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

 

2

 

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

 

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

 

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.

 

5

 

(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

 

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.]

 

7

 

 

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

 

 

	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

 

 

	MERRILL LYNCH CAPITAL CORPORATION,
	Individually, and as Administrative Agent and Collateral Agent,
	by:	/s/ Scott Tolchin
		Name:	Scott Tolchin
		Title:	Vice President

 

 

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:

 

 

* For Lenders requiring a second signature line.

 

 

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

 

 

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]

 

 

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

 

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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

 

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

 

iii

 

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

 

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).

 

 

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

 

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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

 

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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

 

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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 Rat e” 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 66 2 / 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