Exhibit 4.2
SUPPLEMENTAL INDENTURE (this "Supplemental
Indenture") dated as of October 12, 2006, among LEVEL
3 FINANCING, INC., a Delaware corporation (the
"Issuer"), LEVEL 3 COMMUNICATIONS, INC., a Delaware
corporation ("Parent"), LEVEL 3 COMMUNICATIONS, LLC,
a limited liability company ("Level 3 LLC"), and THE
BANK OF NEW YORK, a New York banking corporation, as
trustee under the Indenture referred to below (the
"Trustee").
W I T N E S S E T H :
WHEREAS the Issuer, Parent and the Trustee have heretofore
executed and delivered (a) an Indenture dated as of March 14, 2006 (the
"Indenture"; capitalized terms used but not defined herein having the meanings
assigned thereto in the Indenture), providing for the issuance by the Issuer of
its Floating Rate Senior Notes Due 2011 (the "Securities"), and (b) a
Supplemental Indenture dated October 12, 2006, pursuant to which Xxxxx 0 LLC has
guaranteed the Issuer's obligations under the Indenture (the "Subordinated
Guarantee");
WHEREAS the Issuer, Parent, certain lenders (together with
their successors and assigns and any future Lenders under and as defined in the
Credit Agreement (as hereafter defined) (the "Lenders") and Xxxxxxx Xxxxx
Capital Corporation, as administrative agent and collateral agent (the
"Administrative Agent"), have entered into a Credit Agreement dated as of
December 1, 2004 (the "Credit Agreement"), under which the Issuer has borrowed
term loans in an aggregate principal amount of $730,000,000 from the Lenders
(the "Term Loans");
WHEREAS the obligations of the Issuer under the Credit
Agreement and the other Loan Documents (as defined therein) have been guaranteed
by Xxxxx 0 LLC;
WHEREAS the proceeds of the Term Loans have been advanced to
Level 3 LLC under an intercompany demand note dated December 1, 2004 in an
initial principal amount of $730,000,000 issued by Level 3 LLC to the Issuer
(together with any additional loan proceeds note issued pursuant to Section 9.02
of the Credit Agreement, and as such note or any such additional note may be
amended from time to time, the "Loan Proceeds Note");
WHEREAS the Loan Proceeds Note has been pledged by the Issuer
to the Collateral Agent (as defined in the Credit Agreement) in order to assure
the Lenders against loss in respect of the obligations of the Issuer under the
Credit Agreement;
WHEREAS pursuant to Section 1308 of the Indenture, the Trustee
is authorized to enter into a supplemental indenture which subordinates in any
bankruptcy,
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liquidation or winding up proceeding a guarantee of an Issuer Restricted
Subsidiary as guarantor or borrower pursuant to the Indenture to the obligations
of such Subsidiary under a Qualified Credit Facility;
WHEREAS upon the guarantee of the Securities by an Issuer
Restricted Subsidiary (other than Level 3 LLC), the Issuer, Parent, the Trustee
and such Issuer Restricted Subsidiary shall enter into a supplemental indenture
in substantially the form of this Supplemental Indenture pursuant to which such
guarantee will be subordinated in any bankruptcy, liquidation or winding up
proceeding to the obligations of such Issuer Restricted Subsidiary under the
Loan Documents (as defined in the Credit Agreement);
WHEREAS the Credit Agreement constitutes a Qualified Credit
Facility and the guarantee of the obligations under the Credit Agreement by
Level 3 LLC and the issuance and pledge of the Loan Proceeds Note constitute
Guarantees of a Qualified Credit Facility;
WHEREAS pursuant to Section 901 and Section 1307 of the
Indenture, the Trustee, Parent, the Issuer and Level 3 LLC are authorized to
execute and deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
Parent, the Issuer, Level 3 LLC and the Trustee mutually covenant and agree for
the equal and ratable benefit of the holders of the Securities as follows:
ARTICLE I
Subordination
SECTION 1.1. Subordination. The Trustee hereby agrees that all
obligations in respect of any amounts payable by Level 3 LLC pursuant to the
Subordinated Guarantee, including the guarantee of the payment of principal,
premium (if any), interest or all other amounts payable in respect of the
Securities (the "Subordinated Obligations"), shall be subordinate and junior in
right of payment, to the extent and in the manner provided in the Indenture (as
supplemented by this Supplemental Indenture), to the prior payment in full in
cash of all obligations (including without limitation the Obligations (as
defined in the Credit Agreement)) of Level 3 LLC under or in respect of the Loan
Documents (as defined in the Credit Agreement) and the Loan Proceeds Note,
including the payment of principal, premium (if any), interest (including
interest arising after the commencement of a bankruptcy or other proceeding,
whether or not such a claim is permitted in such proceeding), the guarantees
thereof or all other amounts payable thereunder (the "Senior Obligations").
SECTION 1.2. Subordination in the Event of Dissolution or
Insolvency of Level 3 LLC. Upon any distribution of assets of Level 3 LLC in
connection with its dissolution or insolvency or upon any dissolution, winding
up, liquidation or
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reorganization of Level 3 LLC, whether in bankruptcy, insolvency,
reorganization, arrangement or receivership or similar proceedings, or upon any
assignment for the benefit of creditors or any other marshaling of the assets
and liabilities of Level 3 LLC:
(a) the holders of the Senior Obligations (the "Senior
Creditors") shall first be entitled to receive payment in full in cash of the
Senior Obligations in accordance with the terms of such Senior Obligations
before the Securityholders shall be entitled to receive any payment on account
of the Subordinated Obligations owed by Level 3 LLC in respect of the
Securities, whether of principal, premium (if any), interest, pursuant to the
Subordinated Guarantee or otherwise; and
(b) any payment by, or distribution of the assets of, Level 3
LLC of any kind or character, whether in cash, property or securities, to which
the Securityholders would be entitled except for the provisions of Section 1308
of the Indenture and this Supplemental Indenture shall be paid or delivered by
the Person making such payment or distribution (whether a trustee in bankruptcy,
a receiver, custodian or liquidating trustee or otherwise) directly to the
Administrative Agent or the Senior Creditors to the extent necessary to make
payment in full in cash of all Senior Obligations remaining unpaid, after giving
effect to any concurrent payment or distribution to the Administrative Agent or
the Senior Creditors in respect of the Senior Obligations.
SECTION 1.3. Certain Payments Held in Trust. In the event that
any payment by, or distribution of the assets of, Level 3 LLC of any kind or
character, whether in cash, property or securities, and whether directly or
otherwise, shall be received by or on behalf of the Trustee or the
Securityholders at a time when such payment is prohibited by or contrary to the
agreements set forth in this Supplemental Indenture, such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
to, the Administrative Agent or the Senior Creditors to the extent necessary to
make payment in full in cash of all Senior Obligations remaining unpaid, after
giving effect to any concurrent payment or distribution to the Administrative
Agent or the Senior Creditors in respect of such Senior Obligations.
SECTION 1.4 Trustee Not Fiduciary. The Trustee shall not be
deemed to owe any fiduciary duty to the Senior Creditors and shall not be liable
to any such Senior Creditor if the Trustee shall in good faith mistakenly pay
over or distribute to the Securityholders or to the Issuer or to any other
person cash, property or securities to which any holders of Senior Obligations
shall be entitled by virtue of this Article or otherwise. With respect to the
holders of Senior Obligations, the Trustee undertakes to perform or to observe
only such of its covenants or obligations as are specifically set forth in this
Article and no implied covenants or obligations with respect to holders of
Senior Obligations shall be read into this Supplemental Indenture against the
Trustee.
SECTION 1.5. Legend. Any and all instruments or records now or
hereafter creating or evidencing the Subordinated Obligations, whether upon
refunding, extension, renewal, refinancing, replacement or otherwise, shall
contain the following legend:
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"Notwithstanding anything contained herein to the contrary, neither the
principal of nor the interest on, nor any other amounts payable in respect
of, the indebtedness created or evidenced by this instrument or record
shall be paid or payable with or by the funds provided by Level 3
Communications, LLC, except to the extent permitted under the Supplemental
Indenture dated October 12, 2006, among Xxxxx 0 Communications, Inc., Xxxxx
0 Xxxxxxxxxxxxxx, XXX, Xxxxx 0 Financing, Inc. and the Trustee, which
Supplemental Indenture is incorporated herein with the same effect as if
fully set forth herein."
SECTION 1.6. Obligations Hereunder Not Affected. So long as
the Credit Agreement shall constitute a Qualified Credit Facility, this
Supplemental Indenture shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of the Senior Obligations or any part
thereof shall be rescinded or must otherwise be returned by the Administrative
Agent and the Senior Creditors upon the insolvency, bankruptcy or reorganization
of Level 3 LLC or otherwise, all as though such payment had not been made.
ARTICLE II
Miscellaneous
SECTION 2.1. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 2.2. Modification. No modification, amendment or
waiver of any provision of this Supplemental Indenture shall in any event be
effective unless the same shall be in writing and signed by the Trustee, and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given.
SECTION 2.3. Opinion of Counsel. Concurrently with the
execution and delivery of this Supplemental Indenture, the Issuer shall deliver
to the Trustee an Opinion of Counsel to the effect that this Supplemental
Indenture has been duly authorized, executed and delivered by each of Parent,
the Issuer and Level 3 LLC and that, subject to the application of bankruptcy,
insolvency, moratorium, fraudulent conveyance or transfer and other similar laws
relating to creditors' rights generally and to the principles of equity, whether
considered in a proceeding at law or in equity, this Supplemental Indenture is a
legal, valid and binding obligation of Parent, the Issuer and Level 3 LLC,
enforceable against each of them in accordance with its terms.
SECTION 2.4. Ratification of Indenture; Supplemental
Indentures Part of Indenture. Except as expressly amended hereby, the Indenture
is in all respects ratified
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and confirmed and all the terms, conditions and provisions thereof shall remain
in full force and effect. This Supplemental Indenture shall form a part of the
Indenture for all purposes, and every holder of Securities heretofore or
hereafter authenticated and delivered shall be bound hereby.
SECTION 2.5. Counterparts. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement.
SECTION 2.8. Headings. Article and Section headings used
herein are for convenience of reference only, are not part of this Supplemental
Indenture and are not to affect the construction of, or to be taken into
consideration in interpreting, this Supplemental Indenture.
SECTION 2.9. Trustee. The Trustee makes no representations as
to the validity or sufficiency of this Supplemental Indenture. The recitals and
statements herein are deemed to be those of the Issuer, Parent and Level 3 LLC
and not of the Trustee.
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IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.
XXXXX 0 XXXXXXXXXXXXXX, XXX.,
By
/s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Group Vice President
LEVEL 3 FINANCING, INC.,
By
/s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
XXXXX 0 COMMUNICATIONS, LLC,
By
/s/ Xxxxx X. Grey
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Name: Xxxxx X. Grey
Title: Senior Vice President and Treasurer
THE BANK OF NEW YORK, as Trustee,
By
/s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx
Title: Assistant Vice President
