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 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