Refer to the exhibit.
An EBGP session is not established between Router1 and Router2.
A.
The ebgp-multihop value must be increased to 3.
B.
A static route needs to be added on Router1 and Router2.
C.
The update-source loopback 0 command needs to be removed.
D.
Use the serial interface IP addresses in the neighbor command, but leave the update source
pointing to loopback 0.
Peers must be directly connected when using eBGP. If they are not directly connected, the neighbor ebgp-multihop (registered customers only) command must be used and a path through an IGP or static route to reach the peer must exist in order for the routers to establish neighbor relationship. In the configuration above, R1-AGS router belongs to AS 300 while R6-2500 router belongs to AS 400.
http://www.cisco.com/c/en/us/support/docs/ip/border-gateway-protocol-bgp/13751-23.html