Document:

Exhibit 4.4

 

EXECUTION COPY

 

EUR 500,000,000 ADDITIONAL FACILITY V ACCESSION AGREEMENT

 

To:                              Toronto
Dominion (Texas) LLC as Facility Agent (the Facility
Agent) and TD Bank Europe Limited as Security Agent (the Security  Agent)

 

From:                  UPCB Finance
Limited (the Additional Facility V Lender)

 

Date:                    20  January 2010

 

UPC Broadband Holding B.V.
(formerly known as UPC Distribution Holding B.V) - €1,072,000,000 Term Credit
Agreement dated 16 January 2004 as amended from time to time (the Credit Agreement)

 

1.                                       In this
Agreement:

 

Indenture
means the indenture, dated on or about the date of this Agreement, among, inter
alios, the Additional Facility V Lender, as issuer and The Bank of New York
Mellon, as trustee, transfer agent, registrar and principal paying agent.

 

Facility
V means the EUR 500,000,000 term loan facility made
available under this Agreement.

 

Facility
V Advance means the EUR denominated advance made to
UPC Financing by the Additional Facility V Lender under Facility V.

 

Facility
V Commitment means, in relation to the
Additional Facility V Lender, the amount in EUR set opposite its name under the
heading “Facility V Commitment” in Schedule 1 to this Agreement, to the extent
not cancelled, transferred, or reduced under the Credit Agreement.

 

Notes
has the meaning given to that term in the Indenture.

 

2.                                       Unless otherwise
defined in this Agreement, terms defined in the Credit Agreement shall have the
same meaning in this Agreement and a reference to a Clause is a reference to a
Clause of the Credit Agreement.  The
principles of construction set out in Clause 1.2 (Construction) of the Credit
Agreement apply to this Agreement as though they were set out in full in this
Agreement.

 

3.                                       We refer to
Clause 2.2 (Additional Facilities) of the Credit Agreement.

 

4.                                       This Agreement
will take effect on the date on which the Facility Agent notifies UPC Broadband
and the Additional Facility V Lender that it has received the documents and
evidence set out in Schedule 2 to this Agreement, in each case in form and
substance satisfactory to it or, as the case may be, the requirement to provide
any of such documents or evidence has been waived by the Facility Agent on
behalf of the Additional Facility V Lender (the Effective
Date).

 

5.                                       The Additional
Facility V Lender agrees:

 

 

(a)                                  to become a party
to and to be bound by the terms of the Credit Agreement as Lender in accordance
with Clause 2.2 (Additional Facilities) of the Credit Agreement; and

 

(b)                                 to become a party
to the Security Deed as Lender and to observe, perform and be bound by the
terms and provisions of the Security Deed in the capacity of Lender in
accordance with Clause 9.3 (Transfers by Lenders) of the Security Deed.

 

6.                                       The Additional
Facility Commitment in relation to the Additional Facility V Lender (for the
purpose of the definition of Additional Facility Commitment in Clause 1.1
(Definitions) of the Credit Agreement) is its Facility V Commitment.

 

7.                                       The Borrower in
relation to Facility V is UPC Financing.

 

8.                                       Facility V may be
drawn by one Advance on the date of this Agreement and such date will
constitute the Availability Period for Facility V.  No more than one Request may be made in
respect of Facility V under the Credit Agreement and such Request may only be
in a principal amount of the Additional Facility Commitment in relation to
Facility V as set out in paragraph 6 above.

 

9.                                       The Facility V
Advance will be used for general corporate purposes and working capital
purposes, including the repayment or prepayment of existing indebtedness.

 

10.                                 The Final
Maturity Date in respect of Facility V is January 15 2020.  Any outstanding Advance under Facility V
shall be repaid in full on the Final Maturity Date.

 

11.                                 The interest rate
for the Facility V will be a fixed rate of 75/8 per cent per annum.  This will be calculated in accordance with
Clause 8.1 (Interest rate) of the Credit Agreement as being the sum of EURIBOR,
the applicable Margin and the Mandatory Costs, where, in order to achieve the
fixed rate referred to above, the applicable Margin will be:

 

(a)                                  75/8 per pent. per
annum, calculated on the basis of a 360-day year comprised of twelve 30-day
months;

 

minus

 

(b)                                 the sum of EURIBOR plus the
Mandatory Costs.

 

For the avoidance of doubt, for the purpose of this calculation, the
applicable Margin may be a negative number. 
Further, the interest rate for this Facility V will never exceed 75/8 per cent. per annum (save to the extent that
Clause 8.8 (Default interest) may apply).

 

12.                                 Pursuant to
Clause 8.2 (Selection of Interest Periods) of the Credit Agreement, the
Borrower hereby notifies the Facility Agent that while the Facility V Advance
is outstanding it selects six months for all Interest Periods in relation to
that Advance.

 

13.                                 Upon the delivery
by the Facility Agent of a notice of cancellation of Facility V pursuant to
Clause 7.4(v)(B) (Change of Control) of the Credit Agreement following the
occurrence of a Change of Control (as defined under Clause 7.4 (Change of 

 

2

 

Control) of the Credit Agreement, UPC Broadband shall make a payment to
the Facility Agent (for the account of the Additional Facility V Lender) in an
amount equal to 1 per cent. of the principal amount of the outstanding Facility
V Advance. Such payment shall be due and payable by UPC Broadband to the
Facility Agent (for the account of the Additional Facility V Lender) on the
actual date of such mandatory prepayment.

 

14.                                 Subject to
Paragraph 15 of this Agreement, at any time prior to January 15, 2015,
upon the occurrence of a voluntary prepayment of all or any part of the
outstanding Facility V Advance by UPC Broadband pursuant to Clause 7.3
(Voluntary prepayment) of the Credit Agreement, UPC Broadband shall make a
payment to the Facility Agent (for the account of the Additional Facility V
Lender) in an amount equal to the Make-Whole Amount (as defined below)
(calculated as of a date no more than three Business Days prior to the date of
the relevant Cancellation Notice) as of the due date of such prepayment.  Such payment shall be due and payable by UPC
Broadband to the Facility Agent (for the account of the Additional Facility V
Lender) on the actual date of such prepayment.

 

For the purposes
of this Paragraph 14:

 

Make-Whole
Amount means, with respect to Facility V on any date on
which all or any part of the outstanding Facility V Advance is to be prepaid
pursuant to Clause 7.3 (Voluntary prepayment) of the Credit Agreement, the
excess of:

 

(a)                              the
present value at such prepayment date of (i) the total amount that would
be payable to the Facility Agent (for the account of the Additional Facility V
Lender) if the total outstanding Facility V Advance were prepaid pursuant to Clause
7.3 (Voluntary prepayment) of the Credit Agreement on January 15, 2015
(including the outstanding principal amount of such Advance and the Additional
Amount (as defined below) required under this Clause 14, but excluding accrued
interest and any other amounts payable under the Credit Agreement in connection
with such prepayment) plus (ii) all required interest payments due in
respect of the outstanding Facility V Advance through January 15, 2015
(excluding accrued but unpaid interest to the prepayment date), computed using
a discount rate equal to the Bund Rate (as defined below) as of such prepayment
date plus 50 basis points; over

 

(b)                                 the
principal amount of the outstanding Facility V Advance, if greater.

 

Bund
Rate means, with respect to any relevant date, the rate
per annum equal to the equivalent yield to maturity as of such date of the
Comparable German Bund Issue, assuming a price for the Comparable German Bund
Issue (expressed as a percentage of its principal amount) equal to the
Comparable German Bund Price for such relevant date, where:

 

(i)                                     “Comparable German Bund Issue” means the German Bundesanleihe
security selected by any Reference German Bund Dealer as having a fixed
maturity most nearly equal to the period from such prepayment date to January 15,
2015, and that would be utilized at the time of selection and in accordance
with customary financial practice, in pricing 

 

3

 

new issues of
euro denominated corporate debt securities in a principal amount approximately
equal to the then outstanding principal amount of the Notes and of a maturity
most nearly equal to January 15, 2015; provided, however, that, if the
period from such prepayment date to January 15, 2015, is less than one
year, a fixed maturity of one year shall be used;

 

(ii)                                  “Comparable German Bund Price” means, with
respect to any relevant date, the average of all Reference German Bund Dealer
Quotations for such date (which, in any event, must include at least two such
quotations), after excluding the highest and lowest such Reference German Bund
Dealer Quotations, or if the Issuer obtains fewer than four such Reference
German Bund Dealer Quotations, the average of all such quotations;

 

(iii)                               “Reference German Bund Dealer” means any dealer
of German Bundesanleihe securities appointed by the Parent in consultation with
the Trustee; and

 

(iv)                              “Reference German Bund Dealer Quotations”
means, with respect to each Reference German Bund Dealer and any relevant date,
the average as determined by the Parent of the bid and offered prices for the
Comparable German Bund Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Parent by such Reference German Bund
Dealer at 3:30 p.m. Frankfurt, Germany, time on the third business day in
Frankfurt preceding the relevant date.

 

Subject to Paragraph 15 of this Agreement, on or after January 15,
2015, upon the occurrence of a voluntary prepayment of all or any part of the
outstanding Facility V Advance by UPC Broadband pursuant to Clause 7.3
(Voluntary prepayment) of the Credit Agreement, UPC Broadband shall pay to the
Facility Agent (for the account of the Additional Facility V Lender) an amount
(the Additional Amount) equal to the
relevant percentage set out in the table below of the principal amount of the
Facility V Advance being prepaid on the due date of such prepayment, if prepaid
during the twelve-month period beginning on January 15 of the years
indicated below:

 

	
  Year

  	
   

  	
  Relevant Percentage

  	
   

  
	
  2015

  	
   

  	
  3.813

  	
  %

  
	
  2016

  	
   

  	
  2.542

  	
  %

  
	
  2017

  	
   

  	
  1.271

  	
  %

  
	
  2018 and
  thereafter

  	
   

  	
  0.000

  	
  %

  

 

Such payment shall be due and payable by UPC Broadband to the Facility
Agent (for the account of the Additional Facility V Lender) on the actual date
of such prepayment.

 

15.                                 Notwithstanding
Paragraph 14 above, no Make-Whole Amount or Additional Amount shall be payable
in connection with a voluntary prepayment of the whole of the outstanding
Facility V Advance by UPC Broadband pursuant to Clause 7.3 (Voluntary
prepayment) of the Credit Agreement that is made following the completion of
the UPC Exchange Transaction (as defined in the Indenture), provided 

 

4

 

that the Borrower has given notice of such
prepayment not later than three Business Days prior to the completion of the
UPC Exchange Transaction and such prepayment is made on the completion of the
UPC Exchange Transaction.

 

16.                                 The Additional
Facility V Lender acknowledges that the Borrower may discharge all or part of
the Facility V Advance pursuant to Clause 7.3 (Voluntary prepayment) of the
Credit Agreement in connection with the UPC Exchange Transaction by way of one
or a combination of (1) a cash prepayment, (2) an issue of new notes
or (3) the purchase of the existing Notes (in the case of (2) and
(3), in accordance with the mechanisms, and on the terms, agreed between the
Borrower and the Additional Facility V Lender at the relevant time and provided
that the amount and date of such discharge is notified to the Facility Agent in
writing by the Borrower and the Additional Facility V Lender on or before the
date of such discharge).  The parties to
this Agreement acknowledge that this Agreement may require amendment (in
accordance with the relevant provisions of the Credit Agreement) to facilitate
the discharge of all or part of the Facility V Advance in connection with the
UPC Exchange Transaction and agree to discuss and negotiate any such amendments
in good faith at the relevant time.

 

17.                                 Each of UPC
Broadband and UPC Financing confirms, on behalf of themselves and each other
Obligor that the representations and warranties set out in Clause 15
(Representations and Warranties) of the Credit Agreement (with the exception of
Clauses 15.6(a) (Consents), 15.10 (Financial condition), 15.12 (Security
Interests), 15.13(b) (Litigation and insolvency proceedings), 15.14
(Business Plan), 15.15 (Tax liabilities), 15.16 (Ownership of assets), 15.18
(Works Council), 15.19 (Borrower Group Structure), 15.20 (ERISA), 15.24 (UPC
Financing) and 15.25 (Dutch Banking Act)) are true and correct as if made at
the Effective Date with reference to the facts and circumstances then existing,
and as if each reference to the Finance Documents includes a reference to this
Agreement.

 

18.                                 UPC Broadband
further represents and warrants on the Effective Date that the execution and
delivery by it of this Agreement and the performance of the transactions
contemplated by this Agreement will not violate any agreement or instrument to
which UPC Holding is a party or binding upon UPC Holding or any member of the
Borrower Group or any assets of UPC Holding or any member of the Borrower Group’s
assets, where such violation would or is reasonably likely to have a Material
Adverse Effect.

 

19.                                 The Additional
Facility V Lender confirms to each Finance Party that:

 

(a)                                  it
has made its own independent investigation and assessment of the financial
condition and affairs of each Obligor and its related entities in connection
with its participation in the Credit Agreement and has not relied on any information
provided to it by a Finance Party in connection with any Finance Document; and

 

(b)                                 it
will continue to make its own independent appraisal of the creditworthiness of
each Obligor and its related entities while any amount is or may be outstanding
under the Credit Agreement or any Additional Facility Commitment is in force.

 

5

 

20.                                 The Additional
Facility V Lender agrees to waive the notice period in respect of delivery of
drawdown requests under Clause 5.1 (Delivery of Request) of the Credit
Agreement in respect of the Facility V. 
The Additional Facility V Lender, the Borrower and the Facility Agent
acknowledge and agree that the Facility V Advance shall be made by the
Additional Facility V Lender directly to the Borrower to an account notified by
the Borrower to the Additional Facility V Lender, rather than through the
Facility Agent.

 

21.                                 The Facility
Office and address for notices of the Additional Facility V Lender for the
purposes of Clause 32.2 (Addresses for notices) of the Credit Agreement will be
that notified by the Additional Facility V Lender to the Facility Agent.

 

22.                                 The Facility
Agent may provide copies of the Indenture, or disclose its contents, to any
Finance Party upon request by that Finance Party.

 

23.                                 This Agreement
and any non contractual obligations arising out of or in connection with it are
governed by English law.

 

24.                                 This Agreement
may be executed in any number of counterparts, and by each party on separate
counterparts.  Each counterpart is an
original, but all counterparts shall together constitute one and the same
instrument.  Delivery of an executed
counterpart signature page of this Agreement by e-mail (PDF) or telecopy
shall be as effective as delivery of a manually executed counterpart of this
Agreement.  In relation to each
counterpart, upon confirmation by or on behalf of the signatory that the
signatory authorises the attachment of such counterpart signature page to
the final text of this Agreement, such counterpart signature page shall
take effect together with such final text as a complete authoritative
counterpart.

 

25.                                 For purposes of
any assignment, transfer or novation of rights and/or obligations (in whole or
in part) by a Lender in respect of Facility V under Clause 26.2 (Transfers by
Lenders) of the Credit Agreement, UPC Broadband hereby consents to any
assignment, transfer or novation made by the Additional Facility V Lender
(including any subsequent Lender under Facility V) following an Event of
Default (as defined in the Indenture), provided that any such assignment,
transfer or novation in part shall be in a minimum amount of €100,000.  The Additional Facility V Lender may only
deliver to the Facility Agent a completed assignment or transfer document or
Novation Certificate (as applicable) if at that time it confirms to the
Facility Agent in writing that such assignment, transfer or novation is not
prohibited under the terms of any agreement that is binding on it or any of its
assets.

 

6

 

SCHEDULE 1

 

ADDITIONAL FACILITY V LENDER AND COMMITMENT

 

	
  Additional Facility V Lender

  	
   

  	
  Facility V Commitment

  	
   

  
	
  UPCB Finance Limited

  	
   

  	
  EUR

  	
  500,000,000

  	
   

  
	
  Total

  	
   

  	
  EUR

  	
  500,000,000

  	
   

  

 

7

 

 

SCHEDULE
2

 

CONDITIONS PRECEDENT DOCUMENTS

 

1.                                      Constitutional
Documents

 

(a)                                  A
copy of the constitutional documents of each Obligor (other than UPC Financing)
and the partnership agreement of UPC Financing or, if the Facility Agent
already has a copy, a certificate of an authorised signatory of the relevant
Obligor confirming that the copy in the Facility Agent’s possession is still
correct, complete and in full force and effect as at a date no earlier than the
date of this Agreement.

 

(b)                                 An
extract of the registration of each Obligor established in the Netherlands in
the trade register of the Dutch Chamber of Commerce.

 

2.                                      Authorisations

 

(a)                                  A
copy of a resolution of the board of managing and, to the extent applicable,
board of supervisory directors (or equivalent) and, to the extent that a
shareholders’ resolution is required, a copy of the shareholders’ resolution of
each Obligor:

 

(i)                                     approving the
terms of and the transactions contemplated by this Agreement and (in the case
of UPC Broadband and UPC Financing) resolving that it execute the same (and, in
the case of the Guarantors and the Charging Entities (as defined in the
Security Deed) resolving that it execute the confirmation described at
paragraph 4(a) below; and

 

(ii)                                  (in the case of
UPC Broadband and UPC Financing) authorising the issuance of a power of
attorney to a specified person or persons to execute this Agreement on its
behalf and (in the case of the Guarantors and the Charging Entities (as defined
in the Security Deed)) authorising the issuance of a power of attorney to a
specified person or persons to execute the confirmation described in paragraph
4(a) below.

 

(b)                                 A
specimen of the signature of each person authorised pursuant to its
constitutional documents or to the power of attorney referred to in paragraph (a) above
to sign this Agreement or the confirmation described in paragraph 4(a) below
(as appropriate).

 

(c)                                  A
certificate of an authorised signatory of UPC Broadband, each Guarantor and
each Charging Entity certifying that each copy document specified in this
Schedule and supplied by UPC Broadband, each Guarantor and each Charging Entity
is correct, complete and in full force and effect as at a date no earlier than
the date of this Agreement.

 

(d)                                 A
copy of any other authorisation or other document, opinion or assurance which
the Facility Agent has notified UPC Broadband is necessary in connection with
the entry into and performance of, and the transactions contemplated by, this
Agreement or for the validity and enforceability of this Agreement.

 

8

 

3.                                      Legal opinions

 

(a)                                  A
legal opinion of Allen & Overy LLP, English legal advisers to the
Facility Agent, addressed to the Finance Parties.

 

(b)                                 A
legal opinion of Allen & Overy LLP, Dutch legal advisers to the
Facility Agent, addressed to the Finance Parties.

 

(c)                                  A
legal opinion of Allen & Overy LLP, New York legal advisers to the
Facility Agent, addressed to the Finance Parties.

 

4.                                      Other documents

 

(a)                                  Confirmation
(in writing) from (i) each of the Guarantors that its obligations under
Clause 14 (Guarantee) of the Credit Agreement and (ii) each of the
Charging Entities (as defined in the Security Deed) that the Security Interests
granted to the Beneficiaries pursuant to the Security Documents and its
obligations under the Finance Documents, shall continue unaffected and that
such obligations extend to the Total Commitments as increased by the addition
of Facility V and that such obligations shall be owed to each Finance Party
including the Additional Facility V Lender.

 

9

 

SIGNATORIES

 

Facility
Agent and Security Agent

 

 

	
  TORONTO
  DOMINION (TEXAS) LLC as Facility Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TD BANK EUROPE
  LIMITED as Security Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Authorized Signatory

  	
   

  

 

10

 

SIGNATORIES

 

Additional
Facility V Lender

 

UPCB FINANCE LIMITED

 

By: Authorized Signatory

 

11

 

SIGNATORIES

 

	
  UPC BROADBAND
  HOLDING B.V.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  UPC FINANCING
  PARTNERSHIP

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Authorized Signatory

  	
   

  

 

12Exhibit 4.1

 

 

 

LEVEL 3 COMMUNICATIONS, INC.,

 

as Guarantor,

 

LEVEL 3 FINANCING, INC.,

 

as Issuer,

 

and

 

THE BANK OF NEW YORK MELLON,

 

as Trustee

 

 

Indenture

 

Dated as of January 20, 2010

 

 

10% Senior Notes Due 2018

 

 

 

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE ONE

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS
  AND OTHER PROVISIONS OF GENERAL APPLICATION

  
	
   

  
	
  SECTION 101. 

  	
  Definitions

  	
  2

  
	
  SECTION 102. 

  	
  Compliance Certificates and Opinions

  	
  31

  
	
  SECTION 103. 

  	
  Form of Documents Delivered to Trustee

  	
  31

  
	
  SECTION 104. 

  	
  Acts of Holders

  	
  32

  
	
  SECTION 105. 

  	
  Notices, etc., to Trustee and the Issuer

  	
  33

  
	
  SECTION 106. 

  	
  Notice to Holders; Waiver

  	
  33

  
	
  SECTION 107. 

  	
  Effect of Headings and Table of Contents

  	
  34

  
	
  SECTION 108. 

  	
  Successors and Assigns

  	
  34

  
	
  SECTION 109. 

  	
  Separability Clause

  	
  34

  
	
  SECTION 110. 

  	
  Benefits of Indenture

  	
  34

  
	
  SECTION 111. 

  	
  Governing Law

  	
  34

  
	
  SECTION 112. 

  	
  Conflict with Trust Indenture Act

  	
  34

  
	
  SECTION 113. 

  	
  Legal Holidays

  	
  35

  
	
  SECTION 114. 

  	
  No Personal Liability of Directors, Officers, Employees and
  Stockholders

  	
  35

  
	
  SECTION 115. 

  	
  Independence of Covenants

  	
  35

  
	
  SECTION 116. 

  	
  Exhibits

  	
  35

  
	
  SECTION 117. 

  	
  Counterparts

  	
  35

  
	
  SECTION 118. 

  	
  Duplicate Originals

  	
  36

  
	
  SECTION 119. 

  	
  Waiver of Jury Trial

  	
  36

  
	
  SECTION 120. 

  	
  Force Majeure

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  
	
   

  	
   

  	
   

  
	
  SECURITY FORMS

  
	
   

  	
   

  	
   

  
	
  SECTION 201. 

  	
  Form and Dating

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  
	
   

  	
   

  	
   

  
	
  THE SECURITIES

  
	
   

  	
   

  	
   

  
	
  SECTION 301. 

  	
  Amount of Securities

  	
  37

  
	
  SECTION 302. 

  	
  Execution and Authentication

  	
  38

  

 

 

	
  SECTION 303. 

  	
  Security Registrar and Paying Agent

  	
  38

  
	
  SECTION 304. 

  	
  Paying Agent To Hold Money in Trust

  	
  38

  
	
  SECTION 305. 

  	
  Holders Lists

  	
  39

  
	
  SECTION 306. 

  	
  Replacement Securities

  	
  39

  
	
  SECTION 307. 

  	
  Temporary Securities

  	
  40

  
	
  SECTION 308. 

  	
  Cancellation

  	
  40

  
	
  SECTION 309. 

  	
  Defaulted Interest

  	
  40

  
	
  SECTION 310. 

  	
  CUSIP Numbers

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR

  
	
   

  	
   

  	
   

  
	
  SATISFACTION AND DISCHARGE

  
	
   

  	
   

  	
   

  
	
  SECTION 401. 

  	
  Satisfaction and Discharge of Indenture

  	
  41

  
	
  SECTION 402. 

  	
  Application of Trust Money

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE

  
	
   

  	
   

  	
   

  
	
  REMEDIES

  
	
   

  	
   

  	
   

  
	
  SECTION 501. 

  	
  Events of Default

  	
  42

  
	
  SECTION 502. 

  	
  Acceleration of Maturity; Rescission and Annulment

  	
  43

  
	
  SECTION 503. 

  	
  Collection of Indebtedness and Suits for Enforcement by
  Trustee

  	
  44

  
	
  SECTION 504. 

  	
  Trustee May File Proofs of Claim

  	
  45

  
	
  SECTION 505. 

  	
  Trustee May Enforce Claims Without Possession of
  Securities

  	
  46

  
	
  SECTION 506. 

  	
  Application of Money Collected

  	
  46

  
	
  SECTION 507. 

  	
  Limitation on Suits

  	
  46

  
	
  SECTION 508. 

  	
  Unconditional Right of Holders to Receive Principal,
  Premium and Interest

  	
  47

  
	
  SECTION 509. 

  	
  Restoration of Rights and Remedies

  	
  47

  
	
  SECTION 510. 

  	
  Rights and Remedies Cumulative

  	
  47

  
	
  SECTION 511. 

  	
  Delay or Omission Not Waiver

  	
  47

  
	
  SECTION 512. 

  	
  Control by Holders

  	
  48

  
	
  SECTION 513. 

  	
  Waiver of Past Defaults

  	
  48

  
	
  SECTION 514. 

  	
  Waiver of Stay or Extension Laws

  	
  48

  
	
  SECTION 515. 

  	
  Undertaking for Costs

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  
	
   

  	
   

  	
   

  
	
  THE TRUSTEE

  
	
   

  	
   

  	
   

  
	
  SECTION 601. 

  	
  Certain Duties and Responsibilities

  	
  49

  
	
  SECTION 602. 

  	
  Notice of Default

  	
  50

  

 

 

ii

 

	
  SECTION 603. 

  	
  Certain Rights of Trustee

  	
  50

  
	
  SECTION 604. 

  	
  Trustee Not Responsible for Recitals or Issuance of
  Securities

  	
  52

  
	
  SECTION 605. 

  	
  May Hold Securities

  	
  52

  
	
  SECTION 606. 

  	
  Money Held in Trust

  	
  52

  
	
  SECTION 607. 

  	
  Compensation and Reimbursement

  	
  53

  
	
  SECTION 608. 

  	
  Corporate Trustee Required; Eligibility; Conflicting
  Interests

  	
  54

  
	
  SECTION 609. 

  	
  Resignation and Removal; Appointment of Successor

  	
  54

  
	
  SECTION 610. 

  	
  Acceptance of Appointment by Successor

  	
  55

  
	
  SECTION 611. 

  	
  Merger, Conversion, Consolidation or Succession to Business

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN

  
	
   

  	
   

  	
   

  
	
  HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND THE ISSUER

  
	
   

  	
   

  	
   

  
	
  SECTION 701. 

  	
  Disclosure of Names and Addresses of Holders

  	
  56

  
	
  SECTION 702. 

  	
  Reports by Trustee

  	
  56

  
	
  SECTION 703. 

  	
  Reports by Parent and the Issuer

  	
  57

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  
	
   

  
	
  CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

  
	
   

  
	
  SECTION 801. 

  	
  Parent May Consolidate, etc., Only on Certain Terms

  	
  57

  
	
  SECTION 802. 

  	
  Successor Parent Substituted

  	
  58

  
	
  SECTION 803. 

  	
  Issuer May Consolidate, etc., Only on Certain Terms

  	
  58

  
	
  SECTION 804. 

  	
  Successor Issuer Substituted

  	
  59

  
	
  SECTION 805. 

  	
  Guarantor (other than Parent) May Consolidate, etc.,
  Only on Certain Terms

  	
  60

  
	
  SECTION 806. 

  	
  Successor Guarantor Substituted

  	
  61

  
	
  SECTION 807. 

  	
  Offering Proceeds Note Guarantor May Consolidate,
  etc., Only on Certain Terms

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE

  
	
   

  	
   

  	
   

  
	
  SUPPLEMENTAL INDENTURES

  
	
   

  
	
  SECTION 901. 

  	
  Supplemental Indentures Without Consent of Holders

  	
  62

  
	
  SECTION 902. 

  	
  Supplemental Indentures With Consent of Holders

  	
  63

  
	
  SECTION 903. 

  	
  Execution of Supplemental Indentures

  	
  64

  
	
  SECTION 904. 

  	
  Effect of Supplemental Indentures

  	
  64

  
	
  SECTION 905. 

  	
  Conformity with Trust Indenture Act

  	
  65

  
	
  SECTION 906. 

  	
  Reference in Securities to Supplemental Indentures

  	
  65

  
	
  SECTION 907. 

  	
  Notice of Supplemental Indentures

  	
  65

  

 

iii

 

	
  ARTICLE TEN

  
	
   

  	
   

  	
   

  
	
  COVENANTS

  
	
   

  	
   

  	
   

  
	
  SECTION 1001. 

  	
  Payment of Principal, Premium, if Any, and Interest

  	
  65

  
	
  SECTION 1002. 

  	
  Maintenance of Office or Agency

  	
  65

  
	
  SECTION 1003. 

  	
  Money for Security Payments to Be Held in Trust

  	
  66

  
	
  SECTION 1004. 

  	
  Corporate Existence

  	
  67

  
	
  SECTION 1005. 

  	
  Maintenance of Properties

  	
  67

  
	
  SECTION 1006. 

  	
  Insurance

  	
  68

  
	
  SECTION 1007. 

  	
  Reports

  	
  68

  
	
  SECTION 1008. 

  	
  Statement by Officers as to Default

  	
  68

  
	
  SECTION 1009. 

  	
  Change of Control Triggering Event

  	
  69

  
	
  SECTION 1010. 

  	
  Limitation on Consolidated Debt

  	
  71

  
	
  SECTION 1011. 

  	
  Limitation on Debt of the Issuer and Issuer Restricted Subsidiaries

  	
  75

  
	
  SECTION 1012. 

  	
  Limitation on Restricted Payments

  	
  78

  
	
  SECTION 1013. 

  	
  Limitation on Dividend and Other Payment Restrictions Affecting
  Restricted Subsidiaries

  	
  81

  
	
  SECTION 1014. 

  	
  Limitation on Liens

  	
  83

  
	
  SECTION 1015. 

  	
  Limitation on Sale and Leaseback Transactions

  	
  84

  
	
  SECTION 1016. 

  	
  Limitation on Asset Dispositions

  	
  85

  
	
  SECTION 1017. 

  	
  Limitation on Issuance and Sales of Capital Stock of
  Restricted Subsidiaries

  	
  87

  
	
  SECTION 1018. 

  	
  Transactions with Affiliates

  	
  88

  
	
  SECTION 1019. 

  	
  Limitation on Designations of Unrestricted Subsidiaries

  	
  89

  
	
  SECTION 1020. 

  	
  Limitation on Actions with respect to Existing Intercompany
  Obligations

  	
  90

  
	
  SECTION 1021. 

  	
  Covenant Suspension

  	
  92

  
	
  SECTION 1022. 

  	
  Special Interest Notice

  	
  93

  
	
  SECTION 1023. 

  	
  Authorizations and Consents of Governmental Authorities

  	
  94

  
	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN

  
	
   

  	
   

  	
   

  
	
  REDEMPTION OF SECURITIES

  
	
   

  
	
  SECTION 1101. 

  	
  Right of Redemption

  	
  94

  
	
  SECTION 1102. 

  	
  Applicability of Article

  	
  94

  
	
  SECTION 1103. 

  	
  Election to Redeem; Notice to Trustee

  	
  94

  
	
  SECTION 1104. 

  	
  Selection by Trustee of Securities to Be Redeemed

  	
  95

  
	
  SECTION 1105. 

  	
  Notice of Redemption

  	
  95

  
	
  SECTION 1106. 

  	
  Deposit of Redemption Price

  	
  96

  
	
  SECTION 1107. 

  	
  Securities Payable on Redemption Date

  	
  96

  
	
  SECTION 1108. 

  	
  Securities Redeemed in Part

  	
  96

  

 

iv

 

	
  ARTICLE TWELVE

  
	
   

  	
   

  	
   

  
	
  DEFEASANCE AND COVENANT DEFEASANCE

  
	
   

  	
   

  	
   

  
	
  SECTION 1201. 

  	
  Issuer’s Option to Effect Defeasance or Covenant Defeasance

  	
  97

  
	
  SECTION 1202. 

  	
  Defeasance and Discharge

  	
  97

  
	
  SECTION 1203. 

  	
  Covenant Defeasance

  	
  98

  
	
  SECTION 1204. 

  	
  Conditions to Defeasance or Covenant Defeasance

  	
  98

  
	
  SECTION 1205. 

  	
  Deposited Money and Government Securities to Be Held in
  Trust; Other Miscellaneous Provisions

  	
  100

  
	
  SECTION 1206. 

  	
  Reinstatement

  	
  100

  
	
   

  	
   

  	
   

  
	
  ARTICLE THIRTEEN

  
	
   

  	
   

  	
   

  
	
  GUARANTEES AND OFFERING PROCEEDS NOTE GUARANTEES

  
	
   

  
	
  SECTION 1301. 

  	
  Guarantees

  	
  101

  
	
  SECTION 1302. 

  	
  Contribution

  	
  102

  
	
  SECTION 1303. 

  	
  Release of Guarantees

  	
  102

  
	
  SECTION 1304. 

  	
  Successors and Assigns

  	
  103

  
	
  SECTION 1305. 

  	
  No Waiver

  	
  103

  
	
  SECTION 1306. 

  	
  Modification

  	
  103

  
	
  SECTION 1307. 

  	
  Execution of Supplemental Indenture for Future Guarantors

  	
  103

  
	
  SECTION 1308. 

  	
  Subordination of Note Guarantees

  	
  104

  
	
  SECTION 1309. 

  	
  Execution of Offering Proceeds
  Note Guarantees for Future Offering Proceeds Note Guarantors; Subordination
  of Offering Proceeds Note Guarantee

  	
  104

  

 

	
  APPENDIX A - Provisions Relating to Initial
  Securities and Exchange Securities

  
	
  EXHIBIT A - Form of Exchange Security

  
	
  EXHIBIT B - Form of Incumbency Certificate

  
	
  EXHIBIT C - Form of Supplemental Indenture
  (Future Guarantors)

  
	
  EXHIBIT D - Form of Parent Intercompany Note
  Subordination Agreement

  
	
  EXHIBIT E - Form of Offering Proceeds Note
  Guarantee

  
	
  EXHIBIT F - Form of Offering Proceeds Note
  Subordination Agreement

  
	
  EXHIBIT G - Form of Supplemental Indenture
  (Subordination of Note Guarantees)

  

 

v

 

 

INDENTURE, dated as of January 20, 2010,
among Level 3 Communications, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein called “Parent”),
having its principal office at 1025 Eldorado Boulevard, Broomfield, Colorado
80021, Level 3 Financing, Inc. (the “Issuer”), having its principal office
at 1025 Eldorado Boulevard, Broomfield, Colorado 80021, and The Bank of New
York Mellon, a New York banking corporation, as Trustee (herein called the “Trustee”).

 

RECITALS OF THE ISSUER

 

The Issuer has duly authorized the creation
of an issue of 10% Senior Notes Due 2018 (the “Initial Securities”) and, if and
when issued pursuant to a Registered Exchange Offer or Private Exchange Offer
pursuant to a Registration Agreement for the Initial Securities, 10% Senior
Notes Due 2018 (the “Exchange Securities” and, together with the Initial
Securities, the “Securities”), of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Issuer and Parent have duly
authorized the execution and delivery of this Indenture.

 

All things necessary have been done to make
the Securities, when executed by the Issuer and authenticated and delivered
hereunder and duly issued by the Issuer, the valid and legally binding obligations
of the Issuer and to make this Indenture a valid and legally binding agreement
of each of Parent, the Issuer and the Trustee, in accordance with their and its
terms.

 

Simultaneously with the closing of the
offering of the Initial Securities, the Issuer will lend the net proceeds of
the issuance of the Securities and certain cash on hand to Level 3 LLC in
return for the Offering Proceeds Note. 
Currently, Level 3 LLC is the obligor on the Parent Intercompany
Note.  Pursuant to the Parent
Intercompany Note Subordination Agreement, Level 3 LLC’s obligations under
the Parent Intercompany Note will be subordinated to its obligations under the
Offering Proceeds Note upon the limited circumstances set forth therein.  As set forth herein, under certain circumstances,
Restricted Subsidiaries will be required to enter into a Note Guarantee and an
Offering Proceeds Note Guarantee and subordinate certain intercompany
obligations to their obligations under such guarantee pursuant to the Parent
Intercompany Note Subordination Agreement. 
On March 13, 2007, Parent, as guarantor, the Issuer, as borrower,
Merrill Lynch Capital Corporation, as administrative agent and collateral
agent, and certain lenders entered into a credit agreement pursuant to which
the lenders extended a $1.4 billion senior secured term loan to the
Issuer.  The Issuer lent the proceeds of
the term loan to Level 3 LLC in return for the Loan Proceeds Note.  On April 16, 2009, the parties thereto
amended and restated the credit facility to increase the borrowings thereunder
through the creation of a $220 million Tranche B Term Loan, increased by $60
million to $280 million by amendment on May 15, 2009, that matures on March 13,
2014.  The Issuer lent the net proceeds
of the Tranche B Term Loan, together with cash on hand, to Level 3 LLC and the
Loan Proceeds Note was amended and restated to increase the principal amount by
$280 million.  Pursuant to the Offering
Proceeds Note Subordination Agreement, Level 3 LLC’s obligations under the
Offering Proceeds Note will be subordinated to its obligations under the Loan
Proceeds Note upon the limited circumstances set forth therein.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

 

For and in consideration of the premises and
the purchase of the Securities by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders
of the Securities, as follows:

 

ARTICLE
ONE

 

DEFINITIONS
AND OTHER PROVISIONS

OF GENERAL APPLICATION

 

SECTION 101.       Definitions.

 

For all purposes of this Indenture, including
the recitals set forth above, except as otherwise expressly provided or unless
the context otherwise requires:

 

(a)           the terms defined in this Article have
the meanings assigned to them in this Article, and include the plural as well
as the singular;

 

(b)           all other terms used herein which are
defined in the Trust Indenture Act, either directly or by reference therein,
have the meanings assigned to them therein;

 

(c)           all accounting terms not otherwise
defined herein have the meanings assigned to them in accordance with generally
accepted accounting principles, and, except as otherwise herein expressly
provided, the term “generally accepted accounting principles” with respect to
any computation required or permitted hereunder shall mean United States
generally accepted accounting principles as in effect on the date of this
Indenture;

 

(d)           the words “herein”, “hereof” and “hereunder”
and other words of similar import refer to this Indenture as a whole and not to
any particular Article, Section, paragraph or other subdivision;

 

(e)           unless otherwise indicated,
references to Articles, Sections, paragraphs or other subdivisions are
references to such Articles, Sections, paragraphs or other subdivisions of this
Indenture; and

 

(f)            “or” is not exclusive and “including”
means including without limitation.

 

“Accreted Value” of any Debt 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
Debt 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 Debt 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 Debt) that shall theretofore have
accrued pursuant to Section 1272 of the Code (without regard to Section 1272(a)(7) of
the Code) from 

 

2

 

the date of issue of such
Debt to the date of determination, minus all amounts theretofore paid in
respect of such Debt, which amounts are considered as part of the “stated
redemption price at maturity” of such Debt 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) Debt 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) Debt secured by a Lien encumbering any Property
acquired by such specified Person, which Debt was not incurred in anticipation
of, and was outstanding prior to, such merger, consolidation or acquisition.

 

“Act”, when used with respect to any Holder,
has the meaning specified in Section 104.

 

“Additional Securities” means, subject to the
Issuer’s compliance with the covenants in this Indenture, including Section 1010
and Section 1011, 10% Senior Notes due 2018 issued from time to time after
the Issue Date under the terms of this Indenture (other than pursuant to Section 306,
307, 1016 or 1108 of this Indenture and other than Exchange Securities or
Private Exchange Securities issued pursuant to an exchange offer for other
Securities outstanding under this Indenture).

 

“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 1016 and 1018 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 Parent 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 1018.

 

“Agent Member” has the meaning specified in Section 2.1(b) of
Appendix A.

 

“Asset Disposition” means any transfer,
conveyance, sale, lease, issuance or other disposition by Parent 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 of Parent, but excluding a disposition by
a Restricted Subsidiary to Parent or a Restricted Subsidiary or by Parent 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 1017), (ii) substantially
all of the assets of Parent or any Restricted Subsidiary representing a
division or line of business or (iii) other Property of Parent or any
Restricted Subsidiary outside of the ordinary course of business (excluding any
transfer, conveyance, sale, 

 

3

 

lease or other disposition
of equipment that is obsolete or no longer used by or useful to Parent); 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 1016, (ii) when used with respect to
Parent, any Asset Disposition permitted pursuant to Article Eight which
constitutes a disposition of all or substantially all of the assets of Parent
and the Restricted Subsidiaries taken as a whole, (iii) Receivables sales
constituting Debt under Qualified Receivable Facilities permitted to be
Incurred pursuant to Section 1010 or Section 1011 and (iv) any
disposition that constitutes a Permitted Investment or a Restricted Payment
permitted by Section 1012.

 

“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 generally
accepted accounting principles, 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 generally accepted accounting principles.  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 of Directors” of any Person means the
board of directors or comparable 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
Trustee.

 

“Business Day” means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in The City of New York are authorized or obligated by law or executive
order to close.

 

“Capital Lease Obligation” of any Person
means the obligation to pay rent or other payment amount under a lease of (or
other Debt arrangements conveying the right to use) Property of such Person
which is required to be classified and accounted for as a capital lease or a
liability on the face of a balance sheet of such Person in accordance with
generally accepted accounting principles (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 

 

4

 

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 generally accepted accounting
principles.

 

“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 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 90 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-2 (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 Trustee), (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 Trustee) 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) and (viii) investments
in money market funds 

 

5

 

substantially all of whose
assets comprise securities of the types described in clauses (i) through
(vii).

 

“Change of Control” has the meaning specified
in Section 1009.

 

“Change of Control Triggering Event” has the
meaning specified in Section 1009.

 

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

 

“Commission” means the Securities and
Exchange Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.

 

“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.

 

“Consolidated Capital Ratio” means as of the
date of determination the ratio of (i) the aggregate amount of Debt of
Parent and its Restricted Subsidiaries on a consolidated basis as at the date
of determination to (ii) the sum of (a) $2,024,000,000, (b) the
aggregate net proceeds to Parent from the issuance or sale of any Capital Stock
(including Preferred Stock) of Parent other than Disqualified Stock subsequent
to the Measurement Date, (c) the aggregate net proceeds from the issuance
or sale of Debt of Parent or any Restricted Subsidiary subsequent to the
Measurement Date convertible or exchangeable into Capital Stock of Parent other
than Disqualified Stock, in each case upon conversion or exchange thereof into
Capital Stock of Parent 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 Debt of Parent
or any Restricted Subsidiary (other than Debt that is subordinated to the
Securities or any applicable Note Guarantee or Offering Proceeds Note
Guarantee) and release of Parent and all Restricted Subsidiaries from all
liability on the Debt 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 Debt 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
Debt shall have been issued or sold to Parent, a Subsidiary of Parent or an
employee stock ownership plan or trust established by Parent or any such
Subsidiary for the benefit of their employees.

 

“Consolidated Cash Flow Available for Fixed
Charges” for Parent and its Restricted Subsidiaries or for the Issuer and the
Issuer Restricted Subsidiaries for any period means the Consolidated Net Income
of Parent and its Restricted Subsidiaries or the Issuer and the Issuer
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 Parent and its Restricted Subsidiaries or the Issuer and
the Issuer Restricted Subsidiaries, as 

 

6

 

applicable, for such period,
plus (ii) Consolidated Income Tax Expense of Parent and its Restricted
Subsidiaries or the Issuer and the Issuer 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 Parent and its Restricted Subsidiaries
or for the Issuer and the Issuer Restricted Subsidiaries, as applicable, plus (iv) any
non-recurring expenses or charges (other than depreciation or amortization
expense) related to any equity offering, Permitted Investment, acquisition,
disposition, recapitalization or the Incurrence of Debt permitted to be
Incurred under this Indenture (including a refinancing thereof) (whether or not
successful), including (a) such fees, expenses or charges related to the
offering of the Securities (including breakage costs in connection with hedging
obligations) and (b) any amendment or other modification of the
Securities, and, in each case, deducted (and not added back) in computing
Consolidated Net Income; provided, however, that there shall be
excluded therefrom the Consolidated Cash Flow Available for Fixed Charges (if
positive) of any Restricted Subsidiary or Issuer Restricted Subsidiary, as
applicable (calculated separately for such Restricted Subsidiary or Issuer
Restricted Subsidiary in the same manner as provided above for Parent or the
Issuer, as applicable) that is subject to a restriction which prevents the
payment of dividends or the making of distributions to Parent or another
Restricted Subsidiary or to the Issuer or another Issuer Restricted Subsidiary,
as applicable, to the extent of such restrictions.

 

“Consolidated Income Tax Expense” for Parent
and its Restricted Subsidiaries or for the Issuer and the Issuer Restricted
Subsidiaries for any period means the aggregate amounts of the provisions for
income taxes of Parent and its Restricted Subsidiaries or the Issuer and the
Issuer Restricted Subsidiaries, as applicable, for such period calculated on a
consolidated basis in accordance with generally accepted accounting principles.

 

“Consolidated Interest Expense” for Parent
and its Restricted Subsidiaries or the Issuer and the Issuer Restricted
Subsidiaries for any period means the interest expense included in a
consolidated income statement (excluding interest income) of Parent and its
Restricted Subsidiaries or the Issuer and the Issuer Restricted Subsidiaries,
as applicable, for such period in accordance with generally accepted accounting
principles, including without limitation or duplication (or, to the extent not
so included, with the addition of), (i) the amortization of Debt 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 Debt guaranteed by Parent and its Restricted Subsidiaries or the Issuer and
the Issuer 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 Parent or a Restricted Subsidiary or the Issuer
or an 

 

7

 

Issuer Restricted
Subsidiary, as applicable) in connection with Debt Incurred by such plan or
trust.

 

“Consolidated Net Income” for Parent and its
Restricted Subsidiaries or the Issuer and the Issuer Restricted Subsidiaries
for any period means the net income (or loss) of Parent and its Restricted
Subsidiaries or the Issuer and the Issuer Restricted Subsidiaries, as
applicable, for such period determined on a consolidated basis in accordance
with generally accepted accounting principles; provided, however,
that there shall be excluded therefrom (a) for purposes of Section 1012
only, the net income (or loss) of any Person acquired by Parent or a Restricted
Subsidiary or the Issuer or an Issuer 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 an Issuer Restricted Subsidiary, as applicable, except to the
extent of the amount of dividends or other distributions actually paid to
Parent or a Restricted Subsidiary or to the Issuer or an Issuer Restricted
Subsidiary, as applicable, by such Person during such period (except, for
purposes of Section 1012 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 Parent or
its Restricted Subsidiaries or the Issuer or the Issuer 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 extraordinary
losses, determined in accordance with generally accepted accounting principles,
(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 Parent or
any Restricted Subsidiary or the Issuer or any Issuer Restricted Subsidiary, as
applicable, of (1) options to purchase Capital Stock of Parent or such
Restricted Subsidiary or the Issuer or such Issuer 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 an Issuer Restricted Subsidiary, as
applicable, that is not a Wholly Owned Subsidiary any aggregate net income (or
loss) in excess of Parent’s or any Restricted Subsidiary’s or the Issuer’s or
any Issuer Restricted Subsidiary’s, as applicable, pro rata share of the net
income (or loss) of such Restricted Subsidiary or Issuer Restricted Subsidiary,
as applicable, that is not a Wholly Owned Subsidiary; (j) if the period is
the second, third or fourth fiscal quarter of 2003 or the first fiscal quarter
of 2004, an aggregate of $293,686,650 for all such quarters (such amount
relating to communications revenues recognized by Parent and its Subsidiaries
in connection with the amendment in February 2003 of the 1998 Cost Sharing
and IRU Agreement with XO Communications); and (k) for purposes of
calculating Pro Forma Consolidated Cash Flow Available for Fixed Charges in
paragraphs (a) and (b) of Section 1010 and paragraphs (a) and
(b) of Section 1011 only, ordinary losses or gains (including related
fees and expenses) on early extinguishment of Debt; provided further
that there shall further be excluded therefrom the net income (but not net
loss) of any Restricted Subsidiary or any Issuer Restricted Subsidiary, as
applicable, that is subject to a restriction which prevents the payment of
dividends or the making of distributions to Parent or another Restricted 

 

8

 

Subsidiary or to the Issuer
or another Issuer 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 generally accepted accounting principles, 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 generally accepted accounting principles 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 generally accepted accounting principles would be included on such
consolidated balance sheet.

 

“Corporate Trust Office” means the principal
corporate trust office of the Trustee, at which at any particular time its
corporate trust business shall be administered, which office at the date of
execution of this Indenture is located at 101 Barclay Street, Floor 8 West, New
York, New York 10286, except that, with respect to presentation of Securities
for payment or for registration of transfer or exchange, such term shall mean
the office or agency of the Trustee at which, at any particular time, its
corporate agency business shall be conducted.

 

“Credit Facilities” means one or more credit
agreements, including the Existing Credit Facility, loan agreements or similar
facilities, 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 Parent and its Restricted Subsidiaries, or
Purchase Money Debt, or Debt 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.

 

“Debt” 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, 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 Interest Rate or
Currency Protection 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 

 

9

 

Guaranteed.  The “amount” or “principal amount” of Debt at
any time of determination as used herein represented by (a) any Debt
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 Debt
at such time or (b) in the case of any Receivables sale constituting Debt,
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 Parent or a Wholly Owned
Restricted Subsidiary of Parent) thereof. 
The amount of Debt represented by an obligation under an Interest Rate
or Currency Protection Agreement shall be equal to (x) zero if such
obligation has been Incurred pursuant to clause (x) of paragraph (b) of
Section 1010 or clause (viii) of paragraph (b) of Section 1011
or (y) the notional amount of such obligation if not Incurred pursuant to
such clause.

 

“Default” means any event, act or condition
the occurrence of which is, or after notice or the passage of time or both
would be, an Event of Default.

 

“Depository” means The Depository Trust
Company, its nominees and successors.

 

“Designation” and “Designation Amount” have
the respective meanings specified in Section 1019.

 

“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 final Stated Maturity of the
Securities; provided, however, that any Preferred Stock which
would not constitute Disqualified Stock but for provisions thereof giving
holders thereof the right to require Parent or the Issuer, respectively, to
repurchase or redeem such Preferred Stock upon the occurrence of (i) a
change of control occurring prior to the final Stated Maturity of the
Securities 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 Securities contained in Section 1009
or (ii) an asset sale occurring prior to the final Stated Maturity of the Securities
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 Securities  contained in Section 1016 and, in each
case such Preferred Stock specifically provides that Parent or the Issuer,
respectively, will not repurchase or redeem any such stock pursuant to such
provisions prior to the Issuer’s repurchase of such Securities as are required
to be repurchased pursuant to Sections 1009 or 1016.

 

“Disqualified Stock Dividends” means all
dividends with respect to Disqualified Stock of Parent 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 Parent for the period during which such dividends were paid.

 

10

 

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

 

“8.75% Notes” means the Issuer’s 8.75% Senior
Notes due 2017 issued pursuant to the Indenture dated as of February 14,
2007, among the Issuer, Parent and The Bank of New York, as trustee.

 

“Event of Default” has the meaning specified
in Section 501.

 

“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).

 

“Exchange Securities” has the meaning stated
in the first recital of this Indenture.

 

“Excess Proceeds” has the meaning specified
in Section 1016.

 

“Existing Credit Facility” means the Credit
Agreement dated as of March 13, 2007, among the Issuer, Parent, the
lenders party thereto, and Merrill Lynch Capital Corporation, as Administrative
Agent, as amended and restated as of April 16, 2009 and amended as of May 15,
2009.

 

“Existing Notes” means Parent’s 27/8% Convertible Senior Notes
due 2010 in an aggregate principal amount not to exceed $374,000,000, 6%
Convertible Subordinated Notes due 2010 in an aggregate principal amount not to
exceed $514,000,000, 9% Convertible Senior Discount Notes due 2013 in an
aggregate principal amount at maturity not to exceed $295,000,000, 51⁄4%
Convertible Senior Notes due 2011 in an aggregate principal amount not to
exceed $345,000,000, 10% Convertible Senior Notes due 2011 in an aggregate
principal amount not to exceed $275,000,000, 31⁄2% Convertible Senior Notes due
2012 in an aggregate principal amount not to exceed $301,000,000, 15%
Convertible Senior Notes due 2013 in an aggregate principal amount not to
exceed $400,000,000 and 7% Convertible Senior Notes due 2015 in an aggregate
principal amount not to exceed $475,000,000 (includes Series B), and the
Issuer’s 10.75% Senior Notes due 2011 in an aggregate principal amount not to
exceed $3,000,000, 12.25% Senior Notes due 2013 in an aggregate principal
amount not to exceed $550,000,000, Floating Rate Senior Notes due 2011 in an
aggregate principal amount not to exceed $150,000,000, 9.25% Senior Notes due
2014 in an aggregate principal amount not to exceed $1,250,000,000, Floating
Rate Senior Notes due 2015 in an aggregate principal amount not to exceed
$300,000,000 and 8.75% Senior Notes due 2017 in an aggregate principal amount
not to exceed $700,000,000.

 

“Expiration Date” has the meaning specified
in “Offer to Purchase” below.

 

“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 

 

11

 

Directors of Parent acting
in good faith and shall be evidenced by a Board Resolution of Parent (except in
the case of the last paragraph under Section 1016).

 

“Federal Bankruptcy Code” means the
Bankruptcy Act of Title 11 of the United States Code, as amended from time to
time.

 

“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.

 

“Global Security” means a Rule 144A
Global Security or a Regulation S Global Security, as the case may be.

 

“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.

 

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

 

“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 Debt 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 Debt or to purchase (or to advance or supply funds
for the purchase of) any security for the payment of such Debt, 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 Debt of the payment of such Debt, (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 Debt 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.

 

“Guarantor” means (1) Parent and (2) any
other Person that becomes a Guarantor pursuant to Section 1010, Section 1011,
Article Eight or any other provision of this Indenture.

 

12

 

“Holder” means a Person in whose name a
Security is registered in the Security Register.

 

“Incur” means, with respect to any Debt 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 Debt or other obligation including the recording, as required pursuant
to generally accepted accounting principles or otherwise, of any such Debt 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 generally accepted accounting principles that
results in an obligation of such Person that exists at such time becoming Debt
shall not be deemed an Incurrence of such Debt and that neither the accrual of
interest nor the accretion of original issue discount shall be deemed an
Incurrence of Debt.  Debt otherwise
incurred by a Person before it becomes a Subsidiary of Parent shall be deemed
to have been Incurred at the time at which it becomes a Subsidiary.

 

“Indenture” means this instrument as
originally executed and as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof.

 

“Initial Foreign Purchaser” means each
non-U.S. person (within the meaning of Regulation S) that purchased
Initial Securities from the Initial Purchasers in offshore transactions meeting
the requirements of Regulation S.

 

“Initial Purchasers” means Banc of America
Securities LLC, Citigroup Global Markets Inc., Morgan Stanley & Co.
Incorporated, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc.
and Wells Fargo Securities, LLC.

 

“Initial Securities” has the meaning stated
in the first recital of this Indenture.

 

“Interest Payment Date” means the Stated
Maturity of an installment of interest on the Securities.

 

“Interest Rate or Currency Protection
Agreement” of any Person means any forward contract, futures contract, swap,
option or other financial agreement or arrangement (including caps, floors,
collars and similar agreements) relating to, or the value of which is dependent
upon, interest rates or currency exchange rates or indices.

 

“Invested Capital” means the sum of (a) $500,000,000,
(b) the aggregate net proceeds received by Parent from the issuance or
sale of any Capital Stock, including Preferred Stock, of Parent but excluding
Disqualified Stock, subsequent to the Measurement Date, and (c) the
aggregate net proceeds from the issuance or sale of Debt of Parent or any
Restricted Subsidiary subsequent to the Measurement Date convertible or
exchangeable into Capital Stock of Parent other than Disqualified Stock, in
each case upon conversion or exchange thereof into Capital Stock of Parent
subsequent to the Measurement Date; provided, however, that the
net proceeds from the issuance or sale of Capital Stock or Debt 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 Debt shall have been issued or sold to Parent, a Subsidiary of
Parent 

 

13

 

or an employee stock
ownership plan or trust established by Parent 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 Debt 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 (except to the extent such repaid amount has been included in
Consolidated Net Income of Parent 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.

 

“Issuer” means the Person named as “Issuer”
in the first paragraph of this Indenture, until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Issuer” shall mean such successor Person.

 

“Issue Date” means January 20, 2010.

 

“Issue Date Purchase Money Debt” means
Purchase Money Debt outstanding on the Issue 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.

 

“Issue Date Rating” means Caa1 in the case of
Moody’s and CCC in the case of S&P, which are the respective ratings
assigned to the Securities by the Rating Agencies on the Issue Date.

 

“Issuer Debt Ratio” means the ratio of (a) the
aggregate consolidated principal amount (or, in the case of Debt issued at a
discount, the then-Accreted Value) of Debt of the Issuer and the Issuer
Restricted Subsidiaries (other than Debt owed to Parent or a Sister Restricted
Subsidiary that is subordinated to the Offering Proceeds Note (if Level 3 LLC
is the obligor on such Debt) or to an Offering Proceeds Note Guarantee of the
obligor on such Debt), 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 Debt giving rise to such calculation and
any other Debt Incurred or repaid since such balance sheet date and the receipt
and 

 

14

 

application of the net
proceeds thereof, to (b) the sum of, without duplication, (x) Consolidated
Cash Flow Available for Fixed Charges of the Issuer and the Issuer Restricted
Subsidiaries for the four full fiscal quarters next preceding such proposed
Incurrence of Debt for which consolidated financial statements are available
and (y) Consolidated Cash Flow Available for Fixed Charges of Parent and
the Sister Restricted Subsidiaries to the extent 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 Issuer, any Issuer Restricted Subsidiary,
Parent or any Sister Restricted Subsidiary shall have made one or more Asset
Dispositions or an Investment (by merger or otherwise) in any Issuer Restricted
Subsidiary or Sister Restricted Subsidiary (or any Person which becomes an
Issuer Restricted Subsidiary or a Sister Restricted Subsidiary) or an
acquisition, merger or consolidation of Property or (B) since the
beginning of such period any Person (that subsequently became an Issuer
Restricted Subsidiary or a Sister Restricted Subsidiary or was merged with or
into the Issuer, any Issuer 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 Parent, 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 Parent 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 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.

 

“Issuer Order” or “Issuer Request” means a
written request or order signed in the name of the Issuer by the Chairman of
the Board of Directors, a Vice Chairman of the Board of Directors, 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 the Issuer, and delivered to the
Trustee.

 

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

 

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

 

15

 

“Level 3 LLC” means Level 3 Communications,
LLC, a Delaware limited liability company and a direct Wholly Owned Subsidiary
of the Issuer.

 

“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 Parent or any
of its Subsidiaries of, including the grant of indefeasible rights of use or
equivalent 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.

 

“Loan Proceeds Note” means the amended and
restated intercompany demand note dated March 13, 2007 in an initial
principal amount of $1,400,000,000 and subsequently increased to $1,680,000,000
issued by Level 3 LLC to the Issuer to evidence the loans in such aggregate
amount made by the Issuer to Level 3 LLC with the proceeds of the loans under
the Existing Credit Facility, as it may be further amended from time to time.

 

“Maturity”, when used with respect to any
Security, means the date on which the principal of such Security or an
installment of principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, notice of
redemption or otherwise.

 

“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
national 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 Trustee by a written notice given to the
Issuer.

 

“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 Debt 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 

 

16

 

made by such Person or its
Subsidiaries on any Debt 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 generally accepted accounting principles 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 filed with the Trustee; 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 Indenture and the Securities, 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 Indenture and
the Securities as a new Asset 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 Issuer’s 9.25% Senior
Notes due 2014 issued pursuant to the Indenture dated as of October 30,
2006, among the Issuer, Parent and The Bank of New York, as trustee.

 

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

 

“Note Guarantee” means an unconditional
Guarantee of the due and punctual payment of the principal of and premium, if
any, and interest on the Securities, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, and all
other monetary obligations of the Issuer under this Indenture and the
Securities, and the due and punctual performance of all covenants, agreements,
obligations and liabilities of the Issuer under or pursuant to this Indenture
and the Securities, including the Parent Guarantee.

 

“Offer” has the meaning specified in “Offer
to Purchase” below.

 

“Offer to Purchase” means a written offer
(the “Offer”) sent by the Issuer by first-class mail, postage prepaid, to each
Holder of Securities at its address appearing in the Security Register on the
date of the Offer offering to purchase up to the principal amount of Securities
specified in such Offer at the purchase price specified in such Offer (as
determined pursuant to this Indenture). 
Unless otherwise required by applicable law, the Offer shall specify an
expiration date (the “Expiration Date”) of the Offer to Purchase which shall
be, subject to any 

 

17

 

contrary requirements of
applicable law, not less than 30 days or more than 60 days after the
date of such Offer and a settlement date (the “Purchase Date”) for purchase of
Securities within five Business Days after the Expiration Date.  The Issuer shall notify the Trustee at least
15 Business Days (or such shorter period as is acceptable to the Trustee) prior
to the mailing of the Offer of the obligation to make an Offer to Purchase, and
the Offer shall be mailed by the Issuer or, at the Issuer’s request, by the
Trustee in the name and at the expense of the Issuer.  The Offer shall contain information
concerning the business of Parent and its Subsidiaries which the Issuer in good
faith believes will enable such Holders to make an informed decision with
respect to the Offer to Purchase.  The
Offer shall contain all instructions and materials necessary to enable such
Holders to tender Securities pursuant to the Offer to Purchase.  The Offer shall also state:

 

a. the Section of this Indenture
pursuant to which the Offer to Purchase is being made;

 

b.
the Expiration Date and the Purchase Date;

 

c. the aggregate principal amount of the
Outstanding Securities offered to be purchased by the Issuer pursuant to the
Offer to Purchase (including, if less than 100%, the manner by which such
amount has been determined pursuant to the Section hereof requiring the
Offer to Purchase) (the “Purchase Amount”);

 

d. the purchase price to be paid by the
Issuer for $1,000 aggregate principal amount of Securities accepted for payment
(as specified pursuant to this Indenture) (the “Purchase Price”);

 

e. that the Holder may tender all or any
portion of the Securities registered in the name of such Holder and that any
portion of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount;

 

f. the place or places where Securities are
to be surrendered for tender pursuant to the Offer to Purchase;

 

g. that any Securities not tendered or
tendered but not purchased by the Issuer will continue to accrue interest;

 

h. that on the Purchase Date the Purchase
Price will become due and payable upon each Security being accepted for payment
pursuant to the Offer to Purchase and that interest thereon, if any, shall
cease to accrue on and after the Purchase Date;

 

i. that each Holder electing to tender a
Security pursuant to the Offer to Purchase will be required to surrender such
Security at the place or places specified in the Offer prior to the close of
business on the Expiration Date (such Security being, if the Issuer or the
Trustee so requires, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Issuer and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing);

 

j. that Holders will be entitled to withdraw
all or any portion of Securities tendered if the Issuer (or the Paying Agent)
receives, not later than the close of business on the Expiration Date, 

 

18

 

a facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Security the Holder tendered, the certificate number of the Security the Holder
tendered and a statement that such Holder is withdrawing all or a portion of
his tender;

 

k. that (i) if Securities in an
aggregate principal amount less than or equal to the Purchase Amount are duly
tendered and not withdrawn pursuant to the Offer to Purchase, the Issuer shall
purchase all such Securities and (ii) if Securities in an aggregate
principal amount in excess of the Purchase Amount are tendered and not
withdrawn pursuant to the Offer to Purchase, the Issuer shall purchase
Securities having an aggregate principal amount equal to the Purchase Amount on
a pro  rata basis (with such adjustments as may be deemed
appropriate so that only Securities in denominations of $1,000 or integral
multiples thereof shall be purchased); and

 

l. that in the case of any Holder whose
Security is purchased only in part, the Issuer shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and in
exchange for the unpurchased portion of the Security so tendered.

 

Any Offer to Purchase shall be governed by
and effected in accordance with the Offer for such Offer to Purchase.

 

“Offering Proceeds Note” means the
intercompany demand note dated the Issue Date, in an initial principal amount
equal to $640,000,000, issued by Level 3 LLC to the Issuer as it may be
amended from time to time pursuant to Sections 301 and 1020.

 

“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 the 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 the Offering Proceeds Note, in substantially the form set forth in Exhibit E
hereto.

 

“Offering Proceeds Note Guarantor” means any
Restricted Subsidiary that provides an Offering Proceeds Note Guarantee
pursuant to Section 1010, Section 1011 or any other provision of the
Indenture.

 

“Offering Proceeds Note Subordination
Agreement” means the Offering Proceeds Note Subordination Agreement, dated the
Issue Date, among the Issuer, Parent and Level 3 LLC, and the other Restricted
Subsidiaries becoming party thereto as contemplated therein, pursuant to which
such Restricted Subsidiaries shall subordinate obligations owed to the Issuer
or any Restricted Subsidiary to any obligations owed in respect of the Loan
Proceeds Note, in substantially the form set forth in Exhibit F hereto.

 

“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 

 

19

 

Officer, the Treasurer, an
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of
such Person and delivered to the Trustee, which shall comply with this
Indenture.

 

“Opinion of Counsel” means an opinion of
counsel (who may be counsel to Parent or the Issuer, including an employee of
Parent or the Issuer).

 

“OECD” shall mean the Organization for
Economic Cooperation and Development.

 

“Original Securities” has the meaning set
forth in Section 301.

 

“Outstanding”, when used with respect to
Securities, means, as of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture, except:

 

(i)          Securities
theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;

 

(ii)         on and after
any maturity or redemption date, Securities, or portions thereof, for whose
payment or redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than Parent or the
Issuer) in trust or set aside and segregated in trust by Parent, the Issuer (if
Parent or the Issuer shall act as its own Paying Agent) for the Holders of such
Securities; provided that (a) the Trustee or the Paying Agent, as
applicable, is not prohibited from paying such money to the Holders and (b) if
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture;

 

(iii)        Securities,
except to the extent provided in Sections 1202 and 1203, with respect to which
the Issuer has effected defeasance or covenant defeasance as provided in Article Twelve;
and

 

(iv)        Securities
which have been paid pursuant to Section 306 or in exchange for or in lieu
of which other Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of which there shall
have been presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands the Securities are
valid obligations of the Issuer;

 

provided, however,
that in determining whether the Holders of the requisite principal amount of
Outstanding Securities have given any request, demand, authorization,
direction, consent, notice or waiver hereunder, and for the purpose of making
the calculations required by TIA Section 313, Securities owned by the
Issuer or any other obligor upon the Securities or any Affiliate of the Issuer
or such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in making
such calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which any Responsible
Officer of the Trustee actually knows to be so owned or as to which the Trustee
has received written notice shall be so disregarded.  Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee’s right so to act with respect to such

 

20

 

Securities and that the pledgee is not the
Issuer or any other obligor upon the Securities or any Affiliate of the Issuer
or such other obligor.

 

“Parent” means the Person named as “Parent”
in the first paragraph of this Indenture, until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Parent” shall mean such successor Person.

 

“Parent Guarantee” means the Note Guarantee
of Parent.

 

“Parent Intercompany Note” means the
intercompany demand note dated December 8, 1999, as amended and restated
on October 1, 2003, in the principal amount of $18,800,000,000 as of September 30,
2009, issued by Level 3 LLC to Parent.

 

“Parent Intercompany Note Subordination
Agreement” means the Parent Intercompany Note Subordination Agreement dated the
Issue Date, among the Issuer, Parent and Level 3 LLC, and the other
Restricted Subsidiaries and Sister Restricted Subsidiaries becoming party
thereto as contemplated therein, pursuant to which such Restricted Subsidiaries
shall subordinate obligations owed to Parent or any Sister Restricted
Subsidiary to any obligations owed in respect of the Offering Proceeds Note, in
substantially the form set forth in Exhibit D hereto.

 

“Paying Agent” means any Person (including
Parent or the Issuer acting as Paying Agent) authorized by Parent or the Issuer
to pay the principal of (and premium, if any) or interest on any Securities on
behalf of the Issuer.

 

“Permitted Holders” means the members of
Parent’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
Exchange Act) at least 66 2/3% of the total voting power of the Voting Stock of
such Person.

 

“Permitted Interest Rate or Currency
Protection Agreement” of any Person means any Interest Rate or Currency
Protection 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 Debt
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 Debt 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
Interest Rate or Currency Protection Agreements; (f) bonds, notes,
debentures and other securities received as a result of Asset Dispositions
pursuant to and in compliance with Section 1016; (g) Investments in
any Person as a result of 

 

21

 

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 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 generally accepted accounting principles shall have
been made therefor; (b) other Liens incidental to the conduct of Parent’s
and its Restricted Subsidiaries’ businesses or the ownership of its Property
not securing any Debt, and which do not in the aggregate materially detract
from the value of Parent’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 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 Parent 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 Parent 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 Parent’s communications network that (i) constitute capital
assets in accordance with generally accepted accounting principles and (ii) after
giving effect to such disposition, would result in Parent 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
Parent’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 Parent (i.e., Dallas), the entire through-portion of such network,
excluding the spurs which branch off the through-portion.

 

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

 

“Predecessor Security” of any particular
Security means every previous Security evidencing all or a portion of the same
debt as that evidenced by such particular Security; and, 

 

22

 

for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for a mutilated security or in lieu of a lost, destroyed or stolen
Security shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Security.

 

“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.

 

“Preferred Stock Dividends” means all
dividends with respect to Preferred Stock of Restricted Subsidiaries held by
Persons other than Parent or the Issuer or a Wholly Owned Restricted Subsidiary
of Parent or the Issuer, 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 issuer of such Preferred Stock for the period during which such
dividends were paid.

 

“Private Exchange Offer” means the offer by
the Issuer, pursuant to Section 2(f) of the Registration Agreement
dated January 20, 2010, or pursuant to any similar Registration Agreement
entered into in connection with the registration of Additional Securities, to
issue and deliver to certain purchasers, in exchange for the Initial Securities
held by such purchasers as part of their initial distribution, a like aggregate
principal amount of Private Exchange Securities.

 

“Private Exchange Securities” means the
Exchange Securities to be issued pursuant to this Indenture in connection with
a Private Exchange Offer pursuant to the relevant Registration Agreement.

 

“Pro Forma Consolidated Cash Flow Available
for Fixed Charges” for Parent and its Restricted Subsidiaries for any period
means Consolidated Cash Flow Available for Fixed Charges of Parent and its
Restricted Subsidiaries for such period, calculated in accordance with the
definition thereof; provided, however, that if (A) since the
beginning of the applicable period Parent or one of its Restricted Subsidiaries
shall have made one or more Asset Dispositions or an Investment (by merger or
otherwise) in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition, merger or consolidation of Property
or (B) since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into Parent or any
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 Parent, 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 

 

23

 

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 Parent 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 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 Indenture, 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 Parent 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 Amount” has the meaning specified
in “Offer to Purchase” above.

 

“Purchase Date” has the meaning specified in “Offer
to Purchase” above.

 

“Purchase Money Debt” means Debt (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 Parent or any Restricted Subsidiary of any Telecommunications/IS Assets of
Parent 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.

 

“Purchase Price” has the meaning specified in
“Offer to Purchase” above.

 

“Qualified Credit Facility” means one or more
credit agreements, loan agreements, or similar facilities, 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 Parent and its Restricted Subsidiaries, 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, including,
without limitation, the Existing Credit Facility.

 

“Qualified Institutional Buyer” or “QIB” has
the meaning specified in Rule 144A.

 

24

 

“Qualified Receivable Facility” means Debt of
Parent or any Subsidiary Incurred from time to time pursuant to either (x) credit
facilities secured by 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.

 

“Rating Date” means the earlier of the date
of public notice of the occurrence of a Change of Control or of the intention
of Parent 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 Securities 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 Securities
that is lower than the applicable Issue Date Rating (or the equivalent
thereof).  If, prior to the Rating Date,
either of the ratings assigned to the Securities by the Rating Agencies is
lower than the applicable Issue 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.

 

“Redemption Date”, when used with respect to
any Security to be redeemed, in whole or in part, means the date fixed for such
redemption by or pursuant to this Indenture.

 

“Redemption Price”, when used with respect to
any Security to be redeemed, means the price at which it is to be redeemed
pursuant to this Indenture.

 

“refinancing” has the meaning specified in Section 1010(b)(viii) and
1011(b)(iv).

 

“Registered Exchange Offer” means the offer
by the Issuer, pursuant to the relevant Registration Agreement, to certain
Holders of Initial Securities, to issue and deliver to such Holders, in
exchange for the Initial Securities, a like aggregate principal amount of
Exchange Securities registered under the Securities Act.

 

“Registration Agreement” means the
Registration Agreement dated January 20, 2010, among the Issuer, Parent
and the Initial Purchasers relating to the Original Securities or any similar
agreement relating to any registration of Additional Securities.

 

25

 

“Regular Record Date” for the interest
payable on any Interest Payment Date means the January 15 or July 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.

 

“Regulation S” means Regulation S under
the Securities Act.

 

“Regulation S Global Security” has the
meaning specified in Section 2.1(a) of Appendix A.

 

“Representative Amount” means a principal
amount of not less than $1,000,000 for a single transaction in the relevant
market at the relevant time.

 

“Required Filing Dates” has the meaning
specified in Section 1007.

 

“Responsible Officer”, when used with respect
to the Trustee, means any officer within the Trustee’s Corporate Trust Office,
including any vice president, any assistant treasurer, or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above-designated officers, and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject and who
shall have direct responsibility for the administration of this Indenture.

 

“Restricted Payment” has the meaning
specified in Section 1012.

 

“Restricted Subsidiary” means (a) a
Subsidiary of Parent or of a Restricted Subsidiary, including the Issuer, that
has not been designated or classified as an Unrestricted Subsidiary pursuant to
and in compliance with Section 1019 and (b) an Unrestricted
Subsidiary that is redesignated as a Restricted Subsidiary pursuant to such
Section.

 

“Revocation” has the meaning specified in Section 1019.

 

“Rule 144A” means Rule 144A under
the Securities Act.

 

“Rule 144A Global Security” has the
meaning specified in Section 2.1(a) of Appendix A.

 

“S&P” means Standard & Poor’s
Ratings Service or, if Standard & Poor’s Ratings 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 Trustee by a
written notice given to the Issuer.

 

26

 

“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” has the meaning stated in the
first recital of this Indenture and more particularly means any Securities
authenticated and delivered under this Indenture.

 

“Securities Act” means the Securities Act of
1933, as amended (or any successor act), and the rules and regulations
thereunder (or respective successors thereto).

 

“Security Register” and “Security Registrar”
have the respective meanings specified in Section 303.

 

“Shelf Registration Statement” means a
registration statement issued by Parent and the Issuer in connection with the
offer and sale of Initial Securities pursuant to the relevant Registration
Agreement.

 

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

 

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

 

“Special Assets” means (a) the Capital
Stock or assets of RCN Corporation and Commonwealth Telephone Enterprises, Inc.
(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 Parent 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 1016).

 

“Special Interest” has the meaning specified
in Exhibit A.

 

“Stated Maturity” when used with respect to a
Security or any installment of interest thereon, means the date specified in
such Security as the fixed date on which the principal of such Security or such
installment of interest is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such Security at the option of the Holder thereof upon the happening of any
contingency beyond the control of the Issuer unless such contingency has
occurred).

 

27

 

“Subordinated Debt” means Debt of Parent (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 Debt shall be subordinate to the prior payment in full in cash
of the Parent Guarantee 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 Debt (collectively, “payments of such Debt”) 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 Securities exists, including as a result of acceleration; (ii) in the
event that any other Default exists with respect to the Securities, upon notice
by Holders of 25% or more in aggregate principal amount of the Securities to
the Trustee, the Trustee shall have the right to give notice to Parent and the
holders of such Debt (or trustees or agents therefor) of a payment blockage,
and thereafter no payments of such Debt 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 Securities
during such period; (iii) if payment of such Debt is accelerated when any
Securities are Outstanding, no payments of such Debt may be made until three
Business Days after the Trustee receives notice of such acceleration and,
thereafter, such payments may only be made to the extent the terms of such Debt
permit payment at that time; and (iv) such Debt may not (x) provide
for payments of principal of such Debt 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 Parent (including any
redemption, retirement or repurchase which is contingent upon events or
circumstances but excluding any retirement required by virtue of acceleration
of such Debt upon an event of default thereunder), in each case prior to the
final Stated Maturity of the Securities or (y) permit redemption or other
retirement (including pursuant to an offer to purchase made by Parent) of such
other Debt at the option of the holder thereof prior to the final Stated
Maturity of the Securities, 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 Parent) which is conditioned upon (A) a change
of control of Parent pursuant to provisions substantially similar to those
described in Section 1009 (and which shall provide that such Debt will not
be repurchased pursuant to such provisions prior to the Issuer’s repurchase of
the Securities required to be repurchased by the Issuer pursuant to the
provisions described in Section 1009) or (B) a sale or other
disposition of assets pursuant to provisions substantially similar to those
described in Section 1016 (and which shall provide that such Debt will not
be repurchased pursuant to such provisions prior to the Issuer’s repurchase of
the Securities required to be repurchased by the Issuer pursuant to the
provision described in Section 1016).

 

“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.

 

28

 

“Telecommunications/IS Assets” means (a) any
Property (other than cash, cash equivalents and securities) to be owned by
Parent or any Restricted Subsidiary and used in the Telecommunications/IS
Business; (b) for purposes of Sections 1010, 1011 and 1014 only, Capital
Stock of any Person; or (c) for all other purposes of this Indenture,
Capital Stock of a Person that becomes a Restricted Subsidiary as a result of
the acquisition of such Capital Stock by Parent or another Restricted
Subsidiary from any Person other than an Affiliate of Parent; 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 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, however,
that the determination of what constitutes a Telecommunications/IS Business
shall be made in good faith by the Board of Directors of Parent.

 

“10.75% Notes” means the Issuer’s 10.75%
Senior Notes due 2011 issued pursuant to the Indenture dated as of October 1,
2003, among the Issuer, Parent and The Bank of New York, as trustee.

 

“Trust Indenture Act” or “TIA” means the
Trust Indenture Act of 1939 as in force at the date as of which this Indenture
was executed, except as provided in Section 905.

 

“Trustee” means the Person named as the “Trustee”
in the first paragraph of this Indenture until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Trustee” shall mean such successor Trustee.

 

“12.25% Notes” means the Issuer’s 12.25%
Senior Notes due 2013 issued pursuant to the Indenture dated as of March 14,
2006, among the Issuer, Parent and The Bank of New York, as trustee.

 

“2011 Floating Rate Notes” means the Issuer’s
Floating Rate Senior Notes due 2011 issued pursuant to the Indenture dated as
of March 14, 2006, among the Issuer, Parent and The Bank of New York, as
trustee.

 

“2015 Floating Rate Notes” means the Issuer’s
Floating Rate Senior Notes due 2015 issued pursuant to the Indenture dated as
of February 14, 2007, among the Issuer, Parent and the Bank of New York,
as trustee.

 

29

 

“Unrestricted Subsidiary” means (a) 91 Holding
Corp. (the subsidiary that holds indirectly Parent’s interests in the SR91
tollroad), SR 91 Holding LLC, SR91 Corp, SR LP, Express Lanes, Inc.,
California Private Transportation Company LP, CPTC LLC and 85 Tenth Avenue LLC;
(b) any Subsidiary of an Unrestricted Subsidiary; and (c) any
Subsidiary of Parent designated as such pursuant to and in compliance with Section 1019
and not thereafter redesignated as a Restricted Subsidiary as permitted
pursuant thereto.  For the sake of
clarity, actions taken by an Unrestricted Subsidiary will not be deemed to have
been taken, directly or indirectly, by Parent or any Restricted Subsidiary.

 

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

 

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

 

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

 

The following terms, unless otherwise defined
pursuant to this Section 101, have the meanings given to them in Appendix
A:

 

“Additional
Securities”

“Agent Members”

“Definitive Security”

“Depository”

“Distribution Compliance Period”

“Exchange Securities” 

“Euroclear”

“Global Security”

“Initial Purchasers”

“Initial Securities”

“Original Securities”

“Private Exchange” 

“Private Exchange Securities” 

“Purchase Agreement” 

“QIB”

“Registered Exchange Offer”

“Registration Agreement”

“Regulation S”

“Rule 144A”

“Rule 144A Global Security”

 

30

 

“Rule 144A
Securities”

“Securities”

“Securities Act”

“Securities Custodian”

“Shelf Registration Statement”

“Transfer Restricted Securities”

 

SECTION 102.       Compliance
Certificates and Opinions.

 

Upon any application or request by the Issuer
to the Trustee to take any action under any provision of this Indenture, the
Issuer shall furnish to the Trustee an Officers’ Certificate stating that all
conditions precedent, if any, provided for in this Indenture (including any
covenant compliance with which constitutes a condition precedent) relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with.

 

Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:

 

(1)           a statement that each
individual signing such certificate or opinion has read such covenant or
condition and the definitions herein relating thereto;

 

(2)           a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based;

 

(3)           a statement that, in the
opinion of each such individual, he has made such examination or investigation
as is necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and

 

(4)           a statement as to whether,
in the opinion of each such individual, such condition or covenant has been
complied with.

 

SECTION 103.       Form of
Documents Delivered to Trustee.

 

In any case where several matters are
required to be certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or covered by
only one document, but one such Person may certify or give an opinion with
respect to some matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such matters in one or
several documents.

 

Any certificate or opinion of an officer of
the Issuer or any Guarantor may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or 

 

31

 

opinion is based are
erroneous.  Any such certificate or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of the
Issuer or any Guarantor, respectively, stating that the information with
respect to such factual matters is in the possession of the Issuer or any
Guarantor, respectively, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.

 

Where any Person is required to make, give or
execute two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need not, be
consolidated (with proper identification of each matter covered therein) and
form one instrument.

 

SECTION 104.       Acts
of Holders.

 

(a)           Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the “Act” of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 601) conclusive in favor of the
Trustee and the Issuer, if made in the manner provided in this Section.

 

(b)           The
fact and date of the execution by any Person of any such instrument or writing
may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof.  Where such execution is by a signer acting in
a capacity other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of authority.  The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner that the Trustee deems sufficient.

 

(c)           The
principal amount and serial numbers of Securities held by any Person, and the
date of holding the same, shall be proved by the Security Register.

 

(d)           If
the Issuer shall solicit from the Holders of Securities any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Issuer may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Issuer
shall have no obligation to do so. 
Notwithstanding TIA Section 316(c), such record date shall be the
record date specified in or pursuant to such Board Resolution, which shall be a
date not earlier than the date 30 days prior to the first solicitation of
Holders generally in connection therewith and not later than the date such
solicitation is completed.  If such a 

 

32

 

record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such record
date, but only the Holders of record at the close of business on such record date
shall be deemed to be Holders for the purposes of determining whether Holders
of the requisite proportion of Outstanding Securities have authorized or agreed
or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the Outstanding Securities
shall be computed as of such record date; provided that no such
authorization, agreement or consent by the Holders on such record date shall be
deemed effective unless it shall become effective pursuant to the provisions of
this Indenture not later than six months after the record date.

 

(e)           Any
request, demand, authorization, direction, notice, consent, waiver or other Act
of the Holder of any Security shall bind every future Holder of the same Security
and the Holder of every Security issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Issuer in reliance
thereon, whether or not notation of such action is made upon such
Security.  However, any such Holder or
future Holder may revoke the request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder as to such Holder’s Security or
portion of the Security if the Trustee receives the notice of revocation before
the date such Act becomes effective.

 

SECTION 105.       Notices,
etc., to Trustee and the Issuer.

 

Any request, demand, authorization,
direction, notice, consent, waiver or Act of Holders or other document provided
or permitted by this Indenture to be made upon, given or furnished to, or filed
with,

 

(1)           the Trustee by any Holder or
by the Issuer shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
Office, Attention: Corporate Trust Administration, or

 

(2)           the Issuer or any Guarantor
by the Trustee or by any Holder shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Issuer or such Guarantor addressed to it
(in the case of a Guarantor, in care of the Issuer) at the address of the
Issuer’s principal office specified in the first paragraph of this Indenture,
or at any other address previously furnished in writing to the Trustee by the
Issuer.

 

SECTION 106.       Notice
to Holders; Waiver.

 

Where this Indenture provides for notice of
any event to Holders by the Issuer or the Trustee, such notice shall be given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at the
address of such Holder as it appears in the Security Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice.  In any case where
notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders.  

 

33

 

Notices shall be effective
only upon receipt.  Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.

 

In case by reason of the suspension of or
irregularities in regular mail service or by reason of any other cause, it
shall be impracticable to mail notice of any event to Holders when such notice
is required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Trustee shall be
deemed to be a sufficient giving of such notice for every purpose hereunder.

 

SECTION 107.       Effect
of Headings and Table of Contents.

 

The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.

 

SECTION 108.       Successors
and Assigns.

 

All covenants and agreements in this
Indenture by the Issuer and Parent shall bind its successors and assigns,
whether so expressed or not.

 

SECTION 109.       Separability
Clause.

 

In case any provision in this Indenture or in
the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

SECTION 110.       Benefits
of Indenture.

 

Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person, other than the
parties hereto, any Paying Agent, any Security Registrar and their successors
hereunder and the Holders any legal or equitable right, remedy or claim under
this Indenture.

 

SECTION 111.       Governing
Law.

 

THIS INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY.

 

SECTION 112.       Conflict
with Trust Indenture Act.

 

The Trust Indenture Act shall apply as a
matter of contract to this Indenture for purposes of interpretation,
construction and defining the rights and obligations hereunder.  If any provision 

 

34

 

hereof limits, qualifies or
conflicts with any provision of the Trust Indenture Act or another provision
which is required or deemed to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such provision or requirement of the
Trust Indenture Act shall control.

 

If any provision of this Indenture modifies
or excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or excluded, as the case may be.

 

SECTION 113.       Legal
Holidays.

 

In any case where any Interest Payment Date,
Redemption Date, or Stated Maturity or Maturity of any Security shall not be a
Business Day, then (notwithstanding any other provision of this Indenture or of
the Securities) payment of principal (or premium, if any) or interest need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or Redemption
Date or at the Stated Maturity or Maturity; provided that no interest
shall accrue for the period from and after such Interest Payment Date,
Redemption Date, Stated Maturity or Maturity, as the case may be.

 

SECTION 114.       No
Personal Liability of Directors, Officers, Employees and Stockholders.

 

No director, officer, employee, incorporator
or stockholder of the Issuer or any Guarantor, as such, shall have any
liability for any obligations of the Issuer or any Guarantor under the
Securities or this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation, solely by reason of its status
as a director, officer, employee, incorporator or stockholder of the Issuer or
a Guarantor.  By accepting a Security,
each Holder waives and releases all such liability (but only such liability).
The waiver and release are part of the consideration for issuance of the
Securities.

 

SECTION 115.       Independence
of Covenants.

 

All covenants and agreements in this
Indenture shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default if such action is
taken or condition exists.

 

SECTION 116.       Exhibits.

 

All exhibits attached hereto are by this
reference made a part hereof with the same effect as if herein set forth in
full.

 

SECTION 117.       Counterparts.

 

This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.

 

35

 

SECTION 118.       Duplicate
Originals.

 

The parties may sign any number of copies of
this Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.

 

SECTION 119.       Waiver
of Jury Trial.

 

EACH OF PARENT, THE ISSUER AND
THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

SECTION 120.       Force
Majeure.

 

In no event shall the Trustee be responsible
or liable for any failure or delay in the performance of its obligations
hereunder arising out of or caused by, directly or indirectly, forces beyond
its control, including, without limitation, strikes, work stoppages, accidents,
acts of war or terrorism, civil or military disturbances, nuclear or natural
catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware) services; it
being understood that the Trustee shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.

 

ARTICLE
TWO

SECURITY FORMS

 

SECTION 201.       Form and
Dating.

 

Provisions relating to the Initial Securities
and the Exchange Securities are set forth in Appendix A, which is hereby
incorporated in and expressly made part of this Indenture.  The Initial Securities and the Trustee’s
certificate of authentication shall be substantially in the form of Exhibit 1
to Appendix A which is hereby incorporated in and expressly made a part of
this Indenture.  The Exchange Securities
and the Trustee’s certificate of authentication shall be substantially in the
form of Exhibit A, which is hereby incorporated in and expressly made a
part of this Indenture.  The Securities
may have notations, legends or endorsements required by law, stock exchange
rule, agreements to which the Issuer is subject, if any, or usage, provided
that any such notation, legend or endorsement is in a form reasonably acceptable
to the Issuer.  Each Security shall be
dated the date of its authentication. 
The terms of the Securities set forth in Exhibit 1 to Appendix A
and Exhibit A are part of the terms of this Indenture.

 

The definitive Securities shall be printed,
lithographed or engraved on steel-engraved borders or may be produced in any
other manner permitted by the rules of any securities exchange or system
on which the Securities may be listed or eligible for trading, all as 

 

36

 

determined by the officers
of the Issuer executing such Securities, as evidenced by their execution of
such Securities.

 

ARTICLE
THREE

 

THE
SECURITIES

 

SECTION 301.       Amount
of Securities.  Subject to Section 302,
the Trustee shall authenticate Initial Securities for original issue on the
Issue Date in the aggregate principal amount of $640,000,000 (the “Original
Securities”).

 

The Issuer shall be entitled, subject to its
compliance with the covenants set forth in this Indenture, including Section 1010
and Section 1011, to issue Additional Securities under this Indenture
which shall have identical terms as the Original Securities, other than with
respect to the date of issuance and issue price (and such changes as are
customary to permit escrow arrangements, if any, in connection with the
issuance of such Additional Securities). 
The Original Securities, any Additional Securities and all Exchange
Securities or Private Exchange Securities issued in exchange therefor shall be
treated as a single class for all purposes under this Indenture.

 

With respect to the Additional Securities,
the Issuer shall set forth in a Board Resolution and an Officers’ Certificate,
a copy of each which shall be delivered to the Trustee, the following
information:

 

(1)           the aggregate principal
amount of such Additional Securities to be authenticated and delivered pursuant
to this Indenture;

 

(2)           the issue price, the issue
date and the CUSIP number of such Additional Securities; provided, however,
that no Additional Securities may be issued after the expiration of the “period
of thirteen days” described in Treasury Regulation Section 1.1275-1(f)(1)(iii) unless
such issuance would be a “qualified reopening” within the meaning of Treasury
Regulation Section 1.1275-2(k)(3); and

 

(3)           whether such Additional
Securities shall be Transfer Restricted Securities and issued in the form of
Securities as set forth in the Appendix to this Indenture or shall be issued in
the form of Exchange Securities as set forth in Exhibit A.

 

For each issuance of Additional Securities,
the Issuer shall use the net proceeds of each such issuance and additional
funds as necessary to lend to Level 3 LLC an amount equal to the principal
amount of the Additional Securities so issued, and the principal amount of the
Offering Proceeds Note shall be increased by such amount.

 

37

 

SECTION 302.       Execution
and Authentication.  Two Officers
shall sign the Securities for the Issuer by manual or facsimile signature.

 

If an Officer whose signature is on a
Security no longer holds that office at the time the Trustee authenticates the
Security, the Security shall be valid nevertheless.

 

At any time and from time to time after the
execution and delivery of this Indenture, the Issuer may deliver Securities
executed by the Issuer to the Trustee for authentication, together with a
written order of the Issuer in the form of an Officers’ Certificate for the
authentication and delivery of such Securities, and the Trustee in accordance with
such written order of the Issuer shall authenticate and deliver such
Securities.

 

A Security shall not be valid until an
authorized signatory of the Trustee manually signs the certificate of
authentication on the Security.  The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.

 

The Trustee may appoint an authenticating
agent reasonably acceptable to the Issuer to authenticate the Securities.  Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so.  Each reference in
this Indenture to authentication by the Trustee includes authentication by such
agent.  An authenticating agent has the
same rights as any Security Registrar, Paying Agent or agent for service of
notices and demands.

 

SECTION 303.       Security
Registrar and Paying Agent.  The
Issuer shall maintain an office or agency in The City of New York where
Securities may be presented for registration of transfer or for exchange (the “Security
Registrar”) and an office or agency in The City of New York where Securities
may be presented for payment to the Paying Agent.  The Security Registrar shall keep a register
of the Securities and of their transfer and exchange (the register maintained
in the office of the Security Registrar and in any other office or agency
designated pursuant to Section 1002 being herein sometimes referred to as
the “Security Register”).  The Issuer may
have one or more co-registrars and one or more additional paying agents.  The term “Paying Agent” includes any
additional paying agent.

 

The Issuer shall enter into an appropriate
agency agreement with any Security Registrar, Paying Agent or co-registrar not
a party to this Indenture, which shall incorporate the terms of the TIA.  The agreement shall implement the provisions
of this Indenture that relate to such agent. 
The Issuer shall notify the Trustee of the name and address of any such
agent.  If the Issuer fails to maintain a
Securities Registrar or Paying Agent, the Trustee shall act as such and shall
be entitled to appropriate compensation therefor pursuant to Section 607.

 

The Issuer initially appoints the Trustee as
Security Registrar and Paying Agent in connection with the Securities.

 

SECTION 304.       Paying Agent To Hold Money in Trust.  Prior to each due date of the principal and
interest on any Security, the Issuer shall deposit with the Paying Agent a sum
sufficient to pay such principal and interest when so becoming due.  The Issuer shall require each 

 

38

 

Paying Agent (other than the Trustee) to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of or interest on the Securities and shall notify the Trustee of any
default by the Issuer in making any such payment.  If the Issuer or a Wholly Owned Subsidiary
acts as Paying Agent, it shall segregate the money held by it as Paying Agent
and hold it as a separate trust fund. 
The Issuer at any time may require a Paying Agent to pay all money held
by it to the Trustee and to account for any funds disbursed by the Paying
Agent.  Upon complying with this Section,
the Paying Agent shall have no further liability for the money delivered to the
Trustee.

 

SECTION 305.       Holders Lists.  The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders.  If the
Trustee is not the Security Registrar, the Issuer shall furnish to the Trustee,
in writing at least five Business Days before each Interest Payment Date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and
addresses of Holders.

 

SECTION 306.       Replacement Securities.  If a mutilated Security is surrendered to the
Security Registrar or if the Holder of a Security claims that such Security has
been lost, destroyed or wrongfully taken, the Issuer shall issue and the
Trustee shall authenticate a replacement Security if the requirements of Section 8-405
of the Uniform Commercial Code are met and the Holder satisfies any other
reasonable requirements of the Trustee. 
Such Holder shall furnish an indemnity bond sufficient in the judgment
of the Issuer and the Trustee to protect the Issuer, the Trustee, the Paying
Agent, the Security Registrar and any co-registrar from any loss which any of
them may suffer if a Security is replaced. 
The Issuer and the Trustee may charge the Holder for their expenses in
replacing a Security.

 

Every replacement Security is an additional
obligation of the Issuer.

 

39

 

SECTION 307.       Temporary
Securities.  Until definitive
Securities are ready for delivery, the Issuer may prepare and the Trustee shall
authenticate temporary Securities. 
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Issuer considers appropriate for
temporary Securities.  Without
unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate
definitive Securities and deliver them in exchange for temporary Securities.

 

SECTION 308.       Cancellation.  The Issuer at any time may deliver Securities
to the Trustee for cancellation.  The
Security Registrar and the Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel and
dispose of in accordance with its customary procedures (subject to the record
retention requirements of the Exchange Act) all Securities surrendered for
registration of transfer, exchange, payment or cancellation unless the Issuer
directs the Trustee in writing to deliver canceled Securities to the
Issuer.  The Issuer may not issue new
Securities to replace Securities it has redeemed, paid or delivered to the
Trustee for cancellation.

 

SECTION 309.       Defaulted
Interest.  If the Issuer defaults in
a payment of interest on the Securities, the Issuer shall pay the defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any
lawful manner.  The Issuer may pay the
defaulted interest to the persons who are Holders on a subsequent special
record date.  The Issuer shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each Holder a
notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.

 

SECTION 310.       CUSIP Numbers.  The Issuer in issuing the Securities may use “CUSIP”
numbers (if then generally in use) and, if so, the Trustee shall use “CUSIP”
numbers in notices of redemption as a convenience to Holders; provided, however,
that neither the Issuer nor the Trustee shall have any responsibility for any
defect in the “CUSIP” number that appears on any Security, check, advice of
payment or redemption notice, and any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.  The Issuer
will promptly notify the Trustee in writing of any change in the “CUSIP”
number(s).

 

40

 

ARTICLE FOUR

SATISFACTION AND DISCHARGE

 

SECTION 401.       Satisfaction and Discharge of
Indenture.

 

This Indenture shall cease to be of further effect
(subject to Section 1206 and except as to surviving rights of registration
of transfer, transfer, exchange and replacement of Securities expressly
provided for herein or pursuant hereto) and the Trustee, at the expense of the
Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture when

 

(1)           either

 

(a)           all
Outstanding Securities have been delivered to the Trustee for cancellation; or

 

(b)           all
such Securities not theretofore delivered to the Trustee for cancellation

 

(i) have become due and payable, or

 

(ii) will become due and payable within one
year, or

 

(iii) are to be called for redemption within
one year under irrevocable arrangements satisfactory to the Trustee in its sole
discretion for the giving of notice of redemption by the Trustee in the name
and at the expense of the Issuer,

 

and the Issuer, in the case
of (i), (ii) or (iii) above, has irrevocably deposited or caused to
be deposited with the Trustee funds in an amount sufficient to pay and
discharge the entire indebtedness on the Securities not theretofore delivered
to the Trustee for cancellation, for principal of (and premium, if any, on),
and interest on, the Securities to Maturity or the Redemption Date, as the case
may be;

 

(2)           the
Issuer has paid or caused to be paid all other sums payable by the Issuer
hereunder; and

 

(3)           the
Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied
with.

 

Notwithstanding the satisfaction and discharge
of this Indenture, the obligations under Sections 607 and 609 and, if
money shall have been deposited with the Trustee pursuant to clause (1)(b) of
this Section 401, the obligations of the Trustee under Section 402
and the last paragraph of Section 1003 shall survive such satisfaction and
discharge.

 

41

 

SECTION 402.       Application
of Trust Money.

 

Subject to the provisions of the last
paragraph of Section 1003, all money deposited with the Trustee pursuant
to Section 401 shall be held in trust and applied by it, in accordance
with the provisions of the Securities and this Indenture, to the payment,
either directly or through any Paying Agent (including the Issuer acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled
thereto, of the principal (and premium, if any) and interest for whose payment
such money has been deposited with the Trustee; but such money need not be
segregated from other funds except to the extent required by law.

 

ARTICLE FIVE

REMEDIES

 

SECTION 501.       Events of Default.

 

“Event of Default”, wherever used herein, means any
one of the following events (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

 

(1)           failure to pay principal of
(or premium, if any, on) any Security when due; or

 

(2)           failure to pay any interest
on any Security when due, continued for 30 days; or

 

(3)           default in the payment of
principal of (and premium, if any) and interest on Securities required to be
purchased pursuant to an Offer to Purchase pursuant to Section 1009 when
due and payable; or

 

(4)           failure to perform or comply
with the provisions of Section 801, 803, 805, 807 or 1016; or

 

(5)           failure to perform any
covenant or agreement of Parent, the Issuer or any Restricted Subsidiary in
this Indenture or in any Security (other than a covenant a default in whose
performance is elsewhere in this Section specifically dealt with)
continued for 60 days after written notice to the Issuer by the Trustee or
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities, which notice shall specify the default and state that such notice
is a “Notice of Default” hereunder; or

 

(6)           default under the terms of
any instrument evidencing or securing Debt of Parent or any Restricted
Subsidiary having an outstanding principal amount of not less than $25,000,000
or its foreign currency equivalent at the time individually or in the aggregate
which default results in the acceleration of the payment of such indebtedness
or 

 

42

 

constitutes the failure to
pay such indebtedness when due (after expiration of any applicable grace
period); or

 

(7)           the rendering of a judgment
or judgments against Parent or any Restricted Subsidiary in an aggregate amount
in excess of $25,000,000 or its foreign currency equivalent at the time and
shall not be waived, satisfied or discharged for any period of 45 consecutive
days during which a stay of enforcement shall not be in effect; or

 

(8)           any Note Guarantee ceases to
be in full force and effect (other than in accordance with the terms of such
Note Guarantee) or any Guarantor denies or disaffirms its obligations under its
Note Guarantee; or

 

(9)           the entry of a decree or
order by a court having jurisdiction in the premises adjudging Parent, the
Issuer or any Significant Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of Parent, the Issuer or any Significant
Subsidiary under the Federal Bankruptcy Code or any other applicable federal,
state or foreign law, or appointing a receiver, liquidator, assignee, trustee,
custodian or sequestrator (or other similar official) of Parent, the Issuer or
any Significant Subsidiary or of any substantial part of its Property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of
30 consecutive days; or

 

(10)         the institution by Parent,
the Issuer or any Significant Subsidiary of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under the Federal Bankruptcy Code
or any other applicable federal, state or foreign law, or the consent by it to
the filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee, custodian or sequestrator (or other similar
official) of Parent, the Issuer or any Significant Subsidiary or of any
substantial part of its Property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due.

 

SECTION 502.       Acceleration
of Maturity; Rescission and Annulment.

 

If an Event of Default (other than an Event
of Default specified in Section 501(9) or 501(10) with respect
to Parent or the Issuer) shall occur and be continuing, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities may declare the principal amount of all the Securities to be due and
payable immediately, by a notice in writing to the Issuer (and to the Trustee
if given by Holders), and upon any such declaration such principal amount shall
become immediately due and payable.  If
an Event of Default specified in Section 501(9) or 501(10) occurs
with respect to Parent or the Issuer, the principal amount of all the
Securities shall ipso  facto become immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.

 

43

 

At any time after a declaration of
acceleration has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter provided in this Article Five,
the Holders of a majority in aggregate principal amount of the Outstanding
Securities, by written notice to the Issuer and the Trustee, may rescind and
annul such declaration and its consequences if

 

(1)           the
Issuer has paid or deposited with the Trustee a sum sufficient to pay

 

(A)          all
overdue interest on all Outstanding Securities,

 

(B)           all
unpaid principal of (and premium, if any, on) any Outstanding Securities which
has become due otherwise than by such declaration of acceleration, and interest
on such unpaid principal at the rate borne by the Securities,

 

(C)           to
the extent that payment of such interest is lawful, interest on overdue
interest at the rate borne by the Securities, and

 

(D)          all
sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel;
and

 

(2)           all
Events of Default, other than the nonpayment of amounts of principal of (or
premium, if any, on) Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section 513.

 

No such rescission shall affect any
subsequent default or impair any right consequent thereon.

 

SECTION 503.       Collection of Indebtedness and Suits
for Enforcement by Trustee.

 

The Issuer covenants that if

 

(a)           Default is made in the payment of any
interest on any Security when due, continued for 30 days, or

 

(b)           default is made in the payment of the
principal of (or premium, if any, on) any Security when due,

 

the Issuer will, upon demand of the Trustee,
pay to the Trustee for the benefit of the Holders of such Securities the whole
amount then due and payable on such Securities for principal (and premium, if
any) and interest, and interest on any overdue principal (and premium, if any)
and, to the extent that payment of such interest shall be legally enforceable,
upon any overdue installment of interest, at the rate borne by the Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

 

44

 

If the Issuer fails to pay such amounts
forthwith upon such demand, the Trustee, in its own name as trustee of an
express trust, may institute a judicial proceeding for the collection of the
sums so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Issuer or any other obligor upon
the Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Issuer or any other obligor
upon the Securities, wherever situated.

 

If an Event of Default occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders by such appropriate judicial proceedings
as the Trustee shall deem necessary to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.

 

SECTION 504.       Trustee
May File Proofs of Claim.

 

In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Issuer or any other
obligor upon the Securities (including Parent and any other Guarantor) or the
Property of the Issuer or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Securities shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Issuer for the payment of
overdue principal, premium, if any, or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,

 

(i)      to file and
prove a claim for the whole amount of principal (and premium, if any) and
interest owing and unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee and its agents and counsel)
and of the Holders allowed in such judicial proceeding, and

 

(ii)     to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same;

 

and any custodian, receiver, assignee,
trustee, liquidator or sequestrator (or other similar official) in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee and, in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay the Trustee any amount due it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel, and any other amounts due the Trustee under
Section 607.

 

Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

 

45

 

SECTION 505.       Trustee
May Enforce Claims Without Possession of Securities.

 

All rights of action and claims under this
Indenture or the Securities may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name and as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee
and its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.

 

SECTION 506.       Application
of Money Collected.

 

Any money collected by the Trustee pursuant
to this Article Five shall be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the distribution of such money on
account of principal (or premium, if any) or interest, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:

 

FIRST: 
To the payment of all amounts due the Trustee under Section 607;

 

SECOND: 
To the payment of the amounts then due and unpaid for principal of (and
premium, if any) and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal (and premium, if any) and interest, respectively; and

 

THIRD: 
The balance, if any, to the Issuer.

 

SECTION 507.       Limitation
on Suits.

 

No Holder of any Securities shall have any
right to institute any proceeding with respect to this Indenture or for any
other remedy hereunder, unless

 

(1)           such Holder shall have
previously given to the Trustee written notice of a continuing Event of
Default;

 

(2)           the Holders of not less than
25% in aggregate principal amount of the Outstanding Securities shall have made
written request and offered indemnity reasonably satisfactory to the Trustee to
institute such proceeding as trustee; and

 

(3)           the Trustee shall not have
received from the Holders of a majority in aggregate principal amount of the
Outstanding Securities a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days;

 

it being understood and intended that no one
or more Holders shall have any right in any manner whatsoever by virtue of, or
by availing of, any provision of this Indenture to affect, disturb or 

 

46

 

prejudice the rights of any other Holders, or
to obtain or to seek to obtain priority or preference over any other Holders or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all the Holders.

 

SECTION 508.       Unconditional
Right of Holders to Receive Principal, Premium and Interest.

 

Notwithstanding any other provision in this
Indenture, including Section 507, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment as provided
herein (including, if applicable, Article Twelve) and in such Security of
the principal of (and premium, if any) and interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Holder.

 

SECTION 509.       Restoration
of Rights and Remedies.

 

If the Trustee or any Holder has instituted
any proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Issuer, any
Guarantor, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.

 

SECTION 510.       Rights
and Remedies Cumulative.

 

Except as otherwise provided with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities
in Section 306, no right or remedy herein conferred upon or reserved to
the Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

 

SECTION 511.       Delay
or Omission Not Waiver.

 

No delay or omission of the Trustee or of any
Holder of any Security to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein.  Every right and remedy given by this Article Five
or by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.

 

47

 

SECTION 512.       Control
by Holders.

 

The Holders of a majority in aggregate
principal amount of the Outstanding Securities shall have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee; provided that

 

(1)           such direction shall not be
in conflict with any rule of law or with this Indenture,

 

(2)           the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction, and

 

(3)           the Trustee need not take any
action which might involve it in personal liability or be unjustly prejudicial
to the Holders not consenting.

 

SECTION 513.       Waiver
of Past Defaults.

 

The Holders of not less than a majority in
principal amount of the Outstanding Securities may, on behalf of the Holders of
all the Securities, waive any past Default hereunder and its consequences,
except a Default

 

(1)           in the payment of the
principal of (or premium, if any) or interest on any Security, or

 

(2)           in respect of a covenant or
provision hereof which under Article Nine cannot be modified or amended
without the consent of the Holder of each Outstanding Security affected, or

 

(3)           in respect of the covenant
contained in Section 1020, which under Article Nine cannot be waived
without the consent of the Holders of two-thirds in principal amount of the
Outstanding Securities.

 

The Issuer and Parent shall deliver to the
Trustee an Officers’ Certificate stating that the requisite majority have
consented to such waiver and attaching such consents upon which, subject to Section 104,
the Trustee may conclusively rely.  Upon
any such waiver, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.

 

SECTION 514.       Waiver of Stay or Extension Laws.

 

The Issuer and each Guarantor covenant (to
the extent that they may lawfully do so) that they shall not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Issuer and 

 

48

 

each Guarantor (to the
extent that they may lawfully do so) hereby expressly waive all benefit or
advantage of any such law and covenant that they shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.

 

SECTION 515.       Undertaking
for Costs.

 

In any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorney’s fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. 
This Section 515 does not apply to a suit by the Trustee or a suit
by Holders of more than 10% in principal amount of the then Outstanding
Securities.

 

ARTICLE
SIX

THE
TRUSTEE

 

SECTION 601.       Certain
Duties and Responsibilities.

 

(a)           Except
during the continuance of an Event of Default,

 

(1)           the Trustee undertakes to
perform such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and

 

(2)           in the absence of bad faith
on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture
(but need not confirm or investigate the accuracy of any mathematical
calculations or other facts stated therein).

 

(b)           In
case an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person’s own
affairs.

 

(c)           No
provision of this Indenture shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct, except that

 

49

 

(1)           this paragraph (c) shall
not be construed to limit the effect of paragraph (a) of this Section 601;

 

(2)           the Trustee shall not be
liable for any error of judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;

 

(3)           the Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture;
and

 

(4)           no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or indemnity
reasonably satisfactory to it against such risk or liability is not reasonably
assured to it.

 

(d)           Whether
or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Section 601.

 

SECTION 602.       Notice
of Default.

 

If a Default occurs and is continuing, the
Trustee shall transmit, in the manner and to the extent provided in TIA Section 313(c),
notice of such Default within 60 days after it is known to any Responsible
Officer of the Trustee or written notice of it is received by the Trustee; provided,
however, that, except in the case of a Default in the payment of the
principal of (or premium, if any) or interest on any Security, the Trustee
shall be protected in withholding such notice if and so long as a trust
committee of directors or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interest of the
Holders.

 

The Trustee is not required to take notice or
deemed to have notice of any Event of Default with respect to the Securities,
except an Event of Default under Section 501(1), (2), (3) or (4) hereof
(provided that in the case of Section 501(4), such Event of Default
constitutes a failure to purchase Securities pursuant to an Offer to Purchase
pursuant to Section 1016), unless the Trustee shall have received written
notice at its Corporate Trust Office (which notice shall reference the
Securities, the Issuer and the Indenture) of such Event of Default from the
Issuer or any Holder or unless a Responsible Officer of the Trustee shall
otherwise have knowledge thereof.

 

SECTION 603.       Certain
Rights of Trustee.

 

Subject to Section 601 and to the
provisions of TIA Sections 315(a) through 315(d):

 

50

 

(1)           the Trustee may conclusively
rely and shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;

 

(2)           any request or direction of
the Issuer mentioned herein shall be sufficiently evidenced by an Issuer Request
or Issuer Order and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;

 

(3)           whenever in the
administration of this Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, receive and rely upon
an Officers’ Certificate;

 

(4)           the Trustee may consult with
counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;

 

(5)           the Trustee may act through
counsel, agents, custodians and nominees and shall not be responsible for the
misconduct or negligence of any such person appointed and supervised with due
care and in good faith;

 

(6)           the Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders pursuant to this
Indenture, unless such Holders shall have offered to the Trustee security or
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;

 

(7)           the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry
or investigation, it shall be entitled to examine the books, records and
premises of the Issuer, personally or by agent or attorney at the expense of
the Company and shall incur no liability of any kind by reason of such inquiry
or investigation;

 

(8)           the Trustee shall not be
liable for any action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture;

 

(9)           the rights, privileges,
protections, immunities and benefits given to the Trustee, including, without
limitation, its right to be indemnified, are extended to, and 

 

51

 

shall be enforceable by, the
Trustee in each of its capacities hereunder, and each agent, custodian and
other Person employed to act hereunder;

 

(10)         the Trustee may request that
Parent or the Issuer deliver an Officers’ Certificate in substantially the form
of Exhibit B hereto setting forth the names of individuals and/or titles
of officers authorized at such time to take specified actions pursuant to this
Indenture, which Officers’ Certificate may be signed by any person authorized
to sign an Officers’ Certificate, including any person specified as so
authorized in any such certificate previously delivered and not superseded;

 

(11)         in no event shall the
Trustee be responsible or liable for special, indirect, or consequential loss
or damage of any kind whatsoever (including, but not limited to, loss of
profit) irrespective of whether the Trustee has been advised of the likelihood
of such loss or damage and regardless of the form of action; and

 

(12)         the Trustee shall not be
deemed to have notice of any Default or Event of Default unless a Responsible
Officer of the Trustee has actual knowledge thereof or unless written notice of
any event which is in fact such a default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the
Securities and this Indenture.

 

SECTION 604.       Trustee
Not Responsible for Recitals or Issuance of Securities.

 

The recitals contained herein and in the
Securities, except for the Trustee’s certificates of authentication, shall be
taken as the statements of Parent or the Issuer, as applicable, and the Trustee
assumes no responsibility for their correctness.  The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities, except that
the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities and perform its obligations
hereunder.  The Trustee shall not be
accountable for the use or application by the Issuer of Securities or the
proceeds thereof.

 

SECTION 605.       May Hold
Securities.

 

The Trustee, any Paying Agent, any Security
Registrar or any other agent of Parent, the Issuer or of the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to TIA Sections 310(b) and 311, may otherwise deal with
Parent, the Issuer with the same rights it would have if it were not any
Trustee, Paying Agent, Security Registrar or such other agent.

 

SECTION 606.       Money
Held in Trust.

 

Money held by the Trustee in trust hereunder
need not be segregated from other funds except to the extent required by
law.  The Trustee shall be under no
liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Issuer.

 

52

 

SECTION 607.       Compensation
and Reimbursement.

 

The Issuer agrees:

 

(1)           to pay to the Trustee from
time to time such compensation as shall be agreed in writing between the Issuer
and the Trustee for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);

 

(2)           except as otherwise
expressly provided herein, to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as shall be determined to have
been caused by the Trustee’s own negligence, willful misconduct or bad faith;
and

 

(3)           to fully indemnify each of
the Trustee and any predecessor trustee and its directors, officers, employees
and agents for, and to hold them harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the income
of the Trustee) incurred without negligence, willful misconduct or bad faith on
the part of any of them, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself or themselves against any claim (whether asserted by the Issuer, a
Guarantor, a Holder or any other Person) or liability in connection with the
exercise or performance of any of its or their powers or duties hereunder.

 

The obligations of the Issuer under this Section 607
to compensate the Trustee, to pay or reimburse the Trustee for expenses,
disbursements and advances and to indemnify and hold harmless the Trustee shall
constitute additional indebtedness hereunder. 
As security for the performance of such obligations of the Issuer, the
Trustee shall have a claim prior to the Securities upon all property and funds
held or collected by the Trustee as such, except funds held in trust for the
payment of principal of (and premium, if any, on) or interest on particular
Securities.

 

When the Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 501(9) or
(10), the expenses (including the reasonable charges and expenses of its
counsel) of and the compensation for such services are intended to constitute
expenses of administration under any applicable federal, state or foreign
bankruptcy, insolvency or other similar law.

 

The provisions of this Section 607 shall
survive the termination of this Indenture or the earlier resignation or removal
of the Trustee.

 

53

 

SECTION 608.       Corporate
Trustee Required; Eligibility; Conflicting Interests.

 

(a)           There
shall be at all times a Trustee hereunder which shall be subject to and comply
with the provisions of Section 310(a)(1) of the Trust Indenture Act
and shall have a combined capital and surplus of at least $50,000,000.  If such Person publishes reports of condition
at least annually, pursuant to law or to the requirements of federal, state,
territorial or District of Columbia supervising or examining authority, then,
for the purposes of this Section 608, the combined capital and surplus of
such Person shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.  If at any time a Responsible Officer of the
Trustee shall have actual knowledge that the Trustee ceases to be eligible in
accordance with the provisions of this Section 608, it shall resign
immediately in the manner and with the effect hereinafter specified in this Article VI.

 

(b)           The
Trustee shall be subject to and comply with Section 310(b) of the
Trust Indenture Act.

 

SECTION 609.       Resignation
and Removal; Appointment of Successor.

 

(a)           No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article VI shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 610.

 

(b)           The
Trustee may resign at any time by giving written notice thereof to the
Issuer.  If the instrument of acceptance
by a successor Trustee required by Section 610 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition, at the expense of the Issuer,
any court of competent jurisdiction for the appointment of a successor Trustee.

 

(c)           The
Trustee may be removed at any time by Act of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities, delivered
to the Trustee and to the Issuer.  If the
instrument of acceptance by a successor Trustee required by Section 610
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of removal, the Trustee designated for removal may petition, at the
expense of the Issuer, any court of competent jurisdiction for the appointment
of a successor Trustee.

 

(d)           If
at any time:

 

(1)           the Trustee shall fail to
comply with the provisions of TIA Section 310(b) after written
request therefor by the Issuer or by any Holder who has been a bona fide Holder
of a Security for at least six months, or

 

(2)           the Trustee shall cease to
be eligible under Section 608(a) and shall fail to resign after
written request therefor by the Issuer or by any Holder who has been a bona
fide Holder of a Security for at least six months, or

 

54

 

(3)           the Trustee shall become
incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver
of the Trustee or of its property shall be appointed or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,

 

then, in any such case, (i) the Issuer,
by a Board Resolution, may remove the Trustee or (ii) subject to TIA Section 3.15(e),
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.

 

(e)           If
the Trustee shall resign, be removed or become incapable of acting, or if a
vacancy shall occur in the office of Trustee for any cause, the Issuer, by a
Board Resolution, shall promptly appoint a successor Trustee.  If the Issuer does not promptly appoint a
successor Trustee after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in aggregate principal amount of the Outstanding
Securities delivered to the Issuer and the retiring Trustee.  In either case, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the
Issuer.  If no successor Trustee shall
have been so appointed by the Issuer or the Holders and accepted appointment in
the manner hereinafter provided, any Holder who has been a bona fide Holder of
a Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.

 

(f)            The
Issuer shall give notice of each resignation and each removal of the Trustee
and each appointment of a successor Trustee to the Holders of Securities in the
manner provided for in Section 106. 
Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.

 

(g)           The
retiring Trustee shall not be liable for any of the acts or omissions of any
successor Trustee appointed hereunder.

 

SECTION 610.       Acceptance
of Appointment by Successor.

 

Every successor Trustee appointed hereunder
shall execute, acknowledge and deliver to the Issuer and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on
request of the Issuer or the successor Trustee, such retiring Trustee shall,
upon payment of its charges hereunder, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.  Upon request of any such successor Trustee,
the Issuer shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.

 

55

 

No successor Trustee shall accept its
appointment unless at the time of such acceptance such successor Trustee shall
be qualified and eligible under this Article VI.

 

SECTION 611.       Merger,
Conversion, Consolidation or Succession to Business.

 

Any Person into which the Trustee may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any Person succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder; provided that such Person shall be otherwise qualified and
eligible under this Article Six, without the execution or filing of any
paper or any further act on the part of any of the parties hereto.  In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion, consolidation or transfer of assets to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.  In case
at that time any of the Securities shall not have been authenticated, any
successor Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee.  In all such cases such certificates shall
have the full force and effect which this Indenture provides that the
certificate of authentication of the Trustee shall have; provided, however,
that the right to adopt the certificate of authentication of any predecessor
Trustee or to authenticate Securities in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion,
consolidation or transfer of assets.

 

ARTICLE
SEVEN

HOLDERS’
LISTS AND REPORTS BY TRUSTEE AND THE ISSUER

 

SECTION 701.       Disclosure
of Names and Addresses of Holders.

 

Every Holder of Securities, by receiving and
holding the same, agrees with the Issuer and the Trustee that none of the
Issuer or the Trustee or any agent of any of them shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Holders in accordance with TIA Section 3.12, regardless of the
source from which such information was derived, and that the Trustee shall not
be held accountable by reason of mailing any material pursuant to a request
made under TIA Section 3.12(b).

 

SECTION 702.       Reports
by Trustee.

 

Within 60 days after May 15 of each
year commencing with the first May 15 after the first issuance of
Securities, the Trustee shall transmit to the Holders, in the manner and to the
extent provided in TIA Section 313(c), a brief report dated as of such May 15
if required by TIA Section 313(a).

 

56

 

A copy of each such report at the time of its
mailing to Holders shall be filed with the Commission and the principal
national securities exchange (if any) on which the Securities are listed.

 

The Issuer shall promptly notify a
Responsible Officer of the Trustee if the Securities become listed on any
national securities exchange or of any delisting thereof.

 

SECTION 703.       Reports
by Parent and the Issuer.

 

Parent or the Issuer shall file with the
Trustee and deliver to the Holders of Securities the reports and other
information required to be provided by them pursuant to Section 1007,
subject to the provisions of Section 1007.

 

ARTICLE
EIGHT

CONSOLIDATION,
MERGER, CONVEYANCE, TRANSFER OR LEASE

 

SECTION 801.       Parent
May Consolidate, etc., Only on Certain Terms.

 

Parent shall not, in a single transaction or
a series of related transactions, (i) consolidate with or merge into any
other Person or Persons or permit any other Person to consolidate with or merge
into Parent or (ii) directly or indirectly, transfer, sell, lease, convey
or otherwise dispose of all or substantially all its assets to any other Person
or Persons unless:

 

(1)           in a transaction in which
Parent is not the surviving Person or in which Parent transfers, sells, leases,
conveys or otherwise disposes of all or substantially all of its assets to any
other Person, the resulting surviving or transferee Person (the “successor
entity”) is organized under the laws of the United States of America or any
State thereof or the District of Columbia and shall expressly assume, by a
supplemental indenture executed and delivered to the Trustee in form
satisfactory to the Trustee, all of Parent’s obligations under the Indenture
and the Parent Guarantee;

 

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

 

(3)           immediately after giving
effect to such transaction and treating any Debt which becomes an obligation of
Parent (or the successor entity) or a Restricted Subsidiary as a result of such
transaction as having been Incurred by Parent or such Restricted Subsidiary at
the time of the transaction, Parent (or the successor entity) could Incur at
least $1.00 of additional Debt pursuant to paragraph (a) of Section 1010;

 

57

 

(4)           if, as a result of any such transaction,
Property of Parent (or the successor entity) or any Restricted Subsidiary would
become subject to a Lien prohibited by Section 1014, Parent or the
successor entity to Parent shall have secured the Securities as required by
said covenant;

 

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

 

(6)           Parent and the Issuer have
delivered to the Trustee an Officers’ Certificate and Opinion of Counsel
stating that such consolidation, merger, transfer, sale, lease, conveyance or
other disposition and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, complies with this Article and
that all conditions precedent herein have been complied with, and, with respect
to such Officers’ Certificate, setting forth the manner of determination of the
Consolidated Net Worth, in accordance with clause (3) of this Section 801,
of Parent or, if applicable, of the successor entity as required pursuant to
the foregoing.

 

SECTION 802.       Successor
Parent Substituted.

 

Upon any consolidation of Parent with or
merger of Parent with or into any other Person or any transfer, sale, lease,
conveyance or other disposition of all or substantially all the assets of
Parent to any Person or Persons in accordance with Section 801, the successor
Person formed by such consolidation or into which Parent is merged or to which
such transfer, sale, lease, conveyance or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
Parent under this Indenture with the same effect as if such successor Person
had been named as Parent herein, and the predecessor Parent (which term shall
for this purpose mean the Person named as “Parent” in the first paragraph of
this Indenture or any successor Person which shall have become such in the
manner described in Section 801), except in the case of a lease, shall be
released from all its obligations and covenants under this Indenture and the
Securities and may be dissolved and liquidated.

 

SECTION 803.       Issuer
May Consolidate, etc., Only on Certain Terms.

 

The Issuer shall not, in a single transaction
or a series of related transactions, (i) consolidate or merge into Parent
or permit Parent to consolidate with or merge into the Issuer or (ii) except
to the extent permitted under Section 1012, directly or indirectly,
transfer, sell, lease, convey or otherwise dispose of all or substantially all
its assets to Parent.  Additionally, the
Issuer shall not, in a single transaction or a series of related transactions, (i) consolidate
with or merge into any other Person or Persons or permit any other Person to
consolidate with or merge into the Issuer or (ii) (other than, to the
extent permitted under Section 1012, to a Restricted Subsidiary that is or
becomes a Guarantor and an Offering Proceeds Note Guarantor or to Parent so
long as Parent is a Guarantor) directly or indirectly, transfer, sell, lease,
convey or otherwise dispose of all or substantially all its assets to any other
Person or Persons, unless:

 

58

 

(1)           in a transaction in which
the Issuer is not the surviving Person or in which the Issuer transfers, sells,
leases, conveys or otherwise disposes of all or substantially all of its assets
to any other Person, the successor entity is organized under the laws of the
United States of America or any State thereof or the District of Columbia and
shall expressly assume, by a supplemental indenture executed and delivered to
the Trustee in form satisfactory to the Trustee, all of the Issuer’s
obligations under this Indenture;

 

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

 

(3)           immediately after giving
effect to such transaction and treating any Debt which becomes an obligation of
the Issuer (or the successor entity) or an Issuer Restricted Subsidiary as a
result of such transaction as having been Incurred by the Issuer or such Issuer
Restricted Subsidiary at the time of the transaction, the Issuer (or the
successor entity) could Incur at least $1.00 of additional Debt pursuant to
paragraph (a) of Section 1011;

 

(4)           if, as a result of any such
transaction, Property of the Issuer (or the successor entity) or any Issuer
Restricted Subsidiary would become subject to a Lien prohibited by the
provisions of Section 1014, the Issuer or the successor entity to the
Issuer shall have secured the Securities as required by said covenant;

 

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

 

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

 

SECTION 804.       Successor
Issuer Substituted.

 

Upon any consolidation of the Issuer with or
merger of the Issuer with or into any other Person or any transfer, sale,
lease, conveyance or other disposition of all or substantially all the assets
of the Issuer to any Person or Persons in accordance with Section 803, the
successor Person formed by such consolidation or into which the Issuer is
merged or to which such transfer, sale, lease, conveyance or other disposition
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Issuer under this Indenture with the same 

 

59

 

effect as if such successor
Person had been named as the Issuer herein, and the predecessor Issuer (which
term shall for this purpose mean the Person named as the “Issuer” in the first
paragraph of this Indenture or any successor Person which shall have become
such in the manner described in Section 803), except in the case of a
lease, shall be released from all its obligations and covenants under this
Indenture and the Securities and may be dissolved and liquidated.

 

SECTION 805.       Guarantor
(other than Parent) May Consolidate, etc., Only on Certain Terms.

 

A Guarantor (other than Parent) shall not, in
a single transaction or a series of related transactions, (i) consolidate
with or merge into any other Person or Persons (other than, with respect to a
Guarantor that is an Issuer Restricted Subsidiary, the Issuer or another
Guarantor that is an Issuer Restricted Subsidiary, and with respect to a
Guarantor that is a Sister Restricted Subsidiary, another Guarantor that is a
Sister Restricted Subsidiary or Parent) or permit any other Person (other than,
with respect to a Guarantor that is an Issuer Restricted Subsidiary, another
Guarantor that is an Issuer Restricted Subsidiary, and with respect to a
Guarantor that is a Sister Restricted Subsidiary, Parent or another Guarantor
that is a Sister Restricted Subsidiary) to consolidate with or merge into such
Guarantor or (ii) except to another Guarantor to the extent permitted
under Section 1012, directly or indirectly, transfer, sell, lease, convey
or otherwise dispose of all or substantially all its assets to any other Person
or Persons (other than, with respect to a Guarantor that is an Issuer
Restricted Subsidiary, the Issuer or another Guarantor that is an Issuer
Restricted Subsidiary, and with respect to a Guarantor that is a Sister
Restricted Subsidiary, another Guarantor that is a Sister Restricted Subsidiary
or Parent), unless:

 

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

 

(2)           either (A) in a
transaction in which such Guarantor is not the surviving Person or in which
such Guarantor transfers, sells, leases, conveys or otherwise disposes of all
or substantially all of its assets to any other Person, the resulting surviving
or transferee Person is organized under the laws of the United States of
America or any State thereof or the District of Columbia and shall expressly
assume, by a supplemental indenture executed and delivered to the Trustee in
form satisfactory to the Trustee, all of such Guarantor’s obligations under the
Indenture and its Note Guarantee; or (B) such transaction complies with Section 1016
(or Parent certifies in an Officers’ Certificate to the Trustee that it will
comply with the requirements of such covenant relating to application of the
proceeds of such transaction); and

 

(3)           Parent and the Issuer have
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each
in form and substance reasonably satisfactory to the Trustee, stating that such
consolidation, merger, transfer, sale, lease, conveyance or other disposition
and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, complies with this Article and
that all

 

60

 

conditions precedent herein provided for relating to
such transaction have been complied with.

 

SECTION 806.       Successor
Guarantor Substituted.

 

Upon any consolidation of a Guarantor with or
merger of a Guarantor with or into any other Person or any transfer, sale,
lease, conveyance or other disposition of all or substantially all the assets
of a Guarantor to any Person or Persons in accordance with Section 805,
the successor Person formed by such consolidation or into which such Guarantor
is merged or to which such transfer, sale, lease, conveyance or other
disposition is made (other than any such transaction made in accordance with Section 805(2)(B))
shall succeed to, and be substituted for, and may exercise every right and
power of, such Guarantor under this Indenture with the same effect as if such
successor Person had been named as a Guarantor herein, and the predecessor
Guarantor (which term shall for this purpose mean the Person named as the “New
Guarantor” in the first paragraph of the applicable supplemental indenture or
any successor Person which shall have become such in the manner described in Section 805),
except in the case of a lease, shall be released from all its obligations and
covenants under its Note Guarantee and the Securities and may be dissolved and
liquidated.

 

SECTION 807.       Offering
Proceeds Note Guarantor May Consolidate, etc., Only on Certain Terms.

 

An Offering Proceeds Note Guarantor shall
not, in a single transaction or a series of related transactions, (i) consolidate
with or merge into any other Person or Persons (other than, with respect to an
Offering Proceeds Note Guarantor that is an Issuer Restricted Subsidiary, the
Issuer or another Offering Proceeds Note Guarantor that is an Issuer Restricted
Subsidiary, and with respect to an Offering Proceeds Note Guarantor that is a
Sister Restricted Subsidiary, another Offering Proceeds Note Guarantor that is
a Sister Restricted Subsidiary or Parent) or permit any other Person (other
than, with respect to an Offering Proceeds Note Guarantor that is an Issuer
Restricted Subsidiary, another Offering Proceeds Note Guarantor that is an
Issuer Restricted Subsidiary, and with respect to an Offering Proceeds Note
Guarantor that is a Sister Restricted Subsidiary, Parent or another Offering
Proceeds Note Guarantor that is a Sister Restricted Subsidiary) to consolidate
with or merge into such Offering Proceeds Note Guarantor or (ii) except to
another Offering Proceeds Note Guarantor to the extent permitted under Section 1012,
directly or indirectly, transfer, sell, lease, convey or otherwise dispose of
all or substantially all its assets to any other Person or Persons (other than,
with respect to an Offering Proceeds Note Guarantor that is an Issuer
Restricted Subsidiary, the Issuer or another Offering Proceeds Note Guarantor
that is an Issuer Restricted Subsidiary, and with respect to an Offering
Proceeds Note Guarantor that is a Sister Restricted Subsidiary, another
Offering Proceeds Note Guarantor that is a Sister Restricted Subsidiary or
Parent), unless:

 

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

 

61

 

(2)           either (a) in a
transaction in which such Offering Proceeds Note Guarantor is not the surviving
Person or in which such Offering Proceeds Note Guarantor transfers, sells,
leases, conveys or otherwise disposes of all or substantially all of its assets
to any other Person, the resulting surviving or transferee Person is organized
under the laws of the United States of America or any State thereof or the
district of Columbia and shall expressly assume all of such Offering Proceed
Note Guarantor’s obligations under the Offering Proceeds Note Guarantee and any
subordination agreement between the Issuer and such Offering Proceed Note
Guarantor relating to the Offering Proceeds Note; or (b) such transaction
complies with Section 1016 (or Parent certifies in an Officers’
Certificate to the Trustee that it will comply with the requirements of such
covenant relating to application of the proceeds of such transaction); and

 

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

 

ARTICLE
NINE

SUPPLEMENTAL
INDENTURES

 

SECTION 901.       Supplemental
Indentures Without Consent of Holders.

 

The Issuer, the Guarantors and the Trustee
may, at any time and from time to time, without notice to or consent of any
Holders of Securities, enter into one or more indentures supplemental hereto:

 

(1)           to evidence the succession
of another Person to the Issuer, Parent or any other Guarantor and the
assumption by such successor of the covenants of the Issuer, Parent or such
other Guarantor, respectively, herein, in the Securities and the applicable
Note Guarantee, as applicable; or

 

(2)           to add to the covenants of
Parent, the Issuer or any of their respective Subsidiaries, for the benefit of
the Holders, or to surrender any right or power conferred upon Parent, the
Issuer or any other Guarantor hereby; or

 

(3)           to add any additional Events
of Default; or

 

(4)           to provide for
uncertificated Securities in addition to or in place of certificated
Securities; or

 

62

 

(5)           to evidence and provide for
the acceptance of appointment hereunder of a successor Trustee pursuant to the
requirements of Section 610; or

 

(6)           to secure the Securities; or

 

(7)           to comply with the Trust
Indenture Act or the Securities Act (including Regulation S promulgated
thereunder); or

 

(8)           to add additional Note
Guarantees or to release any Guarantors from Note Guarantees as provided by the
terms of this Indenture; or

 

(9)           as set forth in Section 1308;
or

 

(10)         to cure any ambiguity
herein, to correct or supplement any provision herein which may be inconsistent
with any other provision herein, or to add any other provision with respect to
matters or questions arising under this Indenture; provided such actions
shall not adversely affect the interests of the Holders in any material
respect.

 

SECTION 902.       Supplemental
Indentures With Consent of Holders.

 

With the consent of the Holders of not less
than a majority in principal amount of the Outstanding Securities, by Act of
such Holders delivered to the Issuer and the Trustee, the Issuer, the
Guarantors and the Trustee may enter into one or more indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or waiving or otherwise
modifying in any manner the rights of the Holders, including the waiver of
certain past defaults under the Indenture pursuant to Section 513; provided,
however, that no such supplemental indenture shall, without the consent
of the Holder of each Outstanding Security (or, in the case of clause (10) below,
two-thirds in principal amount of the Outstanding Securities) affected thereby:

 

(1)           change the Stated Maturity
of the principal of, or any installment of interest on, any Security, or reduce
the principal amount thereof or the interest thereon that would be due and
payable upon the Stated Maturity thereof, or change the place of payment where,
or the coin or currency in which, any Security or any premium or interest
thereon is payable, or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof; or

 

(2)           modify any provision of Section 508
or Section 513; or

 

(3)           subordinate in right of
payment, or otherwise subordinate, the Securities or any Note Guarantee to any
other Debt (other than as set forth in Section 1308); or

 

(4)           except as otherwise required
herein, release any security interest that may have been granted in favor of
the Holders of the Securities; or

 

63

 

(5)           reduce the premium payable
upon the redemption of any Security nor change the time at which any Security
may be redeemed, as described in Exhibit A; or

 

(6)           reduce the premium payable
upon a Change of Control Triggering Event or, at any time after a Change of
Control Triggering Event has occurred, change the time at which the Offer to
Purchase relating thereto must be made or at which the Securities must be
repurchased pursuant to such Offer to Purchase; or

 

(7)           at any time after the Issuer
is obligated to make an Offer to Purchase with the Net Available Proceeds from
Asset Dispositions, change the time at which such Offer to Purchase must be made
or at which the Securities must be repurchased pursuant thereto; or

 

(8)           make any change in any Note
Guarantee that would adversely affect the Holders of the Securities (other than
as set forth in Section 1308);

 

(9)           modify any provision of this
Section 902 (except to increase any percentage set forth herein); or

 

(10)         modify or amend Section 1020.

 

It shall not be necessary for any Act of
Holders under this Section 902 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.

 

SECTION 903.       Execution
of Supplemental Indentures.

 

In executing, or accepting the additional
trusts created by, any supplemental indenture permitted by this Article Nine
or the modifications thereby of the trusts created by this Indenture, the
Trustee shall receive, and shall be fully protected in relying upon, an Opinion
of Counsel of the Issuer stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture and an Officers’
Certificate of the Issuer stating that all conditions precedent to the
execution of such supplemental indenture have been fulfilled.  The Trustee may, but shall not be obligated
to, enter into any such supplemental indenture which affects the Trustee’s own
rights, duties or immunities under this Indenture or otherwise.

 

SECTION 904.       Effect
of Supplemental Indentures.

 

Upon the execution of any supplemental
indenture under this Article Nine, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

 

64

 

SECTION 905.       Conformity
with Trust Indenture Act.

 

Every supplemental indenture executed
pursuant to this Article Nine shall conform as a matter of contract or law
to the requirements of the Trust Indenture Act as then in effect.

 

SECTION 906.       Reference
in Securities to Supplemental Indentures.

 

Securities authenticated and delivered after
the execution of any supplemental indenture pursuant to this Article Nine
may bear a notation in form approved by the Trustee and the Issuer as to any
matter provided for in such supplemental indenture.  If the Issuer and shall so determine, new
Securities so modified as to conform, in the opinion of the Trustee and the
Issuer, to any such supplemental indenture may be prepared and executed by the
Issuer and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.

 

SECTION 907.       Notice
of Supplemental Indentures.

 

Promptly after the execution by the Issuer,
the Guarantors and the Trustee of any supplemental indenture pursuant to this Article Nine,
the Issuer shall give notice thereof to the Holders of each Outstanding
Security affected, in the manner provided for in Section 106, setting
forth in general terms the substance of such supplemental indenture.

 

ARTICLE
TEN

COVENANTS

 

SECTION 1001.     Payment
of Principal, Premium, if Any, and Interest.

 

The Issuer covenants and agrees for the
benefit of the Holders that it shall duly and punctually pay the principal of
(and premium, if any) and interest on the Securities in accordance with the terms
of the Securities and this Indenture.

 

SECTION 1002.     Maintenance of Office or Agency.

 

The Issuer shall maintain in The City of
New York an office or agency where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Issuer in
respect of the Securities and this Indenture may be served.  The Corporate Trust Office of the Trustee
shall be such office or agency of the Issuer, unless the Issuer shall designate
and maintain some other office or agency for one or more of such purposes.  The Issuer shall give prompt written notice
to the Trustee of any change in the location of any such office or agency.  If at any time the Issuer shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Issuer hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.

 

65

 

The Issuer may also from time to time
designate one or more other offices or agencies (in or outside of The City of
New York) where the Securities may be presented or surrendered for any or
all such purposes and may from time to time rescind any such designation; provided,
however, that no such designation or rescission shall in any manner
relieve the Issuer of its obligation to maintain an office or agency in The
City of New York for such purposes. 
The Issuer shall give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such other
office or agency.

 

SECTION 1003.     Money
for Security Payments to Be Held in Trust.

 

If the Issuer shall at any time act as its
own Paying Agent, it shall, on or before each due date of the principal of (or
premium, if any) or interest on any of the Securities, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal of (or premium, if any) or interest so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as herein provided
and shall promptly notify the Trustee of its action or failure so to act.

 

Whenever the Issuer shall have one or more
Paying Agents for the Securities, it shall, on or before each due date of the
principal of (or premium, if any) or interest on any Securities, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Issuer will promptly notify the Trustee of
such action or any failure so to act.

 

The Issuer shall cause each Paying Agent
(other than the Trustee) to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section 1003, that such Paying Agent shall:

 

(1)           hold all sums held by it for
the payment of the principal of, premium, if any, or interest on Securities in
trust for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;

 

(2)           give the Trustee notice of
any default by the Issuer (or any other obligor upon the Securities) in the
making of any payment of principal, premium, if any, or interest;

 

(3)           at any time during the
continuance of any such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying Agent;
and

 

(4)           indemnify the Trustee and
its officers, directors, employees and agents against any loss, cost or
liability caused by, or incurred as a result of, such Paying Agent’s acts or
omissions.

 

The Issuer may at any time, for the purpose
of obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Issuer Order direct any Paying Agent to pay, 

 

66

 

to the Trustee all sums held
in trust by the Issuer or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Issuer or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such sums.

 

Any money deposited with the Trustee or any
Paying Agent, or then held by the Issuer, in trust for the payment of the
principal of, premium, if any, or interest on any Security and remaining
unclaimed for two years after such principal, premium or interest has become
due and payable shall be paid to the Issuer on Issuer Request or (if then held
by the Issuer) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Issuer for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Issuer as
trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense of the Issuer cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the Borough of Manhattan, The City
of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date
of such publication, any unclaimed balance of such money then remaining will be
repaid to the Issuer.

 

SECTION 1004.     Corporate
Existence.

 

Subject to Article Eight, Parent and the
Issuer shall do or cause to be done all things necessary to preserve and keep
in full force and effect the corporate existence, rights (charter and
statutory) and franchises of Parent, the Issuer and each Subsidiary of the
Issuer; provided, however, that Parent and the Issuer shall not
be required to preserve, with respect to Parent or the Issuer, respectively,
any such right or franchise or, with respect to any such Subsidiary (subject to
all the other covenants in this Indenture), any such corporate existence, right
or franchise, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of Parent and its
Subsidiaries taken as a whole or the Issuer and its Subsidiaries taken as a
whole, respectively and that, in each case, the loss thereof is not
disadvantageous in any material respect to the Holders.

 

SECTION 1005.     Maintenance
of Properties.

 

The Issuer shall cause all properties owned
by the Issuer or any Issuer Restricted Subsidiary or used or held for use in
the conduct of its business or the business of any Issuer Restricted Subsidiary
to be maintained and kept in good condition, repair and working order and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as
in the judgment of the Issuer may be necessary so that the business carried on
in connection therewith may be properly and advantageously conducted at all
times; provided, however, that nothing in this Section 1005
shall prevent the Issuer from discontinuing the maintenance of any of such
properties if such discontinuance is, in the judgment of the Issuer, desirable
in the conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.

 

67

 

SECTION 1006.     Insurance.

 

The Issuer shall at all times keep all of its
and each Issuer Restricted Subsidiary’s properties which are of an insurable
nature insured with insurers, believed by the Issuer to be responsible, against
loss or damage to the extent that property of similar character is usually so
insured by companies similarly situated and owning like properties.

 

SECTION 1007.     Reports.

 

Whether or not Parent is subject to Section 13(a) or
15(d) of the Exchange Act, or any successor provision thereto, Parent
shall file with the Commission the annual reports, quarterly reports and other
documents which Parent would have been required to file with the Commission
pursuant to such Section 13(a) or 15(d) or any successor
provision thereto if Parent were subject thereto, such documents to be filed
with the Commission on or prior to the respective dates (the “Required Filing
Dates”) by which Parent would have been required to file them.  Parent or the Issuer shall also in any event (a) within
15 days of each Required Filing Date (i) transmit by mail to all
Holders, as their names and addresses appear in the Security Register, without
cost to such Holders, and (ii) file with the Trustee copies of the annual
reports, quarterly reports and other documents (without exhibits) which Parent
would have been required to file with the Commission pursuant to Section 13(a) or
15(d) of the Exchange Act or any successor provisions thereto if Parent
were subject thereto and (b) if filing such documents by Parent with the
Commission is not permitted under the Exchange Act, promptly upon written
request, supply copies of such documents (without exhibits) to any prospective
Holder.  Notwithstanding the foregoing,
Parent and the Issuer will be deemed to have furnished such reports to the
Trustee and the Holders if Parent has filed such reports with the Commission
via the EDGAR filing system and such reports are publicly available.

 

Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee’s
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Issuer’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

 

SECTION 1008.     Statement
by Officers as to Default.

 

(a)  The Issuer shall deliver to the
Trustee, on the date of delivery of each annual report to be delivered pursuant
to Section 1007, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Issuer’s compliance during the period covered by such report
with all conditions and covenants under this Indenture.  If the signer has knowledge of any
noncompliance that occurred during such period, the certificate shall describe
its status and what action the Issuer has taken or is taking or proposes to
take with respect thereto. For purposes of this Section 1008(a), such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.

 

68

 

(b)  When any Default has occurred and
is continuing under this Indenture, or if the trustee for or the holder of any
other evidence of Debt of the Issuer or any Issuer Restricted Subsidiary gives
any notice or takes any other action with respect to a claimed default (other
than with respect to Debt in the principal amount of less than $25,000,000 or
its foreign currency equivalent at the time), the Issuer shall, within 30 days
of such occurrence, notice or other action, deliver to the Trustee by
registered or certified mail or by facsimile transmission an Officers’
Certificate specifying such event, notice or other action, its status and what
action the Issuer is taking or purposes to take with respect thereto.

 

SECTION 1009.     Change
of Control Triggering Event.

 

(a)           Upon
the occurrence of a Change of Control Triggering Event, each Holder shall have
the right to require that the Issuer repurchase such Holder’s Securities in
whole or in part in integral multiples of $1,000, in accordance with the
procedures set forth in this Section 1009 and this Indenture.

 

(b)           Within
30 days of the occurrence of both a Change of Control and a Rating Decline
with respect to the Securities (a “Change of Control Triggering Event”), the
Issuer will be required to make an Offer to Purchase all Outstanding Securities
at a price in cash equal to 101% of the principal amount of the Securities on
the purchase date, plus accrued and unpaid interest (if any) to such purchase
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date).

 

(c)           The
Issuer and the Trustee shall perform their respective obligations for the Offer
to Purchase as specified in the Offer. 
Prior to the Purchase Date, the Issuer shall (i) accept for payment
Securities or portions thereof tendered pursuant to the Offer, (ii) irrevocably
deposit with the Paying Agent (or, if the Issuer is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) money
sufficient to pay the Purchase Price of all Securities or portions thereof so
accepted (provided that such deposit may be made no later than 11:00 A.M.
New York City time on the Purchase Date if the Issuer elects) and (iii) deliver
or cause to be delivered to the Trustee all Securities so accepted together
with an Officers’ Certificate stating the Securities or portions thereof
accepted for payment by the Issuer.  The
Paying Agent shall promptly mail or deliver to Holders of Securities so
accepted payment in an amount equal to the Purchase Price, and the Trustee
shall promptly authenticate and mail or deliver to such Holders a new Security
or Securities equal in principal amount to any unpurchased portion of the
Security surrendered as requested by the Holder.  Any Security not accepted for payment shall
be promptly mailed or delivered by the Issuer to the Holder thereof.  In the event that the aggregate Purchase
Price is less than the amount delivered by the Issuer to the Trustee or the
Paying Agent, the Trustee or the Paying Agent, as the case may be, shall
deliver the excess to the Issuer immediately after the Purchase Date.

 

(d)           A
“Change of Control” means the occurrence of any of the following events:

 

(i)          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 

 

69

 

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 Parent; provided, however,
that the Permitted Holders are the “beneficial owners” (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, in the aggregate of a lesser percentage of the total
voting power of the Voting Stock of Parent than such other person or group (for
purposes of this clause (i), 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

 

(ii)         the sale,
transfer, assignment, lease, conveyance or other disposition, directly or
indirectly, of all or substantially all the assets of (A) Parent and the
Restricted Subsidiaries, or (B) the Issuer and the Issuer 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 Parent or the Issuer, respectively, or one or more
Permitted Holders) shall have occurred; or

 

(iii)        during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of Parent (together with any new directors
whose election or appointment by such board or whose nomination for election by
the shareholders of Parent 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 Parent then in office; or

 

(iv)        the shareholders
of Parent or the Issuer shall have approved any plan of liquidation or
dissolution of Parent or the Issuer, respectively.

 

(e)           The
Issuer shall not be required to make an Offer to Purchase upon a Change of
Control Triggering Event if a third party makes the Offer to Purchase in the
manner, at the times and otherwise in compliance with the requirements set
forth in this Indenture applicable to an Offer to Purchase made by the Issuer
and purchases all Securities validly tendered and not withdrawn under such
Offer to Purchase.

 

(f)            In
the event that the Issuer makes an Offer to Purchase the Securities, the Issuer
shall comply with any applicable securities laws and regulations, including any
applicable requirements of Section 14(e) of, and Rule 14e-1 under,
the Exchange Act.  To the extent that the
provisions of any securities laws or regulations conflict with provisions of
this Section, the Issuer

 

70

 

shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section by
virtue thereof.

 

SECTION 1010.     Limitation
on Consolidated Debt.

 

(a)           Parent
shall not, and shall not permit any Restricted Subsidiary (other than to the
extent permitted by paragraph (b) of Section 1011) to, directly or
indirectly, Incur any Debt; provided, however, that Parent or any
Restricted Subsidiary (subject, in the case of the Issuer and any Issuer
Restricted Subsidiary, to Section 1011) may Incur any Debt if, after
giving pro forma effect to such Incurrence and the receipt and application of
the net proceeds thereof, no Default or Event of Default would occur as a
consequence of such Incurrence or be continuing following such Incurrence and
either (i) the ratio of (A) the aggregate consolidated principal
amount (or, in the case of Debt issued at a discount, the then-Accreted Value)
of Debt of Parent and its Restricted Subsidiaries outstanding as of the most recent
available quarterly or annual balance sheet, after giving pro forma effect to
the Incurrence of such Debt and any other Debt Incurred or repaid since such
balance sheet date and the receipt and application of the net proceeds thereof,
to (B) Pro Forma Consolidated Cash Flow Available for Fixed Charges for
Parent and its Restricted Subsidiaries for the four full fiscal quarters next
preceding the Incurrence of such Debt for which consolidated financial
statements are available, would be less than 5.0 to 1.0, or (ii) Parent’s
Consolidated Capital Ratio as of the most recent available quarterly or annual
balance sheet, after giving pro forma effect to (x) the Incurrence of such
Debt and any other Debt Incurred or repaid since such balance sheet date, (y) the
issuance of any Capital Stock (other than Disqualified Stock) of Parent since
such balance sheet date, including the issuance of any Capital Stock to be
issued concurrently with the Incurrence of such Debt, and (z) the receipt
and application of the net proceeds of such Debt or Capital Stock, as the case
may be, is less than 2.25 to 1.0.

 

(b)           Notwithstanding the
foregoing limitation, Parent or any Restricted Subsidiary (other than the
Issuer or any Issuer Restricted Subsidiary, except to the extent permitted by Section 1011)
may Incur any and all of the following (each of which shall be given
independent effect):

 

(i)          Debt under the
Original Securities (including any Exchange Securities issued in exchange for
such Original Securities), any Note Guarantee in respect of the Original
Securities (including any Exchange Securities issued in exchange for such
Original Securities) or any Offering Proceeds Note Guarantee in respect of the
Offering Proceeds Note;

 

(ii)         Debt under
Credit Facilities in an aggregate principal amount outstanding or available
(together with the sum of (A) the amount of any outstanding Debt Incurred
pursuant to clause (ii) of paragraph (b) of Section 1011, plus (B) the
amount of all refinancing Debt outstanding or available pursuant to clause (vi) of
paragraph (b) of Section 1011 in respect of Debt previously Incurred
pursuant to clause (ii) of paragraph (b) of Section 1011, plus (C) the
amount of all refinancing Debt outstanding or available pursuant to clause (viii) below
in respect of Debt previously Incurred pursuant to this clause (ii)) at any one
time not to exceed the greater of (x) $1,680,000,000 and (y) 2.00 

 

71

 

times Pro Forma Consolidated
Cash Flow Available for Fixed Charges of Parent and its Restricted Subsidiaries
for the four full fiscal quarters next preceding the Incurrence of such Debt
for which consolidated financial statements are available, which amount shall
be permanently reduced by the amount of Net Available Proceeds used to repay
Debt under the Credit Facilities or any refinancing Debt in respect of the
Credit Facilities Incurred pursuant to clause (vi) of paragraph (b) of
Section 1011 or clause (viii) below), and not reinvested in
Telecommunications/IS Assets or used to purchase Securities or repay other
Debt, pursuant to and as permitted by Section 1016;

 

(iii)        Purchase Money
Debt; provided, however, that the amount of such Purchase Money
Debt does not exceed 100% of the cost of the construction, installation, acquisition,
lease, development or improvement of the applicable Telecommunications/IS
Assets;

 

(iv)        Subordinated
Debt of Parent; provided, however, that the aggregate principal
amount (or, in the case of Debt issued at a discount, the Accreted Value) of such
Debt, together with any other outstanding Debt Incurred pursuant to this clause
(iv), shall not exceed $500,000,000 at any one time (which amount shall be
permanently reduced by the amount of Net Available Proceeds used to repay
Subordinated Debt of Parent, and not reinvested in Telecommunications/IS Assets
or used to purchase Securities or repay other Debt, pursuant to and as
permitted by Section 1016), except to the extent such Debt in excess of
$500,000,000 (A) is subordinated to all other Debt of Parent other than
Debt Incurred pursuant to this clause (iv) in excess of such $500,000,000
limitation, (B) does not provide for the payment of cash interest on such
Debt prior to the Stated Maturity of the Securities and (C) (1) does
not provide for payments of principal of such Debt at stated maturity or by way
of a sinking fund applicable thereto or by way of any mandatory redemption,
defeasance, retirement or repurchase thereof by Parent (including any
redemption, retirement or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by virtue of the
acceleration of any payment with respect to such Debt upon any event of default
thereunder), in each case on or prior to the Stated Maturity of the Securities,
and (2) does not permit redemption or other retirement (including pursuant
to an offer to purchase made by Parent but excluding through conversion into
capital stock of Parent, other than Disqualified Stock, without any payment by
Parent or its Restricted Subsidiaries to the holders thereof) of such Debt at
the option of the holder thereof on or prior to the Stated Maturity of the
Securities;

 

(v)         Debt
outstanding on the Measurement Date;

 

(vi)        Debt owed by
Parent to any Restricted Subsidiary or Debt owed by a Restricted Subsidiary to
Parent or a Restricted Subsidiary; provided, however, that (A) any
Person that Incurs Debt owed to Parent or a Sister Restricted Subsidiary
pursuant to this clause (vi) is a Guarantor and an Offering Proceeds Note
Guarantor, (B) (x) upon the transfer, conveyance or other disposition
by such Restricted Subsidiary or Parent of any Debt so permitted to a Person
other than Parent or another Restricted Subsidiary of Parent or (y) if for
any reason such Restricted Subsidiary ceases to be a Restricted Subsidiary, 

 

72

 

the provisions of this
clause (vi) shall no longer be applicable to such Debt and such Debt shall
be deemed to have been Incurred by the issuer thereof at the time of such
transfer, conveyance or other disposition or when such Restricted Subsidiary
ceases to be a Restricted Subsidiary; and (C) the payment obligation of
such Debt (if clause (A) above applies) is expressly subordinated in any
bankruptcy, liquidation or winding up proceeding of the obligor to the prior
payment in full in cash of all obligations with respect to the Offering
Proceeds Note Guarantee of such Offering Proceeds Note Guarantor; and provided
further, however, that a Foreign Restricted Subsidiary need not
become a Guarantor or an Offering Proceeds Note Guarantor pursuant to clause (A) above
until such time and only so long as such Foreign Restricted Subsidiary
Guarantees any other Debt of Parent or any Domestic Restricted Subsidiary;

 

(vii)       Debt Incurred
by a Person prior to the time (A) such Person became a Restricted
Subsidiary, (B) such Person merges into or consolidates with a Restricted
Subsidiary or (C) another Restricted Subsidiary merges into or
consolidates with such Person (in a transaction in which such Person becomes a
Restricted Subsidiary), which Debt was not Incurred in anticipation of such
transaction and was outstanding prior to such transaction;

 

(viii)      Debt Incurred
to renew, extend, refinance, defease, repay, prepay, repurchase, redeem,
retire, exchange or refund (each, a “refinancing”) Debt Incurred pursuant to
paragraph (a) above or clause (i), (ii), (iii), (v), (vii) or (xii)
of this paragraph (b) or this clause (viii), in an aggregate principal
amount (or if issued at a discount, the then-Accreted Value) not to exceed the
aggregate principal amount (or if issued at a discount, the then-Accreted
Value) of and accrued interest on the Debt so refinanced (which shall include
Debt that is or has been refinanced within 45 days before or after such Incurrence
as part of a financing strategy approved by the Board of Directors of Parent)
plus the amount of any premium required to be paid in connection with such
refinancing pursuant to the terms of the Debt so refinanced or the amount of
any premium reasonably determined by the Board of Directors of Parent as
necessary to accomplish such refinancing by means of a tender offer or
privately negotiated repurchase, plus the expenses of Parent Incurred in
connection with such refinancing; provided, however, that (A) if
the Person that originally Incurred the Debt to be refinanced became, or would
have been required to become if not already, a Guarantor or an Offering
Proceeds Note Guarantor as a result of the Incurrence of the Debt being
refinanced in accordance with this covenant, (1) the Person that Incurs
the refinancing Debt pursuant to this clause (viii) shall be a Guarantor
and an Offering Proceeds Note Guarantor and (2) if the Debt to be
refinanced is subordinated to the Offering Proceeds Note Guarantee of such
Offering Proceeds Note Guarantor, the refinancing Debt shall be subordinated to
the same extent to the Offering Proceeds Note Guarantee of the Offering
Proceeds Note Guarantor Incurring such refinancing Debt, (B) the
refinancing Debt shall not be senior in right of payment to the Debt that is
being refinanced and (C) in the case of any refinancing of Debt Incurred
pursuant to paragraph (a) above or clause (i), (v), (vii) or (xii)
or, if such Debt previously refinanced Debt Incurred pursuant to any such
clause, this clause (viii), the refinancing Debt by its terms, or by the terms
of any 

 

73

 

agreement or instrument
pursuant to which such Debt is issued, (x) does not provide for payments
of principal of such Debt at stated maturity or by way of a sinking fund
applicable thereto or by way of any mandatory redemption, defeasance,
retirement or repurchase thereof by Parent or any Restricted Subsidiary
(including any redemption, retirement or repurchase which is contingent upon
events or circumstances, but excluding any retirement required by virtue of the
acceleration of any payment with respect to such Debt upon any event of default
thereunder), in each case prior to the time the same are required by the terms
of the Debt being refinanced and (y) does not permit redemption or other
retirement (including pursuant to an offer to purchase made by Parent or any
Restricted Subsidiary) of such Debt at the option of the holder thereof prior
to the time the same are required by the terms of the Debt being refinanced,
other than, in the case of clause (x) or (y), any such payment, redemption
or other retirement (including pursuant to an offer to purchase made by Parent)
which is conditioned upon a change of control pursuant to provisions
substantially similar to those described under Section 1009 or upon an
asset sale pursuant to provisions substantially similar to those described
under Section 1016;

 

(ix)                          Debt (A) in
respect of performance, surety or appeal bonds, Guarantees, letters of credit
or reimbursement obligations Incurred or provided in the ordinary course of
business securing the performance of contractual, franchise, lease,
self-insurance or license obligations and not in connection with the Incurrence
of Debt or (B) in respect of customary agreements providing for
indemnification, adjustment of purchase price after closing, or similar
obligations, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any such obligations of Parent or any of its
Restricted Subsidiaries pursuant to such agreements, Incurred in connection
with the disposition of any business, assets or Restricted Subsidiary of Parent
(other than Guarantees of Indebtedness Incurred by any Person acquiring all or
any portion of such business, assets or Restricted Subsidiary of Parent for the
purpose of financing such acquisition) and in an aggregate principal amount not
to exceed the gross proceeds actually received by Parent or any Restricted
Subsidiary in connection with such disposition;

 

(x)                             Debt consisting
of Permitted Interest Rate or Currency Protection Agreements;

 

(xi)                          Debt not
otherwise permitted to be Incurred pursuant to clauses (i) through (x) above
or clause (xii) below, which, together with any other outstanding Debt Incurred
pursuant to this clause (xi), has an aggregate principal amount not in excess
of $50,000,000 at any time outstanding; and

 

(xii)                       Issue Date
Purchase Money Debt and Debt under the Existing Notes and the related
indentures and any restricted subsidiary guarantees issued prior to the Issue
Date in accordance with such related indentures.

 

(c)           Notwithstanding
any other provision of this Section 1010, the maximum amount of Debt that
Parent or any Restricted Subsidiary may Incur pursuant to this Section 1010
shall 

 

74

 

not be deemed to be exceeded due solely to the result of fluctuations
in the exchange rates of currencies.

 

(d)           For
purposes of determining any particular amount of Debt under this Section 1010,
(i) Guarantees, Liens or obligations with respect to letters of credit
supporting Debt otherwise included in the determination of such particular
amount shall not be included and (ii) any Liens granted for the benefit of
the Securities pursuant to the provisions referred to in Section 1014
shall not be treated as Debt.  For
purposes of determining compliance with this Section 1010, in the event
that an item of Debt meets the criteria of more than one of the types of Debt
described in the above clauses, Parent, in its sole discretion, shall classify
such item of Debt and only be required to include the amount and type of such
Debt in one of such clauses.

 

SECTION 1011.     Limitation
on Debt of the Issuer and Issuer Restricted Subsidiaries.  (a)  The Issuer shall not, and
shall not permit any Issuer Restricted Subsidiary to, directly or indirectly,
Incur any Debt; provided, however, that (i) the Issuer or (ii) any
Issuer Restricted Subsidiary may incur any Debt if, after giving pro forma
effect to such Incurrence and the receipt and application of the net proceeds
thereof, no Default or Event of Default would occur as a consequence of such
Incurrence or be continuing following such Incurrence and the Issuer Debt Ratio
would be less than 4.25 to 1.0; provided, however, that any
Issuer Restricted Subsidiary that Incurs Debt pursuant to this paragraph (a) is
a Guarantor and an Offering Proceeds Note Guarantor.

 

(b) Notwithstanding the foregoing limitation,
the Issuer or any Issuer Restricted Subsidiary may Incur any and all of the
following (each of which shall be given independent effect):

 

(i) Debt of the Issuer or any Issuer
Restricted Subsidiary under the Original Securities (including any Exchange
Securities issued in exchange for such Original Securities), any Note Guarantee
in respect of the Original Securities (including any Exchange Securities issued
in exchange for such Original Securities) or any Offering Proceeds Note
Guarantee in respect of the Offering Proceeds Note;

 

(ii) Debt of the Issuer or any Issuer
Restricted Subsidiary under Credit Facilities in an aggregate principal amount
outstanding or available (together with the sum of (A) the amount of any
outstanding Debt Incurred pursuant to clause (ii) of paragraph (b) of
Section 1010, plus (B) the amount of all refinancing Debt outstanding
or available pursuant to clause (viii) of paragraph (b) of Section 1010
in respect of Debt previously Incurred pursuant to clause (ii) of
paragraph (b) of Section 1010, plus (C) the amount of all
refinancing Debt outstanding or available pursuant to clause (vi) below in
respect of Debt previously Incurred pursuant to this clause (ii)) at any one
time not to exceed the greater of (x) $1,680,000,000 and (y) 2.00 times
Pro Forma Consolidated Cash Flow Available for Fixed Charges of Parent and its
Restricted Subsidiaries for the four full fiscal quarters next preceding the
Incurrence of such Debt for which consolidated financial statements are
available, which amount shall be permanently reduced by the amount of Net
Available Proceeds used to repay Debt under the Credit Facilities (or any
refinancing Debt in respect of the Credit Facilities Incurred pursuant to
clause (viii) of paragraph 

 

75

 

(b) of Section 1010
or clause (vi) below), and not reinvested in Telecommunications/IS Assets
or used to purchase Securities or repay other Debt, pursuant to and as
permitted by Section 1016;

 

(iii) Debt of the Issuer or any Issuer
Restricted Subsidiary outstanding on the Measurement Date;

 

(iv) Debt owed by the Issuer to a
Restricted Subsidiary, Debt owed by an Issuer Restricted Subsidiary to Parent
or a Restricted Subsidiary (including Debt owed by an Issuer Restricted
Subsidiary to another Issuer Restricted Subsidiary), and Debt with an aggregate
principal amount not in excess of $10,000,000 at any time outstanding owed by
the Issuer to Parent or any Sister Restricted Subsidiary; provided, however,
that (A) any Issuer Restricted Subsidiary that Incurs Debt owed to Parent
or a Sister Restricted Subsidiary pursuant to this clause (iv) is a
Guarantor and an Offering Proceeds Note Guarantor, (B)(x) upon the
transfer, conveyance or other disposition by such Issuer Restricted Subsidiary
or the Issuer of any Debt so permitted to a Person other than the Issuer or
another Issuer Restricted Subsidiary or (y) if for any reason such Issuer
Restricted Subsidiary ceases to be an Issuer Restricted Subsidiary, the
provisions of this clause (iv) shall no longer be applicable to such Debt
and such Debt shall be deemed to have been Incurred by the issuer thereof at
the time of such transfer, conveyance or other disposition or when such Issuer
Restricted Subsidiary ceases to be an Issuer Restricted Subsidiary and (C) the
payment obligation of such Debt (if clause (A) above applies) is expressly
subordinated in any bankruptcy, liquidation or winding up proceeding of the
obligor to the prior payment in full in cash of all obligations with respect to
the Securities or the Offering Proceeds Note Guarantee of such Offering
Proceeds Note Guarantor, respectively; and provided further, however,
that a Foreign Restricted Subsidiary need not become a Guarantor or an Offering
Proceeds Note Guarantor pursuant to clause (A) above until such time and
only so long as such Foreign Restricted Subsidiary Guarantees any other Debt of
Parent or any Domestic Restricted Subsidiary;

 

(v) Debt Incurred by a Person (other
than Parent or any Sister Restricted Subsidiary) prior to the time (A) such
Person became an Issuer Restricted Subsidiary, (B) such Person merges into
or consolidates with an Issuer Restricted Subsidiary or (C) an Issuer
Restricted Subsidiary merges into or consolidates with such Person (in a
transaction in which such Person becomes an Issuer Restricted Subsidiary),
which Debt was not Incurred in anticipation of such transaction and was
outstanding prior to such transaction; provided, however, that
after giving effect to the Incurrence of any Debt pursuant to this clause (v), (A) either
(1) the Issuer could Incur at least $1.00 of additional Debt pursuant to
paragraph (a) above computed using “5.0 to 1.0” rather than “4.25 to 1.0”
as it appears therein or (2) the ratio computed pursuant to paragraph (a) above
would be no higher than before giving effect to the Incurrence of such Debt and
(B) and such Person or the Issuer Restricted Subsidiary into which such
Person merges or consolidates is a Guarantor and an Offering Proceeds Note
Guarantor;

 

(vi) Debt of the Issuer or any Issuer
Restricted Subsidiary Incurred to renew, extend, refinance, defease, repay,
prepay, repurchase, redeem, retire, exchange or refund (each, a “refinancing”)
Debt of the Issuer or any Issuer Restricted Subsidiary Incurred pursuant to
paragraph (a) above or clause (i), (ii), (iii), (v), (x) or (xi) of
this paragraph (b) or this clause (vi), 

 

76

 

in an aggregate principal
amount (or if issued at a discount, the then-Accreted Value) not to exceed the
aggregate principal amount (or if issued at a discount, the then-Accreted
Value) of and accrued interest on the Debt so refinanced plus the amount of any
premium required to be paid in connection with such refinancing pursuant to the
terms of the Debt so refinanced or the amount of any premium reasonably
determined by the Board of Directors of Parent as necessary to accomplish such
refinancing by means of a tender offer or privately negotiated repurchase, plus
the expenses of the Issuer Incurred in connection with such refinancing; provided,
however, that (A) if the Person that originally Incurred the Debt
to be refinanced became, or would have been required to become if not already,
a Guarantor or an Offering Proceeds Note Guarantor as a result of the
Incurrence of the Debt being refinanced in accordance with this covenant, (1) the
Person that Incurs the refinancing Debt pursuant to this clause (vi) (if
not the Issuer) shall be a Guarantor and an Offering Proceeds Note Guarantor
and (2) if the Debt to be refinanced is subordinated to the Offering
Proceeds Note Guarantee of such Offering Proceeds Note Guarantor, the
refinancing Debt shall be subordinated to the same extent to the Offering
Proceeds Note Guarantee of the Offering Proceeds Note Guarantor Incurring such
refinancing Debt, (B) the refinancing Debt shall not be senior in right of
payment to the Debt that is being refinanced and (C) in the case of any
refinancing of Debt Incurred pursuant to paragraph (a) above or clause
(i), (v), (x) or (xi) or, if such Debt previously refinanced Debt Incurred
pursuant to any such clause, this clause (vi), the refinancing Debt by its
terms, or by the terms of any agreement or instrument pursuant to which such
Debt is issued, (x) does not provide for payments of principal of such
Debt at stated maturity or by way of a sinking fund applicable thereto or by
way of any mandatory redemption, defeasance, retirement or repurchase thereof
by the Issuer or any Issuer Restricted Subsidiary (including any redemption,
retirement or repurchase which is contingent upon events or circumstances, but
excluding any retirement required by virtue of the acceleration of any payment
with respect to such Debt upon any event of default thereunder), in each case
prior to the time the same are required by the terms of the Debt being refinanced
and (y) does not permit redemption or other retirement (including pursuant
to an offer to purchase made by the Issuer or an Issuer Restricted Subsidiary)
of such Debt at the option of the holder thereof prior to the time the same are
required by the terms of the Debt being refinanced, other than, in the case of
clause (x) or (y), any such payment, redemption or other retirement
(including pursuant to an offer to purchase made by the Issuer) which is
conditioned upon a change of control pursuant to provisions substantially
similar to those described under Section 1009 or upon an asset sale
pursuant to provisions substantially similar to those described under Section 1016;

 

(vii) Debt of the Issuer or any Issuer
Restricted Subsidiary (A) in respect of performance, surety or appeal
bonds, Guarantees, letters of credit or reimbursement obligations Incurred or
provided in the ordinary course of business securing the performance of
contractual, franchise, lease, self-insurance or license obligations and not in
connection with the Incurrence of Debt or (B) in respect of customary
agreements providing for indemnification, adjustment of purchase price after
closing, or similar obligations, or from Guarantees or letters of credit,
surety bonds or performance bonds securing any such obligations of the Issuer
or any Issuer Restricted Subsidiary pursuant to such agreements, Incurred in
connection with the disposition of any business, assets or Issuer Restricted
Subsidiary (other than Guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or Issuer Restricted 

 

77

 

Subsidiary for the purpose
of financing such acquisition) and in an aggregate principal amount not to
exceed the gross proceeds actually received by the Issuer or any Issuer
Restricted Subsidiary in connection with such disposition;

 

(viii) Debt of the Issuer or any Issuer
Restricted Subsidiary consisting of Permitted Interest Rate or Currency
Protection Agreements;

 

(ix) Debt of any Foreign Restricted
Subsidiary of the Issuer not otherwise permitted to be Incurred pursuant to
clause (i) through (viii) above or clause (x) below, which,
together with any other outstanding Debt Incurred pursuant to this clause (ix) has
an aggregate principal amount not in excess of $100,000,000 at any time
outstanding;

 

(x) Issue Date Purchase Money Debt
initially Incurred by the Issuer or any Issuer Restricted Subsidiary or another
Person that became an Issuer Restricted Subsidiary on or before the Issue Date;
and

 

(xi) Debt under the 12.25% Notes, the 9.25%
Notes, the 2015 Floating Rate Notes and the 8.75% Notes issued on or prior to
the Issue Date.

 

(c) Notwithstanding any other provision
of this Section 1011, the maximum amount of Debt the Issuer or any Issuer
Restricted Subsidiary may Incur pursuant to this Section 1011 shall not be
deemed to be exceeded due solely to the result of fluctuations in the exchange
rates of currencies.

 

(d) For purposes of determining any
particular amount of Debt under this Section 1011, (1) Guarantees
(other than Guarantees of Debt of Parent or any Sister Restricted Subsidiary
that are not Guarantees of Debt Incurred by Parent or any Sister Restricted
Subsidiary pursuant to clause (ii) of paragraph (b) of Section 1010),
Liens or obligations with respect to letters of credit supporting Debt
otherwise included in the determination of such particular amount shall not be
included and (2) any Liens granted for the benefit of the Securities
pursuant to the provisions referred to in Section 1014 described below
shall not be treated as Debt. For purposes of determining compliance with this Section 1011,
(1) any Debt outstanding under the Existing Credit Facility will be
treated as Incurred on the Issue Date pursuant to clause (ii) of paragraph
(b) of this covenant and (2) in the event that an item of Debt meets
the criteria of more than one of the types of Debt described in the above
clauses, the Issuer, in its sole discretion, shall classify such item of Debt
and only be required to include the amount and type of such Debt in one of such
clauses.

 

SECTION 1012.     Limitation
on Restricted Payments.  (a)  Parent
(i) shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, declare or pay any dividend, or make any distribution, in
respect of its Capital Stock or to the holders thereof, excluding any dividends
or distributions which are made solely to Parent or a Restricted Subsidiary
(and, if such Restricted Subsidiary is not a Wholly Owned Subsidiary, to the
other stockholders of such Restricted Subsidiary on a pro rata basis or on a
basis that results in the receipt by Parent or a Restricted Subsidiary of
dividends or distributions of greater value than it would receive on a pro rata
basis) or any dividends or distributions payable solely in shares of Capital
Stock of Parent 

 

78

 

(other than Disqualified Stock) or in options, warrants or other rights
to acquire Capital Stock of Parent (other than Disqualified Stock); (ii) shall
not, and shall not permit any Restricted Subsidiary to, purchase, redeem, or
otherwise retire or acquire for value (x) any Capital Stock of Parent or
any Restricted Subsidiary of Parent or (y) any options, warrants or rights
to purchase or acquire shares of Capital Stock of Parent or any Restricted
Subsidiary or any securities convertible or exchangeable into shares of Capital
Stock of Parent or any Restricted Subsidiary, except, in any such case, any
such purchase, redemption or retirement or acquisition for value (A) paid
to Parent or a Restricted Subsidiary (or, in the case of any such purchase,
redemption or other retirement or acquisition for value with respect to a
Restricted Subsidiary that is not a Wholly Owned Subsidiary, to the other
stockholders of such Restricted Subsidiary on a pro rata basis or on a basis
that results in the receipt by Parent or a Restricted Subsidiary of payments of
greater value than it would receive on a pro rata basis) or (B) paid
solely in shares of Capital Stock (other than Disqualified Stock) of Parent; (iii) shall
not make, or permit any Restricted Subsidiary to make, any Investment (other
than an Investment in Parent or a Restricted Subsidiary or a Permitted
Investment) in any Person, including the Designation of any Restricted
Subsidiary as an Unrestricted Subsidiary, or the Revocation of any such
Designation, according to Section 1019; (iv) shall not, and shall not
permit any Restricted Subsidiary to, redeem, defease, repurchase, retire or
otherwise acquire or retire for value, prior to any scheduled maturity,
repayment or sinking fund payment, Debt of Parent which is subordinate in right
of payment to the Parent Guarantee or Debt of any Restricted Subsidiary which
is subordinate in right of payment to the Securities (in the case of the
Issuer) or the Note Guarantee (in the case of Restricted Subsidiaries other
than the Issuer) of such Restricted Subsidiary (other than any redemption,
defeasance, repurchase, retirement or other acquisition or retirement for value
made in anticipation of satisfying a scheduled maturity, repayment or sinking
fund obligation due within one year thereof); and (v) shall not, and shall
not permit any Restricted Subsidiary to, issue, transfer, convey, sell or otherwise
dispose of Capital Stock of any Restricted Subsidiary to a Person other than
Parent or another Restricted Subsidiary if the result thereof is that such
Restricted Subsidiary shall cease to be a Restricted Subsidiary, in which event
the amount of such “Restricted Payment” shall be the Fair Market Value of the
remaining interest, if any, in such former Restricted Subsidiary held by Parent
and the other Restricted Subsidiaries (each of clauses (i) through (v) being
a “Restricted Payment”) if: (1) an Event of Default, or an event that with
the passing of time or the giving of notice, or both, would constitute an Event
of Default, shall have occurred and be continuing, or (2) upon giving
effect to such Restricted Payment, Parent could not Incur at least $1.00 of
additional Debt pursuant to paragraph (a) of Section 1010, or (3) upon
giving effect to such Restricted Payment, the aggregate of all Restricted
Payments made on or after the Measurement Date, including Restricted Payments
made pursuant to clause (A) or (B) of the proviso at the end of this
sentence, and Permitted Investments made on or after the Measurement Date
pursuant to clause (i) or (j) of the definition thereof (the amount
of any such Restricted Payment or Permitted Investment, if made other than in
cash, to be based upon Fair Market Value) exceeds the sum of: (a) 50% of
cumulative Consolidated Net Income of Parent and its Restricted Subsidiaries
(or, in the case that Consolidated Net Income of Parent and its Restricted
Subsidiaries shall be negative, 100% of such negative amount) since the end of
the last full fiscal quarter prior to the Measurement Date through the last day
of the last full fiscal quarter ending prior to the date of such Restricted
Payment for which consolidated financial statements are available and (b) plus,
in the case of any 

 

79

 

Revocation made after the Measurement Date, an amount equal to the
lesser of the portion (proportionate to Parent’s equity interest in the
Subsidiary to which such Revocation relates) of the Fair Market Value of the
net assets of such Subsidiary at the time of Revocation and the amount of
Investments previously made (and treated as a Restricted Payment) by Parent or
any Restricted Subsidiary in such Subsidiary; provided, however,
that Parent or a Restricted Subsidiary of Parent may, without regard to the
limitations in clause (3) but subject to clauses (1) and (2), make (A) Restricted
Payments in an aggregate amount not to exceed the sum of $50,000,000 and the
aggregate net cash proceeds received after the Measurement Date (i) as
capital contributions to Parent, from the issuance (other than to a Subsidiary
or an employee stock ownership plan or trust established by Parent or any such
Subsidiary for the benefit of their employees) of Capital Stock (other than
Disqualified Stock) of Parent, and (ii) from the issuance or sale of Debt
of Parent or any Restricted Subsidiary (other than to a Subsidiary, Parent or
an employee stock ownership plan or trust established by Parent or any such
Subsidiary for the benefit of their employees) that after the Measurement Date
has been converted into or exchanged for Capital Stock (other than Disqualified
Stock) of Parent and (B) Investments in Persons engaged in the Telecommunications/IS
Business in an aggregate amount not to exceed the after-tax gain on the sale,
after the Measurement Date, of Special Assets to the extent sold for cash, Cash
Equivalents, Telecommunications/IS Assets or the assumption of Debt of Parent
or any Restricted Subsidiary (other than Debt that is subordinated to the
Securities, the Offering Proceeds Note or any applicable Note Guarantee or
Offering Proceeds Note Guarantee) and release of Parent and all Restricted
Subsidiaries from all liability on the Debt assumed.  The aggregate net cash proceeds referred to
in the immediately preceding clauses (A)(i) and (A)(ii) shall not be
utilized to make Restricted Payments pursuant to such clauses to the extent
such proceeds have been utilized to make Permitted Investments under clause (i) of
the definition of “Permitted Investments.”

 

(b)           Notwithstanding
the foregoing limitation, (i) Parent may pay any dividend on Capital Stock
of any class of Parent within 60 days after the declaration thereof if, on
the date when the dividend was declared, Parent could have paid such dividend
in accordance with the foregoing provisions; provided, however,
that at the time of such payment of such dividend, no other Event of Default
shall have occurred and be continuing (or result therefrom); (ii) Parent
may repurchase any shares of its Common Stock or options to acquire its Common
Stock from Persons who were formerly directors, officers or employees of Parent
or any of its Subsidiaries or other Affiliates in an amount not to exceed
$3,000,000 in any 12-month period; (iii) Parent and any Restricted
Subsidiary may refinance any Debt otherwise permitted by clause (viii) of
paragraph (b) of Section 1010 or clause (vi) of paragraph (b) of
Section 1011; (iv) Parent and any Restricted Subsidiary may retire or
repurchase any Capital Stock of Parent or of any Restricted Subsidiary or any
Subordinated Debt of Parent in exchange for, or out of the proceeds of
substantially concurrent sale (other than to a Subsidiary of Parent or an
employee stock ownership plan or trust established by Parent or any such
Subsidiary for the benefit of their employees) of, Capital Stock (other than
Disqualified Stock) of Parent; provided, however, that the
proceeds from any such exchange or sale of Capital Stock shall be excluded from
any calculation pursuant to clause (A)(i) in the proviso at the end
of paragraph (a) above or pursuant to clause (b) of the
definition of “Invested Capital”; and (v) Parent may pay cash dividends in
any amount not in excess of $50,000,000 in any 12-month period in respect of
Preferred Stock of

 

80

 

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

 

(c)           The
Issuer may not, and may not permit any Issuer Restricted Subsidiary to, pay any
dividend or make any distribution in respect of shares of its Capital Stock
held by Parent or a Sister Restricted Subsidiary (whether in cash, securities
or other Property) or any payment (whether in cash, securities or other
Property) on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of Capital Stock (all such dividends,
distributions and payments being referred to herein as “Parent Transfers”),
other than (i) Parent Transfers at such times and in such amounts as shall
be necessary to permit Parent to pay administrative expenses attributable to
the operations of its Restricted Subsidiaries, (ii) Parent Transfers at
such times and in such amounts as are sufficient for Parent to make the timely
payment of interest, premium (if any) and principal (whether at stated
maturity, by way of a sinking fund applicable thereto, by way of any mandatory
redemption, defeasance, retirement or repurchase thereof, including upon the
occurrence of designated events or circumstances or by virtue of acceleration
upon an event of default, or by way of redemption or retirement at the option
of the holder of the Debt of Parent, including pursuant to offers to purchase)
according to the terms of any Debt of Parent, (iii) Parent Transfers (A) to
permit Parent to satisfy its obligations in respect of stock option plans or
other benefit plans for management or employees of Parent and its Subsidiaries,
(B) to permit Parent to pay dividends on Preferred Stock of Parent in an
amount not to exceed the aggregate net cash proceeds received by Parent (1) after
September 30, 1999, from the issuance of Capital Stock, and (2) from
the issuance or sale of Debt of Parent or any Restricted Subsidiary that after September 30,
1999, has been converted into or exchanged for Capital Stock of Parent, (C) in
an annual amount not to exceed 50% of Parent’s Consolidated Net Income for the
prior fiscal year and (D) Parent Transfers in amounts not to exceed the
amount required by Parent to pay accrued and unpaid interest on any Debt of
Parent due upon the conversion, exchange or purchase of such Debt into, for or
with Capital Stock of Parent and (iv) additional Parent Transfers after October 1,
2003 in an aggregate amount not to exceed $50,000,000 in the aggregate.

 

SECTION 1013.     Limitation
on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.

 

(a)           Parent
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction (other than pursuant to law or
regulation) on the ability of any Restricted Subsidiary (i) to pay
dividends (in cash or otherwise) or make any other distributions in respect of
its Capital Stock owned by Parent or any other Restricted Subsidiary or pay any
Debt or other obligation owed to Parent or any other Restricted Subsidiary, (ii) to
make loans or advances to Parent or any other Restricted Subsidiary or (iii) to
transfer any of its Property to Parent or any other Restricted Subsidiary.

 

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(b)           Notwithstanding
the foregoing limitation, Parent may, and may permit any Restricted Subsidiary
to, create or otherwise cause or suffer to exist (i) any encumbrance or
restriction pursuant to any agreement in effect on the Issue Date, (ii) any
customary (as conclusively determined in good faith by the Chief Financial
Officer of Parent) encumbrance or restriction applicable to a Restricted
Subsidiary that is contained in an agreement or instrument governing or
relating to Debt contained in any Qualified Credit Facility or Purchase Money
Debt; provided, however, that such encumbrances and restrictions
permit the distribution of funds to the Issuer in an amount sufficient for the
Issuer to make the timely payment of interest, premium (if any) and principal
(whether at stated maturity, by way of a sinking fund applicable thereto, by
way of any mandatory redemption, defeasance, retirement or repurchase thereof,
including upon the occurrence of designated events or circumstances or by
virtue of acceleration upon an event of default, or by way of redemption or
retirement at the option of the holder of the Debt, including pursuant to
offers to purchase) according to the terms of this Indenture and the Securities
and other Debt that is solely an obligation of the Issuer, but provided
further, however, that such agreement may nevertheless contain
customary (as so determined) net worth, leverage, invested capital and other
financial covenants, customary (as so determined) covenants regarding the
merger of or sale of all or any substantial part of the assets of Parent or any
Restricted Subsidiary, customary (as so determined) restrictions on
transactions with affiliates and customary (as so determined) subordination
provisions governing Debt owed to Parent or any Restricted Subsidiary, (iii) any
encumbrance or restriction pursuant to an agreement relating to any Acquired
Debt, which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person so acquired, (iv) any
encumbrance or restriction pursuant to an agreement relating to any Debt of a
Foreign Restricted Subsidiary Incurred pursuant to clause (ix) of
paragraph (b) of Section 1011 that is applicable only to such Foreign
Restricted Subsidiary and its Subsidiaries, (v) any encumbrance or
restriction pursuant to an agreement to effecting a refinancing of Debt
Incurred pursuant to an agreement referred to in clause (i), (ii) or (iii) of
this paragraph (b); provided, however, that the provisions
contained in such agreement relating to such encumbrance or restriction are no
more restrictive (as so determined) in any material respect than the provisions
contained in the agreement the subject thereof, (vi) in the case of clause
(iii) of paragraph (a) above, any encumbrance or restriction
contained in any security agreement (including a Capital Lease Obligation)
securing Debt of Parent or a Restricted Subsidiary otherwise permitted under
this Indenture, but only to the extent such restrictions restrict the transfer
of the Property subject to such security agreement, (vii) in the case of
clause (iii) of paragraph (a) above, customary provisions (A) that
restrict the subletting, assignment or transfer of any Property that is a
lease, license, conveyance or similar contract, (B) contained in asset
sale or other asset disposition agreements limiting the transfer of the
Property being sold or disposed of pending the closing of such sale or
disposition or (C) arising or agreed to in the ordinary course of
business, not relating to any Debt, and that do not, individually or in the
aggregate, detract from the value of Property of Parent or any Restricted
Subsidiary in any manner material to Parent or any Restricted Subsidiary, (viii) any
encumbrance or restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement which has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or Property of
such Restricted Subsidiary; provided, however, that the
consummation of such transaction would not result in a Default or an Event of
Default, that such restriction terminates if such transaction is abandoned and
that the consummation or abandonment of such transaction 

 

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occurs within one year of the date such agreement was entered into, and
(ix) any encumbrance or restriction pursuant to this Indenture and the
Securities.

 

SECTION 1014.     Limitation
on Liens.

 

Parent shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, Incur or suffer to exist any
Lien on or with respect to any Property now owned or acquired after the Issue
Date to secure any Debt without making, or causing such Restricted Subsidiary
to make, effective provision for securing the Securities (x) equally and
ratably with such Debt as to such Property for so long as such Debt will be so
secured or (y) in the event such Debt is Debt of the Issuer, Parent or a
Restricted Subsidiary that is a Guarantor and such Debt is subordinate in right
of payment to the Securities, the Parent Guarantee or the applicable Note
Guarantee, prior to such Debt as to such Property for so long as such Debt will
be so secured.  The holders of such other
secured Debt may exclusively control the disposition of the property subject to
the Lien.

 

The foregoing restrictions shall not apply
to:  (i) Liens existing on the Issue
Date and securing Debt outstanding on the Issue Date or Liens Incurred on or
after the Issue Date pursuant to any Credit Facility to secure Debt permitted
to be Incurred pursuant to clause (ii) of paragraph (b) under Section 1010
or clause (ii) of paragraph (b) under Section 1011; (ii) Liens
Incurred on or after the Measurement Date securing Debt of Parent or any
Restricted Subsidiary (other than the Issuer or any Issuer Restricted
Subsidiary) in an amount which, together with the aggregate amount of Debt then
outstanding or available under all Credit Facilities (together with all
refinancing Debt then outstanding or available pursuant to clause (viii) of
paragraph (b) of Section 1010 or clause (vi) of paragraph (b) under
Section 1011 in respect of Debt previously Incurred under Credit
Facilities), does not exceed 2.0 times Pro Forma Consolidated Cash Flow
Available for Fixed Charges of Parent and its Restricted Subsidiaries for the
four full fiscal quarters preceding the Incurrence of such Lien for which
Parent’s consolidated financial statements are available, determined on a pro
forma basis as if such Debt had been Incurred and the proceeds thereof had been
applied at the beginning of such four fiscal quarters; (iii) Liens in
favor of Parent or any Restricted Subsidiary; provided, however,
that any subsequent issue or transfer of Capital Stock or other event that
results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary
or any subsequent transfer of the Debt secured by any such Lien (except to
Parent or a Restricted Subsidiary) shall be deemed, in each case, to constitute
the Incurrence of such Lien by the issuer thereof; (iv) Liens outstanding on
the Issue Date securing Purchase Money Debt and Liens to secure Purchase Money
Debt Incurred after the Issue Date pursuant to clause (iii) of paragraph (b) under
Section 1010, provided that any such Lien may not extend to any
Property other than the Telecommunications/IS Assets installed, constructed,
acquired, leased, developed or improved with the proceeds of such Purchase
Money Debt and any improvements or accessions thereto (it being understood that
all Debt to any single lender or group of related lenders or outstanding under
any single credit facility, and in any case relating to the same group or
collection of Telecommunications/IS Assets financed thereby, shall be
considered a single Purchase Money Debt, whether drawn at one time or from time
to time); (v) Liens to secure Acquired Debt, provided that (a) such
Lien attaches to the acquired Property prior to the time of the acquisition of
such Property and (b) such Lien does not extend to or cover any other
Property; (vi) Liens to secure Debt Incurred to refinance, in whole or in
part, Debt 

 

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secured by any Lien referred
to in the foregoing clauses (i), (iv) and (v) or this clause (vi) so
long as such Lien does not extend to any other Property (other than
improvements and accessions to the original Property) and the principal amount
of Debt so secured is not increased except as otherwise permitted under clause (viii) of
paragraph (b) of Section 1010 or clause (vi) of paragraph (b) of
Section 1011; (vii) Liens Incurred on or after the Measurement Date
not otherwise permitted by the foregoing clauses (i) through (vi) (but
including in the computations of Liens permitted under this clause (vii) Liens
existing on the Issue Date which remain existing at the time of computation
which are otherwise permitted under clause (i)) securing Debt of Parent or any
Restricted Subsidiary (other than the Issuer or any Issuer Restricted
Subsidiary) in an aggregate amount not to exceed 5% of Parent’s Consolidated
Tangible Assets; (viii) Liens on Property of any Non-Telecommunications
Subsidiary; provided, however, that the Incurrence of such Lien
does not require the Person Incurring such Lien to secure any Debt of any
Person other than a Non-Telecommunications Subsidiary; (ix) Liens granted
after the Issue Date pursuant to this Section 1014 to secure the
Securities, the 12.25% Notes, the 9.25% Notes, the 2015 Floating Rate Notes or
the 8.75% Notes; provided, however, that no Lien may be granted
to secure the 12.25% Notes, the 9.25% Notes, the 2015 Floating Rate Notes or
the 8.75% Notes unless a pari  passu Lien on the Property subject
to such Lien is concurrently granted to secure the Securities and remains in
effect for so long as such Lien securing the 12.25% Notes, the 9.25% Notes, the
2015 Floating Rate Notes or the 8.75% Notes; (x) Liens to secure Debt
Incurred pursuant to clause (viii) of paragraph (b) of Section 1011;
(xi) Liens to secure amounts deposited into an escrow account for the benefit
of the holders of the 12.25% Notes, the 9.25% Notes, the 2015 Floating Rate
Notes or the 8.75% Notes in connection with the prepayment by Level 3 LLC of
the intercompany note issued by Level 3 LLC in respect of the proceeds of the
12.25% Notes, the intercompany note issued by Level 3 LLC in respect of the
proceeds of the 9.25% Notes, the intercompany note issued by Level 3 LLC in
respect of the proceeds of the 2015 Floating Rate Notes or the intercompany
note issued by Level 3 LLC in respect of the proceeds of the 8.75% Notes, respectively;
(xii) Liens to secure amounts deposited into an escrow account for the benefit
of the Holders of the Securities in connection with the prepayment of the
Offering Proceeds Note by Level 3 LLC; (xiii) Liens on the Property of a
Foreign Restricted Subsidiary and its Subsidiaries Incurred on or after the
Issue Date securing Debt of such Foreign Restricted Subsidiary Incurred
pursuant to clause (ix) of paragraph (b) of Section 1011; and
(xiv) Permitted Liens.

 

SECTION 1015.     Limitation
on Sale and Leaseback Transactions.

 

Parent shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, enter into, assume, Guarantee
or otherwise become liable with respect to any Sale and Leaseback Transaction,
unless (i) Parent or such Restricted Subsidiary would be entitled to Incur
(a) Debt in an amount equal to the Attributable Value of the Sale and
Leaseback Transaction pursuant to Section 1010 or Section 1011 and (b) a
Lien pursuant to Section 1014, equal in amount to the Attributable Value
of the Sale and Leaseback Transaction, without also securing the Securities,
and (ii) the Sale and Leaseback Transaction is treated as an Asset
Disposition and all of the conditions of Section 1016 (including the
provisions concerning the application of Net Available Proceeds) are satisfied
with respect to such Sale and Leaseback Transaction, treating all of the 

 

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consideration received in
such Sale and Leaseback Transaction as Net Available Proceeds for purposes of
such Section 1016.

 

SECTION 1016.     Limitation
on Asset Dispositions.

 

Parent shall not, and shall not permit any
Restricted Subsidiary to, make any Asset Disposition unless: (i) Parent or
the Restricted Subsidiary, as the case may be, receives consideration for such
disposition at least equal to the Fair Market Value for the Property sold or
disposed of as determined by the Board of Directors of Parent in good faith and
evidenced by a Board Resolution of Parent filed with the Trustee; and (ii) at
least 75% of the consideration for such disposition consists of cash or Cash
Equivalents or the assumption of Debt of the Issuer or any Issuer Restricted
Subsidiary (other than Debt of the Issuer that is subordinated to the
Securities or Debt of any Issuer Restricted Subsidiary that is subordinated to
the Note Guarantee or Offering Proceeds Note Guarantee of such Issuer
Restricted Subsidiary) and release of the Issuer and all Issuer Restricted
Subsidiaries from all liability on the Debt assumed (or if less than 75%, the
remainder of such consideration consists of Telecommunications/IS Assets); provided,
however, that, to the extent such disposition involves Special Assets,
all or any portion of the consideration may, at Parent’s election, consist of
Property other than cash, Cash Equivalents or the assumption of Debt or
Telecommunications/IS Assets.

 

The Net Available Proceeds (or any portion
thereof) from Asset Dispositions may be applied by Parent or a Restricted
Subsidiary, to the extent Parent or such Restricted Subsidiary elects (or is
required by the terms of any Debt): (1) to the permanent repayment or
reduction of Debt then outstanding under any Qualified Credit Facility, to the
extent such Qualified Credit Facility would require such application or prohibit
payments pursuant to the Offer to Purchase described in the following paragraph
(other than Debt owed to Parent or any Affiliate of Parent); or (2) to
reinvest in Telecommunications/IS Assets (including by means of an Investment
in Telecommunications/IS Assets by a Restricted Subsidiary with Net Available
Proceeds received by Parent or another Restricted Subsidiary).

 

Any Net Available Proceeds from an Asset
Disposition not applied in accordance with the preceding paragraph within
360 days (or, in the case of a disposition of Special Assets identified in
clause (a) of the definition thereof in which the Net Available Proceeds
exceed $500,000,000, 540 days) from the date of the receipt of such Net
Available Proceeds shall constitute “Excess Proceeds.”  When the aggregate amount of Excess Proceeds
exceeds $10,000,000, the Issuer (or, in the case of Debt of Parent required or
permitted to be repurchased by Parent, Parent) will be required to make an
Offer to Purchase with such Excess Proceeds on a pro rata basis according to
principal amount (or, in the case of Debt issued at a discount, the
then-Accreted Value) for (x) Outstanding Securities at a price in cash
equal to 100% of the principal amount of the Securities on the purchase date
plus accrued and unpaid interest (if any) thereon (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date) and (y) any other Debt of the Issuer that
is pari  passu with the Securities, any Debt of a Guarantor that
is pari  passu with such Guarantor’s Note Guarantee or any Debt of
a Restricted Subsidiary that is a subsidiary of the Issuer but not a Guarantor,
at a price no greater than 100% of the principal amount thereof plus accrued
and 

 

85

 

unpaid interest (if any) to
the purchase date (or 100% of the then-Accreted Value plus accrued and unpaid
interest (if any) to the purchase date in the case of original issue discount
Debt), to the extent, in the case of this clause (y), required under the terms
thereof (other than Debt owed to Parent or any Affiliate of Parent).  To the extent there are any remaining Excess
Proceeds following the completion of the Offer to Purchase, the Issuer shall
apply such Excess Proceeds to the repayment of other Debt of the Issuer or any
Restricted Subsidiary that is a subsidiary of the Issuer, to the extent
permitted or required under the terms thereof. 
Any other remaining Excess Proceeds may be applied to any use as
determined by Parent which is not otherwise prohibited by this Indenture, and
the amount of Excess Proceeds shall be reset to zero.

 

The Issuer, Parent and the Trustee shall
perform their respective obligations for the Offer to Purchase as specified in
the Offer.  Prior to the Purchase Date,
the Issuer, or Parent, as applicable, shall (i) accept for payment
Securities or portions thereof tendered pursuant to the Offer, (ii) irrevocably
deposit with the Paying Agent (or, if the Issuer, or Parent, as applicable, are
acting as their own Paying Agent, segregate and hold in trust as provided in Section 1003)
money sufficient to pay the Purchase Price of all Securities or portions
thereof so accepted (provided that such deposit may be made no later than 11:00 A.M.
New York City time on the Purchase Date if the Issuer, or Parent, as applicable
elect) and (iii) deliver or cause to be delivered to the Trustee all
Securities so accepted together with an Officers’ Certificate stating the
Securities or portions thereof accepted for payment.  The Paying Agent shall promptly mail or
deliver to Holders of Securities so accepted payment in an amount equal to the
Purchase Price, and the Trustee shall promptly authenticate and mail or deliver
to such Holders a new Security or Securities equal in principal amount to any
unpurchased portion of the Security surrendered as requested by the
Holder.  Any Security not accepted for
payment shall be promptly mailed or delivered by the Issuer or Parent, as applicable,
to the Holder thereof.  In the event that
the aggregate Purchase Price is less than the amount delivered by the Issuer or
Parent, as applicable, to the Trustee or the Paying Agent, the Trustee or the
Paying Agent, as the case may be, shall deliver the excess to the Issuer or
Parent, as applicable, immediately after the Purchase Date.

 

Not later than the date upon which written
notice of an Offer to Purchase is delivered to the Trustee, Issuer or Parent,
as applicable, shall deliver to the Trustee an Officers’ Certificate as to (i) the
amount of the Offer, (ii) the allocation of the Net Available Proceeds
from the Asset Disposition pursuant to which such Offer is being made and (iii) the
compliance of such allocation with the provisions of this Section 1016.

 

In the event that the Issuer or Parent, as
applicable, make an Offer to Purchase the Securities, the Issuer or Parent, as
applicable, shall comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1
under, the Exchange Act.  To the extent
that the provisions of any securities laws or regulations conflict with
provisions of this Section, the Issuer or Parent, as applicable, shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.

 

The Issuer shall not, and shall not permit
any Issuer Restricted Subsidiary to, sell, transfer, lease or otherwise dispose
of any Property to Parent or any Sister Restricted Subsidiary 

 

86

 

unless (i) the Issuer
or such Issuer Restricted Subsidiary receives consideration for such sale,
transfer, lease or other disposition at least equal to the Fair Market Value of
such Property (which, in the case of the Offering Proceeds Note or any other
intercompany Debt, is the principal amount of the Offering Proceeds Note or
such other Debt and any accrued and unpaid interest thereon) and (ii) the
consideration consists of either (A) 100% in cash or Cash Equivalents or (B) Debt
of Parent or the Restricted Subsidiary to which Property was transferred that
is secured by a Lien on such transferred Property.  Parent or the Restricted Subsidiary to which
Property was transferred for consideration consisting of Debt that is secured
by a Lien on such Property in accordance with clause (ii)(B) of the prior
sentence may substitute the Lien on such Property with a Lien on other Property
(including any Property owned by the Issuer or an Issuer Restricted Subsidiary)
that, as determined by the Board of Directors of Parent in good faith and
evidenced by a Board Resolution of Parent filed with the Trustee upon request
of the Trustee, has a Fair Market Value of no less than the Fair Market Value
of the Property for which the substitution is made at the time of the
substitution.  Any such Lien may be
second in priority to any Lien on such Property in favor of the lenders under a
Qualified Credit Facility.  The
provisions of this paragraph do not apply to (a) dividends and
distributions (other than any dividend or distribution of the Offering Proceeds
Note or any other intercompany Debt), (b) loans or advances and (c) purchases
of services or goods.

 

SECTION 1017.     Limitation
on Issuance and Sales of Capital Stock of Restricted Subsidiaries.

 

Parent shall at all times own all the issued
and outstanding Capital Stock of the Issuer. 
The Issuer shall at all times own all the issued and outstanding Capital
Stock of Level 3 LLC.  Parent shall not,
and shall not permit any Restricted Subsidiary to, issue, transfer, convey,
sell or otherwise dispose of any shares of Capital Stock of a Restricted
Subsidiary or securities convertible or exchangeable into, or options,
warrants, rights or any other interest with respect to, Capital Stock of a
Restricted Subsidiary to any Person other than Parent or a Restricted
Subsidiary except (i) a sale of all of the Capital Stock of such
Restricted Subsidiary owned by Parent and any Restricted Subsidiary that
complies with the provisions of Section 1016 to the extent such provisions
apply, (ii) in a transaction that results in such Restricted Subsidiary
becoming a Joint Venture, provided (x) such transaction complies
with the provisions of Section 1016 to the extent such provisions apply
and (y) the remaining interest of Parent or any other Restricted
Subsidiary in such Joint Venture would have been permitted as a new Restricted
Payment or Permitted Investment under the provisions of Section 1012, (iii) the
issuance, transfer, conveyance, sale or other disposition of shares of such
Restricted Subsidiary so long as after giving effect to such transaction such
Restricted Subsidiary remains a Restricted Subsidiary and such transaction
complies with the provisions of Section 1016 to the extent such provisions
apply, (iv) the transfer, conveyance, sale or other disposition of shares
required by applicable law or regulation, (v) if required, the issuance,
transfer, conveyance, sale or other disposition of directors’ qualifying
shares, (vi) Disqualified Stock issued in exchange for, or upon conversion
of, or the proceeds of the issuance of which are used to refinance, shares of
Disqualified Stock of such Restricted Subsidiary, provided that the
amounts of the redemption obligations of such Disqualified Stock shall not
exceed the amounts of the redemption obligations of, and such Disqualified
Stock shall have redemption obligations no earlier than those required by, the 

 

87

 

Disqualified Stock being
exchanged, converted or refinanced, (vii) in a transaction where Parent or
a Restricted Subsidiary acquires at the same time not less than its
Proportionate Interest in such issuance of Capital Stock, (viii) Capital
Stock issued and outstanding on the Measurement Date, (ix) Capital Stock
of a Restricted Subsidiary issued and outstanding prior to the time that such
Person becomes a Restricted Subsidiary so long as such Capital Stock was not
issued in contemplation of such Person’s becoming a Restricted Subsidiary or
otherwise being acquired by Parent and (x) an issuance of Preferred Stock
of a Restricted Subsidiary (other than Preferred Stock convertible or
exchangeable into Common Stock of any Restricted Subsidiary) otherwise
permitted by this Indenture.  In the
event of (a) the consummation of a transaction referred to in any of the
foregoing clauses that results in a Restricted Subsidiary that is a Guarantor
no longer being a Restricted Subsidiary and (b) the execution and delivery
of a supplemental indenture providing for such release in form satisfactory to
the Trustee, any such Guarantor shall be released from all its obligations
under its Note Guarantee.

 

SECTION 1018.     Transactions
with Affiliates.

 

Parent shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly, sell, lease, transfer,
or otherwise dispose of any of its Property to, or purchase any Property from,
or enter into any contract, agreement, understanding, loan, advance, Guarantee
or transaction (including the rendering of services) with or for the benefit
of, any Affiliate (each of the foregoing, an “Affiliate Transaction”), unless (a) such
Affiliate Transaction or series of Affiliate Transactions is on terms that are
no less favorable to Parent or such Restricted Subsidiary than those that would
have been obtained in a comparable arm’s-length transaction by Parent or such
Restricted Subsidiary with a Person that is not an Affiliate (or, in the event
that there are no comparable transactions involving Persons who are not Affiliates
of Parent or the relevant Restricted Subsidiary to apply for comparative
purposes, is otherwise on terms that, taken as a whole, Parent has determined
to be fair to Parent or the relevant Restricted Subsidiary) and (b) Parent
obtains (i) with respect to any Affiliate Transaction or series of
Affiliate Transactions involving aggregate payments in excess of $10,000,000
but less than $15,000,000, a certificate of the chief executive, operating or
financial officer of Parent evidencing such officer’s determination that such
Affiliate Transaction or series of Affiliate Transactions complies with clause (a) above
and (ii) with respect to any Affiliate Transaction or series of Affiliate
Transactions involving aggregate payments equal to or in excess of $15,000,000,
a Board Resolution of Parent certifying that such Affiliate Transaction or
series of Affiliate Transactions complies with clause (a) above and that
such Affiliate Transaction or series of Affiliate Transactions has been
approved by the Board of Directors of Parent, including a majority of the
disinterested members of the Board of Directors of Parent; provided, however,
that, in the event that there shall not be at least two disinterested members
of the Board of Directors of Parent with respect to the Affiliate Transaction,
Parent shall, in addition to such Board Resolution, obtain a written opinion
from an investment banking firm of national standing in the United States
which, in the good faith judgment of the Board of Directors of Parent, is independent
with respect to Parent and its Affiliates and qualified to perform such task,
which opinion shall be to the effect that the consideration to be paid or
received in connection with such Affiliate Transaction is fair, from a
financial point of view, to Parent or such Restricted Subsidiary.

 

88

 

Notwithstanding the foregoing, the following
shall not be deemed Affiliate Transactions:  (i) any employment
agreement entered into by Parent or any of its Restricted Subsidiaries in the
ordinary course of business and consistent with industry practice; (ii) any
agreement or arrangement with respect to the compensation of a director or
officer of Parent or any Restricted Subsidiary approved by a majority of the disinterested
members of the Board of Directors of Parent and consistent with industry
practice; (iii) transactions between or among Parent and its Restricted
Subsidiaries; provided, however, that no more than 5% of the
Voting Stock (on a fully diluted basis) of any such Restricted Subsidiary is
owned by an Affiliate of Parent (other than a Restricted Subsidiary); (iv) Restricted
Payments and Permitted Investments permitted by Section 1012 (other than
Investments in Affiliates that are not Parent or Restricted Subsidiaries); (v) transactions
pursuant to the terms of any agreement or arrangement as in effect on the
Measurement Date; and (vi) transactions with respect to wireline or
wireless transmission capacity, the lease or sharing or other use of cable or
fiber optic lines, equipment, rights-of-way or other access rights, between
Parent (or any Restricted Subsidiary) and any other Person; provided, however,
that, in the case of this clause (vi), such transaction complies with clause (a) in
the immediately preceding paragraph.

 

SECTION 1019.     Limitation
on Designations of Unrestricted Subsidiaries.

 

Parent shall not designate (1) the
Issuer or Level 3 LLC as an Unrestricted Subsidiary or (2) any other
Subsidiary of Parent (other than a newly created Subsidiary in which no
Investment has previously been made) as an “Unrestricted Subsidiary” under this
Indenture (a “Designation”) unless:

 

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

 

(b)           immediately after giving effect to
such Designation, Parent would be able to Incur $1.00 of Debt under paragraph (a) of
Section 1010; and

 

(c)           Parent would not be prohibited under
any provision of this Indenture from making an Investment at the time of
Designation (assuming the effectiveness of such Designation) in an amount (the “Designation
Amount”) equal to the portion (proportionate to Parent’s equity interest in
such Restricted Subsidiary) of the Fair Market Value of the net assets of such
Restricted Subsidiary on such date.

 

In the event of any such Designation, Parent
shall be deemed to have made an Investment constituting a Restricted Payment
pursuant to Section 1012 for all purposes of this Indenture in the
Designation Amount; provided, however, that, upon a Revocation of
any such Designation of a Subsidiary, Parent shall be deemed to continue to
have a permanent “Investment” in an Unrestricted Subsidiary of an amount (if
positive) equal to (i) Parent’s “Investment” in such Subsidiary at the
time of such Revocation less (ii) the portion (proportionate to Parent’s
equity interest in such Subsidiary) of the Fair Market Value of the net assets
of such Subsidiary at the time of such Revocation.  At the time of any Designation of any
Subsidiary as an Unrestricted Subsidiary, such Subsidiary shall not own any
Capital Stock of Parent or any Restricted Subsidiary.  In addition, neither Parent nor any
Restricted Subsidiary shall at any time (x) 

 

89

 

provide credit support for,
or a Guarantee of, any Debt of any Unrestricted Subsidiary (including any
undertaking, agreement or instrument evidencing such Debt); provided, however,
that Parent or a Restricted Subsidiary may pledge Capital Stock or Debt of any Unrestricted
Subsidiary on a nonrecourse basis such that the pledgee has no claim whatsoever
against Parent other than to obtain such pledged Capital Stock or Debt, (y) be
directly or indirectly liable for any Debt of any Unrestricted Subsidiary or (z) be
directly or indirectly liable for any Debt which provides that the holder
thereof may (upon notice, lapse of time or both) declare a default thereon or
cause the payment thereof to be accelerated or payable prior to its final
scheduled maturity upon the occurrence of a default with respect to any Debt,
Lien or other obligation of any Unrestricted Subsidiary (including any right to
take enforcement action against such Unrestricted Subsidiary), except in the
case of clause (x) or (y) to the extent permitted under
Sections 1012 and 1018.

 

Unless Designated as an Unrestricted
Subsidiary, any Person that becomes a Subsidiary of Parent will be classified
as a Restricted Subsidiary; provided, however, that such
Subsidiary shall not be designated as a Restricted Subsidiary and shall be
automatically classified as an Unrestricted Subsidiary if either of the
requirements set forth in clauses (a) and (b) of the immediately
following paragraph will not be satisfied immediately following such
classification.  Except as provided in
the first sentence of this Section 1019, no Restricted Subsidiary may be
redesignated as an Unrestricted Subsidiary.

 

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

 

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

 

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

 

All Designations and Revocations must be
evidenced by Board Resolutions of Parent (i) certifying compliance with
the foregoing provisions and (ii) giving the effective date of such
Designation or Revocation.  Upon
Designation of a Restricted Subsidiary as an Unrestricted Subsidiary in
compliance with this Section 1019, such Restricted Subsidiary shall, by
delivery of a supplemental indenture providing for such release in form
satisfactory to the Trustee, be released from any Note Guarantee previously
made by such Subsidiary.

 

SECTION 1020.     Limitation
on Actions with respect to Existing Intercompany Obligations.  Without the consent of the holders of at
least two-thirds in principal amount of the Outstanding Securities:

 

(a)           the Issuer shall not forgive or waive
or fail to enforce any of its rights under the Offering Proceeds Note, any
Offering Proceeds Note Guarantee, the Parent Intercompany Note Subordination
Agreement or any other agreement with Parent or any Restricted Subsidiary to
subordinate a payment obligation on any Debt to the prior payment in full in
cash of all obligations with respect to the Offering Proceeds Note or an

 

90

 

Offering Proceeds Note
Guarantee, and the Issuer and Level 3 LLC may not amend the Offering Proceeds
Note in a manner adverse to the holders of the Securities; provided, however,
that nothing in this covenant shall compel the Issuer to demand payment under
the Offering Proceeds Note or any Offering Proceeds Note Guarantee except
during a bankruptcy, insolvency or similar proceeding;

 

(b)           in the event Level 3 LLC (or any
successor obligor under the Offering Proceeds Note) repays all or a portion of
the Offering Proceeds Note, the Issuer must (i) deposit an amount of cash
equal to the principal amount of the Offering Proceeds Note then repaid in an
escrow account with an unaffiliated financial institution for the benefit of
the Holders of the Securities, and as security for the prompt and complete
payment and performance when due of the Issuer’s obligations in respect of the
Securities, until such time as the Securities are no longer outstanding or such
cash is used pursuant to clause (ii) or (iii) of this paragraph, (ii) redeem
Securities having a principal amount equal to the principal amount of the
Offering Proceeds Note then repaid in accordance with, and if at such time
permitted by, the Securities, or (iii) purchase Securities in the open
market having a principal amount equal to the principal amount of the Offering
Proceeds Note then repaid; provided, however, that if at any time
the principal amount of the Offering Proceeds Note is greater than the
principal amount of Securities that remain outstanding, Level 3 LLC (or any
successor obligor under the Offering Proceeds Note) may repay or forgive or
waive an amount of the Offering Proceeds Note equal to such excess without
complying with clause (i), (ii) or (iii) above;

 

(c)           Parent shall not, and shall not permit
any Restricted Subsidiary to, provide any Lien on its Property for the benefit
of, or any Guarantee (other than a similarly subordinated Guarantee) or other
form of credit enhancement in respect of, (i) the Parent Intercompany Note
or (ii) any other intercompany note required by clause (vi) of
paragraph (b) of Section 1010 or clause (iv) of paragraph (b) of
Section 1011 to be subordinated to the prior payment in full in cash of
all obligations with respect to the Offering Proceeds Note or an Offering
Proceeds Note Guarantee, or take any other action with the purpose or effect of
making the Parent Intercompany Note senior to or equal in right of payment with
the Offering Proceeds Note;

 

(d)           Parent and Level 3 LLC shall not
amend the terms of the Parent Intercompany Note in a manner adverse to the
holders of the Securities, the determination of which shall be made by the
Board of Directors of Parent acting in good faith and shall be evidenced by a
Board Resolution of Parent except to permit subordination of Level 3 LLC’s
obligations under the Parent Intercompany Note to its obligations under a
Qualified Credit Facility as described, and to the extent set forth in the
Parent Intercompany Note Subordination Agreement;

 

(e)           Parent, the Issuer and Level 3 LLC
shall not amend the Parent Intercompany Note Subordination Agreement in a
manner adverse to the holders of the Securities and Parent or any Restricted
Subsidiary and the Issuer shall not amend any other agreement between Parent or
any Restricted Subsidiary and the Issuer to 

 

91

 

subordinate a payment
obligation on any Debt of Parent or any Restricted Subsidiary to the prior
payment in full in cash of all obligations with respect to the Offering
Proceeds Note or any Offering Proceeds Note Guarantee, in each case, the
determination of which shall be made by the Board of Directors of Parent acting
in good faith and shall be evidenced by a Board Resolution of Parent except to
permit subordination of their respective obligations under the Offering
Proceeds Note or any Offering Proceeds Note Guarantee to their respective
obligations under a Qualified Credit Facility as described, and to the extent
set forth, in the Parent Intercompany Note Subordination Agreement; and

 

(f)            Parent may not permit any Restricted
Subsidiary to Guarantee the 10.75% Notes, the intercompany note issued by Level
3 LLC in respect of the proceeds of the 10.75% Notes, the 12.25% Notes, the
intercompany note issued by Level 3 LLC in respect of the proceeds of the
12.25% Notes, the 2011 Floating Rate Notes, the intercompany note issued by
Level 3 LLC in respect of the proceeds of the 2011 Floating Rate Notes, the
9.25% Notes, the intercompany note issued by Level 3 LLC in respect of the proceeds
of the 9.25% Notes, the 2015 Floating Rate Notes, the intercompany note issued
by Level 3 LLC in respect of the proceeds of the 2015 Floating Rate Notes, the
8.75% Notes or the intercompany note issued by Level 3 LLC in respect of the
proceeds of the 8.75% Notes unless such Restricted Subsidiary concurrently
Guarantees the Securities and such Guarantee of the Securities remains in
effect for so long as the Guarantee of the 10.75% Notes, the related
intercompany note, the 12.25% Notes, the related intercompany note, the 2011
Floating Rate Notes, the related intercompany note, the 9.25% Notes, the
related intercompany note, the 2015 Floating Rate Notes, the related
intercompany note, the 8.75% Notes or the related intercompany note; provided,
however, that this provision shall not be deemed to be violated by the
Guarantee of the 10.75% Notes, the 12.25% Notes, the 2011 Floating Rate Notes,
the 9.25% Notes, the 2015 Floating Rate Notes or the 8.75% Notes of Level 3 LLC
outstanding on the Issue Date.

 

SECTION 1021.     Covenant
Suspension.  During any period of
time (a “Suspension Period”) that (i) the ratings assigned to the
Securities by both of the Rating Agencies are Investment Grade Ratings and (ii) no
Default or Event of Default has occurred and is continuing, Parent and the
Restricted Subsidiaries will not be subject to the covenants set forth in
Sections 1010, 1011, 1012, 1013, 1015(i)(a), 1016, 1017 (other than the first
two sentences thereof), 1018, 801(3) and (4), 803(3) and (4) and
clause (b) of the first sentence of Section 1019 (collectively,
the “Suspended Covenants”).  In the event
that Parent and the Restricted Subsidiaries are not subject to the Suspended
Covenants for any period of time as a result of the preceding sentence and, on
any subsequent date (the “Reversion Date”), one or both of the Rating Agencies
withdraws its ratings or downgrades the ratings assigned to the Securities
below the required Investment Grade Ratings or a Default or Event of Default
occurs and is continuing, then Parent and the Restricted Subsidiaries will
thereafter again be subject to the Suspended Covenants and calculations of the
amount available to be made as Restricted Payments under Section 1012 will
be made as though Section 1012 had been in effect during the entire period
of time from the Measurement Date.  On
the Reversion Date, all Debt Incurred during the Suspension Period will 

 

92

 

be classified to have been Incurred pursuant to paragraph (a) of Section 1010
or one of the clauses set forth in paragraph (b) of Section 1010 or
paragraph (a) of Section 1011 or one of the clauses set forth in
paragraph (b) of Section 1011 (in each case to the extent such Debt
would be permitted to be Incurred thereunder as of the Reversion Date and after
giving effect to Debt Incurred prior to the Suspension Period and outstanding
on the Reversion Date).  To the extent
such Debt would not be permitted to be Incurred pursuant to paragraph (a) of
Section 1010 or one of the clauses set forth in paragraph (b) of Section 1010
or paragraph (a) of Section 1011 or one of the clauses set forth in
paragraph (b) of Section 1011, such Debt will be deemed to have been
outstanding on the Measurement Date, so that it is classified as permitted
under Section 1010(b)(v) or Section 1011(b)(iii).  If the Incurrence of any Debt by a Restricted
Subsidiary during the Suspension Period would have been prohibited or
conditioned upon such Restricted Subsidiary entering into a Note Guarantee and
an Offering Proceeds Note Guarantee had Section 1010 and Section 1011
been in effect at the time of such Incurrence, such Restricted Subsidiary shall
enter into a Note Guarantee and an Offering Proceeds Note Guarantee that are
senior to or pari  passu with such Debt within ten days after the
Reversion Date.  For purposes of
determining compliance with Section 1016 on the Reversion Date, the Net
Available Proceeds from all Asset Sales not applied in accordance with the
covenant will be deemed to be reset to zero. 
Notwithstanding the foregoing, neither (a) the continued existence,
after the date of such withdrawal or downgrade, of facts and circumstances or
obligations that were Incurred or otherwise came into existence during a
Suspension Period nor (b) the performance of any such obligations, shall
constitute a breach of any covenant set forth in the Indenture or cause a
Default or Event of Default thereunder; provided, however, that (1) Parent
and its Restricted Subsidiaries did not Incur or otherwise cause such facts and
circumstances or obligations to exist in anticipation of a withdrawal or
downgrade below investment grade, (2) Parent reasonably believed that such
Incurrence or actions would not result in such a withdrawal or downgrade and (3) if
so required each Restricted Subsidiary shall have entered into a Note Guarantee
and an Offering Proceeds Note Guarantee within the specified time period.  For purposes of clauses (1) and (2) in
the preceding sentence, anticipation and reasonable belief may be determined by
Parent and shall be conclusively evidenced by a board resolution to such effect
adopted in good faith by the Board of Directors of Parent.  In reaching their determination, the Board of
Directors of Parent may, but need not, consult with the Rating Agencies.

 

SECTION 1022.     Special
Interest Notice.

 

In the event that the Issuer is required to
pay Special Interest to Holders pursuant to the Registration Agreement, the
Issuer will provide written notice (“Special Interest Notice”) to the Trustee
of its obligation to pay Special Interest no later than fifteen days prior to
the proposed payment date for the Special Interest, and the Special Interest
Notice shall set forth the amount of Special Interest to be paid by the Issuer
on such payment date. The Trustee shall not at any time be under any duty or
responsibility to any Holders to determine the Special Interest, or with
respect to the nature, extent, or calculation of the amount of Special Interest
owed, or with respect to the method employed in such calculation of the Special
Interest.

 

93

 

SECTION 1023.     Authorizations
and Consents of Governmental Authorities.

 

Each of Parent and the Issuer will endeavor,
and cause Level 3 LLC to endeavor, in good faith using commercially reasonable
efforts to cause Level 3 LLC to obtain all material (as determined in good
faith by the General Counsel of Parent) authorizations and consents of Federal
and State Governmental Authorities required in order for it to Guarantee the
Securities at the earliest practicable date and to enter into a Guarantee of
the Securities promptly thereafter.  For
purposes of this covenant, the requirement that Parent, the Issuer or Level 3
LLC 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 Parent shall
determine in good faith to be adverse or materially burdensome.  Upon the reasonable request of Parent or the
Issuer, the Trustee will cooperate with Parent and the Issuer as necessary to
enable them to comply with their obligations under this covenant.

 

ARTICLE
ELEVEN

REDEMPTION OF SECURITIES

 

SECTION 1101.     Right
of Redemption.

 

The Securities will be subject to redemption
at the option of the Issuer, in whole or in part, at any time or from time to
time, upon not less than 30 nor more than 60 days’ prior notice, on the
terms and at the redemption prices (expressed as percentages of principal
amount) set forth in paragraph 5 on the reverse of the form of Security, plus
accrued and unpaid interest thereon (if any) to the Redemption Date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date).

 

SECTION 1102.     Applicability
of Article.

 

This Article shall govern any redemption
of the Securities pursuant to Section 1101.

 

SECTION 1103.     Election
to Redeem; Notice to Trustee.

 

The election of the Issuer to redeem any
Securities pursuant to Section 1101 shall be evidenced by a Board
Resolution of the Issuer.  The Issuer
shall, at least 60 days prior to the Redemption Date fixed by the Issuer
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities to be
redeemed and shall deliver to the Trustee such documentation and records as
shall enable the Trustee to select the Securities to be redeemed pursuant to Section 1104.  Such notice shall be accompanied by an
Officers’ Certificate and an Opinion of Counsel from the Issuer to the effect
that such redemption will comply with the conditions herein.

 

94

 

SECTION 1104.     Selection by Trustee of
Securities to Be Redeemed.

 

If less than all the Securities are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities not previously called for redemption, in compliance with
the requirements of the principal national securities exchange, if any, on
which the Securities are listed, or, if the Securities are not so listed, on a
pro rata basis, by lot or by such other method as the Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions of the principal of Securities; provided, however, that
no such partial redemption shall reduce the portion of the principal amount of
a Security not redeemed to less than $1,000.

 

The Trustee shall promptly notify the Issuer
in writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.

 

For all purposes of this Indenture, unless
the context otherwise requires, all provisions relating to redemption of
Securities shall relate, in the case of any Security redeemed or to be redeemed
only in part, to the portion of the principal amount of such Security which has
been or is to be redeemed.

 

SECTION 1105.     Notice
of Redemption.

 

Notice of redemption shall be given in the
manner provided for in Section 106 not less than 30 nor more than
45 days prior to the Redemption Date, to each Holder of Securities to be
redeemed.

 

Each notice of redemption shall identify the
Securities (including “CUSIP” number(s)) to be redeemed and shall state:

 

(1)  the Redemption Date,

 

(2)  the Redemption Price and the amount
of accrued interest to the Redemption Date payable as provided in Section 1107,
if any,

 

(3)  if less than all Outstanding
Securities are to be redeemed, the identification (and, in the case of a
partial redemption, the principal amounts) of the particular Securities to be redeemed,

 

(4)  in case any Security is to be
redeemed in part only, that on and after the Redemption Date, upon surrender of
such Security, the Holder will receive, without charge, a new Security or
Securities of authorized denominations for the principal amount thereof
remaining unredeemed,

 

(5)  that on the Redemption Date the
Redemption Price (and unpaid and accrued interest, if any, to the Redemption
Date payable as provided in Section 1107) will become due and payable upon
each such Security, or the portion thereof, to be redeemed, and that, unless
the 

 

95

 

Issuer defaults in making
such redemption payment or the Trustee or the Paying Agent is prohibited from
making such payment, interest thereon will cease to accrue on and after said
date, and

 

(6)  the place or places where such
Securities are to be presented and surrendered for payment of the Redemption
Price and accrued interest, if any.

 

Notice of redemption of Securities to be
redeemed at the election of the Issuer shall be given by the Issuer or, at the
Issuer’s request, by the Trustee in the name and at the expense of the Issuer; provided,
however, in the latter case the Issuer shall give the Trustee at least
ten days prior notice of the date of the giving of the notice.

 

SECTION 1106.     Deposit of Redemption Price.

 

On or prior to any Redemption Date (and if on
any Redemption Date, before 11:00 A.M. New York City time, on such
date), the Issuer shall deposit with the Trustee or with a Paying Agent (or, if
the Issuer is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money sufficient to pay the
Redemption Price of, and unpaid and accrued interest (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date) on, all the Securities which are to be redeemed
on that date.

 

SECTION 1107.     Securities
Payable on Redemption Date.

 

Notice of redemption having been given as
aforesaid, the Securities so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified (together with
unpaid and accrued interest, if any, to the Redemption Date), and from and
after such date (unless the Issuer shall default in the payment of the
Redemption Price and accrued interest or the Trustee or the Paying Agent shall
be prohibited from making such payment) such Securities shall cease to bear
interest.  Upon surrender of any such
Security for redemption in accordance with said notice, such Security shall be
paid by the Issuer at the Redemption Price, together with unpaid and accrued
interest, if any, to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms.

 

If any Security called for redemption shall
not be so paid upon surrender thereof for redemption, the principal (and
premium, if any) shall, until paid, bear interest from the Redemption Date at
the rate borne by the Securities.

 

SECTION 1108.     Securities
Redeemed in Part.

 

Any Security which is to be redeemed only in
part shall be surrendered at the office or agency of the Issuer maintained for
such purpose pursuant to Section 1002 (with, if the Issuer and  the Trustee so requires, due endorsement by,
or a written instrument of transfer in form 

 

96

 

satisfactory to the Issuer
and the Trustee duly executed by, the Holder thereof or such Holder’s attorney
duly authorized in writing), and the Issuer shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered.

 

ARTICLE
TWELVE

 

DEFEASANCE
AND COVENANT DEFEASANCE

 

SECTION 1201.     Issuer’s
Option to Effect Defeasance or Covenant Defeasance.

 

The Issuer may, at its option by Board
Resolution of the Issuer, at any time, with respect to the Securities, elect to
have either Section 1202 or Section 1203 be applied to all
Outstanding Securities upon compliance with the conditions set forth below in
this Article Twelve.

 

SECTION 1202.     Defeasance
and Discharge.

 

Upon the Issuer’s exercise under Section 1201
of the option applicable to this Section 1202, the Issuer and the
Guarantors shall be deemed to have been discharged from their obligations with
respect to all Outstanding Securities on the date the conditions set forth in Section 1204
are satisfied (hereinafter, “defeasance”). 
For this purpose, such defeasance means that the Issuer shall be deemed
to have paid and discharged the entire indebtedness represented by the
Outstanding Securities, which shall thereafter be deemed to be “Outstanding”
only for the purposes of Section 1205 and the other Sections of this
Indenture referred to in clauses (A) and (B) below, and to have
satisfied all their other obligations under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the expense of
the Issuer, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (A) the Issuer’s obligations with respect to such Securities
under Section 2.3 of Appendix A and Sections 303, 306, 307, 1002 and
1003 and the Issuer’s rights under Section 1101, (B) rights of
Holders to receive payment of principal of, premium, if any, and interest on
such Securities (but not the Purchase Price referred to under Section 1009
or 1016) and any rights of the Holders with respect to such amounts, (C) the
rights, obligations and immunities of the Trustee under the Indenture and (D) this
Article Twelve.  Subject to
compliance with this Article Twelve, the Issuer may exercise its option
under this Section 1202 notwithstanding the prior exercise of its option
under Section 1203 with respect to the Securities.  If the Issuer exercises its option under this
Section 1202, (u) each Guarantor, if any, shall be released from all
its obligations under its Note Guarantee, (v) all subordination provisions
contained in the Parent Intercompany Note and the Parent Intercompany Note
Subordination Agreement shall be deemed terminated as they relate to the
Offering Proceeds Note and the Offering Proceeds Note Guarantees, (w) the
Offering Proceeds Note may be prepaid in whole or in part, (x) no entity
shall be obligated to guarantee the Offering Proceeds Note, (y) the
Offering Proceeds Note may be canceled and (z) all obligations 

 

97

 

to provide Offering Proceeds
Note Guarantees shall terminate and all references in the Indenture to Offering
Proceeds Note Guarantees and Offering Proceeds Note Guarantees shall be
disregarded and not be deemed to be requirements to take or omit to take any
action by Parent or any Restricted Subsidiary.

 

SECTION 1203.     Covenant
Defeasance.

 

Upon the Issuer’s exercise under Section 1201
of the option applicable to this Section 1203, the Issuer and each Guarantor
shall be released from their obligations under any covenant contained in
Sections 801(3), (4) and (5), 803(3), (4) and (5) in
Sections 804, 806, 1005, 1006, 1007 and 1023 and Sections 1009 through
1021 and from the operation of Sections 501(6), (7), (8), (9) and (10) (but,
in the case of Sections 501(9) and (10), with respect only to Significant
Subsidiaries), with respect to the Outstanding Securities on and after the date
the conditions set forth below are satisfied (hereinafter, “covenant defeasance”),
and the Securities shall thereafter be deemed not to be “Outstanding” for the
purposes of any direction, waiver, consent, declaration or other Act of Holders
(and the consequences of any thereof) in connection with such provisions, but
shall continue to be deemed “Outstanding” for all other purposes
hereunder.  For this purpose, such
covenant defeasance means that, with respect to the Outstanding Securities, the
Issuer and the Guarantors may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any such
provision, whether directly or indirectly, by reason of any reference elsewhere
herein to any such provision or by reason of any reference in any such
provision to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under Section 501(3),
(4), (5), (6), (7), (8), (9) or (10) (but, in the case of Section 501(9) or
(10), with respect only to Significant Subsidiaries) but, except as specified
above, the remainder of this Indenture and such Securities shall be unaffected
thereby.  If the Issuer exercises its
option under this Section 1203, (u) each Guarantor shall be released
from all its obligations under its Note Guarantee, (v) all subordination
provisions contained in the Parent Intercompany Note and the Parent
Intercompany Note Subordination Agreement shall be deemed terminated as they
relate to the Offering Proceeds Note and the Offering Proceeds Note Guarantees,
(w) the Offering Proceeds Note may be prepaid in whole or in part, (x) no
entity shall be obligated to guarantee the Offering Proceeds Note, (y) the
Offering Proceeds Note may be canceled and (z) all obligations to provide
Offering Proceeds Note Guarantees shall terminate and all references in the
Indenture to Offering Proceeds Note Guarantees and Offering Proceeds Note
Guarantees shall be disregarded and not be deemed to be requirements to take or
omit to take any action by Parent or any Restricted Subsidiary.

 

SECTION 1204.     Conditions to Defeasance or
Covenant Defeasance.

 

The following shall be the
conditions to application of either Section 1202 or Section 1203 to
the Outstanding Securities:

 

(1)           The
Issuer shall irrevocably have deposited or caused to be deposited with the
Trustee (or another trustee satisfying the requirements of Section 608 who
shall agree to comply with the provisions of this Article Twelve
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, 

 

98

 

the benefit of the Holders
of such Securities, at any time prior to the Maturity of the Securities: (A) money
in an amount, or (B) Government Securities which through the payment of
interest and principal will provide, not later than one day before the due date
of payment in respect of the Securities, money in an amount, or (C) a
combination thereof, sufficient, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge the principal of (and premium,
if any, on) and interest on, the Outstanding Securities on the Stated Maturity
(or Redemption Date, if applicable) of such principal (and premium, if any) or
installment of interest; provided that the Trustee (or such other
trustee) shall have been irrevocably instructed in writing to apply such money
or the proceeds of such Government Securities to said payments with respect to
the Securities.  Before such a deposit,
the Issuer may give to the Trustee, in accordance with Section 1103, a
notice of their election to redeem all of the Outstanding Securities at a
future date in accordance with Article Eleven, which notice shall be
irrevocable.  Such irrevocable redemption
notice, if given, shall be given effect in applying the foregoing.

 

(2)           No
Default or Event of Default with respect to the Securities shall have occurred
and be continuing on the date of such deposit or, insofar as paragraphs (9) and
(10) of Section 501 are concerned with respect to the Parent and the
Issuer, at any time during the period ending on the 123rd day after the date of
such deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).

 

(3)           Such
defeasance or covenant defeasance shall not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the Issuer or any Guarantor is a party or by which it is
bound.

 

(4)           In
the case of an election under Section 1202, the Issuer shall have
delivered to the Trustee an Opinion of Counsel stating that (x) the Issuer
has received from, or there has been published by, the Internal Revenue Service
a ruling, or (y) since the date of this Indenture, there has been a change
in the applicable federal income tax law, in either case to the effect that,
and based thereon such opinion shall confirm that, the Holders of the Outstanding
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such defeasance had not occurred.

 

(5)           In
the case of an election under Section 1203, the Issuer shall have
delivered to the Trustee an Opinion of Counsel to the effect that the Holders
of the Outstanding Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such covenant defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such covenant defeasance had not
occurred.

 

(6)           The
Issuer shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for
relating to either the defeasance under Section 1202 or the covenant
defeasance under Section 1203 (as the case may be) have been complied
with.

 

99

 

(7)           The
Issuer shall have delivered to the Trustee an Opinion of Counsel acceptable to
the Trustee to the effect that such defeasance will not result in the trust
relating thereto or the Trustee being subject to regulation under the
Investment Company Act of 1940.

 

SECTION 1205.     Deposited
Money and Government Securities to Be Held in Trust; Other Miscellaneous
Provisions.

 

Subject to the provisions of the last paragraph
of Section 1003, all money and Government Securities (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 1205, the “Trustee”) pursuant to
Section 1204 in respect of the Outstanding Securities shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Issuer acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Securities of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent
required by law or to the extent the Issuer or Parent acts as the Issuer’s
Paying Agent.

 

The Issuer shall pay and indemnify the
Trustee and (if applicable) its officers, directors, employees and agents
against any tax, fee or other charge imposed on or assessed against the
Government Securities deposited pursuant to Section 1204 or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Outstanding
Securities.

 

Anything in this Article Twelve to the
contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from
time to time upon Issuer Request any money or Government Securities held by it
as provided in Section 1204 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent defeasance or
covenant defeasance, as applicable, in accordance with this Article Twelve.

 

SECTION 1206.     Reinstatement.

 

If the Trustee or any Paying Agent is unable
to apply any money in accordance with Section 401 or 1205 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the Issuer’s and each Guarantor’s
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 401, 1202
or 1203, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance therewith; provided, however,
that if the Issuer or any Guarantor makes any payment of principal of, premium,
if any, or interest on any Security following the reinstatement of its
obligations, the Issuer or such Guarantor shall be subrogated to the rights of
the Holders of such Securities to receive such payment from the money held by
the Trustee or Paying Agent.

 

100

 

ARTICLE
THIRTEEN

Guarantees and Offering Proceeds Note Guarantees

 

SECTION 1301.     Guarantees.  Each Guarantor hereby unconditionally
guarantees, jointly and severally, to each Holder and to the Trustee and its
successors and assigns (a) the full and punctual payment of principal of
(and premium, if any) and interest on the Securities when due, whether at
Stated Maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Issuer under this Indenture and the Securities and (b) the
full and punctual performance within applicable grace periods of all other
obligations of the Issuer under this Indenture and the Securities (all the
foregoing being hereinafter collectively called the “Obligations”).  Each Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from such Guarantor, and that such Guarantor will remain bound
under this Article Thirteen notwithstanding any extension or renewal of
any Obligation.

 

Each Guarantor waives presentation to, demand
of, payment from and protest to the Issuer of any of the Obligations and also
waives notice of protest for nonpayment. 
Each Guarantor waives notice of any default under the Securities or the
Obligations.  The obligations of each
Guarantor hereunder shall not be affected by (a) the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any right or remedy
against the Issuer or any other Person under this Indenture, the Securities or
any other agreement or otherwise; (b) any extension or renewal of any
thereof; (c) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Indenture, the Securities or any other
agreement; (d) the release of any security held by any Holder or the
Trustee for the Obligations or any of them; (e) the failure of any Holder
or the Trustee to exercise any right or remedy against any other guarantor of
the Obligations; or (f) any change in the ownership of such Guarantor.

 

Each Guarantor further agrees that its Note
Guarantee herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Obligations.

 

Except as expressly set forth in
Sections 805, 806, 1017, 1019, 1202, 1203, 1303 and 1308, the obligations
of each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Guaranteed
Obligations or otherwise.  Without
limiting the generality of the foregoing, the obligations of each Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the obligations, or by any other
act or thing or omission or delay to do any other 

 

101

 

act or thing which may or
might in any manner or to any extent vary the risk of such Guarantor or would
otherwise operate as a discharge of such Guarantor as a matter of law or
equity.

 

Each Guarantor further agrees that its Note
Guarantee herein shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of principal of (or
premium, if any) or interest on any Obligation is rescinded or must otherwise
be restored by any Holder or the Trustee upon the bankruptcy or reorganization
of the Issuer or otherwise.

 

In furtherance of the foregoing and not in
limitation of any other right which any Holder or the Trustee has at law or in
equity against any Guarantor by virtue hereof, upon the failure of the Issuer
to pay the principal of (or premium, if any) or interest on any Obligation when
and as the same shall become due, whether at Stated Maturity, by acceleration,
by redemption or otherwise, or to perform or comply with any other Obligation,
each Guarantor hereby promises to and will, upon receipt of written demand by
the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the
Trustee an amount equal to the sum of (i) the unpaid amount of such
Obligations, (ii) accrued and unpaid interest on such Obligations (but
only to the extent not prohibited by law) and (iii) all other monetary
Obligations of the Issuer to the Holders and the Trustee.

 

Each Guarantor agrees that it shall not be
entitled to any right of subrogation in respect of any Obligations guaranteed
hereby until payment in full in cash of all Obligations.  Each Guarantor further agrees that, as
between it, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article Five for the purposes of such Guarantor’s
Note Guarantee herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration
of such Obligations as provided in Article Five, such Obligations (whether
or not due and payable) shall forthwith become due and payable by such
Guarantor for the purposes of this Section.

 

Each Guarantor also agrees to pay any and all
costs and expenses (including reasonable attorneys’ fees) incurred by the
Trustee or any Holder in enforcing any rights under this Section 1301.

 

SECTION 1302.     Contribution.  Each of the Issuer and any Guarantor (a “Contributing
Party”) agrees that, in the event a payment shall be made by any other
Guarantor under any Note Guarantee (the “Claiming Guarantor”), the Contributing
Party shall indemnify the Claiming Guarantor in an amount equal to the amount
of such payment multiplied by a fraction, the numerator of which shall be the
net worth of the Contributing Party on the date hereof and the denominator of
which shall be the aggregate net worth of the Issuer and all the Guarantors on
the date hereof (or, in the case of any Guarantor becoming a party hereto
pursuant to Section 901, the date of the supplemental indenture executed
and delivered by such Guarantor).

 

SECTION 1303.     Release of Guarantees.  The Note Guarantee of a Guarantor (other than
Parent) will be released (a) in connection with any sale or other
disposition of all or 

 

102

 

substantially all of the assets of that
Guarantor (including by way of merger or consolidation) to a Person that is not
(either before or after giving effect to such transaction) Parent or a
Restricted Subsidiary, if the sale or other disposition of all or substantially
all of the assets of that Guarantor complies with Section 1016 (or Parent
certifies in an Officers’ Certificate to the Trustee that it will comply with
the requirements of Section 1016 relating to application of the proceeds
of such sale or disposition), (b) in connection with any sale of all of
the Capital Stock of a Guarantor (other than Parent) to a Person that is not
(either before or after giving effect to such transaction) Parent or a
Restricted Subsidiary, if the sale of all such Capital Stock of that Guarantor
complies with Section 1016 (or Parent certifies in an Officers’
Certificate to the Trustee that it will comply with the requirements of Section 1016
relating to application of the proceeds of such sale or disposition), (c) if
Parent properly designates any Restricted Subsidiary that is a Guarantor as an
Unrestricted Subsidiary pursuant to Section 1019 or (d) if the Issuer
exercises the legal defeasance option or covenant defeasance option in
accordance with Article Twelve.

 

SECTION 1304.     Successors and Assigns.  This Article Thirteen shall be binding
upon each Guarantor and its successors and assigns and shall inure to the
benefit of the successors and assigns of the Trustee and the Holders and, in
the event of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges conferred upon that party in this Indenture and in
the Securities shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions of this Indenture.

 

SECTION 1305.     No Waiver.  Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article Thirteen shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of
any right, power or privilege.  The
rights, remedies and benefits of the Trustee and the Holders herein expressly
specified are cumulative and not exclusive of any other rights, remedies or
benefits which either may have under this Article Thirteen at law, in
equity, by statute or otherwise.

 

SECTION 1306.     Modification.  No modification, amendment or waiver of any
provision of this Article Thirteen, nor the consent to any departure by
any Guarantor therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Trustee, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which
given.  No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other or further
notice or demand in the same, similar or other circumstances.

 

SECTION 1307.     Execution of Supplemental Indenture for
Future Guarantors.  Each Subsidiary
which is required to become a Guarantor pursuant to any Section of the Indenture
shall promptly execute and deliver to the Trustee a supplemental indenture in
the form of Exhibit C hereto pursuant to which such Subsidiary shall
become a Guarantor under this Article Thirteen and shall guarantee the
Obligations.  Concurrently with the
execution and delivery of such supplemental indenture, the Issuer shall deliver
to the Trustee an Opinion of Counsel to the effect that such supplemental
indenture has been duly authorized, executed and delivered by such Subsidiary
and that, subject to the application of bankruptcy, insolvency, moratorium,
fraudulent conveyance or transfer and other similar laws relating to creditors’
rights 

 

103

 

generally and to the principles of equity,
whether considered in a proceeding at law or in equity, the Note Guarantee of
such Guarantor is a legal, valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms.  Each Person then a Guarantor authorizes the
Issuer to enter into such a supplemental indenture on its behalf.

 

SECTION 1308.     Subordination of Note Guarantees.  The Issuer, the Guarantors and the Trustee
may, without notice to or consent of any holder of Securities, enter into one
or more indentures supplemental to the Indenture substantially in the form of Exhibit G
hereto, or amend any indenture supplemental to the Indenture entered into by
the Issuer, such Guarantor and the Trustee for the purpose of adding an
additional Note Guarantee pursuant to Section 1010, Section 1011 or Section 1020
to provide that the payment obligation on a Note Guarantee of a Guarantor
(other than Parent or any Sister Restricted Subsidiary) be expressly
subordinated in any bankruptcy, liquidation or winding up proceeding of such Guarantor
to the prior payment in full in cash of all obligations of such Guarantor under
any Guarantee of, or obligation as borrower under, any Qualified Credit
Facility Incurred by Parent or a Restricted Subsidiary in accordance with
clause (ii) of paragraph (b) of Section 1010 or clause (ii) of
paragraph (b) of Section 1011; provided, however, that (x) the
terms of the subordination of a Note Guarantee to any such Guarantee of, or
obligation as borrower under, a Qualified Credit Facility may not eliminate or
otherwise adversely affect the subordination of the payment obligation on any
other Debt of such Guarantor to the payment obligation of the Note Guarantee of
such Guarantor and (y) any Guarantee (other than a Guarantee of such
Qualified Credit Facility) by such Guarantor of the 10.75% Notes, the 12.25%
Notes, the 2011 Floating Rate Notes, the 9.25% Notes, the 2015 Floating Rate
Notes, the 8.75% Notes or any other Debt of Parent or any Sister Restricted
Subsidiary also shall be expressly subordinated in any bankruptcy, liquidation
or winding up proceeding of such Guarantor to the prior payment in full in cash
of all obligations of such Guarantor under its Guarantee of such Qualified
Credit Facility to at least the same extent and on the same terms and conditions
as the subordination provisions applicable to such Guarantor’s Note Guarantee.

 

SECTION 1309.     Execution of Offering Proceeds Note
Guarantees for Future Offering Proceeds Note Guarantors; Subordination of
Offering Proceeds Note Guarantee.  (a) 
Each Subsidiary which is required to become an Offering Proceeds Note Guarantor
pursuant to any Section of the Indenture shall promptly execute, and
deliver a copy to the Trustee of, an Offering Proceeds Note Guarantee
substantially in the form set forth in Exhibit E hereto pursuant to which
such Subsidiary shall become an Offering Proceeds Note Guarantor.  Concurrently with the execution and delivery
of such Offering Proceeds Note Guarantee, the Issuer shall deliver to the Trustee
an Opinion of Counsel to the effect that such Offering Proceeds Note Guarantee
has been duly authorized, executed and delivered by such Subsidiary and that,
subject to the application of bankruptcy, insolvency, moratorium, fraudulent
conveyance or transfer and other similar laws relating to creditors’ rights
generally and to the principles of equity, whether considered in a proceeding
at law or in equity, the Offering Proceeds Note Guarantee of such Offering
Proceeds Note Guarantor is a legal, valid and binding obligation of such Offering
Proceeds Note Guarantor, enforceable against such Offering Proceeds Note
Guarantor in accordance with its terms. 
Any Offering Proceeds Note Guarantee of an Offering Proceeds Note 

 

104

 

Guarantor will be released on the terms, and
as set forth in, the form of Offering Proceeds Note Guarantee attached as Exhibit E
hereto.

 

(b)  Each Offering Proceeds Note
Guarantor required expressly to subordinate the payment obligation of certain
intercompany Debt to obligations with respect to the Offering Proceeds Note
Guarantee of such Offering Proceeds Note Guarantor pursuant to, and on terms
set forth in, clause (vi) of paragraph (b) of Section 1010 or
clause (iv) of paragraph (b) of Section 1011, shall promptly execute,
and deliver a copy to the Trustee of, a supplement to the Parent Intercompany
Note Subordination Agreement in substantially the form attached as Exhibit D
hereto.

 

105

 

IN WITNESS WHEREOF, the parties hereto have
caused this Indenture to be duly executed, all as of the day and year first
above written.

 

	
   

  	
  LEVEL
  3 FINANCING, INC., as Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   /s/ Thomas C. Stortz

  
	
   

  	
   

  	
   

  	
  Name:
  Thomas C. Stortz

  
	
   

  	
   

  	
   

  	
  Title:
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
  Legal
  Officer

  

 

 

	
   

  	
  LEVEL
  3 COMMUNICATIONS, INC., as Parent and a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   /s/ Neil J. Eckstein

  
	
   

  	
   

  	
   

  	
  Name:
  Neil J. Eckstein

  
	
   

  	
   

  	
   

  	
  Title:
  Senior Vice President and Assistant

  
	
   

  	
   

  	
   

  	
  General
  Counsel

  

 

106

 

	
   

  	
  THE
  BANK OF NEW YORK MELLON, as Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   /s/ Geovanni Barris

  
	
   

  	
   

  	
   

  	
  Name:  Geovanni Barris

  
	
   

  	
   

  	
   

  	
  Title:
  Vice President

  

 

107

 

APPENDIX A

 

FOR OFFERINGS TO QUALIFIED INSTITUTIONAL
BUYERS PURSUANT TO RULE 144A AND TO CERTAIN PERSONS IN OFFSHORE TRANSACTIONS IN
RELIANCE ON REGULATION S.

 

PROVISIONS RELATING TO INITIAL
SECURITIES

AND EXCHANGE SECURITIES

 

1. Definitions

 

1.1  Definitions

 

For the purposes of this Appendix A the
following terms shall have the meanings indicated below:

 

“Additional Securities” means, subject to the
Issuer’s compliance with the covenants in this Indenture, including Section 1010
and Section 1011, 10% Senior Notes due 2018 issued from time to time after
the Issue Date under the terms of the Indenture (other than pursuant to Section 306,
307, 1016 or 1108 of the Indenture and other than Exchange Securities or
Private Exchange Securities issued pursuant to an exchange offer for other
Securities outstanding under the Indenture).

 

“Definitive Security” means a certificated
Initial Security or Exchange Security or Private Exchange Security bearing, if
required, the restricted securities legend set forth in Section 2.3(c).

 

“Depository” means The Depository Trust
Company, its nominees and their respective successors.

 

“Distribution Compliance Period”, with
respect to any Securities, means the period of 40 consecutive days beginning on
and including the later of (i) the day on which such Securities are first
offered to persons other than distributors (as defined in Regulation S under
the Securities Act) in reliance on Regulation S and (ii) the Issue Date
with respect to such Securities.

 

“Exchange Securities” has the meaning stated
in the first recital of the Indenture.

 

“Euroclear” means the Euroclear Clearance
System or any successor securities clearing agency.

 

“Initial Purchasers” means Banc of America
Securities LLC, Citigroup Global Markets Inc., Morgan Stanley & Co.
Incorporated, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc.
and Wells Fargo Securities, LLC.

 

“Initial Securities” has the meaning stated
in the first recital of the Indenture.

 

“Original Securities” means Initial
Securities in the aggregate principal amount of $640,000,000 issued on January 20,
2010.

 

 

“Private Exchange” means the offer by the
Issuer, pursuant to Section 2(f) of the Registration Agreement dated
as of January 20, 2010, or pursuant to any similar provision of any other
Registration Agreement, to issue and deliver to certain purchasers, in exchange
for the Initial Securities held by such purchasers as part of their initial
distribution, a like aggregate principal amount of Private Exchange Securities.

 

“Private Exchange Securities” means the
Exchange Securities to be issued pursuant to this Indenture in connection with
a Private Exchange Offer pursuant to the relevant Registration Agreement.

 

“Purchase Agreement” means the Purchase
Agreement dated as of January 5, 2010, among Parent, the Issuer and the
Initial Purchasers relating to the Original Securities, or any similar
agreement relating to any future sale of Initial Securities by the Issuer.

 

“QIB” means a “qualified institutional buyer”
as defined in Rule 144A.

 

“Registered Exchange Offer” means the offer
by the Issuer, pursuant to the relevant Registration Agreement, to certain
Holders of Initial Securities, to issue and deliver to such Holders, in
exchange for the Initial Securities, a like aggregate principal amount of
Exchange Securities registered under the Securities Act.

 

“Registration Agreement” means the
Registration Agreement dated as of January 20, 2010, among Parent, the
Issuer and the Initial Purchasers relating to the Original Securities, or any
similar agreement relating to any registration of Additional Securities.

 

“Rule 144A Securities” means all Initial
Securities offered and sold to QIBs in reliance on Rule 144A.

 

“Securities” has the meaning stated in the
first recital of the Indenture and more particularly means any Securities
authenticated and delivered under this Indenture.

 

“Securities Act” means the Securities Act of
1933, as amended (or any successor act), and the rules and regulations
thereunder (or respective successors thereto).

 

“Securities Custodian” means the custodian
with respect to a Global Security (as appointed by the Depository) or any
successor person thereto, who shall initially be the Trustee.

 

“Shelf Registration Statement” means a
registration statement issued by Parent and the Issuer in connection with the
offer and sale of Initial Securities or Private Exchange Securities pursuant to
the relevant Registration Agreement.

 

“Transfer Restricted Securities” means
Definitive Securities and any other Securities that bear or are required to
bear the legend set forth in Section 2.3(c) hereto.

 

A-2

 

1.2  Other
Definitions

 

	
  Term

  	
   

  	
  Defined in Section:

  
	
  “Agent
  Members”

  	
   

  	
  2.1(b)

  
	
  “Global
  Security”

  	
   

  	
  2.1(a)

  
	
  “Regulation
  S”

  	
   

  	
  2.1

  
	
  “Regulation
  S Global Security”

  	
   

  	
  2.1(a)

  
	
  “Rule 144A”

  	
   

  	
  2.1

  
	
  “Rule 144A Global Security”

  	
   

  	
  2.1(a)

  

 

2.   The
Securities

 

2.1  Form and
Dating

 

The Initial Securities will be offered and
sold by the Issuer, from time to time, pursuant to one or more Purchase
Agreements.  The Initial Securities will
be resold initially only to QIBs in reliance on Rule 144A under the
Securities Act (“Rule 144A”) and in reliance on Regulation S under the
Securities Act (“Regulation S”).  Initial
Securities may thereafter be transferred to, among others, QIBs and purchasers
in reliance on Regulation S.

 

(a)  Global Securities.  Initial Securities initially resold pursuant
to Rule 144A shall be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form (collectively,
the “Rule 144A Global Security”) and Initial Securities initially resold
pursuant to Regulation S shall be issued initially in the form of one or more
global securities (collectively, the “Regulation S Global Security”), in each
case without interest coupons and with the global securities legend and
restricted securities legend set forth in Exhibit 1 hereto, which shall be
deposited on behalf of the purchasers of the Initial Securities represented
thereby with the Securities Custodian, and registered in the name of the
Depository or a nominee of the Depository, duly executed by the Issuer and
authenticated by the Trustee as provided in this Indenture.  The Rule 144A Global Security and
Regulation S Global Security are collectively referred to herein as “Global
Securities.”  The aggregate principal
amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the Depository or its
nominee as hereinafter provided.

 

(b)  Book-Entry Provisions.  This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.

 

The Issuer shall execute and the Trustee
shall, in accordance with this Section 2.1(b) and pursuant to an
order of the Issuer, authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for
such Global Security or Global Securities or the nominee of such Depository and
(b) shall be delivered by the Trustee to such Depository or pursuant to
such Depository’s instructions or held by the Trustee as Securities Custodian.

 

Members of, or participants in, the
Depository (“Agent Members”) shall have no rights under this Indenture with
respect to any Global Security held on their behalf by the

 

A-3

 

Depository or by the Trustee
as Securities Custodian or under such Global Security, and the Depository may
be treated by the Issuer, the Trustee and any agent of the Issuer or the
Trustee as the absolute owner of such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein
shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices of such Depository governing the
exercise of the rights of a holder of a beneficial interest in any Global
Security.

 

(c)  Definitive Securities.  Except as provided in Section 2.3 or
2.4, owners of beneficial interests in Global Securities will not be entitled
to receive physical delivery of Definitive Securities.

 

2.2  Authentication.  The Trustee shall authenticate and
deliver:  (1) Original Securities, (2) any
Additional Securities, and (3) the Exchange Securities or Private Exchange
Securities for issue only in a Registered Exchange Offer or a Private Exchange,
respectively, pursuant to the relevant Registration Agreement, for a like
principal amount of Initial Securities or Private Exchange Securities, as
applicable, upon a written order of the Issuer signed by two Officers or by an
Officer and either an Assistant Treasurer or an Assistant Secretary of the
Issuer.  Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated and whether the Securities are to be
Initial Securities or Exchange Securities.

 

2.3  Transfer
and Exchange.  (a)  Transfer
and Exchange of Definitive Securities. 
When Definitive Securities are presented to the Security Registrar or a
co-registrar with a request:

 

(x)  to register the transfer of such Definitive Securities; or

 

(y)  to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,

 

the Security Registrar or co-registrar shall
register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met; provided, however, that the
Definitive Securities surrendered for transfer or exchange:

 

(i)  shall be duly endorsed or accompanied by a written instrument
of transfer in form reasonably satisfactory to the Issuer and the Security
Registrar or co-registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing; and

 

(ii)  if such Definitive Securities bear a restricted securities
legend, they are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act or pursuant to clause (A), (B) or
(C) below, and are accompanied by the following additional information and
documents, as applicable:

 

A-4

 

(A) 
if such Definitive Securities are being delivered to the Security Registrar by
a Holder for registration in the name of such Holder, without transfer, a
certification from such Holder to that effect; or

 

(B) 
if such Definitive Securities are being transferred to the Issuer, a
certification to that effect; or

 

(C) 
if such Definitive Securities are being transferred pursuant to an exemption
from registration in accordance with Rule 144 under the Securities Act, (i) a
certification to that effect and (ii) if the Issuer so requests, an
opinion of counsel or other evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the legend set forth in Section 2.3(d)(i).

 

(b)  Transfer and Exchange of Global Securities.  (i)  The transfer and exchange of
Global Securities or beneficial interests therein shall be effected through the
Depository, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depository therefor.  A transferor of a
beneficial interest in a Global Security shall deliver a written order given in
accordance with the Depository’s procedures containing information regarding
the participant account of the Depository to be credited with a beneficial
interest in the Global Security and such account shall be credited in
accordance with such instructions with a beneficial interest in the Global
Security and the account of the Person making the transfer shall be debited by
an amount equal to the beneficial interest in the Global Security being
transferred.

 

(ii)  If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another Global
Security, the Security Registrar shall reflect on its books and records the
date and an increase in the principal amount of the Global Security to which
such interest is being transferred in an amount equal to the principal amount
of the interest to be so transferred, and the Security Registrar shall reflect
on its books and records the date and a corresponding decrease in the principal
amount of the Global Security from which such interest is being transferred.

 

(iii)  Notwithstanding any other provisions of this Appendix A
(other than the provisions set forth in Section 2.4), a Global Security
may not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.

 

A-5

 

(iv)  In the event that a Global Security is exchanged for
Definitive Securities pursuant to Section 2.4 prior to the consummation of
a Registered Exchange Offer or the effectiveness of a Shelf Registration
Statement with respect to such Securities, such Securities may be exchanged
only in accordance with such procedures as are substantially consistent with
the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Securities intended to
ensure that such transfers comply with Rule 144A, Regulation S or such
other applicable exemption from registration under the Securities Act, as the
case may be) and such other procedures as may from time to time be adopted by
the Issuer.

 

(c)  Legend.

 

(i)  Except as permitted by the following paragraphs (ii), (iii) and
(iv), each certificate evidencing the Global Securities and the Definitive
Securities (and all Securities issued in exchange therefor or in substitution
thereof) shall bear a legend in substantially the following form:

 

“THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”). THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF
THE ISSUER THAT THIS NOTE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED (X) PRIOR TO THE FIRST ANNIVERSARY OF THE ISSUANCE HEREOF (OR
ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN
AFFILIATE OF THE ISSUER AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE
OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE  ISSUER, (2) SO LONG AS THIS NOTE IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”),
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER
ON THE REVERSE OF THIS NOTE), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY
THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS NOTE), (4) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
(IF APPLICABLE) UNDER THE SECURITIES ACT, OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE
WITH ANY APPLICABLE 

 

A-6

 

SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. 
THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND AGREES FOR
THE BENEFIT OF THE ISSUER THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A OR (2) A NON-U.S. PERSON OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS
OF PARAGRAPH (k)(2)(i) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT.”

 

Each Security will also bear the following
additional legend:

 

THIS NOTE WAS ISSUED WITH
ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE ISSUER AGREES TO PROVIDE
PROMPTLY TO THE HOLDER OF THIS NOTE, UPON WRITTEN REQUEST, THE ISSUE PRICE,
AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY WITH
RESPECT TO THE NOTE. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO THE ISSUER AT
THE FOLLOWING ADDRESS: LEVEL 3 FINANCING, INC., 1025 ELDORADO BOULEVARD,
BROOMFIELD, COLORADO 80021, ATTENTION: LEGAL DEPARTMENT.

 

Each Definitive Security will also bear the
following additional legend:

 

“IN
CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE SECURITY REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.”

 

(ii)  Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Security)
pursuant to Rule 144 under the Securities Act:

 

(A) 
in the case of any Transfer Restricted Security that is a Definitive Security,
the Security Registrar shall permit the Holder thereof to exchange such Transfer
Restricted Security for a Security that does not bear the legends set forth
above and rescind any restriction on the transfer of such Transfer Restricted
Security; and

 

(B) 
in the case of any Transfer Restricted Security that is represented by a Global
Security, the Security Registrar shall permit the Holder thereof to exchange
such Transfer Restricted Security for a Security that does not bear the legends
set forth above and rescind any restriction on the transfer of such Transfer
Restricted Security,

 

A-7

 

in
either case, if the Holder certifies in writing to the Security Registrar that
its request for such exchange was made in reliance on Rule 144 (such
certification to be in the form set forth on the reverse of the Initial
Security).

 

(iii)  After a transfer of any Initial Securities or Private
Exchange Securities, as the case may be, during the period of the effectiveness
of a Shelf Registration Statement with respect to such Initial Securities or
Private Exchange Securities, all requirements pertaining to restricted legends
on such Initial Security or such Private Exchange Security will cease to apply
and an Initial Security or Private Exchange Security, as the case may be, in
global form without restricted legends will be available to the transferee of
the beneficial interests of such Initial Securities or Private Exchange
Securities.  Upon the occurrence of any
of the circumstances described in this paragraph, the Issuer will deliver an
Officers’ Certificate to the Trustee instructing the Trustee to issue
Securities without restricted legends.

 

(iv)  Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which certain Holders of such
Initial Securities are offered Exchange Securities in exchange for their
Initial Securities, Exchange Securities in global form without the restricted
legends will be available to Holders or beneficial owners that exchange such
Initial Securities (or beneficial interests therein) in such Registered
Exchange Offer.  Upon the occurrence of
any of the circumstances described in this paragraph, the Issuer will deliver
an Officers’ Certificate to the Trustee instructing the Trustee to issue
Securities without restricted legends.

 

(d)  Cancellation or Adjustment of Global Security.  At such time as all beneficial interests in a
Global Security have either been exchanged for Definitive Securities, redeemed,
repurchased or canceled, such Global Security shall be returned by the Depository
to the Trustee for cancellation or retained and canceled by the Trustee.  At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for Definitive
Securities, redeemed, repurchased or canceled, the principal amount of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is then
the Securities Custodian for such Global Security) with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such
reduction.

 

(e)  Obligations with Respect to
Transfers and Exchanges of Securities.

 

(i)  To permit registrations of transfers and exchanges, the
Issuer shall execute and the Trustee shall authenticate Definitive Securities
and Global Securities at the Security Registrar’s or co-registrar’s request.

 

A-8

 

(ii) No service charge shall be made for any registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge payable in
connection therewith (other than any such transfer taxes, assessments or
similar governmental charge payable upon exchange or transfer pursuant to
Sections 907, 1013, 1017 and 1108 of this Indenture).

 

(iii)  The Security Registrar or co-registrar shall not be
required to register the transfer of or exchange of any Security for a period
beginning 15 days before the mailing of a notice of redemption or an offer to
repurchase Securities or 15 days before an interest payment date.

 

(iv)  Prior to the due presentation for registration of transfer
of any Security, the Issuer, the Trustee, the Paying Agent, the Security
Registrar or any co-registrar may deem and treat the person in whose name a
Security is registered as the absolute owner of such Security for the purpose
of receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and none of
the Issuer, the Trustee, the Paying Agent, the Security Registrar or any
co-registrar shall be affected by notice to the contrary.

 

(v)  All Securities issued upon any transfer or exchange pursuant
to the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.

 

(f)  No Obligation of the Trustee.

 

(i)  The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in the
Depository or any other Person with respect to the accuracy of the records of
the Depository or its nominee or of any participant or member thereof, with
respect to any ownership interest in the Securities or with respect to the
delivery to any participant, member, beneficial owner or other Person (other
than the Depository) of any notice (including any notice of redemption or
repurchase) or the payment of any amount, under or with respect to such
Securities.  All notices and
communications to be given to the Holders and all payments to be made to
Holders under the Securities shall be given or made only to the registered
Holders (which shall be the Depository or its nominee in the case of a Global
Security).  The rights of beneficial
owners in any Global Security shall be exercised only through the Depository
subject to the applicable rules and procedures of the Depository.  The Trustee may conclusively rely and shall
be fully protected in relying upon information furnished by the Depository with
respect to its members, participants and any beneficial owners.

 

A-9

 

(ii)  The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of
any interest in any Security (including any transfers between or among
Depository participants, members or beneficial owners in any Global Security)
other than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.

 

2.4  Definitive Securities

 

(a)           A
Global Security deposited with the Depository or with the Trustee as Securities
Custodian pursuant to Section 2.1 shall be transferred to the beneficial
owners thereof in the form of Definitive Securities in an aggregate principal
amount equal to the principal amount of such Global Security, in exchange for
such Global Security, only if such transfer complies with Section 2.3 and (i) the
Depository notifies the Issuer that it is unwilling or unable to continue as a
Depository for such Global Security or if at any time the Depository ceases to
be a “clearing agency” registered under the Exchange Act, and a successor
Depository is not appointed by the Issuer within 90 days of such notice, or (ii) a
Default or an Event of Default has occurred and is continuing or (iii) the
Issuer, in its sole discretion, notifies the Trustee in writing that it elects
to cause the issuance of Definitive Securities under this Indenture.

 

(b)  Any Global Security that is
transferable to the beneficial owners thereof pursuant to this Section 2.4
shall be surrendered by the Depository to the Trustee, to be so transferred, in
whole or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Security, an equal aggregate principal amount of Definitive Securities of
authorized denominations.  Definitive
Securities issued in exchange for any portion of a Global Security transferred
pursuant to this Section shall be executed, authenticated and delivered
only in denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depository shall direct.  Any Definitive Security delivered in exchange
for an interest in the Global Security shall, except as otherwise provided by Section 2.3(c),
bear the restricted securities legend set forth in Exhibit 1 hereto.

 

(c)  The registered Holder of a Global
Security may grant proxies and otherwise authorize any Person, including Agent
Members and Persons that may hold interests through Agent Members, to take any
action that a Holder is entitled to take under this Indenture or the
Securities.

 

(d)  In the event of the occurrence of
any of the events specified in Section 2.4(a)(i), (ii) or (iii), the
Issuer will promptly make available to the Trustee a reasonable supply of
Definitive Securities in definitive, fully registered form without interest
coupons.

 

A-10

 

EXHIBIT 1

to
APPENDIX A

 

[FORM OF FACE OF INITIAL
SECURITY]

 

[Global Securities Legend]

 

[UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]

 

[Restricted Securities Legend]

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE HOLDER HEREOF,
BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF THE ISSUER THAT THIS NOTE MAY NOT
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE FIRST
ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY
ANY HOLDER THAT WAS AN AFFILIATE OF THE ISSUER AT ANY TIME DURING THE THREE
MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO
THE  ISSUER, (2) SO LONG AS THIS
NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE
144A”) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS NOTE), (3) IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE
BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS NOTE), (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR

 

 

(5) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.  THE HOLDER HEREOF, BY PURCHASING
THIS NOTE, REPRESENTS AND AGREES FOR THE BENEFIT OF THE ISSUER THAT IT IS (1) A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) A
NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT
SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2)(i) OF RULE 902 UNDER)
REGULATION S UNDER THE SECURITIES ACT.

 

[Original Issue Discount Legend]

 

THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE
DISCOUNT FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED. THE ISSUER AGREES TO PROVIDE PROMPTLY TO THE HOLDER
OF THIS NOTE, UPON WRITTEN REQUEST, THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE
DISCOUNT, ISSUE DATE AND YIELD TO MATURITY WITH RESPECT TO THE NOTE. ANY SUCH
WRITTEN REQUEST SHOULD BE SENT TO THE ISSUER AT THE FOLLOWING ADDRESS: LEVEL 3
FINANCING, INC., 1025 ELDORADO BOULEVARD, BROOMFIELD, COLORADO 80021,
ATTENTION: LEGAL DEPARTMENT.

 

[Definitive Securities Legend]

 

[IN CONNECTION WITH ANY
TRANSFER, THE HOLDER WILL DELIVER TO THE SECURITY REGISTRAR AND TRANSFER AGENT
SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.]

 

2

 

[FORM OF FACE OF INITIAL
SECURITY]

 

No.                                                                                                                                                      [up
to]** $                

 

10% Senior Notes due 2018

 

CUSIP No.                      

 

LEVEL 3 FINANCING, INC., a Delaware
corporation, promises to pay to [Cede & Co.]**, or registered assigns,
the principal sum [of                
Dollars]* [as set forth on the
             Schedule
of Increases or Decreases annexed hereto] on February 1, 2018.

 

Interest Payment Dates:  February 1 and August 1.

 

Record Dates: 
January 15 and July 15.

 

	
  *
  Insert for Definitive Securities.

  	
   

  
	
   

  	
   

  
	
  **
  Insert for Global Securities.

  	
   

  

 

 

Additional provisions of this Security are
set forth on the other side of this Security.

 

IN WITNESS WHEREOF, the parties have caused
this instrument to be duly executed.

 

	
   

  	
  LEVEL
  3 FINANCING, INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  Title

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  Title

  

 

 

TRUSTEE’S
CERTIFICATE OF

AUTHENTICATION

 

Dated:

 

THE BANK OF NEW YORK MELLON,

 

	
   

  	
  as
  Trustee, certifies

  	
   

  
	
   

  	
  that
  this is one of

  	
   

  
	
   

  	
  the
  Securities referred

  	
   

  
	
   

  	
  to
  in the Indenture.

  	
   

  
	
   

  	
   

  	
   

  
	
  by:

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
				

 

2

 

[FORM OF REVERSE SIDE OF
INITIAL SECURITY]

 

10% Senior Notes due 2018

 

1.  Interest

 

(a) LEVEL 3 FINANCING, INC., a Delaware
corporation (such corporation, and its successors and assigns under the
Indenture hereinafter referred to, being herein called the “Issuer”), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above.  The Issuer will pay
interest semiannually on February 1 and August 1 of each year,
commencing August 1, 2010.  Interest
on the Security will accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from January 20, 2010.  Interest shall be computed on the basis of a
360-day year of twelve 30-day months.

 

(b) Special Interest.  The holder of this Security is entitled to
the benefits of a Registration Agreement, dated as of January 20, 2010,
among Parent, the Issuer and the Initial Purchasers named therein, or any other
similar Registration Agreement for the registration of Additional Securities  (each, a “Registration Agreement”).
Capitalized terms used in this paragraph (b) but not defined herein have
the meanings assigned to them in the relevant Registration Agreement. If (i) on
or prior to July 19, 2010, neither the Exchange Offer Registration
Statement nor the Shelf Registration Statement has been filed with the
Commission, (ii) on or prior to October 17, 2010 neither the Exchange
Offer Registration Statement nor the Shelf Registration Statement has been
declared effective, (iii) on or prior to the later of November 16,
2010 and 30 business days following the initial effectiveness date of the
Exchange Offer Registration Statement, neither the Exchange Offer has been
consummated nor the Shelf Registration Statement has been declared effective,
or (iv) after either the Exchange Offer Registration Statement or the
Shelf Registration Statement has been declared effective, such Registration
Statement thereafter ceases to be effective or usable (subject to certain
exceptions) in connection with resales of Original Securities or New Securities
offered in exchange for such Original Securities, in accordance with and during
the periods specified in, the Registration Agreement (each such event referred
to in clauses (i) through (iv), a “Registration Default”), interest (“Special
Interest”) will accrue on the principal amount of the Original Securities and
the New Securities offered in exchange for such Original Securities (in
addition to the stated interest on the Original Securities and such New
Securities) from and including the date on which the first such Registration
Default shall occur to but excluding the date on which all Registration
Defaults have been cured.  Special
Interest will accrue at a rate of 0.50% per annum during the 90-day period
immediately following the occurrence of such Registration Default and shall
increase by 0.25% per annum at the end of each subsequent 90-day period, but in
no event shall such rate exceed 1.00% per annum.  Special Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months.  Notwithstanding the foregoing, in the case of
an event referred to in clause (ii) above, a Registration Default will not
be deemed to have occurred so long as the Issuer has used and is continuing to
use its reasonable best efforts to cause the Exchange Offer Registration
Statement to be declared effective.

 

 

2.  Method of Payment

 

The Issuer will pay interest on the
Securities (except defaulted interest) to the Persons who are registered
holders of Securities at the close of business on the January 15 or July 15
next preceding the interest payment date even if Securities are canceled after
the record date and on or before the interest payment date.  Holders must surrender Securities to a Paying
Agent to collect principal payments.  The
Issuer will pay principal and interest in money of the United States of America
that at the time of payment is legal tender for payment of public and private
debts.  Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company.  The Issuer will make all payments in respect
of a Definitive Security (including principal, premium and interest), by
mailing a check to the registered address of each Holder thereof; provided,
however, that, at the option of the Issuer, payments on the Securities may also
be made, in the case of a Holder of at least $1,000,000 aggregate principal
amount of Securities, by wire transfer to a U.S. dollar account maintained by
the payee with a bank in the United States if such Holder requests payment by
wire transfer by giving written notice to the Trustee or the Paying Agent to such
effect designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).

 

3.  Paying Agent and Security Registrar

 

Initially, THE BANK OF NEW YORK MELLON, a New
York banking corporation (the “Trustee”), will act as Paying Agent and Security
Registrar.  The Issuer may appoint and
change any Paying Agent, Security Registrar or co-registrar without notice.

 

4.  Indenture

 

The Issuer issued the Securities under an
Indenture dated as of January 20, 2010 (the “Indenture”), among Parent,
the Issuer and the Trustee.  The terms of
the Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§
77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all such terms,
and Holders are referred to the Indenture and the TIA for a statement of those
terms.

 

The Securities are unsubordinated unsecured
obligations of the Issuer.  [This
Security is one of the Original Securities referred to in the Indenture issued
in an aggregate principal amount of $640,000,000.  The Securities include the Original
Securities, any Additional Securities, and any Exchange Securities issued in
exchange for Original or Additional Securities].  [This Security is one of the Additional
Securities issued in addition to the Original Securities and Exchange
Securities issued in exchange therefor in an aggregate principal amount of
$640,000,000 previously issued under the Indenture.  The Original Securities, the Exchange
Securities issued in exchange for the Original Securities, the Additional
Securities and any Exchange Securities issued in exchange for the Additional
Securities are treated as a single class of securities under the
Indenture.]  The Indenture imposes
certain limitations on the ability of 

 

2

 

Parent, the Issuer and their
respective Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Debt, enter into consensual restrictions upon the payment
of certain dividends and distributions by such Restricted Subsidiaries, issue
or sell shares of capital stock of such Restricted Subsidiaries, enter into or
permit certain transactions with Affiliates, create or incur Liens and make
Asset Sales.  The Indenture also imposes
limitations on the ability of Parent, the Issuer and their respective
Restricted Subsidiaries to consolidate or merge with or into any other Person
or sell, transfer, assign, lease, convey or otherwise dispose of all or
substantially all of the Property of such entities.

 

To guarantee the due and punctual payment of
the principal and interest on the Securities and all other amounts payable by
the Issuer under the Indenture and the Securities when and as the same shall be
due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, Parent has unconditionally
guaranteed the Securities on an unsubordinated basis pursuant to the terms of
the Indenture.

 

5.  Optional Redemption

 

At any time prior to February 1, 2014,
the Issuer may redeem all or a part of the Securities, upon not less than 30
nor more than 60 days’ prior notice, at a Redemption Price equal to 100% of the
principal amount of the Securities so redeemed plus the Applicable Premium as
of, and accrued and unpaid interest thereon (if any) to, but not including, the
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant Interest Payment Date).

 

“Applicable Premium” means, with respect to
any Security on any Redemption Date, the greater of (1) 1.0% of the
principal amount of such Security and (2) the excess, if any, of (a) the
present value at such Redemption Date of (i) the Redemption Price of such
Security at  February 1, 2014 (such
Redemption Price being set forth in the table appearing in this Section 5),
plus (ii) all required interest payments due on such Security through February 1,
2014 (excluding accrued but unpaid interest to the Redemption Date), computed
using a discount rate equal to the Treasury Rate as of such Redemption Date
plus 50 basis points, over (b) the principal amount of such Security.

 

“Treasury Rate” means, as of any Redemption
Date, the yield to maturity as of such Redemption Date of United States
Treasury securities with a constant maturity (as 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 Redemption Date
(or, if such Statistical Release is no longer published, any publicly available
source of similar market data)) most nearly equal to the period from the
Redemption Date to February 1, 2014; provided, however,
that if the period from the redemption date to February 1, 2014 is less
than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year will be used.

 

On and after February 1, 2014, the
Issuer may redeem all or a part of the Securities, upon not less than 30 nor
more than 60 days’ prior notice, at the Redemption Prices 

 

3

 

set forth below (expressed
as a percentage of principal amount), plus accrued and unpaid interest thereon
(if any) to, but not including, the Redemption Date (subject to the right of
holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the twelve months beginning
February 1, of the years indicated below:

 

	
  Period

  	
   

  	
  Redemption Price

  	
   

  
	
  2014

  	
   

  	
  105.000

  	
  %

  
	
  2015

  	
   

  	
  102.500

  	
  %

  
	
  2016 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, at any time from time to time on
or prior to February 1, 2013, the Issuer may redeem up to 35% of the
original aggregate principal amount of the Securities (including any Additional
Securities) at a Redemption Price equal to 110.00% of the principal amount of
the Securities so redeemed, plus a premium equal to the interest rate per annum
on the Securities applicable on the date that notice of redemption is
given,  plus accrued and unpaid interest
thereof (if any) to the Redemption Date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
Interest Payment Date), with the net cash proceeds contributed to the capital
of the Issuer of one or more private placements to Persons other than
Affiliates of Parent or underwritten public offerings of Common Stock of Parent
resulting, in each case, in gross proceeds of at least $100,000,000 in the
aggregate; provided, however, that at least 65% of the original
aggregate principal amount of the Securities (including any Additional
Securities) would remain outstanding immediately after giving effect to such
redemption.  Any such redemption shall be
made within 90 days of such private placement or public offering upon not less
than 30 nor more than 60 days’ prior notice.

 

6.  Sinking Fund

 

The Securities are not subject to any sinking
fund.

 

7.  Notice of Redemption

 

Notice of redemption will be mailed by
first-class mail at least 30 days but not more than 60 days prior to the
Redemption Date to each Holder of Securities to be redeemed at his or her
registered address.  Securities in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000.  If money sufficient to pay the
Redemption Price of and accrued interest on all Securities (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent on or before the Redemption Date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.

 

8.                                       Repurchase of
Securities at the Option of Holders upon Change of Control Triggering Event

 

Upon a Change of Control Triggering Event,
any Holder of Securities will have the right, subject to certain conditions
specified in the Indenture, to cause the Issuer to 

 

4

 

repurchase all or any part
of the Securities of such Holder at a purchase price equal to 101% of the
principal amount of the Securities to be repurchased plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
Interest Payment Date that is on or prior to the date of purchase) as provided
in, and subject to the terms of, the Indenture.

 

9.  Denominations; Transfer; Exchange

 

The Securities are in registered form without
coupons in denominations of $1,000 and whole multiples of $1,000.  A Holder may transfer or exchange Securities
in accordance with the Indenture.  Upon
any transfer or exchange, the Security Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes required by law or permitted by the
Indenture.  The Security Registrar need
not register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to the mailing of a notice of redemption of Securities
to be redeemed or 15 days before an interest payment date.

 

10.  Persons Deemed Owners

 

The registered Holder of this Security may be
treated as the owner of it for all purposes.

 

11.  Unclaimed Money

 

If money for the payment of principal or
interest remains unclaimed for two years, the Trustee or Paying Agent shall pay
the money back to the Issuer at its written request unless an abandoned
property law designates another Person. 
After any such payment, Holders entitled to the money must look only to
the Issuer and not to the Trustee for payment.

 

12.  Discharge and Defeasance

 

Subject to certain conditions, the Issuer at
any time may terminate some of or all its obligations under the Securities and
the Indenture if the Issuer deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.

 

13.  Amendment, Waiver

 

Subject to certain exceptions set forth in
the Indenture, (i) the Indenture or the Securities may be amended without
prior notice to any Holder but with the written consent of the Holders of at
least a majority (or, with respect to certain covenants, the written consent of
at least two-thirds) in aggregate principal amount of the Outstanding
Securities and (ii) any default or noncompliance with any provision may be
waived with the written consent of the Holders of at least a majority in
principal amount of the Outstanding Securities. 
Subject to certain exceptions set forth in the Indenture, without the
consent of any Holder of Securities, the Issuer and the 

 

5

 

Trustee may amend the
Indenture or the Securities (i) to evidence the succession of another
Person to the Issuer, Parent or any other Guarantor and the assumption by such
successor of the covenants of the Issuer, Parent or any other Guarantor,
respectively, in the Indenture, the Securities and the applicable Note
Guarantee, (ii) to add to the covenants of Parent, the Issuer or any of
their respective Subsidiaries, for the benefit of the Holders, or to surrender
any right or power conferred upon Parent, the Issuer or any other Guarantor by
the Indenture; (iii) to add any additional Events of Default; (iv) to
provide for uncertificated Securities in addition to or in place of
certificated Securities; (v) to evidence and provide for the acceptance of
appointment under the Indenture of a successor Trustee; (vi) to secure the
Securities; (vii) to comply with the Trust Indenture Act or the Securities
Act (including Regulation S promulgated thereunder); (viii) to add
additional Note Guarantees or to release any Guarantors from Note Guarantees as
provided by the terms of the Indenture; (ix) to subordinate Note
Guarantees under the circumstances and to the extent set forth in the
Indenture; and (x) to cure any ambiguity in the Indenture, to correct or
supplement any provision in the Indenture which may be inconsistent with any
other provision therein or to add any other provision with respect to matters
or questions arising under the Indenture; provided such actions shall
not adversely affect the interests of the Holders in any material respect.

 

14.  Defaults and Remedies

 

If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding, subject to certain limitations, may
declare all the Securities to be immediately due and payable.  Certain events of bankruptcy or insolvency
are Events of Default and shall result in the Securities being immediately due
and payable upon the occurrence of such Events of Default without any further
act of the Trustee or any Holder.

 

Holders of Securities may not enforce the
Indenture or the Securities except as provided in the Indenture.  The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or
security.  Subject to certain
limitations, Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the Trustee in its exercise of any trust
or power under the Indenture.  The
Holders of a majority in aggregate principal amount of the Securities then
outstanding, by written notice to the Issuer and the Trustee, may rescind any
declaration of acceleration and its consequences if the rescission would not
conflict with any judgment or decree, and if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration.

 

15.  Trustee Dealings with the Issuer

 

Subject to certain limitations imposed by the
TIA,  the Trustee under the Indenture, in
its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with and collect obligations owed to it by
the Issuer or its Affiliates and may otherwise deal with the Issuer or its
Affiliates with the same rights it would have if it were not Trustee.

 

6

 

16.  No Recourse Against Others

 

A director, officer, employee, incorporator
or stockholder, as such, of the Issuer or any Guarantor shall not have any
liability for any obligations of the Issuer under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation, solely by reason of its status as a director,
officer, employee, incorporator or stockholder of such Person.  By accepting a Security, each Securityholder
waives and releases all such liability. 
The waiver and release are part of the consideration for the issue of
the Securities.

 

17.  Authentication

 

This Security shall not be valid until an
authorized signatory of the Trustee (or an authenticating agent) manually signs
the certificate of authentication on the other side of this Security.

 

18.  Abbreviations

 

Customary abbreviations may be used in the
name of a Securityholder or an assignee, such as TEN COM (=tenants in common),
TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A
(=Uniform Gift to Minors Act).

 

19.  Governing Law

 

THIS SECURITY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

20.  CUSIP Numbers

 

Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Issuer has
caused CUSIP numbers to be printed on the Securities and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to
Holders.  No representation is made as to
the accuracy of such numbers either as printed on the Securities or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

 

The Issuer will furnish to any
Holder of Securities upon written request and without charge to the Holder a
copy of the Indenture which has in it the text of this Security.

 

7

 

ASSIGNMENT FORM

 

To assign this Security, fill in the form
below:

 

I or we assign and transfer this Security to

 

(Print or type assignee’s name, address and
zip code)

 

(Insert assignee’s soc. sec. or tax I.D. No.)

 

and irrevocably appoint
                          
agent to transfer this Security on the books of the Issuer.  The agent may substitute another to act for
him.

	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  
	
   

  
	
  Sign exactly as your name
  appears on the other side of this Security.

  

 

In connection with any transfer of any of the
Securities evidenced by this certificate occurring prior to the expiration of
the period referred to in Rule 144(d) under the Securities Act after
the later of the date of original issuance of such Securities and the last
date, if any, on which such Securities were owned by the Issuer or any
Affiliate of the Issuer, the undersigned confirms that such Securities are
being transferred in accordance with its terms:

 

CHECK ONE BOX BELOW

 

(1)                                                                                  o            to the Issuer; or

 

(2)                                                                                  o            pursuant to an effective
registration statement under the Securities Act of 1933; or

 

(3)                                                                                  o            inside the United States to a “qualified
institutional buyer” (as defined in Rule 144A under the Securities Act of
1933) that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is being made in
reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or

 

(4)                                                                                  o            outside the United States in an
offshore transaction within the meaning of Regulation S under the Securities
Act in compliance with Rule 904 under the Securities Act of 1933; or

 

 

(5)                                                                                  o            pursuant to another available
exemption from registration provided by Rule 144 under the Securities Act
of 1933.

 

Unless one of the boxes is checked, the
Trustee will refuse to register any of the Securities evidenced by this
certificate in the name of any person other than the registered holder thereof;
provided, however, that if box (4) or (5) is checked,
the Trustee may require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other information as the
Issuer has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933.

 

	
   

  	
   

  	
  Your
  signature

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
  Signature
  must be guaranteed by a participant in a recognized signature guaranty medallion
  program or other signature guarantor acceptable to the Trustee

  	
   

  	
  Signature
  of Signature

  
	
   

  	
  Guarantee

  
	
   

  	
   

  
	
   

  	
   

  
					

 

TO BE COMPLETED BY PURCHASER IF (3) ABOVE
IS CHECKED:

 

The undersigned represents and warrants that
it is purchasing this Security for its own account or an account with respect
to which it exercises sole investment discretion and that it and any such
account is a “qualified institutional buyer” within the meaning of Rule 144A
under the Securities Act of 1933, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Issuer as the undersigned has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned’s foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NOTICE:
  To be executed by an executive officer

  

 

2

 

[TO BE ATTACHED TO GLOBAL
SECURITIES]

 

SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY

 

The initial principal amount of this Global
Security is $[        ].  The following increases or decreases in this
Global Security have been made:

 

	
  Date
  of

  Exchange

  	
   

  	
  Amount of

  decrease in

  Principal

  Amount of this

  Global Security

  	
   

  	
  Amount of

  increase in

  Principal

  Amount of this

  Global Security

  	
   

  	
  Principal

  amount of this

  Global Security

  following such

  decrease or

  increase

  	
   

  	
  Signature of

  authorized

  signatory of

  Trustee or

  Securities

  Custodian

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

3

 

OPTION OF HOLDER TO ELECT
PURCHASE

 

If you want to elect to have this
Security purchased by the Issuer pursuant to Section 1016 (Asset Sale) or
1009 (Change of Control Triggering Event) of the Indenture, check the box:

 

o

 

If you want to elect to have only
part of this Security purchased by the Issuer pursuant to Section 1016 or
1009 of the Indenture, state the amount:

 

$

 

	
  Date:
  

  	
   

  	
  Your
  Signature:

  	
   

  	
   

  
	
  (Sign
  exactly as your name appears on the other side of the Security)

  
	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
  Signature must be guaranteed by a participant in
  a recognized signature guaranty medallion program or other signature
  guarantor acceptable to the Trustee.

  
							

 

 

EXHIBIT
A

 

[FORM OF FACE OF SECURITY]

 

[Global Securities Legend]

 

[UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]

 

[Original Issue Discount Legend]

 

THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE
DISCOUNT FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED. THE ISSUER AGREES TO PROVIDE PROMPTLY TO THE HOLDER
OF THIS NOTE, UPON WRITTEN REQUEST, THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE
DISCOUNT, ISSUE DATE AND YIELD TO MATURITY WITH RESPECT TO THE NOTE. ANY SUCH
WRITTEN REQUEST SHOULD BE SENT TO THE ISSUER AT THE FOLLOWING ADDRESS: LEVEL 3
FINANCING, INC., 1025 ELDORADO BOULEVARD, BROOMFIELD, COLORADO 80021,
ATTENTION: LEGAL DEPARTMENT.

 

[Definitive Securities Legend]

 

[IN CONNECTION WITH ANY
TRANSFER, THE HOLDER WILL DELIVER TO THE SECURITY REGISTRAR AND TRANSFER AGENT
SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.]

 

 

[FORM OF FACE OF SECURITY]

 

	
  No.

  	
  [up to](**) $                        

  

 

10% Senior Notes due 2018

 

	
  CUSIP No.                      

  

 

LEVEL 3 FINANCING, INC., a Delaware
corporation, promises to pay to [Cede & Co.]** or registered assigns,
the principal sum [of                Dollars]*
[as set forth on the Schedule of Increases or Decreases annexed hereto] on February 1,
2018.

 

Interest Payment Dates:  February 1 and August 1.

 

Record Dates: 
January 15 and July 15.

 

* Insert for Definitive
Securities.

 

** If the Security is to be
issued in global form, add the attachment from Exhibit 1 to Appendix A captioned
“TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN
GLOBAL SECURITY”.

 

2

 

Additional provisions of this Security are
set forth on the other side of this Security.

 

IN WITNESS WHEREOF, the parties have caused
this instrument to be duly executed.

 

	
   

  	
  LEVEL
  3 FINANCING, INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
   

  	
  Title

  

 

	
  TRUSTEE’S
  CERTIFICATE OF

  
	
  AUTHENTICATION

  
	
   

  
	
  Dated:

  
	
   

  
	
  THE
  BANK OF NEW YORK MELLON,

  
	
   

  
	
   

  	
  as
  Trustee, certifies

  
	
   

  	
  that
  this is one of

  
	
   

  	
  the
  Securities referred

  
	
   

  	
  to
  in the Indenture.

  
	
   

  
	
  by:

  	
   

  	 

	
  Authorized Signatory

  	
   

  
					

 

3

 

[FORM OF REVERSE SIDE OF
SECURITY]

 

10% Senior Notes due 2018

 

1.  Interest

 

LEVEL 3 FINANCING, INC., a Delaware
corporation (such corporation, and its successors and assigns under the
Indenture hereinafter referred to, being herein called the “Issuer”), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above.  The Issuer will pay
interest semiannually on February 1 and August 1 of each year,
commencing August 1, 2010.  Interest
on the Security will accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from January 20, 2010.  Interest shall be computed on the basis of a
360-day year of twelve 30-day months.

 

2.  Method
of Payment

 

The Issuer will pay interest on the
Securities (except defaulted interest) to the Persons who are registered
holders of Securities at the close of business on the January 15 or July 15
next preceding the interest payment date even if Securities are canceled after
the record date and on or before the interest payment date.  Holders must surrender Securities to a Paying
Agent to collect principal payments.  The
Issuer will pay principal and interest in money of the United States of America
that at the time of payment is legal tender for payment of public and private
debts.  Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company.  The Issuer will make all payments in respect
of a Definitive Security (including principal, premium and interest), by
mailing a check to the registered address of each Holder thereof; provided,
however, that, at the option of the Issuer, payments on the Securities may also
be made, in the case of a Holder of at least $1,000,000 aggregate principal
amount of Securities, by wire transfer to a U.S. dollar account maintained by
the payee with a bank in the United States if such Holder requests payment by
wire transfer by giving written notice to the Trustee or the Paying Agent to
such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).

 

3.  Paying
Agent and Security Registrar

 

Initially, THE BANK OF NEW YORK MELLON, a New
York banking corporation (the “Trustee”), will act as Paying Agent and Security
Registrar.  The Issuer may appoint and
change any Paying Agent, Security Registrar or co-registrar without notice.

 

4.  Indenture

 

The Issuer issued the Securities under an
Indenture dated as of January 20, 2010 (the “Indenture”), among Parent,
the Issuer and the Trustee.  The terms of
the Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§
77aaa-77bbbb) as in effect on the date of the Indenture (the

 

 

“TIA”).  Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all such terms,
and Holders are referred to the Indenture and the TIA for a statement of those
terms.

 

The Securities are unsubordinated unsecured
obligations of the Issuer.  [This
Security is one of the Original Securities referred to in the Indenture issued
in an aggregate principal amount of $640,000,000.  The Securities include the Original
Securities, any Additional Securities, and any Exchange Securities issued in
exchange for Original or Additional Securities].  [This Security is one of the Additional
Securities issued in addition to the Original Securities and Exchange
Securities issued in exchange therefor in an aggregate principal amount of
$640,000,000 previously issued under the Indenture.  The Original Securities, the Exchange
Securities issued in exchange for the Original Securities, the Additional
Securities and any Exchange Securities issued in exchange for the Additional
Securities are treated as a single class of securities under the
Indenture.]  The Indenture imposes
certain limitations on the ability of Parent, the Issuer and their respective
Restricted Subsidiaries to, among other things, make certain Investments and
other Restricted Payments, pay dividends and other distributions, incur Debt,
enter into consensual restrictions upon the payment of certain dividends and
distributions by such Restricted Subsidiaries, issue or sell shares of capital
stock of such Restricted Subsidiaries, enter into or permit certain
transactions with Affiliates, create or incur Liens and make Asset Sales.  The Indenture also imposes limitations on the
ability of Parent, the Issuer and their respective Restricted Subsidiaries to
consolidate or merge with or into any other Person or sell, transfer, assign,
lease, convey or otherwise dispose of all or substantially all of the Property
of such entities.

 

To guarantee the due and punctual payment of
the principal and interest on the Securities and all other amounts payable by
the Issuer under the Indenture and the Securities when and as the same shall be
due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, Parent has unconditionally
guaranteed the Securities on an unsubordinated basis pursuant to the terms of
the Indenture.

 

5.  Optional
Redemption

 

At any time prior to February 1, 2014,
the Issuer may redeem all or a part of the Securities, upon not less than 30
nor more than 60 days’ prior notice, at a Redemption Price equal to 100% of the
principal amount of the Securities so redeemed plus the Applicable Premium as
of, and accrued and unpaid interest thereon (if any) to, but not including, the
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant Interest Payment Date).

 

“Applicable Premium” means, with respect to
any Security on any Redemption Date, the greater of (1) 1.0% of the
principal amount of such Security and (2)  the excess, if any, of (a) the
present value at such Redemption Date of (i) the Redemption Price of such
Security at  February 1, 2014 (such
Redemption Price being set forth in the table appearing in this Section 5),
plus (ii) all required interest payments due on such Security through February 1,
2014 (excluding accrued but unpaid interest to the Redemption Date), computed
using a discount rate equal to the 

 

2

 

Treasury Rate as of such
Redemption Date plus 50 basis points, over (b) the principal amount of
such Security.

 

“Treasury Rate” means, as of any Redemption Date,
the yield to maturity as of such Redemption Date of United States Treasury
securities with a constant maturity (as 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 Redemption Date (or, if such
Statistical Release is no longer published, any publicly available source of
similar market data)) most nearly equal to the period from the Redemption Date
to February 1, 2014; provided, however,
that if the period from the redemption date to February 1, 2014 is less
than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year will be used.

 

On and after February 1, 2014, the
Issuer may redeem all or a part of the Securities, upon not less than 30 nor
more than 60 days’ prior notice, at the Redemption Prices set forth below
(expressed as a percentage of principal amount), plus accrued and unpaid
interest thereon (if any) to, but not including, the Redemption Date (subject
to the right of holders of record on the relevant record date to receive
interest due on the relevant interest payment date), if redeemed during the
twelve months beginning February 1, of the years indicated below:

 

	
  Period

  	
   

  	
  Redemption Price

  	
   

  
	
  2014

  	
   

  	
  105.000

  	
  %

  
	
  2015

  	
   

  	
  102.500

  	
  %

  
	
  2016 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, at any time from time to time on
or prior to February 1, 2013, the Issuer may redeem up to 35% of the
original aggregate principal amount of the Securities (including any Additional
Securities) at a Redemption Price equal to 110.00% of the principal amount of
the Securities so redeemed, plus a premium equal to the interest rate per annum
on the Securities applicable on the date that notice of redemption is given,
plus accrued and unpaid interest thereof (if any) to the Redemption Date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant Interest Payment Date), with the net cash
proceeds contributed to the capital of the Issuer of one or more private
placements to Persons other than Affiliates of Parent or underwritten public
offerings of Common Stock of Parent resulting, in each case, in gross proceeds
of at least $100,000,000 in the aggregate; provided, however,
that at least 65% of the original aggregate principal amount of the Securities
(including any Additional Securities) would remain outstanding immediately
after giving effect to such redemption. 
Any such redemption shall be made within 90 days of such private
placement or public offering upon not less than 30 nor more than 60 days’ prior
notice.

 

6.  Sinking
Fund

 

The Securities are not subject to any sinking
fund.

 

3

 

7.  Notice
of Redemption

 

Notice of redemption will be mailed by
first-class mail at least 30 days but not more than 60 days prior to the
Redemption Date to each Holder of Securities to be redeemed at his or her
registered address.  Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000.  If money sufficient
to pay the Redemption Price of and accrued interest on all Securities (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent on or before the Redemption Date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.

 

8.  Repurchase
of Securities at the Option of Holders upon Change of Control Triggering Event

 

Upon a Change of Control Triggering Event,
any Holder of Securities will have the right, subject to certain conditions
specified in the Indenture, to cause the Issuer to repurchase all or any part
of the Securities of such Holder at a purchase price equal to 101% of the
principal amount of the Securities to be repurchased plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
Interest Payment Date that is on or prior to the date of purchase) as provided
in, and subject to the terms of, the Indenture.

 

9.  Denominations;
Transfer; Exchange

 

The Securities are in registered form without
coupons in denominations of $1,000 and whole multiples of $1,000.  A Holder may transfer or exchange Securities
in accordance with the Indenture.  Upon
any transfer or exchange, the Security Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes required by law or permitted by the
Indenture.  The Security Registrar need
not register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to the mailing of a notice of redemption of Securities
to be redeemed or 15 days before an interest payment date.

 

10.  Persons Deemed Owners

 

The registered Holder of this Security may be
treated as the owner of it for all purposes.

 

11.  Unclaimed Money

 

If money for the payment of principal or
interest remains unclaimed for two years, the Trustee or Paying Agent shall pay
the money back to the Issuer at its written request unless an abandoned
property law designates another Person. 
After any such payment, Holders entitled to the money must look only to
the Issuer and not to the Trustee for payment.

 

4

 

12.  Discharge and Defeasance

 

Subject to certain conditions, the Issuer at
any time may terminate some of or all its obligations under the Securities and
the Indenture if the Issuer deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.

 

13.  Amendment, Waiver

 

Subject to certain exceptions set forth in
the Indenture, (i) the Indenture or the Securities may be amended without
prior notice to any Holder but with the written consent of the Holders of at
least a majority (or, with respect to certain covenants, the written consent of
at least two-thirds) in aggregate principal amount of the Outstanding Securities
and (ii) any default or noncompliance with any provision may be waived
with the written consent of the Holders of at least a majority in principal
amount of the Outstanding Securities. 
Subject to certain exceptions set forth in the Indenture, without the
consent of any Holder of Securities, the Issuer and the Trustee may amend the
Indenture or the Securities (i) to evidence the succession of another
Person to the Issuer, Parent or any other Guarantor and the assumption by such
successor of the covenants of the Issuer, Parent or any other Guarantor,
respectively, in the Indenture, the Securities and the applicable Note
Guarantee, (ii) to add to the covenants of Parent, the Issuer or any of
their respective Subsidiaries, for the benefit of the Holders, or to surrender
any right or power conferred upon Parent, the Issuer or any other Guarantor by
the Indenture; (iii) to add any additional Events of Default; (iv) to
provide for uncertificated Securities in addition to or in place of
certificated Securities; (v) to evidence and provide for the acceptance of
appointment under the Indenture of a successor Trustee; (vi) to secure the
Securities; (vii) to comply with the Trust Indenture Act or the Securities
Act (including Regulation S promulgated thereunder); (viii) to add
additional Note Guarantees or to release any Guarantors from Note Guarantees as
provided by the terms of the Indenture; (ix) to subordinate Note
Guarantees under the circumstances and to the extent set forth in the
Indenture; and (x) to cure any ambiguity in the Indenture, to correct or
supplement any provision in the Indenture which may be inconsistent with any
other provision therein or to add any other provision with respect to matters
or questions arising under the Indenture; provided such actions shall
not adversely affect the interests of the Holders in any material respect.

 

14.  Defaults and Remedies

 

If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding, subject to certain limitations, may
declare all the Securities to be immediately due and payable.  Certain events of bankruptcy or insolvency
are Events of Default and shall result in the Securities being immediately due
and payable upon the occurrence of such Events of Default without any further
act of the Trustee or any Holder.

 

Holders of Securities may not enforce the
Indenture or the Securities except as provided in the Indenture.  The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or
security.  Subject to certain
limitations, Holders of a

 

5

 

 

majority in aggregate
principal amount of the Securities then outstanding may direct the Trustee in
its exercise of any trust or power under the Indenture.  The Holders of a majority in aggregate
principal amount of the Securities then outstanding, by written notice to the
Issuer and the Trustee, may rescind any declaration of acceleration and its
consequences if the rescission would not conflict with any judgment or decree,
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration.

 

15.  Trustee Dealings with the Issuer

 

Subject to certain limitations imposed by the
TIA,  the Trustee under the Indenture, in
its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with and collect obligations owed to it by
the Issuer or its Affiliates and may otherwise deal with the Issuer or its
Affiliates with the same rights it would have if it were not Trustee.

 

16.  No Recourse Against Others

 

A director, officer, employee, incorporator
or stockholder, as such, of the Issuer or any Guarantor shall not have any
liability for any obligations of the Issuer under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation, solely by reason of its status as a director,
officer, employee, incorporator or stockholder of such Person.  By accepting a Security, each Securityholder
waives and releases all such liability. 
The waiver and release are part of the consideration for the issue of
the Securities.

 

17.  Authentication

 

This Security shall not be valid until an
authorized signatory of the Trustee (or an authenticating agent) manually signs
the certificate of authentication on the other side of this Security.

 

18.  Abbreviations

 

Customary abbreviations may be used in the
name of a Securityholder or an assignee, such as TEN COM (=tenants in common),
TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A
(=Uniform Gift to Minors Act).

 

19.  Governing Law

 

THIS SECURITY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

6

 

20.  CUSIP Numbers

 

Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Issuer has
caused CUSIP numbers to be printed on the Securities and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to
Holders.  No representation is made as to
the accuracy of such numbers either as printed on the Securities or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

 

The Issuer will furnish to any
Holder of Securities upon written request and without charge to the Holder a
copy of the Indenture which has in it the text of this Security.

 

7

 

ASSIGNMENT FORM

 

To assign this Security, fill in the form
below:

 

I or we assign and transfer this Security to

 

(Print or type assignee’s name, address and
zip code)

 

(Insert assignee’s soc. sec. or tax I.D. No.)

 

and irrevocably appoint
                          
agent to transfer this Security on the books of the Issuer.  The agent may substitute another to act for
him.

 

	
   

  	
   

  
	
   

  	
   

  
	
  Date: 

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Sign exactly as your name
  appears on the other side of this Security. Signature must be guaranteed by a
  participant in a recognized signature guaranty medallion program or other
  signature guarantor acceptable to the Trustee.

  
						

 

 

OPTION OF HOLDER TO ELECT
PURCHASE

 

If you want to elect to have this
Security purchased by the Issuer pursuant to Section 1016 (Asset Sale) or
1009 (Change of Control Triggering Event) of the Indenture, check the box:

 

o

 

If you want to elect to have only
part of this Security purchased by the Issuer pursuant to Section 1016 or
1009 of the Indenture, state the amount:

 

$

 

	
  Date:
  

  	
   

  	
  Your
  Signature:

  	
   

  	
   

  
	
  (Sign exactly as your name
  appears on the other side of the Security)

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
  Signature must be
  guaranteed by a participant in a recognized signature guaranty medallion
  program or other signature guarantor acceptable to the Trustee.

  
							

 

 

EXHIBIT B

 

INCUMBENCY CERTIFICATE

 

The undersigned,
                        ,
being the
                        
of
                        
(the “Company”) does hereby certify that the individuals listed below are
qualified and acting officers of the Company as set forth in the right column
opposite their respective names and the signatures appearing in the extreme
right column opposite the name of each such officer is a true specimen of the
genuine signature of such officer and such individuals have the authority to
execute documents to be delivered to, or upon the request of, The Bank of New
York Mellon, as Trustee under the Indenture dated as of
                       ,
20    , among the Company, [Level 3 Communications, Inc./Level
3 Financing, Inc.] and The Bank of New York Mellon.

 

	
  Name

  	
   

  	
  Title

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

IN WITNESS WHEREOF, the undersigned has duly
executed and delivered this Certificate as of the
         day of
                ,
20    .

 

	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

EXHIBIT C

 

FORM OF SUPPLEMENTAL INDENTURE

 

SUPPLEMENTAL INDENTURE (this
“Supplemental Indenture”) dated as of         ,
among [GUARANTOR] (the “New Guarantor”), a direct or indirect subsidiary of
Level 3 Communications, Inc. (or its successor), a Delaware corporation (“Parent”),
LEVEL 3 FINANCING, INC., a Delaware corporation (the “Issuer”) on behalf of
itself and the Guarantors (the “Existing Guarantors”), if any, under the
Indenture referred to below, and THE BANK OF NEW YORK MELLON, a New York
banking corporation, as trustee under the indenture referred to below (the “Trustee”).

 

W I T N E S
S E T H :

 

WHEREAS the Issuer and Parent have heretofore
executed and delivered to the Trustee an Indenture dated as of January 20,
2010 (the “Indenture”; capitalized terms used but not defined herein having the
meanings assigned thereto in the Indenture), providing for the issuance of its
10% Senior Notes Due 2018;

 

WHEREAS the Indenture permits the New
Guarantor to execute and deliver to the Trustee a supplemental indenture
pursuant to which the New Guarantor shall unconditionally guarantee all the
Issuer’s obligations under the Securities pursuant to a Guarantee on the terms
and conditions set forth herein;

 

WHEREAS the Guarantee contained in this
Supplemental Indenture shall constitute a “Restricted Subsidiary Guarantee”,
and the New Guarantor shall constitute a “Guarantor”, for all purposes of the
Indenture; and

 

WHEREAS pursuant to Section 901 and Section 1307
of the Indenture, the Trustee and the Issuer are authorized to execute and
deliver this Supplemental Indenture;

 

NOW THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the New Guarantor, the Issuer, the Existing Guarantors
and the Trustee mutually covenant and agree for the equal and ratable benefit
of the holders of the Securities as follows:

 

1. Agreement to Guaranty. The New
Guarantor hereby agrees, jointly and severally with all the existing
Guarantors, to unconditionally guarantee the Issuer’s obligations under the
Securities on the terms and subject to the conditions set forth in Article 13
of the Indenture and to be bound by all other applicable provisions of the
Indenture and the Securities.

 

2. Successors and Assigns. This
Supplemental Indenture shall be binding upon the New Guarantor and its
successors and assigns and shall enure to the benefit of the

 

 

successors and assigns of
the Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges conferred upon
that party in the Indenture and in the Securities shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions of this Indenture.

 

3. No Waiver. Neither a failure nor a
delay on the part of either the Trustee or the Holders in exercising any right,
power or privilege under this Supplemental Indenture, the Indenture or the
Securities shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise of any right, power or
privilege. The rights, remedies and benefits of the Trustee and the Holders
herein and therein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Supplemental
Indenture, the Indenture or the Securities at law, in equity, by statute or
otherwise.

 

4. Modification. No modification,
amendment or waiver of any provision of this Supplemental Indenture, nor the
consent to any departure by the New Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Trustee, and
then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice to or demand on the New Guarantor
in any case shall entitle the New Guarantor to any other or further notice or
demand in the same, similar or other circumstances.

 

5. Opinion of Counsel. Concurrently
with the execution and delivery of this Supplemental Indenture, the Issuer
shall deliver to the Trustee an Opinion of Counsel to the effect that this
Supplemental Indenture has been duly authorized, executed and delivered by each
of the New Guarantor and the Issuer and that, subject to the application of
bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other
similar laws relating to creditors’ rights generally and to the principles of
equity, whether considered in a proceeding at law or in equity, the Guarantee
of the New Guarantor is a legal, valid and binding obligation of the New
Guarantor, enforceable against the New Guarantor in accordance with its terms.

 

6.  Ratification of Indenture;
Supplemental Indentures Part of Indenture. Except as expressly amended
hereby, the Indenture is in all respects ratified and confirmed and all the
terms, conditions and provisions thereof shall remain in full force and effect.
This Supplemental Indenture shall form a part of the Indenture for all
purposes, and every holder of Securities heretofore or hereafter authenticated
and delivered shall be bound hereby.

 

7. Governing Law.  THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

C-2

 

8. Counterparts. The parties may sign
any number of copies of this Supplemental Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement.

 

9. Effect of Headings. The Section headings
herein are for convenience only and shall not effect the construction thereof.

 

C-3

 

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

 

	
   

  	
  [NEW
  GUARANTOR],

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LEVEL 3 FINANCING, INC.,
  on behalf of itself as the Issuer and the Existing Guarantors, if any,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK MELLON, as Trustee,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  
				

 

C-4

 

EXHIBIT
D

 

PARENT INTERCOMPANY NOTE
SUBORDINATION AGREEMENT dated as of January 20, 2010 among LEVEL 3
FINANCING, INC. (the “Issuer”), LEVEL 3 COMMUNICATIONS, LLC (“Level 3
LLC”), each Issuer Restricted Subsidiary (as defined in the Indenture described
below) that becomes party hereto as provided in Section 4.12 hereto (each
such Issuer Restricted Subsidiary and Level 3 LLC individually, a “Subordinated
Borrower,” and collectively, the “Subordinated Borrowers”), LEVEL 3
COMMUNICATIONS, INC. (“Parent”), each Sister Restricted Subsidiary (as defined
in the Indenture described below) that becomes party hereto as provided in Section 4.13
hereto (each such Sister Restricted Subsidiary and Parent individually, a “Subordinated
Lender,” and collectively, the “Subordinated Lenders”).

 

Reference is made to (a) the Purchase
Agreement dated as of January 5, 2010 (the “Purchase Agreement”) among the
initial purchasers party thereto (the “Purchasers”), the Issuer and Parent, (b) the
Indenture dated as of January 20, 2010 (the “Indenture”) among the Issuer,
Parent and The Bank of New York Mellon, as trustee (in such capacity, the “Trustee”),
(c) the intercompany demand note dated the Issue Date, in an initial
principal amount equal to $640,000,000, issued by Level 3 LLC to the
Issuer, as it may be amended from time to time pursuant to Sections 301 and
1020 of the Indenture (the “Offering Proceeds Note”) and (d) the
intercompany demand note dated December 8, 1999, as amended and restated
on October 1, 2003 (the “Parent Intercompany Note”) issued by Level 3
LLC to Parent, the outstanding balance of which, as of September 30, 2009,
was $18,800,000,000. Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to such terms in the Indenture.

 

The Issuer has agreed to sell to the
Purchasers, upon the terms set forth in the Purchase Agreement, its 10% Senior
Notes due 2018 (the “Securities”) to be guaranteed on an unsecured
unsubordinated basis by Parent. The obligation of the Purchasers to purchase
the Securities is conditioned on, among other things, the execution and
delivery by Parent, the Issuer and Level 3 LLC of a subordination
agreement in the form hereof. Additionally, upon the incurrence of certain
intercompany indebtedness, the Indenture requires Restricted Subsidiaries of
Parent (other than the Issuer) to guarantee the Offering Proceeds Note (each
such guarantee, an “Offering Proceeds Note Guarantee”, and each such Restricted
Subsidiary that provides such a guarantee, an “Offering Proceeds Note Guarantor”)
and to subordinate their obligations with respect to such newly incurred
indebtedness to their obligations with respect to their Offering Proceeds Note
Guarantee. Offering Proceeds Note Guarantors required to provide subordination
with respect to intercompany indebtedness and the creditors on such
indebtedness are required to become parties to this Agreement, if they are not
yet parties. In order to induce the Purchasers to purchase the Securities,
Parent, the Issuer and Level 3 LLC are willing to execute and deliver this
Agreement. Accordingly, Parent,

 

 

as a Subordinated Lender,
the Issuer and Level 3 LLC, as a Subordinated Borrower, hereby agree as
follows:

 

ARTICLE I

 

Subordination

 

SECTION 1.1. Subordination.  Each Subordinated Lender hereby agrees that
all obligations in respect of any Debt owed to such Subordinated Lender by any
Subordinated Borrower, including the payment of principal, premium (if any),
interest, Guarantees or all other amounts payable thereunder (the “Subordinated
Obligations”), are subordinate and junior in right of payment, to the extent
and in the manner provided in this Article I, to the prior payment in full
in cash of all obligations of such Subordinated Borrower in respect of the
Offering Proceeds Note, including the payment of principal, premium (if any),
interest (including interest arising after the commencement of a bankruptcy or
other proceeding, whether or not such a claim is permitted in such proceeding),
Offering Proceeds Note Guarantees thereof or all other amounts payable
thereunder (the “Senior Obligations”).

 

SECTION 1.2.  Subordination in the Event of Dissolution
or Insolvency of any Subordinated Borrower. 
Subject to the terms of a subordination agreement entered into pursuant
to Section 4.14, upon any distribution of the assets of any Subordinated
Borrower in connection with its dissolution or insolvency or upon any
dissolution, winding up, liquidation or reorganization of any Subordinated
Borrower, whether in bankruptcy, insolvency, reorganization, arrangement or
receivership or similar proceedings, or upon any assignment for the benefit of
creditors or any other marshaling of the assets and liabilities of any
Subordinated Borrower:

 

(a)  the Issuer shall first be entitled
to receive payment in full in cash of the Senior Obligations of such
Subordinated Borrower in accordance with the terms of such Senior Obligations
before any Subordinated Lender shall be entitled to receive any payment on
account of the Subordinated Obligations owed by such Subordinated Borrower to
such Subordinated Lender, whether as principal, premium (if any), interest,
pursuant to an Offering Proceeds Note Guarantee or otherwise; and

 

(b)  any payment by, or distribution of
the assets of, such Subordinated Borrower of any kind or character, whether in
cash, property or securities, to which any Subordinated Lender would be
entitled except for the provisions of this Agreement shall be paid or delivered
by the Person making such payment or distribution (whether a trustee in
bankruptcy, a receiver, custodian or liquidating trustee or otherwise) directly
to the Issuer to the extent necessary to make payment in full in cash of all
Senior Obligations remaining unpaid, after giving effect to any concurrent
payment or distribution to the Issuer in respect of the Senior Obligations.

 

In the event of any proceeding involving any
Subordinated Borrower under any bankruptcy, insolvency, reorganization,
receivership or similar law, each Subordinated 

 

D-2

 

Lender agrees, until the indefeasible payment
in full of all monetary Senior Obligations, not to ask, demand, sue for or take
or receive from any Subordinated Borrower in cash, securities or other property
or by setoff, purchase or redemption (including, without limitation, from or by
way of collateral), payment of all or any part of the Subordinated Obligations
owed to such Subordinated Lender (other than payments permitted pursuant to
clause (b) above) and agrees that in connection with any proceeding
involving any Subordinated Borrower under any bankruptcy, insolvency,
reorganization, receivership or similar law (i) the Issuer is irrevocably
authorized and empowered (in its own name or in the name of such Subordinated
Borrower or otherwise), but shall have no obligation, to demand, sue for,
collect and receive every payment or distribution referred to in the preceding
sentence and give acquittance therefor and to file claims and proofs of claim
and take such other action (including, without limitation, voting the
applicable Subordinated Obligations and enforcing any security interest or
other lien securing payment of such Subordinated Obligations) as the Issuer may
deem necessary or advisable for the exercise or enforcement of any of its
rights or interests and (ii) each Subordinated Lender shall duly and promptly
take such action as the Issuer may reasonably request to (A) collect
amounts in respect of the applicable Subordinated Obligations for the account
of the Issuer and to file appropriate claims or proofs of claim in respect of
such Subordinated Obligations, (B) execute and deliver to the Issuer such
irrevocable powers of attorney, assignments or other instruments as the Issuer
may reasonably request in order to enable the Issuer to enforce any and all
claims with respect to, and any security interests and other liens securing
payment of, the applicable Subordinated Obligations and (C) collect and
receive any and all payments or distributions which may be payable or
deliverable upon or with respect to the applicable Subordinated
Obligations.  A copy of this Agreement
may be filed with any court as evidence of the Issuer’s right, power and
authority hereunder.

 

SECTION 1.3.  Certain Payments Held in Trust.  Subject to the terms of a subordination
agreement entered into pursuant to Section 4.14, in the event that any
payment by, or distribution of the assets of, any Subordinated Borrower of any
kind or character, whether in cash, property or securities, and whether
directly or otherwise, shall be received by or on behalf of any Subordinated
Lender at a time when such payment is prohibited by this Agreement, such
payment or distribution shall be held in trust for the benefit of, and shall be
paid over to, the Issuer to the extent necessary to make payment in full in
cash of all Senior Obligations remaining unpaid, after giving effect to any
concurrent payment or distribution to the Issuer in respect of such Senior
Obligations.

 

SECTION 1.4.  Subrogation.  Subject to the prior indefeasible payment in
full in cash of the Senior Obligations, each Subordinated Lender shall be
subrogated to the rights of the Issuer to receive payments or distributions in
cash, property or securities of each applicable Subordinated Borrower in
respect of the Senior Obligations until all amounts owing on the applicable
Subordinated Obligations shall be paid in full, and as between and among a
Subordinated Borrower, its creditors (other than the Issuer) and the applicable
Subordinated Lender, no such payment or distribution made to the Issuer by
virtue of this Agreement that otherwise would have been made to such
Subordinated 

 

D-3

 

Lender shall be deemed to be
a payment by such Subordinated Borrower on account of such Subordinated
Obligations, it being understood that the provisions of this Agreement are
intended solely for the purpose of defining the relative rights of the
Subordinated Lenders, on the one hand, and the Issuer, on the other hand.

 

ARTICLE II

 

Other Matters Regarding the Subordinated Obligations

 

SECTION 2.1.  Other Creditors.  Except in the limited circumstances set forth
in Article I, nothing contained in this Agreement is intended to or shall
impair, as between and among a Subordinated Borrower, its creditors and any
Subordinated Lender, the obligations of such Subordinated Borrower to pay to
such Subordinated Lender the Subordinated Obligations of such Subordinated
Borrower as and when the same shall become payable in accordance with the terms
thereof, or affect the relative rights of such Subordinated Lender and the
other creditors of such Subordinated Borrower.

 

SECTION 2.2.  Proofs of Claims.  In the event of any dissolution, winding up,
liquidation or reorganization of any Subordinated Borrower, whether in
bankruptcy, insolvency, reorganization, arrangement or receivership proceedings
or otherwise, or any assignment for the benefit of creditors or any other
marshaling of the assets and liabilities of any Subordinated Borrower, each
Subordinated Lender agrees to file proofs of claim for the Subordinated
Obligations owed to it upon demand of the Issuer, in default of which the
Issuer or an authorized representative of the Issuer is hereby irrevocably
authorized so to file in order to effectuate the provisions hereof.  This Section shall not be construed to
permit any Subordinated Lender to retain any payment received by it in respect
of a Subordinated Obligation that such Subordinated Lender is not entitled to
receive and retain under any other provision of this Agreement.

 

SECTION 2.3.  Waivers.  (a)  Each Subordinated Lender waives the
right to compel any assets or property of any Subordinated Borrower or the
assets or property of any Offering Proceeds Note Guarantor or any other Person
to be applied in any particular order to discharge the Senior Obligations.  Each Subordinated Lender expressly waives the
right to require the Issuer to proceed against any Subordinated Borrower, any
Offering Proceeds Note Guarantor or any other Person, or to pursue any other
remedy in the Issuer’s power which such Subordinated Lender cannot pursue and
which would lighten such Subordinated Lender’s burden, notwithstanding that the
failure of the Issuer to do so may thereby prejudice such Subordinated
Lender.  Each Subordinated Lender agrees
that it shall not be discharged, exonerated or have its obligations hereunder
to the Issuer reduced (i) by the Issuer’s delay in proceeding against or
enforcing any remedy against any Subordinated Borrower, any Offering Proceeds
Note Guarantor or any other Person; (ii) by the Issuer releasing any
Subordinated Borrower, any Offering Proceeds Note Guarantor or any other Person
from all or any part of the Senior Obligations; or (iii) by the discharge
of any Subordinated Borrower, any Offering Proceeds Note Guarantor or any other
Person by an operation of law or otherwise, with or without the intervention or
omission of the Issuer, except in each case unless all Senior Obligations due
to the 

 

D-4

 

Issuer have been
indefeasibly paid in full in cash.  The
Issuer’s vote to accept or reject any plan of reorganization relating to any
Subordinated Borrower, any Offering Proceeds Note Guarantor or any other
Person, or the Issuer’s receipt on account of all or part of the Senior
Obligations of any cash, securities or other property distributed in any
bankruptcy, reorganization, or insolvency case, shall not discharge, exonerate,
or reduce the obligations of any Subordinated Lender hereunder to the Issuer,
except in each case unless all Senior Obligations have been indefeasibly paid
in full in cash.

 

(b)  Each Subordinated Lender waives all
rights and defenses arising out of an election of remedies by the Issuer, even
though that election of remedies, including, without limitation, any
nonjudicial foreclosure with respect to security for the Senior Obligations,
has impaired the value of such Subordinated Lender’s rights of subrogation,
reimbursement, or contribution against any Subordinated Borrower, any Offering
Proceeds Note Guarantor or any other Person. 
Each Subordinated Lender expressly waives any rights or defenses it may
have by reason of protection afforded to any Subordinated Borrower, any
Offering Proceeds Note Guarantor or any other Person with respect to the Senior
Obligations pursuant to any anti deficiency laws or other laws of similar
import which limit or discharge the principal debtor’s indebtedness upon
judicial or nonjudicial foreclosure of real property or personal property
collateral for the Senior Obligations, if any.

 

(c)  Each Subordinated Lender agrees
that, without the necessity of any reservation of rights against it, and
without notice to or further assent by it, any demand for payment of the Senior
Obligations made by the Issuer may be rescinded in whole or in part by the
Issuer, and any Senior Obligation may be continued, and the Senior Obligations,
or the liability of any Subordinated Borrower or any Offering Proceeds Note
Guarantor or any other party upon or for any part thereof, or any Guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, modified, accelerated, compromised,
waived, surrendered, or released by the Issuer, in each case without notice to
or further assent by such Subordinated Lender, which will remain bound under
this Agreement and without impairing, abridging, releasing or affecting the
subordination and other agreements provided for herein.

 

(d)  Each Subordinated Lender waives any
and all notice of the creation, renewal, extension or accrual of any of the
Senior Obligations and notice of or proof of reliance by the Issuer upon this
Agreement.  The Senior Obligations, and
any of them, shall be deemed conclusively to have been created, contracted or
incurred in reliance upon this Agreement, and all dealings between any Subordinated
Borrower and the Issuer shall be deemed to have been consummated in reliance
upon this Agreement.  Each Subordinated
Lender acknowledges and agrees that the Issuer has relied upon the
subordination and other agreements provided for herein in consenting to this
Agreement.  Each Subordinated Lender
waives notice of or proof of reliance on this Agreement and protest, demand for
payment and notice of default.

 

D-5

 

SECTION 2.4.  Legend.  Any and all instruments or records now or
hereafter creating or evidencing the Subordinated Obligations, whether upon
refunding, extension, renewal, refinancing, replacement or otherwise, shall
contain the following legend:

 

“Notwithstanding anything contained herein to the contrary, neither the
principal of nor the interest on, nor any other amounts payable in respect of,
the indebtedness created or evidenced by this instrument or record shall become
due or be paid or payable, except to the extent permitted under the Parent
Intercompany Note Subordination Agreement dated as of January 20, 2010,
among Level 3 Communications, Inc., [any additional Subordinated Lenders,]
Level 3 Communications, LLC[, any additional Subordinated Borrowers] and Level
3 Financing, Inc., which Parent Intercompany Note Subordination Agreement
is incorporated herein with the same effect as if fully set forth herein.”

 

SECTION 2.5.  Transfer of Subordinated Obligations.  Each Subordinated Lender agrees that it will
not sell, assign, transfer or otherwise dispose of all or any part of the
Subordinated Obligations owed to it unless the Person to whom such sale,
assignment, transfer or disposition is made shall acknowledge in writing
(delivered to the Issuer and the Purchasers) that it shall be bound by the
terms of this Agreement to the same extent as such Subordinated Lender,
including the terms of this Section 2.5, as though it is a party hereto as
of the date hereof.

 

SECTION 2.6.  Obligations Hereunder Not Affected.  (a)  All rights and interests of the
Issuer hereunder, and all agreements and obligations of each Subordinated
Lender hereunder, shall remain in full force and effect irrespective of:

 

(i)            any
lack of validity or enforceability of the Offering Proceeds Note, the Purchase
Agreement or any document contemplated thereby;

 

(ii)           any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Senior Obligations, or any other amendment or waiver of or
consent to departure from the Offering Proceeds Note;

 

(iii)          any
release, amendment, waiver or other modification, whether in writing or by
course of conduct or otherwise, of, or consent to departure from, any Offering
Proceeds Note Guarantee; or

 

(iv)          any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Subordinated Borrower in respect of its Senior Obligations or
of any Subordinated Lender in respect of this Agreement.

 

D-6

 

(b)  This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
the Senior Obligations or any part thereof is rescinded or must otherwise be
returned by the Issuer upon the insolvency, bankruptcy or reorganization of any
Subordinated Borrower or otherwise, all as though such payment had not been
made.

 

ARTICLE III

 

Representations and Warranties of the Subordinated
Lenders

 

Each Subordinated Lender represents and
warrants to the Issuer that:

 

(a)  It is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized.

 

(b)  The execution, delivery and
performance by it of this Agreement and the consummation of the transactions
contemplated hereby are within its powers, have been duly authorized by all
necessary action on its part, require no action by or in respect of, or filing
with, any court or governmental or regulatory body or agency (other than such
as have been duly taken or made) and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of its certificate of
incorporation or by-laws (or other organizational documents, as applicable) or
of any material agreement, judgment, injunction, order, decree or other
instrument binding upon it or any of its subsidiaries.

 

(c)  This Agreement constitutes a valid
and binding agreement of such Subordinated Lender, enforceable against such
Subordinated Lender in accordance with its terms, subject to the effect of
applicable bankruptcy, insolvency or similar laws affecting creditors’ rights
generally and equitable principles of general applicability.

 

ARTICLE IV

 

Miscellaneous

 

SECTION 4.1.  Notices.  All communications and notices hereunder
shall be in writing and shall be mailed or delivered and sent by fax and confirmed
at 1025 Eldorado Boulevard, Broomfield, Colorado 80021, attention:  General Counsel (Telecopy No. 720-888-5127;
Telephone Confirm 720-888-2505), with a copy in like manner to Banc of America
Securities LLC at One Bryant Park, New York, New York 10036 (Telecopy No. (212)
901-7897).

 

SECTION 4.2.  Successors and Assigns.  Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party.  All
representations, warranties, covenants, promises and agreements by or on behalf
of each Subordinated Lender and each Subordinated Borrower that are contained
in this Agreement shall bind its successors and 

 

D-7

 

assigns and inure to the
benefit of the Issuer and the successors and assigns of the Issuer.  Each Subordinated Lender and each
Subordinated Borrower agrees that it shall not assign or delegate any of its
obligations under this Agreement without the prior written consent of the
Issuer, and any attempted assignment or delegation without such consent shall
be void and of no effect.

 

SECTION 4.3.  Governing Law; Jurisdiction; Consent to
Service of Process.  (a)    THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

 

(b)  Each Subordinated Lender hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this
Agreement shall affect any right that the Issuer may otherwise have to bring
any action or proceeding relating to this Agreement against any Subordinated
Lender or its properties in the courts of any jurisdiction.

 

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

 

(d)  Each Subordinated Lender hereby
irrevocably consents to service of process in the manner provided for notices
in Section 4.1 hereto.  Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.

 

SECTION 4.4.  Waivers; Amendment.  No failure or delay of the Issuer in
exercising any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power by the Issuer
preclude any other or further exercise thereof or the exercise of any other
right or power.  The rights and remedies
of the Issuer hereunder and instruments creating or securing its respective 

 

D-8

 

Senior Obligations are
cumulative and are not exclusive of any other rights or remedies provided by
law.  Neither this Agreement nor any
provision hereof may be waived, amended or modified except (i) in
accordance with Section 1020 of the Indenture and (ii) pursuant to an
agreement or agreements in writing entered into by the Issuer, each
Subordinated Lender and each Subordinated Borrower intending to be bound
thereby.

 

SECTION 4.5.  Waiver of Claims.  (a)  To the maximum extent
permitted by law, each Subordinated Lender waives any claim it might have
against the Issuer with respect to, or arising out of, any action or failure to
act or any error of judgment, negligence, or mistake or oversight whatsoever on
the part of the Issuer or its directors, officers, employees, agents or
affiliates with respect to any exercise of rights or remedies under the
Offering Proceeds Note.  Neither the
Issuer nor any of its respective directors, officers, employees, agents or
affiliates shall be liable for failure to demand, collect or realize upon any
Offering Proceeds Note Guarantee or for any delay in doing so or shall be under
any obligation to take any other action whatsoever with regard to the Offering
Proceeds Note or any part thereof.

 

(b)  Each Subordinated Lender, for
itself and on behalf of its successors and assigns, hereby waives any and all
now existing or hereafter arising rights it may have to require the Issuer to
marshal assets for the benefit of such Subordinated Lender, or to otherwise
direct the timing, order or manner of any enforcement of the Offering Proceeds
Note.  The Issuer is under no duty or
obligation, and each Subordinated Lender hereby waives any right it may have to
compel the Issuer, to pursue any Offering Proceeds Note Guarantor or other
Person who may be liable for the Senior Obligations.

 

(c)  Each Subordinated Lender hereby
waives and releases all rights which a guarantor or surety with respect to the
Senior Obligations could exercise.

 

(d)  Each Subordinated Lender hereby
waives any duty on the part of the Issuer to disclose to it any fact known or
hereafter known by the Issuer relating to the operation or financial condition
of any Subordinated Borrower or any Offering Proceeds Note Guarantor, or their
respective businesses.  Each Subordinated
Lender enters into this Agreement based solely upon its independent knowledge
of the applicable Subordinated Borrower’s results of operations, financial
condition and business and such Subordinated Lender assumes full responsibility
for obtaining any further or future information with respect to the applicable
Subordinated Borrower or its results of operations, financial condition or
business.

 

SECTION 4.6.  Further Assurances.  Each Subordinated Lender and each
Subordinated Borrower, at its own expense and at any time from time to time,
upon the written request of the Issuer, will promptly and duly execute and
deliver such further instruments and documents and take such further actions as
the Issuer reasonably may request for the purposes of obtaining or preserving
the full benefits of this Agreement and of the rights and powers herein
granted.

 

D-9

 

SECTION 4.7.  Provisions Define Relative Rights.  This Agreement is intended solely for the
purpose of defining the relative rights of the Issuer on the one hand and the
Subordinated Lenders and the Subordinated Borrowers on the other, and no other
Person shall have any right, benefit or other interest under this Agreement.

 

SECTION 4.8.  WAIVER OF JURY TRIAL.   EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN  ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 4.9.  Severability.  In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.  The parties shall
endeavor in good faith negotiations to replace any invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

 

SECTION 4.10.  Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which, when
taken together, shall constitute but one instrument.

 

SECTION 4.11.  Headings.  Article and Section headings used
herein are for convenience of reference only, are not part of this Agreement
and are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.

 

SECTION 4.12.  Additional Subordinated Borrowers.  Pursuant to clause (vi) of paragraph (b) of
Section 1010 of the Indenture or clause (iv) of paragraph (b) of
Section 1011 of the Indenture, upon execution and delivery by, as
applicable, any Restricted Subsidiary or Issuer Restricted Subsidiary of an
instrument in the form of Annex I attached hereto or otherwise in a form
acceptable to the Issuer, such Restricted Subsidiary or Issuer Restricted Subsidiary,
as applicable, shall become a Subordinated Borrower hereunder with the same
force and effect as if originally named as a Subordinated Borrower herein.  The execution and delivery of any such
instrument shall not require the consent of any other Subordinated Borrower
hereunder.  The rights and 

 

D-10

 

obligations of each
Subordinated Borrower herein shall remain in full force and effect
notwithstanding the addition of any Subordinated Borrower as a party to this
Agreement.

 

SECTION 4.13.  Additional Subordinated Lenders.  Pursuant to clause (vi) of paragraph (b) of
Section 1010 of the Indenture or clause (iv) of paragraph (b) of
Section 1011 of the Indenture or both such clauses, upon execution and
delivery by any Sister Restricted Subsidiary of an instrument in the form of
Annex II attached hereto or otherwise in a form acceptable to the Issuer, such
Sister Restricted Subsidiary shall become a Subordinated Lender hereunder with
the same force and effect as if originally named as a Subordinated Lender
herein.  The execution and delivery of
any such instrument shall not require the consent of any other Subordinated
Lender hereunder.  The rights and
obligations of each Subordinated Lender herein shall remain in full force and
effect notwithstanding the addition of any Subordinated Lender as a party to
this Agreement.

 

SECTION 4.14.  Subordination of Senior Obligations to
Qualified Credit Facility.  The
Issuer, a Subordinated Borrower and the Subordinated Lenders may enter into an
agreement or arrangement that provides that the payment obligation on the
Senior Obligations of such Subordinated Borrower be expressly subordinated in
any bankruptcy, liquidation or winding up proceeding of such Subordinated
Borrower to the prior payment in full in cash of all obligations of such
Subordinated Borrower under any Guarantee of, or obligation as borrower under,
any Qualified Credit Facility Incurred by Parent or a Restricted Subsidiary in
accordance with clause (ii) of paragraph (b) of Section 1010 or
clause (ii) of paragraph (b) of Section 1011 of the Indenture; provided,
however, that (x) the terms of the subordination of such Senior
Obligations of such Subordinated Borrower, to any such Guarantee of or
obligation as borrower under a Qualified Credit Facility may not eliminate or
otherwise adversely affect the subordination of the payment obligation on any
other Debt of such Subordinated Borrower, to the payment obligation of the
Senior Obligations of such Subordinated Borrower, and (y) any Guarantee
(other than a Guarantee of such Qualified Credit Facility) by such Subordinated
Borrower of any other Debt of Parent or any Sister Restricted Subsidiary also
shall be expressly subordinated in any bankruptcy, liquidation or winding up
proceeding of such Subordinated Borrower, to the prior payment in full in cash
of all obligations of such Subordinated Borrower under its Guarantee of such
Qualified Credit Facility to at least the same extent and on the same terms and
conditions as the subordination provisions applicable to the Senior Obligations
of such Subordinated Borrower.

 

D-11

 

IN WITNESS WHEREOF, Level 3 LLC, as
a Subordinated Borrower, Parent, as a Subordinated Lender and the Issuer have caused
this Agreement to be duly executed by their respective authorized
representatives as of the day and year first above written.

 

 

	
   

  	
  LEVEL
  3 COMMUNICATIONS, LLC,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
   

  	
  LEVEL
  3 COMMUNICATIONS, INC.,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
   

  	
  LEVEL
  3 FINANCING, INC.,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

D-12

 

Annex I to the Parent Intercompany

Note Subordination Agreement

 

SUPPLEMENT
NO. [   ] dated as of
[                  ]
to the Parent Intercompany Note Subordination Agreement dated as of January 20,
2010 (the “Parent Intercompany Note Subordination Agreement”), among
LEVEL 3 COMMUNICATIONS, LLC (“Level 3 LLC”), each Restricted
Subsidiary or Issuer Restricted Subsidiary becoming a party thereto pursuant to
Section 4.12 thereof (each such Restricted Subsidiary or Issuer Restricted
Subsidiary and Level 3 LLC, a “Subordinated Borrower”), LEVEL 3
COMMUNICATIONS, INC. (“Parent”), each Sister Restricted Subsidiary becoming a
party thereto pursuant to Section 4.13 thereof (each such Sister
Restricted Subsidiary and Parent, a “Subordinated Lender”) and LEVEL 3
FINANCING, INC. (the “Issuer”).

 

Reference is made to the Parent Intercompany
Note Subordination Agreement.

 

Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Parent Intercompany Note Subordination Agreement.

 

Pursuant to clause (vi) of paragraph (b) of
Section 1010 or clause (iv) of paragraph (b) of Section 1011
of the Indenture, as applicable, a Restricted Subsidiary or an Issuer
Restricted Subsidiary is allowed to incur Debt from Parent or a Sister
Restricted Subsidiary provided that (i) such Restricted Subsidiary or
Issuer Restricted Subsidiary, as applicable, is a Guarantor and an Offering
Proceeds Note Guarantor and (ii) such Debt is expressly subordinated in
any bankruptcy, liquidation or winding up proceeding of such Restricted
Subsidiary or Issuer Restricted Subsidiary, as applicable, to such Restricted
Subsidiary’s or Issuer Restricted Subsidiary’s Offering Proceeds Note
Guarantee, as applicable.  Section 4.12
of the Parent Intercompany Note Subordination Agreement provides that a
Restricted Subsidiary or an Issuer Restricted Subsidiary may become a
Subordinated Borrower under the Parent Intercompany Note Subordination
Agreement by execution and delivery of an instrument in the form of this
Supplement.  The undersigned Restricted
Subsidiary or Issuer Restricted Subsidiary (the “New Subordinated Borrower”) is
executing this Supplement to become a Subordinated Borrower under the Parent
Intercompany Note Subordination Agreement in order to comply with the terms of
the Indenture and as consideration for amounts previously advanced to the
Issuer under the Indenture.

 

Accordingly, the New Subordinated Borrower
agrees as follows:

 

In accordance with Section 4.12 of the
Parent Intercompany Note Subordination Agreement, the New Subordinated Borrower
by its signature below becomes a Subordinated Borrower under the Parent
Intercompany Note Subordination Agreement with the same force and effect as if
originally named therein as a

 

 

Subordinated Borrower and
the New Subordinated Borrower hereby agrees to all the terms and provisions of
the Parent Intercompany Note Subordination Agreement applicable to it as a
Subordinated Borrower thereunder.  Each
reference to a “Subordinated Borrower” in the Parent Intercompany Note
Subordination Agreement shall be deemed to include the New Subordinated
Borrower.  The Parent Intercompany Note
Subordination Agreement is hereby incorporated herein by reference.

 

The New Subordinated Borrower represents and
warrants to the Issuer that this Supplement has been duly authorized, executed
and delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, 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.

 

This Supplement may be executed in
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute a single contract.  This Supplement shall become effective when
the Issuer shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Subordinated Borrower and the
Issuer.  Delivery of an executed
signature page to this Supplement by facsimile transmission shall be as
effective as delivery of a manually executed counterpart of this Supplement.

 

Except as expressly supplemented hereby and
pursuant to any other supplement contemplated by Section 4.12 or 4.13 of
the Parent Intercompany Note Subordination Agreement, the Parent Intercompany
Note Subordination Agreement shall remain in full force and effect.

 

THIS SUPPLEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

 

In the event any one or more of the
provisions contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.  The parties shall
endeavor in good faith negotiations to replace any invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

 

All communications and notices hereunder
shall be in writing and given as provided in Section 4.1 of the Parent
Intercompany Note Subordination Agreement. 
All communications and notices hereunder to the New Subordinated
Borrower shall be given to it at the address set forth under its signature
below.

 

2

 

IN WITNESS WHEREOF, the New Subordinated
Borrower and the Issuer have duly executed this Supplement to the Parent
Intercompany Note Subordination Agreement as of the day and year first above
written.

 

 

	
   

  	
  [NAME
  OF NEW SUBORDINATED

  
	
   

  	
  BORROWER],

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
   

  	
  LEVEL
  3 FINANCING, INC.,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

3

 

Annex II to the Parent Intercompany

Note Subordination Agreement

 

SUPPLEMENT
NO. [   ] dated as of
[                       ]
to the Parent Intercompany Note Subordination Agreement dated as of January 20,
2010 (the “Parent Intercompany Note Subordination Agreement”), among
LEVEL 3 COMMUNICATIONS, LLC (“Level 3 LLC”), each Restricted
Subsidiary or Issuer Restricted Subsidiary becoming a party thereto pursuant to
Section 4.12 thereof (each such Restricted Subsidiary or Issuer Restricted
Subsidiary and Level 3 LLC, a “Subordinated Borrower”), LEVEL 3
COMMUNICATIONS, INC. (“Parent”), each Sister Restricted Subsidiary becoming a
party thereto pursuant to Section 4.13 thereof (each such Sister
Restricted Subsidiary and Parent, a “Subordinated Lender” and, collectively,
the “Subordinated Lenders”) and LEVEL 3 FINANCING, INC. (the “Issuer”).

 

Reference is made to the Parent Intercompany
Note Subordination Agreement.

 

Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Parent Intercompany Note Subordination Agreement.

 

Pursuant to clause (vi) of paragraph (b) of
Section 1010 or clause (iv) of paragraph (b) of Section 1011
of the Indenture, as applicable, a Restricted Subsidiary or an Issuer
Restricted Subsidiary is allowed to incur Debt from Parent or a Sister
Restricted Subsidiary provided that (i) such Restricted Subsidiary or
Issuer Restricted Subsidiary, as applicable, is a Guarantor and an Offering
Proceeds Note Guarantor and (ii) such Debt is subordinated in any
bankruptcy, liquidation or winding up proceeding of such Restricted Subsidiary
or Issuer Restricted Subsidiary, as applicable, to such Restricted Subsidiary’s
or Issuer Restricted Subsidiary’s Offering Proceeds Note Guarantee.  Section 4.13 of the Parent Intercompany
Note Subordination Agreement provides that a Sister Restricted Subsidiary may
become a Subordinated Lender under the Parent Intercompany Note Subordination
Agreement by execution and delivery of an instrument in the form of this
Supplement.  The undersigned Sister
Restricted Subsidiary (the “New Subordinated Lender”) is executing this
Supplement to become a Subordinated Lender under the Parent Intercompany Note
Subordination Agreement in order to comply with the terms of the Indenture and
as consideration for amounts previously advanced to the Issuer under the
Indenture.

 

Accordingly, the New Subordinated Lender
agrees as follows:

 

In accordance with Section 4.13 of the
Parent Intercompany Note Subordination Agreement, the New Subordinated Lender
by its signature below becomes a Subordinated Lender under the Parent
Intercompany Note Subordination Agreement with the same force and effect as if
originally named therein as a Subordinated Lender

 

 

and the New Subordinated
Lender hereby (a) agrees to all the terms and provisions of the Parent
Intercompany Note Subordination Agreement applicable to it as a Subordinated
Lender thereunder and (b) represents and warrants that the representations
and warranties made by it as a Subordinated Lender thereunder are true and
correct on and as of the date hereof. 
Each reference to a “Subordinated Lender” in the Parent Intercompany
Note Subordination Agreement shall be deemed to include the New Subordinated
Lender.  The Parent Intercompany Note
Subordination Agreement is hereby incorporated herein by reference.

 

The New Subordinated Lender represents and
warrants to the Issuer that this Supplement has been duly authorized, executed
and delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, 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.

 

This Supplement may be executed in
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute a single contract.  This Supplement shall become effective when
the Issuer shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Subordinated Lender and the
Issuer.  Delivery of an executed
signature page to this Supplement by facsimile transmission shall be as
effective as delivery of a manually executed counterpart of this Supplement.

 

Except as expressly supplemented hereby and
pursuant to any other supplement contemplated by Section 4.12 or 4.13 of
the Parent Intercompany Note Subordination Agreement, the Parent Intercompany
Note Subordination Agreement shall remain in full force and effect.

 

THIS SUPPLEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

 

In the event any one or more of the
provisions contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.  The parties shall
endeavor in good faith negotiations to replace any invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

 

All communications and notices hereunder
shall be in writing and given as provided in Section 4.1 of the Parent
Intercompany Note Subordination Agreement. 
All 

 

2

 

communications and notices
hereunder to the New Subordinated Lender shall be given to it at the address
set forth under its signature below.

 

3

 

IN WITNESS WHEREOF, the New Subordinated Lender
and the Issuer have duly executed this Supplement to the Parent Intercompany
Note Subordination Agreement as of the day and year first above written.

 

 

	
   

  	
  [NAME
  OF NEW SUBORDINATED 

  
	
   

  	
  LENDER]

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  LEVEL
  3 FINANCING, INC.,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

4

 

EXHIBIT E

 

OFFERING PROCEEDS NOTE
GUARANTEE AGREEMENT (this “Agreement”) dated as of
[           ], between
[OFFERING PROCEEDS NOTE GUARANTOR] (the “Offering Proceeds Note Guarantor”), a
subsidiary of Level 3 Financing, Inc., and LEVEL 3 FINANCING,
INC. (the “Issuer”).

 

W I T N E S S E T H :

 

WHEREAS Level 3 Communications, LLC (“Level 3
LLC”) has heretofore executed and delivered to Level 3 Financing, Inc.
(the “Issuer”) an intercompany demand note in an initial principal amount equal
to $640,000,000, as it may be amended from time to time pursuant to
Sections 301 and 1020 of the Indenture (as defined below) (the “Offering
Proceeds Note”).

 

WHEREAS the Issuer has heretofore executed
and delivered to The Bank of New York Mellon, as trustee, an Indenture dated as
of January 20, 2010 (the “Indenture”; capitalized terms used but not
defined herein having the meanings assigned thereto in the Indenture),
providing for the issuance of its 10% Senior Notes Due 2018 (the “Securities”);

 

WHEREAS the Indenture permits the Offering
Proceeds Note Guarantor to incur certain Debt provided, among other things,
that such Offering Proceeds Note Guarantor execute and deliver to the Issuer a
Guarantee pursuant to which the Offering Proceeds Note Guarantor shall
unconditionally guarantee all Level 3 LLC’s obligations under the Offering
Proceeds Note pursuant to a Guarantee on the terms and conditions set forth
herein; and

 

WHEREAS the Guarantee contained in this
Guarantee Agreement shall constitute an “Offering Proceeds Note Guarantee” for
all purposes of the Indenture;

 

NOW THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the Offering Proceeds Note Guarantor and the Issuer
mutually covenant and agree for the equal and ratable benefit of the Issuer as
follows:

 

ARTICLE I

 

Offering Proceeds Note Guarantee

 

SECTION 1.01. Guarantees.  Subject to a subordination agreement entered
into pursuant to Section 1.03, the Offering Proceeds Note Guarantor hereby
unconditionally guarantees to the Issuer and its successors and assigns (a) the
full and punctual payment in cash of all obligations of Level 3 LLC in respect
of the Offering Proceeds Note, including the payment of principal, premium (if
any), interest (including

 

 

interest arising after the
commencement of a bankruptcy or other proceeding, whether or not such a claim
is permitted in such proceeding) or any other amount payable thereunder (the “Obligations”).  The Offering Proceeds Note Guarantor further
agrees that the Obligations may be extended or renewed, in whole or in part,
without notice or further assent from the Offering Proceeds Note Guarantor and
that the Offering Proceeds Note Guarantor will remain bound under this
Agreement notwithstanding any extension or renewal of the Obligations.

 

The Offering Proceeds Note Guarantor waives
presentation to, demand of, payment from and protest to Level 3 LLC of any of
the Obligations and also waives notice of protest for nonpayment.  The Offering Proceeds Note Guarantor waives
notice of any default under the Obligations. 
The obligations of the Offering Proceeds Note Guarantor hereunder shall
not be affected by (a) the failure of the Issuer to assert any claim or
demand or to enforce any right or remedy against Level 3 LLC, any Offering
Proceeds Note Guarantor or any other Person under the Offering Proceeds Note or
any other agreement or otherwise; (b) any extension or renewal of any
obligation thereof; (c) any rescission, waiver, amendment or modification
of any of the terms or provisions of the Offering Proceeds Note, any Offering
Proceeds Note Guarantee or any other agreement or (d) the release of any
security held by the Issuer for the Obligations, if any.

 

The Offering Proceeds Note Guarantor further
agrees that its Guarantee herein constitutes a Guarantee of payment,
performance and compliance when due (and not a guarantee of collection) and
waives any right to require that any resort be had by the Issuer to any
security held for payment of the Obligations.

 

Except as expressly set forth in Section 1.03
or Section 2.08, the obligations of the Offering Proceeds Note Guarantor
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Obligations or otherwise.  Without limiting the generality of the
foregoing, the obligations of the Offering Proceeds Note Guarantor herein shall
not be discharged or impaired or otherwise affected by the failure of the
Issuer to assert any claim or demand or to enforce any remedy under the
Offering Proceeds Note, any Offering Proceeds Note Guarantee or any other
agreement, by any waiver or modification of any term thereof, by any default,
failure or delay, willful or otherwise, in the performance of the Obligations,
or by any other act or thing or omission or delay to do any other act or thing
which may or might in any manner or to any extent vary the risk of the Offering
Proceeds Note Guarantor or would otherwise operate as a discharge of the
Offering Proceeds Note Guarantor as a matter of law or equity.

 

The Offering Proceeds Note Guarantor further
agrees that its Guarantee herein shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
principal of or (premium, if any) interest on any Senior 

 

E-2

 

Obligation is rescinded or
must otherwise be restored by the Issuer upon the bankruptcy or reorganization
of Level 3 LLC or otherwise.

 

In furtherance of the foregoing and not in
limitation of any other right which the Issuer has at law or in equity against
the Offering Proceeds Note Guarantor by virtue hereof, upon the failure of
Level 3 LLC to pay the principal of (or premium, if any) or interest on the
Obligations when and as the same shall become due or to perform or comply with
any other Senior Obligation, the Offering Proceeds Note Guarantor hereby
promises to and will, upon receipt of written demand by the Issuer, forthwith
pay, or cause to be paid, in cash, to the Issuer an amount equal to all unpaid
amounts in respect of the Obligations.

 

The Offering Proceeds Note Guarantor agrees
that it shall not be entitled to any right of subrogation in respect of any
Obligations guaranteed hereby until payment in full in cash of all Obligations.

 

The Offering Proceeds Note Guarantor also
agrees to pay any and all costs and expenses (including reasonable attorneys’
fees) incurred by the Issuer in enforcing any rights under this Article I.

 

SECTION 1.02. Contribution.  The Offering Proceeds Note Guarantor (a “Contributing
Party”) agrees that, in the event a payment shall be made by any other Offering
Proceeds Note Guarantor under any other Offering Proceeds Note Guarantee (the “Claiming
Offering Proceeds Note Guarantor”), the Contributing Party shall indemnify the
Claiming Offering Proceeds Note Guarantor in an amount equal to the amount of
such payment multiplied by a fraction, the numerator of which shall be the net
worth of the Contributing Party (which shall be measured on the date hereof)
and the denominator of which shall be the aggregate net worth of Level 3 LLC on
the Issue Date and the Offering Proceeds Note Guarantors on the respective
dates of the Offering Proceeds Note Guarantee Agreements executed and delivered
by such Offering Proceeds Note Guarantors.

 

SECTION 1.03. Subordination of
Guarantees to Qualified Credit Facility. 
The Offering Proceeds Note Guarantor may enter into an agreement or
arrangement that provides that its payment obligation on the Obligations
arising hereunder be expressly subordinated to the extent and under the
conditions set forth in Section 1308 of the Indenture.

 

ARTICLE II

 

Miscellaneous

 

SECTION 2.01. Successors and Assigns.  This Agreement shall be binding upon the
Offering Proceeds Note Guarantor and its successors and assigns and shall enure
to the benefit of the successors and assigns of the Issuer and, in the event of
any transfer or assignment of rights by the Issuer, the rights and privileges
conferred 

 

E-3

 

upon that party in the
Offering Proceeds Note shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of the
Indenture.

 

SECTION 2.02. No Waiver.  Neither a failure nor a delay on the part of
the Issuer in exercising any right, power or privilege under this Agreement or
the Offering Proceeds Note shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of
any right, power or privilege.  The rights,
remedies and benefits of the Issuer herein and therein expressly specified are
cumulative and not exclusive of any other rights, remedies or benefits which
either may have under this Agreement or the Offering Proceeds Note at law, in
equity, by statute or otherwise.

 

SECTION 2.03. Modification.  Subject to Section 1020 of the
Indenture, no modification, amendment or waiver of any provision of this
Agreement, nor the consent to any departure by the Offering Proceeds Note
Guarantor therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Issuer, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which
given.  No notice to or demand on the
Offering Proceeds Note Guarantor in any case shall entitle the Offering
Proceeds Note Guarantor to any other or further notice or demand in the same,
similar or other circumstances.

 

SECTION 2.04. Opinion of Counsel.  Concurrently with the execution and delivery
of this Agreement, the Offering Proceeds Note Guarantor shall deliver to the
Issuer an Opinion of Counsel to the effect that this Agreement has been duly
authorized, executed and delivered by the Offering Proceeds Note Guarantor and
that, subject to the application of bankruptcy, insolvency, moratorium,
fraudulent conveyance or transfer and other similar laws relating to creditors’
rights generally and to the principles of equity, whether considered in a
proceeding at law or in equity, the Guarantee of the Offering Proceeds Note
Guarantor is a legal, valid and binding obligation of the Offering Proceeds
Note Guarantor, enforceable against the Offering Proceeds Note Guarantor in
accordance with its terms.

 

SECTION 2.05. Governing Law.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

 

SECTION 2.06. Counterparts.  The parties may sign any number of copies of
this Agreement.  Each signed copy shall
be an original, but all of them together represent the same agreement.

 

SECTION 2.07. Effect of Headings.  The Section headings herein are for
convenience only and shall not effect the construction thereof.

 

E-4

 

SECTION 2.08. Termination of
Agreement and Release of Guarantee. 
This Agreement will be terminated and all obligations hereunder of the
Offering Proceeds Note Guarantor will be released under the circumstances and
conditions set forth in Section 1303 of the Indenture.

 

E-5

 

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

 

 

	
   

  	
  [OFFERING
  PROCEEDS NOTE

  
	
   

  	
  GUARANTOR],

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  LEVEL
  3 FINANCING, INC.,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

E-6

 

EXHIBIT F

 

OFFERING PROCEEDS NOTE SUBORDINATION
AGREEMENT dated as of January 20, 2010 among LEVEL 3 COMMUNICATIONS,
INC. (“Level 3”), LEVEL 3 FINANCING, INC. (the “Borrower”),
LEVEL 3 COMMUNICATIONS, LLC (“Level 3 LLC”), each Subsidiary
that becomes party hereto as provided in Section 4.12 hereof (each such
Subsidiary and Level 3 LLC being called individually, an “Intercompany
Obligor”, and collectively, the “Intercompany Obligors”), the
BORROWER in its capacity as obligee of the Offering Proceeds Note (as defined
below), and each Subsidiary that becomes party hereto as provided in Section 4.13
hereof (each such Subsidiary, Level 3 and the BORROWER in its capacity as
obligee of the Offering Proceeds Note individually, a “Subordinated Lender”,
and collectively, the “Subordinated Lenders”).

 

Reference(1) is made to (a) the Credit
Agreement dated as of March 13, 2007 (as amended and restated as of April 16,
2009 and as amended as of May 15, 2009, and as may be further amended,
modified or supplemented from time to time, the “Credit Agreement”), among
the Borrower, Level 3, the Lenders party thereto and Merrill Lynch Capital
Corporation, as Administrative Agent and Collateral Agent (in such capacity,
the “Administrative Agent”), (b) the intercompany demand note dated
January 20, 2010, in an initial principal amount equal to $640,000,000
issued by Level 3 LLC to the Borrower, as it may be amended from time to
time pursuant to Sections 301 and 1020 of the Indenture dated as of January 20,
2010, among Level 3, the Borrower and The Bank of New York Mellon, as
trustee (the “Offering Proceeds Note”), (c) the amended and
restated intercompany demand note dated March 13, 2007, as further amended
and restated on April 16, 2009 and May 15, 2009, in a principal
amount equal to $1,680,000,000, issued by Level 3 LLC to the Borrower
(such note, as it may be further amended from time to time pursuant to Sections
9.02(d) and 6.11 of the Credit Agreement, together with any additional
loan proceeds notes issued to evidence additional Indebtedness incurred by the
Borrower in connection with additional loans made pursuant to Section 9.02(d) of
the Credit Agreement, the “Loan Proceeds Note”) and (d) the Parent
Intercompany Note Subordination Agreement, dated as of January 20, 2010,
among the Borrower, Level 3 LLC and Level 3 (the “Parent Intercompany Note
Subordination Agreement”). 
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement.

 

Pursuant to Section 4.14 of the Parent
Intercompany Note Subordination Agreement, the Borrower, Level 3 LLC, any other
Intercompany Obligor and Level 3 may enter into an agreement which subordinates
in any bankruptcy, liquidation or winding up proceeding the obligations of an
Intercompany Obligor under the Offering

 

(1) Revise recitals and definitions to
reflect any replacement or successor Qualifying Credit Facility.

 

 

Proceeds Note and any
guarantee thereof to such Intercompany Obligor’s obligations under a Qualified
Credit Facility.

 

The Lenders have provided to the Borrower,
upon the terms and subject to the conditions set forth in the Credit Agreement,
secured term loans (the “Term Loans” and, together with any additional
loan provided pursuant to Section 9.02(d) of the Credit Agreement,
the “Loans”) guaranteed on a secured unsubordinated basis by Level
3.  In order to induce the Lenders to
provide the Term Loans, the Borrower has agreed that, pursuant to the
Collateral Agreement, it shall pledge all its rights, title and interest in, to
and under the Loan Proceeds Note and the Loan Proceeds Note Collateral
Agreement to the Collateral Agent. 
Additionally, upon the incurrence of certain intercompany indebtedness
(including, without limitation, any guarantee of the Offering Proceeds Note),
the Credit Agreement requires Restricted Subsidiaries of Level 3 (other than
the Borrower) to guarantee the Loan Proceeds Note (each such guarantee, a “Loan
Proceeds Note Guarantee”, and each such Restricted Subsidiary that provides
such a guarantee, a “Loan Proceeds Note Guarantor”) and to subordinate,
in any bankruptcy, liquidation or winding up proceeding, their obligations with
respect to such newly incurred indebtedness to their obligations with respect
to their Loan Proceeds Note Guarantee. 
Loan Proceeds Note Guarantors required to provide subordination with
respect to intercompany indebtedness and the creditors on such indebtedness are
required to become parties to this Agreement, if they are not yet parties.  In order to comply with the terms of the
Credit Agreement, Level 3, the Borrower and Level 3 LLC are willing to
execute and deliver this Agreement. 
Accordingly, Level 3, the Borrower (in its capacity as a Subordinated
Lender as obligee of the Offering Proceeds Note), and Level 3 LLC, as an
Intercompany Obligor, hereby agree as follows:

 

ARTICLE
I

 

Subordination

 

SECTION 1.1. Subordination.  Each Subordinated Lender hereby agrees that
all obligations in respect of any Indebtedness (including, without limitation,
the Offering Proceeds Note and any guarantee of the Offering Proceeds Note)
owed to such Subordinated Lender by any Intercompany Obligor, including all
obligations in respect of principal, premium (if any), interest, amounts owed
under Guarantees and all other amounts payable in respect thereof (including by
reason of subordination of any Indebtedness owed to such Subordinated Lender to
any Indebtedness subordinated hereby) (all the foregoing being collectively
called the “Subordinated Obligations”), are subordinate and junior in
right of payment, to the extent and in the manner provided in this Article I,
to the prior payment in full in cash of all obligations of such Intercompany
Obligor in respect of (a) the Loan Proceeds Note and (b) any
Guarantees by such Intercompany Obligor of the Obligations, including all obligations
in respect of principal, premium (if any), interest (including interest arising
after the commencement of a bankruptcy or other proceeding, whether or not such
a claim is permitted in such 

 

F-2

 

proceeding) and all other
amounts in respect thereof (collectively, the “Senior Obligations”).

 

SECTION 1.2.  Subordination in the Event of Dissolution
or Insolvency of any Intercompany Obligor. 
Upon any distribution of the assets of any Intercompany Obligor in
connection with its dissolution or insolvency or upon any dissolution, winding
up, liquidation or reorganization of any Intercompany Obligor, whether in
bankruptcy, insolvency, reorganization, arrangement or receivership or similar
proceedings, or upon any assignment for the benefit of creditors or any other
marshaling of the assets and liabilities of any Intercompany Obligor:

 

(a)  the Borrower and the Collateral
Agent shall first be entitled to receive payment in full in cash of the Senior
Obligations of such Intercompany Obligor in accordance with the terms of such
Senior Obligations before any Subordinated Lender shall be entitled to receive
any payment on account of the Subordinated Obligations (including any payment
by reason of subordination of any Indebtedness to any Subordinated Obligation)
owed by such Intercompany Obligor to such Subordinated Lender, whether as
principal, premium (if any), interest or otherwise; and

 

(b)  any payment by, or distribution of
the assets of, such Intercompany Obligor of any kind or character (including
any payment by reason of subordination of any Indebtedness to any Subordinated
Obligation), whether in cash, property or securities, to which any Subordinated
Lender would be entitled except for the provisions of this Agreement shall be
paid or delivered by the Person making such payment or distribution (whether a
trustee in bankruptcy, a receiver, custodian or liquidating trustee or
otherwise) directly to the Borrower or the Collateral Agent to the extent
necessary to make payment in full in cash of all Senior Obligations remaining
unpaid, after giving effect to any concurrent payment or distribution to the
Borrower in respect of the Senior Obligations.

 

In the event of any proceeding involving any
Intercompany Obligor under any bankruptcy, insolvency, reorganization,
receivership or similar law, each Subordinated Lender agrees, until the
indefeasible payment in full of all monetary Senior Obligations, not to ask,
demand, sue for or take or receive from any Intercompany Obligor in cash,
securities or other property or by setoff, purchase or redemption (including,
without limitation, from or by way of collateral), payment of all or any part
of the Subordinated Obligations owed to such Subordinated Lender (other than payments
permitted pursuant to clause (b) above) and agrees that in connection with
any proceeding involving any Intercompany Obligor under any bankruptcy,
insolvency, reorganization, receivership or similar law (i) the Borrower
is irrevocably authorized and empowered (in its own name or in the name of such
Intercompany Obligor or otherwise), but shall have no obligation, to demand,
sue for, collect and receive every payment or distribution referred to in the
preceding sentence and give acquittance therefor and to file claims and proofs
of claim and take such other action (including, without limitation, voting the
applicable Subordinated Obligations and enforcing any security interest or
other lien securing 

 

F-3

 

payment of such Subordinated Obligations) as
the Borrower may deem necessary or advisable for the exercise or enforcement of
any of its rights or interests and (ii) each Subordinated Lender shall
duly and promptly take such action as the Borrower may reasonably request to (A) collect
amounts in respect of the applicable Subordinated Obligations for the account
of the Borrower and to file appropriate claims or proofs of claim in respect of
such Subordinated Obligations, (B) execute and deliver to the Borrower
such irrevocable powers of attorney, assignments or other instruments as the
Borrower may reasonably request in order to enable the Borrower to enforce any
and all claims with respect to, and any security interests and other liens
securing payment of, the applicable Subordinated Obligations and (C) collect
and receive any and all payments or distributions which may be payable or
deliverable upon or with respect to the applicable Subordinated
Obligations.  A copy of this Agreement
may be filed with any court as evidence of the Borrower’s right, power and
authority hereunder.

 

SECTION 1.3.  Certain Payments Held in Trust.  In the event that any payment by, or
distribution of the assets of, any Intercompany Obligor of any kind or
character (including any payment by reason of subordination of any Indebtedness
to any Subordinated Obligations), whether in cash, property or securities, and
whether directly or otherwise, shall be received by or on behalf of any
Subordinated Lender at a time when such payment is prohibited by this
Agreement, such payment or distribution shall be held in trust for the benefit
of, and shall be paid over to, the Borrower or the Collateral Agent to the
extent necessary to make payment in full in cash of all Senior Obligations
remaining unpaid, after giving effect to any concurrent payment or distribution
to the Borrower or the Collateral Agent in respect of such Senior Obligations.

 

SECTION 1.4.  Subrogation.  Subject to the prior indefeasible payment in
full in cash of the Senior Obligations, each Subordinated Lender shall be
subrogated to the rights of the Borrower to receive payments or distributions
in cash, property or securities of each applicable Intercompany Obligor in
respect of the Senior Obligations until all amounts owing on the applicable
Subordinated Obligations shall be paid in full, and as between and among an
Intercompany Obligor, its creditors (other than the Borrower) and the
applicable Subordinated Lender, no such payment or distribution made to the
Borrower by virtue of this Agreement that otherwise would have been made to
such Subordinated Lender shall be deemed to be a payment by such Intercompany
Obligor on account of such Subordinated Obligations, it being understood that
the provisions of this Agreement are intended solely for the purpose of
defining the relative rights of the Subordinated Lenders, on the one hand, and
the Borrower, on the other hand.

 

ARTICLE II

 

Other Matters Regarding the Subordinated Obligations

 

SECTION 2.1.  Other Creditors.  Except in the limited circumstances set forth
in Article I, nothing contained in this Agreement is intended to or shall
impair, as between and among an Intercompany Obligor, its creditors and any
Subordinated Lender, the obligations of such Intercompany Obligor to pay to
such Subordinated Lender the 

 

F-4

 

Subordinated Obligations of
such Intercompany Obligor as and when the same shall become payable in
accordance with the terms thereof, or affect the relative rights of such
Subordinated Lender and the other creditors of such Intercompany Obligor.

 

SECTION 2.2.  Proofs of Claims.  In the event of any dissolution, winding up,
liquidation or reorganization of any Intercompany Obligor, whether in
bankruptcy, insolvency, reorganization, arrangement or receivership proceedings
or otherwise, or any assignment for the benefit of creditors or any other
marshaling of the assets and liabilities of any Intercompany Obligor, each
Subordinated Lender agrees to file proofs of claim for the Subordinated
Obligations owed to it upon demand of the Borrower, in default of which the
Borrower or an authorized representative of the Borrower is hereby irrevocably
authorized so to file in order to effectuate the provisions hereof.  This Section shall not be construed to
permit any Subordinated Lender to retain any payment received by it in respect
of a Subordinated Obligation (including any payment by reason of subordination
of any Indebtedness to any Subordinated Obligation)  that such Subordinated Lender is not entitled
to receive and retain under any other provision of this Agreement.

 

SECTION 2.3.  Waivers.  (a)  Each Subordinated Lender waives the
right to compel any assets or property of any Intercompany Obligor or the
assets or property of any Loan Proceeds Note Guarantor or any other Person to
be applied in any particular order to discharge the Senior Obligations.  Each Subordinated Lender expressly waives the
right to require the Borrower to proceed against any Intercompany Obligor, any
Loan Proceeds Note Guarantor or any other Person, or to pursue any other remedy
in the Borrower’s power which such Subordinated Lender cannot pursue and which
would lighten such Subordinated Lender’s burden, notwithstanding that the
failure of the Borrower to do so may thereby prejudice such Subordinated
Lender.  Each Subordinated Lender agrees
that it shall not be discharged, exonerated or have its obligations hereunder
to the Borrower reduced (i) by the Borrower’s delay in proceeding against
or enforcing any remedy against any Intercompany Obligor, any Loan Proceeds
Note Guarantor or any other Person; (ii) by the Borrower releasing any
Intercompany Obligor, any Loan Proceeds Note Guarantor or any other Person from
all or any part of the Senior Obligations; or (iii) by the discharge of
any Intercompany Obligor, any Loan Proceeds Note Guarantor or any other Person
by operation of law or otherwise, with or without the intervention or omission
of the Borrower, in each case unless all Senior Obligations due to the Borrower
have been indefeasibly paid in full in cash. 
The Borrower’s vote to accept or reject any plan of reorganization
relating to any Intercompany Obligor, any Loan Proceeds Note Guarantor or any
other Person, or the Borrower’s receipt on account of all or part of the Senior
Obligations of any cash, securities or other property distributed in any
bankruptcy, reorganization, or insolvency case, shall not discharge, exonerate,
or reduce the obligations of any Subordinated Lender hereunder to the Borrower,
in each case unless all Senior Obligations have been indefeasibly paid in full
in cash.

 

(b)  Each Subordinated Lender waives all
rights and defenses arising out of an election of remedies by the Borrower,
even though that election of remedies, including, without limitation, any
nonjudicial foreclosure with respect to security for the

 

F-5

 

Senior Obligations, has
impaired the value of such Subordinated Lender’s rights of subrogation,
reimbursement, or contribution against any Intercompany Obligor, any Loan
Proceeds Note Guarantor or any other Person. 
Each Subordinated Lender expressly waives any rights or defenses it may
have by reason of protection afforded to any Intercompany Obligor, any Loan
Proceeds Note Guarantor or any other Person with respect to the Senior
Obligations pursuant to any anti-deficiency laws or other laws of similar import
which limit or discharge the principal debtor’s indebtedness upon judicial or
nonjudicial foreclosure of real property or personal property collateral for
the Senior Obligations, if any.

 

(c)  Each Subordinated Lender agrees
that, without the necessity of any reservation of rights against it, and
without notice to or further assent by it, any demand for payment of the Senior
Obligations made by the Borrower may be rescinded in whole or in part by the
Borrower, and any Senior Obligation may be continued, and the Senior
Obligations, or the liability of any Intercompany Obligor or any Loan Proceeds
Note Guarantor or any other party upon or for any part thereof, or any
Guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, modified, accelerated,
compromised, waived, surrendered, or released by the Borrower, in each case
without notice to or further assent by such Subordinated Lender, which will
remain bound under this Agreement and without impairing, abridging, releasing
or affecting the subordination and other agreements provided for herein.

 

(d)  Each Subordinated Lender waives any
and all notice of the creation, renewal, extension or accrual of any of the
Senior Obligations and notice of or proof of reliance by the Borrower upon this
Agreement.  The Senior Obligations, and
any of them, shall be deemed conclusively to have been created, contracted or
incurred in reliance upon this Agreement, and all dealings between any
Intercompany Obligor and the Borrower shall be deemed to have been consummated
in reliance upon this Agreement.  Each
Subordinated Lender acknowledges and agrees that the Borrower has relied upon
the subordination and other agreements provided for herein in consenting to this
Agreement.  Each Subordinated Lender
waives notice of or proof of reliance on this Agreement and protest, demand for
payment and notice of default.

 

SECTION 2.4.  Legend.  Any and all instruments or records now or
hereafter creating or evidencing the Subordinated Obligations, whether upon
refunding, extension, renewal, refinancing, replacement or otherwise, shall
contain the following legend:

 

“Notwithstanding anything contained herein to the contrary, neither the
principal of nor the interest on, nor any other amounts payable in respect of,
the indebtedness created or evidenced by this instrument or record shall become
due or be paid or payable, except to the extent permitted under the Offering
Proceeds Note Subordination Agreement dated January 20, 2010, among Level
3 Communications, Inc., [any 

 

F-6

 

additional
Subordinated Lenders,] Level 3 Communications, LLC[, any additional
Intercompany Obligors] and Level 3 Financing, Inc., which Offering
Proceeds Note Subordination Agreement is incorporated herein with the same
effect as if fully set forth herein.”

 

SECTION 2.5.  Transfer of Subordinated Obligations.  Each Subordinated Lender agrees that it will
not sell, assign, transfer or otherwise dispose of all or any part of the
Subordinated Obligations owed to it unless the Person to whom such sale,
assignment, transfer or disposition is made shall acknowledge in writing
(delivered to the Borrower and the Purchasers) that it shall be bound by the
terms of this Agreement to the same extent as such Subordinated Lender,
including the terms of this Section 2.5, as though it is a party hereto as
of the date hereof.

 

SECTION 2.6.  Obligations Hereunder Not Affected.  (a)  All rights and interests of the
Borrower hereunder, and all agreements and obligations of each Subordinated
Lender hereunder, shall remain in full force and effect irrespective of:

 

(i)            any
lack of validity or enforceability of the Loan Proceeds Note, the Credit
Agreement or any document contemplated thereby;

 

(ii)           any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Senior Obligations, or any other amendment or waiver of or
consent to departure from the Loan Proceeds Note;

 

(iii)          any
release, amendment, waiver or other modification, whether in writing or by
course of conduct or otherwise, of, or consent to departure from, any Loan
Proceeds Note Guarantee; or

 

(iv)          any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Intercompany Obligor in respect of its Senior Obligations or
of any Subordinated Lender in respect of this Agreement.

 

(b)  This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
the Senior Obligations or any part thereof is rescinded or must otherwise be
returned by the Borrower upon the insolvency, bankruptcy or reorganization of
any Intercompany Obligor or otherwise, all as though such payment had not been
made.

 

F-7

 

ARTICLE III

 

Representations and Warranties of the Subordinated
Lenders

 

Each Subordinated Lender represents and warrants to
the Borrower that:

 

(a)  It is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized.

 

(b)  The execution, delivery and
performance by it of this Agreement and the consummation of the transactions
contemplated hereby are within its powers, have been duly authorized by all
necessary action on its part, require no action by or in respect of, or filing
with, any court or governmental or regulatory body or agency (other than such
as have been duly taken or made) and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of its certificate of
incorporation or by-laws (or other organizational documents, as applicable) or
of any material agreement, judgment, injunction, order, decree or other
instrument binding upon it or any of its subsidiaries.

 

(c)  This Agreement constitutes a valid
and binding agreement of such Subordinated Lender, enforceable against such
Subordinated Lender in accordance with its terms, subject to the effect of
applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally
and equitable principles of general applicability.

 

ARTICLE IV

 

Miscellaneous

 

SECTION 4.1.  Notices.  All communications and notices hereunder
shall be in writing and shall be mailed or delivered and sent by fax and
confirmed at 1025 Eldorado Boulevard, Broomfield, Colorado 80021, attention:
General Counsel (Telecopy No. 720-888-5127; Telephone Confirm
720-888-2505), with a copy in like manner to Banc of America Securities LLC at
One Bryant Park, New York, New York 10036 (Telecopy No. (212) 901-7897).

 

SECTION 4.2.  Successors and Assigns.  Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party.  All
representations, warranties, promises and agreements by or on behalf of each
Subordinated Lender and each Intercompany Obligor that are contained in this
Agreement shall bind its successors and assigns and inure to the benefit of the
Borrower and the successors and assigns of the Borrower (including the Collateral
Agent as assignee of the rights of the Borrower hereunder pursuant to the
Collateral Agreement).  Each Subordinated
Lender and each Intercompany Obligor agrees that it shall not assign or
delegate any of its obligations under this Agreement without the prior written
consent of the Borrower, and any attempted assignment or delegation without
such consent shall be void and of no effect.

 

F-8

 

SECTION 4.3.  Governing Law; Jurisdiction; Consent to
Service of Process.  (a)    THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

 

(b)  Each Subordinated Lender hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this Agreement
shall affect any right that the Borrower may otherwise have to bring any action
or proceeding relating to this Agreement against any Subordinated Lender or its
properties in the courts of any jurisdiction.

 

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

 

(d)  Each Subordinated Lender hereby
irrevocably consents to service of process in the manner provided for notices
in Section 4.1 hereto.  Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.

 

SECTION 4.4.  Waivers; Amendment.  No failure or delay of the Borrower in
exercising any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power by the Borrower
preclude any other or further exercise thereof or the exercise of any other
right or power.  The rights and remedies
of the Borrower hereunder and instruments creating or securing its respective
Senior Obligations are cumulative and are not exclusive of any other rights or
remedies provided by law.  Neither this
Agreement nor any provision hereof may be waived, amended or modified except in
accordance with Section 6.11 of the Credit Agreement pursuant to an
agreement or agreements in writing entered into by the 

 

F-9

 

Borrower, each Subordinated
Lender and each Intercompany Obligor intended to be bound thereby.

 

SECTION 4.5.  Waiver of Claims.  (a)  To the maximum extent
permitted by law, each Subordinated Lender waives any claim it might have
against the Borrower with respect to, or arising out of, any action or failure
to act or any error of judgment, negligence, or mistake or oversight whatsoever
on the part of the Borrower or its directors, officers, employees, agents or
affiliates with respect to any exercise of rights or remedies under the Loan
Proceeds Note.  Neither the Borrower nor
any of its respective directors, officers, employees, agents or affiliates
shall be liable for failure to demand, collect or realize upon any Loan
Proceeds Note Guarantee or for any delay in doing so or shall be under any
obligation to take any other action whatsoever with regard to the Loan Proceeds
Note or any part thereof.

 

(b)  Each Subordinated Lender, for
itself and on behalf of its successors and assigns, hereby waives any and all
now existing or hereafter arising rights it may have to require the Borrower to
marshal assets for the benefit of such Subordinated Lender, or to otherwise
direct the timing, order or manner of any enforcement of the Loan Proceeds
Note.  The Borrower is under no duty or
obligation, and each Subordinated Lender hereby waives any right it may have to
compel the Borrower, to pursue any Loan Proceeds Note Guarantor or other Person
who may be liable for the Senior Obligations.

 

(c)  Each Subordinated Lender hereby
waives and releases all rights which a guarantor or surety with respect to the
Senior Obligations could exercise.

 

(d)  Each Subordinated Lender hereby
waives any duty on the part of the Borrower to disclose to it any fact known or
hereafter known by the Borrower relating to the operation or financial
condition of any Intercompany Obligor or any Loan Proceeds Note Guarantor, or
their respective businesses.  Each
Subordinated Lender enters into this Agreement based solely upon its
independent knowledge of the applicable Intercompany Obligor’s results of
operations, financial condition and business and such Subordinated Lender
assumes full responsibility for obtaining any further or future information
with respect to the applicable Intercompany Obligor or its results of
operations, financial condition or business.

 

SECTION 4.6.  Further Assurances.  Each Subordinated Lender and each
Intercompany Obligor, at its own expense and at any time from time to time,
upon the written request of the Borrower, will promptly and duly execute and
deliver such further instruments and documents and take such further actions as
the Borrower reasonably may request for the purposes of obtaining or preserving
the full benefits of this Agreement and of the rights and powers herein
granted.

 

SECTION 4.7.  Provisions Define Relative Rights.  This Agreement is intended solely for the
purpose of defining the relative rights of the Borrower on the one 

 

F-10

 

hand and the Subordinated
Lenders and the Intercompany Obligors on the other, and no other Person shall
have any right, benefit or other interest under this Agreement.

 

SECTION 4.8.  WAIVER OF JURY TRIAL.   EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN  ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 4.9.  Severability.  In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.  The parties shall endeavor
in good faith negotiations to replace any invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

 

SECTION 4.10.  Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which, when
taken together, shall constitute but one instrument.

 

SECTION 4.11.  Headings.  Article and Section headings used
herein are for convenience of reference only, are not part of this Agreement
and are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.

 

SECTION 4.12.  Additional Intercompany Obligors.  Upon execution and delivery by, as
applicable, any Subsidiary of Level 3 of an instrument in the form of Annex I
attached hereto or otherwise in a form acceptable to the Borrower, such
Subsidiary of Level 3 shall become an Intercompany Obligor hereunder with the
same force and effect as if originally named as an Intercompany Obligor
herein.  The execution and delivery of
any such instrument shall not require the consent of any other Intercompany
Obligor hereunder.  The rights and
obligations of each Intercompany Obligor herein shall remain in full force and
effect notwithstanding the addition of any Intercompany Obligor as a party to
this Agreement.

 

SECTION 4.13.  Additional Subordinated Lenders.  Upon execution and delivery by any Subsidiary
of Level 3 of an instrument in the form of Annex II attached 

 

F-11

 

hereto or otherwise in a
form acceptable to the Borrower, such Subsidiary of Level 3 shall become a
Subordinated Lender hereunder with the same force and effect as if originally
named as a Subordinated Lender herein.  The
execution and delivery of any such instrument shall not require the consent of
any other Subordinated Lender hereunder. 
The rights and obligations of each Subordinated Lender herein shall
remain in full force and effect notwithstanding the addition of any
Subordinated Lender as a party to this Agreement.

 

F-12

 

IN WITNESS WHEREOF, Level 3,
Level 3 LLC, as an Intercompany Obligor, the Borrower (in its capacity as
a Subordinated Lender as obligee of the Offering Proceeds Note) and the
Borrower have caused this Agreement to be duly executed by
their respective authorized representatives as of the day and year first above
written.

 

	
   

  	
  LEVEL
  3 COMMUNICATIONS, LLC,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
   

  	
  LEVEL
  3 COMMUNICATIONS, INC.,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
   

  	
  LEVEL
  3 FINANCING, INC., in its capacity as a Subordinated Lender as obligee of the
  Offering Proceeds Note

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
   

  	
  LEVEL
  3 FINANCING, INC.,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

F-13

 

Annex I to the Offering Proceeds

Note Subordination Agreement

 

SUPPLEMENT
NO. [   ] dated as of
[                  ]
to the Offering Proceeds Note Subordination Agreement dated as of January 20,
2010 (the “Offering Proceeds Note Subordination Agreement”), among
LEVEL 3 COMMUNICATIONS, INC. (“Level 3”), LEVEL 3 COMMUNICATIONS, LLC
(“Level 3 LLC”), each Subsidiary of Level 3 becoming a party
thereto pursuant to Section 4.12 thereof (each such Subsidiary and
Level 3 LLC, a “Intercompany Obligor”), each Subsidiary of Level 3
becoming a party thereto pursuant to Section 4.13 thereof (each such
Subsidiary a “Subordinated Lender”) and LEVEL 3 FINANCING, INC.
(the “Borrower”).

 

Reference is made to the Offering Proceeds
Note Subordination Agreement.

 

Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to such terms in the Offering
Proceeds Note Subordination Agreement.

 

Section 4.12 of the Offering Proceeds
Note Subordination Agreement provides that a Subsidiary of Level 3 may become
an Intercompany Obligor under the Offering Proceeds Note Subordination
Agreement by execution and delivery of an instrument in the form of this
Supplement.  The undersigned Subsidiary
of Level 3 (the “New Intercompany Obligor”) is executing this Supplement
to become an Intercompany Obligor under the Offering Proceeds Note
Subordination Agreement in order to comply with the terms of the Credit
Agreement and as consideration for amounts previously advanced to the Borrower under
the Credit Agreement.

 

Accordingly, the New Intercompany Obligor
agrees as follows:

 

In accordance with Section 4.12 of the
Offering Proceeds Note Subordination Agreement, the New Intercompany Obligor by
its signature below becomes an Intercompany Obligor under the Offering Proceeds
Note Subordination Agreement with the same force and effect as if originally
named therein as an Intercompany Obligor and the New Intercompany Obligor
hereby agrees to all the terms and provisions of the Offering Proceeds Note
Subordination Agreement applicable to it as an Intercompany Obligor
thereunder.  Each reference to an “Intercompany
Obligor” in the Offering Proceeds Note Subordination Agreement shall be deemed
to include the New Intercompany Obligor. 
The Offering Proceeds Note Subordination Agreement is hereby
incorporated herein by reference.

 

The New Intercompany Obligor represents and
warrants to the Borrower that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, 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.

 

This Supplement may be executed in
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute a single contract.  This Supplement shall become effective when
the Borrower shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Intercompany Obligor and the
Borrower.  Delivery of an executed
signature page to this Supplement by facsimile transmission shall be as
effective as delivery of a manually executed counterpart of this Supplement.

 

Except as expressly supplemented hereby and
pursuant to any other supplement contemplated by Section 4.12 or 4.13 of
the Offering Proceeds Note Subordination Agreement, the Offering Proceeds Note
Subordination Agreement shall remain in full force and effect.

 

THIS SUPPLEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

 

In the event any one or more of the
provisions contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.  The parties shall
endeavor in good faith negotiations to replace any invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

 

All communications and notices hereunder
shall be in writing and given as provided in Section 4.1 of the Offering
Proceeds Note Subordination Agreement. 
All communications and notices hereunder to the New Intercompany Obligor
shall be given to it at the address set forth under its signature below.

 

2

 

IN WITNESS WHEREOF, the New Intercompany
Obligor and the Borrower have duly executed this Supplement to the Offering
Proceeds Note Subordination Agreement as of the day and year first above
written.

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [NAME
  OF NEW INTERCOMPANY OBLIGOR],

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LEVEL
  3 FINANCING, INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
						

 

3

 

Annex II to the Offering Proceeds

Note Subordination Agreement

 

SUPPLEMENT
NO. [   ] dated as of
[                       ]
to the Offering Proceeds Note Subordination Agreement dated as of January 20,
2010 (the “Offering Proceeds Note Subordination Agreement”), among
LEVEL 3 COMMUNICATIONS, INC. (“Level 3”), LEVEL 3 COMMUNICATIONS, LLC
(“Level 3 LLC”), each Subsidiary of Level 3 becoming a party
thereto pursuant to Section 4.12 thereof (each such Subsidiary and
Level 3 LLC, a “Intercompany Obligor”), each Subsidiary of Level 3
becoming a party thereto pursuant to Section 4.13 thereof (each such
Subsidiary a “Subordinated Lender” and, collectively, the “Subordinated
Lenders”) and LEVEL 3 FINANCING, INC. (the “Borrower”).

 

Reference is made to the Offering Proceeds
Note Subordination Agreement.

 

Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to such terms in the Offering
Proceeds Note Subordination Agreement.

 

Section 4.13 of the Offering Proceeds
Note Subordination Agreement provides that a Subsidiary of Level 3 may become a
Subordinated Lender under the Offering Proceeds Note Subordination Agreement by
execution and delivery of an instrument in the form of this Supplement.  The undersigned Subsidiary of Level 3 (the “New
Subordinated Lender”) is executing this Supplement to become a Subordinated
Lender under the Offering Proceeds Note Subordination Agreement in order to
comply with the terms of the Credit Agreement and as consideration for amounts
previously advanced to the Borrower under the Credit Agreement.

 

Accordingly, the New Subordinated Lender
agrees as follows:

 

In accordance with Section 4.13 of the
Offering Proceeds Note Subordination Agreement, the New Subordinated Lender by
its signature below becomes a Subordinated Lender under the Offering Proceeds
Note Subordination Agreement with the same force and effect as if originally
named therein as a Subordinated Lender and the New Subordinated Lender hereby (a) agrees
to all the terms and provisions of the Offering Proceeds Note Subordination
Agreement applicable to it as a Subordinated Lender thereunder and (b) represents
and warrants that the representations and warranties made by it as a
Subordinated Lender thereunder are true and correct on and as of the date
hereof.  Each reference to a “Subordinated
Lender” in the Offering Proceeds Note Subordination Agreement shall be deemed
to include the New Subordinated Lender. 
The Offering Proceeds Note Subordination Agreement is hereby
incorporated herein by reference.

 

 

The New Subordinated Lender represents and
warrants to the Borrower that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, 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.

 

This Supplement may be executed in
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute a single contract.  This Supplement shall become effective when
the Borrower shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Subordinated Lender and the
Borrower.  Delivery of an executed
signature page to this Supplement by facsimile transmission shall be as
effective as delivery of a manually executed counterpart of this Supplement.

 

Except as expressly supplemented hereby and
pursuant to any other supplement contemplated by Section 4.12 or 4.13 of
the Offering Proceeds Note Subordination Agreement, the Offering Proceeds Note
Subordination Agreement shall remain in full force and effect.

 

THIS SUPPLEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

 

In the event any one or more of the
provisions contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.  The parties shall
endeavor in good faith negotiations to replace any invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

 

All communications and notices hereunder
shall be in writing and given as provided in Section 4.1 of the Offering
Proceeds Note Subordination Agreement. 
All communications and notices hereunder to the New Subordinated Lender
shall be given to it at the address set forth under its signature below.

 

2

 

IN WITNESS WHEREOF, the New Subordinated
Lender and the Borrower have duly executed this Supplement to the Offering
Proceeds Note Subordination Agreement as of the day and year first above
written.

 

	
   

  	
   

  
	
   

  	
  [NAME
  OF NEW SUBORDINATED LENDER]

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LEVEL
  3 FINANCING, INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

3

 

EXHIBIT G

 

SUPPLEMENTAL INDENTURE (this
“Supplemental Indenture”) dated as of [    ], among LEVEL 3 FINANCING, INC., a
Delaware corporation (the “Issuer”), LEVEL 3 COMMUNICATIONS, INC., a
Delaware corporation (“Parent”), LEVEL 3 COMMUNICATIONS, LLC, a limited
liability company (“Level 3 LLC”), and THE BANK OF NEW YORK MELLON, a
New York banking corporation, as trustee under the Indenture referred to below
(the “Trustee”).

 

W I T N E S
S E T H :(2)

 

WHEREAS the Issuer, Parent and the Trustee
have heretofore executed and delivered (a) an Indenture dated as of January 20,
2010 (the “Indenture”; capitalized terms used but not defined herein having the
meanings assigned thereto in the Indenture), providing for the issuance by the
Issuer of its 10% Senior Notes Due 2018 (the “Securities”), and (b) a
Supplemental Indenture dated [    ],
pursuant to which Level 3 LLC has guaranteed the Issuer’s obligations under the
Indenture (the “Subordinated Guarantee”);

 

WHEREAS the Issuer, Parent, certain lenders
(together with their successors and assigns and any future Lenders under and as
defined in the Credit Agreement (as hereafter defined) (the “Lenders”)
and Merrill Lynch Capital Corporation, as administrative agent and collateral
agent (the “Administrative Agent”), have entered into a Credit Agreement
dated as of March 13, 2007 (as amended and restated as of April 16,
2009 and as amended as of May 15, 2009, the “Credit Agreement”),
under which the Issuer has borrowed term loans in an aggregate principal amount
of $1,680,000,000 from the Lenders (the “Term Loans”);

 

WHEREAS the obligations of the Issuer under
the Credit Agreement and the other Loan Documents (as defined therein) have
been guaranteed by Level 3 LLC;

 

WHEREAS the proceeds of the Term Loans have
been advanced to Level 3 LLC under an intercompany demand note dated March 13,
2007 in an initial principal amount of $1,400,000,000 and subsequently
increased to $1,680,000,000, issued by Level 3 LLC to the Issuer (together with
any additional loan proceeds note issued pursuant to Section 9.02 of the
Credit Agreement, and as such note or any such additional note may be further
amended from time to time, the “Loan Proceeds Note”);

 

WHEREAS the Loan Proceeds Note has been
pledged by the Issuer to the Collateral Agent (as defined in the Credit
Agreement) in order to assure the Lenders against loss in respect of the
obligations of the Issuer under the Credit Agreement;

 

(2) Revise recitals and definitions to reflect any replacement or
successor Qualifying Credit Facility.

 

 

WHEREAS pursuant to Section 1308 of the
Indenture, the Trustee is authorized to enter into a supplemental indenture
which subordinates in any bankruptcy, liquidation or winding up proceeding a
guarantee of an Issuer Restricted Subsidiary as guarantor or borrower pursuant
to the Indenture to the obligations of such Subsidiary under a Qualified Credit
Facility;

 

WHEREAS upon the guarantee of the Securities
by an Issuer Restricted Subsidiary (other than Level 3 LLC), the Issuer,
Parent, the Trustee and such Issuer Restricted Subsidiary shall enter into a
supplemental indenture in substantially the form of this Supplemental Indenture
pursuant to which such guarantee will be subordinated in any bankruptcy,
liquidation or winding up proceeding to the obligations of such Issuer
Restricted Subsidiary under the Loan Documents (as defined in the Credit
Agreement);

 

WHEREAS the Credit Agreement constitutes a
Qualified Credit Facility and the guarantee of the obligations under the Credit
Agreement by Level 3 LLC and the issuance and pledge of the Loan Proceeds Note
constitute Guarantees of a Qualified Credit Facility;

 

WHEREAS pursuant to Section 901 and Section 1307
of the Indenture, the Trustee, Parent, the Issuer and Level 3 LLC are
authorized to execute and deliver this Supplemental Indenture;

 

NOW THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the receipt of which
is hereby acknowledged, Parent, the Issuer, Level 3 LLC and the Trustee
mutually covenant and agree for the equal and ratable benefit of the holders of
the Securities as follows:

 

ARTICLE I

 

Subordination

 

SECTION 1.1. Subordination.  The Trustee hereby agrees that all
obligations in respect of any amounts payable by Level 3 LLC pursuant to the
Subordinated Guarantee, including the guarantee of the payment of principal, premium
(if any), interest or all other amounts payable in respect of the Securities
(the “Subordinated Obligations”), shall be subordinate and junior in
right of payment, to the extent and in the manner provided in the Indenture (as
supplemented by this Supplemental Indenture), to the prior payment in full in
cash of all obligations (including without limitation the Obligations (as
defined in the Credit Agreement)) of Level 3 LLC under or in respect of the
Loan Documents (as defined in the Credit Agreement) and the Loan Proceeds Note,
including the payment of principal, premium (if any), interest (including
interest arising after the commencement of a bankruptcy or other proceeding,
whether or not such a claim is permitted in such proceeding), the guarantees thereof
or all other amounts payable thereunder (the “Senior Obligations”).

 

2

 

SECTION 1.2.  Subordination in the Event of Dissolution
or Insolvency of Level 3 LLC.  Upon
any distribution of assets of Level 3 LLC in connection with its dissolution or
insolvency or upon any dissolution, winding up, liquidation or reorganization
of Level 3 LLC, whether in bankruptcy, insolvency, reorganization, arrangement
or receivership or similar proceedings, or upon any assignment for the benefit
of creditors or any other marshaling of the assets and liabilities of Level 3
LLC:

 

(a)  the holders of the Senior
Obligations (the “Senior Creditors”) shall first be entitled to receive
payment in full in cash of the Senior Obligations in accordance with the terms
of such Senior Obligations before the Securityholders shall be entitled to
receive any payment on account of the Subordinated Obligations owed by Level 3
LLC in respect of the Securities, whether of principal, premium (if any),
interest, pursuant to the Subordinated Guarantee or otherwise; and

 

(b)  any payment by, or distribution of
the assets of, Level 3 LLC of any kind or character, whether in cash, property
or securities, to which the Securityholders would be entitled except for the
provisions of Section 1308 of the Indenture and this Supplemental
Indenture shall be paid or delivered by the Person making such payment or
distribution (whether a trustee in bankruptcy, a receiver, custodian or
liquidating trustee or otherwise) directly to the Administrative Agent or the
Senior Creditors to the extent necessary to make payment in full in cash of all
Senior Obligations remaining unpaid, after giving effect to any concurrent
payment or distribution to the Administrative Agent or the Senior Creditors in
respect of the Senior Obligations.

 

SECTION 1.3.  Certain Payments Held in Trust.  In the event that any payment by, or
distribution of the assets of, Level 3 LLC of any kind or character, whether in
cash, property or securities, and whether directly or otherwise, shall be
received by or on behalf of the Trustee or the Securityholders at a time when
such payment is prohibited by or contrary to the agreements set forth in this
Supplemental Indenture, such payment or distribution shall be held in trust for
the benefit of, and shall be paid over to, the Administrative Agent or the
Senior Creditors to the extent necessary to make payment in full in cash of all
Senior Obligations remaining unpaid, after giving effect to any concurrent
payment or distribution to the Administrative Agent or the Senior Creditors in
respect of such Senior Obligations.

 

SECTION 1.4   Trustee Not Fiduciary. The Trustee
shall not be deemed to owe any fiduciary duty to the Senior Creditors and shall
not be liable to any such Senior Creditor if the Trustee shall in good faith
mistakenly pay over or distribute to the Securityholders or to the Issuer or to
any other person cash, property or securities to which any holders of Senior
Obligations shall be entitled by virtue of this Article or otherwise. With
respect to the holders of Senior Obligations, the Trustee undertakes to perform
or to observe only such of its covenants or obligations as are specifically set
forth in this Article and no implied covenants or obligations with respect
to holders of Senior Obligations shall be read into this Supplemental Indenture
against the Trustee.

 

3

 

SECTION 1.5.  Legend.  Any and all instruments or records now or
hereafter creating or evidencing the Subordinated Obligations, whether upon
refunding, extension, renewal, refinancing, replacement or otherwise, shall
contain the following legend:

 

“Notwithstanding anything contained herein to the contrary, neither the
principal of nor the interest on, nor any other amounts payable in respect of,
the indebtedness created or evidenced by this instrument or record shall be
paid or payable with or by the funds provided by Level 3 Communications, LLC,
except to the extent permitted under the Supplemental Indenture dated [    ], among Level 3 Communications, Inc.,
Level 3 Communications, LLC, Level 3 Financing, Inc. and the Trustee,
which Supplemental Indenture is incorporated herein with the same effect as if
fully set forth herein.”

 

SECTION 1.6.  Obligations Hereunder Not Affected.  So long as the Credit Agreement shall
constitute a Qualified Credit Facility, this Supplemental Indenture shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of the Senior Obligations or any part thereof shall be rescinded or
must otherwise be returned by the Administrative Agent and the Senior Creditors
upon the insolvency, bankruptcy or reorganization of Level 3 LLC or otherwise,
all as though such payment had not been made.

 

ARTICLE II

 

Miscellaneous

 

SECTION 2.1.  Governing Law.  THIS
SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

SECTION 2.2. Modification.  No modification, amendment or waiver of any
provision of this Supplemental Indenture shall in any event be effective unless
the same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given.

 

SECTION 2.3.  Opinion of Counsel.  Concurrently with the execution and delivery
of this Supplemental Indenture, the Issuer shall deliver to the Trustee an
Opinion of Counsel to the effect that this Supplemental Indenture has been duly
authorized, executed and delivered by each of Parent, the Issuer and Level 3
LLC and that, subject to the application of bankruptcy, insolvency, moratorium,
fraudulent conveyance or transfer and other similar laws relating to creditors’
rights generally and to the principles of equity, whether considered in a
proceeding at law or in equity, this Supplemental 

 

4

 

Indenture is a legal, valid
and binding obligation of Parent, the Issuer and Level 3 LLC, enforceable
against each of them in accordance with its terms.

 

SECTION 2.4.  Ratification
of Indenture; Supplemental Indentures Part of Indenture.  Except as expressly amended hereby, the
Indenture is in all respects ratified and confirmed and all the terms,
conditions and provisions thereof shall remain in full force and effect.  This Supplemental Indenture shall form a part
of the Indenture for all purposes, and every holder of Securities heretofore or
hereafter authenticated and delivered shall be bound hereby.

 

SECTION 2.5.  Counterparts. The parties may sign any
number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but
all of them together represent the same agreement.

 

SECTION 2.8.  Headings.  Article and Section headings used
herein are for convenience of reference only, are not part of this Supplemental
Indenture and are not to affect the construction of, or to be taken into
consideration in interpreting, this Supplemental Indenture.

 

5

 

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

	
   

  	
   

  
	
   

  	
  LEVEL
  3 COMMUNICATIONS, INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LEVEL
  3 FINANCING, INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LEVEL
  3 COMMUNICATIONS, LLC,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK MELLON, as Trustee,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

6

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