BORROWER RESTRICTED SUBSIDIARY, THE PROVISIONS OF THIS
CLAUSE (IV) SHALL NO LONGER BE APPLICABLE TO SUCH INDEBTEDNESS AND SUCH
INDEBTEDNESS SHALL BE DEEMED TO HAVE BEEN INCURRED BY THE BORROWER THEREOF AT
THE TIME OF SUCH TRANSFER, CONVEYANCE OR OTHER DISPOSITION OR WHEN SUCH BORROWER
RESTRICTED SUBSIDIARY CEASES TO BE A BORROWER RESTRICTED SUBSIDIARY AND (C) THE
PAYMENT OBLIGATION OF (I) SUCH INDEBTEDNESS (IF CLAUSE (A) ABOVE APPLIES) AND
(II) ALL OBLIGATIONS (IF CLAUSE (A) ABOVE APPLIES) WITH RESPECT TO ANY OFFERING
PROCEEDS NOTE GUARANTEE OF SUCH OBLIGOR IS EXPRESSLY SUBORDINATED IN ANY
BANKRUPTCY, LIQUIDATION OR WINDING UP PROCEEDING OF THE OBLIGOR TO THE PRIOR
PAYMENT IN FULL IN CASH OF ALL OBLIGATIONS OF SUCH GUARANTOR WITH RESPECT TO THE
LOAN PROCEEDS NOTE GUARANTEE OF SUCH LOAN PROCEEDS NOTE GUARANTOR; AND PROVIDED
FURTHER, HOWEVER, THAT A FOREIGN RESTRICTED SUBSIDIARY NEED NOT BECOME A
GUARANTOR OR A LOAN PROCEEDS NOTE GUARANTOR PURSUANT TO CLAUSE (A) ABOVE UNTIL
SUCH TIME AND ONLY SO LONG AS SUCH FOREIGN RESTRICTED SUBSIDIARY GUARANTEES ANY
OTHER INDEBTEDNESS OF LEVEL 3 OR ANY DOMESTIC RESTRICTED SUBSIDIARY;

 

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(V) INDEBTEDNESS INCURRED BY A PERSON (OTHER THAN LEVEL 3 OR ANY SISTER
RESTRICTED SUBSIDIARY) PRIOR TO THE TIME (A) SUCH PERSON BECAME A BORROWER
RESTRICTED SUBSIDIARY, (B) SUCH PERSON MERGES INTO OR CONSOLIDATES WITH A
BORROWER RESTRICTED SUBSIDIARY OR (C) A BORROWER RESTRICTED SUBSIDIARY MERGES
INTO OR CONSOLIDATES WITH SUCH PERSON (IN A TRANSACTION IN WHICH SUCH PERSON
BECOMES A BORROWER RESTRICTED SUBSIDIARY), WHICH INDEBTEDNESS WAS NOT INCURRED
IN ANTICIPATION OF SUCH TRANSACTION AND WAS OUTSTANDING PRIOR TO SUCH
TRANSACTION; PROVIDED, HOWEVER, THAT AFTER GIVING EFFECT TO THE INCURRENCE OF
ANY INDEBTEDNESS PURSUANT TO THIS CLAUSE (V), THE BORROWER COULD INCUR AT LEAST
$1.00 OF ADDITIONAL INDEBTEDNESS PURSUANT TO PARAGRAPH (A) ABOVE COMPUTED USING
“5.0 TO 1.0” RATHER THAN “4.0 TO 1.0”  OR “3.75 TO 1.0,” AS THE CASE MAY BE, AS
IT APPEARS THEREIN AND SUCH PERSON OR THE BORROWER RESTRICTED SUBSIDIARY INTO
WHICH SUCH PERSON MERGES OR CONSOLIDATES IS A GUARANTOR AND A LOAN PROCEEDS NOTE
GUARANTOR;

 

(VI) INDEBTEDNESS OF THE BORROWER OR ANY BORROWER RESTRICTED SUBSIDIARY INCURRED
TO RENEW, EXTEND, REFINANCE, DEFEASE, REPAY, PREPAY, REPURCHASE, REDEEM, RETIRE,
EXCHANGE OR REFUND (EACH, A “REFINANCING”) INDEBTEDNESS OF THE BORROWER OR ANY
BORROWER RESTRICTED SUBSIDIARY INCURRED PURSUANT TO PARAGRAPH (A) ABOVE OR
CLAUSE (I), (II), (III), (V) OR (X) OF THIS PARAGRAPH (B) OR THIS CLAUSE (VI),
IN AN AGGREGATE PRINCIPAL AMOUNT (OR IF ISSUED AT A DISCOUNT, THE THEN-ACCRETED
VALUE) NOT TO EXCEED THE AGGREGATE PRINCIPAL AMOUNT (OR IF ISSUED AT A DISCOUNT,
THE THEN-ACCRETED VALUE) OF AND ACCRUED INTEREST ON THE INDEBTEDNESS SO
REFINANCED PLUS THE AMOUNT OF ANY PREMIUM REQUIRED TO BE PAID IN CONNECTION WITH
SUCH REFINANCING PURSUANT TO THE TERMS OF THE INDEBTEDNESS SO REFINANCED OR THE
AMOUNT OF ANY PREMIUM REASONABLY DETERMINED BY THE BOARD OF DIRECTORS OF LEVEL 3
AS NECESSARY TO ACCOMPLISH SUCH REFINANCING BY MEANS OF A TENDER OFFER OR
PRIVATELY NEGOTIATED REPURCHASE, PLUS THE EXPENSES OF THE BORROWER INCURRED IN
CONNECTION WITH SUCH REFINANCING; PROVIDED, HOWEVER, THAT (A) IF THE PERSON THAT
ORIGINALLY INCURRED THE INDEBTEDNESS TO BE REFINANCED BECAME, OR WOULD HAVE BEEN
REQUIRED TO BECOME IF NOT ALREADY, A GUARANTOR OR A LOAN PROCEEDS NOTE GUARANTOR
AS A RESULT OF THE INCURRENCE OF THE INDEBTEDNESS BEING REFINANCED IN ACCORDANCE
WITH THIS COVENANT, (1) THE PERSON THAT INCURS THE REFINANCING INDEBTEDNESS
PURSUANT TO THIS CLAUSE (VI) (IF NOT THE BORROWER) SHALL BE A GUARANTOR AND A
LOAN PROCEEDS NOTE GUARANTOR AND (2) IF THE INDEBTEDNESS TO BE REFINANCED IS
SUBORDINATED TO THE LOAN PROCEEDS NOTE GUARANTEE OF SUCH LOAN PROCEEDS NOTE
GUARANTOR OR THE GUARANTEE OF THE OBLIGATIONS OF SUCH GUARANTOR, THE REFINANCING
INDEBTEDNESS SHALL BE SUBORDINATED TO THE SAME EXTENT TO THE LOAN PROCEEDS NOTE
GUARANTEE OF SUCH LOAN PROCEEDS NOTE GUARANTOR OR THE GUARANTEE OF THE
OBLIGATIONS OF SUCH GUARANTOR, AS THE CASE MAY BE, INCURRING SUCH REFINANCING
INDEBTEDNESS, (B) THE REFINANCING INDEBTEDNESS SHALL NOT BE SENIOR IN RIGHT OF
PAYMENT TO THE INDEBTEDNESS THAT IS BEING REFINANCED AND (C) IN THE CASE OF ANY
REFINANCING OF INDEBTEDNESS INCURRED PURSUANT TO PARAGRAPH (A) ABOVE OR
CLAUSE (I), (V) OR (X) OR, IF SUCH INDEBTEDNESS PREVIOUSLY REFINANCED
INDEBTEDNESS INCURRED PURSUANT TO ANY SUCH CLAUSE, THIS CLAUSE (VI), THE
REFINANCING INDEBTEDNESS BY ITS TERMS, OR BY THE TERMS OF ANY AGREEMENT OR
INSTRUMENT PURSUANT TO WHICH SUCH INDEBTEDNESS IS ISSUED, (X) DOES NOT PROVIDE
FOR PAYMENTS OF PRINCIPAL OF SUCH INDEBTEDNESS AT STATED MATURITY OR BY WAY OF A
SINKING FUND APPLICABLE THERETO OR BY WAY OF ANY

 

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MANDATORY REDEMPTION, DEFEASANCE, RETIREMENT OR REPURCHASE THEREOF BY THE
BORROWER OR ANY BORROWER RESTRICTED SUBSIDIARY (INCLUDING ANY REDEMPTION,
RETIREMENT OR REPURCHASE WHICH IS CONTINGENT UPON EVENTS OR CIRCUMSTANCES, BUT
EXCLUDING ANY RETIREMENT REQUIRED BY VIRTUE OF THE ACCELERATION OF ANY PAYMENT
WITH RESPECT TO SUCH INDEBTEDNESS UPON ANY EVENT OF DEFAULT THEREUNDER), IN EACH
CASE PRIOR TO THE TIME THE SAME ARE REQUIRED BY THE TERMS OF THE INDEBTEDNESS
BEING REFINANCED AND (Y) DOES NOT PERMIT REDEMPTION OR OTHER RETIREMENT
(INCLUDING PURSUANT TO AN OFFER TO PURCHASE MADE BY THE BORROWER OR A BORROWER
RESTRICTED SUBSIDIARY) OF SUCH INDEBTEDNESS AT THE OPTION OF THE HOLDER THEREOF
PRIOR TO THE TIME THE SAME ARE REQUIRED BY THE TERMS OF THE INDEBTEDNESS BEING
REFINANCED, OTHER THAN, IN THE CASE OF CLAUSE (X) OR (Y), ANY SUCH PAYMENT,
REDEMPTION OR OTHER RETIREMENT (INCLUDING PURSUANT TO AN OFFER TO PURCHASE MADE
BY THE BORROWER) WHICH IS CONDITIONED UPON A CHANGE OF CONTROL PURSUANT TO
PROVISIONS SUBSTANTIALLY SIMILAR TO THOSE DESCRIBED UNDER SECTION 2.05(D) OR
UPON AN ASSET SALE PURSUANT TO PROVISIONS SUBSTANTIALLY SIMILAR TO THOSE
DESCRIBED UNDER SECTION 6.07(C);

 

(VII) INDEBTEDNESS OF THE BORROWER OR ANY BORROWER RESTRICTED SUBSIDIARY (A) IN
RESPECT OF PERFORMANCE, SURETY OR APPEAL BONDS, GUARANTEES, LETTERS OF CREDIT OR
REIMBURSEMENT OBLIGATIONS INCURRED OR PROVIDED IN THE ORDINARY COURSE OF
BUSINESS SECURING THE PERFORMANCE OF CONTRACTUAL, FRANCHISE, LEASE,
SELF-INSURANCE OR LICENSE OBLIGATIONS AND NOT IN CONNECTION WITH THE INCURRENCE
OF INDEBTEDNESS OR (B) IN RESPECT OF CUSTOMARY AGREEMENTS PROVIDING FOR
INDEMNIFICATION, ADJUSTMENT OF PURCHASE PRICE AFTER CLOSING, OR SIMILAR
OBLIGATIONS, OR FROM GUARANTEES OR LETTERS OF CREDIT, SURETY BONDS OR
PERFORMANCE BONDS SECURING ANY SUCH OBLIGATIONS OF THE BORROWER OR ANY BORROWER
RESTRICTED SUBSIDIARY PURSUANT TO SUCH AGREEMENTS, INCURRED IN CONNECTION WITH
THE DISPOSITION OF ANY BUSINESS, ASSETS OR BORROWER RESTRICTED SUBSIDIARY (OTHER
THAN GUARANTEES OF INDEBTEDNESS INCURRED BY ANY PERSON ACQUIRING ALL OR ANY
PORTION OF SUCH BUSINESS, ASSETS OR BORROWER RESTRICTED SUBSIDIARY FOR THE
PURPOSE OF FINANCING SUCH ACQUISITION) AND IN AN AGGREGATE PRINCIPAL AMOUNT NOT
TO EXCEED THE GROSS PROCEEDS ACTUALLY RECEIVED BY THE BORROWER OR ANY BORROWER
RESTRICTED SUBSIDIARY IN CONNECTION WITH SUCH DISPOSITION;

 

(VIII) INDEBTEDNESS OF THE BORROWER OR ANY BORROWER RESTRICTED SUBSIDIARY
CONSISTING OF PERMITTED HEDGING AGREEMENTS;

 

(IX) INDEBTEDNESS OF ANY FOREIGN RESTRICTED SUBSIDIARY OF THE BORROWER NOT
OTHERWISE PERMITTED TO BE INCURRED PURSUANT TO CLAUSE (I) THROUGH (VIII) ABOVE
OR CLAUSE (X) BELOW, WHICH, TOGETHER WITH ANY OTHER OUTSTANDING INDEBTEDNESS
INCURRED PURSUANT TO THIS CLAUSE (IX) HAS AN AGGREGATE PRINCIPAL AMOUNT NOT IN
EXCESS OF $100,000,000 AT ANY TIME OUTSTANDING;

 

(X) (A) EFFECTIVE DATE PURCHASE MONEY DEBT INITIALLY INCURRED BY THE BORROWER OR
ANY BORROWER RESTRICTED SUBSIDIARY OR ANOTHER PERSON THAT BECAME A BORROWER
RESTRICTED SUBSIDIARY ON OR BEFORE THE EFFECTIVE DATE AND (B) INDEBTEDNESS UNDER
THE FINANCING INC. NOTES AND THE RELATED FINANCING INC. INDENTURES, ANY
GUARANTEES OF THE FINANCING INC. NOTES ISSUED PRIOR TO THE

 

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EFFECTIVE DATE IN ACCORDANCE WITH SUCH RELATED FINANCING INC. INDENTURES AND ANY
GUARANTEE OF THE FINANCING INC. NOTES ISSUED AFTER THE EFFECTIVE DATE; PROVIDED,
HOWEVER, THAT IN THE CASE OF ANY SUCH GUARANTEE OF THE FINANCING INC. NOTES
ENTERED INTO AFTER THE EFFECTIVE DATE, SUCH GUARANTEE IS INCURRED IN ACCORDANCE
WITH THE LAST SENTENCE OF PARAGRAPH (D) OF THIS SECTION 6.02; AND

 

(C)  NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION 6.02, THE MAXIMUM
AMOUNT OF INDEBTEDNESS THE BORROWER OR ANY BORROWER RESTRICTED SUBSIDIARY MAY
INCUR PURSUANT TO THIS SECTION 6.02 SHALL NOT BE DEEMED TO BE EXCEEDED DUE
SOLELY TO THE RESULT OF FLUCTUATIONS IN THE EXCHANGE RATES OF CURRENCIES.

 

(D)  FOR PURPOSES OF DETERMINING ANY PARTICULAR AMOUNT OF INDEBTEDNESS UNDER
THIS SECTION 6.02, GUARANTEES (OTHER THAN GUARANTEES OF INDEBTEDNESS OF LEVEL 3
OR ANY SISTER RESTRICTED SUBSIDIARY THAT ARE NOT GUARANTEES OF INDEBTEDNESS
INCURRED BY LEVEL 3 OR ANY SISTER RESTRICTED SUBSIDIARY PURSUANT TO CLAUSE (II)
OF PARAGRAPH (B) OF SECTION 6.01), LIENS OR OBLIGATIONS WITH RESPECT TO LETTERS
OF CREDIT SUPPORTING INDEBTEDNESS OTHERWISE INCLUDED IN THE DETERMINATION OF
SUCH PARTICULAR AMOUNT SHALL NOT BE INCLUDED AND SHALL NOT BE TREATED AS
INDEBTEDNESS.  FOR PURPOSES OF DETERMINING COMPLIANCE WITH THIS SECTION 6.02, IN
THE EVENT THAT AN ITEM OF INDEBTEDNESS MEETS THE CRITERIA OF MORE THAN ONE OF
THE TYPES OF INDEBTEDNESS DESCRIBED IN THE ABOVE CLAUSES, THE BORROWER, IN ITS
SOLE DISCRETION, SHALL CLASSIFY, AND MAY LATER RECLASSIFY, SUCH ITEM OF
INDEBTEDNESS IN ANY MANNER THAT COMPLIES WITH THIS SECTION.  TO THE EXTENT
PERMITTED UNDER APPLICABLE LAWS AND REGULATIONS, IN THE EVENT THAT ANY BORROWER
RESTRICTED SUBSIDIARY GUARANTEES ANY OF THE FINANCING INC. NOTES, THEN THE
BORROWER SHALL CAUSE SUCH BORROWER RESTRICTED SUBSIDIARY TO (I) BECOME A
GUARANTOR AND A LOAN PROCEEDS NOTE GUARANTOR, (II) TO SUBORDINATE, IN ANY
BANKRUPTCY, LIQUIDATION OR WINDING UP PROCEEDING OF SUCH BORROWER RESTRICTED
SUBSIDIARY, SUCH BORROWER RESTRICTED SUBSIDIARY’S GUARANTEE OF SUCH FINANCING
INC. NOTES TO THE GUARANTEE OF THE OBLIGATIONS AND THE LOAN PROCEEDS NOTE
GUARANTEE OF SUCH BORROWER RESTRICTED SUBSIDIARY (OR, IN THE CASE OF LEVEL 3
LLC, TO THE LOAN PROCEEDS NOTE) AND (III) IN THE CASE OF A LEVEL 3 LLC GUARANTEE
OF THE 2011 FLOATING RATE NOTES, THE 12.25% NOTES, THE 9.25% NOTES, THE 8.75%
NOTES OR THE 2015 FLOATING RATE NOTES, CAUSE LEVEL 3 LLC TO ENTER INTO THE LEVEL
3 LLC 2011 FLOATING RATE NOTES SUPPLEMENTAL INDENTURE, THE LEVEL 3 LLC 12.25%
NOTES SUPPLEMENTAL INDENTURE, THE LEVEL 3 LLC 9.25% NOTES SUPPLEMENTAL
INDENTURE, THE LEVEL 3 LLC 8.75% NOTES SUPPLEMENTAL INDENTURE OR THE LEVEL 3 LLC
2015 FLOATING RATE NOTES SUPPLEMENTAL INDENTURE, AS THE CASE MAY BE.

 

SECTION 6.03.  LIMITATION ON RESTRICTED PAYMENTS.  (A)  LEVEL 3:

 

(I) SHALL NOT, AND SHALL NOT PERMIT ANY RESTRICTED SUBSIDIARY TO, DIRECTLY OR
INDIRECTLY, DECLARE OR PAY ANY DIVIDEND, OR MAKE ANY DISTRIBUTION, IN RESPECT OF
ITS CAPITAL STOCK OR TO THE HOLDERS THEREOF, EXCLUDING ANY DIVIDENDS OR
DISTRIBUTIONS WHICH ARE MADE SOLELY TO LEVEL 3 OR A RESTRICTED SUBSIDIARY (AND,
IF SUCH RESTRICTED SUBSIDIARY IS NOT A WHOLLY OWNED SUBSIDIARY, TO THE OTHER
STOCKHOLDERS OF SUCH RESTRICTED SUBSIDIARY ON A PRO RATA BASIS OR ON A BASIS
THAT RESULTS IN THE RECEIPT BY LEVEL 3 OR A RESTRICTED SUBSIDIARY OF DIVIDENDS
OR DISTRIBUTIONS OF GREATER VALUE THAN IT WOULD RECEIVE ON A PRO RATA BASIS) OR
ANY DIVIDENDS OR

 

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DISTRIBUTIONS PAYABLE SOLELY IN SHARES OF CAPITAL STOCK OF LEVEL 3 (OTHER THAN
DISQUALIFIED STOCK) OR IN OPTIONS, WARRANTS OR OTHER RIGHTS TO ACQUIRE CAPITAL
STOCK OF LEVEL 3 (OTHER THAN DISQUALIFIED STOCK);

 

(II) SHALL NOT, AND SHALL NOT PERMIT ANY RESTRICTED SUBSIDIARY TO, PURCHASE,
REDEEM, OR OTHERWISE RETIRE OR ACQUIRE FOR VALUE (X) ANY CAPITAL STOCK OF
LEVEL 3 OR ANY RESTRICTED SUBSIDIARY OR (Y) ANY OPTIONS, WARRANTS OR RIGHTS TO
PURCHASE OR ACQUIRE SHARES OF CAPITAL STOCK OF LEVEL 3 OR ANY RESTRICTED
SUBSIDIARY OR ANY SECURITIES CONVERTIBLE OR EXCHANGEABLE INTO SHARES OF CAPITAL
STOCK OF LEVEL 3 OR ANY RESTRICTED SUBSIDIARY, EXCEPT, IN ANY SUCH CASE, ANY
SUCH PURCHASE, REDEMPTION OR RETIREMENT OR ACQUISITION FOR VALUE (A) PAID TO
LEVEL 3 OR A RESTRICTED SUBSIDIARY (OR, IN THE CASE OF ANY SUCH PURCHASE,
REDEMPTION OR OTHER RETIREMENT OR ACQUISITION FOR VALUE WITH RESPECT TO A
RESTRICTED SUBSIDIARY THAT IS NOT A WHOLLY OWNED SUBSIDIARY, TO THE OTHER
STOCKHOLDERS OF SUCH RESTRICTED SUBSIDIARY ON A PRO RATA BASIS OR ON A BASIS
THAT RESULTS IN THE RECEIPT BY LEVEL 3 OR A RESTRICTED SUBSIDIARY OF PAYMENTS OF
GREATER VALUE THAN IT WOULD RECEIVE ON A PRO RATA BASIS) OR (B) PAID SOLELY IN
SHARES OF CAPITAL STOCK (OTHER THAN DISQUALIFIED STOCK) OF LEVEL 3;

 

(III) SHALL NOT MAKE, OR PERMIT ANY RESTRICTED SUBSIDIARY TO MAKE, ANY
INVESTMENT (OTHER THAN AN INVESTMENT IN LEVEL 3 OR A RESTRICTED SUBSIDIARY OR A
PERMITTED INVESTMENT) IN ANY PERSON, INCLUDING THE DESIGNATION OF ANY RESTRICTED
SUBSIDIARY AS AN UNRESTRICTED SUBSIDIARY, OR THE REVOCATION OF ANY SUCH
DESIGNATION, ACCORDING TO SECTION 6.10;

 

(IV) SHALL NOT, AND SHALL NOT PERMIT ANY RESTRICTED SUBSIDIARY TO, REDEEM,
DEFEASE, REPURCHASE, RETIRE OR OTHERWISE ACQUIRE OR RETIRE FOR VALUE, PRIOR TO
ANY SCHEDULED MATURITY, REPAYMENT OR SINKING FUND PAYMENT, INDEBTEDNESS OF
LEVEL 3 WHICH IS SUBORDINATE IN RIGHT OF PAYMENT TO THE GUARANTEE BY LEVEL 3 OF
THE OBLIGATIONS OR INDEBTEDNESS OF ANY RESTRICTED SUBSIDIARY WHICH IS
SUBORDINATE IN RIGHT OF PAYMENT TO THE LOANS (IN THE CASE OF THE BORROWER) OR
THE GUARANTEE OF THE OBLIGATIONS (IN THE CASE OF RESTRICTED SUBSIDIARIES OTHER
THAN THE BORROWER) BY SUCH RESTRICTED SUBSIDIARY (OTHER THAN ANY REDEMPTION,
DEFEASANCE, REPURCHASE, RETIREMENT OR OTHER ACQUISITION OR RETIREMENT FOR VALUE
MADE IN ANTICIPATION OF AND SATISFYING A SCHEDULED MATURITY, REPAYMENT OR
SINKING FUND OBLIGATION DUE WITHIN ONE YEAR THEREOF); AND

 

(V) SHALL NOT, AND SHALL NOT PERMIT ANY RESTRICTED SUBSIDIARY TO, ISSUE,
TRANSFER, CONVEY, SELL OR OTHERWISE DISPOSE OF CAPITAL STOCK OF ANY RESTRICTED
SUBSIDIARY TO A PERSON OTHER THAN LEVEL 3 OR ANOTHER RESTRICTED SUBSIDIARY IF
THE RESULT THEREOF IS THAT SUCH RESTRICTED SUBSIDIARY SHALL CEASE TO BE A
RESTRICTED SUBSIDIARY, IN WHICH EVENT THE AMOUNT OF SUCH “RESTRICTED PAYMENT”
SHALL BE THE FAIR MARKET VALUE OF THE REMAINING INTEREST, IF ANY, IN SUCH FORMER
RESTRICTED SUBSIDIARY HELD BY LEVEL 3 AND THE OTHER RESTRICTED SUBSIDIARIES
(EACH OF CLAUSES (I) THROUGH (V) BEING A “RESTRICTED PAYMENT”)

 

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if:

 

(1) an Event of Default, or an event that with the passing of time or the giving
of notice, or both, would constitute an Event of Default, shall have occurred
and be continuing, or

 

(2) upon giving effect to such Restricted Payment, Level 3 could not Incur at
least $1.00 of additional Indebtedness pursuant to paragraph (a) of
Section 6.01, or

 

(3) upon giving effect to such Restricted Payment, the aggregate of all
Restricted Payments made on or after Measurement Date, including Restricted
Payments made pursuant to clause (A) or (B) of the proviso at the end of this
sentence, and Permitted Investments made on or after the Measurement Date
pursuant to clause (i) or (j) of the definition thereof (the amount of any such
Restricted Payment or Permitted Investment, if made other than in cash, to be
based upon Fair Market Value) exceeds the sum of:

 

(A) 50% of cumulative Consolidated Net Income of Level 3 and its Restricted
Subsidiaries (or subtracting, in the case that Consolidated Net Income of Level
3 and its Restricted Subsidiaries shall be negative, 100% of such negative
amount) since the end of the last full fiscal quarter prior to the Measurement
Date through the last day of the last full fiscal quarter ending prior to the
date of such Restricted Payment for which consolidated financial statements have
been delivered pursuant to Section 5.01 or 5.02, as applicable, and

 

(B) plus, in the case of any Revocation made after the Measurement Date, an
amount equal to the lesser of the portion (proportionate to Level 3’s equity
interest in the Subsidiary to which such Revocation relates) of the Fair Market
Value of the net assets of such Subsidiary at the time of Revocation and the
amount of Investments previously made (and treated as a Restricted Payment) by
Level 3 or any Restricted Subsidiary in such Subsidiary;

 

provided, however, that Level 3 or a Restricted Subsidiary may, without regard
to the limitations in clause (3) but subject to clauses (1) and (2), make
(A) Restricted Payments in an aggregate amount not to exceed the sum of
$50,000,000 and the aggregate net cash proceeds received after the Measurement
Date (i) as capital contributions to Level 3, from the issuance (other than to a
Subsidiary or an employee stock ownership plan or trust established by Level 3
or any such Subsidiary for the benefit of their employees) of Capital Stock
(other than Disqualified Stock) of Level 3, and (ii) from the issuance or sale
of Indebtedness of Level 3 or any Restricted Subsidiary (other than to a
Subsidiary, Level 3 or an employee stock ownership plan or trust established by
Level 3 or any such

 

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Subsidiary for the benefit of their employees) that after the Measurement Date
has been converted into or exchanged for Capital Stock (other than Disqualified
Stock) of Level 3 and (B) Investments in Persons engaged in the
Telecommunications/IS Business in an aggregate amount not to exceed the
after-tax gain on the sale, after the Measurement Date, of Special Assets to the
extent sold for cash, Cash Equivalents, Telecommunications/IS Assets or the
assumption of Indebtedness of Level 3 or any Restricted Subsidiary (other than
Indebtedness that is subordinated to the Loans, the Loan Proceeds Note or any
applicable Guarantee of the Obligations or Loan Proceeds Note Guarantee) and
release of Level 3 and all Restricted Subsidiaries from all liability on the
Indebtedness assumed.  The aggregate net cash proceeds referred to in the
immediately preceding clauses (A)(i) and (A)(ii) shall not be utilized to make
Restricted Payments pursuant to such clauses to the extent such proceeds have
been utilized to make Permitted Investments under clause (i) of the definition
of “Permitted Investments.”

 

(B)  NOTWITHSTANDING THE FOREGOING LIMITATION,

 

(I) LEVEL 3 MAY PAY ANY DIVIDEND ON CAPITAL STOCK OF ANY CLASS OF LEVEL 3 WITHIN
60 DAYS AFTER THE DECLARATION THEREOF IF, ON THE DATE WHEN THE DIVIDEND WAS
DECLARED, LEVEL 3 COULD HAVE PAID SUCH DIVIDEND IN ACCORDANCE WITH THE FOREGOING
PROVISIONS; PROVIDED, HOWEVER, THAT AT THE TIME OF SUCH PAYMENT OF SUCH
DIVIDEND, NO OTHER EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING (OR
RESULT THEREFROM);

 

(II) LEVEL 3 MAY REPURCHASE ANY SHARES OF ITS COMMON STOCK OR OPTIONS TO ACQUIRE
ITS COMMON STOCK FROM PERSONS WHO WERE FORMERLY DIRECTORS, OFFICERS OR EMPLOYEES
OF LEVEL 3 OR ANY OF ITS SUBSIDIARIES OR OTHER AFFILIATES IN AN AMOUNT NOT TO
EXCEED $3,000,000 IN ANY 12-MONTH PERIOD;

 

(III) LEVEL 3 AND ANY RESTRICTED SUBSIDIARY MAY REFINANCE ANY INDEBTEDNESS
OTHERWISE PERMITTED BY CLAUSE (VIII) OF PARAGRAPH (B) OF SECTION 6.01 OR
CLAUSE (VI) OF PARAGRAPH (B) OF SECTION 6.02;

 

(IV) LEVEL 3 AND ANY RESTRICTED SUBSIDIARY MAY RETIRE OR REPURCHASE ANY CAPITAL
STOCK OF LEVEL 3 OR OF ANY RESTRICTED SUBSIDIARY OR ANY SUBORDINATED DEBT OF
LEVEL 3 IN EXCHANGE FOR, OR OUT OF THE PROCEEDS OF SUBSTANTIALLY CONCURRENT SALE
(OTHER THAN TO A SUBSIDIARY OR AN EMPLOYEE STOCK OWNERSHIP PLAN OR TRUST
ESTABLISHED BY LEVEL 3 OR ANY SUCH SUBSIDIARY FOR THE BENEFIT OF THEIR
EMPLOYEES) OF, CAPITAL STOCK (OTHER THAN DISQUALIFIED STOCK) OF LEVEL 3;
PROVIDED, HOWEVER, THAT THE PROCEEDS FROM ANY SUCH EXCHANGE OR SALE OF CAPITAL
STOCK SHALL BE EXCLUDED FROM ANY CALCULATION PURSUANT TO CLAUSE (A)(I) IN THE
PROVISO AT THE END OF PARAGRAPH (A) ABOVE OR PURSUANT TO CLAUSE (B) OF THE
DEFINITION OF “INVESTED CAPITAL”; AND

 

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(V) LEVEL 3 MAY PAY CASH DIVIDENDS IN ANY AMOUNT NOT IN EXCESS OF $50,000,000 IN
ANY 12-MONTH PERIOD IN RESPECT OF PREFERRED STOCK OF LEVEL 3 (OTHER THAN
DISQUALIFIED STOCK).

 

The Restricted Payments described in the foregoing clauses (i), (ii) and (v)
shall be included in the calculation of Restricted Payments; the Restricted
Payments described in clauses (iii) and (iv) shall be excluded in the
calculation of Restricted Payments.

 

(C)  THE BORROWER MAY NOT, AND MAY NOT PERMIT ANY BORROWER RESTRICTED SUBSIDIARY
TO, PAY ANY DIVIDEND OR MAKE ANY DISTRIBUTION IN RESPECT OF SHARES OF ITS
CAPITAL STOCK HELD BY LEVEL 3 OR A SISTER RESTRICTED SUBSIDIARY (WHETHER IN
CASH, SECURITIES OR OTHER PROPERTY) OR ANY PAYMENT (WHETHER IN CASH, SECURITIES
OR OTHER PROPERTY) ON ACCOUNT OF THE PURCHASE, REDEMPTION, RETIREMENT,
ACQUISITION, CANCELLATION OR TERMINATION OF ANY SUCH SHARES OF CAPITAL STOCK
(ALL SUCH DIVIDENDS, DISTRIBUTIONS AND PAYMENTS BEING REFERRED TO HEREIN AS
“LEVEL 3 TRANSFERS”), OTHER THAN (I) LEVEL 3 TRANSFERS AT SUCH TIMES AND IN SUCH
AMOUNTS AS SHALL BE NECESSARY TO PERMIT LEVEL 3 TO PAY ADMINISTRATIVE EXPENSES
ATTRIBUTABLE TO THE OPERATIONS OF ITS RESTRICTED SUBSIDIARIES, (II) LEVEL 3
TRANSFERS AT SUCH TIMES AND IN SUCH AMOUNTS AS ARE SUFFICIENT FOR LEVEL 3 TO
MAKE THE TIMELY PAYMENT OF INTEREST, PREMIUM (IF ANY) AND PRINCIPAL (WHETHER AT
STATED MATURITY, BY WAY OF A SINKING FUND APPLICABLE THERETO, BY WAY OF ANY
MANDATORY REDEMPTION, DEFEASANCE, RETIREMENT OR REPURCHASE THEREOF, INCLUDING
UPON THE OCCURRENCE OF DESIGNATED EVENTS OR CIRCUMSTANCES OR BY VIRTUE OF
ACCELERATION UPON AN EVENT OF DEFAULT, OR BY WAY OF REDEMPTION OR RETIREMENT AT
THE OPTION OF THE HOLDER OF THE INDEBTEDNESS OF LEVEL 3, INCLUDING PURSUANT TO
OFFERS TO PURCHASE) ACCORDING TO THE TERMS OF ANY INDEBTEDNESS OF LEVEL 3,
(III) LEVEL 3 TRANSFERS (A) TO PERMIT LEVEL 3 TO SATISFY ITS OBLIGATIONS IN
RESPECT OF STOCK OPTION PLANS OR OTHER BENEFIT PLANS FOR MANAGEMENT OR EMPLOYEES
OF LEVEL 3 AND ITS SUBSIDIARIES, (B) TO PERMIT LEVEL 3 TO PAY DIVIDENDS ON
PREFERRED STOCK OF LEVEL 3 IN AN AMOUNT NOT TO EXCEED THE AGGREGATE NET CASH
PROCEEDS RECEIVED BY LEVEL 3 (1) AFTER SEPTEMBER 30, 1999, FROM THE ISSUANCE OF
CAPITAL STOCK, AND (2) FROM THE ISSUANCE OR SALE OF INDEBTEDNESS OF LEVEL 3 OR
ANY RESTRICTED SUBSIDIARY THAT AFTER SEPTEMBER 30, 1999, HAS BEEN CONVERTED INTO
OR EXCHANGED FOR CAPITAL STOCK OF LEVEL 3, (C) IN AN ANNUAL AMOUNT NOT TO EXCEED
50% OF LEVEL 3’S CONSOLIDATED NET INCOME FOR THE PRIOR FISCAL YEAR AND
(D) LEVEL 3 TRANSFERS IN AMOUNTS NOT TO EXCEED THE AMOUNT REQUIRED BY LEVEL 3 TO
PAY ACCRUED AND UNPAID INTEREST ON ANY INDEBTEDNESS OF LEVEL 3 DUE UPON THE
CONVERSION, EXCHANGE OR PURCHASE OF SUCH INDEBTEDNESS INTO, FOR OR WITH CAPITAL
STOCK OF LEVEL 3 AND (IV) ADDITIONAL LEVEL 3 TRANSFERS AFTER OCTOBER 1, 2003 IN
AN AGGREGATE AMOUNT NOT TO EXCEED $50,000,000 IN THE AGGREGATE.

 

SECTION 6.04.  LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES.  (A)  LEVEL 3 SHALL NOT, AND SHALL NOT PERMIT ANY
RESTRICTED SUBSIDIARY TO, DIRECTLY OR INDIRECTLY, CREATE OR OTHERWISE CAUSE OR
SUFFER TO EXIST OR BECOME EFFECTIVE ANY CONSENSUAL ENCUMBRANCE OR RESTRICTION
(OTHER THAN PURSUANT TO LAW OR REGULATION) ON THE ABILITY OF ANY RESTRICTED
SUBSIDIARY (I) TO PAY DIVIDENDS (IN CASH OR OTHERWISE) OR MAKE ANY OTHER
DISTRIBUTIONS IN RESPECT OF ITS CAPITAL STOCK OWNED BY LEVEL 3 OR ANY OTHER
RESTRICTED SUBSIDIARY OR PAY ANY INDEBTEDNESS OR OTHER OBLIGATION OWED TO
LEVEL 3 OR ANY OTHER RESTRICTED SUBSIDIARY, (II) TO MAKE LOANS OR ADVANCES TO

 

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LEVEL 3 OR ANY OTHER RESTRICTED SUBSIDIARY OR (III) TO TRANSFER ANY OF ITS
PROPERTY TO LEVEL 3 OR ANY OTHER RESTRICTED SUBSIDIARY.

 

(B)  NOTWITHSTANDING THE FOREGOING LIMITATION, LEVEL 3 MAY, AND MAY PERMIT ANY
RESTRICTED SUBSIDIARY TO, CREATE OR OTHERWISE CAUSE OR SUFFER TO EXIST

 

(I) ANY ENCUMBRANCE OR RESTRICTION IN EFFECT ON THE MEASUREMENT DATE,

 

(II) ANY ENCUMBRANCE OR RESTRICTION UNDER THE LOAN DOCUMENTS, AND ANY CUSTOMARY
(AS CONCLUSIVELY DETERMINED IN GOOD FAITH BY THE CHIEF FINANCIAL OFFICER OF
LEVEL 3) ENCUMBRANCE OR RESTRICTION APPLICABLE TO A RESTRICTED SUBSIDIARY THAT
IS CONTAINED IN AN AGREEMENT OR INSTRUMENT GOVERNING OR RELATING TO INDEBTEDNESS
CONTAINED IN ANY QUALIFIED RECEIVABLE FACILITY OR PURCHASE MONEY DEBT INCURRED
PURSUANT TO CLAUSE (II) OF PARAGRAPH (B) UNDER SECTION 6.01 OR CLAUSE (II) OF
PARAGRAPH (B) UNDER SECTION 6.02 (OR REFINANCING INDEBTEDNESS THEREOF INCURRED
PURSUANT TO CLAUSE (VIII) OF PARAGRAPH (B) UNDER SECTION 6.01 OR CLAUSE (VI) OF
PARAGRAPH (B) UNDER SECTION 6.02); PROVIDED, HOWEVER, THAT SUCH ENCUMBRANCES AND
RESTRICTIONS DO NOT LIMIT THE ABILITY OF SUCH RESTRICTED SUBSIDIARY, DIRECTLY OR
INDIRECTLY (INCLUDING THROUGH ANOTHER SUBSIDIARY OF THE BORROWER) (I) TO PAY
DIVIDENDS (IN CASH OR OTHERWISE) OR MAKE ANY OTHER DISTRIBUTIONS IN RESPECT OF
ITS CAPITAL STOCK OWNED BY THE BORROWER OR ANY OTHER BORROWER RESTRICTED
SUBSIDIARY OR PAY ANY INDEBTEDNESS OR OTHER OBLIGATION OWED TO THE BORROWER,
(II) TO MAKE LOANS OR ADVANCES TO THE BORROWER OR (III) TO TRANSFER ANY OF ITS
PROPERTY (OTHER THAN IN THE CASE OF PURCHASE MONEY DEBT, THE
TELECOMMUNICATIONS/IS ASSETS INSTALLED, CONSTRUCTED, ACQUIRED, LEASED, DEVELOPED
OR IMPROVED WITH THE PROCEEDS OF SUCH PURCHASE MONEY DEBT AND ANY IMPROVEMENTS
OR ACCESSIONS THERETO) TO THE BORROWER,

 

(III) ANY ENCUMBRANCE OR RESTRICTION PURSUANT TO AN AGREEMENT RELATING TO ANY
ACQUIRED DEBT, WHICH ENCUMBRANCE OR RESTRICTION IS NOT APPLICABLE TO ANY PERSON,
OR THE PROPERTIES OR ASSETS OF ANY PERSON, OTHER THAN THE PERSON SO ACQUIRED,

 

(IV) ANY ENCUMBRANCE OR RESTRICTION PURSUANT TO AN AGREEMENT EFFECTING A
REFINANCING OF INDEBTEDNESS INCURRED PURSUANT TO AN AGREEMENT REFERRED TO IN
CLAUSE (I), (II) OR (III) OF THIS PARAGRAPH (B); PROVIDED, HOWEVER, THAT THE
PROVISIONS CONTAINED IN SUCH AGREEMENT RELATING TO SUCH ENCUMBRANCE OR
RESTRICTION ARE NO MORE RESTRICTIVE (AS SO DETERMINED) IN ANY MATERIAL RESPECT
THAN THE PROVISIONS CONTAINED IN THE AGREEMENT THE SUBJECT THEREOF,

 

(V) IN THE CASE OF CLAUSE (III) OF PARAGRAPH (A) ABOVE, ANY ENCUMBRANCE OR
RESTRICTION CONTAINED IN ANY SECURITY AGREEMENT (INCLUDING A CAPITAL LEASE
OBLIGATION) SECURING INDEBTEDNESS OF LEVEL 3 OR A RESTRICTED SUBSIDIARY
OTHERWISE PERMITTED UNDER THIS AGREEMENT, BUT ONLY TO THE EXTENT SUCH
RESTRICTIONS RESTRICT THE TRANSFER OF THE PROPERTY SUBJECT TO SUCH SECURITY
AGREEMENT,

 

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(VI) IN THE CASE OF CLAUSE (III) OF PARAGRAPH (A) ABOVE, CUSTOMARY PROVISIONS
(A) THAT RESTRICT THE SUBLETTING, ASSIGNMENT OR TRANSFER OF ANY PROPERTY THAT IS
A LEASE, LICENSE, CONVEYANCE OR SIMILAR CONTRACT, (B) CONTAINED IN ASSET SALE OR
OTHER ASSET DISPOSITION AGREEMENTS LIMITING THE TRANSFER OF THE PROPERTY BEING
SOLD OR DISPOSED OF PENDING THE CLOSING OF SUCH SALE OR DISPOSITION OR
(C) ARISING OR AGREED TO IN THE ORDINARY COURSE OF BUSINESS, NOT RELATING TO ANY
INDEBTEDNESS, AND THAT DO NOT, INDIVIDUALLY OR IN THE AGGREGATE, DETRACT FROM
THE VALUE OF PROPERTY OF LEVEL 3 OR ANY RESTRICTED SUBSIDIARY IN ANY MANNER
MATERIAL TO LEVEL 3 OR ANY RESTRICTED SUBSIDIARY,

 

(VII) ANY ENCUMBRANCE OR RESTRICTION WITH RESPECT TO A RESTRICTED SUBSIDIARY
IMPOSED PURSUANT TO AN AGREEMENT WHICH HAS BEEN ENTERED INTO FOR THE SALE OR
DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE CAPITAL STOCK OR PROPERTY OF SUCH
RESTRICTED SUBSIDIARY; PROVIDED, HOWEVER, THAT THE CONSUMMATION OF SUCH
TRANSACTION WOULD NOT RESULT IN A DEFAULT OR AN EVENT OF DEFAULT, THAT SUCH
RESTRICTION TERMINATES IF SUCH TRANSACTION IS ABANDONED AND THAT THE
CONSUMMATION OR ABANDONMENT OF SUCH TRANSACTION OCCURS WITHIN ONE YEAR OF THE
DATE SUCH AGREEMENT WAS ENTERED INTO, AND

 

(VIII) ANY ENCUMBRANCE OR RESTRICTION PURSUANT TO THIS AGREEMENT.

 

SECTION 6.05.  LIMITATION ON LIENS.  LEVEL 3 SHALL NOT, AND SHALL NOT PERMIT ANY
RESTRICTED SUBSIDIARY TO, DIRECTLY OR INDIRECTLY, INCUR OR SUFFER TO EXIST ANY
LIEN ON OR WITH RESPECT TO ANY PROPERTY NOW OWNED OR ACQUIRED AFTER THE
EFFECTIVE DATE TO SECURE ANY INDEBTEDNESS OTHER THAN:

 

(I) LIENS EXISTING ON THE EFFECTIVE DATE AND SECURING INDEBTEDNESS OUTSTANDING
ON THE EFFECTIVE DATE, WHICH IN ANY EVENT SHALL NOT INCLUDE LIENS SECURING THE
PARENT INTERCOMPANY NOTE OR THE EXISTING NOTES;

 

(II) LIENS INCURRED ON OR AFTER THE EFFECTIVE DATE:

 

(1) pursuant to the Loan Documents to secure Indebtedness permitted to be
Incurred pursuant to clause (ii) of paragraph (b) under Section 6.01 or clause
(ii) of paragraph (b) under Section 6.02 (or refinancing Indebtedness in respect
thereof Incurred pursuant to clause (viii) of paragraph (b) under Section 6.01
or clause (vi) of paragraph (b) under Section 6.02);

 

(2) on Receivables, collections thereof and accounts established solely for the
collection of such Receivables to secure Indebtedness under Qualified
Receivables Facilities permitted to be Incurred pursuant to clause (ii) of
paragraph (b) under Section 6.01 or clause (ii) of paragraph (b) under
Section 6.02 (or refinancing Indebtedness thereof Incurred pursuant to
clause (viii) of paragraph (b) under Section 6.01 or clause (vi) of
paragraph (b) under Section 6.02);

 

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(3) on cash to secure reimbursement obligations in respect of letters of credit
permitted to be Incurred pursuant to clause (ii) of paragraph (b) under
Section 6.01 or clause (ii) of paragraph (b) under Section 6.02 (or refinancing
Indebtedness thereof Incurred pursuant to clause (vi) of paragraph (b) under
Section 6.02 or clause (viii) of paragraph (b) under Section 6.01), provided
that the amount of such cash does not exceed 110% of the face amount of such
letters of credit; and

 

(4) on Property acquired after the Effective Date with the proceeds of Purchase
Money Debt Incurred pursuant to clause (ii) of paragraph (b) under Section 6.01
or clause (ii) of paragraph (b) under Section 6.02 (or refinancing Indebtedness
thereof Incurred pursuant to clause (vi) of paragraph (b) under Section 6.02 or
clause (viii) of paragraph (b) under Section 6.01) to secure such Purchase Money
Debt, provided that any such Lien may not extend to any Property other than the
Telecommunications/IS Assets installed, constructed, acquired, leased, developed
or improved with the proceeds of such Purchase Money Debt and any improvements
or accessions thereto (it being understood that all Indebtedness to any single
lender or group of related lenders or outstanding under any single credit
facility, and in any case relating to the same group or collection of
Telecommunications/IS Assets financed thereby, shall be considered a single
Purchase Money Debt, whether drawn at one time or from time to time);

 

(III) LIENS IN FAVOR OF LEVEL 3 OR ANY RESTRICTED SUBSIDIARY; PROVIDED, HOWEVER,
THAT ANY SUBSEQUENT ISSUE OR TRANSFER OF CAPITAL STOCK OR OTHER EVENT THAT
RESULTS IN ANY SUCH RESTRICTED SUBSIDIARY CEASING TO BE A RESTRICTED SUBSIDIARY
OR ANY SUBSEQUENT TRANSFER OF THE INDEBTEDNESS SECURED BY ANY SUCH LIEN (EXCEPT
TO LEVEL 3 OR A RESTRICTED SUBSIDIARY) SHALL BE DEEMED, IN EACH CASE, TO
CONSTITUTE THE INCURRENCE OF SUCH LIEN BY THE BORROWER THEREOF;

 

(IV) LIENS OUTSTANDING ON THE EFFECTIVE DATE SECURING PURCHASE MONEY DEBT AND
LIENS ON PROPERTY ACQUIRED AFTER THE EFFECTIVE DATE WITH THE PROCEEDS OF
PURCHASE MONEY DEBT INCURRED PURSUANT TO CLAUSE (III) OF PARAGRAPH (B) UNDER
SECTION 6.01 TO SECURE SUCH PURCHASE MONEY DEBT, PROVIDED THAT ANY SUCH LIEN MAY
NOT EXTEND TO ANY PROPERTY OTHER THAN THE TELECOMMUNICATIONS/IS ASSETS
INSTALLED, CONSTRUCTED, ACQUIRED, LEASED, DEVELOPED OR IMPROVED WITH THE
PROCEEDS OF SUCH PURCHASE MONEY DEBT AND ANY IMPROVEMENTS OR ACCESSIONS THERETO
(IT BEING UNDERSTOOD THAT ALL INDEBTEDNESS TO ANY SINGLE LENDER OR GROUP OF
RELATED LENDERS OR OUTSTANDING UNDER ANY SINGLE CREDIT FACILITY, AND IN ANY CASE
RELATING TO THE SAME GROUP OR COLLECTION OF TELECOMMUNICATIONS/IS ASSETS
FINANCED THEREBY, SHALL BE CONSIDERED A SINGLE PURCHASE MONEY DEBT, WHETHER
DRAWN AT ONE TIME OR FROM TIME TO TIME);

 

(V) LIENS TO SECURE ACQUIRED DEBT, PROVIDED THAT (A) SUCH LIEN ATTACHES TO THE
ACQUIRED PROPERTY PRIOR TO THE TIME OF THE ACQUISITION OF SUCH PROPERTY AND
(B) SUCH LIEN DOES NOT EXTEND TO OR COVER ANY OTHER PROPERTY;

 

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(VI) LIENS TO SECURE INDEBTEDNESS INCURRED TO REFINANCE, IN WHOLE OR IN PART,
INDEBTEDNESS SECURED BY ANY LIEN REFERRED TO IN THE FOREGOING CLAUSES (I),
(IV) AND (V) OR THIS CLAUSE (VI) SO LONG AS SUCH LIEN DOES NOT EXTEND TO ANY
OTHER PROPERTY (OTHER THAN IMPROVEMENTS AND ACCESSIONS TO THE ORIGINAL PROPERTY)
AND THE PRINCIPAL AMOUNT OF INDEBTEDNESS SO SECURED IS NOT INCREASED EXCEPT AS
OTHERWISE PERMITTED UNDER CLAUSE (VIII) OF PARAGRAPH (B) OF SECTION 6.01 OR
CLAUSE (VI) OF PARAGRAPH (B) OF SECTION 6.02;

 

(VII) LIENS ON PROPERTY (A) NOT CONSTITUTING COLLATERAL AND (B) NOT REQUIRED TO
BECOME COLLATERAL FOLLOWING THE SATISFACTION OF THE GUARANTEE PERMIT CONDITION
AND THE COLLATERAL PERMIT CONDITION, INCURRED ON OR AFTER THE MEASUREMENT DATE
NOT OTHERWISE PERMITTED BY THE FOREGOING CLAUSES (I) THROUGH (V) (BUT INCLUDING
IN THE COMPUTATIONS OF LIENS PERMITTED UNDER THIS CLAUSE (VII) LIENS EXISTING ON
THE EFFECTIVE DATE WHICH REMAIN EXISTING AT THE TIME OF COMPUTATION WHICH ARE
OTHERWISE PERMITTED UNDER CLAUSE (I)) SECURING INDEBTEDNESS OF LEVEL 3 OR ANY
RESTRICTED SUBSIDIARY (OTHER THAN THE BORROWER OR ANY BORROWER RESTRICTED
SUBSIDIARY) IN AN AGGREGATE AMOUNT NOT TO EXCEED 5% OF LEVEL 3’S CONSOLIDATED
TANGIBLE ASSETS.

 

(VIII) LIENS ON PROPERTY OF ANY NON-TELECOMMUNICATIONS SUBSIDIARY; PROVIDED,
HOWEVER, THAT THE INCURRENCE OF SUCH LIEN DOES NOT REQUIRE THE PERSON INCURRING
SUCH LIEN TO SECURE ANY INDEBTEDNESS OF ANY PERSON OTHER THAN A
NON-TELECOMMUNICATIONS SUBSIDIARY;

 

(IX) LIENS TO SECURE INDEBTEDNESS INCURRED PURSUANT TO CLAUSE (VIII) OF
PARAGRAPH (B) OF SECTION 6.02; AND

 

(X) PERMITTED LIENS.

 

SECTION 6.06.  LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.  LEVEL 3 SHALL
NOT, AND SHALL NOT PERMIT ANY RESTRICTED SUBSIDIARY TO, DIRECTLY OR INDIRECTLY,
ENTER INTO, ASSUME, GUARANTEE OR OTHERWISE BECOME LIABLE WITH RESPECT TO ANY
SALE AND LEASEBACK TRANSACTION, UNLESS (I) LEVEL 3 OR SUCH RESTRICTED SUBSIDIARY
WOULD BE ENTITLED TO INCUR (A) INDEBTEDNESS IN AN AMOUNT EQUAL TO THE
ATTRIBUTABLE VALUE OF THE SALE AND LEASEBACK TRANSACTION PURSUANT TO
SECTION 6.01 OR SECTION 6.02 AND (B) A LIEN PURSUANT TO SECTION 6.05, EQUAL IN
AMOUNT TO THE ATTRIBUTABLE VALUE OF THE SALE AND LEASEBACK TRANSACTION, AND
(II) THE SALE AND LEASEBACK TRANSACTION IS TREATED AS AN ASSET DISPOSITION AND
ALL OF THE CONDITIONS OF SECTION 6.07 (INCLUDING THE PROVISIONS CONCERNING THE
APPLICATION OF NET AVAILABLE PROCEEDS) ARE SATISFIED WITH RESPECT TO SUCH SALE
AND LEASEBACK TRANSACTION, TREATING ALL OF THE CONSIDERATION RECEIVED IN SUCH
SALE AND LEASEBACK TRANSACTION AS NET AVAILABLE PROCEEDS FOR PURPOSES OF SUCH
SECTION 6.07.

 

SECTION 6.07.  LIMITATION ON ASSET DISPOSITIONS.  (A)  LEVEL 3 SHALL NOT, AND
SHALL NOT PERMIT ANY RESTRICTED SUBSIDIARY TO, MAKE ANY ASSET DISPOSITION
UNLESS: (I) LEVEL 3 OR THE RESTRICTED SUBSIDIARY, AS THE CASE MAY BE, RECEIVES
CONSIDERATION FOR SUCH DISPOSITION AT LEAST EQUAL TO THE FAIR MARKET VALUE FOR
THE PROPERTY SOLD OR DISPOSED OF AS DETERMINED BY THE BOARD OF DIRECTORS OF
LEVEL 3 IN GOOD FAITH AND EVIDENCED BY A

 

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BOARD RESOLUTION OF LEVEL 3; AND (II) AT LEAST 75% OF THE CONSIDERATION FOR SUCH
DISPOSITION CONSISTS OF CASH OR CASH EQUIVALENTS OR THE ASSUMPTION OF
INDEBTEDNESS OF THE BORROWER OR ANY BORROWER RESTRICTED SUBSIDIARY (OTHER THAN
INDEBTEDNESS OF THE BORROWER THAT IS SUBORDINATED TO THE OBLIGATIONS OR
INDEBTEDNESS OF ANY BORROWER RESTRICTED SUBSIDIARY THAT IS SUBORDINATED TO THE
OBLIGATIONS OF SUCH BORROWER RESTRICTED SUBSIDIARY) AND RELEASE OF THE BORROWER
AND ALL BORROWER RESTRICTED SUBSIDIARIES FROM ALL LIABILITY ON THE INDEBTEDNESS
ASSUMED (OR IF LESS THAN 75%, THE REMAINDER OF SUCH CONSIDERATION CONSISTS OF
TELECOMMUNICATIONS/IS ASSETS); PROVIDED, HOWEVER, THAT, TO THE EXTENT SUCH
DISPOSITION INVOLVES SPECIAL ASSETS, ALL OR ANY PORTION OF THE CONSIDERATION
MAY, AT LEVEL 3’S ELECTION, CONSIST OF PROPERTY OTHER THAN CASH, CASH
EQUIVALENTS OR THE ASSUMPTION OF INDEBTEDNESS OR TELECOMMUNICATIONS/IS ASSETS.

 

(B)  IF THE NET AVAILABLE PROCEEDS FROM ANY ASSET DISPOSITION (OR ANY SERIES OF
RELATED ASSET DISPOSITIONS) CONSISTING OF PROPERTY THAT IS COLLATERAL OR
PROPERTY THAT WOULD BE REQUIRED TO BECOME COLLATERAL FOLLOWING THE SATISFACTION
OF THE GUARANTEE PERMIT CONDITION AND THE COLLATERAL PERMIT CONDITION EXCEED
$20,000,000, THE BORROWER SHALL DEPOSIT AN AMOUNT IN CASH OR CASH EQUIVALENTS
EQUAL TO SUCH NET AVAILABLE PROCEEDS (WHICH SUCH AMOUNT SHALL THEREAFTER
CONSTITUTE THE NET AVAILABLE PROCEEDS OF SUCH ASSET DISPOSITION OR RELATED ASSET
DISPOSITIONS) INTO A DEPOSIT ACCOUNT IN WHICH THE COLLATERAL AGENT HAS A
PERFECTED SECURITY INTEREST IN FAVOR OF THE LENDERS.  PRIOR TO THE TIME A NOTICE
OF DEFAULT SHALL HAVE BEEN DELIVERED TO THE BORROWER PURSUANT TO ARTICLE VII,
THE BORROWER MAY WITHDRAW SUCH NET AVAILABLE PROCEEDS, AND THE COLLATERAL AGENT,
AT THE REQUEST OF THE BORROWER, SHALL TAKE ALL ACTIONS NECESSARY, AT THE EXPENSE
OF THE BORROWER, TO PROMPTLY RELEASE THE SECURITY INTEREST IN SUCH NET AVAILABLE
PROCEEDS (I) TO PERMIT LEVEL 3 OR A RESTRICTED SUBSIDIARY TO REINVEST SUCH NET
AVAILABLE PROCEEDS IN TELECOMMUNICATIONS/IS ASSETS, (II) TO PERMIT THE BORROWER
TO REPAY THE LOANS IN ACCORDANCE WITH SECTION 2.05(B) OR (III) FOLLOWING ANY
PREPAYMENT OF THE LOANS AS REQUIRED BY SECTION 2.05(B), WITH RESPECT TO ANY SUCH
NET AVAILABLE PROCEEDS THAT HAVE BEEN REJECTED BY DECLINING LENDERS PURSUANT TO
SECTION 2.05(E), TO LEVEL 3 OR ANY RESTRICTED SUBSIDIARY FOR ANY PURPOSE.

 

(C)  THE NET AVAILABLE PROCEEDS (OR ANY PORTION THEREOF) FROM ASSET DISPOSITIONS
MAY BE APPLIED BY LEVEL 3 OR A RESTRICTED SUBSIDIARY, TO THE EXTENT LEVEL 3 OR
SUCH RESTRICTED SUBSIDIARY ELECTS: (1) TO PERMANENTLY PREPAY BORROWINGS IN
ACCORDANCE WITH SECTION 2.05(B) OR (C) OR (2) TO REINVEST IN
TELECOMMUNICATIONS/IS ASSETS (INCLUDING BY MEANS OF AN INVESTMENT IN
TELECOMMUNICATIONS/IS ASSETS BY A RESTRICTED SUBSIDIARY WITH NET AVAILABLE
PROCEEDS RECEIVED BY LEVEL 3 OR ANOTHER RESTRICTED SUBSIDIARY).  LEVEL 3 SHALL
NOT, AND SHALL NOT PERMIT ANY RESTRICTED SUBSIDIARY, TO ACQUIRE ANY
TELECOMMUNICATIONS/IS ASSETS WITH THE NET AVAILABLE PROCEEDS OF ANY ASSET
DISPOSITION CONSISTING OF COLLATERAL OR PROPERTY THAT WOULD BE REQUIRED TO
BECOME COLLATERAL FOLLOWING THE SATISFACTION OF THE GUARANTEE PERMIT CONDITION
AND THE COLLATERAL PERMIT CONDITION UNLESS SUCH TELECOMMUNICATIONS/IS ASSETS ARE
COLLATERAL OR PROPERTY THAT WOULD BE REQUIRED TO BECOME COLLATERAL FOLLOWING THE
SATISFACTION OF THE GUARANTEE PERMIT CONDITION AND THE COLLATERAL PERMIT
CONDITION.  ANY NET AVAILABLE PROCEEDS FROM AN ASSET DISPOSITION NOT APPLIED IN
ACCORDANCE WITH PARAGRAPH (B) WITHIN 330 DAYS (OR, IN THE CASE OF A DISPOSITION
OF SPECIAL ASSETS IDENTIFIED IN CLAUSE (A) OF THE DEFINITION THEREOF IN WHICH
THE NET AVAILABLE PROCEEDS EXCEED $500,000,000, 510 DAYS) FROM THE DATE OF THE

 

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RECEIPT OF SUCH NET AVAILABLE PROCEEDS SHALL CONSTITUTE “EXCESS PROCEEDS.”  THE
BORROWER SHALL APPLY SUCH EXCESS PROCEEDS TO THE EXTENT AND IN THE MANNER
REQUIRED BY SECTION 2.05.

 

(D)  (1) THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY BORROWER RESTRICTED
SUBSIDIARY, TO SELL, TRANSFER, LEASE OR OTHERWISE DISPOSE OF ANY PROPERTY THAT
IS COLLATERAL OR THAT WOULD BE REQUIRED TO BECOME COLLATERAL FOLLOWING THE
SATISFACTION OF THE COLLATERAL PERMIT CONDITION TO A SUBSIDIARY OF LEVEL 3
(OTHER THAN A SUBSIDIARY THAT IS A GUARANTOR AND A GRANTOR OR THAT WILL BECOME A
GUARANTOR AND A GRANTOR FOLLOWING SATISFACTION OF THE GUARANTEE PERMIT CONDITION
AND THE COLLATERAL PERMIT CONDITION), AND (2) LEVEL 3 SHALL NOT DESIGNATE AS AN
UNRESTRICTED SUBSIDIARY ANY BORROWER RESTRICTED SUBSIDIARY THAT OWNS, DIRECTLY
OR INDIRECTLY, ANY PROPERTY THAT IS COLLATERAL OR THAT WOULD BE REQUIRED TO
BECOME COLLATERAL FOLLOWING THE SATISFACTION OF THE COLLATERAL PERMIT CONDITION
UNLESS EITHER:

 

(A) (1) IN THE CASE OF A SALE, TRANSFER, LEASE OR OTHER DISPOSITION, THE
BORROWER OR SUCH BORROWER RESTRICTED SUBSIDIARY RECEIVES CONSIDERATION FOR SUCH
SALE, TRANSFER, LEASE OR OTHER DISPOSITION AT LEAST EQUAL TO THE FAIR MARKET
VALUE OF SUCH PROPERTY (WHICH, IN THE CASE OF THE OFFERING PROCEEDS NOTES, ANY
OTHER INTERCOMPANY INDEBTEDNESS OR THE LOAN PROCEEDS NOTE, IS THE PRINCIPAL
AMOUNT OF SUCH OFFERING PROCEEDS NOTE, SUCH INDEBTEDNESS OR THE LOAN PROCEEDS
NOTE, AS APPLICABLE, AND ANY ACCRUED AND UNPAID INTEREST THEREON), AND

 

(2) in the case of a sale, transfer, lease or other disposition, the
consideration consists of 100% in cash or Cash Equivalents; or

 

(B) SUCH TRANSACTION:

 

(1) is desirable in the conduct of the business of Level 3 and its Subsidiaries
taken as a whole (as conclusively determined by the Board of Directors of Level
3), and

 

(2) (i) in the case of a sale, transfer, lease or other disposition in which the
consideration does not consist of 100% cash or Cash Equivalents, the Fair Market
Value of the Property that is Collateral so sold, transferred, leased or
disposed of (net of any cash or Cash Equivalents received by the Borrower or
such Borrower Restricted Subsidiary in respect of such Collateral), or (ii) in
the case of a designation of a Borrower Restricted Subsidiary as an Unrestricted
Subsidiary, the Fair Market Value of all Property that is Collateral owned,
directly or indirectly, by such Borrower Restricted Subsidiary at the time it is
designated an Unrestricted Subsidiary, when taken together with the Collateral
Release Amount (determined prior to such sale, lease, transfer or other
disposition or designation as an Unrestricted Subsidiary), does not exceed 5.0%
of Consolidated Tangible Assets as determined at the time of such sale, lease,
transfer or other disposition or designation as an Unrestricted Subsidiary, on
the basis of the most recent consolidated

 

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balance sheet available to Level 3 (as conclusively determined in good faith by
the Chief Financial Officer of Level 3).

 

For purposes of this Section 6.07(d), “Collateral Release Amount” means an
amount equal to:

 

(1) the sum of (x) the Fair Market Value of any Property that constituted
Collateral previously sold, transferred, leased or otherwise disposed of
pursuant to this Section 6.07(d) for consideration not consisting of 100% cash
or Cash Equivalents (net of any cash or Cash Equivalents received by the
transferor in consideration for such sale, transfer, lease or other disposition)
plus (y) the Fair Market Value of all Property that constituted Collateral held
directly or indirectly by each Borrower Restricted Subsidiary previously
designated as an Unrestricted Subsidiary pursuant to this Section 6.07(d), minus

 

(2) the sum of, without duplication, (x) the amount of any cash or Cash
Equivalents received by the Borrower or a Borrower Restricted Subsidiary in
repayment of principal or as a return of capital from an Investment made
pursuant to clause (B) of this Section 6.07(d) plus (y) the amount of any cash
or Cash Equivalents received by the Borrower or a Borrower Restricted Subsidiary
from a Borrower Restricted Subsidiary designated as an Unrestricted Subsidiary
pursuant to this Section 6.07(d) representing a return of capital, in the case
of clauses (x) and (y), to the extent such cash or Cash Equivalents were treated
as Net Available Proceeds from an Asset Disposition, plus (z) the Fair Market
Value (determined at the time that such Property again becomes Collateral in
accordance with the Security Documents) of any Property which had ceased to be
Collateral pursuant to this Section 6.07(d) and thereafter became Collateral in
accordance with the terms of the Security Documents.

 

In the event of (a) a transfer of Property that constitutes Collateral made in
accordance with this Section 6.07(d), such Property shall be released from any
Lien to which it is subject pursuant to the Security Documents in accordance
with the procedures in Section 9.14 or (b) the designation of a Restricted
Subsidiary as an Unrestricted Subsidiary in compliance with this
Section 6.07(d), such Restricted Subsidiary shall, by delivery of documentation
providing for such release in form satisfactory to the Administrative Agent, be
released from any Guarantee (in the case of a Guarantor) and its obligations
under the Collateral Agreement (in the case of a Grantor) previously made by
such Subsidiary.

 

(E)  THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY BORROWER RESTRICTED
SUBSIDIARY TO, SELL, TRANSFER, LEASE OR OTHERWISE DISPOSE OF ANY PROPERTY THAT
DOES NOT CONSTITUTE COLLATERAL TO LEVEL 3 OR ANY SISTER RESTRICTED SUBSIDIARY
UNLESS (I) THE BORROWER OR SUCH BORROWER RESTRICTED SUBSIDIARY RECEIVES
CONSIDERATION FOR SUCH SALE, TRANSFER, LEASE OR OTHER DISPOSITION AT LEAST EQUAL
TO THE FAIR MARKET VALUE OF SUCH

 

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PROPERTY AND (II) THE CONSIDERATION CONSISTS OF EITHER (A) 100% IN CASH OR CASH
EQUIVALENTS OR (B) INDEBTEDNESS OF LEVEL 3 OR THE RESTRICTED SUBSIDIARY TO WHICH
PROPERTY WAS TRANSFERRED THAT IS SECURED BY A LIEN ON SUCH TRANSFERRED
PROPERTY.  LEVEL 3 OR THE RESTRICTED SUBSIDIARY TO WHICH PROPERTY WAS
TRANSFERRED FOR CONSIDERATION CONSISTING OF INDEBTEDNESS THAT IS SECURED BY A
LIEN ON SUCH PROPERTY IN ACCORDANCE WITH CLAUSE (II)(B) OF THE PRIOR SENTENCE
MAY SUBSTITUTE THE LIEN ON SUCH PROPERTY WITH A LIEN ON OTHER PROPERTY
(INCLUDING ANY PROPERTY OWNED BY THE BORROWER OR A BORROWER RESTRICTED
SUBSIDIARY) THAT, AS DETERMINED BY THE BOARD OF DIRECTORS OF LEVEL 3 IN GOOD
FAITH AND EVIDENCED BY A BOARD RESOLUTION OF LEVEL 3 FILED WITH THE AGENT UPON
REQUEST OF THE AGENT, HAS A FAIR MARKET VALUE OF NO LESS THAN THE FAIR MARKET
VALUE OF THE PROPERTY FOR WHICH THE SUBSTITUTION IS MADE AT THE TIME OF THE
SUBSTITUTION.  THE PROVISIONS OF THIS PARAGRAPH DO NOT APPLY TO (A) DIVIDENDS
AND DISTRIBUTIONS, (B) LOANS OR ADVANCES AND (C) PURCHASES OF SERVICES OR GOODS.

 

SECTION 6.08.  LIMITATION ON ISSUANCE AND SALES OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES.  LEVEL 3 SHALL AT ALL TIMES OWN ALL THE ISSUED AND OUTSTANDING
CAPITAL STOCK OF THE BORROWER.  THE BORROWER SHALL AT ALL TIMES OWN ALL THE
ISSUED AND OUTSTANDING CAPITAL STOCK OF LEVEL 3 LLC.  LEVEL 3 SHALL NOT, AND
SHALL NOT PERMIT ANY RESTRICTED SUBSIDIARY TO, ISSUE, TRANSFER, CONVEY, SELL OR
OTHERWISE DISPOSE OF ANY SHARES OF CAPITAL STOCK OF A RESTRICTED SUBSIDIARY OR
SECURITIES CONVERTIBLE OR EXCHANGEABLE INTO, OR OPTIONS, WARRANTS, RIGHTS OR ANY
OTHER INTEREST WITH RESPECT TO, CAPITAL STOCK OF A RESTRICTED SUBSIDIARY TO ANY
PERSON OTHER THAN LEVEL 3 OR A RESTRICTED SUBSIDIARY EXCEPT (I) A SALE OF ALL OF
THE CAPITAL STOCK OF SUCH RESTRICTED SUBSIDIARY OWNED BY LEVEL 3 AND ANY
RESTRICTED SUBSIDIARY THAT COMPLIES WITH THE PROVISIONS OF SECTION 6.07 TO THE
EXTENT SUCH PROVISIONS APPLY, (II) IN A TRANSACTION THAT RESULTS IN SUCH
RESTRICTED SUBSIDIARY BECOMING A JOINT VENTURE, PROVIDED (X) SUCH TRANSACTION
COMPLIES WITH THE PROVISIONS OF SECTION 6.07 TO THE EXTENT SUCH PROVISIONS APPLY
AND (Y) THE REMAINING INTEREST OF LEVEL 3 OR ANY OTHER RESTRICTED SUBSIDIARY IN
SUCH JOINT VENTURE WOULD HAVE BEEN PERMITTED AS A NEW RESTRICTED PAYMENT OR
PERMITTED INVESTMENT UNDER THE PROVISIONS OF SECTION 6.03, (III) THE ISSUANCE,
TRANSFER, CONVEYANCE, SALE OR OTHER DISPOSITION OF SHARES OF SUCH RESTRICTED
SUBSIDIARY SO LONG AS AFTER GIVING EFFECT TO SUCH TRANSACTION SUCH RESTRICTED
SUBSIDIARY REMAINS A RESTRICTED SUBSIDIARY AND SUCH TRANSACTION COMPLIES WITH
THE PROVISIONS OF SECTION 6.07 TO THE EXTENT SUCH PROVISIONS APPLY, (IV) THE
TRANSFER, CONVEYANCE, SALE OR OTHER DISPOSITION OF SHARES REQUIRED BY APPLICABLE
LAW OR REGULATION, (V) IF REQUIRED, THE ISSUANCE, TRANSFER, CONVEYANCE, SALE OR
OTHER DISPOSITION OF DIRECTORS’ QUALIFYING SHARES, (VI) DISQUALIFIED STOCK
ISSUED IN EXCHANGE FOR, OR UPON CONVERSION OF, OR THE PROCEEDS OF THE ISSUANCE
OF WHICH ARE USED TO REFINANCE, SHARES OF DISQUALIFIED STOCK OF SUCH RESTRICTED
SUBSIDIARY, PROVIDED THAT THE AMOUNTS OF THE REDEMPTION OBLIGATIONS OF SUCH
DISQUALIFIED STOCK SHALL NOT EXCEED THE AMOUNTS OF THE REDEMPTION OBLIGATIONS
OF, AND SUCH DISQUALIFIED STOCK SHALL HAVE REDEMPTION OBLIGATIONS NO EARLIER
THAN THOSE REQUIRED BY, THE DISQUALIFIED STOCK BEING EXCHANGED, CONVERTED OR
REFINANCED, (VII) IN A TRANSACTION WHERE LEVEL 3 OR A RESTRICTED SUBSIDIARY
ACQUIRES AT THE SAME TIME NOT LESS THAN ITS PROPORTIONATE INTEREST IN SUCH
ISSUANCE OF CAPITAL STOCK, (VIII) CAPITAL STOCK ISSUED AND OUTSTANDING ON THE
MEASUREMENT DATE, (IX) CAPITAL STOCK OF A RESTRICTED SUBSIDIARY ISSUED AND
OUTSTANDING PRIOR TO THE TIME THAT SUCH PERSON BECOMES A RESTRICTED SUBSIDIARY
SO LONG AS SUCH CAPITAL STOCK WAS NOT ISSUED IN CONTEMPLATION OF SUCH PERSON’S
BECOMING A RESTRICTED SUBSIDIARY OR OTHERWISE BEING ACQUIRED BY LEVEL 3 AND

 

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(X) AN ISSUANCE OF PREFERRED STOCK OF A RESTRICTED SUBSIDIARY (OTHER THAN
PREFERRED STOCK CONVERTIBLE OR EXCHANGEABLE INTO COMMON STOCK OF ANY RESTRICTED
SUBSIDIARY) OTHERWISE PERMITTED BY THIS AGREEMENT.  IN THE EVENT OF (A) THE
CONSUMMATION OF A TRANSACTION REFERRED TO IN ANY OF THE FOREGOING CLAUSES THAT
RESULTS IN A RESTRICTED SUBSIDIARY THAT IS A GUARANTOR OR A GRANTOR (OR BOTH) NO
LONGER BEING A RESTRICTED SUBSIDIARY AND (B) THE EXECUTION AND DELIVERY OF
DOCUMENTATION PROVIDING FOR SUCH RELEASE IN FORM SATISFACTORY TO THE
ADMINISTRATIVE AGENT, ANY SUCH GUARANTOR OR GRANTOR (OR GUARANTOR AND GRANTOR)
SHALL BE RELEASED FROM ALL ITS OBLIGATIONS UNDER ITS GUARANTEE (IN THE CASE OF A
GUARANTOR) AND ITS OBLIGATIONS UNDER THE COLLATERAL AGREEMENT (IN THE CASE OF A
GRANTOR).

 

SECTION 6.09.  TRANSACTIONS WITH AFFILIATES.  LEVEL 3 SHALL NOT, AND SHALL NOT
PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY, SELL,
LEASE, TRANSFER, OR OTHERWISE DISPOSE OF ANY OF ITS PROPERTY TO, OR PURCHASE ANY
PROPERTY FROM, OR ENTER INTO ANY CONTRACT, AGREEMENT, UNDERSTANDING, LOAN,
ADVANCE, GUARANTEE OR TRANSACTION (INCLUDING THE RENDERING OF SERVICES) WITH OR
FOR THE BENEFIT OF, ANY AFFILIATE (EACH OF THE FOREGOING, AN “AFFILIATE
TRANSACTION”), UNLESS (A) SUCH AFFILIATE TRANSACTION OR SERIES OF AFFILIATE
TRANSACTIONS IS (I) IN THE BEST INTEREST OF LEVEL 3 OR SUCH RESTRICTED
SUBSIDIARY AND (II) ON TERMS THAT ARE NO LESS FAVORABLE TO LEVEL 3 OR SUCH
RESTRICTED SUBSIDIARY THAN THOSE THAT WOULD HAVE BEEN OBTAINED IN A COMPARABLE
ARM’S-LENGTH TRANSACTION BY LEVEL 3 OR SUCH RESTRICTED SUBSIDIARY WITH A PERSON
THAT IS NOT AN AFFILIATE (OR, IN THE EVENT THAT THERE ARE NO COMPARABLE
TRANSACTIONS INVOLVING PERSONS WHO ARE NOT AFFILIATES OF LEVEL 3 OR THE RELEVANT
RESTRICTED SUBSIDIARY TO APPLY FOR COMPARATIVE PURPOSES, IS OTHERWISE ON TERMS
THAT, TAKEN AS A WHOLE, LEVEL 3 HAS DETERMINED TO BE FAIR TO LEVEL 3 OR THE
RELEVANT RESTRICTED SUBSIDIARY) AND (B) LEVEL 3 OBTAINS (I) WITH RESPECT TO ANY
AFFILIATE TRANSACTION OR SERIES OF AFFILIATE TRANSACTIONS INVOLVING AGGREGATE
PAYMENTS IN EXCESS OF $10,000,000 BUT LESS THAN $15,000,000, A CERTIFICATE OF
THE CHIEF EXECUTIVE, OPERATING OR FINANCIAL OFFICER OF LEVEL 3 EVIDENCING SUCH
OFFICER’S DETERMINATION THAT SUCH AFFILIATE TRANSACTION OR SERIES OF AFFILIATE
TRANSACTIONS COMPLIES WITH CLAUSE (A) ABOVE AND (II) WITH RESPECT TO ANY
AFFILIATE TRANSACTION OR SERIES OF AFFILIATE TRANSACTIONS INVOLVING AGGREGATE
PAYMENTS EQUAL TO OR IN EXCESS OF $15,000,000, A BOARD RESOLUTION OF LEVEL 3
CERTIFYING THAT SUCH AFFILIATE TRANSACTION OR SERIES OF AFFILIATE TRANSACTIONS
COMPLIES WITH CLAUSE (A) ABOVE AND THAT SUCH AFFILIATE TRANSACTION OR SERIES OF
AFFILIATE TRANSACTIONS HAS BEEN APPROVED BY THE BOARD OF DIRECTORS OF LEVEL 3,
INCLUDING A MAJORITY OF THE DISINTERESTED MEMBERS OF THE BOARD OF DIRECTORS OF
LEVEL 3; PROVIDED, HOWEVER, THAT, IN THE EVENT THAT THERE SHALL NOT BE AT LEAST
TWO DISINTERESTED MEMBERS OF THE BOARD OF DIRECTORS OF LEVEL 3 WITH RESPECT TO
THE AFFILIATE TRANSACTION, LEVEL 3 SHALL, AT THE REQUEST OF THE ADMINISTRATIVE
AGENT, IN ADDITION TO SUCH BOARD RESOLUTION, DELIVER TO THE ADMINISTRATIVE AGENT
A WRITTEN OPINION FROM AN INVESTMENT BANKING FIRM OF NATIONAL STANDING IN THE
UNITED STATES WHICH, IN THE GOOD FAITH JUDGMENT OF THE BOARD OF DIRECTORS OF
LEVEL 3, IS INDEPENDENT WITH RESPECT TO LEVEL 3 AND ITS AFFILIATES AND QUALIFIED
TO PERFORM SUCH TASK, WHICH OPINION SHALL BE TO THE EFFECT THAT THE
CONSIDERATION TO BE PAID OR RECEIVED IN CONNECTION WITH SUCH AFFILIATE
TRANSACTION IS FAIR, FROM A FINANCIAL POINT OF VIEW, TO LEVEL 3 OR SUCH
RESTRICTED SUBSIDIARY.

 

Notwithstanding the foregoing, the following shall not be deemed Affiliate
Transactions: (i) any employment agreement entered into by Level 3 or any of its
Restricted Subsidiaries in the ordinary course of business and consistent with
industry

 

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practice; (ii) any agreement or arrangement with respect to the compensation of
a director or officer of Level 3 or any Restricted Subsidiary approved by a
majority of the disinterested members of the Board of Directors of Level 3 and
consistent with industry practice; (iii) transactions between or among Level 3
and its Restricted Subsidiaries; provided, however, that no more than 5% of the
Voting Stock (on a fully diluted basis) of any such Restricted Subsidiary is
owned by an Affiliate of Level 3 (other than a Restricted Subsidiary);
(iv) Restricted Payments and Permitted Investments permitted by Section 6.03
(other than Investments in Affiliates that are not Level 3 or Restricted
Subsidiaries); (v) transactions pursuant to the terms of any agreement or
arrangement as in effect on the Measurement Date; and (vi) transactions with
respect to wireline or wireless transmission capacity, the lease or sharing or
other use of cable or fiber optic lines, equipment, rights-of-way or other
access rights, between Level 3 (or any Restricted Subsidiary) and any other
Person; provided, however, that, in the case of this clause (vi), such
transaction complies with clause (a) in the immediately preceding paragraph.

 

SECTION 6.10.  LIMITATION ON DESIGNATIONS OF UNRESTRICTED SUBSIDIARIES.  LEVEL 3
SHALL NOT DESIGNATE (1) THE BORROWER OR LEVEL 3 LLC AS AN UNRESTRICTED
SUBSIDIARY OR (2) ANY OTHER SUBSIDIARY (OTHER THAN A NEWLY CREATED SUBSIDIARY IN
WHICH NO INVESTMENT HAS PREVIOUSLY BEEN MADE) AS AN “UNRESTRICTED SUBSIDIARY”
UNDER THIS AGREEMENT (A “DESIGNATION”) UNLESS IN THE CASE OF THIS CLAUSE (2):

 

(A) NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AT THE
TIME OF OR AFTER GIVING EFFECT TO SUCH DESIGNATION;

 

(B) IMMEDIATELY AFTER GIVING EFFECT TO SUCH DESIGNATION, LEVEL 3 WOULD BE ABLE
TO INCUR $1.00 OF INDEBTEDNESS UNDER PARAGRAPH (A) OF SECTION 6.01; AND

 

(C) LEVEL 3 WOULD NOT BE PROHIBITED UNDER ANY PROVISION OF THIS AGREEMENT FROM
MAKING AN INVESTMENT AT THE TIME OF DESIGNATION (ASSUMING THE EFFECTIVENESS OF
SUCH DESIGNATION) IN AN AMOUNT (THE “DESIGNATION AMOUNT”) EQUAL TO THE PORTION
(PROPORTIONATE TO LEVEL 3’S EQUITY INTEREST IN SUCH RESTRICTED SUBSIDIARY) OF
THE FAIR MARKET VALUE OF THE NET ASSETS OF SUCH RESTRICTED SUBSIDIARY ON SUCH
DATE.

 

In the event of any such Designation, Level 3 shall be deemed to have made an
Investment constituting a Restricted Payment pursuant to Section 6.03 for all
purposes of this Agreement in the Designation Amount; provided, however, that,
upon a Revocation of any such Designation of a Subsidiary, Level 3 shall be
deemed to continue to have a permanent “Investment” in an Unrestricted
Subsidiary of an amount (if positive) equal to (i) Level 3’s “Investment” in
such Subsidiary at the time of such Revocation less (ii) the portion
(proportionate to Level 3’s equity interest in such Subsidiary) of the Fair
Market Value of the net assets of such Subsidiary at the time of such
Revocation.  At the time of any Designation of any Subsidiary as an Unrestricted
Subsidiary, such Subsidiary shall not own any Capital Stock of Level 3 or any
Restricted Subsidiary.  In addition, neither Level 3 nor any Restricted
Subsidiary shall at any time (x) provide credit support for, or a Guarantee of,
any Indebtedness of any Unrestricted Subsidiary (including any undertaking,
agreement or instrument evidencing such Indebtedness); provided, however,

 

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that Level 3 or a Restricted Subsidiary may pledge Capital Stock or Indebtedness
of any Unrestricted Subsidiary on a nonrecourse basis such that the pledgee has
no claim whatsoever against Level 3 other than to obtain such pledged Capital
Stock or Indebtedness, (y) be directly or indirectly liable for any Indebtedness
of any Unrestricted Subsidiary or (z) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the occurrence
of a default with respect to any Indebtedness, Lien or other obligation of any
Unrestricted Subsidiary (including any right to take enforcement action against
such Unrestricted Subsidiary), except in the case of clause (x) or (y) to the
extent permitted under Sections 6.03 and 6.09.

 

Unless Designated as an Unrestricted Subsidiary, any Person that becomes a
Subsidiary of Level 3 will be classified as a Restricted Subsidiary; provided,
however, that such Subsidiary shall not be designated as a Restricted Subsidiary
and shall be automatically classified as an Unrestricted Subsidiary if either of
the requirements set forth in clauses (a) and (b) of the immediately following
paragraph will not be satisfied immediately following such classification. 
Except as provided in the first sentence of this Section 6.10, no Restricted
Subsidiary may be redesignated as an Unrestricted Subsidiary.

 

A Designation may be revoked (a “Revocation”) by a Board Resolution of Level 3
delivered to the Administrative Agent, provided that Level 3 will not make any
Revocation unless:

 

(a) no Default or Event of Default shall have occurred and be continuing at the
time of and after giving effect to such Revocation; and

 

(b) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding
immediately following such Revocation would, if Incurred at such time, have been
permitted to be Incurred at such time for all purposes of this Agreement.

 

All Designations and Revocations must be evidenced by Board Resolutions of Level
3 delivered to the Administrative Agent (i) certifying compliance with the
foregoing provisions and (ii) giving the effective date of such Designation or
Revocation.  Upon Designation of a Restricted Subsidiary as an Unrestricted
Subsidiary in compliance with this Section 6.10, such Restricted Subsidiary
shall, by delivery of documentation providing for such release in form
satisfactory to the Administrative Agent, be released from any Guarantee (in the
case of a Guarantor) and its obligations under the Collateral Agreement (in the
case of a Grantor) previously made by such Subsidiary.

 

SECTION 6.11.  LIMITATION ON ACTIONS WITH RESPECT TO EXISTING INTERCOMPANY
OBLIGATIONS.  WITHOUT THE CONSENT OF THE HOLDERS OF AT LEAST TWO-THIRDS OF THE
OUTSTANDING PRINCIPAL AMOUNT OF THE LOANS:

 

(A) THE BORROWER SHALL NOT FORGIVE OR WAIVE OR FAIL TO ENFORCE ANY OF ITS RIGHTS
UNDER ANY OFFERING PROCEEDS NOTE, THE LOAN PROCEEDS NOTE, ANY FINANCING

 

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INC. NOTES SUPPLEMENTAL INDENTURE, THE OMNIBUS OFFERING PROCEEDS NOTE
SUBORDINATION AGREEMENT OR ANY OTHER AGREEMENT WITH LEVEL 3 OR ANY RESTRICTED
SUBSIDIARY TO SUBORDINATE A PAYMENT OBLIGATION ON ANY INDEBTEDNESS TO THE PRIOR
PAYMENT IN FULL IN CASH OF ALL OBLIGATIONS WITH RESPECT TO THE LOAN PROCEEDS
NOTE, A LOAN PROCEEDS NOTE GUARANTEE, ANY OFFERING PROCEEDS NOTE OR ANY OFFERING
PROCEEDS NOTE GUARANTEE, AND THE BORROWER AND LEVEL 3 LLC MAY NOT AMEND THE LOAN
PROCEEDS NOTE, A LOAN PROCEEDS NOTE GUARANTEE, ANY OFFERING PROCEEDS NOTE OR ANY
OFFERING PROCEEDS NOTE GUARANTEE, IN A MANNER ADVERSE TO THE LENDERS; PROVIDED,
HOWEVER, THAT THAT IN THE EVENT OF AN EVENT OF DEFAULT OF LEVEL 3 LLC AS
DESCRIBED IN CLAUSE (I) OR (J) OF ARTICLE VII, THE PRINCIPAL THEN OUTSTANDING
TOGETHER WITH ACCRUED INTEREST THEREON ON THE LOAN PROCEEDS NOTE, EACH OFFERING
PROCEEDS NOTE, THE LOAN PROCEEDS NOTE GUARANTEE AND EACH OFFERING PROCEEDS NOTE
GUARANTEE SHALL AUTOMATICALLY BECOME DUE AND PAYABLE WITHOUT PRESENTMENT,
DEMAND, PROTEST OR OTHER NOTICE OF ANY KIND;

 

(B) IN THE EVENT LEVEL 3 LLC (OR ANY SUCCESSOR OBLIGOR UNDER THE LOAN PROCEEDS
NOTE) REPAYS ALL OR A PORTION OF THE LOAN PROCEEDS NOTE, THE BORROWER MUST
PREPAY THE LOANS IN A PRINCIPAL AMOUNT EQUAL TO THE PRINCIPAL AMOUNT OF THE LOAN
PROCEEDS NOTE THEN REPAID IN ACCORDANCE WITH, AND IF AT SUCH TIME PERMITTED BY,
THIS AGREEMENT; PROVIDED, HOWEVER, THAT IF AT ANY TIME THE PRINCIPAL AMOUNT OF
THE LOAN PROCEEDS NOTE IS GREATER THAN THE PRINCIPAL AMOUNT OF THE LOANS THAT
REMAINS OUTSTANDING, LEVEL 3 LLC (OR ANY SUCCESSOR OBLIGOR UNDER THE LOAN
PROCEEDS NOTE) MAY REPAY OR FORGIVE OR WAIVE AN AMOUNT OF THE LOAN PROCEEDS NOTE
EQUAL TO SUCH EXCESS WITHOUT COMPLYING WITH THIS PARAGRAPH (B);

 

(C) LEVEL 3 SHALL NOT, AND SHALL NOT PERMIT ANY RESTRICTED SUBSIDIARY TO,
PROVIDE ANY LIEN ON ITS PROPERTY FOR THE BENEFIT OF, OR ANY GUARANTEE (OTHER
THAN A SIMILARLY SUBORDINATED GUARANTEE) OR OTHER FORM OF CREDIT ENHANCEMENT IN
RESPECT OF, (I) THE PARENT INTERCOMPANY NOTE OR (II) ANY OTHER INTERCOMPANY NOTE
REQUIRED BY CLAUSE (VI) OF PARAGRAPH (B) OF SECTION 6.01 OR CLAUSE (IV) OF
PARAGRAPH (B) OF SECTION 6.02 TO BE SUBORDINATED TO THE PRIOR PAYMENT IN FULL IN
CASH OF ALL OBLIGATIONS WITH RESPECT TO THE LOAN PROCEEDS NOTE OR A LOAN
PROCEEDS NOTE GUARANTEE, OR TAKE ANY OTHER ACTION WITH THE PURPOSE OR EFFECT OF
MAKING THE PARENT INTERCOMPANY NOTE SENIOR TO OR EQUAL IN RIGHT OF PAYMENT WITH
ANY OFFERING PROCEEDS NOTE OR THE LOAN PROCEEDS NOTE;

 

(D) LEVEL 3 SHALL NOT, AND SHALL NOT PERMIT ANY RESTRICTED SUBSIDIARY TO,
PROVIDE ANY LIEN ON ITS PROPERTY FOR THE BENEFIT OF, OR ANY GUARANTEE (OTHER
THAN A SIMILARLY SUBORDINATED GUARANTEE) OR OTHER FORM OF CREDIT ENHANCEMENT IN
RESPECT OF, (I) ANY OFFERING PROCEEDS NOTE OR (II) ANY OTHER INTERCOMPANY NOTE
REQUIRED BY CLAUSE (VI) OF PARAGRAPH (B) OF SECTION 6.01 OR CLAUSE (IV) OF
PARAGRAPH (B) OF SECTION 6.02 TO BE SUBORDINATED TO THE PRIOR PAYMENT IN FULL IN
CASH OF ALL OBLIGATIONS WITH RESPECT TO THE LOAN PROCEEDS NOTE OR A LOAN
PROCEEDS NOTE GUARANTEE, OR TAKE ANY OTHER ACTION WITH THE PURPOSE OR EFFECT OF
MAKING ANY OFFERING PROCEEDS NOTE SENIOR TO OR EQUAL IN RIGHT OF PAYMENT WITH
THE LOAN PROCEEDS NOTE;

 

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(E) LEVEL 3 AND LEVEL 3 LLC SHALL NOT AMEND THE TERMS OF THE PARENT INTERCOMPANY
NOTE OR ANY OFFERING PROCEEDS NOTE IN A MANNER ADVERSE TO THE LENDERS, THE
DETERMINATION OF WHICH SHALL BE MADE BY THE BOARD OF DIRECTORS OF LEVEL 3 ACTING
IN GOOD FAITH AND SHALL BE EVIDENCED BY A BOARD RESOLUTION OF LEVEL 3;

 

(F) LEVEL 3, THE BORROWER AND LEVEL 3 LLC SHALL NOT AMEND ANY OF THE FINANCING
INC. NOTES SUPPLEMENTAL INDENTURES OR THE OMNIBUS OFFERING PROCEEDS NOTE
SUBORDINATION AGREEMENT IN A MANNER ADVERSE TO THE LENDERS AND LEVEL 3 OR ANY
RESTRICTED SUBSIDIARY AND THE BORROWER SHALL NOT AMEND ANY OTHER AGREEMENT
BETWEEN LEVEL 3 OR ANY RESTRICTED SUBSIDIARY AND THE BORROWER TO SUBORDINATE A
PAYMENT OBLIGATION ON ANY INDEBTEDNESS OF LEVEL 3 OR ANY RESTRICTED SUBSIDIARY
TO THE PRIOR PAYMENT IN FULL IN CASH OF ALL OBLIGATIONS WITH RESPECT TO THE LOAN
PROCEEDS NOTE, IN EACH CASE, THE DETERMINATION OF WHICH SHALL BE MADE BY THE
BOARD OF DIRECTORS OF LEVEL 3 ACTING IN GOOD FAITH AND SHALL BE EVIDENCED BY A
BOARD RESOLUTION OF LEVEL 3;

 

(G) UNLESS AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, LEVEL 3 SHALL
NEITHER CAUSE NOR PERMIT THE BORROWER TO DEMAND REPAYMENT OF ANY OFFERING
PROCEEDS NOTE PRIOR TO THE SATISFACTION OF THE GUARANTEE PERMIT CONDITION AND
THE COLLATERAL PERMIT CONDITION; AND

 

(H) LEVEL 3 AND THE BORROWER SHALL CAUSE ANY INDEBTEDNESS OF LEVEL 3 LLC TO
LEVEL 3 TO BE EVIDENCED BY EITHER THE PARENT INTERCOMPANY NOTE OR ANOTHER DULY
EXECUTED PROMISSORY NOTE THAT IS PLEDGED AND DELIVERED TO THE COLLATERAL AGENT
WITHIN 3 BUSINESS DAYS OF THE INCURRENCE OF SUCH INDEBTEDNESS.

 

SECTION 6.12.  COVENANT SUSPENSION.  DURING ANY PERIOD OF TIME (A “SUSPENSION
PERIOD”) THAT (I) THE RATINGS ASSIGNED TO ALL TRANCHE A TERM LOANS AND TRANCHE B
TERM LOANS BY BOTH OF THE RATING AGENCIES ARE INVESTMENT GRADE RATINGS AND
(II) NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, LEVEL 3 AND
THE RESTRICTED SUBSIDIARIES WILL NOT BE SUBJECT TO THE COVENANTS SET FORTH IN
SECTIONS 6.01, 6.02, 6.03, 6.04, 6.06(I)(A), 6.07, 6.08 (OTHER THAN THE FIRST
TWO SENTENCES THEREOF), 6.09, 6.13(A)(3) AND (4), 6.13(C)(3) AND (4) AND CLAUSE
(B) OF THE FIRST SENTENCE OF SECTION 6.10 (COLLECTIVELY, THE “SUSPENDED
COVENANTS”).  IN THE EVENT THAT LEVEL 3 AND THE RESTRICTED SUBSIDIARIES ARE NOT
SUBJECT TO THE SUSPENDED COVENANTS FOR ANY PERIOD OF TIME AS A RESULT OF THE
PRECEDING SENTENCE AND, ON ANY SUBSEQUENT DATE (THE “REVERSION DATE”), ONE OR
BOTH OF THE RATING AGENCIES WITHDRAWS ITS RATINGS OR DOWNGRADES THE RATINGS
ASSIGNED TO THE LOAN BELOW THE REQUIRED INVESTMENT GRADE RATINGS OR A DEFAULT OR
EVENT OF DEFAULT OCCURS AND IS CONTINUING, THEN LEVEL 3 AND THE RESTRICTED
SUBSIDIARIES WILL THEREAFTER AGAIN BE SUBJECT TO THE SUSPENDED COVENANTS AND
CALCULATIONS OF THE AMOUNT AVAILABLE TO BE MADE AS RESTRICTED PAYMENTS UNDER
SECTION 6.03 WILL BE MADE AS THOUGH SECTION 6.03 HAD BEEN IN EFFECT DURING THE
ENTIRE PERIOD OF TIME FROM THE MEASUREMENT DATE.  ON THE REVERSION DATE, ALL
INDEBTEDNESS INCURRED DURING THE SUSPENSION PERIOD WILL BE CLASSIFIED TO HAVE
BEEN INCURRED PURSUANT TO PARAGRAPH (A) OF SECTION 6.01 OR ONE OF THE CLAUSES
SET FORTH IN PARAGRAPH (B) OF SECTION 6.01 OR PARAGRAPH (A) OF SECTION 6.02 OR
ONE OF THE CLAUSES SET FORTH IN PARAGRAPH (B) OF SECTION 6.02 (IN EACH CASE TO
THE EXTENT SUCH

 

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INDEBTEDNESS WOULD BE PERMITTED TO BE INCURRED THEREUNDER AS OF THE REVERSION
DATE AND AFTER GIVING EFFECT TO INDEBTEDNESS INCURRED PRIOR TO THE SUSPENSION
PERIOD AND OUTSTANDING ON THE REVERSION DATE).  TO THE EXTENT SUCH INDEBTEDNESS
WOULD NOT BE PERMITTED TO BE INCURRED PURSUANT TO PARAGRAPH (A) OF SECTION 6.01
OR ONE OF THE CLAUSES SET FORTH IN PARAGRAPH (B) OF SECTION 6.01 OR
PARAGRAPH (A) OF SECTION 6.02 OR ONE OF THE CLAUSES SET FORTH IN
PARAGRAPH (B) OF SECTION 6.02, SUCH INDEBTEDNESS WILL BE DEEMED TO HAVE BEEN
OUTSTANDING ON THE MEASUREMENT DATE, SO THAT IT IS CLASSIFIED AS PERMITTED UNDER
SECTION 6.01(B)(V) OR SECTION 6.02(B)(III).  IF THE INCURRENCE OF ANY
INDEBTEDNESS BY A RESTRICTED SUBSIDIARY DURING THE SUSPENSION PERIOD WOULD HAVE
BEEN PROHIBITED OR CONDITIONED UPON SUCH RESTRICTED SUBSIDIARY ENTERING INTO A
GUARANTEE OF THE OBLIGATIONS AND A LOAN PROCEEDS NOTE GUARANTEE HAD SECTION 6.01
AND SECTION 6.02 BEEN IN EFFECT AT THE TIME OF SUCH INCURRENCE, SUCH RESTRICTED
SUBSIDIARY SHALL ENTER INTO A GUARANTEE OF THE OBLIGATIONS AND A LOAN PROCEEDS
NOTE GUARANTEE THAT ARE SENIOR TO OR PARI PASSU WITH SUCH INDEBTEDNESS WITHIN
TEN DAYS AFTER THE REVERSION DATE.  FOR PURPOSES OF DETERMINING COMPLIANCE WITH
SECTION 6.07 ON THE REVERSION DATE, THE NET AVAILABLE PROCEEDS FROM ALL ASSET
DISPOSITIONS NOT APPLIED IN ACCORDANCE WITH THE COVENANT WILL BE DEEMED TO BE
RESET TO ZERO.  NOTWITHSTANDING THE FOREGOING, NEITHER (A) THE CONTINUED
EXISTENCE, AFTER THE DATE OF SUCH WITHDRAWAL OR DOWNGRADE, OF FACTS AND
CIRCUMSTANCES OR OBLIGATIONS THAT WERE INCURRED OR OTHERWISE CAME INTO EXISTENCE
DURING A SUSPENSION PERIOD NOR (B) THE PERFORMANCE OF ANY SUCH OBLIGATIONS,
SHALL CONSTITUTE A BREACH OF ANY COVENANT SET FORTH IN THE AGREEMENT OR CAUSE A
DEFAULT OR EVENT OF DEFAULT THEREUNDER; PROVIDED, HOWEVER, THAT (1) LEVEL 3 AND
ITS RESTRICTED SUBSIDIARIES DID NOT INCUR OR OTHERWISE CAUSE SUCH FACTS AND
CIRCUMSTANCES OR OBLIGATIONS TO EXIST IN ANTICIPATION OF A WITHDRAWAL OR
DOWNGRADE BELOW INVESTMENT GRADE, (2) LEVEL 3 REASONABLY BELIEVED THAT SUCH
INCURRENCE OR ACTIONS WOULD NOT RESULT IN SUCH A WITHDRAWAL OR DOWNGRADE AND
(3) IF SO REQUIRED EACH RESTRICTED SUBSIDIARY SHALL HAVE ENTERED INTO A
GUARANTEE OF THE OBLIGATIONS AND A LOAN PROCEEDS NOTE GUARANTEE WITHIN THE
SPECIFIED TIME PERIOD.  FOR PURPOSES OF CLAUSES (1) AND (2) IN THE PRECEDING
SENTENCE, ANTICIPATION AND REASONABLE BELIEF MAY BE DETERMINED BY LEVEL 3 AND
SHALL BE CONCLUSIVELY EVIDENCED BY A BOARD RESOLUTION TO SUCH EFFECT ADOPTED IN
GOOD FAITH BY THE BOARD OF DIRECTORS OF LEVEL 3.  IN REACHING THEIR
DETERMINATION, THE BOARD OF DIRECTORS OF LEVEL 3 MAY, BUT NEED NOT, CONSULT WITH
THE RATING AGENCIES.

 

SECTION 6.13.  CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.  (A) 
LEVEL 3 MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.  LEVEL 3 SHALL NOT, IN A
SINGLE TRANSACTION OR A SERIES OF RELATED TRANSACTIONS, (I) CONSOLIDATE WITH OR
MERGE INTO ANY OTHER PERSON OR PERSONS OR PERMIT ANY OTHER PERSON TO CONSOLIDATE
WITH OR MERGE INTO LEVEL 3 OR (II) DIRECTLY OR INDIRECTLY, TRANSFER, SELL,
LEASE, CONVEY OR OTHERWISE DISPOSE OF ALL OR SUBSTANTIALLY ALL ITS ASSETS TO ANY
OTHER PERSON OR PERSONS UNLESS:

 

(1) in a transaction in which Level 3 is not the surviving Person or in which
Level 3 transfers, sells, leases, conveys or otherwise disposes of all or
substantially all of its assets to any other Person, the resulting surviving or
transferee Person (the “successor entity”) is organized under the laws of the
United States of America or any State thereof or the District of Columbia and
shall expressly assume all of Level 3’s Obligations under the Loan Documents in
a form satisfactory to the Administrative Agent;

 

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(2) immediately before and after giving effect to such transaction and treating
any Indebtedness which becomes an obligation of Level 3 (or the successor
entity) or a Restricted Subsidiary as a result of such transaction as having
been Incurred by Level 3 or such Restricted Subsidiary at the time of the
transaction, no Default or Event of Default shall have occurred and be
continuing;

 

(3) immediately after giving effect to such transaction and treating any
Indebtedness which becomes an obligation of Level 3 (or the successor entity) or
a Restricted Subsidiary as a result of such transaction as having been Incurred
by Level 3 or such Restricted Subsidiary at the time of the transaction, Level 3
(or the successor entity) could Incur at least $1.00 of additional Indebtedness
pursuant to paragraph (a) of Section 6.01;

 

(4) in the case of a transfer, sale, lease, conveyance or other disposition of
all or substantially all of the assets of Level 3, such assets shall have been
transferred as an entirety or virtually as an entirety to one Person and such
Person shall have complied with all the provisions of this paragraph; and

 

(5) Level 3 and the Borrower have delivered to the Administrative Agent an
Officers’ Certificate and Opinion of Counsel, each in form and substance
reasonably satisfactory to the Administrative Agent, stating that such
consolidation, merger, transfer, sale, lease, conveyance or other disposition
and the assumption by such Person of the Obligations under the Loan Documents,
complies with this Section and that all conditions precedent herein have been
complied with.

 

(B)  SUCCESSOR LEVEL 3 SUBSTITUTED.  UPON ANY CONSOLIDATION OF LEVEL 3 WITH OR
MERGER OF LEVEL 3 WITH OR INTO ANY OTHER PERSON OR ANY TRANSFER, SALE, LEASE,
CONVEYANCE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL THE ASSETS OF
LEVEL 3 TO ANY PERSON OR PERSONS IN ACCORDANCE WITH SECTION 6.13(A), THE
SUCCESSOR PERSON FORMED BY SUCH CONSOLIDATION OR INTO WHICH LEVEL 3 IS MERGED OR
TO WHICH SUCH TRANSFER, SALE, LEASE, CONVEYANCE OR OTHER DISPOSITION IS MADE
SHALL SUCCEED TO, AND BE SUBSTITUTED FOR, AND MAY EXERCISE EVERY RIGHT AND POWER
OF, LEVEL 3 UNDER THIS AGREEMENT WITH THE SAME EFFECT AS IF SUCH SUCCESSOR
PERSON HAD BEEN NAMED AS LEVEL 3 HEREIN, AND THE PREDECESSOR LEVEL 3 (WHICH TERM
SHALL FOR THIS PURPOSE MEAN THE PERSON NAMED AS “LEVEL 3” IN THE FIRST PARAGRAPH
OF THIS AGREEMENT OR ANY SUCCESSOR PERSON WHICH SHALL HAVE BECOME SUCH IN THE
MANNER DESCRIBED IN SECTION 6.13(A)), EXCEPT IN THE CASE OF A LEASE, SHALL BE
RELEASED FROM ALL ITS OBLIGATIONS AND COVENANTS UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS AND MAY BE DISSOLVED AND LIQUIDATED.

 

(C)  BORROWER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.  THE BORROWER SHALL
NOT, IN A SINGLE TRANSACTION OR A SERIES OF RELATED TRANSACTIONS,
(I) CONSOLIDATE OR MERGE INTO LEVEL 3 OR PERMIT LEVEL 3 TO CONSOLIDATE WITH OR
MERGE INTO THE BORROWER OR (II) EXCEPT TO THE EXTENT PERMITTED UNDER
SECTION 6.03, DIRECTLY OR INDIRECTLY, TRANSFER, SELL, LEASE, CONVEY OR OTHERWISE
DISPOSE OF ALL OR SUBSTANTIALLY ALL ITS ASSETS TO LEVEL 3.  ADDITIONALLY, THE
BORROWER SHALL NOT, IN A SINGLE TRANSACTION OR A SERIES OF RELATED TRANSACTIONS,
(I) CONSOLIDATE WITH OR MERGE INTO ANY OTHER PERSON OR PERSONS OR

 

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PERMIT ANY OTHER PERSON TO CONSOLIDATE WITH OR MERGE INTO THE BORROWER OR
(II) (OTHER THAN, TO THE EXTENT PERMITTED UNDER SECTION 6.03, TO A RESTRICTED
SUBSIDIARY THAT IS OR BECOMES A GUARANTOR AND A LOAN PROCEEDS NOTE GUARANTOR OR
TO LEVEL 3 SO LONG AS LEVEL 3 IS A GUARANTOR) DIRECTLY OR INDIRECTLY, TRANSFER,
SELL, LEASE, CONVEY OR OTHERWISE DISPOSE OF ALL OR SUBSTANTIALLY ALL ITS ASSETS
TO ANY OTHER PERSON OR PERSONS, UNLESS:

 

(1) in a transaction in which the Borrower is not the surviving Person or in
which the Borrower transfers, sells, leases, conveys or otherwise disposes of
all or substantially all of its assets to any other Person, the successor entity
is organized under the laws of the United States of America or any State thereof
or the District of Columbia and shall expressly assume all of the Borrower’s
Obligations under the Loan and the Loan Documents in a form satisfactory to the
Administrative Agent;

 

(2) immediately before and after giving effect to such transaction and treating
any Indebtedness which becomes an obligation of the Borrower (or the successor
entity) or a Borrower Restricted Subsidiary as a result of such transaction as
having been Incurred by the Borrower or such Borrower Restricted Subsidiary at
the time of the transaction, no Default or Event of Default shall have occurred
and be continuing;

 

(3) immediately after giving effect to such transaction, the Consolidated Net
Worth of the Borrower (or the successor entity) is equal to or greater than that
of the Borrower immediately prior to the transaction;

 

(4) immediately after giving effect to such transaction and treating any
Indebtedness which becomes an obligation of the Borrower (or the successor
entity) or a Borrower Restricted Subsidiary as a result of such transaction as
having been Incurred by the Borrower or such Borrower Restricted Subsidiary at
the time of the transaction, the Borrower (or the successor entity) could Incur
at least $1.00 of additional Indebtedness pursuant to paragraph (a) of
Section 6.02;

 

(5) in the case of a transfer, sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Borrower, such assets shall have
been transferred as an entirety or virtually as an entirety to one Person and
such Person shall have complied with all the provisions of this paragraph; and

 

(6) Level 3 and the Borrower have delivered to the Administrative Agent an
Officers’ Certificate and an Opinion of Counsel, each in form and substance
reasonably satisfactory to the Administrative Agent, stating that such
consolidation, merger, transfer, sale, lease, conveyance or other disposition
and the assumption by such Person of the Obligations under the Loan Documents
complies with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with, and, with respect to such
Officers’ Certificate, setting forth the manner of determination of the
Consolidated Net Worth, in accordance with clause (3) of this subsection (c), of

 

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the Borrower or, if applicable, of the successor entity as required pursuant to
the foregoing.

 

(D)  SUCCESSOR BORROWER SUBSTITUTED.  UPON ANY CONSOLIDATION OF THE BORROWER
WITH OR MERGER OF THE BORROWER WITH OR INTO ANY OTHER PERSON OR ANY TRANSFER,
SALE, LEASE, CONVEYANCE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL THE
ASSETS OF THE BORROWER TO ANY PERSON OR PERSONS IN ACCORDANCE WITH
SECTION 6.13(C), THE SUCCESSOR PERSON FORMED BY SUCH CONSOLIDATION OR INTO WHICH
THE BORROWER IS MERGED OR TO WHICH SUCH TRANSFER, SALE, LEASE, CONVEYANCE OR
OTHER DISPOSITION IS MADE SHALL SUCCEED TO, AND BE SUBSTITUTED FOR, AND MAY
EXERCISE EVERY RIGHT AND POWER OF, THE BORROWER UNDER THIS AGREEMENT AND EACH
OTHER LOAN DOCUMENT WITH THE SAME EFFECT AS IF SUCH SUCCESSOR PERSON HAD BEEN
NAMED AS THE BORROWER HEREIN, AND THE PREDECESSOR BORROWER (WHICH TERM SHALL FOR
THIS PURPOSE MEAN THE PERSON NAMED AS THE “BORROWER” IN THE FIRST PARAGRAPH OF
THIS AGREEMENT OR ANY SUCCESSOR PERSON WHICH SHALL HAVE BECOME SUCH IN THE
MANNER DESCRIBED IN SECTION 6.13(C), EXCEPT IN THE CASE OF A LEASE, SHALL BE
RELEASED FROM ALL ITS OBLIGATIONS AND COVENANTS UNDER THIS AGREEMENT AND THE
TRANCHE A TERM LOANS AND TRANCHE B TERM LOANS AND MAY BE DISSOLVED AND
LIQUIDATED.

 

(E)  GUARANTOR (OTHER THAN LEVEL 3) MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS.  A GUARANTOR (OTHER THAN LEVEL 3) SHALL NOT, IN A SINGLE TRANSACTION OR A
SERIES OF RELATED TRANSACTIONS, (I) CONSOLIDATE WITH OR MERGE INTO ANY OTHER
PERSON OR PERSONS (OTHER THAN, WITH RESPECT TO A GUARANTOR THAT IS A BORROWER
RESTRICTED SUBSIDIARY, THE BORROWER OR ANOTHER GUARANTOR THAT IS A BORROWER
RESTRICTED SUBSIDIARY AND WITH RESPECT TO A GUARANTOR THAT IS A SISTER
RESTRICTED SUBSIDIARY, ANOTHER GUARANTOR THAT IS A SISTER RESTRICTED SUBSIDIARY
OR LEVEL 3) OR PERMIT ANY OTHER PERSON (OTHER THAN, WITH RESPECT TO A GUARANTOR
THAT IS A BORROWER RESTRICTED SUBSIDIARY, ANOTHER GUARANTOR THAT IS A BORROWER
RESTRICTED SUBSIDIARY, AND WITH RESPECT TO A GUARANTOR THAT IS A SISTER
RESTRICTED SUBSIDIARY, LEVEL 3 OR ANOTHER GUARANTOR THAT IS A SISTER RESTRICTED
SUBSIDIARY) TO CONSOLIDATE WITH OR MERGE INTO SUCH GUARANTOR OR (II) EXCEPT TO
ANOTHER GUARANTOR TO THE EXTENT PERMITTED UNDER SECTION 6.03, DIRECTLY OR
INDIRECTLY, TRANSFER, SELL, LEASE, CONVEY OR OTHERWISE DISPOSE OF ALL OR
SUBSTANTIALLY ALL ITS ASSETS TO ANY OTHER PERSON OR PERSONS (OTHER THAN, WITH
RESPECT TO A GUARANTOR THAT IS A BORROWER RESTRICTED SUBSIDIARY, THE BORROWER OR
ANOTHER GUARANTOR THAT IS A BORROWER RESTRICTED SUBSIDIARY, AND WITH RESPECT TO
A GUARANTOR THAT IS A SISTER RESTRICTED SUBSIDIARY, ANOTHER GUARANTOR THAT IS A
SISTER RESTRICTED SUBSIDIARY OR LEVEL 3), UNLESS:

 

(1) immediately before and after giving effect to such transaction and treating
any Indebtedness which becomes an obligation of such Guarantor as a result of
such transaction as having been Incurred by such Guarantor at the time of the
transaction, no Default or Event of Default shall have occurred and be
continuing;

 

(2) either (A) in a transaction in which such Guarantor is not the surviving
Person or in which such Guarantor transfers, sells, leases, conveys or otherwise
disposes of all or substantially all of its assets to any other Person, the
resulting surviving or transferee Person is organized under the laws of the
United States of America or any State thereof or the District of Columbia and
shall expressly

 

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assume all of such Restricted Subsidiary’s Obligations under the Loan Documents
in a form satisfactory to the Administrative Agent; or (B) such transaction
complies with Section 6.07 (or Level 3 certifies in an Officers’ Certificate to
the Administrative Agent that it will comply with the requirements of such
covenant relating to application of the proceeds of such transaction); and

 

(3) Level 3 and the Borrower have delivered to the Administrative Agent an
Officers’ Certificate and an Opinion of Counsel, each in form and substance
reasonably satisfactory to the Administrative Agent, stating that such
consolidation, merger, transfer, sale, lease, conveyance or other disposition
and, if a supplement to any Loan Document is required in connection with such
transaction, such supplement complies with this Article and that all conditions
precedent herein provided for relating to such transaction have been complied
with.

 

(F)  SUCCESSOR GUARANTOR SUBSTITUTED.  UPON ANY CONSOLIDATION OF A GUARANTOR
WITH OR MERGER OF A GUARANTOR WITH OR INTO ANY OTHER PERSON OR ANY TRANSFER,
SALE, LEASE, CONVEYANCE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL THE
ASSETS OF A GUARANTOR TO ANY PERSON OR PERSONS IN ACCORDANCE WITH
SUBSECTION (E), THE SUCCESSOR PERSON FORMED BY SUCH CONSOLIDATION OR INTO WHICH
SUCH GUARANTOR IS MERGED OR TO WHICH SUCH TRANSFER, SALE, LEASE, CONVEYANCE OR
OTHER DISPOSITION IS MADE (OTHER THAN ANY SUCH TRANSACTION MADE IN ACCORDANCE
WITH SECTION 6.13(E)(2)(B)) SHALL SUCCEED TO, AND BE SUBSTITUTED FOR, AND MAY
EXERCISE EVERY RIGHT AND POWER OF, SUCH GUARANTOR UNDER THE LOAN DOCUMENTS WITH
THE SAME EFFECT AS IF SUCH SUCCESSOR PERSON HAD BEEN NAMED AS A GUARANTOR
HEREIN, AND THE PREDECESSOR GUARANTOR (WHICH TERM SHALL FOR THIS PURPOSE MEAN
THE PERSON NAMED AS THE “GUARANTOR” IN THE FIRST PARAGRAPH OF THE APPLICABLE
SUPPLEMENT TO THIS AGREEMENT OR ANY SUCCESSOR PERSON WHICH SHALL HAVE BECOME
SUCH IN THE MANNER DESCRIBED IN SUBSECTION (E)), EXCEPT IN THE CASE OF A LEASE,
SHALL BE RELEASED FROM ALL ITS OBLIGATIONS AND COVENANTS UNDER THE LOAN
DOCUMENTS AND MAY BE DISSOLVED AND LIQUIDATED.

 

(G)  LOAN PROCEEDS NOTE GUARANTOR MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. 
A LOAN PROCEEDS NOTE GUARANTOR SHALL NOT, IN A SINGLE TRANSACTION OR A SERIES OF
RELATED TRANSACTIONS, (I) CONSOLIDATE WITH OR MERGE INTO ANY OTHER PERSON OR
PERSONS (OTHER THAN, WITH RESPECT TO AN LOAN PROCEEDS NOTE GUARANTOR THAT IS AN
BORROWER RESTRICTED SUBSIDIARY, THE BORROWER OR ANOTHER LOAN PROCEEDS NOTE
GUARANTOR THAT IS AN BORROWER RESTRICTED SUBSIDIARY, AND WITH RESPECT TO AN LOAN
PROCEEDS NOTE GUARANTOR THAT IS A SISTER RESTRICTED SUBSIDIARY, ANOTHER LOAN
PROCEEDS NOTE GUARANTOR THAT IS A SISTER RESTRICTED SUBSIDIARY OR LEVEL 3) OR
PERMIT ANY OTHER PERSON (OTHER THAN, WITH RESPECT TO AN LOAN PROCEEDS NOTE
GUARANTOR THAT IS AN BORROWER RESTRICTED SUBSIDIARY, ANOTHER LOAN PROCEEDS NOTE
GUARANTOR THAT IS AN BORROWER RESTRICTED SUBSIDIARY, AND WITH RESPECT TO AN LOAN
PROCEEDS NOTE GUARANTOR THAT IS A SISTER RESTRICTED SUBSIDIARY, LEVEL 3 OR
ANOTHER LOAN PROCEEDS NOTE GUARANTOR THAT IS A SISTER RESTRICTED SUBSIDIARY) TO
CONSOLIDATE WITH OR MERGE INTO SUCH LOAN PROCEEDS NOTE GUARANTOR OR (II) EXCEPT
TO ANOTHER LOAN PROCEEDS NOTE GUARANTOR TO THE EXTENT PERMITTED UNDER
SECTION 6.03, DIRECTLY OR INDIRECTLY, TRANSFER, SELL, LEASE, CONVEY OR OTHERWISE
DISPOSE OF ALL OR SUBSTANTIALLY ALL ITS ASSETS TO ANY OTHER PERSON OR PERSONS
(OTHER THAN, WITH RESPECT TO A

 

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LOAN PROCEEDS NOTE GUARANTOR THAT IS A BORROWER RESTRICTED SUBSIDIARY, THE
BORROWER OR ANOTHER LOAN PROCEEDS NOTE GUARANTOR THAT IS A BORROWER RESTRICTED
SUBSIDIARY, AND WITH RESPECT TO AN LOAN PROCEEDS NOTE GUARANTOR THAT IS A SISTER
RESTRICTED SUBSIDIARY, ANOTHER LOAN PROCEEDS NOTE GUARANTOR THAT IS A SISTER
RESTRICTED SUBSIDIARY OR LEVEL 3), UNLESS:

 

(1) immediately before and after giving effect to such transaction and treating
any Indebtedness which becomes an obligation of such Loan Proceeds Note
Guarantor as a result of such transaction as having been Incurred by such Loan
Proceeds Note Guarantor at the time of the transaction, no Default or Event of
Default shall have occurred and be continuing;

 

(2) either (a) in a transaction in which such Loan Proceeds Note Guarantor is
not the surviving Person or in which such Loan Proceeds Note Guarantor
transfers, sells, leases, conveys or otherwise disposes of all or substantially
all of its assets to any other Person, the resulting surviving or transferee
Person is organized under the laws of the United States of America or any State
thereof or the district of Columbia and shall expressly assume all of such Loan
Proceed Note Guarantor’s obligations under the Loan Proceeds Note Guarantee and
any subordination agreement between the Borrower and such Loan Proceed Note
Guarantor relating to the Loan Proceeds Note; or (b) such transaction complies
with Section 6.07 (or Level 3 certifies in an Officers’ Certificate to the
Administrative Agent that it will comply with the requirements of such covenant
relating to application of the proceeds of such transaction); and

 

(3) Level 3 and the Borrower have delivered to the Administrative Agent an
Officers’ Certificate and an Opinion of Counsel, each in form and substance
reasonably satisfactory to the Administrative Agent, stating that such
consolidation, merger, transfer, sale, lease, conveyance or other disposition
and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, complies with this Article and that
all conditions precedent herein provided for relating to such transaction have
been complied with.

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

If any of the following events (“Events of Default”) shall occur:

 

(A) THE BORROWER SHALL FAIL TO PAY ANY PRINCIPAL OF ANY LOAN WHEN AND AS THE
SAME SHALL BECOME DUE AND PAYABLE, WHETHER AT THE DUE DATE THEREOF OR AT A DATE
FIXED FOR PREPAYMENT THEREOF OR OTHERWISE;

 

(B) THE BORROWER SHALL FAIL TO PAY ANY INTEREST ON ANY LOAN OR ANY FEE OR ANY
OTHER AMOUNT (OTHER THAN AN AMOUNT REFERRED TO IN CLAUSE (A) OF THIS ARTICLE)
PAYABLE BY IT UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, WHEN AND AS THE

 

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SAME SHALL BECOME DUE AND PAYABLE, AND SUCH FAILURE SHALL CONTINUE UNREMEDIED
FOR A PERIOD OF 30 DAYS;

 

(C) THE BORROWER SHALL FAIL TO PAY THE LOANS WHEN REQUIRED PURSUANT TO
SECTION 2.05(D);

 

(D) ANY REPRESENTATION OR WARRANTY MADE OR DEEMED MADE BY OR ON BEHALF OF
LEVEL 3, THE BORROWER OR ANY RESTRICTED SUBSIDIARY IN OR IN CONNECTION WITH ANY
LOAN DOCUMENT OR ANY AMENDMENT OR MODIFICATION THEREOF OR WAIVER THEREUNDER, OR
IN ANY REPORT, CERTIFICATE, FINANCIAL STATEMENT OR OTHER DOCUMENT FURNISHED
PURSUANT TO OR IN CONNECTION WITH ANY LOAN DOCUMENT OR ANY AMENDMENT OR
MODIFICATION THEREOF OR WAIVER THEREUNDER, SHALL PROVE TO HAVE BEEN INCORRECT IN
ANY MATERIAL RESPECT WHEN MADE OR DEEMED MADE AND SHALL CONTINUE TO BE MATERIAL
AT THE TIME TESTED;

 

(E) LEVEL 3, THE BORROWER OR ANY RESTRICTED SUBSIDIARY SHALL FAIL TO OBSERVE OR
PERFORM WITH THE COVENANTS CONTAINED IN SECTIONS 6.07 OR 6.13(A), (C), (E) OR
(G);

 

(F) LEVEL 3, THE BORROWER OR ANY RESTRICTED SUBSIDIARY SHALL FAIL TO OBSERVE OR
PERFORM ANY COVENANT, CONDITION OR AGREEMENT CONTAINED IN ANY LOAN DOCUMENT
(OTHER THAN A COVENANT, CONDITION OR AGREEMENT A DEFAULT IN THE PERFORMANCE OF
WHICH IS ELSEWHERE IN THIS ARTICLE SPECIFICALLY DEALT WITH) AND SUCH FAILURE
SHALL CONTINUE UNREMEDIED FOR 60 DAYS AFTER WRITTEN NOTICE TO THE BORROWER BY
THE ADMINISTRATIVE AGENT OR THE REQUIRED LENDERS, WHICH NOTICE SHALL SPECIFY THE
DEFAULT AND STATE THAT SUCH NOTICE IS A “NOTICE OF DEFAULT” HEREUNDER;

 

(G) LEVEL 3 OR ANY RESTRICTED SUBSIDIARY SHALL DEFAULT UNDER THE TERMS OF ANY
INSTRUMENT EVIDENCING OR SECURING MATERIAL INDEBTEDNESS OF LEVEL 3 OR ANY
RESTRICTED SUBSIDIARY WHICH DEFAULT RESULTS IN THE ACCELERATION OF THE PAYMENT
OF SUCH INDEBTEDNESS OR CONSTITUTES THE FAILURE TO PAY SUCH INDEBTEDNESS WHEN
DUE (AFTER EXPIRATION OF ANY APPLICABLE GRACE PERIOD);

 

(H) A JUDGMENT OR JUDGMENTS SHALL BE RENDERED AGAINST LEVEL 3 OR ANY RESTRICTED
SUBSIDIARY IN AN AGGREGATE AMOUNT IN EXCESS OF $25,000,000 OR ITS FOREIGN
CURRENCY EQUIVALENT AT THE TIME AND SHALL NOT BE WAIVED, SATISFIED OR DISCHARGED
FOR ANY PERIOD OF 45 CONSECUTIVE DAYS DURING WHICH A STAY OF ENFORCEMENT SHALL
NOT BE IN EFFECT;

 

(I) AN INVOLUNTARY PROCEEDING SHALL BE COMMENCED OR AN INVOLUNTARY PETITION
SHALL BE FILED SEEKING (I) LIQUIDATION, REORGANIZATION OR OTHER RELIEF IN
RESPECT OF LEVEL 3, THE BORROWER OR ANY SIGNIFICANT SUBSIDIARY OR ITS DEBTS, OR
OF A SUBSTANTIAL PART OF ITS ASSETS, UNDER ANY  FEDERAL, STATE OR FOREIGN
BANKRUPTCY, INSOLVENCY, RECEIVERSHIP OR SIMILAR LAW NOW OR HEREAFTER IN EFFECT
OR (II) THE APPOINTMENT OF A RECEIVER, TRUSTEE, CUSTODIAN, SEQUESTRATOR,
CONSERVATOR OR SIMILAR OFFICIAL FOR LEVEL 3, THE BORROWER OR ANY SIGNIFICANT
SUBSIDIARY OR FOR A SUBSTANTIAL PART OF ITS ASSETS, AND, IN ANY SUCH CASE, SUCH
PROCEEDING OR PETITION

 

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SHALL CONTINUE UNDISMISSED FOR 60 DAYS OR AN ORDER OR DECREE APPROVING OR
ORDERING ANY OF THE FOREGOING SHALL BE ENTERED;

 

(J) LEVEL 3, THE BORROWER OR ANY SIGNIFICANT SUBSIDIARY SHALL (I) VOLUNTARILY
COMMENCE ANY PROCEEDING OR FILE ANY PETITION SEEKING LIQUIDATION, REORGANIZATION
OR OTHER RELIEF UNDER ANY FEDERAL, STATE OR FOREIGN BANKRUPTCY, INSOLVENCY,
RECEIVERSHIP OR SIMILAR LAW NOW OR HEREAFTER IN EFFECT, (II) CONSENT TO THE
INSTITUTION OF, OR FAIL TO CONTEST IN A TIMELY AND APPROPRIATE MANNER, ANY
PROCEEDING OR PETITION DESCRIBED IN CLAUSE (I) OF THIS ARTICLE, (III) APPLY FOR
OR CONSENT TO THE APPOINTMENT OF A RECEIVER, TRUSTEE, CUSTODIAN, SEQUESTRATOR,
CONSERVATOR OR SIMILAR OFFICIAL FOR LEVEL 3, THE BORROWER OR ANY SIGNIFICANT
SUBSIDIARY OR FOR A SUBSTANTIAL PART OF ITS ASSETS, (IV) FILE AN ANSWER
ADMITTING THE MATERIAL ALLEGATIONS OF A PETITION FILED AGAINST IT IN ANY SUCH
PROCEEDING, (V) MAKE A GENERAL ASSIGNMENT FOR THE BENEFIT OF CREDITORS OR
(VI) TAKE ANY ACTION FOR THE PURPOSE OF EFFECTING ANY OF THE FOREGOING;

 

(K) LEVEL 3, THE BORROWER OR ANY SIGNIFICANT SUBSIDIARY SHALL BECOME UNABLE,
ADMIT IN WRITING ITS INABILITY OR FAIL GENERALLY TO PAY ITS DEBTS AS THEY BECOME
DUE;

 

(L) ANY LIEN PURPORTED TO BE CREATED UNDER THIS AGREEMENT OR ANY SECURITY
DOCUMENT SHALL CEASE TO BE, OR SHALL BE ASSERTED BY ANY LOAN PARTY NOT TO BE, A
VALID AND PERFECTED LIEN ON ANY COLLATERAL (OTHER THAN IMMATERIAL PORTIONS OF
THE COLLATERAL OR EXCEPT AS OTHERWISE CONTEMPLATED BY THE SECURITY DOCUMENTS),
WITH THE PRIORITY REQUIRED BY THIS AGREEMENT OR THE APPLICABLE SECURITY
DOCUMENT, EXCEPT (I) AS PROVIDED IN SECTION 9.14 OR (II) AS A RESULT OF THE
COLLATERAL AGENT’S FAILURE TO MAINTAIN POSSESSION OF ANY STOCK CERTIFICATES,
PROMISSORY NOTES OR OTHER INSTRUMENTS DELIVERED TO IT UNDER THIS AGREEMENT OR
THE APPLICABLE SECURITY DOCUMENT; OR

 

(M) ANY MATERIAL PROVISION OF ANY LOAN DOCUMENT, AFTER THE DELIVERY THEREOF,
CEASES TO BE IN FULL FORCE AND EFFECT (OTHER THAN IN ACCORDANCE WITH THE TERMS
OF SUCH LOAN DOCUMENT) OR LEVEL 3, THE BORROWER OR ANY GUARANTOR DENIES OR
DISAFFIRMS ITS OBLIGATIONS UNDER ANY MATERIAL PROVISION OF A LOAN DOCUMENT.

 

then, and in every such event (other than an event with respect to the Borrower
or Level 3 described in clause (i) or (j) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take any or all of the following actions, at the same or different
times: declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable, provided that any partial
acceleration of the Loans must be made ratably between the Classes of Loans),
and thereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower and

 

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enforce, as Collateral Agent, all the rights and remedies under the Security
Documents; and in case of any event with respect to Level 3 or the Borrower
described in clause (i) or (j) of this Article, the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower, and the Collateral Agent may, to
the extent permitted by applicable law, exercise all rights and remedies under
the Security Documents.

 

ARTICLE VIII

 

THE AGENT

 

Each of the Lenders hereby irrevocably appoints the Agent as its agent and
authorizes the Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto.

 

In the event the institution serving as the Agent hereunder shall also be a
Lender, it shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the Agent, and
such institution and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Level 3, the Borrower or any
Subsidiary or Affiliate thereof as if it were not the Agent hereunder.

 

The Agent shall not have any duties or obligations except those expressly set
forth in the Loan Documents.  Without limiting the generality of the foregoing,
(a) the Agent shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing, (b) the Agent
shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Agent is required to exercise in
writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and shall not have any duty to take any action or exercise any
powers that would result in the incurrence by it of costs or expenses unless
arrangements satisfactory to it to ensure the prompt payment of all such costs
or expenses shall have been made by the Lenders, and (c) except as expressly set
forth in the Loan Documents, the Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
Level 3, the Borrower or any of the Subsidiaries of Level 3 that is communicated
to or obtained by the institution serving as Agent or any of its Affiliates in
any capacity.  The Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own gross
negligence or willful misconduct.  The Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is

 

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given to the Agent by Level 3, the Borrower or a Lender, and the Agent shall not
be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Agent.  As to any matters not expressly provided for by this
Agreement and the other Loan Documents (including enforcement or collection),
the Administrative Agent and the Collateral Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Requisite Lenders, and such
instructions shall be binding upon all Lenders, provided, however, that the
Administrative Agent and the Collateral Agent shall not be required to take any
action that (i) the Administrative Agent or the Collateral Agent in good faith
believes exposes it to personal liability unless it receives an indemnification
satisfactory to it from the Lenders with respect to such action or (ii) is
contrary to this Agreement or applicable law.

 

The Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing believed by it to be genuine and to have been signed
or sent by the proper Person.  The Agent also may rely upon any statement made
to it orally or by telephone and believed by it to be made by the proper Person,
and shall not incur any liability for relying thereon.  The Agent may consult
with legal counsel (who may be counsel for Level 3 or the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

 

The Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by the Agent.  The Agent and
any such sub-agent may perform any and all its duties and exercise its rights
and powers through their respective Related Parties.  The exculpatory provisions
of the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.

 

Subject to the appointment and acceptance of a successor as provided in this
paragraph, the Agent may resign at any time by notifying the Lenders and
Level 3.  Upon any such resignation, the Required Lenders shall have the right,
with, so long as no Default or Event of Default shall have occurred and be
continuing, the consent of Level 3 (which consent shall not be unreasonably
withheld or delayed) to appoint a successor.  If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may, on behalf of the Lenders, appoint a successor

 

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Agent which shall be a Lender or a bank with an office in New York, New York, or
an Affiliate of such Lender or any such bank.  Upon the acceptance of its
appointment as Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder.  The fees payable by Level 3 and the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed with such successor.  After the Agent’s resignation hereunder,
the provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Agent.

 

Each Lender acknowledges that it has, independently and without reliance upon
the Agent or any other Lender and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement.  Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or related agreement or any document
furnished hereunder or thereunder.

 

ARTICLE IX

 

MISCELLANEOUS

 

SECTION 9.01.  NOTICES.  EXCEPT IN THE CASE OF NOTICES AND OTHER COMMUNICATIONS
EXPRESSLY PERMITTED TO BE GIVEN BY TELEPHONE, ALL NOTICES AND OTHER
COMMUNICATIONS PROVIDED FOR HEREIN SHALL BE IN WRITING AND SHALL BE DELIVERED BY
HAND OR OVERNIGHT COURIER SERVICE, MAILED BY CERTIFIED OR REGISTERED MAIL OR
SENT BY TELECOPY OR EMAIL, AS FOLLOWS:

 

(A) IF TO LEVEL 3 OR THE BORROWER, TO IT AT LEVEL 3 COMMUNICATIONS, INC., 1025
ELDORADO BOULEVARD, BROOMFIELD, COLORADO 80021, ATTENTION OF CHIEF FINANCIAL
OFFICER AND GENERAL COUNSEL;

 

(B) IF TO THE ADMINISTRATIVE AGENT, TO IT AT DEUTSCHE BANK, 60 WALL STREET, 39TH
FLOOR, NEW YORK, NEW YORK 10005, ATTENTION OF ADRIAN CIOINIGEL (TELEPHONE
NO. 212-250-1312, TELECOPY NO. 212-797-0407, EMAIL ADDRESS:
ADRIAN.CIOINIGEL@DB.COM), WITH A COPY TO (I) DEUTSCHE BANK, 60 WALL STREET, 39TH
FLOOR, NEW YORK, NEW YORK 10005, ATTENTION OF ARVIND VAIRAVAN (TELEPHONE
NO. 212-250-4184, TELECOPY NO. 212-797-0407, EMAIL ADDRESS:
ARVIND.VAIRAVAN@DB.COM) AND (II) MERRILL LYNCH CAPITAL CORPORATION, MERRILL
LYNCH WORLD HEADQUARTERS, 4 WORLD FINANCIAL CENTER, 22ND FLOOR, NEW YORK,

 

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NEW YORK 10080, ATTENTION OF ARMINEE BOWLER (TELEPHONE NO. 212-449-2662,
TELECOPY NO. 212-738-1186, EMAIL ADDRESS: ARMINEE_BOWLER@ML.COM);

 

(C) IF TO ANY OTHER LENDER, TO IT AT ITS ADDRESS (OR TELECOPY NUMBER) SET FORTH
IN ITS ADMINISTRATIVE QUESTIONNAIRE.

 

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.

 

SECTION 9.02.  WAIVERS; AMENDMENTS; ADDITION OF TERM OR REVOLVING TRANCHES. 
(A)  NO FAILURE OR DELAY BY THE ADMINISTRATIVE AGENT OR ANY LENDER IN EXERCISING
ANY RIGHT OR POWER HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT SHALL OPERATE AS A
WAIVER THEREOF, NOR SHALL ANY SINGLE OR PARTIAL EXERCISE OF ANY SUCH RIGHT OR
POWER, OR ANY ABANDONMENT OR DISCONTINUANCE OF STEPS TO ENFORCE SUCH A RIGHT OR
POWER, PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY
OTHER RIGHT OR POWER.  THE RIGHTS AND REMEDIES OF THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS ARE CUMULATIVE AND ARE
NOT EXCLUSIVE OF ANY RIGHTS OR REMEDIES THAT THEY WOULD OTHERWISE HAVE.  NO
WAIVER OF ANY PROVISION OF ANY LOAN DOCUMENT OR CONSENT TO ANY DEPARTURE BY ANY
LOAN PARTY THEREFROM SHALL IN ANY EVENT BE EFFECTIVE UNLESS THE SAME SHALL BE
PERMITTED BY PARAGRAPH (B) OF THIS SECTION, AND THEN SUCH WAIVER OR CONSENT
SHALL BE EFFECTIVE ONLY IN THE SPECIFIC INSTANCE AND FOR THE PURPOSE FOR WHICH
GIVEN.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE MAKING OF A LOAN
SHALL NOT BE CONSTRUED AS A WAIVER OF ANY DEFAULT, REGARDLESS OF WHETHER THE
ADMINISTRATIVE AGENT OR ANY LENDER MAY HAVE HAD NOTICE OR KNOWLEDGE OF SUCH
DEFAULT AT THE TIME.

 

(B)  EXCEPT AS PROVIDED IN PARAGRAPH (D) OF THIS SECTION, NONE OF THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY PROVISION HEREOF OR THEREOF MAY BE
WAIVED, AMENDED OR MODIFIED EXCEPT, IN THE CASE OF THIS AGREEMENT, PURSUANT TO
AN AGREEMENT OR AGREEMENTS IN WRITING ENTERED INTO BY LEVEL 3, THE BORROWER AND
THE REQUIRED LENDERS OR, IN THE CASE OF ANY OTHER LOAN DOCUMENT, PURSUANT TO AN
AGREEMENT OR AGREEMENTS IN WRITING ENTERED INTO BY THE ADMINISTRATIVE AGENT AND
THE LOAN PARTY OR LOAN PARTIES THAT ARE PARTIES THERETO, IN EACH CASE WITH THE
CONSENT OF THE REQUIRED LENDERS; PROVIDED THAT NO SUCH AGREEMENT SHALL
(I) INCREASE THE COMMITMENT OF OR IMPOSE ADDITIONAL OBLIGATIONS ON ANY LENDER
WITHOUT THE WRITTEN CONSENT OF SUCH LENDER, (II) REDUCE THE PRINCIPAL AMOUNT OF
ANY LOAN OR REDUCE THE RATE OF INTEREST THEREON WITHOUT THE WRITTEN CONSENT OF
EACH LENDER AFFECTED THEREBY, (III) POSTPONE THE SCHEDULED DATE OF PAYMENT OF
THE PRINCIPAL AMOUNT OF ANY LOAN OR ANY INTEREST THEREON, OR REDUCE THE AMOUNT
OF, WAIVE OR EXCUSE ANY SUCH PAYMENT, WITHOUT THE WRITTEN CONSENT OF EACH LENDER
AFFECTED THEREBY, (IV) CHANGE SECTION 2.12(B) OR (C) IN A MANNER THAT WOULD
ALTER THE PRO RATA SHARING OF PAYMENTS REQUIRED THEREBY WITHOUT THE WRITTEN
CONSENT OF EACH LENDER (EXCEPT AS PROVIDED IN PARAGRAPH (D) OF THIS SECTION),
(V) CHANGE ANY OF THE PROVISIONS OF THIS SECTION OR THE DEFINITION OF “REQUIRED
LENDERS” OR ANY OTHER PROVISION OF ANY LOAN DOCUMENT SPECIFYING THE NUMBER OR
PERCENTAGE OF LENDERS (OR LENDERS OF ANY CLASS) REQUIRED TO WAIVE, AMEND OR
MODIFY ANY RIGHTS THEREUNDER OR MAKE ANY DETERMINATION OR GRANT ANY CONSENT
THEREUNDER, WITHOUT THE WRITTEN CONSENT OF EACH LENDER (OR EACH LENDER

 

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OF SUCH CLASS, AS THE CASE MAY BE), EXCEPT AS PROVIDED IN PARAGRAPH (D) OF THIS
SECTION, (VI) RELEASE LEVEL 3 OR ANY OTHER GUARANTOR FROM ITS GUARANTEE OF THE
OBLIGATIONS UNDER THE GUARANTEE AGREEMENT (EXCEPT AS EXPRESSLY PROVIDED IN
SECTIONS 6.07, 6.08, 6.10 OR 9.14 OR IN THE GUARANTEE AGREEMENT), OR LIMIT ITS
LIABILITY IN RESPECT OF ANY SUCH GUARANTEE, WITHOUT THE WRITTEN CONSENT OF EACH
LENDER, (VII) RELEASE ALL OR ANY SUBSTANTIAL PART OF THE COLLATERAL FROM THE
LIENS OF THE SECURITY DOCUMENTS (EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 6.07,
6.08, 6.10 OR 9.14 OR IN COLLATERAL AGREEMENT), OR SUBORDINATE SUCH LIENS,
WITHOUT THE WRITTEN CONSENT OF EACH LENDER, (VIII) EXCEPT TO THE EXTENT
NECESSARY TO COMPLY WITH APPLICABLE LAW, AMEND OR MODIFY SECTION 9.04 IN A
MANNER THAT WOULD BY THE TERMS OF SUCH AMENDMENT OR WAIVER, AS APPLICABLE,
RESTRICT THE ABILITY OF THE LENDERS TO MAKE ASSIGNMENTS, WITHOUT THE WRITTEN
CONSENT OF EACH LENDER OR (IX) CHANGE ANY PROVISION OF ANY LOAN DOCUMENT IN A
MANNER THAT BY ITS TERMS DIRECTLY ADVERSELY AFFECTS THE RIGHTS OF LENDERS
HOLDING COMMITMENTS OR LOANS OF ANY CLASS DIFFERENTLY THAN THOSE HOLDING
COMMITMENTS OR LOANS OF ANY OTHER CLASS, WITHOUT THE WRITTEN CONSENT OF LENDERS
HOLDING A MAJORITY IN INTEREST OF THE UNUSED COMMITMENTS AND OUTSTANDING LOANS
OF THE ADVERSELY AFFECTED CLASS, PROVIDED FURTHER THAT (I) NO SUCH AGREEMENT
SHALL AMEND, MODIFY OR OTHERWISE AFFECT THE RIGHTS OR DUTIES OF THE
ADMINISTRATIVE AGENT, WITHOUT THE PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE
AGENT AND (II) ANY WAIVER, AMENDMENT OR MODIFICATION OF THIS AGREEMENT THAT BY
ITS TERMS DIRECTLY AFFECTS THE RIGHTS OR DUTIES UNDER THIS AGREEMENT OF ONE OR
MORE CLASSES OF LENDERS (BUT NOT THE OTHER CLASS OR CLASSES OF LENDERS) MAY BE
EFFECTED BY AN AGREEMENT OR AGREEMENTS IN WRITING ENTERED INTO BY LEVEL 3, THE
BORROWER AND REQUISITE PERCENTAGE IN INTEREST OF THE AFFECTED CLASS OR CLASSES
OF LENDERS THAT WOULD BE REQUIRED TO CONSENT THERETO UNDER THIS SECTION IF SUCH
CLASS OR CLASSES OF LENDERS WERE THE ONLY CLASS OR CLASSES OF LENDERS HEREUNDER
AT THE TIME.

 

(C)  IF, IN CONNECTION WITH ANY PROPOSED CHANGE, WAIVER, DISCHARGE OR
TERMINATION OF ANY OF THE PROVISIONS OF THIS AGREEMENT REFERRED TO IN ANY OF
CLAUSES (I) THROUGH (VII) OF THE FIRST PROVISO IN PARAGRAPH (B) OF THIS SECTION,
THE CONSENT OF THE REQUIRED LENDERS SHALL BE OBTAINED BUT THE CONSENT OF ONE OR
MORE OTHER LENDERS WHOSE CONSENT IS SOUGHT SHALL NOT BE OBTAINED, THEN THE
BORROWER SHALL HAVE THE RIGHT, SO LONG AS ALL NON-CONSENTING LENDERS WHOSE
INDIVIDUAL CONSENTS ARE SOUGHT ARE TREATED AS DESCRIBED IN EITHER CLAUSES (A) OR
(B) BELOW, TO EITHER (A) REPLACE EACH SUCH NON-CONSENTING LENDER OR LENDERS WITH
ONE OR MORE REPLACEMENT LENDERS IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 2.13(B) SO LONG AS, AT THE TIME OF SUCH REPLACEMENT, EACH SUCH
REPLACEMENT LENDER CONSENTS TO THE PROPOSED CHANGE, WAIVER, DISCHARGE OR
TERMINATION OR (B) REPAY THE OUTSTANDING LOANS OF EACH SUCH NON-CONSENTING
LENDER IN ACCORDANCE WITH SECTIONS 2.05(A) AND 2.10; PROVIDED THAT, UNLESS THE
LOANS THAT ARE REPAID PURSUANT TO PRECEDING CLAUSE (B) ARE IMMEDIATELY REPLACED
IN FULL AT SUCH TIME THROUGH THE ADDITION OF NEW LENDERS OR THE INCREASE OF THE
OUTSTANDING LOANS OF EXISTING LENDERS (WHO IN EACH CASE MUST SPECIFICALLY
CONSENT THERETO), THEN IN THE CASE OF ANY ACTION PURSUANT TO PRECEDING CLAUSE
(B) EACH LENDER (DETERMINED AFTER GIVING EFFECT TO THE PROPOSED ACTION) SHALL
SPECIFICALLY CONSENT THERETO.

 

(D)  NOTWITHSTANDING ANYTHING IN PARAGRAPH (B) OF THIS SECTION TO THE CONTRARY,
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE AMENDED AT ANY TIME AND FROM
TIME TO TIME TO ESTABLISH REVOLVING CREDIT COMMITMENTS OR ONE OR MORE ADDITIONAL
CLASSES OF TERM LOANS BY AN AGREEMENT IN WRITING ENTERED INTO BY LEVEL 3, THE
BORROWER,

 

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THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND EACH PERSON (INCLUDING ANY
LENDER) THAT SHALL AGREE TO PROVIDE SUCH A REVOLVING CREDIT COMMITMENT OR MAKE A
TERM LOAN OF ANY CLASS SO ESTABLISHED (BUT WITHOUT THE CONSENT OF ANY OTHER
LENDER), AND EACH SUCH PERSON THAT SHALL NOT ALREADY BE A LENDER SHALL, AT THE
TIME SUCH AGREEMENT BECOMES EFFECTIVE, BECOME A LENDER WITH THE SAME EFFECT AS
IF IT HAD ORIGINALLY BEEN A LENDER UNDER THIS AGREEMENT WITH THE REVOLVING
CREDIT COMMITMENT AND/OR TERM LOANS SET FORTH IN SUCH AGREEMENT; PROVIDED THAT
THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF THE REVOLVING CREDIT COMMITMENTS
AND TERM LOANS OF ALL CLASSES ESTABLISHED PURSUANT TO THIS PARAGRAPH SHALL AT NO
TIME EXCEED THE MAXIMUM PRINCIPAL AMOUNT OF THE INDEBTEDNESS PERMITTED TO BE
INCURRED AT SUCH TIME UNDER SECTION 6.01(B)(II) AND 6.02(B)(II)).  ANY SUCH
AGREEMENT SHALL AMEND THE PROVISIONS OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO SET FORTH THE TERMS OF THE REVOLVING CREDIT COMMITMENTS OR CLASS OF
TERM LOANS ESTABLISHED THEREBY (INCLUDING THE AMOUNT AND FINAL MATURITY THEREOF
(WHICH, IN THE CASE OF ANY CLASS OF TERM LOANS, SHALL NOT BE EARLIER THAN THE
MATURITY DATE), ANY PROVISIONS RELATING TO AMORTIZATION OR MANDATORY PREPAYMENTS
OR OFFERS TO PREPAY (IT BEING AGREED THAT NOT MORE THAN 1% OF THE AGGREGATE
PRINCIPAL AMOUNT OF THE TERM LOANS OF ANY CLASS SHALL AMORTIZE DURING ANY
CALENDAR YEAR PRIOR TO THE MATURITY DATE AND THAT PROVISIONS FOR MANDATORY
PREPAYMENTS OF AND OFFERS TO PREPAY THE TERM LOANS OF ANY CLASS MAY REQUIRE SUCH
TERM LOANS TO BE PREPAID OR OFFERED THE RIGHT TO BE PREPAID RATABLY WITH THE
LOANS BUT SHALL NOT INCLUDE ANY ADDITIONAL MANDATORY PREPAYMENT RIGHTS), THE
INTEREST TO ACCRUE AND BE PAYABLE THEREON AND ANY FEES TO BE PAYABLE IN RESPECT
THEREOF) AND TO EFFECT SUCH OTHER CHANGES (INCLUDING CHANGES TO THE PROVISIONS
OF THIS SECTION, SECTION 2.12 AND THE DEFINITION OF “REQUIRED LENDERS” AND
CHANGES TO PROVIDE FOR A NOTE OF LEVEL 3 LLC EVIDENCING THE ADVANCE OF THE
PROCEEDS OF ANY LOANS) AS LEVEL 3, THE BORROWER AND THE ADMINISTRATIVE AGENT
SHALL DEEM NECESSARY OR ADVISABLE IN CONNECTION WITH THE ESTABLISHMENT OF ANY
SUCH REVOLVING CREDIT COMMITMENTS OR CLASS OF TERM LOANS; PROVIDED THAT NO SUCH
AGREEMENT SHALL (I) EFFECT ANY CHANGE DESCRIBED IN ANY OF CLAUSES (I), (II),
(III), (VI) OR (VII) OF PARAGRAPH (B) OF THIS SECTION WITHOUT THE CONSENT OF
EACH PERSON REQUIRED TO CONSENT TO SUCH CHANGE UNDER SUCH CLAUSE (IT BEING
AGREED, HOWEVER, THAT THE ESTABLISHMENT OF ANY REVOLVING COMMITMENT OR CLASS OF
TERM LOANS WILL NOT, OF ITSELF, BE DEEMED TO EFFECT ANY OF THE CHANGES DESCRIBED
IN CLAUSES (VI) OR (VII) OF SUCH PARAGRAPH (B)), OR (II) AMEND ARTICLE V, VI OR
VII TO ESTABLISH ANY AFFIRMATIVE OR NEGATIVE COVENANT, EVENT OF DEFAULT OR
REMEDY THAT BY ITS TERMS BENEFITS ANY SUCH REVOLVING CREDIT COMMITMENTS OR CLASS
OF TERM LOANS BUT NOT THE LOANS WITHOUT THE PRIOR WRITTEN CONSENT OF LENDERS
HOLDING A MAJORITY IN INTEREST OF THE LOANS.  WITHOUT LIMITING THE FOREGOING, A
QUALIFIED RECEIVABLE FACILITY PERMITTED BY SECTIONS 6.01 AND 6.02 MAY BE
ESTABLISHED PURSUANT TO AND IN ACCORDANCE WITH THE PROVISIONS OF THIS PARAGRAPH
AND MAY HAVE A FIRST PRIORITY LIEN ON COLLATERAL CONSISTING OF RECEIVABLES,
COLLECTIONS THEREOF AND ACCOUNTS ESTABLISHED SOLELY FOR THE COLLECTION OF SUCH
RECEIVABLES, AND THE AGENT IS AUTHORIZED AND DIRECTED TO ENTER INTO ALL SUCH
AMENDMENTS TO THE LOAN DOCUMENTS AS IT SHALL DEEM NECESSARY OR ADVISABLE TO
ESTABLISH SUCH FIRST PRIORITY LIEN AND TO SUBORDINATE TO SUCH LIEN ON CUSTOMARY
TERMS (AS DETERMINED BY THE AGENT AND LEVEL 3) THE LIENS ON SUCH RECEIVABLES
SECURING THE OTHER OBLIGATIONS.  THE LOANS OF ANY CLASS ESTABLISHED PURSUANT TO
THIS PARAGRAPH SHALL, TO THE EXTENT PROVIDED IN THE AMENDMENT ENTERED INTO IN
CONNECTION THEREWITH, BE ENTITLED TO ALL THE BENEFITS AFFORDED BY THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS, AND SHALL BENEFIT EQUALLY AND RATABLY (EXCEPT AS
PROVIDED IN THE

 

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NEXT PRECEDING SENTENCE) FROM THE GUARANTEES CREATED BY THE GUARANTEE AGREEMENT
AND SECURITY INTERESTS CREATED BY THE COLLATERAL AGREEMENT AND THE OTHER
SECURITY DOCUMENTS.  LEVEL 3 AND THE BORROWER SHALL TAKE ANY ACTIONS REASONABLY
REQUIRED BY THE ADMINISTRATIVE AGENT TO ENSURE AND/OR DEMONSTRATE THAT THE
GUARANTEE AND COLLATERAL REQUIREMENT CONTINUES TO BE SATISFIED AFTER THE
ESTABLISHMENT OF ANY SUCH REVOLVING CREDIT COMMITMENTS OR CLASS OF TERM LOANS. 
NOTWITHSTANDING THE FOREGOING OF THIS PARAGRAPH (D), NO REGULATED GRANTOR
SUBSIDIARY SHALL PLEDGE ANY ASSETS AS COLLATERAL IN SUPPORT OF ANY LOANS OF ANY
CLASS ESTABLISHED PURSUANT TO THIS PARAGRAPH, NOR SHALL ANY REGULATED GUARANTOR
SUBSIDIARY GUARANTEE ANY SUCH LOANS, UNLESS IT HAS OBTAINED ALL MATERIAL (AS
DETERMINED IN GOOD FAITH BY THE GENERAL COUNSEL OF LEVEL 3) AUTHORIZATIONS AND
CONSENTS OF FEDERAL AND STATE GOVERNMENTAL AUTHORITIES REQUIRED IN ORDER FOR
SUCH LOANS AND ALL OTHER LOANS OUTSTANDING HEREUNDER TO BE SECURED BY SUCH
ASSETS AND GUARANTEED BY SUCH REGULATED GUARANTOR SUBSIDIARY.

 

(E)  FOR EACH BORROWING UNDER AN ADDITIONAL TRANCHE, THE BORROWER SHALL USE THE
NET PROCEEDS OF EACH SUCH ISSUANCE AND ADDITIONAL FUNDS AS NECESSARY TO LEND TO
LEVEL 3 LLC AN AMOUNT EQUAL TO THE PRINCIPAL AMOUNT OF THE ADDITIONAL TRANCHE SO
ISSUED, AND THE PRINCIPAL AMOUNT OF THE LOAN PROCEEDS NOTE SHALL BE INCREASED BY
SUCH AMOUNT.

 

SECTION 9.03.  EXPENSES; INDEMNITY; DAMAGE WAIVER.  (A)  LEVEL 3 AND THE
BORROWER SHALL PAY, ON A JOINT AND SEVERAL BASIS, (I) ALL REASONABLE
OUT-OF-POCKET EXPENSES INCURRED BY THE AGENT AND ITS AFFILIATES, INCLUDING THE
REASONABLE FEES, CHARGES AND DISBURSEMENTS OF COUNSEL FOR THE AGENT, IN
CONNECTION WITH ALL MINISTERIAL ACTIVITIES IN THE ADMINISTRATION OF THE LOAN
DOCUMENTS AND ANY AMENDMENTS, MODIFICATIONS OR WAIVERS OF THE PROVISIONS THEREOF
AND (II) ALL REASONABLE OUT-OF-POCKET EXPENSES INCURRED BY THE AGENT AND ITS
AFFILIATES AND EACH LENDER IN CONNECTION WITH THE ENFORCEMENT OF THE LOAN
DOCUMENTS, INCLUDING RIGHTS UNDER THIS SECTION, OR IN CONNECTION WITH THE LOANS,
BUT LEVEL 3 AND THE BORROWER SHALL ONLY BE LIABLE FOR THE FEES AND EXPENSES OF
COUNSEL FOR THE AGENT AND ONE OTHER COUNSEL FOR ALL SUCH OTHER PERSONS (AS WELL
AS SEPARATE LOCAL AND REGULATORY COUNSEL).  THE BORROWER ALSO SHALL PAY ALL LIEN
SEARCH, FILING, RECORDING AND SIMILAR FEES INCURRED BY THE COLLATERAL AGENT IN
CONNECTION WITH THE CREATION AND PERFECTION OF THE SECURITY INTERESTS
CONTEMPLATED BY THE LOAN DOCUMENTS (OTHER THAN THE FILING FEES IN CONNECTION
WITH ANY LOCAL FIXTURE FILINGS AND THE EXPENSES IN CONNECTION WITH OBTAINING
REAL ESTATE DESCRIPTIONS FOR FIXTURE FILINGS).

 

(B)  LEVEL 3 AND THE BORROWER SHALL INDEMNIFY, ON A JOINT AND SEVERAL BASIS, THE
AGENT, EACH RELATED PARTY OF THE AGENT (EACH SUCH PERSON BEING CALLED AN
“INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL
LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE FEES,
CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR
ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A
RESULT OF (I) THE EXECUTION OR DELIVERY OF ANY LOAN DOCUMENT OR ANY OTHER
AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY THE
PARTIES TO THE LOAN DOCUMENTS OF THEIR RESPECTIVE OBLIGATIONS THEREUNDER OR THE
CONSUMMATION OF THE TRANSACTIONS OR ANY OTHER TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY, OR THE COLLATERAL, (II) ANY LOAN OR THE USE OF THE PROCEEDS THEREOF,
(III) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS

 

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MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY LEVEL 3, THE BORROWER OR
ANY OF THE SUBSIDIARIES OF LEVEL 3, OR ANY ENVIRONMENTAL LIABILITY RELATED IN
ANY WAY TO LEVEL 3, THE BORROWER OR ANY OF THE SUBSIDIARIES OF LEVEL 3, OR
(IV) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING
RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO; PROVIDED
THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT
THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE
DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE
JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
SUCH INDEMNITEE.  IT IS AGREED THAT THE EXPENSES FOR WHICH LEVEL 3 AND THE
BORROWER AGREE TO INDEMNIFY THE AGENT UNDER THIS PARAGRAPH SHALL NOT INCLUDE
EXPENSES ASSOCIATED WITH (I) THE ARRANGEMENT AND SYNDICATION OF THE
LOANS, (II) THE PREPARATION, EXECUTION AND DELIVERY OF THE LOAN DOCUMENTS,
(III) THE ENFORCEMENT OF THE LOAN DOCUMENTS OR (IV) THE FILING FEES IN
CONNECTION WITH ANY LOCAL FIXTURE FILINGS AND THE EXPENSES IN CONNECTION WITH
OBTAINING REAL ESTATE DESCRIPTIONS FOR FIXTURE FILINGS; PROVIDED, THAT NOTHING
IN THIS SENTENCE SHALL HAVE THE EFFECT OF REDUCING ANY RIGHTS OF THE AGENT OR
ITS AFFILIATES PURSUANT TO PARAGRAPH (A) OF THIS SECTION OR OF REDUCING THE
BORROWER’S RESPONSIBILITY FOR EXPENSES RELATED TO CLAIMS, LITIGATION,
INVESTIGATIONS OR PROCEEDINGS REFERRED TO IN CLAUSE (IV) OF THE IMMEDIATELY
PRECEDING SENTENCE.

 

(C)  TO THE EXTENT THAT LEVEL 3 AND THE BORROWER FAIL TO PAY ANY AMOUNT REQUIRED
TO BE PAID BY THEM TO THE AGENT OR ANY RELATED PARTY OF THE AGENT UNDER
PARAGRAPH (A) OR (B) OF THIS SECTION, EACH LENDER SEVERALLY AGREES TO PAY TO THE
AGENT SUCH LENDER’S PRO RATA SHARE (DETERMINED AS OF THE TIME THAT THE
APPLICABLE UNREIMBURSED EXPENSE OR INDEMNITY PAYMENT IS SOUGHT), BASED ON THE
AMOUNT OF ITS COMMITMENT OR OUTSTANDING LOANS OR, IF NO LOANS SHALL BE
OUTSTANDING, ON THE AMOUNT OF ITS LOANS ON THE MOST RECENT DATE ON WHICH LOANS
WERE OUTSTANDING, OF SUCH UNPAID AMOUNT; PROVIDED THAT (I) THE UNREIMBURSED
EXPENSE OR INDEMNIFIED LOSS, CLAIM, DAMAGE, LIABILITY OR RELATED EXPENSE, AS THE
CASE MAY BE, WAS INCURRED BY OR ASSERTED AGAINST THE AGENT IN ITS CAPACITY AS
SUCH AND (II) SUCH INDEMNITY SHALL NOT, AS TO THE AGENT OR ANY RELATED PARTY, BE
AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR
RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL
AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE AGENT OR SUCH RELATED PARTY, AS THE CASE MAY BE.

 

(D)  TO THE EXTENT PERMITTED BY APPLICABLE LAW, NEITHER LEVEL 3 NOR THE BORROWER
SHALL ASSERT, AND EACH HEREBY WAIVES, ANY CLAIM AGAINST ANY INDEMNITEE, ON ANY
THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES
(AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR
AS A RESULT OF THIS AGREEMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED
HEREBY, THE TRANSACTIONS, ANY LOAN OR THE USE OF THE PROCEEDS THEREOF.

 

(E)  ALL AMOUNTS DUE UNDER THIS SECTION SHALL BE PAYABLE PROMPTLY AFTER WRITTEN
DEMAND THEREFOR.

 

SECTION 9.04.  SUCCESSORS AND ASSIGNS.  (A)  THE PROVISIONS OF THIS AGREEMENT
SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO, THE

 

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INDEMNITEES AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS PERMITTED HEREBY, EXCEPT
THAT (I) THE BORROWER MAY NOT ASSIGN OR OTHERWISE TRANSFER ANY OF ITS RIGHTS OR
OBLIGATIONS HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF EACH LENDER (AND ANY
ATTEMPTED ASSIGNMENT OR TRANSFER BY THE BORROWER WITHOUT SUCH CONSENT SHALL BE
NULL AND VOID) AND (II) NO LENDER MAY ASSIGN OR OTHERWISE TRANSFER ITS RIGHTS OR
OBLIGATIONS HEREUNDER EXCEPT IN ACCORDANCE WITH THIS SECTION.  NOTHING IN THIS
AGREEMENT, EXPRESSED OR IMPLIED, SHALL BE CONSTRUED TO CONFER UPON ANY PERSON
(OTHER THAN THE PARTIES HERETO, INDEMNITEES, THEIR RESPECTIVE SUCCESSORS AND
ASSIGNS PERMITTED HEREBY AND, TO THE EXTENT EXPRESSLY CONTEMPLATED HEREBY, THE
RELATED PARTIES OF THE AGENT) ANY LEGAL OR EQUITABLE RIGHT, REMEDY OR CLAIM
UNDER OR BY REASON OF THIS AGREEMENT.

 

(B)  ANY LENDER MAY ASSIGN TO ONE OR MORE ASSIGNEES ALL OR A PORTION OF ITS
RIGHTS UNDER THIS AGREEMENT (INCLUDING ALL OR A PORTION OF THE LOANS AT THE TIME
OWING TO IT) TO AN ELIGIBLE TRANSFEREE; PROVIDED, THAT (I) EXCEPT IN THE CASE OF
AN ASSIGNMENT TO A LENDER, THE AMOUNT OF THE LOANS OF THE ASSIGNING LENDER
SUBJECT TO EACH SUCH ASSIGNMENT (DETERMINED AS OF THE DATE THE ASSIGNMENT AND
ASSUMPTION WITH RESPECT TO SUCH ASSIGNMENT IS DELIVERED TO THE ADMINISTRATIVE
AGENT) SHALL BE AN INTEGRAL MULTIPLE OF $1,000,000 (OR THE ENTIRE REMAINING
AMOUNT OF THE ASSIGNING LENDER’S LOANS, IF LESS THAN $1,000,000) UNLESS THE
ADMINISTRATIVE AGENT SHALL OTHERWISE CONSENT, PROVIDED THAT (A) IN THE EVENT OF
CONCURRENT ASSIGNMENTS TO TWO OR MORE ASSIGNEES THAT ARE AFFILIATES OF ONE
ANOTHER, OR TO TWO OR MORE APPROVED FUNDS MANAGED BY THE SAME INVESTMENT ADVISOR
OR BY AFFILIATED INVESTMENT ADVISORS, ALL SUCH CONCURRENT ASSIGNMENTS SHALL BE
AGGREGATED IN DETERMINING COMPLIANCE WITH THIS SUBSECTION AND (B) IN THE EVENT
OF CONCURRENT ASSIGNMENTS TO OR BY TWO OR MORE ASSIGNORS THAT ARE AFFILIATES OF
ONE ANOTHER, OR TO OR BY TWO OR MORE APPROVED FUNDS MANAGED BY THE SAME
INVESTMENT ADVISOR OR BY AFFILIATED INVESTMENT ADVISORS, ALL SUCH CONCURRENT
ASSIGNMENTS SHALL BE AGGREGATED IN DETERMINING COMPLIANCE WITH THIS SUBSECTION;
(II) EACH PARTIAL ASSIGNMENT SHALL BE MADE AS AN ASSIGNMENT OF A PROPORTIONATE
PART OF ALL THE ASSIGNING LENDER’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT;
(III) THE PARTIES TO EACH ASSIGNMENT SHALL EXECUTE AND DELIVER TO THE
ADMINISTRATIVE AGENT AN ASSIGNMENT AND ASSUMPTION, TOGETHER WITH A PROCESSING
AND RECORDATION FEE OF $3,500 (EXCEPT THAT IN THE EVENT OF (A) CONCURRENT
ASSIGNMENTS TO TWO OR MORE ASSIGNEES THAT ARE AFFILIATES OF ONE ANOTHER, OR TO
TWO OR MORE APPROVED FUNDS MANAGED BY THE SAME INVESTMENT ADVISOR OR BY
AFFILIATED INVESTMENT ADVISORS OR (B) CONCURRENT ASSIGNMENTS BY TWO OR MORE
ASSIGNEES THAT ARE AFFILIATES OF ONE ANOTHER, OR BY TWO OR MORE APPROVED FUNDS
MANAGED BY THE SAME INVESTMENT ADVISOR OR BY AFFILIATED INVESTMENT ADVISORS,
ONLY ONE SUCH FEE SHALL BE PAYABLE); AND (IV) THE ASSIGNEE, IF IT SHALL NOT BE A
LENDER, SHALL DELIVER TO THE ADMINISTRATIVE AGENT AN ADMINISTRATIVE
QUESTIONNAIRE.

 

(C)  SUBJECT TO ACCEPTANCE AND RECORDING THEREOF PURSUANT TO PARAGRAPH (D) OF
THIS SECTION, FROM AND AFTER THE EFFECTIVE DATE SPECIFIED IN EACH ASSIGNMENT AND
ASSUMPTION THE ASSIGNEE THEREUNDER SHALL BE A PARTY HERETO AND, TO THE EXTENT OF
THE INTEREST ASSIGNED BY SUCH ASSIGNMENT AND ASSUMPTION, HAVE THE RIGHTS AND
OBLIGATIONS OF A LENDER OF THE APPLICABLE CLASS UNDER THIS AGREEMENT, AND THE
ASSIGNING LENDER THEREUNDER SHALL, TO THE EXTENT OF THE INTEREST ASSIGNED BY
SUCH ASSIGNMENT AND ASSUMPTION, BE RELEASED FROM ITS OBLIGATIONS UNDER THIS
AGREEMENT (AND, IN THE CASE OF AN ASSIGNMENT AND ASSUMPTION COVERING ALL OF THE
ASSIGNING LENDER’S RIGHTS AND OBLIGATIONS

 

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UNDER THIS AGREEMENT, SUCH LENDER SHALL CEASE TO BE A PARTY HERETO BUT SHALL
CONTINUE TO BE ENTITLED TO THE BENEFITS OF SECTIONS 2.09, 2.10, 2.11 AND 9.03). 
ANY ASSIGNMENT OR TRANSFER BY A LENDER OF RIGHTS OR OBLIGATIONS UNDER THIS
AGREEMENT THAT DOES NOT COMPLY WITH THIS SECTION SHALL BE TREATED FOR PURPOSES
OF THIS AGREEMENT AS A SALE BY SUCH LENDER OF A PARTICIPATION IN SUCH RIGHTS AND
OBLIGATIONS IN ACCORDANCE WITH PARAGRAPH (F) OF THIS SECTION.  EACH ASSIGNMENT
HEREUNDER SHALL BE DEEMED TO BE AN ASSIGNMENT OF THE RELATED RIGHTS UNDER THE
SECURITY DOCUMENTS.

 

(D)  THE ADMINISTRATIVE AGENT SHALL MAINTAIN AT ONE OF ITS OFFICES A COPY OF
EACH ASSIGNMENT AND ASSUMPTION DELIVERED TO IT AND A REGISTER FOR THE
RECORDATION OF THE NAMES AND ADDRESSES OF THE LENDERS, AND THE COMMITMENT OF,
AND PRINCIPAL AMOUNT OF THE LOANS OWING TO, EACH LENDER, AND THE APPLICABLE
CLASS THEREOF, PURSUANT TO THE TERMS HEREOF FROM TIME TO TIME (THE “REGISTER”). 
THE ENTRIES IN THE REGISTER SHALL BE CONCLUSIVE, AND THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS MAY TREAT EACH PERSON WHOSE NAME IS
RECORDED IN THE REGISTER PURSUANT TO THE TERMS HEREOF AS A LENDER HEREUNDER FOR
ALL PURPOSES OF THIS AGREEMENT, NOTWITHSTANDING NOTICE TO THE CONTRARY.  THE
REGISTER SHALL BE AVAILABLE FOR INSPECTION BY THE BORROWER AND ANY LENDER AT ANY
REASONABLE TIME AND FROM TIME TO TIME UPON REASONABLE PRIOR NOTICE.  UPON ITS
RECEIPT OF A DULY COMPLETED ASSIGNMENT AND ASSUMPTION EXECUTED BY AN ASSIGNING
LENDER AND AN ASSIGNEE, THE ASSIGNEE’S COMPLETED ADMINISTRATIVE QUESTIONNAIRE
(UNLESS THE ASSIGNEE SHALL ALREADY BE A LENDER HEREUNDER) AND THE PROCESSING AND
RECORDATION FEE REFERRED TO IN PARAGRAPH (B) OF THIS SECTION, THE ADMINISTRATIVE
AGENT SHALL ACCEPT SUCH ASSIGNMENT AND ASSUMPTION AND RECORD THE INFORMATION
CONTAINED THEREIN IN THE REGISTER.  NO ASSIGNMENT SHALL BE EFFECTIVE FOR
PURPOSES OF THIS AGREEMENT UNLESS IT HAS BEEN RECORDED IN THE REGISTER AS
PROVIDED IN THIS PARAGRAPH.

 

(E)  BY EXECUTING AND DELIVERING AN ASSIGNMENT AND ASSUMPTION, THE ASSIGNING
LENDER THEREUNDER AND THE ASSIGNEE THEREUNDER SHALL BE DEEMED TO CONFIRM TO AND
AGREE WITH EACH OTHER AND THE OTHER PARTIES HERETO AS FOLLOWS: (I) SUCH
ASSIGNING LENDER WARRANTS THAT IT IS THE LEGAL AND BENEFICIAL OWNER OF THE
INTEREST BEING ASSIGNED THEREBY FREE AND CLEAR OF ANY ADVERSE CLAIM AND THAT ITS
COMMITMENT AND THE OUTSTANDING BALANCES OF ITS LOANS, IN EACH CASE WITHOUT
GIVING EFFECT TO ASSIGNMENTS THEREOF THAT HAVE NOT BECOME EFFECTIVE, ARE AS SET
FORTH IN SUCH ASSIGNMENT AND ASSUMPTION; (II) EXCEPT AS SET FORTH IN
CLAUSE (I) ABOVE, SUCH ASSIGNING LENDER MAKES NO REPRESENTATION OR WARRANTY AND
ASSUMES NO RESPONSIBILITY WITH RESPECT TO ANY STATEMENTS, WARRANTIES OR
REPRESENTATIONS MADE IN OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY OTHER INSTRUMENT OR DOCUMENT FURNISHED PURSUANT HERETO OR
THERETO, OR THE EXECUTION, LEGALITY, VALIDITY, ENFORCEABILITY, GENUINENESS,
SUFFICIENCY OR VALUE OF ANY OF THE FOREGOING, OR THE FINANCIAL CONDITION OF THE
LOAN PARTIES OR THE PERFORMANCE OR OBSERVANCE BY THE LOAN PARTIES OF ANY OF
THEIR OBLIGATIONS UNDER THIS AGREEMENT OR UNDER ANY OTHER LOAN DOCUMENT OR ANY
OTHER INSTRUMENT OR DOCUMENT FURNISHED PURSUANT HERETO OR THERETO; (III) EACH OF
THE ASSIGNEE AND THE ASSIGNOR REPRESENTS AND WARRANTS THAT IT IS LEGALLY
AUTHORIZED TO ENTER INTO SUCH ASSIGNMENT AND ASSUMPTION; (IV) SUCH ASSIGNEE
CONFIRMS THAT IT HAS RECEIVED A COPY OF THIS AGREEMENT, TOGETHER WITH COPIES OF
ANY AMENDMENTS OR CONSENTS ENTERED INTO PRIOR TO THE DATE OF SUCH ASSIGNMENT AND
ASSUMPTION AND COPIES OF THE MOST RECENT FINANCIAL STATEMENTS DELIVERED PURSUANT
TO SECTION 5.01 AND SUCH OTHER DOCUMENTS AND INFORMATION AS IT HAS DEEMED
APPROPRIATE TO

 

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MAKE ITS OWN CREDIT ANALYSIS AND DECISION TO ENTER INTO SUCH ASSIGNMENT AND
ASSUMPTION; (V) SUCH ASSIGNEE WILL INDEPENDENTLY AND WITHOUT RELIANCE UPON THE
AGENTS, SUCH ASSIGNING LENDER OR ANY OTHER LENDER AND BASED ON SUCH DOCUMENTS
AND INFORMATION AS IT SHALL DEEM APPROPRIATE AT THE TIME, CONTINUE TO MAKE ITS
OWN CREDIT DECISIONS IN TAKING OR NOT TAKING ACTION UNDER THIS AGREEMENT;
(VI) SUCH ASSIGNEE APPOINTS AND AUTHORIZES THE AGENTS TO TAKE SUCH ACTION AS
AGENTS ON ITS BEHALF AND TO EXERCISE SUCH POWERS UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS AS ARE DELEGATED TO THEM BY THE TERMS HEREOF AND THEREOF,
TOGETHER WITH SUCH POWERS AS ARE REASONABLY INCIDENTAL THERETO; AND (VII) SUCH
ASSIGNEE AGREES THAT IT WILL PERFORM IN ACCORDANCE WITH THEIR TERMS ALL THE
OBLIGATIONS THAT BY THE TERMS OF THIS AGREEMENT ARE REQUIRED TO BE PERFORMED BY
IT AS A LENDER.

 

(F)  (I) ANY LENDER MAY, WITHOUT THE CONSENT OF THE BORROWER, OR THE
ADMINISTRATIVE AGENT, SELL PARTICIPATIONS TO ONE OR MORE OTHER PERSONS (EACH A
“PARTICIPANT”) IN ALL OR A PORTION OF SUCH LENDER’S RIGHTS AND/OR OBLIGATIONS
UNDER THIS AGREEMENT (INCLUDING ALL OR A PORTION OF ITS COMMITMENT AND THE LOANS
OWING TO IT); PROVIDED THAT (I) SUCH LENDER’S OBLIGATIONS UNDER THIS AGREEMENT
SHALL REMAIN UNCHANGED, (II) SUCH LENDER SHALL REMAIN SOLELY RESPONSIBLE TO THE
OTHER PARTIES HERETO FOR THE PERFORMANCE OF SUCH OBLIGATIONS AND (III) THE
BORROWER, THE ADMINISTRATIVE AGENT AND THE OTHER LENDERS SHALL CONTINUE TO DEAL
SOLELY AND DIRECTLY WITH SUCH LENDER IN CONNECTION WITH SUCH LENDER’S RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT.  ANY AGREEMENT OR INSTRUMENT PURSUANT TO WHICH
A LENDER SELLS SUCH A PARTICIPATION SHALL PROVIDE THAT SUCH LENDER SHALL RETAIN
THE SOLE RIGHT TO ENFORCE THIS AGREEMENT AND TO APPROVE ANY AMENDMENT,
MODIFICATION OR WAIVER OF ANY PROVISION OF THIS AGREEMENT; PROVIDED THAT SUCH
AGREEMENT OR INSTRUMENT MAY PROVIDE THAT SUCH LENDER WILL NOT, WITHOUT THE
CONSENT OF THE PARTICIPANT, AGREE TO ANY AMENDMENT, MODIFICATION OR WAIVER THAT
AFFECTS SUCH PARTICIPANT AND THAT, UNDER SECTION 9.02(B), WOULD REQUIRE THE
CONSENT OF EACH AFFECTED LENDER.  SUBJECT TO PARAGRAPH (F)(II) OF THIS SECTION,
THE BORROWER AGREES THAT EACH PARTICIPANT SHALL BE ENTITLED TO THE BENEFITS OF
SECTIONS 2.09, 2.10 AND 2.11 TO THE SAME EXTENT AS IF IT WERE A LENDER AND HAD
ACQUIRED ITS INTEREST BY ASSIGNMENT PURSUANT TO PARAGRAPH (B) OF THIS SECTION. 
TO THE EXTENT PERMITTED BY LAW, EACH PARTICIPANT ALSO SHALL BE ENTITLED TO THE
BENEFITS OF SECTION 9.08 AS THOUGH IT WERE A LENDER, PROVIDED SUCH PARTICIPANT
AGREES TO BE SUBJECT TO SECTION 2.12(C) AS THOUGH IT WERE A LENDER.

 

(II) A PARTICIPANT SHALL NOT BE ENTITLED TO RECEIVE ANY GREATER PAYMENT UNDER
SECTION 2.09, 2.10 OR 2.11 THAN THE APPLICABLE LENDER WOULD HAVE BEEN ENTITLED
TO RECEIVE WITH RESPECT TO THE PARTICIPATION SOLD TO SUCH PARTICIPANT UNLESS THE
SALE OF THE PARTICIPATION TO SUCH PARTICIPANT IS MADE WITH THE BORROWER’S PRIOR
WRITTEN CONSENT, WHICH CONSENT SHALL SPECIFICALLY REFER TO THIS EXCEPTION.  A
PARTICIPANT THAT WOULD BE A FOREIGN LENDER IF IT WERE A LENDER SHALL NOT BE
ENTITLED TO THE BENEFITS OF SECTION 2.11 UNLESS THE BORROWER IS NOTIFIED OF THE
PARTICIPATION SOLD TO SUCH PARTICIPANT AND SUCH PARTICIPANT AGREES, FOR THE
BENEFIT OF THE BORROWER, TO COMPLY WITH SECTION 2.11(E) AS THOUGH IT WERE A
LENDER.

 

(G)  ANY LENDER MAY AT ANY TIME PLEDGE OR ASSIGN A SECURITY INTEREST IN ALL OR
ANY PORTION OF ITS RIGHTS UNDER THIS AGREEMENT TO SECURE OBLIGATIONS OF SUCH
LENDER, INCLUDING ANY PLEDGE OR ASSIGNMENT TO SECURE OBLIGATIONS TO A FEDERAL
RESERVE BANK, AND THIS SECTION SHALL NOT APPLY TO ANY SUCH PLEDGE OR ASSIGNMENT
OF A SECURITY INTEREST;

 

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PROVIDED THAT NO SUCH PLEDGE OR ASSIGNMENT OF A SECURITY INTEREST SHALL RELEASE
A LENDER FROM ANY OF ITS OBLIGATIONS HEREUNDER OR SUBSTITUTE ANY SUCH PLEDGEE OR
ASSIGNEE FOR SUCH LENDER AS A PARTY HERETO.

 

SECTION 9.05.  SURVIVAL.  ALL COVENANTS, AGREEMENTS, REPRESENTATIONS AND
WARRANTIES MADE BY THE LOAN PARTIES IN THE LOAN DOCUMENTS AND IN THE
CERTIFICATES OR OTHER INSTRUMENTS DELIVERED IN CONNECTION WITH OR PURSUANT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE CONSIDERED TO HAVE BEEN
RELIED UPON BY THE OTHER PARTIES HERETO AND SHALL SURVIVE THE EXECUTION AND
DELIVERY OF THE LOAN DOCUMENTS AND THE MAKING OF ANY LOANS, REGARDLESS OF ANY
INVESTIGATION MADE BY ANY SUCH OTHER PARTY OR ON ITS BEHALF AND NOTWITHSTANDING
THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY HAVE HAD NOTICE OR KNOWLEDGE OF
ANY DEFAULT OR INCORRECT REPRESENTATION OR WARRANTY AT THE TIME ANY CREDIT IS
EXTENDED HEREUNDER, AND SHALL CONTINUE IN FULL FORCE AND EFFECT AS LONG AS THE
PRINCIPAL OF OR ANY ACCRUED INTEREST ON ANY LOAN OR ANY OTHER AMOUNT PAYABLE
UNDER THIS AGREEMENT IS OUTSTANDING AND UNPAID AND SO LONG AS THE COMMITMENTS
HAVE NOT EXPIRED OR TERMINATED.  THE PROVISIONS OF SECTIONS 2.09, 2.10, 2.11 AND
9.03 AND ARTICLE VIII SHALL SURVIVE AND REMAIN IN FULL FORCE AND EFFECT
REGARDLESS OF THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, THE
REPAYMENT OF THE LOANS OR THE TERMINATION OF THIS AGREEMENT OR ANY PROVISION
HEREOF.

 

SECTION 9.06.  COUNTERPARTS; INTEGRATION; EFFECTIVENESS.  THIS AGREEMENT MAY BE
EXECUTED IN COUNTERPARTS (AND BY DIFFERENT PARTIES HERETO ON DIFFERENT
COUNTERPARTS), EACH OF WHICH SHALL CONSTITUTE AN ORIGINAL, BUT ALL OF WHICH WHEN
TAKEN TOGETHER SHALL CONSTITUTE A SINGLE CONTRACT.  DELIVERY OF AN EXECUTED
SIGNATURE PAGE TO THIS AGREEMENT BY FACSIMILE OR ELECTRONIC TRANSMISSION SHALL
BE EFFECTIVE AS DELIVERY OF A MANUALLY SIGNED COUNTERPART OF THIS AGREEMENT. 
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ANY SEPARATE LETTER AGREEMENTS WITH
RESPECT TO FEES PAYABLE TO THE ADMINISTRATIVE AGENT CONSTITUTE THE ENTIRE
CONTRACT AMONG THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDE
ANY AND ALL PREVIOUS AGREEMENTS AND UNDERSTANDINGS, ORAL OR WRITTEN, RELATING TO
THE SUBJECT MATTER HEREOF.  THIS AGREEMENT SHALL BECOME EFFECTIVE AS PROVIDED IN
SECTION 4.01.

 

SECTION 9.07.  SEVERABILITY.  ANY PROVISION OF THIS AGREEMENT HELD TO BE
INVALID, ILLEGAL OR UNENFORCEABLE IN ANY JURISDICTION SHALL, AS TO SUCH
JURISDICTION, BE INEFFECTIVE TO THE EXTENT OF SUCH INVALIDITY, ILLEGALITY OR
UNENFORCEABILITY WITHOUT AFFECTING THE VALIDITY, LEGALITY AND ENFORCEABILITY OF
THE REMAINING PROVISIONS HEREOF; AND THE INVALIDITY OF A PARTICULAR PROVISION IN
A PARTICULAR JURISDICTION SHALL NOT INVALIDATE SUCH PROVISION IN ANY OTHER
JURISDICTION.

 

SECTION 9.08.  RIGHT OF SETOFF.  IF AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND
BE CONTINUING AND THE LOANS SHALL HAVE BECOME DUE AND PAYABLE PURSUANT TO
ARTICLE VII, EACH LENDER AND EACH OF ITS AFFILIATES IS HEREBY AUTHORIZED AT ANY
TIME AND FROM TIME TO TIME, TO THE FULLEST EXTENT PERMITTED BY LAW, TO SET OFF
AND APPLY ANY AND ALL DEPOSITS (GENERAL OR SPECIAL, TIME OR DEMAND, PROVISIONAL
OR FINAL) AT ANY TIME HELD AND OTHER OBLIGATIONS AT ANY TIME OWING BY SUCH
LENDER OR AFFILIATE TO OR FOR THE CREDIT OR THE ACCOUNT OF THE BORROWER AGAINST
ANY OF AND ALL THE OBLIGATIONS OF THE BORROWER NOW OR HEREAFTER EXISTING UNDER
THIS AGREEMENT HELD BY SUCH LENDER, IRRESPECTIVE OF WHETHER OR

 

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NOT SUCH LENDER SHALL HAVE MADE ANY DEMAND UNDER THIS AGREEMENT AND ALTHOUGH
SUCH OBLIGATIONS MAY BE UNMATURED.  THE RIGHTS OF EACH LENDER UNDER THIS
SECTION ARE IN ADDITION TO OTHER RIGHTS AND REMEDIES (INCLUDING OTHER RIGHTS OF
SETOFF) WHICH SUCH LENDER MAY HAVE.

 

SECTION 9.09.  GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.  (A) 
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.

 

(B)  EACH OF LEVEL 3 AND THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE
UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN
SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. 
NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT
THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST
LEVEL 3, THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)  Each of Level 3 and the Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this Section.  Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.

 

(d)  Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01.  Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

 

SECTION 9.10.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN  ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT

 

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SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 9.11.  HEADINGS.  ARTICLE AND SECTION HEADINGS AND THE TABLE OF CONTENTS
USED HEREIN ARE FOR CONVENIENCE OF REFERENCE ONLY, ARE NOT PART OF THIS
AGREEMENT AND SHALL NOT AFFECT THE CONSTRUCTION OF, OR BE TAKEN INTO
CONSIDERATION IN INTERPRETING, THIS AGREEMENT.

 

SECTION 9.12.  CONFIDENTIALITY.  THE ADMINISTRATIVE AGENT AND EACH LENDER AGREES
TO MAINTAIN THE CONFIDENTIALITY OF THE INFORMATION (AS DEFINED BELOW), EXCEPT
THAT INFORMATION MAY BE DISCLOSED (A) TO ITS AND ITS AFFILIATES’ DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS, INCLUDING ACCOUNTANTS, LEGAL COUNSEL AND OTHER
ADVISORS (IT BEING UNDERSTOOD THAT THE PERSONS TO WHOM SUCH DISCLOSURE IS MADE
WILL BE INFORMED OF THE CONFIDENTIAL NATURE OF SUCH INFORMATION AND INSTRUCTED
TO KEEP SUCH INFORMATION CONFIDENTIAL), (B) TO THE EXTENT REQUESTED BY ANY
REGULATORY AUTHORITY, (C) TO THE EXTENT REQUIRED BY APPLICABLE LAWS OR
REGULATIONS OR BY ANY SUBPOENA OR SIMILAR LEGAL PROCESS, (D) TO ANY OTHER PARTY
TO THIS AGREEMENT, (E) IN CONNECTION WITH THE EXERCISE OF ANY REMEDIES HEREUNDER
OR ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE ENFORCEMENT OF RIGHTS HEREUNDER OR THEREUNDER, (F) SUBJECT TO AN
AGREEMENT CONTAINING PROVISIONS SUBSTANTIALLY THE SAME AS THOSE OF THIS SECTION,
TO ANY PLEDGEE REFERRED TO IN SECTION 9.04(G) OR TO ANY ASSIGNEE OF OR
PARTICIPANT IN, OR ANY PROSPECTIVE ASSIGNEE OF OR PARTICIPANT IN, ANY OF ITS
RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT, (G) WITH THE CONSENT OF THE
BORROWER, (H) TO THE EXTENT SUCH INFORMATION (I) BECOMES PUBLICLY AVAILABLE
OTHER THAN AS A RESULT OF A BREACH OF THIS SECTION, (II) BECOMES AVAILABLE TO
THE ADMINISTRATIVE AGENT OR ANY LENDER ON A NONCONFIDENTIAL BASIS FROM A SOURCE
OTHER THAN LEVEL 3 OR THE BORROWER, (I) TO ANY DIRECT OR INDIRECT CONTRACTUAL
COUNTERPARTY IN SWAP AGREEMENTS OR SUCH CONTRACTUAL COUNTERPARTY’S PROFESSIONAL
ADVISOR (SO LONG AS SUCH CONTRACTUAL COUNTERPARTY OR PROFESSIONAL ADVISOR TO
SUCH CONTRACTUAL COUNTERPARTY AGREES TO BE BOUND BY THE PROVISIONS OF THIS
SECTION OR (J) TO THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS OR ANY
SIMILAR ORGANIZATION OR ANY NATIONALLY RECOGNIZED RATING AGENCY THAT REQUIRES
ACCESS TO INFORMATION ABOUT A LENDER’S INVESTMENT PORTFOLIO IN CONNECTION WITH
RATINGS ISSUED WITH RESPECT TO SUCH LENDER.  FOR THE PURPOSES OF THIS SECTION,
“INFORMATION” MEANS ALL INFORMATION RECEIVED FROM LEVEL 3 OR THE BORROWER
RELATING TO LEVEL 3 OR THE BORROWER OR ITS BUSINESS (INCLUDING INFORMATION
OBTAINED THROUGH THE EXERCISE OF A LENDER’S RIGHTS UNDER SECTIONS 5.01) OTHER
THAN ANY SUCH INFORMATION THAT IS AVAILABLE TO THE ADMINISTRATIVE AGENT OR ANY
LENDER ON A NONCONFIDENTIAL BASIS PRIOR TO DISCLOSURE BY LEVEL 3 OR THE
BORROWER.  ANY PERSON REQUIRED TO MAINTAIN THE CONFIDENTIALITY OF INFORMATION AS
PROVIDED IN THIS SECTION SHALL BE CONSIDERED TO HAVE COMPLIED WITH ITS
OBLIGATION TO DO SO IF SUCH PERSON HAS EXERCISED THE SAME DEGREE OF CARE TO
MAINTAIN THE CONFIDENTIALITY OF SUCH INFORMATION AS SUCH PERSON WOULD ACCORD TO
ITS OWN CONFIDENTIAL INFORMATION.

 

SECTION 9.13.  INTEREST RATE LIMITATION.  NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, IF AT ANY TIME THE INTEREST RATE APPLICABLE TO ANY LOAN, TOGETHER WITH

 

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ALL FEES, CHARGES AND OTHER AMOUNTS WHICH ARE TREATED AS INTEREST ON SUCH LOAN
UNDER APPLICABLE LAW (COLLECTIVELY THE “CHARGES”), SHALL EXCEED THE MAXIMUM
LAWFUL RATE (THE “MAXIMUM RATE”) WHICH MAY BE CONTRACTED FOR, CHARGED, TAKEN,
RECEIVED OR RESERVED BY THE LENDER HOLDING SUCH LOAN IN ACCORDANCE WITH
APPLICABLE LAW, THE RATE OF INTEREST PAYABLE IN RESPECT OF SUCH LOAN HEREUNDER,
TOGETHER WITH ALL CHARGES PAYABLE IN RESPECT THEREOF, SHALL BE LIMITED TO THE
MAXIMUM RATE AND, TO THE EXTENT LAWFUL, THE INTEREST AND CHARGES THAT WOULD HAVE
BEEN PAYABLE IN RESPECT OF SUCH LOAN BUT WERE NOT PAYABLE AS A RESULT OF THE
OPERATION OF THIS SECTION SHALL BE CUMULATED AND THE INTEREST AND CHARGES
PAYABLE TO SUCH LENDER IN RESPECT OF OTHER LOANS OR PERIODS SHALL BE INCREASED
(BUT NOT ABOVE THE MAXIMUM RATE THEREFOR) UNTIL SUCH CUMULATED AMOUNT, TOGETHER
WITH INTEREST THEREON AT THE FEDERAL FUNDS EFFECTIVE RATE TO THE DATE OF
REPAYMENT, SHALL HAVE BEEN RECEIVED BY SUCH LENDER.

 

SECTION 9.14.  RELEASE OF SUBSIDIARY LOAN PARTIES AND COLLATERAL.  (A)  
NOTWITHSTANDING ANY CONTRARY PROVISION HEREIN OR IN ANY OTHER LOAN DOCUMENT, IF
LEVEL 3 SHALL REQUEST THE RELEASE UNDER ANY SECURITY DOCUMENT OF (I) ANY OF ITS
SUBSIDIARIES (OTHER THAN THE BORROWER OR LEVEL 3 LLC) OR ANY COLLATERAL TO BE
SOLD OR OTHERWISE DISPOSED OF (INCLUDING THROUGH THE SALE OR DISPOSITION OF ANY
SUBSIDIARY (OTHER THAN THE BORROWER OR LEVEL 3 LLC) OWNING ANY SUCH SUBSIDIARY
OR COLLATERAL) TO A PERSON OTHER THAN LEVEL 3 OR A SUBSIDIARY OF LEVEL 3 IN A
TRANSACTION PERMITTED UNDER THE TERMS OF THIS AGREEMENT (INCLUDING TO THE EXTENT
PERMITTED BY SECTION 6.07, 6.08 OR 6.10), (II) ANY RECEIVABLES, COLLECTIONS
THEREOF AND ACCOUNTS ESTABLISHED SOLELY FOR THE COLLECTION OF SUCH RECEIVABLES
TO SECURE THE INCURRENCE OF INDEBTEDNESS PURSUANT TO A QUALIFIED RECEIVABLE
FACILITY AS PERMITTED BY SECTION 6.01(B)(II) OR 6.02(B)(II) OR (III) ANY
PROPERTY THAT IS TO BECOME SUBJECT TO ANY LIEN PERMITTED TO BE INCURRED UNDER
SECTION 6.05(II)(3) OR (4), AND SHALL DELIVER TO THE COLLATERAL AGENT A
CERTIFICATE TO THE EFFECT THAT SUCH SALE OR OTHER DISPOSITION AND THE
APPLICATION OF THE PROCEEDS THEREOF WILL COMPLY WITH THE TERMS OF THIS AGREEMENT
AND THAT NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, THE
COLLATERAL AGENT, IF SATISFIED THAT THE APPLICABLE CERTIFICATE IS CORRECT, AND
IF SATISFIED WITH ANY ARRANGEMENTS FOR THE RECEIPT AND DEPOSIT OF PROCEEDS OF
SUCH TRANSACTION TO THE EXTENT REQUIRED UNDER SECTION 6.07(B), SHALL, UNLESS AN
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, EXECUTE AND DELIVER ALL SUCH
INSTRUMENTS, RELEASES, FINANCING STATEMENTS OR OTHER AGREEMENTS, AND TAKE ALL
SUCH FURTHER ACTIONS, AS SHALL BE NECESSARY TO EFFECTUATE THE RELEASE OF SUCH
SUBSIDIARY OR SUCH COLLATERAL SUBSTANTIALLY SIMULTANEOUSLY WITH OR AT ANY TIME
AFTER THE COMPLETION OF SUCH SALE OR OTHER DISPOSITION; PROVIDED THAT IF THE
COLLATERAL TO BE SOLD OR OTHERWISE DISPOSED OF IS SOLD OR OTHERWISE DISPOSED OF
BY A GRANTOR IN A TRANSACTION PERMITTED BY THE CREDIT AGREEMENT TO A PERSON
OTHER THAN LEVEL 3 OR A SUBSIDIARY OF LEVEL 3, THEN SUCH COLLATERAL SHALL BE
AUTOMATICALLY RELEASED FROM ANY LIEN CREATED BY THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT UPON THE EFFECTIVENESS OF SUCH SALE OR DISPOSITION.  ANY SUCH RELEASE
SHALL BE WITHOUT RECOURSE TO, OR REPRESENTATION OR WARRANTY BY, THE COLLATERAL
AGENT AND SHALL NOT REQUIRE THE CONSENT OF ANY LENDER.  THE COLLATERAL AGENT
SHALL EXECUTE AND DELIVER ALL SUCH RELEASES, TERMINATION STATEMENTS OR OTHER
INSTRUMENTS, AND TAKE ALL SUCH FURTHER ACTIONS, AS SHALL BE NECESSARY TO
EFFECTUATE OR CONFIRM ANY RELEASE OF COLLATERAL REQUIRED BY THIS PARAGRAPH.

 

(B)  WITHOUT LIMITING THE PROVISIONS OF SECTION 9.03, LEVEL 3 AND THE BORROWER
SHALL REIMBURSE THE COLLATERAL AGENT FOR ALL REASONABLE OUT-OF-POCKET COSTS AND

 

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EXPENSES, INCLUDING THE REASONABLE FEES, CHARGES AND DISBURSEMENTS OF COUNSEL,
INCURRED BY IT IN CONNECTION WITH ANY ACTION CONTEMPLATED BY THIS SECTION.

 

(c)  No such termination or cessation shall release, reduce or otherwise
adversely affect the obligations of any other Loan Party under this Agreement or
any other Loan Document, all of which obligations continue to remain in full
force and effect.

 

SECTION 9.15.  SENIOR DEBT STATUS.  IN THE EVENT THAT LEVEL 3 OR ANY SUBSIDIARY
OF LEVEL 3 SHALL AT ANY TIME ISSUE OR HAVE OUTSTANDING ANY INDEBTEDNESS THAT BY
ITS TERMS IS SUBORDINATED TO ANY OTHER INDEBTEDNESS OF LEVEL 3 OR SUCH
SUBSIDIARY, LEVEL 3 SHALL TAKE OR CAUSE SUCH SUBSIDIARY TO TAKE ALL SUCH ACTIONS
AS SHALL BE NECESSARY TO CAUSE THE OBLIGATIONS TO CONSTITUTE SENIOR INDEBTEDNESS
(HOWEVER DENOMINATED) IN RESPECT OF SUCH SUBORDINATED INDEBTEDNESS AND TO ENABLE
THE LENDERS TO HAVE AND EXERCISE ANY PAYMENT BLOCKAGE OR OTHER REMEDIES
AVAILABLE OR POTENTIALLY AVAILABLE TO HOLDERS OF SENIOR INDEBTEDNESS UNDER THE
TERMS OF SUCH SUBORDINATED INDEBTEDNESS.  WITHOUT LIMITING THE FOREGOING, THE
OBLIGATIONS ARE HEREBY DESIGNATED AS “SENIOR INDEBTEDNESS” AND, IF RELEVANT, AS
“DESIGNATED SENIOR INDEBTEDNESS” IN RESPECT OF ALL SUCH SUBORDINATED
INDEBTEDNESS AND ARE FURTHER GIVEN ALL SUCH OTHER DESIGNATIONS AS SHALL BE
REQUIRED UNDER THE TERMS OF ANY SUCH SUBORDINATED INDEBTEDNESS IN ORDER THAT THE
LENDERS MAY HAVE AND EXERCISE ANY PAYMENT BLOCKAGE OR OTHER REMEDIES AVAILABLE
OR POTENTIALLY AVAILABLE TO HOLDERS OF SENIOR INDEBTEDNESS UNDER THE TERMS OF
SUCH SUBORDINATED INDEBTEDNESS.

 

SECTION 9.16.  NO FIDUCIARY RELATIONSHIP.  LEVEL 3 AND THE BORROWER, ON BEHALF
OF THEMSELVES AND THE SUBSIDIARIES, AGREE THAT IN CONNECTION WITH ALL ASPECTS OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND ANY COMMUNICATIONS IN CONNECTION
THEREWITH, LEVEL 3, THE BORROWER, THE SUBSIDIARIES AND THEIR AFFILIATES, ON THE
ONE HAND, AND THE AGENT AND THE LENDERS AND THEIR AFFILIATES, ON THE OTHER HAND,
WILL HAVE A BUSINESS RELATIONSHIP THAT DOES NOT CREATE, BY IMPLICATION OR
OTHERWISE, ANY FIDUCIARY DUTY ON THE PART OF THE AGENT, THE LENDERS, OR THEIR
AFFILIATES, AND NO SUCH DUTY WILL BE DEEMED TO HAVE ARISEN IN CONNECTION WITH
ANY SUCH TRANSACTIONS OR COMMUNICATIONS.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

 

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