Document:

Exhibit 4.2

 

EXECUTION COPY

 

 

 

LEVEL 3
COMMUNICATIONS, INC.,

 

as Guarantor,

 

LEVEL 3 FINANCING, INC.

 

as Issuer,

 

and

 

THE BANK OF
NEW YORK,

 

as Trustee

 

 

 

Indenture

 

Dated as of March 14,
2006

 

 

 

12.25% Senior
Notes Due 2013

 

 

 

i

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE ONE

  	
   

  
	
   

  	
   

  
	
  DEFINITIONS AND
  OTHER PROVISIONS OF GENERAL APPLICATION

  	
   

  
	
   

  	
   

  
	
  SECTION 101. Definitions

  	
  2

  
	
  SECTION 102. Compliance Certificates and Opinions

  	
  30

  
	
  SECTION 103. Form of Documents Delivered to Trustee

  	
  31

  
	
  SECTION 104. Acts of Holders

  	
  31

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

  	
  32

  
	
  SECTION 106. Notice to Holders; Waiver

  	
  33

  
	
  SECTION 107. Effect of Headings and Table of Contents

  	
  33

  
	
  SECTION 108. Successors and Assigns

  	
  33

  
	
  SECTION 109. Separability Clause

  	
  33

  
	
  SECTION 110. Benefits of Indenture

  	
  34

  
	
  SECTION 111. Governing Law

  	
  34

  
	
  SECTION 112. Conflict with Trust Indenture Act

  	
  34

  
	
  SECTION 113. Legal Holidays

  	
  34

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

  	
  34

  
	
  SECTION 115. Independence of Covenants

  	
  35

  
	
  SECTION 116. Exhibits

  	
  35

  
	
  SECTION 117. Counterparts

  	
  35

  
	
  SECTION 118. Duplicate Originals

  	
  35

  
	
   

  	
   

  
	
  ARTICLE TWO

  	
   

  
	
   

  	
   

  
	
  SECURITY FORMS

  	
   

  
	
   

  	
   

  
	
  SECTION 201. Form and Dating

  	
  35

  
	
   

  	
   

  
	
  ARTICLE THREE

  	
   

  
	
   

  	
   

  
	
  THE SECURITIES

  	
   

  
	
   

  	
   

  
	
  SECTION 301. Amount of Securities

  	
  36

  
	
  SECTION 302. Execution and Authentication

  	
  37

  

 

ii

 

	
  SECTION 303. Security Registrar and Paying Agent

  	
  37

  
	
  SECTION 304. Paying Agent To Hold Money in Trust

  	
  37

  
	
  SECTION 305. Holders Lists

  	
  38

  
	
  SECTION 306. Replacement Securities

  	
  38

  
	
  SECTION 307. Temporary Securities

  	
  39

  
	
  SECTION 308. Cancellation

  	
  39

  
	
  SECTION 309. Defaulted Interest

  	
  39

  
	
  SECTION 310. CUSIP Numbers

  	
  39

  
	
   

  	
   

  
	
  ARTICLE FOUR

  	
   

  
	
   

  	
   

  
	
  SATISFACTION AND
  DISCHARGE

  	
   

  
	
   

  	
   

  
	
  SECTION 401. Satisfaction and Discharge of Indenture

  	
  40

  
	
  SECTION 402. Application of Trust Money

  	
  41

  
	
   

  	
   

  
	
  ARTICLE FIVE

  	
   

  
	
   

  	
   

  
	
  REMEDIES

  	
   

  
	
   

  	
   

  
	
  SECTION 501. Events of Default

  	
  41

  
	
  SECTION 502. Acceleration of Maturity; Rescission and Annulment

  	
  42

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

  	
  43

  
	
  SECTION 504. Trustee May File Proofs of Claim

  	
  44

  
	
  SECTION 505. Trustee May Enforce Claims Without Possession
  of Securities

  	
  45

  
	
  SECTION 506. Application of Money Collected

  	
  45

  
	
  SECTION 507. Limitation on Suits

  	
  45

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

  	
  46

  
	
  SECTION 509. Restoration of Rights and Remedies

  	
  46

  
	
  SECTION 510. Rights and Remedies Cumulative

  	
  46

  
	
  SECTION 511. Delay or Omission Not Waiver

  	
  46

  
	
  SECTION 512. Control by Holders

  	
  47

  
	
  SECTION 513. Waiver of Past Defaults

  	
  47

  
	
  SECTION 514. Waiver of Stay or Extension Laws

  	
  47

  
	
  SECTION 515. Undertaking for Costs

  	
  48

  
	
   

  	
   

  
	
  ARTICLE SIX

  	
   

  
	
   

  	
   

  
	
  THE TRUSTEE

  	
   

  
	
   

  	
   

  
	
  SECTION 601. Certain Duties and Responsibilities

  	
  48

  
	
  SECTION 602. Notice of Default

  	
  49

  

 

iii

 

	
  SECTION 603. Certain Rights of Trustee

  	
  49

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

  	
  51

  
	
  SECTION 605. May Hold Securities

  	
  51

  
	
  SECTION 606. Money Held in Trust

  	
  51

  
	
  SECTION 607. Compensation and Reimbursement

  	
  51

  
	
  SECTION 608. Corporate Trustee Required; Eligibility;
  Conflicting Interests

  	
  52

  
	
  SECTION 609. Resignation and Removal; Appointment of Successor

  	
  53

  
	
  SECTION 610. Acceptance of Appointment by Successor

  	
  54

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

  	
  54

  
	
   

  	
   

  
	
  ARTICLE SEVEN

  	
   

  
	
   

  	
   

  
	
  HOLDERS’ LISTS AND
  REPORTS BY TRUSTEE AND THE ISSUER

  	
   

  
	
   

  	
   

  
	
  SECTION 701. Disclosure of Names and Addresses of Holders

  	
  55

  
	
  SECTION 702. Reports by Trustee

  	
  55

  
	
  SECTION 703. Reports by Parent and the Issuer

  	
  55

  
	
   

  	
   

  
	
  ARTICLE EIGHT

  	
   

  
	
   

  	
   

  
	
  CONSOLIDATION,
  MERGER, CONVEYANCE, TRANSFER OR LEASE

  	
   

  
	
   

  	
   

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

  	
  56

  
	
  SECTION 802. Successor Parent Substituted

  	
  57

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

  	
  57

  
	
  SECTION 804. Successor Issuer Substituted

  	
  58

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

  	
  59

  
	
  SECTION 806. Successor Guarantor Substituted

  	
  60

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

  	
  60

  
	
   

  	
   

  
	
  ARTICLE NINE

  	
   

  
	
   

  	
   

  
	
  SUPPLEMENTAL
  INDENTURES

  	
   

  
	
   

  	
   

  
	
  SECTION 901. Supplemental Indentures Without Consent of Holders

  	
  61

  
	
  SECTION 902. Supplemental Indentures With Consent of Holders

  	
  62

  
	
  SECTION 903. Execution of Supplemental Indentures

  	
  63

  
	
  SECTION 904. Effect of Supplemental Indentures

  	
  63

  
	
  SECTION 905. Conformity with Trust Indenture Act

  	
  64

  
	
  SECTION 906. Reference in Securities to Supplemental Indentures

  	
  64

  
	
  SECTION 907. Notice of Supplemental Indentures

  	
  64

  

 

iv

 

	
  ARTICLE TEN

  	
   

  
	
   

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

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

  	
  64

  
	
  SECTION 1002. Maintenance of Office or Agency

  	
  64

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

  	
  65

  
	
  SECTION 1004. Corporate Existence

  	
  66

  
	
  SECTION 1005. Maintenance of Properties

  	
  66

  
	
  SECTION 1006. Insurance

  	
  67

  
	
  SECTION 1007. Reports

  	
  67

  
	
  SECTION 1008. Statement by Officers as to Default

  	
  67

  
	
  SECTION 1009. Change of Control Triggering Event

  	
  68

  
	
  SECTION 1010. Limitation on Consolidated Debt

  	
  70

  
	
  SECTION 1011. Limitation on Debt of the Issuer and Issuer
  Restricted Subsidiaries

  	
  74

  
	
  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

  	
  82

  
	
  SECTION 1015. Limitation on Sale and Leaseback Transactions

  	
  83

  
	
  SECTION 1016. Limitation on Asset Dispositions

  	
  84

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

  	
  86

  
	
  SECTION 1018. Transactions with Affiliates

  	
  87

  
	
  SECTION 1019. Limitation on Designations of Unrestricted
  Subsidiaries

  	
  88

  
	
  SECTION 1020. Limitation on Actions with respect to Existing
  Intercompany Obligations

  	
  90

  
	
  SECTION 1021. Covenant Suspension

  	
  91

  
	
  SECTION 1022. Special Interest Notice

  	
  92

  
	
  SECTION 1023. Authorizations and Consents of Governmental
  Authorities

  	
  93

  
	
   

  	
   

  
	
  ARTICLE ELEVEN

  	
   

  
	
   

  	
   

  
	
  REDEMPTION OF
  SECURITIES

  	
   

  
	
   

  	
   

  
	
  SECTION 1101. Right of Redemption

  	
  93

  
	
  SECTION 1102. Applicability of Article

  	
  93

  
	
  SECTION 1103. Election to Redeem; Notice to Trustee

  	
  93

  
	
  SECTION 1104. Selection by Trustee of Securities to Be Redeemed

  	
  94

  
	
  SECTION 1105. Notice of Redemption

  	
  94

  
	
  SECTION 1106. Deposit of Redemption Price

  	
  95

  
	
  SECTION 1107. Securities Payable on Redemption Date

  	
  95

  
	
  SECTION 1108. Securities Redeemed in Part

  	
  96

  

 

v

 

	
  ARTICLE TWELVE

  	
   

  
	
   

  	
   

  
	
  DEFEASANCE AND
  COVENANT DEFEASANCE

  	
   

  
	
   

  	
   

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

  	
  96

  
	
  SECTION 1202. Defeasance and Discharge

  	
  96

  
	
  SECTION 1203. Covenant Defeasance

  	
  97

  
	
  SECTION 1204. Conditions to Defeasance or Covenant Defeasance

  	
  98

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

  	
  99

  
	
  SECTION 1206. Reinstatement

  	
  99

  
	
   

  	
   

  
	
  ARTICLE THIRTEEN

  	
   

  
	
   

  	
   

  
	
  GUARANTEES AND
  OFFERING PROCEEDS NOTE GUARANTEES

  	
   

  
	
   

  	
   

  
	
  SECTION 1301. Guarantees

  	
  100

  
	
  SECTION 1302. Contribution

  	
  102

  
	
  SECTION 1303. Release of Guarantees

  	
  102

  
	
  SECTION 1304. Successors and Assigns

  	
  102

  
	
  SECTION 1305. No Waiver

  	
  102

  
	
  SECTION 1306. Modification

  	
  102

  
	
  SECTION 1307. Execution of Supplemental Indenture for Future
  Guarantors

  	
  103

  
	
  SECTION 1308. Subordination of Note Guarantees

  	
  103

  
	
  SECTION 1309. Execution of Offering Proceeds Note Guarantees for
  Future Offering Proceeds Note Guarantors; Subordination of Offering Proceeds
  Note Guarantee

  	
  103

  
	
   

  	
   

  
	
  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)

  	
   

  

 

vi

 

INDENTURE,
dated as of March 14, 2006, 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, 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 12.25% Senior Notes Due 2013 (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, 12.25% Senior Notes Due 2013 (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 obligations of the Issuer and to make this Indenture a valid 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 December 1, 2004, 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 $730.0 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. 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
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).

 

2

 

“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, 12.25%
Senior Notes due 2013 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, lease or other
disposition of equipment that is obsolete or no longer used by or useful to
Parent; provided, however, that Parent has delivered to the
Trustee an Officers’ Certificate stating that such criteria are satisfied); 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-

 

3

 

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 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 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

 

4

 

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

 

5

 

“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 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

 

6

 

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; 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 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

 

7

 

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 and (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); 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 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.

 

8

 

“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 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.

 

9

 

“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 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 and 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 Section 1009.

 

“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.

 

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

 

“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 December 1, 2004,
among the Issuer, Parent, the lenders party thereto, and Merrill Lynch Capital
Corporation, as Administrative Agent.

 

10

 

“Existing
Notes” means Parent’s 27/8% Convertible Senior Notes due
2010 in an aggregate principal amount not to exceed $374,000,000, 11% Senior
Notes due 2008 in an aggregate principal amount not to exceed $78,000,000, 111⁄4%
Senior Notes due 2010 in an aggregate principal amount not to exceed $96,000,000,
127/8% Senior Discount Notes due 2010 in an aggregate
principal amount at maturity not to exceed $488,000,000, 103⁄4% Senior Notes due
2008 in an aggregate principal amount not to exceed €59,000,000, 111⁄4% Senior
Notes due 2010 in an aggregate principal amount not to exceed €123,000,000, 91/8%
Senior Notes due 2008 in an aggregate principal amount not to exceed $398,000,000,
101⁄2% Senior Discount Notes due 2008 in an aggregate principal amount at
maturity not to exceed $62,000,000, 6% Convertible Subordinated Notes due 2009
in an aggregate principal amount not to exceed $362,000,000, 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 not to exceed $254,000,000, 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 $880,000,000, 111⁄2% Senior Notes due 2010 in an aggregate principal
amount not to exceed $692,000,000 and the Issuer’s 103⁄4% Senior Notes due 2011
in an aggregate principal amount not to exceed $500,000,000.

 

“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 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) delivered to the Trustee.

 

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

 

“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.

 

“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.

 

11

 

“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.

 

“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.

 

12

 

“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 Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit
Suisse Securities (USA) LLC, Morgan Stanley & Co. Incorporated and J.P.
Morgan Securities Inc.

 

“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 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

 

13

 

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 the date on which the Original Securities are initially issued.

 

“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 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
which constitutes all or substantially all of an operating unit of a business
or a line of business, or (B) since the beginning of such period any
Person (that subsequently became 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,

 

14

 

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.

 

“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.

 

15

 

“Loan Proceeds
Note” means the intercompany demand note dated December 1, 2004 in an
initial principal amount of $730,000,000 issued by Level 3 LLC to the Issuer to
evidence the loan in such amount made by the Issuer to Level 3 LLC with the
proceeds of the loans under the Existing Credit Facility, as it may be
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 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

 

16

 

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.

 

“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 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 (which at a minimum will include (i) the
most recent annual and quarterly financial statements and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
contained in the documents required to be filed with the Trustee pursuant to
this Indenture (which requirements may be satisfied by delivery of such
documents together with the Offer), (ii) a description of material
developments in Parent’s business subsequent to the date of the latest of such
financial statements referred to in clause (i) (including a description of
the events requiring the Issuer

 

17

 

to make the Offer to Purchase), (iii) if applicable, appropriate
pro forma financial information concerning the Offer to Purchase and the events
requiring the Issuer to make the Offer to Purchase and (iv) any other
information required by applicable law to be included therein). 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, 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

 

18

 

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 $250,000,000, 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 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).

 

19

 

“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 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.

 

20

 

“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 $14,370,673,908
as of December 31, 2005, 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 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

 

21

 

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, for the purposes of this definition, any Security authenticated
and delivered under Section 306 in

 

22

 

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 March 14, 2006, 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.

 

“Private
Placement Legend” means the third paragraph of the legend set forth in the
Securities in the form set forth in Exhibit 1 to Appendix A.

 

“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.

 

23

 

“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 or restated 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, 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.

 

“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.

 

24

 

“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 March 14, 2006, among
the Issuer, Parent and the Initial Purchasers relating to the Original
Securities or any similar agreement relating to any registration of Additional
Securities.

 

“Regular
Record Date” for the interest payable on any Interest Payment Date means the March 1
or September 1 (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
secretary, 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.

 

“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

 

25

 

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.

 

“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.

 

26

 

“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).

 

“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 

 

27

 

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.

 

“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.

 

“103⁄4% Notes”
means the Issuer’s 103⁄4% 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.

 

28

 

“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 9.05.

 

“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.

 

“Unrestricted
Subsidiary” means (a) 91 Holding Corp. (the subsidiary that holds
indirectly Parent’s interests in the SR91 tollroad), Level 3 Finance LLC, Level
3 Finance II LLC, Eldorado Funding LLC, 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”

 

29

 

“Private Exchange” 

“Private Exchange Securities” 

“Purchase Agreement” 

“QIB”

“Registered Exchange Offer”

“Registration Agreement”

“Regulation S”

“Rule 144A”

“Rule 144A Global Security”

“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, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.

 

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.

 

30

 

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
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

 

31

 

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 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

 

32

 

(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. 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.

 

33

 

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 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

 

34

 

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.

 

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.

 

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.

 

35

 

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 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
$250,000,000 (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. 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.

 

36

 

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

 

37

 

sufficient to
pay such principal and interest when so becoming due. The Issuer shall require
each 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.

 

38

 

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 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).

 

39

 

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.

 

40

 

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

 

41

 

aggregate which default results in the acceleration of the payment of
such indebtedness or constitutes the failure to pay such indebtedness when due
(after expiration of any applicable grace period); 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 

 

42

 

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.

 

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

 

43

 

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.

 

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 most effectual 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.

 

44

 

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.

 

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

 

45

 

(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 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

 

46

 

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.

 

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.

 

47

 

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 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.

 

(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

 

48

 

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

 

(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 5.01(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 10.16), unless the Trustee shall
have received written notice at its Corporate Trust Office (which notice shall

 

49

 

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):

 

(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 

 

50

 

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

 

(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.

 

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.

 

51

 

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.

 

52

 

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

 

53

 

(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, 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.

 

54

 

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).

 

55

 

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.

 

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, the Consolidated Net Worth of Parent
(or the successor entity) is equal to or greater than that of Parent
immediately prior to the transaction;

 

(4)                                  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

 

56

 

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;

 

(5)                                  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;

 

(6)                                  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

 

(7)                                  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 

 

57

 

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:

 

(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, the Consolidated Net Worth of the
Issuer (or the successor entity) is equal to or greater than that of the Issuer
immediately prior to the transaction;

 

(4)                                  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;

 

(5)                                  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;

 

(6)                                  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

 

(7)                                  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, and, with respect to such
Officers’ Certificate, setting forth the manner of

 

58

 

determination of the Consolidated Net Worth, in accordance with clause (3) of
this Section 803, of the Issuer or, if applicable, of the successor entity
as required pursuant to the foregoing.

 

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 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

 

59

 

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 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 8.05(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

 

60

 

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;

 

(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:

 

61

 

(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

 

(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

 

62

 

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

 

(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

 

63

 

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.

 

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.

 

64

 

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.

 

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;

 

65

 

(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, 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

 

66

 

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.

 

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.

 

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).

 

67

 

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.

 

(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

 

68

 

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 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

 

69

 

(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 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) 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):

 

70

 

(i)                                                       (A) 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 and (B) Debt under the Floating Rate Notes issued
on the Issue Date (including any Floating Rate Notes issued in an exchange
offer for the Floating Rate Notes issued on the Issue Date), any Guarantee in
respect of the Floating Rate Notes issued on the Issue Date (including any
Floating Rate Notes issued in an exchange offer for the Floating Rate Notes
issued on the Issue Date) or any Guarantee in respect of the intercompany note
issued by Level 3 LLC in respect of the proceeds of the Floating Rate Notes
issued on the Issue Date;

 

(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) $750,000,000 and (y) 1.5 times 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

 

71

 

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,
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

 

72

 

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 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 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;

 

(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

 

73

 

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 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 (1) 4.0 to 1.0, if
such Debt is Incurred on or prior to March 15, 2008 and (2) 3.75 to
1.0, if such Debt is Incurred after March 15, 2008; 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):

 

74

 

(i) Debt
of the Issuer or any Issuer Restricted Subsidiary (A) 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 and (B) under the Floating Rate Notes issued on the Issue
Date (including any Floating Rate Notes issued in an exchange offer for the
Floating Rate Notes issued on the Issue Date), any Guarantee in respect of the
Floating Rate Notes issued on the Issue Date (including any Floating Rate Notes
issued in an exchange offer for the Floating Rate Notes issued on the Issue
Date) or any Guarantee in respect of the intercompany note issued by Level 3
LLC in respect of the proceeds of the Floating Rate Notes issued on the Issue
Date;

 

(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, 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) $750,000,000 and (y) 1.5 times
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 (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

 

75

 

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),
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 “4.0 to 1.0” or “3.75 to 1.0,” as the
case may be, as it appears therein 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), 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 

 

76

 

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;

 

(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 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 103⁄4% Notes issued 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.

 

77

 

(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 (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

 

78

 

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 at least 45 days prior to the date of such
Restricted Payment and (b) plus, in the case of any Revocation made after
the Measurement Date, an amount equal to the lesser of the portion
(proportionate to 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

 

79

 

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 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

 

80

 

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.

 

(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

 

81

 

properties or assets of any
Person, other than the Person so acquired, (iv) any encumbrance or
restriction pursuant to an agreement effecting a refinancing of 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, (v) in the case of clause (iii) of
paragraph (a) above, any encumbrance or restriction contained in any
security agreement (including a Capital Lease Obligation) securing 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, (vi) in the case of clause (iii) of
paragraph (a) above, customary provisions (A) that restrict the
subletting, assignment or transfer of any Property that is a lease, license,
conveyance or similar contract, (B) contained in asset sale or other asset
disposition agreements limiting the transfer of the Property being sold or
disposed of pending the closing of such sale or disposition or (C) arising
or agreed to in the ordinary course of business, not relating to any 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, (vii) any encumbrance or restriction
with respect to a Restricted Subsidiary imposed pursuant to an agreement which
has been entered into for the sale or disposition of all or substantially all
of the Capital Stock or Property of such Restricted Subsidiary; provided,
however, that the consummation of such transaction would not result in a
Default or an Event of Default, that such restriction terminates if such
transaction is abandoned and that the consummation or abandonment of such
transaction occurs within one year of the date such agreement was entered into,
and (viii) any encumbrance or restriction pursuant to this 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

 

82

 

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 1.5 times 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 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 Floating Rate Notes or the 103⁄4% Notes; provided, however,
that no Lien may be granted to secure the Floating Rate Notes or the 103⁄4%
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 Floating Rate Notes or the 103⁄4% 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 Floating Rate Notes or the 103⁄4%
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

 

83

 

Floating Rate Notes or the intercompany note issued by Level 3 LLC in
respect of the proceeds of the 103⁄4% 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; and (xiii) 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 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).

 

84

 

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 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.

 

85

 

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 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

 

86

 

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 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 (i) in the best interest of Parent or such Restricted
Subsidiary and (ii) 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,

 

87

 

Parent has determined to be
fair to Parent or the relevant Restricted Subsidiary) and (b) Parent delivers
to the Trustee (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, file with the Trustee 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.

 

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:

 

88

 

(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) 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:

 

89

 

(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 delivered
to the Trustee (i) certifying compliance with the foregoing provisions and (ii)
giving the effective date of such Designation or Revocation, such delivery to
the Trustee to occur within 45 days after the end of the fiscal quarter of
Parent in which such Designation or Revocation is made (or, in the case of a
Designation or Revocation made during the last fiscal quarter of Parent’s
fiscal year, within 90 days after the end of such fiscal year). 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 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 

 

90

 

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 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 103⁄4% Notes, the
intercompany note issued by Level 3 LLC in respect of the proceeds of the 103⁄4%
Notes, the Floating Rate Notes or the intercompany note issued by Level 3 LLC
in respect of the proceeds of the Floating Rate 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 103⁄4% Notes, the
related intercompany note, the Floating Rate Notes or the related intercompany
note; provided, however, that this

 

91

 

provision
shall not be deemed to be violated by the Guarantee of the 103⁄4% 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 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

 

92

 

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.

 

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).

 

93

 

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.

 

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,

 

94

 

(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 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.

 

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;

 

95

 

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 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

 

96

 

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 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

 

97

 

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, 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

 

98

 

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.

 

(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

 

99

 

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.

 

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.

 

100

 

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 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 

 

101

 

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
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,

 

102

 

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 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 103⁄4% 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

 

103

 

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 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.

 

104

 

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/ Neil J. Eckstein

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Neil
  J. Eckstein

  	
   

  
	
   

  	
   

  	
   

  	
  Title:
  Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LEVEL 3
  COMMUNICATIONS, INC., as Parent

  and a Guarantor

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Thomas C. Stortz

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Thomas
  C. Stortz

  	
   

  
	
   

  	
   

  	
   

  	
  Title:
  Executive Vice President

  	
   

  
						

 

105

 

	
   

  	
  THE BANK OF
  NEW YORK, as Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Stacey
  B. Poindexter

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Stacey
  B. Poindexter

  	
   

  
	
   

  	
   

  	
   

  	
  Title:
  Assistant Vice President

  	
   

  
						

 

106

 

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, 12.25% Senior Notes due
2013 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 Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. Incorporated and
J.P. Morgan Securities Inc.

 

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

 

“Original
Securities” means Initial Securities in the aggregate principal amount of $250,000,000
issued on March 14, 2006.

 

 

“Private
Exchange” means the offer by the Issuer, pursuant to Section 2(f) of the
Registration Agreement dated as of March 14, 2006, 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 March 9, 2006, 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 March 14, 2006, 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

  	
   

  
	
  “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
Depository or by the Trustee as Securities Custodian or under such Global
Security, and the

 

A-3

 

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 SECOND 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

 

A-6

 

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.”

 

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,

 

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

 

A-7

 

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.

 

(v) 
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 BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT IN AN AMOUNT
EQUAL TO THE DIFFERENCE BETWEEN ITS STATED REDEMPTION PRICE AT MATURITY (THE
SUM OF ALL PAYMENTS TO BE MADE ON THE NOTE OTHER THAN “QUALIFIED STATED
INTEREST”) AND ITS ISSUE PRICE. COMMENCING NO LATER THAN 10 DAYS AFTER THE
ISSUE DATE, THE ISSUER SHALL PROMPTLY MAKE AVAILABLE TO HOLDERS, UPON WRITTEN
REQUEST, INFORMATION ABOUT THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY OF THE NOTE. HOLDERS MAY
MAKE SUCH WRITTEN REQUESTS TO THE ISSUER AT LEVEL 3 FINANCING, INC., 1025
ELDORADO BOULEVARD, BROOMFIELD, COLORADO 80021, ATTENTION:  GENERAL COUNSEL.”

 

(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.

 

A-8

 

(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.

 

(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

 

A-9

 

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.

 

(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.

 

A-10

 

(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-11

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 SECOND 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.

 

[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.]

 

[Original Issue Discount Legend]

 

“THIS NOTE HAS
BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT IN AN AMOUNT EQUAL TO THE DIFFERENCE
BETWEEN ITS STATED REDEMPTION PRICE AT MATURITY (THE SUM OF ALL PAYMENTS TO BE
MADE ON THE NOTE OTHER THAN “QUALIFIED STATED INTEREST”) AND ITS ISSUE PRICE. COMMENCING
NO LATER THAN 10 DAYS AFTER THE ISSUE DATE, THE ISSUER SHALL PROMPTLY MAKE
AVAILABLE TO HOLDERS, UPON WRITTEN REQUEST, INFORMATION ABOUT THE ISSUE PRICE,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY
OF THE NOTE. HOLDERS MAY MAKE SUCH WRITTEN REQUESTS TO THE ISSUER AT LEVEL 3
FINANCING, INC., 1025 ELDORADO BOULEVARD, BROOMFIELD, COLORADO 80021,
ATTENTION:  GENERAL COUNSEL.”

 

2

 

[FORM OF FACE OF INITIAL SECURITY]

 

	
  No.

  	
  [up to]** $

  

 

12.25% Senior Notes due 2013

 

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 March 15, 2013.

 

Interest
Payment Dates:  March 15 and September 15.

 

Record
Dates:  March 1 and September 1.

 

 

*
Insert for Definitive Securities.

 

** Insert for Global Securities. 
If the Security is to be issued in global form, add the Global
Securities Legend from Exhibit 1 to Appendix A and the attachment
from such Exhibit 1 captioned “TO BE ATTACHED TO GLOBAL SECURITIES -
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY”.

 

 

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,

 

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]

 

12.25% Senior Notes due 2013

 

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 March 15 and September 15 of each year, commencing September 15, 2006. 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 March 14, 2006. 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 March 14, 2006, among Parent, the Issuer
and the Initial Purchasers named therein, or any other similar Registration Rights
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 June 12, 2006, neither the Exchange Offer
Registration Statement nor the Shelf Registration Statement has been filed with
the Commission, (ii) on or prior to October 10, 2006, neither the Exchange
Offer Registration Statement nor the Shelf Registration Statement has been
declared effective, (iii) on or prior to November 21, 2006, 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 March
1 or September 1 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, 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 March 14, 2006 (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 $250,000,000. 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 $250,000,000 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

 

2

 

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

 

The Securities
will be subject to redemption at the option of the Issuer, in whole or in part,
at any time from time to time on or after March 15, 2010, 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 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
March 15, of the years indicated below:

 

	
  Period

  	
   

  	
  Redemption Price

  	
   

  
	
  2010

  	
   

  	
  106.125

  	
  %

  
	
  2011

  	
   

  	
  103.063

  	
  %

  
	
  2012

  	
   

  	
  100.000

  	
  %

  

 

In addition,
at any time from time to time on or prior to March 15, 2009, the Issuer may
redeem up to 35% of the original aggregate principal amount of the Securities
at a Redemption Price equal to 112.25% 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 would remain
outstanding immediately after

 

3

 

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 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.

 

4

 

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 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

 

5

 

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.

 

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).

 

6

 

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(k)
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

  	
  Signature of Signature

  
	
  by a participant in a

  	
  Guarantee

  
	
  recognized signature guaranty

  	
   

  
	
  medallion program or other

  	
   

  
	
  signature guarantor acceptable

  	
   

  
	
  to the Trustee

  	
   

  

 

 

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]

 

	
  No.

  	
  [up to]** $            

  

 

12.25% Senior Notes due 2013

 

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 March 15, 2013.

 

Interest
Payment Dates:  March 15 and September 15.

 

Record Dates:  March 1 and September 1.

 

THIS NOTE HAS
BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT IN AN AMOUNT EQUAL TO THE DIFFERENCE
BETWEEN ITS STATED REDEMPTION PRICE AT MATURITY (THE SUM OF ALL PAYMENTS TO BE
MADE ON THE NOTE OTHER THAN “QUALIFIED STATED INTEREST”) AND ITS ISSUE PRICE. COMMENCING
NO LATER THAN 10 DAYS AFTER THE ISSUE DATE, THE ISSUER SHALL PROMPTLY MAKE AVAILABLE
TO HOLDERS, UPON WRITTEN REQUEST, INFORMATION ABOUT THE ISSUE PRICE, THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY OF THE
NOTE. HOLDERS MAY MAKE SUCH WRITTEN REQUESTS TO THE ISSUER AT LEVEL 3
FINANCING, INC., 1025 ELDORADO BOULEVARD, BROOMFIELD, COLORADO 80021,
ATTENTION:  GENERAL COUNSEL.

 

 

* Insert for Definitive Securities.

 

** If the Security is to be issued in global form, add
the Global Securities Legend from Exhibit 1 to Appendix A and the attachment
from such Exhibit 1 captioned “TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL SECURITY”.

 

 

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,

 

as Trustee, certifies

that this is one of

the Securities referred

to in the Indenture.

 

 

	
  by:

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  

 

2

 

[FORM OF REVERSE SIDE OF SECURITY]

 

12.25% Senior Notes due 2013

 

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 March 15 and September 15 of each year, commencing September
15, 2006. 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 March 14,
2006. 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 March
1 or September 1 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, 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 March 14, 2006 (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 $250,000,000. 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 $250,000,000 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

 

The Securities
will be subject to redemption at the option of the Issuer, in whole or in part,
at any time from time to time on or after March 15, 2010, 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 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 March 15, of the years
indicated below:

 

	
  Period

  	
   

  	
  Redemption Price

  	
   

  
	
  2010

  	
   

  	
  106.125

  	
  %

  
	
  2011

  	
   

  	
  103.063

  	
  %

  
	
  2012

  	
   

  	
  100.000

  	
  %

  

 

2

 

In addition,
at any time from time to time on or prior to March 15, 2009, the Issuer may
redeem up to 35% of the original aggregate principal amount of the Securities
at a Redemption Price equal to 100.0% 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 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 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.

 

3

 

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 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

 

4

 

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.

 

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

 

5

 

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.

 

6

 

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.

 

7

 

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, 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.

 

	
  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, 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 March 14, 2006 (the “Indenture”; capitalized terms used
but not defined herein having the meanings assigned thereto in the Indenture),
providing for the issuance of its 12.25% Senior Notes Due 2013;

 

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

 

C-2

 

THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

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, as Trustee,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title

  

 

C-4

 

EXHIBIT D

 

PARENT
INTERCOMPANY NOTE SUBORDINATION AGREEMENT dated as of March 14, 2006 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 March 9, 2006 (the “Purchase
Agreement”) among the initial purchasers party thereto (the “Purchasers”), the
Issuer and Parent, (b) the Indenture dated as of March 14, 2006 (the “Indenture”)
among the Issuer, Parent and The Bank of New York, as trustee (in such
capacity, the “Trustee”), (c) the intercompany demand note dated the Issue
Date, in an initial principal amount equal to $250,000,000, 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 December
31, 2005, was $14,370,673,908. 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 12.25% Senior Notes due 2013 (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.

 

D-2

 

In the event
of any proceeding involving any Subordinated Borrower 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
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

 

D-3

 

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 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

 

D-4

 

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 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

 

D-5

 

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 Parent Intercompany Note Subordination Agreement
dated as of March 14, 2006, 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

 

D-6

 

(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.

 

(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 Merrill Lynch, Pierce, Fenner
& Smith Incorporated, at Merrill Lynch World

 

D-7

 

Headquarters, North Tower,
World Financial Center, New York, New York, 10281-1201 (Telecopy No. 212-449-9435).

 

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
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-8

 

(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 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

 

D-9

 

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.

 

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.

 

D-10

 

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 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 I 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

 

D-11

 

as the subordination provisions
applicable to the Senior Obligations of such Subordinated Borrower.

 

D-12

 

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-13

 

Annex I to the Parent Intercompany

Note Subordination Agreement

 

SUPPLEMENT
NO. [   ] dated as of
[                  ]
to the Parent Intercompany Note Subordination Agreement dated as of March 14,
2006 (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

 

2

 

communications and notices
hereunder to the New Subordinated Borrower shall be given to it at the address
set forth under its signature below.

 

3

 

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:

  

 

4

 

Annex II to the Parent Intercompany

Note Subordination Agreement

 

SUPPLEMENT
NO. [   ] dated as of
[                       ]
to the Parent Intercompany Note Subordination Agreement dated as of March 14,
2006 (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.

 

2

 

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 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 $250,000,000, 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, as
trustee, an Indenture dated as of March 14, 2006 (the “Indenture”; capitalized
terms used but not defined herein having the meanings assigned thereto in the
Indenture), providing for the issuance of its 12.25% Senior Notes Due 2013 (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

 

E-2

 

payment, or any part thereof,
of principal of or (premium, if any) interest on any Senior 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

 

E-3

 

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 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.

 

E-4

 

SECTION 2.07. Effect
of Headings. The Section headings herein are for convenience only and shall
not effect the construction thereof.

 

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 March 14, 2006 among
LEVEL 3 COMMUNICATIONS, INC. (“Level 3”), LEVEL 3 FINANCING,
INC. (the “Borrower”), LEVEL 3 COMMUNICATIONS, LLC (“Level 3
LLC”), each Restricted Subsidiary (as defined in the Credit Agreement
described below) that becomes party hereto as provided in Section 4.12
hereof (each such Subsidiary and Level 3 LLC individually, a “Subordinated
Borrower”, and collectively, the “Subordinated Borrowers”), 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 December 1, 2004 (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 March 14, 2006, in an initial principal amount
equal to $250,000,000 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 March 14, 2006, among Level 3, the Borrower and The Bank of
New York, as trustee (the “Offering Proceeds Note”), (c) the
intercompany demand note dated December 1, 2004, in an initial principal amount
equal to $730,000,000, issued by Level 3 LLC to the Borrower, as it may be
amended from time to time pursuant to Sections 9.02 and 6.11 of the Credit
Agreement (such note, together with any additional loan proceeds note issued
pursuant to Section 9.02 of the Credit Agreement the “Loan Proceeds Note”)
and (d) the Parent Intercompany Note Subordination Agreement, dated as of March
14, 2006, 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 Subordinated Borrower and Level 3 may enter
into an agreement which subordinates in any bankruptcy, liquidation or winding
up proceeding the obligations of a Subordinated Borrower under the Offering
Proceeds Note and any guarantee thereof to such Subordinated Borrower’s
obligations under a Qualified Credit Facility.

 

(1) Revise recitals and definitions
to reflect any replacement or successor Qualifying Credit Facility.

 

 

The Lenders
have provided to the Borrower, upon the terms set forth in the Credit
Agreement, a secured term loan (the “Term Loan” and, together with any
additional loan provided pursuant to Section 9.02 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 Loan, 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 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 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
Indebtedness (including, without limitation, the Offering Proceeds Note and any
guarantee of the Offering Proceeds Note) 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 (including
any payment by reason of subordination of any Indebtedness owed to such
Subordinated Lender to any Indebtedness subordinated hereby) (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 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),
Loan 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. Upon
any distribution of the assets of any Subordinated Borrower in connection with
its dissolution or insolvency or upon any dissolution,

 

F-2

 

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 Borrower 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 (including any payment by reason of subordination of
any Indebtedness to any Subordinated Obligation) owed by such Subordinated
Borrower to such Subordinated Lender, whether as principal, premium (if any),
interest, pursuant to a Loan Proceeds Note Guarantee or otherwise; and

 

(b)  any payment by, or distribution of the assets
of, such Subordinated Borrower 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 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 Subordinated Borrower 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
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 Borrower 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 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

 

F-3

 

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 Subordinated Borrower 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 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 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 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 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 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 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 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.

 

F-4

 

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 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 Subordinated Borrower 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 Subordinated Borrower, 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 Subordinated Borrower,
any Loan Proceeds Note Guarantor or any other Person; (ii) by the Borrower
releasing any Subordinated Borrower, 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 Subordinated Borrower, 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 Subordinated
Borrower, 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 Senior Obligations,
has impaired the value of such Subordinated Lender’s rights of subrogation,
reimbursement, or contribution against any Subordinated Borrower, any Loan
Proceeds Note Guarantor or any other Person. Each Subordinated Lender expressly

 

F-5

 

waives any rights or defenses
it may have by reason of protection afforded to any Subordinated Borrower, 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 Subordinated Borrower 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 Subordinated Borrower 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
March 14, 2006, among Level 3 Communications, Inc., [any additional
Subordinated Lenders,] Level 3 Communications, LLC[, any additional
Subordinated Borrowers] and Level 3 Financing, Inc., which

 

F-6

 

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 Subordinated Borrower 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
Subordinated Borrower 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
Merrill Lynch, Pierce, Fenner & Smith Incorporated, 4 World Financial
Center, North Tower, New York, New York, 10080 (Telecopy No. 212-449-9435).

 

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 Subordinated Borrower 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. 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 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 Subordinated Borrower 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
Subordinated Borrower 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 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
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 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. 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 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 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.

 

F-11

 

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 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 a Subordinated Borrower,
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 March 14,
2006 (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 “Subordinated Borrower”), 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 a Subordinated Borrower 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 Borrower”) is executing this Supplement to
become a Subordinated Borrower 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 Borrower agrees as follows:

 

In accordance
with Section 4.12 of the Offering Proceeds Note Subordination Agreement,
the New Subordinated Borrower by its signature below becomes a Subordinated
Borrower under the Offering Proceeds 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 Offering Proceeds Note Subordination Agreement applicable to it as a
Subordinated Borrower thereunder. Each reference to a “Subordinated Borrower”
in the Offering Proceeds Note Subordination Agreement shall be deemed to
include the New Subordinated Borrower. The Offering Proceeds Note Subordination
Agreement is hereby incorporated herein by reference.

 

The New
Subordinated Borrower 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 Borrower 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 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 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

  BORROWER],

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  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 March 14,
2006 (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 “Subordinated Borrower”), 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, 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 March 14, 2006 (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 12.25% Senior Notes
Due 2013 (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 December 1, 2004 (the “Credit
Agreement”), under which the Issuer has borrowed term loans in an aggregate
principal amount of $730,000,000 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 December 1, 2004 in an initial principal amount
of $730,000,000 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 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”).

 

G-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.

 

G-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,

 

G-4

 

whether considered in a
proceeding at law or in equity, this Supplemental 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.

 

G-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, as Trustee,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

G-6Exhibit 4.3

 

LEVEL 3
FINANCING, INC.

 

Floating Rate Senior
Notes due 2011

 

REGISTRATION
AGREEMENT

 

New York, New
York

March 14, 2006

 

Merrill Lynch,
Pierce, Fenner & Smith

Incorporated

Credit Suisse Securities (USA) LLC

Morgan Stanley & Co. Incorporated

J.P. Morgan Securities Inc.

 

In care of:

 

Merrill Lynch,
Pierce, Fenner & Smith

Incorporated

4 World
Financial Center

North Tower

250 Vesey
Street

New York, New York 10080

 

Ladies and
Gentlemen:

 

Level 3
Financing, Inc., a Delaware company (the “Issuer”), proposes to issue and
sell to certain purchasers (the “Purchasers”), upon the terms set forth in a
purchase agreement dated March 9, 2006, (the “Purchase Agreement”), $150,000,000
aggregate principal amount of its Floating Rate Senior Notes due 2011 (the “Original
Floating Rate Notes”) (such sale, the “Initial Placement”), to be guaranteed on
an unsecured unsubordinated basis by Level 3 Communications, Inc., the direct
parent company of the Issuer (“Parent”). As an inducement to the Purchasers to
enter into the Purchase Agreement and in satisfaction of a condition to your
obligations thereunder, the Issuer and Parent jointly and severally agree with
you, (i) for your benefit and the benefit of the other Purchasers and (ii) for
the benefit of the holders from time to time of the Original Floating Rate
Notes (including you and the other Purchasers) (each of the foregoing a “Holder”
and together the “Holders”), as follows:

 

1. Definitions.  Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following capitalized defined terms
shall have the following meanings:

 

 

“Affiliate”
of any specified person means any other person which, directly or indirectly,
is in control of, is controlled by, or is under common control with, such
specified person. For purposes of this definition, control of a person means
the power, direct or indirect, to direct or cause the direction of the
management and policies of such person whether by contract or otherwise; and
the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

 

“Commission”
means the Securities and Exchange Commission.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.

 

“Exchange
Offer Prospectus” means the prospectus included in the Exchange Offer
Registration Statement, as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the New
Floating Rate Notes covered by such Exchange Offer Registration Statement, and
all amendments and supplements thereto and all material incorporated by
reference therein.

 

“Exchange
Offer Registration Period” means the 180-day period following the
consummation of the Registered Exchange Offer, exclusive of any period during
which any stop order shall be in effect suspending the effectiveness of the
Exchange Offer Registration Statement.

 

“Exchange
Offer Registration Statement” means a registration statement of the Issuer
and Parent on an appropriate form under the Securities Act with respect to
the Registered Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

 

“Exchanging
Dealer” means any Holder (which may include the Purchasers) which is a
broker-dealer electing to exchange Original Floating Rate Notes acquired for
its own account as a result of market-making activities or other trading
activities for New Floating Rate Notes.

 

“Holder” has the meaning set forth in
the preamble hereto.

 

“Indenture”
means the Indenture relating to the Original Floating Rate Notes and the New Floating
Rate Notes, dated as of March 14, 2006, among Parent, the Issuer and The
Bank of New York, as trustee, as the same may be amended from time to time
in accordance with the terms thereof.

 

“Initial
Placement” has the meaning set forth in the preamble hereto.

 

“Floating
Rate Majority Holders” means the Holders of a majority of the aggregate
principal amount of the Original Floating Rate Notes and the New Floating Rate
Notes registered under a Registration Statement.

 

2

 

“Managing
Underwriters” means the investment banker or investment bankers and manager
or managers that shall administer an offering of securities under a Shelf
Registration Statement.

 

“New Floating
Rate Notes” means debt securities of the Issuer identical in all material
respects to the Original Floating Rate Notes (except that the interest rate
step-up provisions and the transfer restrictions will be modified or
eliminated, as appropriate), to be issued under the Indenture.

 

“Original
Floating Rate Notes” has the meaning set forth in the preamble hereto.

 

“Prospectus”
means the prospectus included in any Registration Statement (including, without
limitation, a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in
reliance upon Rule 430A under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Original Floating Rate Notes or the New Floating
Rate Notes, covered by such Registration Statement, and all amendments and
supplements to the Prospectus, including post-effective amendments.

 

“Registered
Exchange Offer” means the proposed offer to the Holders to issue and
deliver to such Holders, in exchange for the Original Floating Rate Notes, a
like principal amount of the New Floating Rate Notes.

 

“Registration
Securities” has the meaning set forth in Section 3(a) hereof.

 

“Registration
Statement” means any Exchange Offer Registration Statement or Shelf
Registration Statement that covers any of the Original Floating Rate Notes or
the New Floating Rate Notes pursuant to the provisions of this Agreement, all
amendments and supplements to such registration statement, including, without
limitation, post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.

 

“Shelf
Registration” means a registration effected pursuant to Section 3
hereof.

 

“Shelf
Registration Period” has the meaning set forth in Section 3(b) hereof.

 

“Shelf
Registration Statement” means a “shelf” registration statement of Parent
and the Issuer pursuant to the provisions of Section 3 hereof which covers
some of or all the Original Floating Rate Notes or New Floating Rate Notes, as
applicable, on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be

 

3

 

adopted by the Commission, all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

 

“Trustee”
means the trustee with respect to the Original Floating Rate Notes and the New
Floating Rate Notes under the Indenture.

 

“underwriter”
means any underwriter of securities in connection with an offering thereof
under a Shelf Registration Statement.

 

2. Registered Exchange Offer; Resales of New
Floating Rate Notes by Exchanging Dealers; Private Exchange.

 

(a)  The Issuer
and Parent shall prepare and, not later than June 12, 2006, shall file
with the Commission the Exchange Offer Registration Statement with respect to
the Registered Exchange Offer. The Issuer and Parent shall use their commercially
reasonable efforts to cause the Exchange Offer Registration Statement to become
effective under the Securities Act by October 10, 2006.

 

(b)  Upon
the effectiveness of the Exchange Offer Registration Statement, the Issuer and Parent
shall promptly commence the Registered Exchange Offer, it being the objective
of such Registered Exchange Offer to enable each Holder electing to exchange Original
Floating Rate Notes for New Floating Rate Notes (assuming that such Original Floating
Rate Notes do not constitute a portion of an unsold allotment acquired by such
Holder directly from the Issuer, such Holder is not an Affiliate of the Issuer or
Parent, such Holder acquires the New Floating Rate Notes in the ordinary course
of its business and such Holder has no arrangements with any person to
participate in the distribution of the New Floating Rate Notes) to trade such New
Floating Rate Notes from and after their receipt without any limitations or
restrictions under the Securities Act and without material restrictions under
the securities laws of a substantial proportion of the several states of the
United States.

 

(c)  In
connection with the Registered Exchange Offer, the Issuer and Parent shall:

 

(i) mail to
each Holder a copy of the Prospectus forming part of the Exchange Offer Registration
Statement, together with an appropriate letter of transmittal and related
documents;

 

(ii) keep
the Registered Exchange Offer open for not less than 20 business days after the
date notice thereof is mailed to the Holders (or longer if required by
applicable law);

 

(iii) utilize
the services of a depositary for the Registered Exchange Offer with an address
in the Borough of Manhattan, The City of New York; and

 

4

 

(iv) comply
in all material respects with all applicable laws.

 

(d)  As
soon as practicable after the close of the Registered Exchange Offer, the Issuer
and Parent shall:

 

(i) accept
for exchange all Original Floating Rate Notes tendered and not validly
withdrawn pursuant to the Registered Exchange Offer;

 

(ii) deliver
to the Trustee for cancellation all Original Floating Rate Notes so accepted
for exchange; and

 

(iii) cause
the Trustee promptly to authenticate and deliver to each Holder of Original Floating
Rate Notes, a principal amount of New Floating Rate Notes equal to the
principal amount of the Original Floating Rate Notes of such Holder so accepted
for exchange.

 

(e)  The
Purchasers, the Issuer and Parent acknowledge that, pursuant to current
interpretations by the Commission’s staff of Section 5 of the Securities
Act, and in the absence of an applicable exemption therefrom, each Exchanging
Dealer is required to deliver a Prospectus in connection with a sale of any New
Floating Rate Notes received by such Exchanging Dealer pursuant to the
Registered Exchange Offer in exchange for Original Floating Rate Notes acquired
for its own account as a result of market-making activities or other trading
activities. Accordingly, the Issuer and Parent shall:

 

(i) include
the information set forth in Annex A hereto on the cover of the Exchange
Offer Registration Statement, in Annex B hereto in the forepart of
the Exchange Offer Registration Statement in a section setting forth
details of the Exchange Offer, in Annex C hereto in the underwriting or
plan of distribution section of the Prospectus forming a part of the
Exchange Offer Registration Statement, and in Annex D hereto in the Letter
of Transmittal delivered pursuant to the Registered Exchange Offer (it being
understood that a Holder’s participation in the Exchange Offer is conditioned
on the Holder, by executing and returning the Letter of Transmittal,
representing in writing to the Issuer as set forth in Rider B of
Annex D hereto); and

 

(ii) use
commercially reasonable efforts to keep the Exchange Offer Registration
Statement continuously effective under the Securities Act during the Exchange
Offer Registration Period for delivery by Exchanging Dealers in connection with
sales of New Floating Rate Notes received pursuant to the Registered Exchange Offer,
as contemplated by Section 4(h) below.

 

(f)  In
the event that any Purchaser determines that it is not eligible to participate
in the Registered Exchange Offer with respect to the exchange of Original Floating
Rate Notes constituting any portion of an unsold allotment, at the request of
such Purchaser, the Issuer and Parent shall issue and deliver to such Purchaser
or the party purchasing New Floating Rate Notes registered under a Shelf
Registration

 

5

 

Statement as contemplated by Section 3
hereof from such Purchaser, in exchange for such Original Floating Rate Notes,
a like principal amount of New Floating Rate Notes. The Issuer and Parent shall
seek to cause the CUSIP Service Bureau to issue the same CUSIP number for such New
Floating Rate Notes as for New Floating Rate Notes issued pursuant to the
Registered Exchange Offer.

 

(g)  Parent
and the Issuer may include in the Exchange Offer Registration Statement up
to $250,000,000 aggregate principal amount of the Issuer’s 12.25% Senior Notes
due 2013 (the “Original 2013 Notes”), guaranteed by Parent, to be exchanged for
debt securities of the Issuer identical in all material respects to the
Original 2013 Notes (except that the interest rate step-up provisions and the
transfer restrictions will be modified or eliminated, as appropriate) (the “New
2013 Notes”).

 

3. Shelf Registration. If, (i) because
of any change in law or applicable interpretations thereof by the Commission’s
staff, the Issuer and Parent determine upon advice of outside counsel that they
are not permitted to effect the Registered Exchange Offer as contemplated by Section 2
hereof, or (ii) for any other reason the Exchange Offer Registration
Statement is not declared effective by October 10, 2006 or the Registered
Exchange Offer is not consummated within 30 business days following the initial
effectiveness date of the Exchange Offer Registration Statement , or (iii) any
Purchaser so requests with respect to Original Floating Rate Notes (or any New
Floating Rate Notes received pursuant to Section 2(f)) not eligible to be
exchanged for New Floating Rate Notes in a Registered Exchange Offer or, in the
case of any Purchaser that participates in any Registered Exchange Offer, such
Purchaser does not receive freely tradable New Floating Rate Notes, or (iv) any
Holder (other than a Purchaser) is not eligible to participate in the
Registered Exchange Offer or (v) in the case of any such Holder that
participates in the Registered Exchange Offer, such Holder does not receive
freely tradable New Floating Rate Notes in exchange for tendered securities,
other than by reason of such Holder being an affiliate of the Issuer and Parent
within the meaning of the Securities Act (it being understood that, for purposes
of this Section 3, (x) the requirement that a Purchaser deliver a
Prospectus containing the information required by Items 507 and/or 508 of
Regulation S-K under the Securities Act in connection with sales of New
Floating Rate Notes acquired in exchange for such Original Floating Rate Notes
shall result in such New Floating Rate Notes being not “freely tradeable” but
(y) the requirement that an Exchanging Dealer deliver a Prospectus in
connection with sales of New Floating Rate Notes acquired in the Registered
Exchange Offer in exchange for Original Floating Rate Notes acquired as a
result of market-making activities or other trading activities shall not result
in such New Floating Rate Notes being not “freely tradeable”), the following
provisions shall apply:

 

(a)  The Issuer
and Parent shall as promptly as practicable (but in no event more than the
later of (i) June 12, 2006 or (ii) 45 days after so required or
requested pursuant to this Section 3), file with the Commission and
thereafter shall use their commercially reasonable efforts to cause to become
effective under the Securities Act, or, if permitted by Rule 430B under
the Securities Act, otherwise designate an existing

 

6

 

registration statement filed with
the Commission as, a Shelf Registration Statement relating to the offer and
sale of the Original Floating Rate Notes or the New Floating Rate Notes, as
applicable, by the Holders from time to time in accordance with the methods of
distribution elected by such Holders and set forth in such Shelf Registration
Statement (such Original Floating Rate Notes or New Floating Rate Notes, as
applicable, to be sold by such Holders under such Shelf Registration Statement
being referred to herein as “Registration Securities”); provided, however,
that, with respect to New Floating Rate Notes received by a Purchaser in
exchange for Original Floating Rate Notes constituting any portion of an unsold
allotment, the Issuer and Parent may, if permitted by current interpretations
by the Commission’s staff, file a post-effective amendment to the Exchange
Offer Registration Statement containing the information required by Regulation
S-K Items 507 and/or 508, as applicable, in satisfaction of their obligations
under this paragraph (a) with respect thereto, and any such Exchange Offer
Registration Statement, as so amended, shall be referred to herein as, and
governed by the provisions herein applicable to, a Shelf Registration Statement.
Unless the Shelf Registration Statement is an automatic shelf registration
statement (as defined in Rule 405 under the Securities Act), the Issuer
and Parent shall include the information required by Rule 430B(b)(2)(iii) under
the Securities Act.

 

(b)  The Issuer
and Parent shall use their commercially reasonable efforts to keep the Shelf
Registration Statement continuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of two years
from the date the Shelf Registration Statement becomes effective or is
designated as such or such shorter period that will terminate when all the Original
Floating Rate Notes or New Floating Rate Notes, as applicable, covered by the
Shelf Registration Statement have been sold pursuant to the Shelf Registration
Statement (in any such case, such period being called the “Shelf Registration
Period”). The Issuer and Parent shall be deemed not to have used their commercially
reasonable efforts to keep the Shelf Registration Statement effective during
the Shelf Registration Period if the Issuer, or Parent voluntarily takes any
action that would result in Holders of securities covered thereby not being
able to offer and sell such securities during that period, unless (i) such
action is required by applicable law or (ii) such action is taken by such
party in good faith and for valid business reasons (not including avoidance of
the obligations of the Issuer and Parent hereunder), including the acquisition
or divestiture of assets, so long as the Issuer and Parent promptly thereafter
comply with the requirements of Section 4(k) hereof, if applicable.

 

(c)  Parent
and the Issuer may include in the Shelf Registration Statement up to
$250,000,000 aggregate principal amount of the Original 2013 Notes or the New
2013 Notes, as applicable, to be offered and sold by the holders thereof from
time to time in accordance with the methods of distribution elected by such
holders and set forth in such Shelf Registration Statement.

 

4. Registration Procedures. In
connection with any Shelf Registration Statement and, to the extent applicable,
any Exchange Offer Registration Statement, the following provisions shall
apply:

 

7

 

(a)  (i)  The Issuer and Parent
shall furnish to you, prior to the filing or designation thereof with the
Commission, a copy of any Exchange Offer Registration Statement, each amendment
thereof and each amendment or supplement, if any, to the Prospectus included
therein and shall use its commercially reasonable efforts to reflect in each
such document, when so filed or designated with the Commission, such comments
as you reasonably may propose.

 

(ii) The Issuer and Parent shall furnish
to you, prior to the filing or designation thereof with the Commission, a copy
of any Shelf Registration Statement, each amendment thereof and each amendment
or supplement, if any, to the Prospectus included therein and shall use its
commercially reasonable efforts to reflect in each such document, when so filed
or designated with the Commission, such comments as any Holder whose securities
are to be included in such Shelf Registration Statement reasonably may propose.

 

(b)  The Issuer and Parent shall ensure
that (i) any Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any amendment or supplement thereto
complies in all material respects with the Securities Act and the rules and
regulations thereunder, (ii) any Registration Statement and any amendment
thereto does not, when it becomes effective (or, in the case of a previously filed
registration statement that is effective at the time it is designated as a
Shelf Registration Statement, when it is so designated), contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
and (iii) any Prospectus forming part of any Registration Statement,
and any amendment or supplement to such Prospectus, does not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

 

(c)  (1) The Issuer and Parent shall
advise you and, in the case of a Shelf Registration Statement, the Holders of
securities covered thereby, and, if requested by you or any such Holder,
confirm such advice in writing:

 

(i) when
a Registration Statement and any amendment thereto has been filed (or, in the
case of a previously
filed registration statement designated as a Shelf Registration Statement, when
it is so designated) with the Commission and when the Registration
Statement or any post-effective amendment thereto has become effective (or, in
the case of a previously
filed registration statement that is effective at the time it is designated as
a Shelf Registration Statement, when it is so designated); and

 

8

 

(ii) of
any request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus included therein or for additional information.

 

(2)  The Issuer
and Parent shall advise you and, in the case of a Shelf Registration Statement,
the Holders of securities covered thereby, and, in the case of an Exchange
Offer Registration Statement, any Exchanging Dealer which has provided in
writing to the Issuer a telephone or facsimile number and address for notices,
and, if requested by you or any such Holder or Exchanging Dealer, confirm such
advice in writing:

 

(i) of
the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose;

 

(ii) of
the receipt by the Issuer or Parent of any notification with respect to the
suspension of the qualification of the securities included therein for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose; and

 

(iii) of
the happening of any event that requires the making of any changes in the
Registration Statement or the Prospectus so that, as of such date, the
statements therein are not misleading and do not omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in the light of the circumstances under which they
were made) not misleading (which advice shall be accompanied by an instruction
to suspend the use of the Prospectus until the requisite changes have been
made).

 

Each such
Holder or Exchanging Dealer agrees by its acquisition of such securities to be
sold by such Holder or Exchanging Dealer, that, upon being so advised by the Issuer
or Parent of any event described in clause (iii) of this
paragraph (c)(2), such Holder or Exchanging Dealer will forthwith
discontinue disposition of such securities under such Registration Statement or
Prospectus, until such Holder’s or Exchanging Dealer’s receipt of the copies of
the supplemented or amended Prospectus contemplated by paragraph 4(k)
hereof, or until it is advised in writing by the Issuer or Parent that the use
of the applicable Prospectus may be resumed.

 

(d)  The Issuer and Parent shall use their
commercially reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of any Registration Statement at the earliest
possible time.

 

(e)  The Issuer and Parent shall furnish
to each Holder of securities included within the coverage of any Shelf
Registration Statement, without charge, at least one copy of such Shelf
Registration Statement and any post-effective

 

9

 

amendment thereto, including financial statements and schedules, and,
if the Holder so requests in writing, any documents incorporated by reference
therein and all exhibits thereto (including those incorporated by reference
therein).

 

(f)  The Issuer and Parent shall, during
the Shelf Registration Period, deliver to each Holder of securities included
within the coverage of any Shelf Registration Statement, without charge, as
many copies of the Prospectus (including each preliminary Prospectus) included
in such Shelf Registration Statement and any amendment or supplement thereto as
such Holder may reasonably request; and each of the Issuer and Parent hereby
consent to the use of the Prospectus or any amendment or supplement thereto by
each of the selling Holders of securities in connection with the offering and
sale of the securities covered by the Prospectus or any amendment or supplement
thereto.

 

(g)  The Issuer and Parent shall furnish
to each Exchanging Dealer which so requests, without charge, at least one copy
of the Exchange Offer Registration Statement and any post-effective amendment
thereto, including financial statements and schedules and, if the Exchanging
Dealer so requests in writing, any documents incorporated by reference therein
and all exhibits thereto (including those incorporated by reference therein).

 

(h)  The Issuer and Parent shall, during
the Exchange Offer Registration Period, promptly deliver to each Exchanging
Dealer, without charge, as many copies of the Prospectus included in such
Exchange Offer Registration Statement and any amendment or supplement thereto
as such Exchanging Dealer may reasonably request for delivery by such
Exchanging Dealer in connection with a sale of New Floating Rate Notes received
by it pursuant to the Registered Exchange Offer; and the Issuer and Parent hereby
consent to the use of the Prospectus or any amendment or supplement thereto by
any such Exchanging Dealer, as aforesaid.

 

(i)  Prior to the Registered Exchange
Offer or any other offering of securities pursuant to any Registration
Statement, the Issuer shall register or qualify or cooperate with the Holders
of securities included therein and their respective counsel in connection with
the registration or qualification of such securities for offer and sale under
the securities or blue sky laws of such jurisdictions as any such Holder
reasonably requests in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions of
the securities covered by such Registration Statement; provided, however,
that the Issuer will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which
would subject it to general service of process or to taxation in any such
jurisdiction where it is not then so subject.

 

(j)  The
Issuer and Parent shall cooperate with the Holders of Original Floating Rate
Notes to facilitate the timely preparation and delivery of certificates

 

10

 

representing Original Floating Rate Notes to be sold pursuant to any
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as Holders may request prior to
sales of securities pursuant to such Registration Statement.

 

(k)  Upon
the occurrence of any event contemplated by paragraph (c)(2)(iii) above,
the Issuer and Parent shall promptly prepare a post-effective amendment to any
Registration Statement or an amendment or supplement to the related Prospectus
or file any other required document so that, as thereafter delivered to
purchasers of the securities included therein, the Prospectus will not include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

 

(l)  Not
later than the effective date (or the designation date, in
the case of a previously filed registration statement that is effective at the
time it is designated as a Shelf Registration Statement) of any such
Registration Statement hereunder, the Issuer and Parent shall provide a CUSIP
number for each of the Original Floating Rate Notes or the New Floating Rate
Notes, as the case may be, registered under such Registration Statement,
and provide the Trustee with printed certificates for such Original Floating
Rate Notes or New Floating Rate Notes, in a form, if requested by the
applicable Holder or Holder’s counsel, eligible for deposit with The Depository
Trust Company or any successor thereto under the Indenture.

 

(m)  The
Issuer and Parent shall use their commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission to the extent
and so long as they are applicable to the Registered Exchange Offer or the
Shelf Registration and will make generally available to the security holders of
the Issuer a consolidated earnings statement (which need not be audited) covering
a twelve-month period commencing after the effective date (or the
designation date, in the case of a previously filed registration statement that
is effective at the time it is designated as a Shelf Registration Statement) of
the Registration Statement and ending not later than 15 months thereafter,
as soon as practicable after the end of such period, which consolidated
earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act.

 

(n)  The
Issuer and Parent shall cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended, on or prior to the effective date (or the
designation date, in the case of a previously filed registration statement that
is effective at the time it is designated as a Shelf Registration Statement) of
any Shelf Registration Statement or Exchange Offer Registration Statement.

 

(o)  The
Issuer and Parent may require each Holder of securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Issuer in
writing such information regarding the Holder and the distribution of such
securities as

 

11

 

the Issuer may from time to time reasonably require for inclusion
in such Registration Statement. The Issuer may exclude from any such
Registration Statement the securities of any such Holder who fails to furnish
such information within a reasonable time after receiving such request. Each
Holder as to which any Shelf Registration is being effected agrees to furnish
promptly to the Issuer all information required to be disclosed in order to
make the information previously furnished to the Issuer by such Holder not
materially misleading. Each Holder further agrees that, neither such Holder nor
any underwriter participating in any disposition pursuant to any Shelf
Registration Statement on such Holder’s behalf, will make any offer relating to
the securities to be sold pursuant to such Shelf Registration Statement that
would constitute an issuer free writing prospectus (as defined in Rule 433
under the Securities Act) or that would otherwise constitute a “free writing
prospectus” (as defined in Rule 405 under the Securities Act) required to
be filed by the Issuer and Parent with the Commission or retained by the Issuer
and Parent under Rule 433 of the Securities Act, unless it has obtained
the prior written consent of the Issuer and Parent (and except for as otherwise
provided in any underwriting agreement entered into by the Issuer and Parent
and any such underwriter).

 

(p)  The
Issuer and Parent shall, if requested, promptly incorporate in a Prospectus
supplement or post-effective amendment to a Shelf Registration Statement, such
information as the Managing Underwriters, if any, and the Floating Rate
Majority Holders reasonably agree should be included therein and shall make all
required filings of such Prospectus supplement or post-effective amendment as
soon as notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.

 

(q)  (i)  In
the case of any Shelf Registration Statement, the Issuer and Parent shall enter
into such agreements (including underwriting agreements) and take all other
appropriate actions in order to expedite or facilitate the registration or the
disposition of the Original Floating Rate Notes, and in connection therewith,
if an underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures no less favorable than those set
forth in Section 6 hereof (or such other provisions and procedures
acceptable to the Floating Rate Majority Holders and the Managing Underwriters,
if any), with respect to all parties to be indemnified pursuant to Section 6
hereof.

 

(ii)  Without
limiting in any way paragraph (q)(i), no Holder may participate in any
underwritten registration hereunder unless such Holder (x) agrees to sell
such Holder’s securities to be covered by such registration on the basis
provided in any underwriting arrangements approved by the Floating Rate
Majority Holders and the Managing Underwriters and (y) completes and
executes in a timely manner all customary questionnaires, powers of attorney,
underwriting agreements and other documents reasonably required by the Issuer or
the Managing Underwriters in connection with such underwriting arrangements.

 

12

 

(r)  In
the case of any Shelf Registration Statement, the Issuer and Parent shall (i) make
reasonably available for inspection by the Holders of securities to be
registered thereunder, any underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney, accountant or other
agent retained by the Holders or any such underwriter all relevant financial
and other records, pertinent corporate documents and properties of Parent and
its subsidiaries reasonably requested by such person; (ii) cause the officers,
directors and employees of the Issuer and Parent to supply all relevant
information reasonably requested by the Holders or any such underwriter,
attorney, accountant or agent in connection with any such Registration
Statement as is customary for due diligence examinations in connection with
primary underwritten offerings; provided, however, that any
information that is nonpublic at the time of delivery of such information shall
be kept confidential by the Holders or any such underwriter, attorney,
accountant or agent, unless such disclosure is made in connection with a court
proceeding or required by law, or such information becomes available to the
public generally or through a third party without an accompanying obligation of
confidentiality; provided further, however, that such Holders or
any such underwriter, attorney, accountant or agent may disclose to any
and all persons, without limitation of any kind, the U.S. tax treatment and
U.S. tax structure of any transaction contemplated therein and all materials of
any kind (including opinions or other tax analyses) that are provided to such
Holders or any such underwriter, attorney, accountant or agent relating to such
U.S. tax treatment and U.S. tax structure, other than any information for which
nondisclosure is reasonably necessary in order to comply with applicable
securities laws; (iii) make such representations and warranties to the
Holders of securities registered thereunder and the underwriters, if any, in
form, substance and scope as are customarily made by an issuer to underwriters
in primary underwritten offerings; (iv) obtain opinions of counsel to the Issuer
and Parent (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the Managing Underwriters, if any) addressed to each
selling Holder and the underwriters, if any, covering such matters as are
customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Holders and
underwriters; (v) obtain “cold comfort” letters (or, in the case of any
person that does not satisfy the conditions for receipt of a “cold comfort”
letter specified in Statement on Auditing Standards No. 72, an “agreed-upon
procedures” letter under Statement on Auditing Standards No. 35) and
updates thereof from the independent certified public accountants of Parent (and,
if necessary, any other independent certified public accountants of any
subsidiary of Parent or of any business acquired by Parent for which financial
statements and financial data are, or are required to be, included or
incorporated by reference in the Registration Statement), addressed to each
selling Holder of securities registered thereunder and the underwriters, if
any, in customary form and covering matters of the type customarily
covered in “cold comfort” letters in connection with primary underwritten
offerings; and (vi) deliver such documents and certificates as may be
reasonably requested by the Floating Rate Majority

 

13

 

Holders and the Managing Underwriters, if any, including those to
evidence compliance with Section 4(k) and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the Issuer
and Parent. The foregoing actions set forth in clauses (iii), (iv), (v) and
(vi) of this Section 4(r) shall be performed (A) on the
effective date (or the designation date, in the case of a
previously filed registration statement that is effective at the time it is
designated as a Shelf Registration Statement) of such Registration
Statement and each post-effective amendment thereto and (B) at each
closing under any underwriting or similar agreement as and to the extent
required thereunder.

 

(s)  In
the case of any Exchange Offer Registration Statement, the Issuer and Parent shall
(i) make reasonably available for inspection by each Purchaser, and any
attorney, accountant or other agent retained by such Purchaser, all relevant
financial and other records, pertinent corporate documents and properties of Parent
and its subsidiaries reasonably requested by such person; (ii) cause the
officers, directors and employees of the Issuer and Parent to supply all
relevant information reasonably requested by such Purchaser or any such
attorney, accountant or agent in connection with any such Registration
Statement as is customary for due diligence examinations in connection with
primary underwritten offerings; provided, however, that any
information that is nonpublic at the time of delivery of such information shall
be kept confidential by such Purchaser or any such attorney, accountant or
agent, unless such disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the public generally
or through a third party without an accompanying obligation of confidentiality;
provided further, however, that such Purchaser or any such attorney,
accountant or agent may disclose to any and all persons, without
limitation of any kind, the U.S. tax treatment and U.S. tax structure of any
transaction contemplated therein and all materials of any kind (including
opinions or other tax analyses) that are provided to such Purchaser or any such
attorney, accountant or agent relating to such U.S. tax treatment and U.S. tax
structure, other than any information for which nondisclosure is reasonably
necessary in order to comply with applicable securities laws; (iii) make
such representations and warranties to such Purchaser, in form, substance and
scope as are customarily made by an issuer to underwriters in primary
underwritten offerings; (iv) obtain opinions of counsel to the Issuer and Parent
(which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to such Purchaser and its counsel), addressed to such Purchaser,
covering such matters as are customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such Purchaser or its counsel; (v) obtain “cold comfort”
letters and updates thereof from the independent certified public accountants
of Parent (and, if necessary, any other independent certified public accountants
of any subsidiary of Parent or of any business acquired by Parent for which
financial statements and financial data are, or are required to be, included or
incorporated by reference in the Registration Statement), addressed to such
Purchaser, in customary form and

 

14

 

covering matters of the type customarily covered in “cold comfort”
letters in connection with primary underwritten offerings, or if requested by
such Purchaser or its counsel in lieu of a “cold comfort” letter, an
agreed-upon procedures letter under Statement on Auditing Standards No. 35,
covering matters requested by such Purchaser or its counsel; and (vi) deliver
such documents and certificates as may be reasonably requested by such
Purchaser or its counsel, including those to evidence compliance with Section 4(k)
and with conditions customarily contained in underwriting agreements. The
foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of
this Section 4(s) shall be performed (A) at the close of the
Registered Exchange Offer and (B) on the effective date of any
post-effective amendment to the Exchange Offer Registration Statement.

 

5. Registration Expenses. The Issuer
and Parent shall jointly and severally bear all expenses incurred in connection
with the performance of their obligations under Sections 2, 3 and 4 hereof
and, in the event of any Shelf Registration Statement, will reimburse the Holders
for the reasonable fees and disbursements of one firm or counsel (in addition
to one local counsel in each relevant jurisdiction) designated by the Floating
Rate Majority Holders to act as counsel for the Holders in connection therewith.
Notwithstanding the foregoing, the Holders of the securities being registered
shall pay all agency or brokerage fees and commissions and underwriting
discounts and commissions attributable to the sale of such securities and the
fees and disbursements of any counsel or other advisors or experts retained by
such Holders (severally or jointly), other than the counsel and experts
specifically referred to above in this Section 5, transfer taxes on resale
of any of the securities by such Holders and any advertising expenses incurred
by or on behalf of such Holders in connection with any offers they may make.

 

6. Indemnification and Contribution. (a) 
In connection with any Registration Statement, the Issuer and Parent jointly
and severally agree to indemnify and hold harmless each Holder of securities
covered thereby (including each Purchaser and, with respect to any Prospectus
delivery as contemplated in Section 4(h) hereof, each Exchanging
Dealer), the directors, officers, employees and agents of each such Holder and
each other person, if any, who controls any such Holder within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act against any and
all losses, claims, damages or liabilities, joint or several, to which they or
any of them may become subject under the Securities Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement as originally filed or in any amendment thereof, or in any
preliminary Prospectus or Prospectus, or in any amendment thereof or supplement
thereto, or in any issuer free writing prospectus approved for use by the
Issuer and Parent, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party, as

 

15

 

incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Issuer and Parent
will not be liable in any case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the Issuer
or Parent by or on behalf of any such Holder specifically for inclusion
therein; provided further, however, that the indemnity agreement
contained in this Section 6(a) shall not inure to the benefit of any
indemnified party to the extent that it is determined by a final, non-appealable
judgment that (i) a preliminary Prospectus contained an untrue statement
of a material fact or omitted to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii) the
sale to the person asserting any such losses, claims, damages or liabilities
was an initial resale of securities by any Holder, (iii) any such loss,
claim, damage or liability of such indemnified party results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such securities to such person, a copy of any
revised preliminary Prospectus, the related Prospectus or the related
Prospectus as amended or supplemented in any case where such delivery is
required by the Securities Act, and the Issuer and Parent had previously
furnished copies thereof to such Holder and (iv) the revised preliminary
Prospectus, the related Prospectus or the related Prospectus as amended or
supplemented corrected such untrue statement or omission. This indemnity
agreement will be in addition to any liability which the Issuer and Parent may otherwise
have.

 

The Issuer and
Parent also jointly and severally agree to indemnify or contribute to Losses
(as defined below) of, as provided in Section 6(d), any underwriters of Original
Floating Rate Notes or New Floating Rate Notes registered under a Shelf
Registration Statement, their officers, directors, employees and agents and
each person who controls such underwriters on substantially the same basis as
that of the indemnification of the Purchasers and the selling Holders provided
in this Section 6(a) and shall, if requested by any Holder, enter
into an underwriting agreement reflecting such agreement, as provided in Section 4(q)
hereof.

 

(b)  Each
Holder of securities covered by a Registration Statement (including each
Purchaser and, with respect to any Prospectus delivery as contemplated in Section 4(h) hereof,
each Exchanging Dealer) severally and not jointly agrees to indemnify and hold
harmless the Issuer, Parent, each of their directors and officers and each
other person, if any, who controls the Issuer or Parent within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Issuer and Parent to each such Holder, but
only with reference to written information relating to such Holder furnished to
the Issuer by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.

 

16

 

(c)  Promptly
after receipt by an indemnified party under this Section 6 of notice of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this Section 6,
notify the indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses and (ii) will
not, in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be
entitled to appoint counsel of the indemnifying party’s choice at the
indemnifying party’s expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below); provided,
however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party’s election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel (and local counsel) if (i) the use of counsel chosen
by the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice
of the institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the expense of
the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding. It is
understood, however, that the Issuer and Parent shall, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such Holders
and controlling persons. An indemnifying party shall not be liable under this Section 6
to any indemnified party regarding any settlement or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless

 

17

 

such settlement, compromise or
consent is consented to by such indemnifying party, which consent shall not be
unreasonably withheld.

 

(d)  In
the event that the indemnity provided in paragraph (a) or (b) of
this Section 6 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then the Issuer, Parent and the Holders, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively “Losses”) to
which the Issuer, Parent and the Holders may be subject in such proportion
as is appropriate to reflect the relative benefits received by the Issuer and Parent,
on the one hand, and by the Holders, on the other hand, from the Initial
Placement and the Registration Statement which resulted in such Losses; provided,
however, that in no case shall any Purchaser or any subsequent Holder of
any Original Floating Rate Note or New Floating Rate Note be responsible, in
the aggregate, for any amount in excess of the purchase discount or commission
applicable to such Original Floating Rate Note, or in the case of a New
Floating Rate Note, applicable to the security which was exchangeable into such
New Floating Rate Note, as set forth in the Final Memorandum and in the
Purchase Agreement, nor shall any underwriter be responsible for any amount in
excess of the underwriting discount or commission applicable to the securities
purchased by such underwriter under the Registration Statement which resulted
in such Losses. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Issuer, Parent and the Holders
severally shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Issuer and Parent,
on the one hand, and the Holders, on the other hand, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Issuer and Parent shall
be deemed to be equal to the sum of (x) the total net proceeds from the
Initial Placement (before deducting expenses) as set forth in the Final
Memorandum and in the Purchase Agreement and (y) the total amount of
additional interest which the Issuer was not required to pay as a result of
registering the securities covered by the Registration Statement which resulted
in such Losses. Benefits received by the Purchasers shall be deemed to be equal
to the total purchase discounts and commissions as set forth in the Final
Memorandum and in the Purchase Agreement, and benefits received by any other
Holders shall be deemed to be equal to the value of receiving Original Floating
Rate Notes or New Floating Rate Notes, as applicable, registered under the
Securities Act. Benefits received by any underwriter shall be deemed to be
equal to the total underwriting discounts and commissions, as set forth on the
cover page of the Prospectus forming a part of the Registration
Statement which resulted in such Losses. Relative fault shall be determined by
reference to whether any alleged untrue statement or omission relates to
information provided by the Issuer and Parent, on the one hand, or by Holders,
on the other hand. The parties agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent

 

18

 

misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person who
controls a Holder within the meaning of either the Securities Act or the
Exchange Act and each director, officer, employee and agent of such Holder
shall have the same rights to contribution as such Holder, and each person who
controls the Issuer or Parent within the meaning of either the Securities Act
or the Exchange Act, each of their officers who shall have signed the
Registration Statement and each of their directors shall have the same rights
to contribution as the Issuer and Parent, subject in each case to the
applicable terms and conditions of this paragraph (d).

 

(e)  The
provisions of this Section 6 will remain in full force and effect,
regardless of any investigation made by or on behalf of any Purchaser, any
other Holder, the Issuer and Parent or any underwriter or any of the officers,
directors or controlling persons referred to in this Section 6, and will
survive the sale by a Holder of securities covered by a Registration Statement.

 

7. Miscellaneous.

 

(a)  No
Inconsistent Agreements. None of the Issuer or Parent has, as of the date
hereof, entered into, nor shall it, on or after the date hereof, enter into,
any agreement with respect to its securities that limits the rights granted to
the Holders herein or otherwise conflicts with the provisions hereof.

 

(b)  Amendments
and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, qualified, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not
be given, unless the Issuer has obtained the written consent of the Holders of
at least a majority of the then outstanding aggregate principal amount of Original
Floating Rate Notes (or, after the consummation of any Exchange Offer in
accordance with Section 2 hereof, of New Floating Rate Notes); provided
that, with respect to any matter that directly or indirectly affects the rights
of any Purchaser hereunder, the Issuer shall obtain the written consent of each
such Purchaser against which such amendment, qualification, supplement, waiver
or consent is to be effective. Notwithstanding the foregoing (except the
foregoing proviso), a waiver or consent to departure from the provisions hereof
with respect to a matter that relates exclusively to the rights of Holders
whose securities are being sold pursuant to a Registration Statement and that
does not directly or indirectly affect the rights of other Holders may be
given by the Floating Rate Majority Holders, determined on the basis of
securities being sold rather than registered under such Registration Statement.

 

(c)  Notices.
All notices and other communications provided for or permitted hereunder shall
be made in writing by hand-delivery, first-class mail, facsimile, or air
courier guaranteeing overnight delivery:

 

19

 

(1) if to
a Holder, at the most current address given by such Holder to the Issuer in
accordance with the provisions of this Section 7(c), which address
initially is, with respect to each Holder, the address of such Holder
maintained by the registrar under the Indenture, with a copy in like manner to Merrill
Lynch, Pierce, Fenner & Smith Incorporated by facsimile (212-449-3207)
and confirmed by mail to it at Merrill Lynch World Headquarters, North Tower,
World Financial Center, New York, New York 10281-1201, Attention: Global
Origination Counsel;

 

(2) if to
you, initially at the address set forth in the Purchase Agreement; and

 

(3) if to
the Issuer or Parent, initially at the address set forth in the Purchase
Agreement.

 

All such
notices and communications shall be deemed to have been duly given when
received.

 

The Purchasers
or the Issuer by notice to the other may designate additional or different
addresses for subsequent notices or communications.

 

(d)  Successors
and Assigns. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties, including, without the
need for an express assignment or any consent by the Issuer and Parent or
subsequent Holders of Original Floating Rate Notes and/or New Floating Rate
Notes. The Issuer and Parent hereby agree to extend the benefits of this
Agreement to any Holder of Original Floating Rate Notes and/or New Floating
Rate Notes and any such Holder may specifically enforce the provisions of
this Agreement as if an original party hereto.

 

(e)  Counterparts.
This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
one and the same agreement.

 

(f)  Headings.
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

 

(g)  Governing
Law.  THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF).

 

(h)  Severability.
In the event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not

 

20

 

be in any way impaired or
affected thereby, it being intended that all the rights and privileges of the
parties shall be enforceable to the fullest extent permitted by law.

 

(i)  Securities
Held by the Issuer or Parent, etc. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Original Floating Rate
Notes or New Floating Rate Notes is required hereunder, Original Floating Rate
Notes or New Floating Rate Notes, as applicable, held by the Issuer, Parent or
their Affiliates (other than subsequent Holders of Original Floating Rate Notes
or New Floating Rate Notes if such subsequent Holders are deemed to be Affiliates
solely by reason of their holdings of such Original Floating Rate Notes or New
Floating Rate Notes) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.

 

(j)  Termination. This Agreement shall
automatically terminate, without any further action on the part of the Issuer
and Parent or the Purchasers, upon the termination or cancellation of the
Purchase Agreement prior to the Closing Date.

 

21

 

Please confirm that the foregoing correctly
sets forth the agreement among Parent, the Issuer and you.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Level 3 Financing, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Neil J. Eckstein

  	
   

  
	
   

  	
  Name: Neil J. Eckstein

  
	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  
	
   

  	
  Level 3 Communications, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Thomas C. Stortz

  	
   

  
	
   

  	
  Name: Thomas C. Stortz

  
	
   

  	
  Title: Executive Vice President

  

 

22

 

The foregoing Agreement is hereby

confirmed and accepted as of the

date first above written.

 

Merrill Lynch,
Pierce, Fenner & Smith Incorporated

Credit Suisse Securities (USA) LLC

Morgan Stanley & Co. Incorporated

J.P. Morgan Securities Inc.

 

By: Merrill
Lynch, Pierce, Fenner & Smith Incorporated

 

 

	
  By:

  	
   /s/ Vikram Kaul

  	
   

  
	
  Name: Vikram
  Kaul

  
	
  Title: Vice
  President

  

 

23

 

ANNEX A

 

Each
broker-dealer that receives New Floating Rate Notes for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such New Floating Rate Notes. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter”
within the meaning of the Securities Act. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of New Floating Rate Notes received in exchange for Original
Floating Rate Notes where such New Floating Rate Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Issuer and Parent have agreed that, starting on the date hereof
(the “Expiration Date”) and ending on the close of business on the day that is 180
days following the Expiration Date, it will make this Prospectus available to
any broker-dealer for use in connection with any such resale. See “Plan of
Distribution.”

 

 

ANNEX B

 

Each
broker-dealer that receives New Floating Rate Notes for its own account in
exchange for Original Floating Rate Notes, where such Original Floating Rate
Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such New Floating Rate Notes. See “Plan
of Distribution.”

 

 

ANNEX C

 

PLAN OF
DISTRIBUTION

 

Each
broker-dealer that receives New Floating Rate Notes for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such New Floating Rate Notes. The
Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of New Floating Rate Notes
received in exchange for Original Floating Rate Notes where such Original Floating
Rate Notes were acquired as a result of market-making activities or other
trading activities. Each of the Issuer and Parent has agreed that, starting on
the Expiration Date and ending on the close of business on the day that is 180
days following the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any
such resale. In addition, until             ,
2006, all dealers effecting transactions in the Exchange Securities may be
required to deliver a prospectus.*

 

Neither the Issuer
nor Parent will receive any proceeds from any sale of New Floating Rate Notes
by broker-dealers. New Floating Rate Notes received by broker-dealers for their
own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Floating Rate Notes or
a combination of such methods of resale, at market prices prevailing at the
time of resale, at prices related to such prevailing market prices or
negotiated prices. Any such resale may be made directly to purchasers or
to or through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or the purchasers of
any such New Floating Rate Notes. Any broker-dealer that resells New Floating
Rate Notes that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such New Floating Rate Notes may be deemed to be an “underwriter”
within the meaning of the Securities Act and any profit of any such resale of New
Floating Rate Notes and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an “underwriter” within the meaning of the Securities Act.

 

For a period
of 180 days after the Expiration Date, the Issuer and Parent will promptly send
additional copies of this Prospectus and any amendment or supplement to this
Prospectus to any broker-dealer that requests such documents in the Letter of
Transmittal. The Issuer and Parent have agreed to pay all expenses incident to
the Exchange Offer (other than the expenses of counsel for the Holders of the Original
Floating Rate Notes) other than commissions or concessions of any brokers or

 

* In addition, the legend required by Item
502(e) of Regulation S-K will appear on the back cover page of the
Exchange Offer Prospectus.

 

 

dealers and
will indemnify the Holders of the Original Floating Rate Notes (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.

 

[If applicable, add information required by
Regulation S-K Items 507 and/or 508.]

 

2

 

ANNEX D

 

Rider A

 

CHECK HERE IF YOU ARE A BROKER-DEALER AND
WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES
OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

 

	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Rider B

 

If the
undersigned is not a broker-dealer, the undersigned represents that it acquired
the New Floating Rate Notes in the ordinary course of its business, it is not
engaged in, and does not intend to engage in, a distribution of New Floating Rate
Notes and it has no arrangements or understandings with any person to
participate in a distribution of the New Floating Rate Notes. If the
undersigned is a broker-dealer that will receive New Floating Rate Notes for
its own account in exchange for Original Floating Rate Notes, it represents
that the Original Floating Rate Notes to be exchanged for New Floating Rate
Notes were acquired by it as a result of market-making activities or other
trading activities and acknowledges that it will deliver a prospectus in
connection with any resale of such New Floating Rate Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be
deemed to admit that it is an “underwriter” within the meaning of the
Securities Act.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]