Document:

Exhibit 10.1

                             ADEPT TECHNOLOGY, INC.
                        1998 EMPLOYEE STOCK PURCHASE PLAN
                        (as amended through October 2002)

         The following  constitute  the  provisions  of the 1998 Employee  Stock
Purchase Plan of Adept Technology, Inc.

         1.  Purpose.  The  purpose of the Plan is to provide  employees  of the
Company and its Designated  Subsidiaries  with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an  "Employee  Stock  Purchase  Plan"
under  Section  423 of the  Internal  Revenue  Code of  1986,  as  amended.  The
provisions  of the Plan,  accordingly,  shall be  construed  so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

         2. Definitions.

                  (a) "Board" shall mean the Board of Directors of the Company.

                  (b) "Code"  shall mean the Internal  Revenue Code of 1986,  as
amended.

                  (c) "Common Stock" shall mean the common stock of the Company.

                  (d)  "Company"  shall  mean  Adept  Technology,  Inc.  and any
Designated Subsidiary of the Company.

                  (e)  "Compensation"  shall mean all base  straight  time gross
earnings, commissions, and payments for overtime.

                  (f)  "Designated  Subsidiaries"  shall  mean the  Subsidiaries
which have been designated by the Board from time to time in its sole discretion
as eligible to participate in the Plan.

                  (g) "Employee" shall mean any individual who is an employee of
the Company for tax purposes whose  customary  employment with the Company is at
least  twenty  (20) hours per week and more than two (2) months in any  calendar
year. For purposes of the Plan, the employment  relationship shall be treated as
continuing  intact  while  the  individual  is on sick  leave or other  leave of
absence  approved by the Company.  Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or by
contract,  the employment  relationship will be deemed to have terminated on the
91st day of such leave.

                  (h) "Enrollment Date" shall mean the first Trading Day of each
Offering Period.

                  (i)  "Exercise  Date" shall mean the last  Trading Day of each
Purchase Period.

                  (j) "Fair Market Value" shall mean, as of any date,  the value
of Common Stock determined as follows:

                           (1) If the Common Stock is listed on any  established
stock exchange or a national  market system,  including  without  limitation The
Nasdaq Stock Market or The Nasdaq  SmallCap  Market of The Nasdaq Stock  Market,
its Fair Market  Value shall be the closing  sale price for the Common Stock (or
the mean of the closing bid and asked  prices,  if no sales were  reported),  as
quoted on such exchange or system for the last market trading day on the date of
such determination,  as reported in The Wall Street Journal or such other source
as the Board deems reliable; or

                           (2) If the  Common  Stock is  regularly  quoted  by a
recognized  securities  dealer but  selling  prices are not  reported,  its Fair
Market  Value  shall be the mean of the  closing  bid and asked  prices  for the
Common Stock on the date of such  determination,  as reported in The Wall Street
Journal or such other source as the Board deems reliable; or

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                           (3) In the absence of an  established  market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board.

                  (k) "Offering Period" shall mean,  commencing May 1, 2001, the
period of  approximately  twenty-four (24) months during which an option granted
pursuant to the Plan may be exercised, commencing on the first Trading Day on or
after May 1 and November 1 of each year and  terminating on the last Trading Day
in the period ending twenty-four (24) months later; provided,  however, that the
first  Offering  Period under the Plan shall commence with the first Trading Day
on or after  November 6, 1998,  and ending on the last  Trading Day on or before
October 31, 1999.  The  duration  and timing of Offering  Periods may be changed
pursuant to Section 4 of this Plan.

                  (l) "Plan" shall mean this 1998 Employee Stock Purchase Plan.

                  (m) "Purchase  Period" shall mean the  approximately six month
period  commencing  after one  Exercise  Date and ending with the next  Exercise
Date,  except  that the first  Purchase  Period  of any  Offering  Period  shall
commence on the Enrollment  Date and end with the next Exercise Date;  provided,
however,  that the first Purchase  Period under the Plan shall commence with the
first  Trading  Day on or after  November  6,  1998,  and  shall end on the last
Trading Day on or before April 30, 1999.

                  (n)  "Purchase  Price" shall mean 85% of the Fair Market Value
of a share of  Common  Stock on the  Enrollment  Date or on the  Exercise  Date,
whichever is lower; provided however, that the Purchase Price may be adjusted by
the Board pursuant to Section 20.

                  (o) "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been  exercised and the
number of shares of Common Stock which have been  authorized  for issuance under
the Plan but not yet placed under option.

                   (p)  "Subsidiary"  shall  mean  a  corporation,  domestic  or
foreign, of which not less than 50% of the voting shares are held by the Company
or a  Subsidiary,  whether or not such  corporation  now exists or is  hereafter
organized or acquired by the Company or a Subsidiary.

                  (q)  "Trading  Day" shall mean a day on which  national  stock
exchanges and the Nasdaq System are open for trading.

         3. Eligibility.

                  (a) Any  Employee (as defined in Section  2(g)),  who shall be
employed  by the  Company  on a given  Enrollment  Date  shall  be  eligible  to
participate in the Plan.

                  (b)   Any   provisions   of   the   Plan   to   the   contrary
notwithstanding,  no Employee  shall be granted an option  under the Plan (i) to
the extent that, immediately after the grant, such Employee (or any other person
whose stock would be attributed to such Employee  pursuant to Section  424(d) of
the Code) would own capital stock of the Company and/or hold outstanding options
to  purchase  such  stock  possessing  five  percent  (5%) or more of the  total
combined  voting  power or  value of all  classes  of the  capital  stock of the
Company or of any  Subsidiary,  or (ii) to the extent  that his or her rights to
purchase  stock under all employee  stock  purchase plans of the Company and its
subsidiaries  accrues  at a rate  which  exceeds  Twenty-Five  Thousand  Dollars
($25,000)  worth of stock  (determined at the fair market value of the shares at
the time such option is granted) for each  calendar year in which such option is
outstanding at any time.

         4. Offering  Periods.  The Plan shall be  implemented  by  consecutive,
overlapping  Offering Periods with a new Offering Period commencing on the first
Trading Day on or after May 1 and November 1 of each year, or on such other date
as the Board shall  determine,  and continuing  thereafter  until  terminated in
accordance with Section 20 hereof;  provided,  however,  that the first Offering
Period  under the Plan shall  commence  with the first  Trading  Day on or after
November 6, 1998,  and ending on the last  Trading Day on or before  October 31,
1999. The Board shall have the power to change the duration of Offering  Periods
(including  the  commencement  dates  thereof)

                                       2
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                                                                    Exhibit 10.1

with respect to future offerings without shareholder  approval if such change is
announced  prior to the scheduled  beginning of the first Offering  Period to be
affected thereafter.

         5. Participation.

                  (a) An eligible  Employee may become a participant in the Plan
by completing a subscription  agreement  authorizing  payroll  deductions in the
form of Exhibit A to this Plan and filing it with the Company's  payroll  office
prior to the applicable Enrollment Date.

                   (b) Payroll  deductions  for a participant  shall commence on
the  first  payroll  following  the  Enrollment  Date and  shall end on the last
payroll in the Offering Period to which such authorization is applicable, unless
sooner terminated by the participant as provided in Section 10 hereof.

         6.       Payroll Deductions.

                  (a) At the time a  participant  files his or her  subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering  Period in an amount not exceeding  fifteen percent (15%) of
the  Compensation  which he or she  receives on each pay day during the Offering
Period, provided, however, the aggregate of such payroll deductions under two or
more employee stock purchase plans of the Company that are  overlapping  may not
exceed fifteen percent (15%) of the participant's  Compensation  which he or she
receives on each pay day during the Offering Period.

                  (b) All payroll  deductions  made for a  participant  shall be
credited  to his or her  account  under the Plan and will be  withheld  in whole
percentages  only. A participant may not make any additional  payments into such
account.

                  (c) A participant may discontinue his or her  participation in
the Plan as provided in Section 10 hereof,  or may increase or decrease the rate
of his or her payroll  deductions  during the Offering  Period by  completing or
filing with the Company a new  subscription  agreement  authorizing  a change in
payroll  deduction rate. The Board may, in its  discretion,  limit the number of
participation  rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation  more quickly. A participant's
subscription  agreement shall remain in effect for successive  Offering  Periods
unless terminated as provided in Section 10 hereof.

                  (d) Notwithstanding the foregoing,  to the extent necessary to
comply  with  Section   423(b)(8)  of  the  Code  and  Section  3(b)  hereof,  a
participant's  payroll  deductions  may be decreased to zero percent (0%) by the
participant  at any time  during a Purchase  Period.  Payroll  deductions  shall
recommence at the rate provided in such participant's  subscription agreement at
the  beginning  of the first  Purchase  Period  which is scheduled to end in the
following  calendar year,  unless  terminated by the  participant as provided in
Section 10 hereof.

                  (e) At the time the option is exercised,  in whole or in part,
or at the time some or all of the  Company's  Common Stock issued under the Plan
is disposed of, the participant  must make adequate  provision for the Company's
federal, state, or other tax withholding  obligations,  if any, which arise upon
the exercise of the option or the  disposition of the Common Stock. At any time,
the Company may, but will not be obligated to,  withhold from the  participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax  deductions or benefits  attributable  to sale or early  disposition  of
Common Stock by the Employee.

                                       3
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                                                                    Exhibit 10.1

         7. Grant of Option.  On the  Enrollment  Date of each Offering  Period,
each eligible Employee participating in such Offering Period shall be granted an
option to purchase on each  Exercise  Date during such  Offering  Period (at the
applicable  Purchase  Price) up to a number of  shares of the  Company's  Common
Stock  determined by dividing such  Employee's  payroll  deductions  accumulated
prior to such Exercise Date and retained in the Participant's  account as of the
Exercise Date by the applicable Purchase Price;  provided that in no event shall
an Employee be permitted to purchase during each Purchase Period more than 3,000
shares of the  Company's  Common Stock  (subject to any  adjustment  pursuant to
Section  19), and provided  further that such  purchase  shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof.  The Board may, for future
Offering Periods, increase or decrease, in its absolute discretion,  the maximum
number of shares of the Company's  Common Stock an Employee may purchase  during
each Purchase Period of such Offering Period. Exercise of the option shall occur
as provided in Section 8 hereof,  unless the participant has withdrawn  pursuant
to  Section  10  hereof,  and the  option  shall  expire  on the last day of the
Offering Period.

         8. Exercise of Option.

                  (a) Unless a participant  withdraws  from the Plan as provided
in Section 10 hereof,  his or her  option  for the  purchase  of shares  will be
exercised  automatically  on the Exercise  Date,  and the maximum number of full
shares  subject  to  option  shall  be  purchased  for such  participant  at the
applicable  Purchase Price with the accumulated payroll deductions in his or her
account.  No  fractional  shares  will  be  purchased;  any  payroll  deductions
accumulated  in a  participant's  account which are not sufficient to purchase a
full share  shall be retained in the  participant's  account for the  subsequent
Purchase  Period or  Offering  Period,  subject  to  earlier  withdrawal  by the
participant  as provided in Section 10 hereof.  Any other  monies left over in a
participant's  account  after  the  Exercise  Date  shall  be  returned  to  the
participant.  The participant may elect to have excess monies rolled-over to the
next purchase period.  To effect such a request,  an ESPP RollOver Election Form
must be submitted to Payroll prior to the next payroll processing  following the
purchase  date.  During a  participant's  lifetime,  a  participant's  option to
purchase shares hereunder is exercisable only by him or her.

                  (b) If the Board  determines  that, on a given  Exercise Date,
the number of shares  with  respect to which  options  are to be  exercised  may
exceed:

                           (i) the  number of shares of Common  Stock  that were
available  for sale  under  the Plan on the  Enrollment  Date of the  applicable
Offering Period, or

                           (ii) the  number of shares  available  for sale under
the Plan on such Exercise Date, the Board may in its sole discretion

                                    (x) provide  that the  Company  shall make a
pro rata allocation of the shares of Common Stock available for purchase on such
Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall
be practicable  and as it shall determine in its sole discretion to be equitable
among all  participants  exercising  options to  purchase  Common  Stock on such
Exercise Date, and continue all Offering Periods then in effect, or

                                    (y) provide  that the  Company  shall make a
pro rata allocation of the shares available for purchase on such Enrollment Date
or Exercise Date, as applicable,  in as uniform a manner as shall be practicable
and as it shall  determine  in its sole  discretion  to be  equitable  among all
participants  exercising options to purchase Common Stock on such Exercise Date,
and terminate any or all Offering  Periods then in effect pursuant to Section 20
hereof.

The  Company  may make a pro rata  allocation  of the  shares  available  on the
Enrollment  Date of any  applicable  Offering  Period  pursuant to the preceding
sentence,  notwithstanding  any  authorization of additional shares for issuance
under the Plan by the Company's shareholders subsequent to such Enrollment Date.

         9.  Delivery.  As promptly as  practicable  after each Exercise Date on
which a purchase of shares  occurs,  the Company  shall  arrange the delivery to
each  participant,  as  appropriate,  of a certificate  representing  the shares
purchased upon exercise of his or her option.

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                                                                    Exhibit 10.1
         10.      Withdrawal.

                  (a) A  participant  may withdraw all but not less than all the
payroll  deductions  credited to his or her account and not yet used to exercise
his or her  option  under the Plan at any time by giving  written  notice to the
Company in the form of Exhibit B to this Plan. All of the participant's  payroll
deductions  credited  to his or her  account  will be  paid to such  participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering  Period will be  automatically  terminated,  and no further payroll
deductions for the purchase of shares will be made for such Offering Period.  If
a participant  withdraws from an Offering  Period,  payroll  deductions will not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.

                  (b) A  participant's  withdrawal from an Offering Period shall
not have any effect upon his or her  eligibility  to  participate in any similar
plan which may  hereafter  be adopted by the Company or in  succeeding  Offering
Periods which commence after the  termination of the Offering  Period from which
the participant withdraws.

         11. Termination of Employment.

                  Upon a participant's  ceasing to be an Employee (as defined in
Section 2(g) hereof),  for any reason,  he or she will be deemed to have elected
to  withdraw  from  the  Plan  and  the  payroll  deductions  credited  to  such
participant's  account  during the Offering  Period but not yet used to exercise
the option will be returned  to such  participant  or, in the case of his or her
death, to the person or persons  entitled  thereto under Section 15 hereof,  and
such  participant's  option  will be  automatically  terminated.  The  preceding
sentence  notwithstanding,  a participant who receives payment in lieu of notice
of  termination  of employment  shall be treated as continuing to be an Employee
for the  participant's  customary number of hours per week of employment  during
the  period in which the  participant  is  subject  to such  payment  in lieu of
notice.

         12. Interest.  No interest shall accrue on the payroll  deductions of a
participant in the Plan.

         13. Stock.

                  (a) Subject to adjustment  upon changes in  capitalization  of
the Company as provided  in Section 19 hereof,  the maximum  number of shares of
the Company's Common Stock which shall be made available for sale under the Plan
shall be 600,000 shares, plus an annual increase to be added on the first day of
the  Company's  fiscal  year  beginning  in July 1999 equal to the lesser of (i)
600,000 shares or (ii) 3% of the outstanding shares on the last day of the prior
fiscal year or (iii) a lesser amount determined by the Board.

                  (b) The  participant  will have no interest or voting right in
shares covered by his option until such option has been exercised.

                  (c) Shares to be  delivered  to a  participant  under the Plan
will  be  registered  in the  name  of the  participant  or in the  name  of the
participant and his or her spouse.

         14.  Administration.  The Plan shall be  administered by the Board or a
committee  of members  of the Board  appointed  by the  Board.  The Board or its
committee  shall have full and  exclusive  discretionary  authority to construe,
interpret  and  apply the terms of the Plan,  to  determine  eligibility  and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination  made by the  Board or its  committee  shall,  to the full  extent
permitted by law, be final and binding upon all parties.

         15. Designation of Beneficiary.

                  (a)  A  participant  may  file  a  written  designation  of  a
beneficiary   who  is  to  receive  any  shares  and  cash,  if  any,  from  the
participant's  account under the Plan in the event of such  participant's  death
subsequent  to an Exercise  Date on which the option is  exercised  but prior to
delivery to such participant of such shares and cash. In addition, a participant
may file a written  designation of a beneficiary who is to receive any cash from
the participant's

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                                                                    Exhibit 10.1

account  under  the  Plan in the  event  of such  participant's  death  prior to
exercise  of  the  option.  If a  participant  is  married  and  the  designated
beneficiary  is not the  spouse,  spousal  consent  shall be  required  for such
designation to be effective.

                  (b) Such  designation  of  beneficiary  may be  changed by the
participant  at any time by  written  notice.  In the  event  of the  death of a
participant  and in the absence of a beneficiary  validly  designated  under the
Plan who is living at the time of such  participant's  death,  the Company shall
deliver such shares and/or cash to the executor or  administrator  of the estate
of the participant,  or if no such executor or administrator  has been appointed
(to the knowledge of the Company),  the Company, in its discretion,  may deliver
such  shares  and/or  cash to the  spouse  or to any one or more  dependents  or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.

         16.   Transferability.   Neither  payroll  deductions   credited  to  a
participant's account nor any rights with regard to the exercise of an option or
to  receive  shares  under the Plan may be  assigned,  transferred,  pledged  or
otherwise  disposed of in any way (other  than by will,  the laws of descent and
distribution or as provided in Section 15 hereof) by the  participant.  Any such
attempt at assignment,  transfer,  pledge or other  disposition shall be without
effect,  except  that the  Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

         17.  Use of  Funds.  All  payroll  deductions  received  or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.

         18.   Reports.   Individual   accounts  will  be  maintained  for  each
participant  in the Plan.  Statements of account will be given to  participating
Employees  at least  annually,  which  statements  will set forth the amounts of
payroll  deductions,  the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.

         19.   Adjustments   Upon   Changes  in   Capitalization,   Dissolution,
Liquidation, Merger or Asset Sale.

                  (a) Changes in Capitalization.  Subject to any required action
by the shareholders of the Company,  the Reserves,  the maximum number of shares
each  participant may purchase each Purchase Period  (pursuant to Section 7), as
well as the price per share and the number of shares of Common Stock  covered by
each  option  under  the  Plan  which  has  not  yet  been  exercised  shall  be
proportionately  adjusted  for any  increase or decrease in the number of issued
shares of Common Stock resulting from a stock split,  reverse stock split, stock
dividend,  combination  or  reclassification  of the Common Stock,  or any other
increase or decrease in the number of shares of Common  Stock  effected  without
receipt of consideration by the Company;  provided,  however, that conversion of
any  convertible  securities  of the  Company  shall  not be deemed to have been
"effected  without receipt of  consideration".  Such adjustment shall be made by
the Board,  whose  determination  in that  respect  shall be final,  binding and
conclusive.  Except as expressly  provided herein, no issuance by the Company of
shares of stock of any class, or securities  convertible into shares of stock of
any class,  shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.

                  (b) Dissolution or  Liquidation.  In the event of the proposed
dissolution or liquidation of the Company,  the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall  terminate   immediately  prior  to  the  consummation  of  such  proposed
dissolution or  liquidation,  unless  provided  otherwise by the Board.  The New
Exercise Date shall be before the date of the Company's proposed  dissolution or
liquidation.  The Board shall notify each  participant in writing,  at least ten
(10)  business days prior to the New Exercise  Date,  that the Exercise Date for
the participant's  option has been changed to the New Exercise Date and that the
participant's option shall be exercised  automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.

                  (c) Merger or Asset Sale.  In the event of a proposed  sale of
all or  substantially  all of the  assets of the  Company,  or the merger of the
Company  with or into  another  corporation,  each  outstanding  option shall be
assumed or an equivalent  option  substituted by the successor  corporation or a
Parent  or  Subsidiary  of the  successor  corporation.  In the  event  that the
successor  corporation  refuses  to assume or  substitute  for the  option,  any
Purchase  Periods then in progress  shall be shortened by setting a new Exercise
Date (the "New Exercise Date") and

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<PAGE>
                                                                    Exhibit 10.1

any Offering  Periods then in progress  shall end on the New Exercise  Date. The
New Exercise  Date shall be before the date of the  Company's  proposed  sale or
merger.  The Board shall notify each  participant in writing,  at least ten (10)
business  days prior to the New Exercise  Date,  that the Exercise  Date for the
participant's  option  has been  changed to the New  Exercise  Date and that the
participant's option shall be exercised  automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.

         20. Amendment or Termination.

                  (a) The Board of  Directors of the Company may at any time and
for any reason  terminate  or amend the Plan.  Except as  provided in Section 19
hereof, no such termination can affect options previously granted, provided that
an Offering  Period may be  terminated by the Board of Directors on any Exercise
Date if the Board  determines that the termination of the Offering Period or the
Plan is in the best  interests  of the Company and its  shareholders.  Except as
provided in Section 19 and this  Section 20 hereof,  no  amendment  may make any
change in any option  theretofore  granted which adversely affects the rights of
any participant.  To the extent necessary to comply with Section 423 of the Code
(or any successor rule or provision or any other  applicable law,  regulation or
stock exchange rule),  the Company shall obtain  shareholder  approval in such a
manner and to such a degree as required.

                  (b) Without  shareholder consent and without regard to whether
any participant rights may be considered to have been "adversely  affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period,  establish  the  exchange  ratio  applicable  to amounts  withheld  in a
currency other than U.S.  dollars,  permit payroll  withholding in excess of the
amount  designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections,  establish
reasonable  waiting and  adjustment  periods  and/or  accounting  and  crediting
procedures  to ensure that amounts  applied  toward the purchase of Common Stock
for  each  participant  properly  correspond  with  amounts  withheld  from  the
participant's  Compensation,  and establish such other limitations or procedures
as the Board (or its  committee)  determines  in its sole  discretion  advisable
which are consistent with the Plan.

                  (c) In  the  event  the  Board  determines  that  the  ongoing
operation  of  the  Plan  may  result  in   unfavorable   financial   accounting
consequences,  the Board may, in its discretion and, to the extent  necessary or
desirable,  modify  or amend the Plan to reduce  or  eliminate  such  accounting
consequence including, but not limited to:

                           (1)  altering  the  Purchase  Price for any  Offering
Period  including  an  Offering  Period  underway  at the time of the  change in
Purchase Price;

                           (2)  shortening  any  Offering  Period  so  that  the
Offering  Period ends on a new  Exercise  Date,  including  an  Offering  Period
underway at the time of the Board action; and

                           (3) allocating shares pursuant to Section 8(b) above.

                           Such  modifications  or amendments  shall not require
shareholder approval or the consent
of any Plan participants.

         21. Notices.  All notices or other  communications  by a participant to
the Company  under or in  connection  with the Plan shall be deemed to have been
duly given when  received in the form  specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.

         22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option  unless the  exercise of such option and the  issuance  and
delivery of such  shares  pursuant  thereto  shall  comply  with all  applicable
provisions  of law,  domestic or foreign,  including,  without  limitation,  the
Securities  Act of 1933,  as amended,  the  Securities  Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder,  and the requirements
of any stock  exchange  upon which the  shares may then be listed,  and shall be
further  subject to the approval of counsel for the Company with respect to such
compliance.

                                       7
<PAGE>
                                                                    Exhibit 10.1

                  As a condition to the  exercise of an option,  the Company may
require the person  exercising  such option to represent and warrant at the time
of any such exercise that the shares are being purchased only for investment and
without  any  present  intention  to sell or  distribute  such shares if, in the
opinion of counsel for the Company,  such a representation is required by any of
the aforementioned applicable provisions of law.

         23. Term of Plan.  The Plan shall become  effective upon the earlier to
occur  of its  adoption  by the  Board  of  Directors  or  its  approval  by the
shareholders of the Company.  It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 20 hereof.

          24.  Automatic  Transfer to Low Price Offering  Period.  To the extent
permitted by any applicable  laws,  regulations,  or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the  Enrollment  Date
of such Offering Period,  then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their  option on such  Exercise  Date and  automatically  re-enrolled  in the
immediately following Offering Period as of the first day thereof.

                                       8Exhibit 10.1

                          SHELF REGISTRATION AGREEMENT

     AGREEMENT dated as of November 12, 2002 among Commonwealth Telephone
Enterprises, Inc., a Pennsylvania corporation (the "Company"), Level 3
Communications, Inc., a Delaware corporation ("Level 3") and Eldorado Equity
Holdings, Inc., a Delaware corporation ("Eldorado").

     WHEREAS, Level 3 is the indirect beneficial owner of 4,741,326 issued and
outstanding shares of the Company's Common Stock, par value $1.00 per share
(together with any shares distributed as a dividend with respect to, or issued
in exchange for or in replacement of such stock, the "Common Stock"), and
1,017,061 issued and outstanding shares of the Company's Class B Common Stock,
par value $1.00 per share (together with any shares distributed as a dividend
with respect to, or issued in exchange for or in replacement of such stock, the
"Class B Common Stock"; and together with the Common Stock, the "Capital
Stock").

     WHEREAS, Eldorado is an indirect, wholly-owned subsidiary of Level 3 and
the holder of record of the Capital Stock.

     WHEREAS, the Company and Level 3 have entered into a Registration Rights
Agreement dated as of February 7, 2002 (the "Registration Rights Agreement").

     WHEREAS, the parties hereto desire to enter into this Agreement to govern
the filing and use of a shelf registration statement (the "Registration
Statement") with the U.S. Securities and Exchange Commission (the "Commission")
to allow for the offer and sale from time to time of the Common Stock by
Eldorado.

     WHEREAS, the parties hereto desire to supersede the Registration Rights
Agreement with this Agreement insofar as the Registration Rights Agreement
relates to offers and sales of Common Stock.

     WHEREAS, the parties hereto intend for the Registration Rights Agreement
to remain operative as it relates to offers and sales of Class B Common Stock.

     WHEREAS, the Company and Level 3 desire to amend and restate the
allocation of registration expenses and certain other terms that are set forth
in the Registration Rights Agreement as set forth herein.

     NOW, THEREFORE, the parties hereto agree as follows:

                                      II-9
<PAGE>

                                   ARTICLE 1
                                  DEFINITIONS

     SECTION 1.01. Definitions. The following terms, as used herein, have the
following meanings:

     "Adverse Disclosure" means public disclosure of material non-public
information, which disclosure in the good faith judgment of the Chief Executive
Officer of the Company: (i) would be required to be made in the Registration
Statement or any supplement thereto filed by the Company with the Commission so
that the Registration Statement would not be materially misleading; (ii) would
not be required to be made at such time but for the filing of such supplement
to the Registration Statement; and (iii) is such that it would be seriously
detrimental to the Company or its shareholders if it were publicly disclosed.

     "Agent" means a securities broker who arranges for the purchase of shares
and who does not purchase such shares as principal.

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

     "Company Expenses" means: (i) registration and filing fees with the
Commission and the NASD, Inc., (ii) fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with applicable blue sky qualifications), (iii) printing
expenses, (iv) fees and expenses incurred in connection with the listing or
quotation of shares, (v) fees and expenses of counsel to the Company and fees
and expenses of independent certified public accountants for the Company
(including fees and expenses associated with any special audits or the delivery
of comfort letters), (vi) reasonable fees and expenses of any additional
experts retained by the Company in connection with any offer of shares, and
(vii) reasonable fees and expenses of one counsel for both Level 3 and Eldorado
not to exceed $25,000.

     "Demand Registration" means a Demand Registration as such term is defined
in Section 2.1 of the Registration Rights Agreement.

     "Person" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.

     "Subsidiary" means each corporation, partnership, joint venture or other
legal entity of which a holder of Common Stock beneficially owns, directly or
indirectly, more than 50% of the outstanding stock or other equity interests.

                                     II-10
<PAGE>

     "Underwriter" means a securities dealer who purchases shares as principal
and not as part of such dealer's market-making activities.

                                   ARTICLE 2
                    STATUS OF REGISTRATION RIGHTS AGREEMENT

     SECTION 2.01. Status of Registration Rights Agreement. (a) The parties
hereto hereby agree that upon the effectiveness of this Agreement, the
Registration Rights Agreement shall no longer be effective insofar as the
Registration Rights Agreement relates to offers and sales of Common Stock.

     (b) The Registration Rights Agreement shall remain operative and in full
force and effect at all times insofar as it relates to offers and sales of
Class B Common Stock.

     (c) Notwithstanding Section 2.01(a) hereof and for the avoidance of doubt,
the indemnification and contribution provisions contained in Article 4 of the
Registration Rights Agreement, insofar as such provisions relate to sales of
Capital Stock made thereunder, shall remain operative in their entirety and in
full force and effect at all times and regardless of the effectiveness of this
Agreement.

     (d) Upon the effectiveness of this Agreement, Section 3.2(a) of the
Registration Rights Agreement shall be amended and restated as set forth in
Section 4.02 hereof.

     (e) Nothing contained herein shall limit the number of Demand
Registrations that may be exercised under the Registration Rights Agreement.

                                   ARTICLE 3
                               SHELF REGISTRATION

     SECTION 3.01. Shelf Registration. (a) The Company is currently eligible to
use Form S-3 and will use all commercially reasonable efforts to maintain such
eligibility during the Effective Period (as defined in Section 3.01(c)), and,
in the event such eligibility is not maintained, the Company shall convert the
Registration Statement to a registration statement on Form S-1.

     (b) Subject to Section 3.01(c) below, the Company will use all
commercially reasonable efforts to expeditiously prepare and file, within 5
Business Days of the date of this Agreement, the Registration Statement with
the Commission on Form S-3 to register the Common Stock for offer and sale by
Eldorado or its permitted assigns on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, as amended (the "Securities Act").

                                     II-11
<PAGE>

     (c) The Company will use all commercially reasonable efforts to
expeditiously cause the Registration Statement to become effective and to
remain so until the date on which Level 3 and its affiliates no longer
beneficially own any shares of Common Stock (the "Effective Period"); provided
that if the Company shall furnish to Level 3 a certificate signed by the
Company's Chairman or President stating that, in the good faith judgment of the
Company's Board of Directors, it would be seriously detrimental to the Company
or its shareholders for the Registration Statement to be filed or become
effective as expeditiously as possible, the Company may postpone, upon giving
prompt (but in any event within 5 Business Days of such determination) written
notice of such action to Level 3, the filing or effectiveness of the
Registration Statement for a period of not more than 120 days (provided that
the Company may not defer such filing or effectiveness pursuant to this clause
more than once); and provided further that if (i) the effective date of the
Registration Statement would otherwise be at least 45 days, but fewer than 90
days, after December 31, 2002, and (ii) the Securities Act requires the Company
to include audited financials as of December 31, 2002, the Company may delay
the effectiveness of the Registration Statement for such period as is
reasonably necessary to include therein its audited financial statements as of
and for the year ended December 31, 2002, although the Company will use all
commercially reasonable efforts to minimize the length of such delay. The
Company shall promptly (but in any event within 5 Business Days) notify Level 3
of the termination of any such suspension period.

     (d) The Company will, if requested, prior to filing the Registration
Statement or any amendment or supplement thereto, furnish to Level 3 and each
managing Underwriter or Agent, if any, copies thereof, and thereafter furnish
to Level 3 and each such Underwriter or Agent, if any, such number of copies of
the Registration Statement, amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein)
and the prospectus included in the Registration Statement (including each
preliminary prospectus supplement and prospectus supplement) as Level 3 or each
such Underwriter or Agent may reasonably request in order to facilitate the
offer and sale of the Common Stock.

     (e) The Company will promptly notify Level 3 of any stop order issued in
connection with the Registration Statement or, to the Company's knowledge,
threatened to be issued by the Commission, and will take all commercially
reasonable actions required to prevent the entry of such stop order or to
remove it if entered.

     (f) Notwithstanding any provision contained herein to the contrary, the
Company will pay all pre-effective expenses that do not relate to a specific
Shelf Takedown (as defined in Section 4.01(a)) incurred in connection with the
Registration Statement.

     (g) To the extent a post-effective amendment to the Registration Statement
is required by Rule 416 under the Securities Act, the Company shall at its
expense file such an amendment (or take such other action to fulfill such
requirement as is then permitted by the Staff of the Commission) within 2
Business Days of the effective date of the event requiring such action.

                                     II-12
<PAGE>

                                   ARTICLE 4
                                SHELF TAKEDOWNS

     SECTION 4.01. Shelf Takedowns. (a) So long as the Registration Statement
is effective, Eldorado may offer and sell some or all of the Common Stock
through Underwriters or Agents ("Underwritten Takedowns") or directly to
investors ("Direct Takedowns", and together with Underwritten Takedowns, "Shelf
Takedowns"), as more fully described in the Registration Statement. Level 3
shall have the right to select the managing Underwriters or Agents and any
additional investment bankers, managers, dealers, brokers or agents to be used
in connection with any Underwritten Takedown, subject to the Company's
approval, which approval shall not be unreasonably withheld, conditioned or
delayed.

     (b) Level 3 shall provide verbal notice to the Company immediately prior
to a proposed Direct Takedown and shall provide written notice to the Company 5
Business Days prior to a proposed Underwritten Takedown. Such written notice
shall state that Level 3, to the best knowledge of one of its authorized
officers, is not, and will not be at the time of the sale, in possession of any
material, non-public information regarding the Company and shall specify the
number of shares of Common Stock to be offered and the intended method of
disposition of such shares.

     (c) At the request of any Underwriter or Agent (as the case may be) in
connection with any Underwritten Takedown, Level 3 and Eldorado will complete
and execute all customary and normal questionnaires, powers of attorney,
custody arrangements, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting or placement
agreements and this Agreement.

     (d) The Company will use all commercially reasonable efforts to qualify
the shares to be offered in a Shelf Takedown under such securities or blue sky
laws of such jurisdictions in the United States as Level 3 shall reasonably
request; provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph, (ii) subject itself to taxation in
any such jurisdiction, or (iii) consent to general service of process in any
such jurisdiction.

     (e) At the request of any Underwriter or Agent (as the case may be) in
connection with any Underwritten Takedown, the Company will enter into
customary agreements (including an underwriting or placement agreement in
customary form) and take such other actions as are required in order to
expedite or facilitate such Underwritten Takedown, including furnishing (i) an
opinion of counsel addressed to the Underwriters or Agents (as the case may be)
covering such customary matters as the managing Underwriter or Agent (as the
case may be) may reasonably request and (ii) a comfort letter or comfort
letters from the Company's independent public accountants covering such
customary matters as the managing Underwriter or Agent (as the case may be) may
reasonably request. In connection with any Direct Takedown, the Company will
enter into customary agreements and take such other actions as are reasonably
required in order to expedite or facilitate the Direct Takedown.

                                     II-13
<PAGE>

     (f) An Underwritten Takedown will not count as an Underwritten Takedown
for the purposes of Section 4.02 hereof unless the distribution contemplated
thereby is actually consummated. Should the distribution contemplated by an
Underwritten Takedown not be consummated due to the failure of Level 3 or
Eldorado to perform its obligations under this Agreement or the inability of
Level 3 or Eldorado to reach agreement with the Underwriters or Agents (as the
case may be) for the proposed sale on the price or other customary terms for
such transaction, or in the event that Level 3 or Eldorado withdraws or does
not pursue the Underwritten Takedown (in each of the foregoing cases, provided
that at such time the Company is in compliance in all material respects with
its obligations under this Agreement), then such Underwritten Takedown shall
not be deemed to have been effected for the purposes of Section 4.02 hereof but
Level 3 shall pay those expenses incurred by the Company in connection
therewith as set forth in Section 4.02 hereof.

     (g) (i) The Company will have the right to preempt, subject to Sections
4.01(g)(ii) and (iii) hereof, any Underwritten Takedown with a primary
registration (a "Proposed Offering") by delivering written notice (the
"Proposed Offering Notice") of such intention to Level 3 (within 5 Business
Days after the Company has received from Level 3 a request for such a takedown)
indicating that the Company has identified a specific business need and use for
the proceeds of the sale of such securities, the required time frame for such
need directly interferes with the proposed Underwritten Takedown and the
Company shall use all commercially reasonable efforts to consummate the sale of
such securities pursuant to such primary registration within 90 days of such
notice. Upon the Company's preemption of an Underwritten Takedown, such
takedown shall not count as an Underwritten Takedown for the purposes of
Section 4.02. The Company shall not be entitled to exercise this right of
preemption more than one time in any 180-day period.

     (ii) In the case of a Proposed Offering (other than an offering made on
Form S-4 or S-8 or pursuant to Rule 415 (or any substitute form or rule,
respectively, that may be adopted by the Commission)), the Company shall offer
Level 3 the opportunity in the Proposed Offering Notice to conduct a concurrent
offering of such number of shares (subject to 4.01(g)(iii) hereof) of Common
Stock held by Eldorado as Level 3 may request (a "Concurrent Offering") on the
same terms and conditions as the Proposed Offering. Level 3 will have 5
Business Days after receipt of the Proposed Offering Notice to notify the
Company as to whether it wishes to conduct a Concurrent Offering and, if so,
the number of shares of Common Stock proposed to be included in such offering;
provided that should Level 3 fail to provide timely notice to the Company,
Level 3 and Eldorado will forfeit any rights to conduct a Concurrent Offering
with respect to such Proposed Offering. The Company shall be entitled to select
the Underwriters in connection with any Proposed Offering and any Concurrent
Offering.

     (iii) Notwithstanding anything contained herein, if the managing
underwriter of a Proposed Offering advises the Company and Level 3 that
marketing factors require a limitation of the number of shares to be
underwritten, then the number of securities to be offered in the Proposed
Offering for the account of selling persons exercising piggy-back registration
rights (other than Eldorado) shall be reduced to the extent necessary to reduce
the total size of the Proposed Offering and the Concurrent Offering to the
number of securities recommended (the "Recommended Amount") by the managing
underwriter; provided however that, to the extent that the total number of
shares to be offered in the Proposed Offering and the Concurrent Offering after
such reduction continues to exceed the Recommended Amount, the number of shares
to be offered by Eldorado in the Proposed Offering and the Concurrent Offering
shall then be reduced until the Recommended Amount is met. For the avoidance of
doubt, nothing contained in this Section 4.01(g)(iii) shall reduce the number
of securities to be offered by the Company in the Proposed Offering.

                                     II-14
<PAGE>

     (iv) If the Company shall determine in its sole discretion not to conduct
such Proposed Offering, the Company shall provide written notice of such
determination within 1 Business Day of such determination to Level 3. Upon
receipt of such notice, Level 3 and Eldorado shall have the right to exercise a
Shelf Takedown.

     (h) Notwithstanding the preemption provision contained in the immediately
preceding paragraph, if a Shelf Takedown would require the Company to make an
Adverse Disclosure, the Company shall have the right to prevent, for the
shortest period of time determined in good faith by the Chief Executive Officer
of the Company to be necessary for such purpose (the "Suspension Period"), any
Shelf Takedown by delivering written notice of such intention (the "Suspension
Notice") to Level 3 within 2 Business Days after the Company has received from
Level 3 a request for such a takedown. The Company shall deliver a written
notice to Level 3 stating that the Chief Executive Officer of the Company has
determined in good faith that the Suspension Period has expired (the
"Suspension Expiration Notice") within 1 Business Day of such determination.
Notwithstanding the foregoing, (i) the Company shall not be permitted to
exercise such suspension right more than 1 time in any 12-month period or for a
period that exceeds 90 days per exercise of such right and (ii) Level 3 shall
have the right to exercise a Shelf Takedown upon the earlier of (x) the 90th
day following the date on which Level 3 receives the Suspension Notice and (y)
the date on which such Adverse Disclosure is made or Level 3 receives the
Suspension Expiration Notice.

     (i) Notwithstanding any other provision in this Article 4, Level 3 shall
not request an Underwritten Takedown within 90 days of the completion of a
prior Underwritten Takedown.

     (j) The Company will as promptly as is practicable notify Level 3, at any
time when a prospectus relating to the sale of shares of Common Stock is
required by law to be delivered in connection with sales by an Underwriter or
Agent (as the case may be), of the occurrence of any event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such shares, such prospectus (as
amended or supplemented) will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading and promptly make available to Level
3 and any Underwriters or Agents (as the case may be) any such amendment or
supplement. Upon receipt of any notice from the Company of the occurrence of
any event of the kind described in the preceding sentence, Level 3 will
forthwith discontinue, or cause to be discontinued, the offer and sale of
shares pursuant to the Registration Statement until receipt by Level 3 and the
Underwriters or Agents (as the case may be) of the copies of such supplemented
or amended prospectus and, if so directed by the Company, Level 3 will deliver,
or cause to be delivered, to the Company all copies, other than permanent file
copies then in the possession of Level 3 or any of its affiliates, of the most
recent prospectus covering such shares at the time of receipt of such notice.

     (k) The Company may require Level 3 to promptly furnish in writing to the
Company such information regarding Level 3 and its affiliates, the plan of
distribution of the shares of Common Stock and other information as the Company
may from time to time reasonably request or as may be legally required in
connection with a Shelf Takedown.

     (l) The Company shall make generally available to its security holders, as
soon as reasonably practicable, an earning statement covering a period of 12
months, beginning within three months after

                                     II-15
<PAGE>

the effective date of the Registration Statement, which earning statement shall
satisfy the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.

     (m) The Company shall use all commercially reasonable efforts to cause the
Common Stock to be listed on each securities exchange or quoted on each
inter-dealer quotation system on which the Common Stock is then listed or
quoted.

     (n) Level 3 and Eldorado agree, if requested by the Company and an
underwriter of equity securities of the Company, not to offer, sell, contract
to sell or otherwise dispose of shares of Common Stock, or any securities
convertible into or exchangeable or exercisable for such securities, during the
90-day period beginning on the effective date of the registration statement
filed in connection therewith, provided that all executive officers and
directors of the Company enter into similar arrangements.

     SECTION 4.02. Registration and Shelf Takedown Expenses. (a) Subject to
Section 3.01(f) hereof, Level 3 shall bear 50% of the Company Expenses incurred
in connection with each of an aggregate of any three (including the Demand
Registration that was consummated on or about April 2, 2002) Underwritten
Takedowns or Demand Registrations (up to $500,000 per Underwritten Takedown or
Demand Registration, as the case may be) and the Company shall bear the balance
of the Company Expenses in such cases. Level 3 shall bear 100% of the Company
Expenses incurred in connection with any other Underwritten Takedowns or Demand
Registrations. Level 3 shall also bear 100% of the Company Expenses incurred in
connection with any Direct Takedown, except for (i) ordinary expenses that the
Company would have otherwise incurred in satisfying its ongoing reporting
requirements under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and (ii) any expenses that the Company may incur in connection
with the issuance of a legal opinion to the transfer agent for the shares of
Common Stock. The Company shall bear all of the Company Expenses incurred in
connection with a Proposed Offering and a Concurrent Offering, whether or not
such offerings are consummated. Level 3 shall pay any underwriting fees,
discounts or commissions attributable to the sale of any Capital Stock and any
out-of-pocket expenses of Level 3 and its affiliates (other than the fees and
expenses of counsel described in clause (vii) of the definition of "Company
Expenses" set forth in Article I hereof). In the event that a distribution
contemplated by an Underwritten Takedown or a Demand Registration is not
consummated for any reason other than the failure by the Company to perform its
obligations under this Agreement or the Registration Rights Agreement, all
reasonable Company Expenses incurred in connection with such takedown or
registration shall be borne by Level 3; provided that should the distribution
contemplated by an Underwritten Takedown or Demand Registration not be
consummated due to Level 3 or any of its affiliates withdrawing such
Underwritten Takedown or a Demand Registration as a result of either (x) a
material adverse change in the condition (financial or otherwise), business,
assets or results of operations of the Company and its subsidiaries taken as a
whole or (y) a material adverse change in the United States financial markets,
in either case occurring subsequent to the date of the written request made by
Level 3 hereunder, Level 3 and the Company shall each bear 50% of the Company
Expenses incurred with such withdrawn Underwritten Takedown or Demand
Registration.

     (b) Notwithstanding any provision in this Agreement to the contrary, each
party to this Agreement shall bear its own expenses (including attorneys' fees
and expenses and the fees and expenses of any financial adviser) incurred by
that party in connection with the negotiation, review, preparation and
execution of this Agreement, and Level 3 shall have no responsibility for the
payment of any other expenses incurred by the Company related to the
transactions contemplated herein other than as set forth in Section 4.02(a)
hereof.

                                     II-16
<PAGE>

                                   ARTICLE 5
                        INDEMNIFICATION AND CONTRIBUTION

     SECTION 5.01. Indemnification by the Company. The Company agrees to
indemnify and hold harmless Level 3 and Eldorado from and against any and all
losses, claims, damages and liabilities (including reasonable attorneys' fees)
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or prospectus (as amended or
supplemented) or any preliminary prospectus supplement, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by or
contained in or based upon any information furnished in writing to the Company
by Level 3 or any Underwriter or Agent (as the case may be) expressly for use
therein. The Company also agrees to indemnify any Underwriters or Agents (as
the case may be) of Common Stock, their officers and directors, and each person
who controls such Underwriters or Agents (as the case may be), on substantially
the same basis as that of the indemnification of Level 3 and Eldorado provided
in this Section 5.01.

     SECTION 5.02. Indemnification by Level 3. Level 3 agrees to indemnify and
hold harmless the Company, its officers and directors, and each Person, if any,
who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to Level 3 and Eldorado, but only with
reference to information furnished in writing by or on behalf of Level 3 and
Eldorado expressly for use in the Registration Statement, prospectus or
prospectus supplement relating to the Common Stock, or any amendment or
supplement thereto, or any preliminary prospectus supplement or the failure to
deliver a copy of such Registration Statement or prospectus or any amendments
or supplements thereto due to the fault of Level 3 or Eldorado. Level 3 and
Eldorado also agree to indemnify and hold harmless any Underwriters or Agents
(as the case may be) of Common Stock, their officers and directors and each
person who controls such Underwriters or Agents (as the case may be), their
officers and directors and each person who controls such Underwriters or Agents
(as the case may be) on substantially the same basis as that of the
indemnification of the Company provided in this Section 5.02. The extent of
Level 3 and Eldorado's liability under this Section 5.02 shall be limited to
the amount Eldorado receives in the relevant offering of Common Stock.

     SECTION 5.03. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Section 5.01 or Section 5.02, such Person (the "Indemnified Party") shall
promptly notify the Person against whom such indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party, upon the request
of the Indemnified Party, shall retain counsel reasonably satisfactory to such
Indemnified Party to represent such Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) at
any time for all such Indemnified Parties,

                                     II-17
<PAGE>

and that all such fees and expenses shall be reimbursed as they are incurred.
In the case of any such separate firm for the Indemnified Parties, such firm
shall be designated in writing by the Indemnified Parties. The Indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent, which consent will not be unreasonably withheld, but if
settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment.

     SECTION 5.04. Contribution. If the indemnification provided for in this
Article 5 is unavailable to an Indemnified Party in respect of any losses,
claims, damages or liabilities in respect of which indemnity is to be provided
hereunder, then each such Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall to the fullest extent permitted by law contribute to
the amount paid or payable by such Indemnified Party as a result of such
losses, claims, damages or liabilities in such proportion as is appropriate to
reflect the relative fault of the Company (on the one hand) and Level 3 and
Eldorado (on the other hand) in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of the Company (on
the one hand) and Level 3 and Eldorado (on the other hand) shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by such party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

     The Company, Level 3 and Eldorado agree that it would not be just and
equitable if contribution pursuant to this Section 5.04 were determined by pro
rata allocation (even if Level 3 and Eldorado were treated as one entity for
such purpose) or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Article 5, neither Level 3 nor
Eldorado shall be required to contribute any amount in excess of the amount by
which the net proceeds of the offerings (before deducting expenses) received by
Eldorado exceeds the amount of any damages which Level 3 and Eldorado have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
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.

                                   ARTICLE 6
                                 MISCELLANEOUS

     SECTION 6.01. Notices. Except as otherwise provided herein, all notices,
requests and other communications to any party hereunder shall be in writing
(including telecopy or similar writing) and shall be given,

                                     II-18
<PAGE>

          If to the Company, to:
          Commonwealth Telephone Enterprises, Inc.
          100 CTE Drive
          Dallas, PA 18612
          Attention:  General Counsel

          With a copy to:
          Davis Polk & Wardwell
          450 Lexington Avenue
          New York, NY 10017
          Attention: Lucy Fato
          Telecopy: (212) 450-3596

          If to Level 3 or Eldorado, to:
          Level 3 Communications, Inc.
          1025 Eldorado Blvd.
          Broomfield, CO 80021
          Attention: General Counsel
          Telecopy: (720) 888-5619

          With a copy to:
          Willkie Farr & Gallagher
          787 Seventh Avenue
          New York, NY 10019
          Attention: David Boston
          Telecopy: (212) 728-8111

or such other address or telecopier number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective when delivered at the address
specified in this Section 6; provided that any copy provided to counsel to a
party hereto shall not constitute delivery of such notice, request or other
communication to such party for purposes of this Agreement.

     SECTION 6.02. Amendments; No Waivers. (a) Any provision of this Agreement
may be amended or waived if and only if such amendment or waiver is in writing
and signed, in the case of an amendment, by Level 3 and the Company, or in the
case of a waiver, by the party or parties against whom the waiver is to be
effective.

     (b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a wavier thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

     SECTION 6.03. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns;
provided that, except as set forth in Section 6.03(b) hereof, no party may
assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement, directly or indirectly, whether by operation of law or
otherwise, without the written consent of the other parties hereto, and any

                                     II-19
<PAGE>

attempted assignment contrary to the terms hereof shall be null and void.
Neither this Agreement nor any provision hereof is intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder.

     (b) Notwithstanding the provisions of Section 6.03(a) hereof, Eldorado or
any other holder who holds shares pursuant to this subsection may transfer and
assign its rights and obligations under this Agreement without the prior
written consent of the Company under the following circumstances:

          (i) the transfer by a deceased person to his or her executors or
     heirs or by an incompetent person to his or her legal guardian;

          (ii) the transfer by such a holder of a minimum of 1,500,000 shares
     of Common Stock (as adjusted for any stock dividends, combinations,
     splits, recapitalizations and the like) to any Person in a bona fide
     private placement transaction; and

          (iii) the transfer by such a holder to any Subsidiary of such a
     holder, provided that such entity continues as a Subsidiary to such
     transferring or assigning holder to and including the time such Subsidiary
     exercises any of its rights hereunder.

     (c) Prior to any transfer or assignment of rights under Section 6.03(b)
hereof, the transferring or assigning holder shall provide the Company with
notice of the transferee's or assignee's name and address and of the shares of
Common Stock with respect to which such rights are being transferred or
assigned. The transferee or assignee of rights under Section 6.03(b) hereof
shall assume the obligations of the transferring or assigning holder under this
Agreement in a written instrument delivered to the Company, whereupon the
transferring and assigning holder shall be released from all liability under
this Agreement other than, and solely with regard to, the provisions of Section
4.02 of this Agreement.

     SECTION 6.04. Counterparts: Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have
received a counterpart hereof signed by the other parties hereto.

     SECTION 6.05. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, understandings and negotiations, both
written and oral, between the parties hereto with respect thereto.

     SECTION 6.06. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York, without
regard to the conflicts of law rules of such state.

     SECTION 6.07. Jurisdiction. Except as otherwise expressly provided in the
Agreement, the parties hereto agree that any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall
be brought in the United States District Court for the Southern District of New
York or any New York State court sitting in the Borough of Manhattan, and each
of the parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an

                                     II-20
<PAGE>

inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 6.01 shall
be deemed effective service of process on such party.

     SECTION 6.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATE
HEREBY.

     SECTION 6.09. Headings. The headings contained in the Agreement are for
reference purposes only and shall not in any way affect the meaning of
interpretation of this Agreement.

                                     II-21
<PAGE>

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

COMMONWEALTH TELEPHONE ENTERPRISES, INC.

By: /s/ Michael J. Mahoney
   -------------------------------------------
Name:   Michael J. Mahoney
Title:  President and Chief Executive Officer

LEVEL 3 COMMUNICATIONS, INC.

By: /s/ Neil J. Eckstein
   -------------------------------------------
Name:   Neil J. Eckstein
Title:  Vice President

ELDORADO EQUITY HOLDINGS, INC.

By: /s/ Neil J. Eckstein
   -------------------------------------------
Name:   Neil J. Eckstein
Title:  Vice President

                                     II-22

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