Document:

Purchase Agreement - convertible senior notes

 Exhibit 10.3 
 EXECUTION COPY 
 LEVEL 3 COMMUNICATIONS, INC. 
 $300,000,000 
 3.5% Convertible Senior Notes
due 2012 
 PURCHASE AGREEMENT 
 New York, New York 
 June 7, 2006 
 MERRILL LYNCH & CO. 
 Merrill Lynch, Pierce, Fenner & Smith 
 Incorporated 
 as Representatives of the several Underwriters 
 c/o Merrill Lynch & Co. 
 Merrill Lynch, Pierce, Fenner & Smith 
 Incorporated 
 4 World Financial Center 
 New York, New York 10080 
 Ladies and Gentlemen: 
 Level 3 Communications, Inc., a corporation organized under the laws of Delaware (the “Company”), proposes to sell to the several underwriters named in Schedule I hereto (the “Underwriters”), for whom you (the
“Representatives”) are acting as representatives, $300,000,000 aggregate principal amount of its 3.5% Convertible Senior Notes due 2012 (the “Underwritten Securities”). The Company also proposes to grant to the Underwriters an
option to purchase up to $45,000,000 additional principal amount of such Convertible Senior Notes to cover over-allotments, if any (the “Option Securities”; and together with the Underwritten Securities, the “Securities”). The
Securities are convertible into shares of Common Stock, par value $0.01 per share (the “Common Stock”), of the Company at the conversion price set forth in the Final Prospectus. The Securities are to be issued under an amended and restated
indenture dated as of July 8, 2003 (the “Base Indenture”), between the Company and The Bank of New York, as trustee (the “Trustee”), as supplemented by a supplemental indenture (the “Supplemental Indenture” and,
together with the Base Indenture, the “Indenture”), to be dated as of June 13, 2006. To the extent there are no additional Underwriters listed on Schedule I other than you, the term Representatives as used herein shall mean you,
as Underwriters, and the terms Representatives and Underwriters shall mean either the singular or plural as the context requires. Any reference herein to the Registration Statement, the Basic Prospectus, any Preliminary Prospectus or the Final
Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or before the Effective Date of the Registration Statement or the
issue date of the Basic Prospectus, any Preliminary Prospectus or the Final Prospectus, as the case may be; and any reference herein to the terms “amend”, “amendment” or “supplement” with respect to the Registration
Statement, the Basic Prospectus, any Preliminary Prospectus or the Final Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement, or the issue date
of the 

 
Basic Prospectus, any Preliminary Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 19 hereof. 
 1. Representations and Warranties. The Company represents and warrants to, and agrees
with, each Underwriter as set forth below in this Section 1. 
 (a) The Company meets the requirements for use of
Form S-3 under the Securities Act and has prepared and filed with the Commission a registration statement (file number 333-53914) on Form S-3, including a related basic prospectus, for registration under the Securities Act of the offering
and sale of the Securities. Such Registration Statement, including any amendments thereto filed prior to the Applicable Time, has become effective. The Company may have filed with the Commission, as part of an amendment to the Registration Statement
or pursuant to Rule 424(b), the Preliminary Prospectus, which has previously been furnished to you. The Company will file with the Commission a final prospectus supplement relating to the Securities in accordance with Rule 424(b). As
filed, such final prospectus supplement shall contain all information required by the Securities Act and the rules thereunder, and, except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Applicable Time or, to the extent not completed at the Applicable Time, shall contain only such specific additional information and other changes (beyond that contained in the Basic Prospectus and
the Preliminary Prospectus) as the Company has advised you, prior to the Applicable Time, will be included or made therein. At the Applicable Time, the Company was eligible to use the Registration Statement for an offering pursuant to
Rule 415(a)(1)(x). 
 (b) On the Effective Date, the Registration Statement did, and when the Final Prospectus is first
filed in accordance with Rule 424(b) and on the Closing Date (as defined herein) and on any date on which Option Securities are purchased, if such date is not the Closing Date (a “settlement date”), the Final Prospectus (and any
supplement thereto) will, comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act and the respective rules thereunder; on the Effective Date and at the Applicable Time, the Registration Statement
did not or will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; and, on the date of any filing pursuant to
Rule 424(b) and on the Closing Date and any settlement date, the Final Prospectus (together with any supplement thereto) will not include any 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; provided, however, that the Company makes no representations or warranties as to the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representatives specifically for inclusion in the
Registration Statement or the Final Prospectus (or any supplement thereto), it being understood and agreed that the only such information furnished by or on behalf of any Underwriters consists of the information described as such in Section 8
hereof. 
  

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 (c) At the Applicable Time, the Disclosure Package does not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or
omissions from the Disclosure Package based upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such
information furnished by or on behalf of any Underwriter consists of the information described as such in Section 8 hereof. 
 (d) (i) At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Securities and (ii) as
of the Applicable Time (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an Ineligible Issuer (as defined in Rule 405), without taking account of any determination by the
Commission pursuant to Rule 405 that it is not necessary that the Company be considered an Ineligible Issuer. 
 (e) Each
Issuer Free Writing Prospectus does not include any information that conflicts with the information contained in the Registration Statement, including any document incorporated therein and any prospectus supplement deemed to be a part thereof that
has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from the Disclosure Package based upon and in conformity with written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in Section 8 hereof. 
 (f) Subsequent to the respective dates as of which information is given in the Disclosure Package and the Final Prospectus, except as set
forth or contemplated in the Disclosure Package and the Final Prospectus, neither the Company nor any of its subsidiaries has incurred any liabilities or obligations, direct or contingent, which are material to the Company and its subsidiaries taken
as a whole, nor entered into any transaction not in the ordinary course of business that is material to the Company and its subsidiaries taken as a whole, and there has not been, singularly or in the aggregate, any material adverse effect in the
properties, business, results of operations, financial condition, affairs or business prospects of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”). Without limiting the foregoing, neither the Company nor any
of its subsidiaries has sustained since the respective dates as of which information is given in the Disclosure Package and the Final Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental or regulatory action, order or decree, constituting a Material Adverse Effect, otherwise than as set forth or contemplated in the Disclosure Package and the Final Prospectus.

 (g) Each of the Company and the Subsidiaries (x) has been duly organized and is validly existing as a corporation or
other business organization under the laws of its 

  

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jurisdiction of organization and is in good standing under the laws of such jurisdiction, (y) has the requisite corporate power and authority to carry
on its business as it is currently being conducted and as described in the Disclosure Package and the Final Prospectus, and to own, lease and operate its properties and (z) is duly qualified and is authorized to do business and is in good
standing in each jurisdiction where the operation, ownership or leasing of property or the conduct of its business requires such qualification, except where any failure to be so qualified would not, singularly or when aggregated with failures to be
qualified elsewhere, have a Material Adverse Effect. The Company has the requisite corporate power and authority to execute, deliver and perform this Agreement and the Supplemental Indenture and to issue, sell and deliver the Securities. As of the
date of its execution, the Company had the requisite corporate power and authority to execute, deliver and perform the Base Indenture. The term “Subsidiary” means each entity listed on Schedule II hereto. 
 (h) The Company has an authorized equity capitalization of 2,260,000,000 shares, consisting of 2,250,000,000 shares of Common Stock, par
value $0.01 per share, and 10,000,000 shares of Preferred Stock, par value $0.01 per share. All of the issued shares of capital stock of the Company have been duly and validly authorized and are fully paid and non-assessable and conform in all
material respects to the descriptions thereof contained in the Disclosure Package and the Final Prospectus. The shares of Common Stock initially issuable upon conversion of the Securities have been duly and validly authorized and, when issued upon
conversion of the Securities against payment of the conversion price and in accordance with the terms of the Indenture, will be validly issued, fully paid and nonassessable; the Board of Directors of the Company or a duly constituted committee
thereof has duly and validly adopted resolutions reserving such shares of Common Stock for issuance upon conversion of the Securities; the holders of outstanding shares of capital stock of the Company are not entitled to preemptive or other rights
to subscribe for the Securities or the shares of Common Stock issuable upon conversion thereof; and, except as set forth in the Disclosure Package and the Final Prospectus and except for outstanding warrants and options to purchase shares of Common
Stock that in the aggregate represent less than 1% of the Common Stock outstanding on the date hereof, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange
any securities for, shares of capital stock of or ownership interests in the Company are outstanding. All of the issued and outstanding shares of capital stock or equity interests of each of the Subsidiaries have been duly and validly authorized and
issued, are fully paid and non-assessable and, except as set forth or contemplated in the Disclosure Package and the Final Prospectus, are owned, directly or through subsidiaries, by the Company, free and clear of any lien or other claim or
encumbrance (other than the pledge of such shares or equity interests pursuant to the agreements the Company and certain of its subsidiaries have entered into in connection with the senior secured term loan described in the Disclosure Package and
the Final Prospectus). 
 (i) The Securities have been duly authorized, and, when executed by the Company and authenticated by
the Trustee in accordance with the terms of the Indenture and delivered to and duly paid for by the Underwriters in accordance with the terms of this Agreement, will constitute valid and legally binding obligations of the Company 

  

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entitled to the benefits provided by the Indenture and will be convertible into Common Stock in accordance with their terms. The Indenture has been duly
authorized and duly qualified under the Trust Indenture Act and, when executed and delivered by the Company and the Trustee, will constitute a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles. The Securities and the Indenture
will conform to the description thereof in the Disclosure Package and the Final Prospectus. 
 (j) There is no franchise,
contract or other document of a character required to be described in the Disclosure Package or the Final Prospectus, or to be filed as an exhibit thereto, which is not described or filed as required; and the statements (i) incorporated by
reference in the Disclosure Package and the Final Prospectus from the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, under the heading “Legal Proceedings”, as supplemented by the Quarterly Report
on Form 10-Q for the quarterly period ended March 31, 2006, and (ii) in the Preliminary Prospectus and the Final Prospectus under the heading “Business—Regulation”, in each case fairly summarize the matters therein
described. 
 (k) This Agreement has been duly authorized, executed and delivered by the Company. 
 (l) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as
described in the Disclosure Package and the Final Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended. 
 (m) The execution and delivery of this Agreement and the Indenture, the issuance and sale of the Securities hereunder, the issuance of
Common Stock upon conversion of the Securities, the performance by the Company of this Agreement and the Indenture and the consummation of the other transactions herein and therein contemplated will not (x) conflict with or result in a breach
or violation of any of the respective charters, by-laws or other organizational documents of the Company or any of the Subsidiaries, (y) violate or conflict with any statute, rule or regulation applicable to the Company or any Subsidiary or any
order or decree of any governmental or regulatory agency or body or any court having jurisdiction over the Company or any Subsidiary or any of their respective properties or (z) after giving effect to the waivers and consents obtained on or
prior to the date hereof, if any, conflict with or result in a breach or violation of any term or provision of, constitute a default or cause an acceleration of any obligation under, or result in the imposition or creation of (or the obligation to
create or impose) a lien or other claim or encumbrance with respect to, any bond, note, debenture or other evidence of indebtedness or any indenture, mortgage or deed of trust or any other agreement or instrument to which the Company or any of the
Subsidiaries, is a party or by which it or any of them is bound, or to which any properties of the Company or any of the Subsidiaries is or may be subject, except, in the case of clauses (y) and (z) for violations, conflicts, breaches,
defaults, accelerations of obligations or liens that would not, 

  

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individually or in the aggregate, have a Material Adverse Effect. No material authorization, approval or consent or order of, or filing, registration or
qualification with, any court or governmental or regulatory body or agency is required in connection with the transactions contemplated by this Agreement or the Indenture except as have been made or obtained and except as may be required by and made
with or obtained from state securities laws or regulations, or, with respect to filing the Final Prospectus with the Commission in accordance with Rule 424(b) under the Securities Act. 
 (n) Except as described in the Disclosure Package and the Final Prospectus, there is no action, suit or proceeding before or by any court,
arbitrator or governmental or regulatory official, agency or body, domestic or foreign, pending against or affecting the Company or any of its subsidiaries, or any of their respective properties, that, if determined adversely, is reasonably expected
to affect adversely the issuance of the Securities or in any manner draw into question the validity of this Agreement, the Indenture or the Securities or to result, singularly or when aggregated with other pending actions and actions known to be
threatened that are not described in the Disclosure Package and the Final Prospectus, in a Material Adverse Effect, or that is reasonably expected to materially and adversely affect the consummation of this Agreement or the Indenture or the
transactions contemplated hereby or thereby, and to the best of the Company’s knowledge, no such proceedings are contemplated or threatened. 
 (o) None of the Company or any of the Subsidiaries is or after giving effect to the issuance of the Securities will be (i) in violation of its respective charter, bylaws or other organizational documents or
(ii) in default in the performance of any bond, debenture, note or any other evidence of indebtedness or any indenture, mortgage, deed of trust or other contract, lease or other instrument to which the Company or any of the Subsidiaries is a
party or by which any of them is bound, or to which any of the property or assets of the Company or any of the Subsidiaries is subject, other than such defaults that could not, singularly or in the aggregate, have a Material Adverse Effect.

 (p) KPMG LLP, who have certified certain of the consolidated financial statements and supporting schedules of the Company
included or incorporated by reference in the Disclosure Package and the Final Prospectus, are independent public accountants with respect to the Company and its subsidiaries, as required by the Securities Act. The consolidated historical statements
and any pro forma information, together with related schedules and notes, if any, included or incorporated by reference in the Disclosure Package and the Final Prospectus comply as to form in all material respects with the requirements of the
Securities Act. Such historical financial statements fairly present in all material respects the consolidated financial position of the Company and its subsidiaries at the respective dates indicated and the results of their operations and their cash
flows for the respective periods indicated, in accordance with generally accepted accounting principles, except as otherwise expressly stated therein, as consistently applied throughout such periods. Such pro forma information has been prepared on a
basis consistent with such historical financial statements, except for the pro forma adjustments specified therein, and gives effect to assumptions made on a reasonable basis and fairly presents in all material respects and gives effect to the
transactions described therein pertaining to such pro forma information. The other 

  

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financial and statistical information and data included in the Disclosure Package and the Final Prospectus, historical and pro forma, are, in all material
respects, accurately presented and prepared on a basis consistent with such financial statements and the books and records of the Company. 
 (q) The consolidated historical financial statements of WilTel Communications Group LLC (“WilTel”), together with related schedules and notes, if any, included or incorporated by reference in the Disclosure
Package and the Final Prospectus, comply as to form in all material respects with the requirements of the Securities Act. Such historical financial statements fairly present in all material respects the consolidated financial position of WilTel at
the respective dates indicated and the results of their operations and their cash flows for the respective periods indicated, in accordance with generally accepted accounting principles, except as otherwise expressly stated therein, as consistently
applied throughout such periods. 
 (r) Each of the Company and the Subsidiaries has all certificates, consents, exemptions,
orders, permits, licenses, authorizations, or other approvals (each, an “Authorization”) of and from, and has made all declarations and filings with, all Federal, state, local and other governmental or regulatory bodies or agencies, and
all courts and other tribunals, necessary or required to own, lease, license and use its properties and assets and to conduct its business as currently operated in the manner described in the Disclosure Package and the Final Prospectus, except to
the extent that the failure to obtain or file any such Authorizations would not, singularly or in the aggregate, reasonably be expected to have a Material Adverse Effect. All such Authorizations are in full force and effect with respect to the
Company and the Subsidiaries, and the Company and the Subsidiaries are in compliance in all material respects with the terms and conditions of all such Authorizations and with the rules and regulations of the regulatory authorities and governing
bodies having jurisdiction with respect thereto. 
 (s) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to material assets is permitted only in accordance with management’s general or specific authorization; and
(iv) the recorded accountability for material assets is compared on a periodic basis, which the Company believes are reasonable intervals, with the existing assets and appropriate action is taken with respect to any material differences. The
Company and its executive officers have complied with Rule 13a-14 under the Exchange Act. 
 (t) Except as disclosed in
the Disclosure Package and the Final Prospectus, no holder of any security of the Company has or will have any right to require the registration of such security by virtue of the offering and sale of the Securities under this Agreement other than
(i) any such right that has been expressly waived in writing and (ii) any such right in respect of outstanding warrants to purchase shares of Common Stock of the Company that in the aggregate represent less than 1% of the shares of 

  

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Common Stock of the Company outstanding on the date hereof. No holder of any of the outstanding shares of capital stock of the Company or any other person is
entitled to preemptive or other rights to subscribe for the Securities. 
 (u) The Company has not taken nor will it take,
directly or indirectly, any action prohibited by Regulation M under the Exchange Act, in connection with the offering of the Securities. 
 (v) Other than the Subsidiaries, there is no entity or other person (i) of which a majority of the voting equity securities or other interests is owned, directly or indirectly, by the Company and (ii) which
held more than 5% of the total assets of the Company on a consolidated basis as of March 31, 2006, excluding inter-company balances. 
 (w) Prior to the date hereof, the Company has furnished to the Representatives letters, substantially in the form of Exhibit E hereto, duly executed by the executive officers and directors of the Company set
forth on Schedule IV hereto and addressed to the Representatives. 
 (x) The Registration Statement is not the subject of
a pending proceeding or examination under Section 8(d) or 8(e) of the Securities Act, and the Company is not the subject of a pending proceeding under Section 8A of the Securities Act in connection with the offering of the Securities.

 Any certificate signed by any officer of the Company and delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter. 
 2. Purchase and Sale. (a) Subject to the terms and conditions and in reliance upon the representations and warranties set forth herein, the Company agrees to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, at the purchase price of 97.5% of the principal amount thereof, plus accrued interest, if any, from June 13, 2006 to the Closing Date, the principal amount of Underwritten
Securities set forth opposite such Underwriter’s name on Schedule I hereto. 
 (b) Subject to the terms and conditions and in
reliance upon the representations and warranties set forth herein, the Company hereby grants an option to the several Underwriters to purchase, severally and not jointly, the Option Securities at the same purchase price as the Underwriters shall pay
for the Underwritten Securities, plus accrued interest, if any, from June 13, 2006 to the settlement date for the Option Securities. Said option may be exercised only to cover over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any time on or before the 30th day after the date of the Final Prospectus upon written notice by the Representatives to the Company setting forth the principal amount of Option
Securities as to which the several Underwriters are exercising the option and the settlement date. Delivery of the Option Securities, and payment therefor, shall be made as provided in Section 3 hereof. The principal amount of Option Securities
to be purchased by each Underwriter shall be the same percentage of the total 

  

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principal amount of Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten Securities, subject
to such adjustments as you in your absolute discretion shall make to eliminate any fractional Securities. 
 3. Delivery and Payment.
Delivery of and payment for the Underwritten Securities and the Option Securities (if the option provided for in Section 2(b) hereof shall have been exercised on or before the third Business Day prior to the Closing Date) shall be made at
10:00 AM, New York City time, on June 13, 2006, or at such time on such later date not more than three Business Days after the foregoing date as the Representatives shall designate, which date and time may be postponed by agreement
among the Representatives and the Company or as provided in Section 9 hereof (such date and time of delivery and payment for the Securities being herein called the “Closing Date”). Delivery of the Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day
funds to an account specified by the Company. Delivery of the Underwritten Securities and the Option Securities shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct. 
 If the option provided for in Section 2(b) hereof is exercised after the third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives, at 4 World Financial Center, New York, New York, on the date specified by the Representatives (which shall be within three Business Days after exercise of said
option) for the respective accounts of the several Underwriters, against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to
an account specified by the Company. If settlement for the Option Securities occurs after the Closing Date, the Company will deliver to the Representatives on the settlement date for the Option Securities, and the obligation of the Underwriters to
purchase the Option Securities shall be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on the Closing Date pursuant to Section 6 hereof.

 4. Offering by Underwriters. It is understood that the several Underwriters propose to offer the Securities for sale to the public
as set forth in the Final Prospectus. 
 5. Agreements. The Company agrees with the several Underwriters that: 
 (a) Prior to the termination of the offering of the Securities, the Company will not file any amendment of the Registration Statement or
supplement (including the Final Prospectus or any preliminary prospectus) to the Basic Prospectus or any Rule 462(b) Registration Statement unless the Company has furnished you a copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object. The Company will cause the Final Prospectus, properly completed, and any supplement thereto to be filed in a form reasonably approved by the Representatives with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will provide evidence satisfactory to 

  

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the Representatives of such timely filing. The Company will promptly advise the Representatives (1) when the Final Prospectus, and any supplement
thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement shall have been filed with the Commission, (2) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been filed or become effective, (3) of any request by the Commission or its staff for any amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Final Prospectus or for any additional information, (4) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of
any proceeding for that purpose and (5) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the institution or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension of the Registration Statement and, upon such issuance or occurrence, to obtain as soon as possible the
withdrawal of such stop order or relief from such occurrence or prevention, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its best efforts to have such amendment or new
registration statement declared effective as soon as practicable. 
 (b) To prepare a final term sheet, containing solely a
description of the Securities and the concurrent Common Stock offering, in a form approved by you and to file such term sheet pursuant to Rule 433(d) within the time required by such Rule. 
 (c) If there occurs an event or development as a result of which the Disclosure Package would include an untrue statement of a material
fact or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will notify promptly the Representatives so that any use of the Disclosure
Package may cease until it is amended or supplemented. 
 (d) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), any event occurs as a result of which the Final Prospectus as then supplemented would include any
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, or if it shall be necessary to amend the Registration
Statement, file a new registration statement or supplement the Final Prospectus to comply with the Securities Act or the Exchange Act or the respective rules thereunder, including in connection with use or delivery of the Final Prospectus, the
Company promptly will (1) notify the Representatives of any such event, (2) prepare and file with the Commission, subject to the first sentence of paragraph (a) of this Section 5, an amendment or supplement or new registration
statement which will correct such statement or omission or effect such compliance, (3) use its reasonable best efforts to have any amendment to the Registration Statement or new registration statement declared effective as soon as practicable
in order to avoid any disruption in use of the Final 

  

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Prospectus and (4) supply any supplemented Final Prospectus to you in such quantities as you may reasonably request. 
 (e) As soon as practicable, the Company will make generally available to its security holders an earnings statement or statements of the
Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158. 
 (f) The Company will furnish to each of the Representatives and counsel for the Underwriters, without charge, a conformed copy of the Registration Statement (including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Securities Act (including in circumstances where such requirement may be satisfied pursuant to
Rule 172), as many copies of each Preliminary Prospectus, the Final Prospectus and each Issuer Free Writing Prospectus and any supplement thereto as the Representatives may reasonably request. The Company will pay the expenses of printing or
other production of all such documents. 
 (g) The Company will cooperate with the Representatives in arranging, at the
Company’s cost, for the qualification of the Securities for sale under the laws of such jurisdictions as the Representatives may designate and will maintain such qualifications in effect so long as required for the sale of the Securities;
provided, however, that in connection therewith the Company shall not be required to qualify as a foreign corporation or to execute a general consent to service of process in any jurisdiction or subject itself to taxation in excess of a
nominal dollar amount in any such jurisdiction where it is not then subject. The Company promptly will advise the Representatives of the receipt by it of any notification with respect to the suspension of the qualification of the Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for such purpose. 
 (h) The Company agrees that,
unless it obtains the prior written consent of the Representatives, and each Underwriter, severally and not jointly, agrees with the Company that, unless it has obtained or will obtain, as the case may be, the prior written consent of the Company,
it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405) required to be
filed by the Company with the Commission or retained by the Company under Rule 433, other than the final term sheet prepared and filed pursuant to Section 5(b) hereto; provided that the prior written consent of the parties hereto
shall be deemed to have been given in respect of the Free Writing Prospectuses included in Schedule III hereto and any electronic or graphic road show. Any such free writing prospectus consented to by the Representatives or the Company is
hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (x) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and
(y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record
keeping. 
  

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 (i) The Company will not for a period of 90 days following the time of execution of
this Agreement, without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”), offer, sell, contract to sell, pledge, or otherwise dispose of, (or enter into any transaction which is
designed to result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any majority controlled affiliate of the Company or any person in privity with the Company
or any majority controlled affiliate of the Company) directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any shares of capital stock or securities convertible into, or exchangeable for, shares of capital stock (other than the Securities) or
publicly announce an intention to effect any such transaction, except for: (A) Common Stock issued pursuant to any employee benefit plan, stock ownership or stock option plan or dividend reinvestment plan in effect at the Applicable Time or
options granted pursuant to any such plan in effect at the Applicable Time, provided that such options cannot be exercised for any remaining portion of such 90-day period, (B) Common Stock issued in connection with the exercise of any warrants
or convertible securities outstanding at the Applicable Time, (C) Common Stock issued to prospective employees in connection with such employees being hired by the Company or any of its subsidiaries, (D) Common Stock to be issued in any
acquisition as direct consideration to the sellers pursuant to any written acquisition agreement entered into prior to the Applicable Time, (E) Common Stock to be issued after the end of such 90-day period as direct consideration to the sellers
in any acquisition and (F) the Securities, the shares of Common Stock issuable upon conversion of the Securities and up to 143,750,000 shares of Common Stock issued pursuant to the concurrent offering of Common Stock by the Company. 

(j) The Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities. 
 (k) The Company will apply the net proceeds from the sale of the Securities sold by it substantially in accordance with its statements
under the caption “Use of Proceeds” in the Disclosure Package and the Final Prospectus. 
 (l) The Company will
reserve and keep available at all times, free of preemptive rights, the full number of shares of Common Stock issuable upon conversion of the Securities. 
 (m) Between the Applicable Time and the Closing Date, the Company will not do or authorize any act or thing that would result in an adjustment of the Conversion Price, as defined in the Indenture. 
 6. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the representations and warranties on the part of the 

  

 12 

 
Company contained herein as of the Applicable Time, the Closing Date and any settlement date pursuant to Section 3 hereof, to the accuracy of the
statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions: 
 (a) The Final Prospectus, and any supplement thereto, have been filed in the manner and within the time period required by
Rule 424(b); the final term sheet contemplated by Section 5(b) hereto, and any other material required to be filed by the Company pursuant to Rule 433(d) under the Act, shall have been filed with the Commission within the applicable
time periods prescribed for such filings by Rule 433; and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or threatened. 

(b) The Company shall have requested and caused Willkie Farr & Gallagher LLP, counsel for the Company, to have furnished to
the Representatives their opinion, dated the Closing Date and addressed to the Representatives on behalf of the Underwriters, to the effect of Exhibit A. 
 (c) The Company shall have caused Bingham McCutchen LLP, regulatory counsel for the Company, to have furnished to the Representatives
their opinion, dated the Closing Date and addressed to the Representatives on behalf of the Underwriters, to the effect of Exhibit B. 
 (d) The Company shall have caused internal counsel for the Company to have furnished to the Representatives its opinion as to Canadian regulatory matters, dated the Closing Date, and addressed to the Representatives
on behalf of the Underwriters, to the effect of Exhibit C. 
 (e) The Company shall have furnished to the Representatives
the opinion of Thomas C. Stortz, Executive Vice President, Chief Legal Officer and Secretary of the Company, or any Assistant General Counsel of the Company, dated the Closing Date and addressed to the Representatives on behalf of the
Underwriters, to the effect of Exhibit D. 
 (f) The Representatives shall have received from Cravath, Swaine &
Moore LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing Date and addressed to the Representatives on behalf of the Underwriters, with respect to the issuance and sale of the Securities, the Registration Statement,
the Disclosure Package, the Final Prospectus (together with any supplement thereto) and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters. 
 (g) The Company shall have furnished to the
Representatives a certificate of the Company, signed by the President and Chief Executive Officer and the Group Vice President and Chief Financial Officer of the Company, dated the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration 

  

 13 

 
Statement, the Disclosure Package, the Final Prospectus, any supplements or amendments thereto and this Agreement and that: 
 (i) the representations and warranties of the Company in this Agreement that are qualified as to materiality are true and correct and all
other representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date; 
 (ii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the Company’s knowledge, threatened; and 
 (iii) since the date of the most recent financial statements included or incorporated by reference in the Disclosure Package and the Final
Prospectus (exclusive of any supplements thereto), there has not been, singularly or in the aggregate, any material adverse effect, in the properties, business, results of operations, financial condition, affairs or business prospects of the Company
and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto).

 (h) At the time of execution of this Agreement and at the Closing Date, the Company shall have requested and caused KPMG
LLP to furnish to the Representatives letters, dated respectively as of the time of execution of this Agreement and as of the Closing Date, in form and substance satisfactory to the Representatives, confirming that they are independent registered
accountants within the meaning of the Securities Act and the Exchange Act and the respective applicable rules and regulations adopted by the Commission thereunder and that they have performed a review of the unaudited interim financial information
of the Company for the three-month period ended March 31, 2006, and as at March 31, 2006, in accordance with Statement on Auditing Standards No. 100, and stating in effect that: 
 (i) in their opinion the audited financial statements and financial statement schedules and pro forma financial statements included or
incorporated by reference in the Registration Statement, the Preliminary Prospectus and the Final Prospectus and reported on by them comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the
Exchange Act and the related rules and regulations adopted by the Commission; 
 (ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company and its subsidiaries; their limited review, in accordance with the standards established under Statement on Auditing Standards No. 100, of the unaudited interim financial information
for the three-month period 

  

 14 

 
ended March 31, 2006, and as at March 31, 2006; carrying out certain specified procedures (but not an examination in accordance with generally
accepted auditing standards) which would not necessarily reveal matters of significance with respect to the comments set forth in such letter; a reading of the minutes of the meetings of the stockholders, directors and audit and compensation
committees of the Company and the Subsidiaries; and inquiries of certain officials of the Company who have responsibility for financial and accounting matters of the Company and its subsidiaries as to transactions and events subsequent to
December 31, 2005, nothing came to their attention which caused them to believe that: 
  

	 	(A)	any unaudited financial statements included or incorporated by reference in the Registration Statement, the Preliminary Prospectus and the Final Prospectus do not comply as to form
in all material respects with applicable accounting requirements of the Securities Act and with the related rules and regulations adopted by the Commission with respect to financial statements included or incorporated by reference in quarterly
reports on Form 10-Q under the Exchange Act; and said unaudited financial statements are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements
included or incorporated by reference in the Registration Statement, the Preliminary Prospectus and the Final Prospectus; or 

  

	 	(B)	with respect to the period subsequent to March 31, 2006, there were any changes, at a specified date not more than five days prior to the date of the letter, in the long-term
debt of the Company and its subsidiaries or capital stock of the Company or decreases in the stockholders’ equity of the Company as compared with the amounts shown on the March 31, 2006 consolidated balance sheet included or incorporated
by reference in the Registration Statement, the Preliminary Prospectus and the Final Prospectus, or for the period from April 1, 2006 to such specified date there were any increases, as compared with the corresponding period in the preceding
quarter, in net loss or loss from continuing operations before income taxes or in total or per share amounts of net income/loss of the Company and its subsidiaries, except in all instances for changes or increases set forth in such letter, in which
case the letter shall be accompanied by an explanation by the Company as to the significance thereof unless said explanation is not deemed necessary by the Representatives; or 

  

 15 

	 	(C)	the information included or incorporated by reference in the Registration Statement, the Preliminary Prospectus and the Final Prospectus in response to Regulation S-K,
Item 301 (Selected Financial Data), Item 302 (Supplementary Financial Information), Item 402 (Executive Compensation) and Item 503(d) (Ratio of Earnings to Fixed Charges) is not in conformity with the applicable disclosure
requirements of Regulation S-K; and 

 (iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement, the Preliminary Prospectus and the Final Prospectus and in Exhibit 12 to the Registration Statement, including the information set forth under the captions “Summary” (other than
with respect to financial information of TelCove, Inc. (“TelCove”)), “Risk Factors”, “Use of Proceeds”, “Capitalization”, “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” (other than with respect to financial information of TelCove), “Business” and “Description of the Notes” in the Final Prospectus, the information included or incorporated by reference in Items 1, 2, 6, 7,
11, 12 and 13 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 incorporated by reference in the Registration Statement, the Preliminary Prospectus and the Final Prospectus, and the information
included in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included or incorporated by reference in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31,
2006 incorporated by reference in the Registration Statement, the Preliminary Prospectus and the Final Prospectus agrees with the accounting records of the Company and its subsidiaries, excluding any questions of legal interpretation; and

 (iv) they have read the unaudited pro forma financial statements included or incorporated by reference in the Registration
Statement, the Preliminary Prospectus and the Final Prospectus (the “pro forma financial statements”); carried out certain specified procedures; inquiries of certain officials of the Company who have responsibility for financial and
accounting matters; and proved the arithmetic accuracy of the application of the pro forma adjustments to the historical amounts in the pro forma financial statements, and the officials of the Company referred to above have stated, in response to
such auditor’s inquiries, that all significant assumptions regarding the business combinations have been reflected in the pro forma adjustments and that the unaudited condensed consolidated financial statements referred to herein comply as to
form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X. 
  

 16 

 All references in this Section 6(h) to the Registration Statement, the Preliminary Prospectus and
the Final Prospectus shall be deemed to include any amendment or supplement thereto at the date of the applicable letter. 
 (i) At the time of execution of this Agreement, the Company shall have requested and caused PricewaterhouseCoopers LLP to furnish to the Representatives a letter, dated as of the time of execution of this Agreement, in form and substance
reasonably satisfactory to the Representatives, confirming that they are independent certified accountants with respect to WilTel under Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants and
its rulings and interpretations, that they have performed a review of the unaudited interim financial information of WilTel for the nine-month period ended September 30, 2005, and as at September 30, 2005, in accordance with SAS
No. 100, Interim Financial Information, and stating in effect that on the basis of a reading of the latest unaudited financial statements made available by WilTel and its subsidiaries; their limited review, in accordance with the
standards established under SAS No. 100, Interim Financial Information, of the unaudited interim financial information for the nine-month period ended September 30, 2004, and as at September 30, 2005; and carrying out certain
specified procedures (but not an examination in accordance with generally accepted auditing standards) which would not necessarily reveal matters of significance with respect to the comments set forth in such letter, except as noted therein, nothing
came to their attention which caused them to believe that any unaudited financial statements included or incorporated by reference in the Preliminary Prospectus and the Final Prospectus are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the audited financial statements included or incorporated by reference in the Preliminary Prospectus and the Final Prospectus. All references in this Section 6(i) to the
Preliminary Prospectus and the Final Prospectus shall be deemed to include any amendment or supplement thereto at the date of the letter. 
 (j) Subsequent to the time of execution of this Agreement or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof), the Disclosure Package and the
Final Prospectus (exclusive of any supplement thereto), there shall not have been (i) any increase, change or decrease specified in the letter or letters referred to in paragraph (h) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the properties, business, results of operations, financial condition, affairs or business prospects of the Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or contemplated in the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto) the effect of which, in any case referred to in clause (i) or
(ii) above, is, in the sole judgment of the Representatives, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Registration Statement (exclusive of
any amendment thereof), the Disclosure Package and the Final Prospectus (in each case exclusive of any supplement thereto). 
  

 17 

 (k) Subsequent to the time of execution of this Agreement, there shall not have been
(i) any decrease in the rating of any of the Company’s debt securities by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 436(g) under the Securities Act) or (ii) any notice
given of any intended or potential decrease in any such rating or that such organization has under surveillance or review (other than any such notice with positive implications of a possible upgrading) its rating of the Company’s or any
Subsidiary’s debt securities. 
 (l) The shares of Common Stock initially issuable upon conversion of the Securities
shall have been listed and admitted and authorized for trading, subject to official notice of issuance, on the Nasdaq National Market, and reasonably satisfactory evidence of such actions shall have been provided to the Representatives. 

(m) Prior to the Closing Date, the Company shall have furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request. 
 If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance
to the Representatives and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancelation shall be given
to the Company in writing or by telephone or facsimile confirmed in writing. 
 The documents required to be delivered by this Section 6
shall be delivered at the office of Cravath, Swaine & Moore LLP, counsel for the Underwriters, at 825 Eighth Avenue, New York, New York 10019, on the Closing Date. 
 7. Reimbursement of Underwriters’ Expenses. If the sale of the Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof or because of any refusal, inability or failure on the part of the Company to perform any agreement
herein or comply with any provision hereof, in each case, other than by reason of a default by any of the Underwriters, the Company will reimburse the Underwriters severally through Merrill Lynch on demand for all reasonable out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities. Except as provided in the preceding sentence or elsewhere in this Agreement, the
Underwriters shall be responsible for all costs and expenses incurred by them in connection with their purchase of the Securities hereunder and the resale of any of the Securities, including, without limitation, their own out-of-pocket lodging, meal
and other “roadshow” expenses and fees and disbursements of counsel for the Underwriters and such other “roadshow” expenses as shall be agreed upon by the Company and the Representatives. 
 8. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each 

  

 18 

 
Underwriter and each person who controls any Underwriter within the meaning of either the Securities Act or 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 for the registration of the Securities as
originally filed or in any amendment thereof, or in the Basic Prospectus, any preliminary prospectus (including the Preliminary Prospectus), the Final Prospectus, any Issuer Free Writing Prospectus or the information contained in the final term
sheet prepared and filed pursuant to Section 5(b) hereof, or in any amendment thereof or supplement thereto, 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 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 Company will not be liable in any such 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 Company by or on behalf of any Underwriter through the Representatives specifically for inclusion
therein. This indemnity agreement will be in addition to any liability which the Company may otherwise have. 
 (b) Each Underwriter
severally and not jointly agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement, and each person who controls the Company within the meaning of either the Securities Act
or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Company by or on behalf of such Underwriter through
the Representatives specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any Underwriter may otherwise have. The Company acknowledges that
(i) the list of Underwriters and their respective participation in the sale of the Securities, (ii) the sentences related to concessions, discounts and reallowances, (iii) the paragraphs related to stabilization, syndicate covering
transactions and penalty bids, (iv) the representations relating to offerings in the European Union, including the United Kingdom, and (v) the paragraph related to electronic distributions of the prospectus supplement under the heading
“Underwriting” in the Preliminary Prospectus and the Final Prospectus, constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in any Preliminary Prospectus or the Final Prospectus.

 (c) Promptly after receipt by an indemnified party under this Section 8 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 8, 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 

  

 19 

 
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 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 Company 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 Underwriters and controlling persons, which firm shall be designated in writing by Merrill Lynch. An indemnifying party
shall not be liable under this Section 8 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 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 8 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Underwriters severally agree 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 Company and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and by the Underwriters on the other from the offering of the Securities; provided, however, that in no case shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any amount in excess of the underwriting discount or commission applicable 

  

 20 

 
to the Securities purchased by such Underwriter hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason,
the Company and the Underwriters severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and of the Underwriters on the other in connection
with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering of the Securities (before
deducting expenses) received by it, and benefits received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Final Prospectus. Relative fault shall
be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company on the one hand or
the Underwriters on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Underwriters 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 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 8, each person who controls an Underwriter within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the
same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d). 
 9.
Default by an Underwriter. If any one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default
in the performance of its or their obligations under this Agreement, the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase, in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall
not have completed such arrangements within such 24 hour period, then the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the amount of Securities set forth opposite their names in
Schedule I hereto bears to the aggregate amount of Securities set forth opposite the names of all the remaining Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate amount of Securities set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting Underwriters do not purchase all the Securities, this Agreement will terminate without
liability to any nondefaulting Underwriter or the Company, except as provided in 

  

 21 

 
Section 11 hereof. In the event of a default by any Underwriter as set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding seven Business Days, as the Representatives shall determine in order that the required changes in the Registration Statement and the Final Prospectus or in any other documents or arrangements may be effected. Nothing contained
in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company and any nondefaulting Underwriter for damages occasioned by its default hereunder. 
 10. Termination. This Agreement shall be subject to termination in the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to such time (i) trading in any of the Company’s securities shall have been suspended by the Commission or the Nasdaq National Market or trading in securities
generally on the New York Stock Exchange or the Nasdaq National Market shall have been suspended or limited or minimum prices shall have been established on such Exchange or the Nasdaq National Market, (ii) a banking moratorium shall have been
declared either by Federal or New York State authorities or (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the Representatives, impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Final Prospectus (exclusive of any supplement
thereto). 
 11. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and
other statements of the Company or its officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or
any of the officers, directors, employees, agents or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7, 8 and 14 hereof shall survive the
termination or cancelation of this Agreement. 
 12. Notices. All communications hereunder will be in writing and effective only on
receipt, and, if sent to the Underwriters, will be mailed, delivered or sent by fax and confirmed to them, care of Merrill Lynch, Pierce, Fenner & Smith Incorporated, at Merrill Lynch World Headquarters, North Tower, World Financial Center,
New York, New York 10281-1201; or, if sent to the Company, will be mailed, delivered or sent by fax and confirmed to it at 1025 Eldorado Boulevard, Broomfield, Colorado 80021, attention: General Counsel. 
 13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in Section 8 hereof, and no other person will have any right or obligation hereunder. 
 14. No Advisory or Fiduciary Relationship. The Company acknowledges and agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the public
offering price of the Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other hand, (b) in connection with the
offering contemplated hereby and the process leading to such transaction each Underwriter is and has been acting solely 

  

 22 

 
as a principal and is not the agent or fiduciary of the Company, or its stockholders, creditors, employees or any other party, (c) no Underwriter has
assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the
Company on other matters) and no Underwriter has any obligation to the Company with respect to the offering contemplated hereby except the obligations expressly set forth in this Agreement, (d) the Underwriters and their respective affiliates
may be engaged in a broad range of transactions that involve interests that differ from those of the Company, and (e) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated
hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate. 
 15.
Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any of them, with respect to the subject matter hereof. 
 16. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York (without regard to the conflict of law provisions thereof). 
 17.
Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement. 
 18. Headings. The section headings used herein are for convenience only and shall not affect the construction hereof. 
 19. Definitions. The terms which follow, when used in this Agreement, shall have the meanings indicated. 
 “Applicable Time” shall mean 6:05 PM (New York City time) on the date of this Agreement or such other time as agreed by the
Company and the Representatives. 
 “Basic Prospectus” shall mean the prospectus referred to in Section 1(a)
above contained in the Registration Statement at the Effective Date. 
 “Business Day” shall mean any day other
than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City. 
 “Commission” shall mean the Securities and Exchange Commission. 
 “Disclosure Package” shall mean (i) the Preliminary Prospectus, as amended and supplemented to the Applicable Time,
(ii) the Issuer Free Writing Prospectuses, if any, identified in Schedule III hereto and (iii) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure
Package. 
  

 23 

 “Effective Date” shall mean each date and time that the Registration Statement,
any post-effective amendment or amendments thereto and any Rule 462(b) Registration Statement became or become effective. 
 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder. 
 “Final Prospectus” shall mean the prospectus supplement relating to the Securities that was first filed pursuant to
Rule 424(b) after the time of execution of this Agreement, together with the Basic Prospectus. 
 “Free Writing
Prospectus” shall mean a free writing prospectus, as defined in Rule 405. 
 “Issuer Free Writing
Prospectus” shall mean an issuer free writing prospectus, as defined in Rule 433. 
 “Preliminary
Prospectus” shall mean the most recent preliminary prospectus supplement to the Basic Prospectus which is used prior to the filing of the Final Prospectus, together with the Basic Prospectus. 
 “Registration Statement” shall mean the Registration Statement referred to in Section 1(a) above, including exhibits and
financial statements and any prospectus supplement relating to the Securities that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430B, as amended on each Effective Date
and, in the event any post-effective amendment thereto or any Rule 462(b) Registration Statement becomes effective prior to the Closing Date, shall also mean such Registration Statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. 
 “Rule 158”, “Rule 164”, “Rule 172”,
“Rule 405”, “Rule 415”, “Rule 424”, “Rule 430B”, “Rule 433” and “Rule 462” refer to such rules under the Securities Act. 
 “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated
thereunder. 
  

 24 

 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us
the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the several Underwriters. 
  

			
	 Very truly yours,

	
	 LEVEL 3 COMMUNICATIONS, INC.

		
	By:	 	 /s/ Thomas C. Stortz

		 	 Name: Thomas C. Stortz

		 	 Title: Executive Vice President

			
	 CONFIRMED AND ACCEPTED,
as of the date first above written:

	
	 MERRILL LYNCH & CO.
 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

	By:	 	MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
		
	By:	 	 /s/ Vikram Kaul

		 	 Name: Vikram Kaul

		 	 Title: Vice President

 For themselves and as Representatives of the other Underwriters named in Schedule I hereto. 

 SCHEDULE I 
  

				
	 Underwriters
	  	Principal Amount of
Underwritten
Securities to be Purchased
	 Merrill Lynch, Pierce, Fenner & Smith Incorporated
	  	 	135,000,000
	 Credit Suisse Securities (USA) LLC
	  	 	52,500,000
	 Morgan Stanley & Co. Incorporated
	  	 	52,500,000
	 Citigroup Global Markets Inc.
	  	 	30,000,000
	 J.P. Morgan Securities Inc.
	  	 	30,000,000
		  	 	 
	 Total
	  	$	300,000,000
		  	 	 

 SCHEDULE II 
 Subsidiaries 
 Level 3 Financing,
Inc. 
 Level 3 Holdings, Inc. 
 KCP, Inc. 
 Level 3 International, Inc. 
 Level 3 Communications, LLC 
 Software Spectrum, Inc. 
 BTE Equipment, LLC 
 Level 3 Holdings, B.V. 
 Level 3 Communications Limited (UK) 
 Level 3 Communications GmbH (Germany) 
 WilTel Communications Group, LLC

 SCHEDULE III 
  

	1.	Pricing term sheet dated June 7, 2006 (attached). 

 Filed Pursuant to Rule 433 
 Registration Statement No. 333-53914 
 FREE WRITING PROSPECTUS DATED JUNE 7, 2006 
 This Free Writing Prospectus relates only to the securities described below and should be read together with the respective Preliminary Prospectus
Supplement dated May 31, 2006 and the Prospectus dated January 31, 2001 relating to these securities. 
 

 
 Level 3 Communications, Inc. 
 (LVLT/NASDAQ) 
 Common Stock Offering 
 Offering Size: 125,000,000 Shares (100% Primary) 
 Overallotment Option (15%): 18,750,000 Shares (100% Primary) 
 Public Offering Price per Share:
$4.55 
 Last Sale Price (6/7/06): $4.55 
 Proceeds per Share, before expenses, to Level 3: $4.3452 
 Trade Date: 6/7/2006 
 Settlement Date: 6/13/2006 
 CUSIP: 52729N 10 0 
 Offering of SEC-Registered Convertible Senior Notes Due 2012 
 Issuer: Level 3 Communications, Inc. 
 Offering Size: $300,000,000 
 Overallotment Option (15%): $45,000,000 
 Issue Price: 100% of principal amount 
 Maturity: June 15, 2012 
 Interest Rate: 3.5% 
 Interest Payment Dates: June 15 and December 15, beginning December 15, 2006 

 Conversion Premium: 20% 
 Conversion Price: $5.46 
 Last Sale Price (6/7/06): $4.55 
 Conversion Rate: 183.1502 
 Optional
Redemption by Issuer: Beginning June 15, 2010, at specified redemption prices set forth below, plus accrued and unpaid interest, if any, to the redemption date. The following prices are for notes redeemed during the 12-month period
commencing on June 15 of the years set forth below, and are expressed as percentages of principal amount: 
  

				
	 Year
	  	Redemption Price	 
	 2010
	  	101.17	%
	 2011
	  	100.58	%

 Make Whole Premium upon Change of Control: If certain changes in control occur as specified
in the Preliminary Prospectus Supplement relating to the notes and the notes are converted in connection with such transaction, the conversion rate will be increased by the number of additional shares set forth in the table below for each $1,000
principal amount of notes in the case of stock prices on the effective date of such change in control transaction between $4.55 and $50.00 (subject to adjustment upon certain events). The amount of the increase in the applicable conversion rate, if
any, will be based on the date on which the change in control becomes effective and the price paid per share of common stock in the transaction constituting the change in control. 

 Make Whole Premium Upon a Change of Control 
  

											
	 Stock Price on
 Effective Date
	  	Effective Date
	  	6/13/06	  	6/15/07	  	6/15/08	  	6/15/09	  	6/15/10
	 $4.55
	  	36.6300	  	36.6300	  	36.6300	  	36.6300	  	36.6300
	 5.00
	  	30.9107	  	27.6440	  	23.9440	  	19.5353	  	16.8498
	 6.00
	  	22.7335	  	19.2489	  	15.1353	  	9.8467	  	0.0000
	 7.00
	  	17.9817	  	14.6954	  	10.8424	  	6.0174	  	0.0000
	 8.00
	  	14.9523	  	11.9736	  	8.5466	  	4.4408	  	0.0000
	 10.00
	  	11.3823	  	8.9649	  	6.2974	  	3.2480	  	0.0000
	 15.00
	  	7.4364	  	5.8279	  	4.0800	  	2.1505	  	0.0000
	 20.00
	  	5.5807	  	4.3677	  	3.0595	  	1.6154	  	0.0000
	 25.00
	  	4.4788	  	3.4979	  	2.4508	  	1.2943	  	0.0000
	 50.00
	  	2.2854	  	1.7670	  	1.2325	  	0.6548	  	0.0000

 If the stock price on the effective date of such change in control transaction is less than $4.55
per share or greater than $50.00 per share, no adjustment to the conversion rate will be made. Notwithstanding the foregoing, in no event will the conversion rate exceed 219.7802 per $1,000 principal amount of notes. 
 Proceeds per $1,000 Principal Amount, before expenses, to Level 3: $975 
 Trade Date: 6/7/2006 
 Settlement Date: 6/13/2006 
 CUSIP: 52729N BK 5 
 Sole-Bookrunner
(both Common & Convert): Merrill Lynch & Co. 
 Joint Leads (both Common & Convert): Credit
Suisse & Morgan Stanley 
 Co-Managers (Common only): Bear Stearns & Co. Inc., JPMorgan & UBS
Investment Bank 
 Co-Managers (Convert only) : Citigroup & JPMorgan 

 The issuer has filed a registration statement (including a prospectus and prospectus supplements with
respect to each offering) with the SEC for the offerings to which this communication relates. Before you invest, you should read the prospectus in that registration statement, the prospectus supplements and other documents the issuer has filed with
the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the
offering will arrange to send you the prospectus if you request it by calling toll-free 1-866-500-5408. 
 This announcement and any offer if
made subsequently is directed only at persons in member states of the European Economic Area who are “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) (“Qualified
Investors”). Any person in the EEA who acquires the securities in any offer (an “investor”) or to whom any offer of the securities is made will be deemed to have represented and agreed that it is a Qualified Investor. Any investor
will also be deemed to have represented and agreed that any securities acquired by it in the offer have not been acquired on behalf of persons in the EEA other than Qualified Investors or persons in the UK and other member states (where equivalent
legislation exists) for whom the investor has authority to make decisions on a wholly discretionary basis, nor have the securities been acquired with a view to their offer or resale in the EEA to persons where this would result in a requirement for
publication by the company, Merrill Lynch International (“MLI”) or any other manager of a prospectus pursuant to Article 3 of the Prospectus Directive. The company, MLI and their affiliates, and others will rely upon the truth and accuracy
of the foregoing representations and agreements. 
 ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS
COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM. 

 SCHEDULE IV 
 Walter Scott, Jr. 
 James Q. Crowe 
 James O. Ellis Jr. 
 Richard R. Jaros 
 Robert E. Julian 
 Arun Netravali 
 John T. Reed 
 Michael B. Yanney 
 Albert C. Yates 
 Kevin J. O’Hara 
 Charles C. Miller 
 Thomas C. Stortz 
 Sunit Patel 

 EXHIBIT A 
 Opinion of 
 Willkie Farr & Gallagher LLP 
 Counsel for the Company 
 1. Each of
the Company and Level 3 Communications, LLC has been duly incorporated or formed and is validly existing as a corporation or limited liability company in good standing under the laws of the jurisdiction of its incorporation or formation, and has the
requisite power and authority to carry on its business and own its properties as currently being conducted as described in the Disclosure Package and the Final Prospectus. 
 2. To such counsel’s knowledge, all the outstanding equity interests of Level 3 Communications, LLC have been duly and validly authorized and are
duly issued and are fully paid and nonassessable, and except as otherwise set forth in the Disclosure Package and the Final Prospectus, all outstanding equity interests of Level 3 Communications, LLC are owned by the Company either directly or
through wholly owned subsidiaries, to the knowledge of such counsel, free and clear of any agreement providing for a security interest in such equity interests to secure any obligation and any stockholders’ agreements, voting trusts, claims or
other encumbrances (other than the pledge of the equity interests of Level 3 Communications, LLC pursuant to the agreements the Company and certain of its subsidiaries have entered into in connection with the senior secured term loan described in
the Disclosure Package and the Final Prospectus). 
 3. (i) To the knowledge of such counsel, there is no pending or threatened action,
suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries listed on Annex I to this opinion letter or its or their property of a character required to be
disclosed in the Registration Statement which is not adequately disclosed or incorporated by reference in the Disclosure Package and the Final Prospectus, and (ii) to the knowledge of such counsel, there is no contract or other document of a
character required to be described in the Registration Statement, the Preliminary Prospectus or the Final Prospectus, or to be filed as an exhibit thereto, which is not described or filed as required; and (iii) the statements included in the
Preliminary Prospectus and the Final Prospectus under the heading “Description of the Notes” and “Description of Capital Stock,” insofar as such sections summarize the terms of the Securities, the Common Stock and the Indenture
and under the heading “Material U.S. Federal Tax Considerations,” insofar as such section summarizes matters of law, fairly summarize in all material respects the matters therein described. 
 4. The Registration Statement has become effective under the Securities Act; any required filing of the Basic Prospectus, any Preliminary Prospectus and
the Final Prospectus and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); to the knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that purpose have been instituted or threatened and the Registration Statement, the Preliminary Prospectus and the Final Prospectus (other than the financial statements and related schedules
and other financial information contained therein or omitted therefrom, as to which such counsel need 

 
express no opinion) appear on their face to comply as to form in all material respects with the applicable requirements of the Securities Act and the
Exchange Act and the respective rules thereunder. 
 5. The Company is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the Final Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended. 
 6. To the knowledge of such counsel, no material consent, approval, authorization, license, certificate, permit or order of any court or governmental
agency or body is required for the execution, delivery and performance of this Agreement, the Indenture and the Securities or for the consummation of the transactions contemplated hereby or thereby, except such as may be required by the Federal
Communications Commission or similar state regulatory authorities or under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters (as to which such counsel need not opine) and
such other approvals (to be specified in such opinion) as have been obtained. 
 7. Neither the execution and delivery of this Agreement or
the Indenture, the issue and sale of the Securities, nor the consummation of any other of the transactions herein contemplated nor the fulfillment of the terms thereof, including the issuance of the Common Stock upon conversion of the Securities,
will conflict with, result in a breach of, or constitute a default under the (x) certificate of incorporation, by-laws or other organizational documents of the Company or of any Subsidiary, (y) the terms of any agreement or instrument
listed on Annex II hereto, or (z) any judgment, order or regulation known to such counsel to be applicable to the Company or any of its Subsidiaries of any court, regulatory body, administrative agency, governmental agency, authority or
body or arbitrator having jurisdiction over the Company or any of its Subsidiaries, except orders or regulations of the Federal Communications Commission or similar state regulatory authorities or regulations of any state securities commission (as
to which such counsel need not opine), except, in the case of clauses (y) and (z) for breaches or defaults that would not, individually or in the aggregate, have a Material Adverse Effect. 
 8. To the knowledge of such counsel, no holders of securities of the Company have rights to the registration of such securities in connection with or as
a result of the offering and sale of the Securities under this Agreement. 
 9. The Company’s actual authorized equity capitalization is
as set forth in the Disclosure Package and the Final Prospectus; the capital stock of the Company conforms in all material respects to the description thereof contained in the Disclosure Package and the Final Prospectus; the shares of Common Stock
initially issuable upon conversion of the Securities have been duly and validly authorized, and, when issued upon conversion in accordance with the terms of the Indenture, will be validly issued, fully paid and nonassessable; the Board of Directors
of the Company or a duly constituted committee thereof has duly and validly adopted resolutions reserving such shares of Common Stock for issuance upon conversion; and the holders of outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the Securities under the certificate of incorporation and by-laws of the Company and the General Corporation Law of the State of Delaware. 
  

 2 

 10. The Securities have been duly authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will constitute valid and legally binding obligations of the Company entitled to the benefits of the Indenture, subject, as
to enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles. 
 11. The Indenture has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company,
enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general
equity principles; and the Indenture has been duly qualified under the Trust Indenture Act. 
 12. The Company has full corporate right,
power and authority to execute and deliver this Agreement and the Supplemental Indenture and to perform its obligations hereunder or thereunder, including the issuance of the Securities; as of the date of its execution, the Company had full
corporate right, power and authority to execute and deliver the Base Indenture and to perform its obligations thereunder, including the issuance of the Securities; and all corporate action required to be taken by the Company for the due and proper
authorization, execution and delivery of this Agreement and the Indenture and for the consummation of the transactions contemplated hereby or thereby has been duly and validly taken. 
 13. This Agreement has been duly authorized, validly executed and delivered by the Company. 
 In addition, such counsel shall state that they have participated in conferences with representatives of the Company, the Underwriters and their counsel,
at which conferences the contents of the Disclosure Package and the Final Prospectus were discussed, and, although, except as otherwise described in paragraph 3(iii) above, such counsel has not independently checked or verified and does not
pass upon and assumes no responsibility for the factual accuracy, completeness or fairness of the statements contained in the Registration Statement, the Disclosure Package or the Final Prospectus, no facts have come to such counsel’s attention
to cause them to believe that (i) at the Applicable Time the Registration Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) at the Applicable Time the Disclosure Package contained any untrue statement of a material fact or omitted 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 (in each case, other than the financial statements and related schedules and other financial information contained therein or omitted therefrom and other than the sections entitled “Risk
Factors—Level 3 is subject to significant regulation that could change in an adverse manner,” “—Canadian law currently does not permit Level 3 to offer services in Canada” and “—Potential regulation of Internet
service providers in the United States could adversely affect Level 3’s operations,” “Business—Regulation” included in the Disclosure Package and the Final Prospectus and comparable sections in the Company’s Exchange
Act reports incorporated in the Preliminary Prospectus by reference, as to which such counsel need 

  

 3 

 
not express a view) or (iii) the Final Prospectus as of its date or as of the Closing Date included or includes any untrue statement of a material fact
or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (in each case, other than the financial statements and related schedules and other
financial information contained therein or omitted therefrom and other than the sections entitled “Risk Factors—Level 3 is subject to significant regulation that could change in an adverse manner,” “—Canadian law currently
does not permit Level 3 to offer services in Canada” and “—Potential regulation of Internet service providers in the United States could adversely affect Level 3’s operations,” “Business—Regulation” included
in the Final Prospectus and comparable sections in the Company’s Exchange Act reports incorporated in the Preliminary Prospectus and the Final Prospectus by reference, as to which such counsel need not express a view). 
 Such opinion may be limited to the laws of the State of New York, the Federal laws of the United States of America and the General Corporation Law and
the Limited Liability Company Act of the State of Delaware. 
 All references in this Exhibit A to the Final Prospectus shall be deemed
to include any amendment or supplement thereto at the Closing Date. The opinion of such counsel shall be rendered to the Underwriters at the request of the Company and shall so state. 
  

 4 

 ANNEX I TO EXHIBIT A 
 Subsidiaries 
 Level 3 Financing, Inc. 
 Level 3 Holdings, Inc. 
 KCP, Inc. 
 Level 3 International, Inc. 
 Level 3 Communications, LLC 
 Software Spectrum, Inc. 
 BTE Equipment, LLC 
 WilTel Communications Group, LLC 

 ANNEX II TO EXHIBIT A 
  

	1.	Fiber Optic Cable License Agreement, dated December 23, 1998, between Norfolk Southern Railway Company, Central of Georgia Railroad Company, and Georgia Southern and Florida
Railway Company and Level 3 Communications, LLC, as modified by the Letter Agreement, dated July 26, 1999, by Level 3 Communications, LLC, and as further modified by the Letter Agreement, dated September 8, 1999, by Level 3
Communications, LLC. 

  

	2.	Agreement, dated November 19, 1998, between Worldwide Fibre Inc. and Level 3 Communications, LLC for construction and right of way. 

  

	3.	Agreement, dated November 19, 1998, between Mi-Link LLC and Level 3 Communications, LLC for construction and right of way. 

  

	4.	Assignment, dated December 19, 1998, by Level 3 Communications, LLC in favor of Level 3 Communications Canada Co. of certain rights under the Agreement, dated November 19,
1998 between Mi-Link LLC and Level 3 Communications, LLC. 

  

	5.	Fiber Optic Survey Agreement between Level 3 Communications, LLC and Union Pacific Rail Road Company, dated March 31, 1998. 

  

	6.	Fiber Optic Agreement between Level 3 Communications, LLC and Union Pacific Rail Road Company, dated 1998. 

  

	7.	Agreement between Kiewit Coal Properties, Inc. and Kiewit Mining Group, Inc., dated January 8, 1992. 

  

	8.	Separation Agreement by and among Peter Kiewit Sons’, Inc., Kiewit Diversified Group, Inc., PKS Holdings, Inc., and Kiewit Construction Group, Inc., dated December 8,
1997. 

  

	9.	Amendment to Separation Agreement by and among Peter Kiewit Sons’, Inc., Level 3 Communications, Inc., PKS Holdings, Inc. and Kiewit Construction Group, Inc., dated
March 18, 1998. 

  

	10.	Tax Sharing Agreement by and between Peter Kiewit Sons’, Inc. and PKS Holdings, Inc., dated March 26, 1998. 

  

	11.	Promissory Note from Peter Kiewit Sons’ Co. to Metropolitan Life Insurance Company, dated June 27, 1997. 

  

	12.	Deed of Trust, Security Agreement and Fixture Filing by Peter Kiewit Sons’ Co., to Metropolitan Life Insurance Company, dated June 27, 1997. 

  

	13.	Master Right-of-Way Agreement among Level 3 Communications, LLC and The Burlington Northern and Santa Fe Railway Company, dated June 23, 1998. 

	14.	Cross Channel Cables Agreement among France Manche S.A., The Channel Tunnel Group Limited, Level 3 Communications Limited and Level 3 Communications S.A., dated
June 22, 1999. 

  

	15.	Fiber Optic Cable System Contract between Level 3 Communications Limited, Level 3 Communications S.A. and Alcatel Submarine Networks S.A., dated May 14, 1999.

  

	16.	Indenture, dated as of April 28, 1998, between Level 3 Communications, Inc. and IBJ Schroder Bank & Trust Company, as trustee. 

  

	17.	Indenture, dated as of December 2, 1998, between Level 3 Communications, Inc. and IBJ Schroder Bank & Trust Company, as trustee. 

  

	18.	Indenture, dated as of September 20, 1999, between Level 3 Communications, Inc. and IBJ Whitehall Bank & Trust Company, as trustee. 

  

	19.	First Supplemental Indenture, dated as of September 20, 1999, between Level 3 Communications, Inc. and IBJ Whitehall Bank & Trust Company, as trustee.

  

	20.	Second Supplemental Indenture, dated as of February 29, 2000, between Level 3 Communications, Inc. and the Bank of New York (as successor to IBJ Whitehall
Bank & Trust Company), as trustee. 

  

	21.	Third Supplemental Indenture, dated as of July 8, 2002, as amended, between Level 3 Communications, Inc. and the Bank of New York (as successor to IBJ Whitehall
Bank & Trust Company), as trustee. 

  

	22.	First Supplemental Indenture dated as of July 8, 2003, between Level 3 Communications, Inc. and The Bank of New York, as trustee. 

  

	23.	Indenture dated as of October 1, 2003, among Level 3 Communications, Inc., Level 3 Financing, Inc. and The Bank of New York, as Trustee. 

  

	24.	Indenture dated as of October 24, 2003, among Level 3 Communications, Inc. and The Bank of New York, as trustee. 

  

	25.	Asset Purchase Agreement by and among Level 3 Communications, Inc., Level 3 Communications, LLC, Genuity Inc., and the subsidiaries of Genuity Inc. listed on the signature page
thereto, dated as of November 27, 2002 (the “Genuity Agreement”). 

  

	26.	Amendment, Consent and Waiver to the Genuity Agreement, dated as of December 30, 2002, effective as of November 27, 2002, by and among Parent, the Purchasers and the
Sellers. 

  

	27.	Second Amendment and Waiver to the Genuity Agreement, dated as of January 24, 2003, by and among Parent, the Purchasers and the Sellers. 

  

 2 

	28.	Third Amendment and Waiver to the Genuity Agreement, dated as of January 31, 2003, by and among Parent, the Purchasers and the Sellers. 

  

	29.	Transition Services Agreement, dated February 4, 2003, by and among the Purchasers and the Sellers. 

  

	30.	Network Services Agreement by and between American Online, Inc. and Genuity Solutions, Inc. (f/k/a BBN Corporation), as amended by the First Amendment dated as of January 8,
2002, and the Second Amendment, dated as of November 20, 2002. 

  

	31.	Master Service Agreement, dated October 24, 2002, between Level 3 Communications, LLC and Verizon Global Solutions, Inc. 

  

	32.	Trans-oceanic Capacity IRU Agreement, dated December 12, 2001, between Level 3 Communications, LLC and America Online, Inc. 

  

	33.	Metro IRU Agreement, dated February 5, 2003, between Level 3 Communications, LLC and America Online Inc. 

  

	34.	Indenture dated as of December 2, 2004 among Level 3 Communications, Inc. and The Bank of New York, as Trustee. 

  

	35.	Purchase Agreement dated as of October 30, 2005 among Leucadia National Corporation, Baldwin Enterprises, Inc., Level 3 Communications, LLC and Level 3 Communications, Inc.

  

	36.	Indentures dated as of February 29, 2000 among Level 3 Communications, Inc. and The Bank of New York, as Trustee (relating to Level 3 Communications, Inc.’s 11% Senior
Notes due 2008, 11 1/4% Senior Notes due 2010, 12 7/8% Senior Notes due 2010, 10 3/4% Senior Euro Notes due 2008 and 11 1/4% Senior Euro Notes due 2010). 

  

	37.	Amended and Restated Indenture dated as of July 8, 2003 among Level 3 Communications, Inc. and The Bank of New York, as Trustee. 

  

	38.	First Supplemental Indenture dated as of February 7, 2005 among Level 3 Communications, Inc. and The Bank of New York, as Trustee. 

  

	39.	Supplemental Indentures dated as of October 20, 2004 among Level 3 Financing, Inc. and The Bank of New York, as Trustee (relating to Level 3 Financing, Inc.’s 10.75%
Senior Notes due 2014 and 10.75% Senior Notes due 2011). 

  

	40.	Supplemental Indenture dated as of December 1, 2004 among Level 3 Communications, Inc., Level 3 Financing, Inc., Level 3 Communications, LLC and The Bank of New York, as
Trustee. 

  

	41.	Credit Agreement dated as of December 1, 2004 among Level 3 Communications, Inc., Level 3 Financing, Inc. and the lenders party thereto and Merrill Lynch Capital Corporation.

  

 3 

	42.	Second Supplemental Indenture dated as of April 4, 2005 between Level 3 Communications, Inc. and The Bank of New York, as Trustee. 

  

	43.	Master Services Agreement among WilTel Communications, LLC, WilTel Local Network LLC, SBC Services, Inc. and SBC Communications Inc. dated June 15, 2005.

  

	44.	Amendment No. 1 to Master Services Agreement among WilTel Communications, LLC, WilTel Local Network, LLC, SBC Services, Inc. and SBC Communications, Inc. dated July 29,
2005. 

  

	45.	Amendment No. 2 to Master Services Agreement among WilTel Communications, LLC, WilTel Local Network, LLC, SBC Services, Inc. and SBC Communications, Inc. dated August 11,
2005. 

  

	46.	Amendment No. 3 to Master Services Agreement among WilTel Communications, LLC, WilTel Local Network, LLC, SBC Services, Inc. and SBC Communications, Inc. dated October 5,
2005. 

  

	47.	Indenture dated as of March 14, 2006, among Level 3 Communications, Inc., Level 3 Financing, Inc. and The Bank of New York, as Trustee, relating to Level 3 Financing,
Inc.’s Floating Rate Senior Notes due 2011. 

  

	48.	Indenture dated as of March 14, 2006, among Level 3 Communications, Inc., Level 3 Financing, Inc. and The Bank of New York, as Trustee, relating to Level 3 Financing,
Inc.’s 12.25% Senior Notes due 2013. 

  

	49.	Agreement and Plan of Merger among Level 3 Communications, Inc., Eldorado Acquisition Three, LLC and TelCove, Inc. dated April 30, 2006. 

  

	50.	Agreement and Plan of Merger among Level 3 Communications, Inc., Eldorado Acquisition One, Inc., Looking Glass Networks Holding Co., Inc. and Cheshire Holding Corp. as Agent of the
Securityholders of Looking Glass Networks Holding Co., Inc. dated June 2, 2006. 

  

 4 

 EXHIBIT B 
 Opinion of 
 Bingham McCutchen LLP 
 Regulatory Counsel for the Company 
 1. The licenses, permits and authorizations
set forth in Attachment A of the Officer’s Certificate delivered in connection with such opinion constitute all of the material licenses, permits and authorizations required by the Federal Communications Commission (“FCC”) and the
State Regulatory Agencies (as defined below) for the provision of telecommunications services by the Company and the Subsidiaries as such counsel understands those services currently to be provided based solely on the Officer’s Certificate,
where the failure to obtain or hold such license, permit or authorization would materially adversely affect the ability of the Company or the Subsidiaries to provide such services, and, to the knowledge of counsel, none of the Company or any
Subsidiary has received any notice of proceedings relating to the revocation or modification of any such license, permit or authorization which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a
material adverse affect on the Company or such Subsidiary, in connection with the provision of such services as counsel understands those services to be provided based solely on the Officer’s Certificate. 
 2. To the knowledge of such counsel, after reasonable inquiry with the FCC and relevant State Regulatory Agencies, neither the Company nor any of the
Subsidiaries is subject to any pending or threatened proceeding, complaint or investigation before the FCC or any State Regulatory Agency based on any alleged violation by the Company or its Subsidiaries in connection with the provision of or
failure to provide telecommunications services, of a character that would be required to be disclosed or incorporated by reference in the Registration Statement, the Preliminary Prospectus Supplement and the Final Prospectus Supplement, which is not
adequately disclosed in the Registration Statement, the Preliminary Prospectus Supplement and the Final Prospectus Supplement. 
 3. The
statements included in the Preliminary Prospectus Supplement and the Final Prospectus Supplement under the headings “Risk Factors—We are subject to significant regulation that could change in an adverse manner” and
“—Potential regulation of Internet service providers in the United States could adversely affect our operations”, “Business—Regulation—Federal Regulation”, “—State Regulation”, “—Local
Regulation” and “—Regulation of Voice over Internet Protocol (VoIP) —Federal and State” (collectively, the “Applicable Sections”), fairly summarize in all material respects the matters of law therein described.

 4. No consent, approval, authorization, license, certificate, permit or order of the FCC or any State Regulatory Agency is required for
the consummation of the transactions contemplated by the Purchase Agreement. 
 5. Neither the execution and delivery of the Purchase
Agreement or the Supplemental Indenture, nor the issue and sale of the Securities contemplated thereby will conflict with or result in a violation by the Company or the Subsidiaries of the Communications 

 
Act or, to such counsel’s knowledge, a material violation of any order, license, certificate, permit, authorization, regulation, rule, or published
decision of the FCC or any State Regulatory Agency applicable to the Company or any of the Subsidiaries, the conflict with or the violation of which would have a material adverse effect on the business of the Company or its Subsidiaries, taken as a
whole, or result in the suspension, revocation, impairment, forfeiture, nonrenewal or termination of any FCC license or other authorization of the FCC. 
 Such counsel has not itself determined the accuracy or completeness of, or otherwise verified, the factual information furnished with respect to the Applicable Sections in the Registration Statement, the Disclosure
Package and the Final Prospectus Supplement, including any amendments or supplements thereto as of the date hereof. Such counsel has generally reviewed and discussed with representatives of and counsel for the Underwriters and with certain officers
and employees of, and counsel for, the Company the information furnished in the Applicable Sections. Although such counsel has not independently checked or verified and is neither passing upon nor assuming any responsibility for the factual
accuracy, completeness or fairness of the statements contained in the Applicable Sections, nothing has become known to the attorneys who have been engaged in the review and discussion of the information furnished in the Preliminary Prospectus
Supplement and the Final Prospectus Supplement in the course of such review and discussion which would cause counsel to believe that the statements contained in or incorporated by reference in the Registration Statement, the Preliminary Prospectus
Supplement and the Final Prospectus Supplement, including any amendments or supplements thereto as of the date hereof, in the Applicable Sections, at the Effective Date, the Applicable Time, on the date of the Final Prospectus Supplement or on the
Closing Date contained or contain an untrue statement of material fact or omitted or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such counsel
expresses no opinion as to the statements contained under any other heading of the Registration Statement, the Preliminary Prospectus Supplement or the Final Prospectus Supplement, including any amendments or supplements thereto as of the date
hereof. Counsel expresses no belief with respect to the financial statements (and notes and schedules thereto) and other statistical, financial or accounting data therein included. 
  

 2 

 EXHIBIT C 
 Opinion of 
 Internal Counsel for the Company Covering Canadian Regulatory Issues 
  

	1.	The statements in the Preliminary Prospectus and the Final Prospectus under the captions “Risk Factors—Canadian law currently does not permit us to offer services in
Canada” and “Canadian Regulation” insofar as such statements describe or summarize matters of law or constitute legal conclusions, fairly describe or summarize all matters referred to therein. 

 EXHIBIT D 
 Opinion of 
 Thomas C. Stortz, Executive Vice President, 
 Chief Legal Officer and Secretary of the Company 
 1. Each of the Subsidiaries, other than Level 3 Communications, LLC, as to which such counsel need not opine, has been duly incorporated or formed and is validly existing and in good standing in the jurisdiction of
its incorporation or formation, and has the requisite corporate power and authority to carry on its business and own its properties as currently being conducted and as described in the Disclosure Package and the Final Prospectus. 
 2. All the outstanding shares of capital stock or other equity interests of each Subsidiary, other than Level 3 Communications, LLC, as to which such
counsel need not opine, have been duly and validly authorized and are duly issued and are fully paid and nonassessable, and have not been issued and are not owned or held in violation of any statutory preemptive right of stockholders; to the
knowledge of such counsel after due inquiry, such shares or other equity interests are not held in violation of any other preemptive right of stockholders, and except as otherwise set forth in the Disclosure Package and the Final Prospectus, all
outstanding shares of capital stock or other equity interests of the Subsidiaries are owned by the Company either directly or through wholly owned Subsidiaries, to the knowledge of such counsel, after due inquiry, free and clear of any agreement
providing for a security interest in such shares or equity interests to secure any obligation and any stockholders’ agreements, voting trusts, claims or other encumbrances (other than the pledge of such shares or equity interests pursuant to
the agreements the Company and certain of its subsidiaries have entered into in connection with the senior secured credit facility described in the Disclosure Package and the Final Prospectus). 
 3. Neither the execution and delivery of this Agreement or the Indenture, the issue and sale of the Securities, nor the consummation of any other of the
transactions herein or therein contemplated nor the fulfillment of the terms thereof, including the issuance of the Common Stock upon conversion of the Securities, will conflict with, result in a breach of, or constitute a default under the terms of
any indenture or other agreement or instrument actually known to such counsel, after due inquiry (which does not include (i) a review of all the agreements or instruments in the Company’s files or of agreements or instruments such counsel
has not been involved with or (ii) a canvassing of the Company’s employees), and to which the Company or any Subsidiary is a party or bound or its property is subject. 
 4. The information included or incorporated by reference in the Preliminary Prospectus and the Final Prospectus under the headings “Risk
Factors—Environmental liabilities from our historical operations could be material” and “Legal Proceedings”, insofar as such headings summarize matters of law, fairly summarize the matters therein described. 
 Such opinion may be limited to the laws of the State of Nebraska, the Federal laws of the United States of America and the General Corporation Law and
the Limited Liability Company Act of the State of Delaware. 

 All references in this Exhibit D to the Final Prospectus shall be deemed to include any amendment or supplement
thereto at the Closing Date. The opinion of such counsel shall be rendered to the Underwriters at the request of the Company and shall so state. 
  

 2 

 EXHIBIT E 
 Dated:                                 
 Merrill Lynch, Pierce, Fenner & Smith Incorporated 
 as Representative of the several Underwriters 
 c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated 
 4 World Financial Center 
 New York, New York 10080 
 Ladies and Gentlemen: 
 This letter is being delivered to you in connection with a proposed Purchase Agreement (the “Purchase Agreement”) between Level 3 Communications, Inc., a Delaware corporation (the “Company”) and the Representatives of
the several Underwriters named in Schedule I thereto, whereby the Underwriters have agreed to purchase $300,000,000 aggregate principal amount of the Company’s Convertible Senior Notes due 2012 (the “Securities”), which are
convertible into shares of common stock, par value $0.01 per share (“Common Stock”), of the Company pursuant to the Purchase Agreement. 
 In order to induce you to purchase the Securities pursuant to the Purchase Agreement, the undersigned will not, without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, offer, sell, contract to sell,
pledge or otherwise dispose of, or file (or participate in the filing of) a registration statement with the U.S. Securities and Exchange Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the U.S. Securities and Exchange Commission promulgated thereunder with respect to, any shares of capital
stock of the Company or any securities convertible or exercisable or exchangeable for such capital stock, or publicly announce an intention to effect any such transaction, for a period of 90 days after the date of the Purchase Agreement, other than
(i) shares of Common Stock disposed of as bona fide gifts, (ii) transfers incident to estate planning matters, including transfers of shares of Common Stock to one or more trusts for the benefit of the undersigned or members of the
undersigned’s family and (iii) testamentary transfers and other transfers of shares of Common Stock made pursuant to the laws of descent and distribution, provided, however, that in the case of any transfer, distribution or
disposition pursuant to clause (i), (ii) or (iii) each donee, distributee or disposition recipient shall agree to be bound by the foregoing restrictions. 

 If for any reason the Purchase Agreement shall be terminated prior to the Closing Date (as defined in the
Purchase Agreement), the agreement set forth above shall likewise be terminated. 
  

	
	 Very truly yours,

	
	   
	 Name:

	 Address:

  

 2Service Agreement

 Exhibit 10.25 
 DATED 11 October 2004 
 (1) SOMANTIS LTD 
 AND 
 (2) BALBIR BRAR

 SERVICE AGREEMENT 
 Chief Technology Officer 
 SOMANTIS LTD 
 81 Harley Street, London W1N 1DE, UK 

 THIS AGREEMENT is made the 11th day of October 2004 
 BETWEEN: 
  

	(1)	SOMANTIS LTD (3401495) whose registered office is at 81 Harley Street, London W1N 1DE, UK (“the Company” ); and 

  

	(2)	BALBIR BRAR 26261 Glen Canyon, Laguna Hills, CA 92653, U.S.A. (“the Technology officer”) 

 NOW IT IS HEREBY AGREED as follows: 
  

	1.	CONSTRUCTION 

  

	 	1.1	In this Agreement: 

  

	 	1.1.1 	any reference to any act of parliament or delegated legislation includes a reference to any statutory modification or re-enactment of it or the provisions referred to whether the
modification or re-enactment arises before or after the date hereof but not, in the case of a modification or re-enactment arising after the date hereof, so as to alter the rights or the obligations of the parties hereto as between themselves;

  

	 	1.1.2 	reference to the Schedule and Clauses are, unless the context otherwise requires, references to the schedule to or clauses in this Agreement and the Schedule forms part of this
Agreement; 

  

	 	1.1.3 	words in any gender include any other gender and words in the singular number include the plural and vice versa. 

  

	 	1.2	Headings to Clauses and Sub-Clauses are intended to assist reference only and shall not affect the construction hereof. 

  

 2 

	 	1.3	In this Agreement unless the context indicates otherwise the words or phrases defined below have the meanings respectively ascribed to them and cognate words or phrases have cognate
meanings; 

  

	 	1.3.1 	“Appointment” means the Executive’s appointment hereunder; 

  

	 	1.3.2 	“Appointment Date” means 01/08/04; 

  

	 	1.3.3 	“Board” means the board of directors for the time being and from time to time of the Company; 

  

	 	1.3.4 	“Chief Executive Officer” means the Chief Executive Officer and Managing Director of the Company for the time being and from time to time; 

  

	 	1.3.5 	“Holiday Period” means 25 Working Days; 

  

	 	1.3.6 	“Holiday Year” means any period of 12 months expiring on 31st December; 

  

	 	1.3.7 	“Intellectual Property” has the meaning set out in Clause 13.4; 

  

	 	1.3.8 	“Location” means the Company’s premises at 81 Harley Street, London W1N 1DE, UK and at 26261 Glen Canyon, Laguna Hills, CA 92653, USA; 

  

	 	1.3.9 	“Notice Period” means 6 (six) months, to be given after an initial 12 month period; 

  

	 	1.3.10 	“Office” means the office of Chief Technology Officer; 

  

	 	1.3.11 	“Option” means a right to subscribe for shares pursuant to the Share Option Scheme; 

  

	 	1.3.12 	“Recognised Investment Exchange” means a body of persons which is for the time being a recognised investment exchange for the purposes of the Financial Services Act 1986;

  

	 	1.3.13 	“Remuneration Committee” means the Remuneration Committee of the Company from time to time; 

  

	 	1.3.14 	“Salary” means $12,000 per annum or such other amounts decided as mentioned in Clause 6.3; This will be appropriately increased after fund raising;

  

	 	1.3.15 	“Salary Review Date” means 1st April in each year or such other date as the Company may in its reasonable discretion determine; 

  

	 	1.3.16 	“Sick Pay Period” means an aggregate period of absence owing to illness, accident or physical infirmity of not more than 180 days during a consecutive period of 1 year;

  

 3 

	 	1.3.17 	“Working Day” means any day not being a Saturday, Sunday or public holiday in the area of the Location. The CTO will be working 2.5 (two and a half) days a week. This may
be averaged out over a period of one year. 

  

	 	1.4	In this Agreement unless the context otherwise requires references to a “person” include references to an individual, company, firm or association.

  

	 	1.5	This Agreement is governed in all respects by English law and the parties submit to the non-exclusive jurisdiction of the English Courts. 

  

	2.	APPOINTMENT AND DURATION 

  

	 	2.1	The Company confirms the appointment of the Chief Technology Officer to the Office and the Executive agree to serve the Company in that capacity. 

  

	 	2.2	The Appointment shall be deemed to have begun on the Appointment Date and shall continue (subject to earlier termination as provided in this Agreement) until terminated by either
party giving to the other notice of not less than the Notice Period. 

  

	3.	DUTIES OF THE EXECUTIVE 

  

	 	3.1	The Executive shall: 

  

	 	3.1.1 	Subject to paragraph 3 of Schedule 1, devote his agreed time attention and ability to the duties of his Office; 

  

	 	3.1.2 	faithfully and diligently perform those duties and exercise such powers consistent with them which are from time to time assigned to or vested in him; 

  

	 	3.1.3 	obey all lawful and reasonable directions given to him by the Chief Executive Officer; 

  

	 	3.1.4 	use his best endeavours to promote the interests of the Company. 

  

 4 

	 	3.2	The Company is not obliged to provide the Executive with work and may at the direction of the Board during any notice period require that the Executive does not attend his place of
work or undertake any activities or certain activities on behalf of the Company. The Company shall nevertheless be obliged to pay the Salary and other benefits to the Executive and all the Executive’s obligations hereunder shall continue.

  

	4.	REPORTING 

  

	 	4.1	The Chief Technical Officer shall report to the Chief Executive Officer of the Company as to the business or affairs of the Company and provide such explanations as the Chief
Executive Officer may reasonably require. 

  

	 	4.2	The Chief Technical Officer shall keep the Chief Executive Officer promptly and fully informed (in writing if so requested) of his conduct and provide such explanations as the Chief
Executive Officer may require. 

  

	5.	PLACE OF WORK 

  

	 	5.1	The Chief Technology Officer shall perform his duties at the Location or such other place as the Executive and the Company shall agree but the Company shall not require him to go to
or reside anywhere outside the Agreed Territory except for occasional visits in the ordinary course of his duties. 

  

	 	5.2	The Chief Technology Officer shall at all times reside within reasonable daily travelling distance of the Location. 

  

	6.	REMUNERATION 

  

	 	6.1	During the continuance of the Appointment the Company shall pay the Chief Technology Officer at the rate of the Salary, which Salary accrues from day to day and shall be paid
monthly in arrears. 

  

	 	6.2	The Salary includes any director’s or other fees receivable by the Executive as a director of or other office holder in the Company. 

  

 5 

	 	6.3	The Salary shall be reviewed annually by the Board by reference to the Salary Review Date and the rate of Salary may be increased by the Company with effect from each Salary Review
Date. 

  

	 	6.4	During the continuance of the Agreement the Chief Technology Officer will be eligible to participate in the Share Option Scheme subject to the rules of the Share Option Scheme from
time to time. 

  

	 	6.5	The Executive shall be eligible to receive a bonus during the Appointment in respect of each financial year of the Company. It will be paid against performance targets to be agreed
by the Executive and the Company in respect of each financial year and the amount of the bonus achievable will be determined by the Remuneration Committee of the Company in its absolute discretion. 

  

	7.	EXPENSES 

 The Executive shall be entitled to be
reimbursed his expenses properly incurred in the performance of his duties hereunder PROVIDED THAT these are properly vouched and have been incurred in accordance with the Company’s policy guidelines on these matters in force from time to time.

  

	8.	INTELLECTUAL PROPERTY 

  

	 	8.1	The Executive is engaged in a role in which he is expected to assume responsibility for managing the research, invention and development of products and services and his
remuneration reflects this role. 

  

	 	8.2	 Unless otherwise agreed by the Company, if at any time while he is an employee of the Company (whether arising in the course of his employment or in the course of
any duties assigned to him from time to time or otherwise howsoever) the Executive shall discover or make or conceive or contribute in any way to the discovery, making or conception either alone or jointly with any other persons any Intellectual
Property and other subject matter which is or may be legally protectable (by contract or otherwise) and which relate to or are connected with any trade or business for the time being and from time to time carried on by the Company he shall forthwith
communicate or explain in writing all particulars concerning the same to the Board and all Intellectual Property or other subject matter shall, subject to the 

  

 6 

	 	 
provisions of the Patents Act 1977 (where applicable), belong to the Company absolutely and beneficially and the Executive shall, if so required, (but at the
Company’s expense) at any time:- 

  

	 	8.2.1 	apply or join in applying for letters patent, registered designs, trade marks, or other similar protection in the United Kingdom, United States or any other part of the world for
any Intellectual Property and execute all instruments and do all things necessary for vesting the said letters patent, registered designs, trade marks or other similar protection when obtained and all right and title to and interest in the same in
the Company or such other third party as the Company may require absolutely and as the sole beneficial owner; and 

  

	 	8.2.2 	sign and execute all such documents and do all such acts as the Company may reasonably require in connection with any proceedings in respect of such applications and any petitions
or applications for revocation of such letters patent, registered designs, trade marks or other protection. 

  

	 	8.3	The Executive hereby irrevocably appoints the Company and any officer thereof to be his attorney in his name and on his behalf to execute and do any such instrument or thing and
generally to use his name for the purpose of giving to the Company the full benefit of the provisions of this Clause 8 and in favour of any third party a certificate in writing signed by any director or the Company Secretary to the effect that the
instrument or act falls within the authority hereby conferred shall be conclusive evidence that such is the case. 

  

	 	8.4	For the purpose of this Clause 8 and Clause 10.2 “Intellectual Property” shall include without limitation inventions, discoveries, creations, designs, know-how, ideas,
writing and other works of authorship, computer programs, lectures and illustrations and improvements upon or additions thereto. 

  

 7 

	9.	CONFLICT OF INTEREST 

  

	 	9.1	The Executive shall not (save as mentioned in Clause 9.2 or Clause 9.4 or except as a representative or nominee of the Company or otherwise with the prior written consent of the
Board (which shall not be unreasonably withheld) during the continuance of the Appointment be directly or indirectly engaged, concerned or interested in any other business, trade or occupation which shall in any way be directly or indirectly
competitive with any business or trade carried on by the Company during the period of the Appointment. 

  

	 	9.2	The Executive may, however, hold a “permitted investment” that is to say not more than 10% (ten per cent) of the issued stock, shares, debentures or other securities of
any class of any company whose shares are dealt in on a Recognised Investment Exchange. The prior written consent of the Board (which shall not be unreasonably withheld) shall be required before the Executive shall hold in excess of 3% (three per
cent) of the issued stock, shares, debentures, or other securities of any class of any one such company. 

  

	 	9.3	The Chief Technology Officer shall notify the Board of any public or honorary office which he may hold or be offered and shall, if in the reasonable opinion of the Board the holding
by the Executive of such office is detrimental to the interests of the Company (whether by reason of its nature, the time commitment required or otherwise), resign or decline such office if the Board reasonably so requests. 

 

	 	9.4	The Executive may continue to be engaged in the activities listed in Schedule 2. 

  

	10.	CONFIDENTIALITY: PROTECTION OF THE COMPANY’S INTERESTS 

  

	 	10.1 	 The Company is in the business of biotechnology research to develop and market innovative therapeutic and diagnostic products including without limitation the
manufacture, licensing, sale and dealing in drugs and all other products and services in relation thereto, this business as it develops and changes and is added to during the period of the Appointment is/are called the “Business”. The
Business is not limited to any particular geographical area. A major feature of the way the Business is carried on and the nature of the Chief Technology 

  

 8 

	 	 
Officer’s duties is the need to develop projects which due to the potential exploitation of rights therein by others, information in respect of which
must be kept absolutely confidential. Further the Chief Technology Officer has access to and is expected in the course of the appointment to develop trade secrets and confidential information relating to the way the Company carries on business and
to the services and products developed, manufactured and sold or supplied by the Company. The Salary payable to the Chief Technology Officer under this Agreement and the expenses which the Company pays or reimburses to or for the Chief Technology
Officer reflect this need, as does the information provided by the Company to the Chief Technology Officer during the course of the Appointment. It is acknowledged by Chief Technology Officer that it would be improper to misappropriate the benefits
of any information or relationships unfairly to the detriment of the Company and that it is reasonable for the company to require conformity with the provisions of this Clause 10 and of Clause 11 some of which provisions must continue without
specific limit in time and other of which continue after the termination of the Appointment but subject to limits in time. The Company has in part relied upon provisions of this Clause 10 and of Clause 11 (as well as its rights under the general
law) in deciding to employ and continue to employ the Chief Technology Officer and facilitate the obtaining by him of information. The Chief Technology Officer further acknowledge that in the event of a breach by him of the obligations contained in
this Clause 10 and in Clause 11 damages are unlikely to be an adequate remedy for the Company. 

  

	 	10.2 	 The Chief Technology Officer shall not use, divulge or communicate to any person (other than whose province it is to know the same or with proper authority) any of
the trade secrets or other confidential information of the Company including in particular information relating to any Intellectual Property now or hereafter owned, used by or in the possession of the Company and information concerning the business
finances of the Company which he may (whether heretofore or hereafter) have received or obtained while in the service of the Company or in respect of which the Company is bound by an obligation of confidence to a third party. These restrictions
shall continue to apply after the termination of his employment without limit 

  

 9 

	 	 
in point of time but shall cease to apply to information or knowledge which may come into the public domain otherwise than through unauthorised disclosure by
the Chief Technology Officer. 

  

	 	10.3 	The provisions of Clause 10.2 shall apply mutatis mutandis in relation to the private, confidential or secret information of each shareholder from time to time of the Company which
the Chief Technology Officer may have received or obtained during his employment and the Executive shall upon request enter into an enforceable agreement with any such shareholder to the like effect. 

  

	 	10.4 	The Chief Technology Officer shall if so requested by the Company sign and deliver to the Company or any person (including a client or customer) with whom the Company deals or
proposes to deal an undertaking in such further covenants relating thereto as may be reasonably required of him. 

  

	11.	PROTECTION OF THE COMPANY’S INTERESTS: RESTRICTIONS AFTER TERMINATION 

  

	 	11.1 	The Chief Technology Officer hereby covenants with the Company that after the termination of this Agreement howsoever that comes about other than wrongful termination by the Company
he will not (without the consent of the Company) during the period of six months (“Restricted Period”) in any part of the world (“Restricted Territory”) engage or be concerned or interested whether directly or indirectly and
whether as principal, partner, employee, adviser, agent, consultant or otherwise in any trade or business which is competitive with the Business (as defined in Clause 10.1) PROVIDED THAT the provisions of this Clause 11.1 shall not restrain the
Chief Technology Officer from engaging, becoming concerned or interested in or accepting employment with any trade or business in which the Chief Technology Officer was not involved at the date of termination of this Agreement or within 2 years
prior thereto. 

  

	 	11.2 	 The Chief Technology Officer shall not (without the previous consent in writing of the Board which the Board may refuse without assigning any reason therefor) at
any time during or after the termination of this Agreement (howsoever that comes about) during the Restricted Period either on his own account or for any other person solicit or 

  

 10 

	 	 
endeavour to entice away from the Company any person who or which during the continuance of this Agreement was a supplier or employee of the Company nor
shall the Chief Technology Officer prevent or seek to prevent any person who is or was such supplier to the Company from supplying goods or services to the Company PROVIDED THAT the provisions of this Clause 11.2 shall not restrain the Chief
Technology Officer from seeking or procuring orders or doing business not related or not similar to the Business. 

  

	 	11.3 	While the covenants set out in Clauses 11.1 and 11.2 are considered by the parties to be reasonable and necessary for the protection of the Company’s legitimate interests in
all the circumstances it is agreed that if any one or more of such restrictions shall either taken by itself or themselves together by adjudged to go beyond what is reasonable in all the circumstances for the protection of the Company’s
legitimate interests but would be adjudged reasonable if any particular restriction or restrictions were deleted or if any part of parts of the wording thereof were deleted restricted or limited in particular manner then the said restrictions shall
apply with such deletions, restrictions or limitations as the case may be. 

  

	12.	TERMINATION 

  

	 	12.1 	The Company may by notice terminate this Agreement with immediate effect without notice or payment in lieu of notice upon the happening of any of the following events, that is to
say: 

  

	 	12.1.1 	if the Chief Technology Officer is adjudicated bankrupt or make any arrangement or composition with his creditors generally; 

  

	 	12.1.2 	if the Chief Technology Officer commits any serious breach or repeats or continues (after warning) any breach of their obligations hereunder; 

  

	 	12.1.3 	if the Chief Technology Officer is guilty of conduct which in the reasonable opinion of the Board brings the Company into disrepute; 

  

	 	12.1.4 	if the Chief Technology Officer is convicted of any criminal offence (excluding an offence under road traffic legislation in the United Kingdom or elsewhere for which he is not
sentenced to any term of imprisonment whether immediate or suspended); 

  

 11 

	 	12.1.5 	if the Chief Technology Officer commits any act of dishonesty relating to the Company; 

  

	 	12.1.6 	if the Chief Technology Officer resigns as a director of the Company without the Company’s consent. 

  

	 	12.2 	In order to investigate a complaint against the Chief Technology Officer of misconduct the Company may suspend the Chief Technology Officer on full pay for up to 10 Working Days to
carry out a proper investigation and hold a disciplinary hearing. 

  

	13.	FURTHER PROVISIONS ON TERMINATION 

 On termination
of this Agreement for whatever reason the Chief Technology Officer shall: 
  

	 	13.1 	at the Company’s request, resign from office as a director of the Company and from all offices held by him in the Company and from all appointments from offices which he holds
as nominee or representative of the Company and if he should fail so to do within 7 days after being requested so to do the Company is hereby irrevocably authorised to appoint some person in the Chief Technology Officer’s name and on the Chief
Technology Officer’s behalf to sign any document and to do any thing necessary or requisite to give effect thereto. Such resignation(s) shall be without prejudice to any rights, liabilities or obligations of either party accrued or accruing due
before such resignation(s); 

  

	 	13.2 	deliver to the Company all books, documents, papers, drawings, designs, materials and copies thereof (including copies and notes made by the Chief Technology Officer) relating to
the Company’s activities and all credit cards, keys and other property of the Company which may then be in this possession or under his control. 

  

	14.	SHARE OPTION SCHEME 

  

	 	14.1 	 On the Appointment Date the Company shall grant to the Chief Technology Officer the right to subscribe for 3,000,000 of ordinary 

  

 12 

	 	 
shares in the capital of the Company at the price of 5p per share. Furthermore, the Executive has the right to subscribe to a further 3,000,000 shares a
year after the appointment date, at that date’s share price. 

  

	 	14.2 	Any Options granted pursuant to Clauses 14.1 shall be exercisable at that date’s share price. 

  

	 	14.3 	Options granted by Clauses 14.1, shall be exercisable the date they are granted and no later than ten years after. 

  

	 	14.4 	The Options shall, at the sole discretion of the Executive, become immediately exercisable on the happening of any of the following events: 

  

	 	14.4.1 	the shares in the Company are sold to an outside investor; 

  

	 	14.4.2 	the Company sells the whole or substantially the whole of its business and/or assets. 

  

	 	14.5 	Subject to Clauses 14.4 and 14.5, an Option shall lapse on the earlier of: 

  

	 	14.5.1 	the eleventh anniversary of the date of the grant of that Option; and 

  

	 	14.5.2 	the first anniversary of the Executive’s death, 

  

	 	14.6 	In the event of any dispute between the Company and the Executive in relation to the operation of this Clause 18, the dispute shall be referred to the Company’s auditors from
time to time, whose decision shall be final. The costs of the auditors in connection with such a reference shall be borne by the Company. 

  

	 	14.7 	An Option shall be exercisable by the Executive giving written notice to the Company of the number of shares in respect of which he wishes to exercise the Option, accompanied by the
appropriate payment. 

  

 13 

	 	14.8 	Shares shall be allotted and issued to the Executive pursuant to a notice of exercise within 30 days of the date of exercise, and a share certificate shall be issued to the
Executive accordingly. Such shares shall rank pari passu with the other ordinary shares in the Company. 

  

	 	14.9 	When an Option is exercised in part only, the balance shall remain exercisable on the same terms as originally applied to the whole Option. 

  

	 	14.10 	In the event of any consolidation, sub-division or reduction of capital by the Company, the number of shares subject to the Option, and the subscription price for the shares, shall
be adjusted in such manner as the Company’s auditors consider to be fair and reasonable provided that: 

  

	 	14.10.1 	the aggregate amount payable on the exercise of an Option is not increased; and 

  

	 	14.10.2 	the subscription price for the shares is not reduced below par. 

  

	 	14.11 	The Company undertakes to insure that at all relevant times it has sufficient authorised but unissued ordinary share capital to enable the Executive to exercise the Options granted
to him pursuant to this Clause 14. 

  

	 	14.12 	Further share options may be granted to the Executive at the discretion of the Remuneration Committee of the Company. 

  

	15.	NOTICES 

  

	 	15.1 	Any notice to be given pursuant to this Agreement shall be in writing and may be delivered by hand, sent by prepaid post sent first class (for inland mail) or airmail (for overseas
mail), or be transmitted by facsimile and shall be addressed to the Party to be served in the case of: 

  

	 	15.1.1 	the Company at its registered office for the time being; and 

  

 14 

	 	15.1.2 	the Executive to the address specified above or to such other address in England as a Party may notify to the other Party in writing as being its address for service.

  

	 	15.2 	Notices sent by post shall be deemed served on the second Working Day (for inland mail) or the fifth Working Day (for overseas mail) after the date of posting and any notice
transmitted by facsimile shall be deemed to have been served on the Working Day following the date of transmission and PROVIDED THAT in the case of facsimile transmission a copy of such transmission shall have been posted on the date of such
transmission in accordance with the provisions of this Clause relating to the posting of notices. 

  

	16.	EFFECT OF TERMINATION 

 The expiration or
termination of this Agreement however arising shall not operate to affect such of the provisions of this Agreement as are expressed to operate or have effect after such expiration or termination and shall be without prejudice to any accrued rights
or remedies of either of the parties. 
  

	17.	EMPLOYMENT RIGHTS ACT 

 The provisions of the
Schedule have effect to record information relating to the Executive given pursuant to the Employment Rights Act 1996. 
 IN WITNESS whereof this
Agreement has been duly executed as a deed the day and the year first before written 
  

 15 

 SCHEDULE 1 
 Employment Rights Act 1996 
 The following information is given to supplement the information given in the body of
the Agreement in order to comply with the requirements of Part I of the above Act:- 
  

	1.	The particulars relating to the Executive’s appointment are correct as at date first appearing in this Agreement and any variation of such particulars shall be notified in
writing to the Executive within 1 month of such changes taking effect PROVIDED ALWAYS that this paragraph shall not have effect so as to entitle the Company to vary the terms and provisions of such employment in any way without the consent of the
Executive. 

  

	2.	The Executive’s employment with the Company began on 1st August 2004. No employment with a previous employer counts as part of the Executive’s continuous period of employment with the Company. 

  

	3.	There are no normal hours of work for an Executive. The standard office hours of the Company are 9:00am to 5:00pm Monday to Friday inclusive each week. The Executive is expected to
work on average 20 hours/week. 

  

	4.	A contracting-out certificate pursuant to the provisions of the Social Security Pensions Act 1975 is in force in respect of the Executive’s employment.

  

	5.	If the Chief Technology Officer has any grievance or alleged grievance relating to his employment he should first of all discuss the matter with the Chairman. In the event that the
Chief Technology Officer is dissatisfied with the outcome they may appeal to the Board whose decision shall be final. 

  

	6.	If any question of discipline arises with regard to the Chief Technology Officer’s employment by the Company it shall be raised with the Chief Technology Officer by the Chief
Executive Officer. In the event that the Chief Technology Officer is dissatisfied with any disciplinary action taken against him he may appeal to the Board whose decision shall be final. 

  

	7.	Save as provided in this Agreement there are no terms and conditions of employment relating to hours of work or to normal working hours or to holiday pay or to incapacity for work
due to sickness or injury or to sick pay or to pensions or to pension schemes. 

  

 16 

 SIGNATURE PAGES 
 SIGNED BY SOMANTIS LTD 
 Has been hereunto 
 Affixed in the presence of: 
  

					
		
	 /s/ Agamemnon A. Epenetos
	 	 Director

	 (signature)
	 	
		
	 AGAMEMNON A. EPENETOS
	 	  
	 (full name in block capitals)
	 	
			
	  	 	  	 	 Director/Secretary

	 (signature)
	 	
			
	  	 	  	 	  
	 (full name in block capitals)
	 	
			
	 SIGNED by BALBIR BRAR 
	 	 /s/ Balbir Brar
	 	  
		 	 (signature)
	 	

  

					
	 in the presence of:-
	 	
		
	 witness
	 	
			
	 Signature
	 	 /s/ Duncan Merritt
	 	  
	 Name
	 	 DUNCAN MERRITT
	 	
			
	 Address
	 	 22741 TOSTON
	 	
		 	 MISSION VIEJO, CA 92692
	 	
			
	 Occupation 
	 	 CFO, SOMANTIS
	 	
		
	 (PLEASE COMPLETE IN CAPITALS)
	 	

  

 17 

 SCHEDULE 2 
 PERMITTED ACTIVITIES 
 FOUNDER, DIRECTOR; ADVANCED CARDIOVASCULAR DEVICES, INC. (ACD) 
 Executive VP R&D Neuros Corporation 
  

 18

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