Affiliate Subordination Agreement between Global Crossing North American Holdings, Inc., Global Crossing Limited, Guarantors, and Wells Fargo Bank Minnesota, N.A. dated December 9, 2003

Summary

This agreement, dated December 9, 2003, is between Global Crossing North American Holdings, Inc., Global Crossing Limited, certain guarantor entities, and Wells Fargo Bank Minnesota, N.A. as trustee. It sets out that any intercompany debts among the affiliated parties (the Credit Parties) are subordinated to the repayment of $200 million in senior secured notes issued under an indenture. The agreement ensures that senior noteholders are paid in full before any affiliated creditors receive payment on intercompany debts, especially in cases of insolvency or bankruptcy.

EX-4.3 6 dex43.txt AFFILIATE SUBORDINATION AGREEMENT DATED AS OF DECEMBER 9, 2003 Exhibit 4.3 AFFILIATE SUBORDINATION AGREEMENT AFFILIATE SUBORDINATION AGREEMENT dated as of December 9, 2003, between GLOBAL CROSSING NORTH AMERICAN HOLDINGS, INC., a corporation duly organized and validly existing under the laws of the State of Delaware (the "Issuer"), GLOBAL CROSSING LIMITED (formerly GC Acquisition Limited), a company duly organized and validly existing under the laws of Bermuda (the "Company"), the other entities identified on the signature pages hereto under the caption "GUARANTORS" (the Company together with such other entities being herein called the "Guarantors" and, together with the Issuer, the "Credit Parties") and WELLS FARGO BANK MINNESOTA, N.A., as trustee and agent under the below-referenced Indenture (in such capacity, together with its successors in such capacity, the "Trustee"). Pursuant to an Indenture dated as of December 9, 2003 (as modified and supplemented and in effect from time to time, the "Indenture") by and between the Credit Parties and the Trustee for the benefit of the holders of the Notes (as hereinafter defined), the Issuer has issued $200,000,000 of its 11% Senior Secured Notes due 2006 (the "Notes") and the Guarantors have unconditionally guaranteed all of the obligations of the Issuer under and in respect of the Notes. To induce the holders of the Notes to accept the same on the terms and conditions as provided in the Indenture, and in accordance with Section 4.09(e)(i) of the Indenture, each Credit Party has agreed to subordinate any Subordinated Indebtedness (as hereinafter defined) held by it to all Senior Indebtedness (as hereinafter defined), all in the manner and to the extent hereinafter provided. Accordingly, the parties hereto agree as follows: Section 1. Definitions. Terms defined in the Indenture are used herein as defined therein. In addition, as used herein: "Senior Indebtedness" shall mean the following indebtedness and obligations: (a) all indebtedness and other obligations of the Issuer under the Notes, of the Guarantors under the Note Guarantees and (without duplication) of the Credit Parties under the Indenture (as the same may be modified and supplemented from time to time, and including all agreements extending, renewing or refinancing the same); and (b) all interest accruing after the commencement of any proceedings referred to in Section 2.01(ii) below, whether or not such interest is an allowed claim in such proceeding. "Subordinated Indebtedness" shall mean any intercompany indebtedness or intercompany accounts payable or other intercompany obligations of a Credit Party owing to any other Credit Party or (without duplication) to any Restricted Subsidiary. "Subordinated Indebtedness Documents" shall mean any credit agreement, promissory note, indenture or other agreement or instrument evidencing any Subordinated Indebtedness. Affiliate Subordination Agreement 2 Section 2. Subordination. 2.01 Subordination of Subordinated Indebtedness. Anything in any Subordinated Indebtedness Document to the contrary notwithstanding, each Credit Party, for itself and its successors and assigns, covenants and agrees that, to the extent and in the manner hereinafter set forth, all Subordinated Indebtedness held by such Credit Party and its successors and assigns (such Credit Party and its successors and assigns, the "Affiliate Holder"), and the payment from whatever source of the principal of, and interest and premium (if any) on, such Subordinated Indebtedness, are hereby expressly made subordinate and subject in right of payment to the prior payment in full in cash of all Senior Indebtedness: (i) The holders of Senior Indebtedness shall be entitled to receive payment in full in cash of all amounts constituting Senior Indebtedness before such Affiliate Holder is entitled to receive any payment on account of the Subordinated Indebtedness held by it (and unless and until all Senior Indebtedness has been so paid, such Affiliate Holder will not (x) ask, demand, sue for, take or receive from any Credit Party obligated in respect of such Subordinated Indebtedness (each, a "Credit Party Obligor"), by set-off or in any other manner, or (y) seek any other remedy allowed at law or in equity against any Credit Party Obligor for breach of such Credit Party Obligor's obligations under any Subordinated Indebtedness Document, provided that, so long as at the time thereof and after giving effect thereto no Event of Default shall have occurred and be continuing, unremedied and unwaived, under the Indenture, any Credit Party Obligor may make, and such Affiliate Holder shall be entitled to receive and retain, payments in respect of the principal of and interest of the Subordinated Indebtedness. (ii) In the event of any insolvency or bankruptcy proceedings, and any receivership, liquidation, reorganization or other similar proceedings in connection therewith, relative to any Credit Party Obligor or to its creditors, as such, or to its property, and in the event of any proceedings for voluntary liquidation, dissolution or other winding up of any Credit Party Obligor, whether or not involving insolvency or bankruptcy, then the holders of Senior Indebtedness shall be entitled to receive payment in full of all amounts constituting Senior Indebtedness before such Affiliate Holder is entitled to receive, or make any demand for, any payment on account of the Subordinated Indebtedness, and to that end the holders of Senior Indebtedness shall be entitled to receive for application in payment thereof any payment or distribution of any kind or character, whether in cash or property or securities. (iii) If any payment or distribution of any character, whether in cash, securities or other property, in respect of any Subordinated Indebtedness shall (despite these subordination provisions) be received by such Affiliate Holder before all Senior Indebtedness shall have been paid in full in cash, such payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Indebtedness (or their representatives), and to holders of any other Indebtedness to which the Subordinated Indebtedness is similarly subordinated, ratably according to the respective aggregate amounts remaining unpaid thereon, to the extent necessary to pay all Senior Indebtedness, and all such other Indebtedness, in full. Affiliate Subordination Agreement 3 No present or future holder of Senior Indebtedness shall be prejudiced in its right to enforce subordination of any Subordinated Indebtedness or any Subordinated Indebtedness Document by any act or failure to act on the part of any Credit Party Obligor or by any act or failure to act, in good faith on the part of such holder or any trustee or agent for such holder. The foregoing provisions are solely for the purpose of defining the relative rights of the holders of Senior Indebtedness on the one hand, and each Affiliate Holder on the other hand, and nothing herein shall impair, as between any Credit Party Obligor and any Affiliate Holder, the obligation of such Credit Party Obligor, which is unconditional and absolute, to pay to such Affiliate Holder any principal of Subordinated Indebtedness and interest thereon in accordance with the terms of any Subordinated Indebtedness Document. 2.02 Subrogation. Subject to the payment in full in cash of all Senior Indebtedness, each Affiliate Holder shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness until the principal of, and interest on, the Subordinated Indebtedness held by such Affiliate Holder shall be paid in full in cash. For purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness of any cash, property or securities to which any Affiliate Holder would be entitled except for the provisions of Section 2.01, and no payments over pursuant to the provisions of Section 2.01 to the holders of Senior Indebtedness by any Affiliate Holder, shall, as between the applicable Credit Party Obligor, its creditors other than holders of Senior Indebtedness, and such Affiliate Holder, be deemed to be a payment or distribution by such Credit Party Obligor to or on account of the Senior Indebtedness. 2.03 Defaults. If after payment in full in cash of the Senior Indebtedness, any payment of Subordinated Indebtedness is not made when due or any other event of default shall occur in respect of such Subordinated Indebtedness, the applicable Affiliate Holder may declare all amounts owing in respect of such Subordinated Indebtedness due and payable, provided that if after repayment in full of the Senior Indebtedness, any payments of Senior Indebtedness shall at any time be rescinded or otherwise must be returned by the holder of any Senior Indebtedness, such demand, if made, shall be automatically rescinded. Section 3. Miscellaneous. 3.01 Notices. All notices, waivers, requests, consents, demands, directions and other instruments delivered pursuant to the terms of this Agreement shall be in writing in the English language or accompanied by a certified English translation (which English translation shall be considered the original instrument and shall control in case of any conflict between the English and foreign language versions) and telecopied or delivered to the respective parties hereto as provided in Section 12.02 of the Indenture. All such communications shall be deemed to have been given at the times specified in said Section 12.02. The Trustee shall receive a copy of any notice under this Agreement from any Credit Party to any other Credit Party. 3.02 No Waiver. No failure on the part of the Trustee or any Holder to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Trustee or any Holder of any right, power or remedy hereunder preclude any other or further exercise Affiliate Subordination Agreement 4 thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law. 3.03 Amendments, Etc. The terms of this Agreement may be waived, altered or amended only by an instrument in writing duly executed by each Credit Party and the Trustee. Any such amendment or waiver shall be binding upon the Trustee, each Holder and each Credit Party. The Trustee shall not be obligated to enter into any amendment, waiver or alteration that affects the Trustee's own rights, duties, immunities or indemnities hereunder or under the Indenture, the Global Security Agreement or otherwise except in accordance with the terms hereof. 3.04 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of each Credit Party, the Trustee and each Holder. 3.05 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. 3.06 Governing Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of New York. 3.07 Captions. The captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. 3.08 Agents and Attorneys-in-Fact. The Trustee may employ agents and attorneys-in-fact in connection herewith and shall not be responsible for the gross negligence or willful misconduct of any such agents or attorneys-in-fact selected by it in good faith. 3.09 Severability. If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (a) the other provisions hereof shall remain in full force and effect in such jurisdiction and (b) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. 3.10 Rights, Privileges; Etc. The rights, privileges, immunities, indemnities and standard of care provided to the Trustee under Article VIII of the Indenture and the Global Security Agreement shall, to the extent applicable, apply in this Agreement and to the Trustee's acts and omissions related to this Agreement as if fully set forth herein. 3.11 Enforcement. By the Trustee's signature below and its acceptance of the benefits of this Agreement, except to the extent otherwise provided in Section 7.06 of the Indenture, each Holder agrees that this Agreement may only be enforced by the Trustee, and that no Holder shall have any right individually to enforce or seek to enforce this Agreement or to realize upon the Collateral or other security given to secure the payment and performance of the Secured Obligations. Affiliate Subordination Agreement 5 IN WITNESS WHEREOF, the parties hereto have caused this Affiliate Subordination Agreement to be duly executed in their respective capacities as set forth below as of the date first written above. ISSUER GLOBAL CROSSING NORTH AMERICAN HOLDINGS, INC. By: /s/ John B. McShane ----------------------------------------- Name: John B. McShane Title: Authorized Signatory GUARANTORS GLOBAL CROSSING LIMITED By: /s/ John B. McShane ----------------------------------------- Name: John B. McShane Title: Exec. VP & General Counsel Affiliate Subordination Agreement 6 US Guarantors: ALC COMMUNICATIONS CORPORATION BUDGET CALL LONG DISTANCE, INC. BUSINESS TELEMANAGEMENT, INC. GC DEV. CO., INC. GC PACIFIC LANDING CORP. GLOBAL CROSSING ADVANCED CARD SERVICES, INC. GLOBAL CROSSING BANDWIDTH, INC. GLOBAL CROSSING BILLING, INC. GLOBAL CROSSING DEVELOPMENT CO. GLOBAL CROSSING EMPLOYEE SERVICES INC. GLOBAL CROSSING GLOBALCENTER HOLDINGS, INC. GLOBAL CROSSING HOLDINGS USA, LLC GLOBAL CROSSING INTERNET DIAL-UP, INC. GLOBAL CROSSING LATIN AMERICA & CARIBBEAN CO. GLOBAL CROSSING LOCAL SERVICES, INC. GLOBAL CROSSING NORTH AMERICA, INC. GLOBAL CROSSING NORTH AMERICAN NETWORKS, INC. GLOBAL CROSSING TELECOMMUNICATIONS, INC. GLOBAL CROSSING TELEMANAGEMENT, INC. GLOBAL CROSSING USA INC. GT LANDING CORP. GT LANDING II CORP. INTERNATIONAL OPTICAL NETWORK, L.L.C. IXNET, INC. MAC LANDING CORP. PAC LANDING CORP. RACAL TELECOMMUNICATIONS INC. SUBSIDIARY TELCO, LLC US CROSSING, INC. By /s/ David Sheffey ------------------------------------------ Name: David Sheffey Title: Assistant Secretary Affiliate Subordination Agreement 7 Bermudan Guarantors: ATLANTIC CROSSING HOLDINGS LTD. ATLANTIC CROSSING LTD. ATLANTIC CROSSING II LTD. GLOBAL CROSSING HOLDINGS GLOBAL CROSSING INTERNATIONAL, LTD. GLOBAL CROSSING NETWORK CENTER LTD. GLOBAL CROSSING PORTFOLIO HOLDINGS LTD. MID-ATLANTIC CROSSING HOLDINGS LTD. MID-ATLANTIC CROSSING LTD. PAC PANAMA LTD. PAN AMERICAN CROSSING HOLDINGS LTD. PAN AMERICAN CROSSING LTD. SOUTH AMERICAN CROSSING HOLDINGS LTD. SOUTH AMERICAN CROSSING LTD. By /s/ David Sheffey ------------------------------------------ Name: David Sheffey Title: Attorney-in-fact Canadian Guarantors: AMERITEL MANAGEMENT, INC. GLOBAL CROSSING CONFERENCING-CANADA, LTD. GLOBAL CROSSING TELECOMMUNICATIONS-CANADA, LTD. GLOBAL CROSSING WORLDWIDE CUSTOMER HELP DESK CANADA LTD. By /s/ David Sheffey ------------------------------------------ Name: David Sheffey Title: Assistant Secretary Affiliate Subordination Agreement 8 UK Guarantors: Executed as a deed by ATLANTIC CROSSING HOLDINGS U.K. LIMITED GC PAN EUROPEAN CROSSINGUK LTD. GEOCONFERENCE LIMITED GLOBAL CROSSING (BIDCO) LIMITED GLOBAL CROSSING CONFERENCING LIMITED GLOBAL CROSSING EUROPE LIMITED GLOBAL CROSSING IXNET EMEA HOLDINGS LIMITED GLOBAL CROSSING NETWORK CENTER (UK) LTD. GLOBAL CROSSING (UK) TELECOMMUNICATIONS LIMITED GT U.K. LTD. IXNET UK LIMITED MID-ATLANTIC CROSSING HOLDINGS UK LTD. PAN AMERICAN CROSSING UK LTD. By /s/ Terrence L. Dugan ------------------------------------------ Name: Terrence L. Dugan Title: Attorney-in-fact By /s/ David Sheffey ------------------------------------------ Name: David Sheffey Title: Attorney-in-fact Irish Guarantors: SIGNED, SEALED and DELIVERED by GC HOLDING SPV GLOBAL CROSSING IRELAND LIMITED GLOBAL CROSSING SERVICES EUROPE LIMITED GLOBAL CROSSING SERVICES IRELAND LIMITED by its duly appointed attorney: By /s/ Terrence L. Dugan ------------------------------------------ Name: Terrence L. Dugan Witnesseth: /s/ Lindsay Stieber --------------------------------- Name: Lindsay Stieber Affiliate Subordination Agreement 10 European Guarantors: GC HUNGARY HOLDINGS VAGYONKEZELO KORLATOLT FELELOSSEGU TARSASAG GC LANDING CO. GMBH GC PAN EUROPEAN CROSSING BELGIE B.V.B.A. GC PAN EUROPEAN CROSSING DANMARK A.P.S. GC PAN EUROPEAN CROSSING DEUTSCHLAND GMBH GC PAN EUROPEAN CROSSING FRANCE S.A.R.L. GC PAN EUROPEAN CROSSING HOLDINGS B.V. GC PAN EUROPEAN CROSSING LUXEMBOURG I S.A.R.L. GC PAN EUROPEAN CROSSING LUXEMBOURG II S.A.R.L. GC PAN EUROPEAN CROSSING NEDERLAND B.V. GC PAN EUROPEAN CROSSING NETWORKS B.V. GC PAN EUROPEAN CROSSING NORGE AS GC PAN EUROPEAN CROSSING SVERIGE AB GC PAN EUROPEAN CROSSING SWITZERLAND GMBH GLOBAL CROSSING BELGIE B.V.B.A. GLOBAL CROSSING CYPRUS HOLDINGS LIMITED GLOBAL CROSSING DANMARK APS GLOBAL CROSSING DEUTSCHLAND GMBH GLOBAL CROSSING FRANCE SAS GLOBAL CROSSING NEDERLAND B.V. GLOBAL CROSSING NORGE AS GLOBAL CROSSING SVERIGE AB GLOBAL CROSSING SWITZERLAND GMBH GLOBAL CROSSING VENEZUELA B.V. GT NETHERLANDS B.V. INTERNATIONAL EXCHANGE NETWORKS SAS By /s/ David Sheffey ------------------------------------------ Name: David Sheffey Title: Attorney-in-fact GC PAN EUROPEAN CROSSING ITALIA S.R.L. GLOBAL CROSSING ITALIA S.R.L. By /s/ David Sheffey ------------------------------------------ Name: David Sheffey Title: ATTORNEY-IN-FACT BY VIRTUE OF THE POWER OF ATTORNEY EXECUTED ON NOVEMBER 6 2003 BEFORE NOTARY Affiliate Subordination Agreement 11 MARIA CELESTE PAMPURI NOTARY PUBLIC IN MILAN Affiliate Subordination Agreement 12 Global Marine Guarantors: GLOBAL MARINE CABLE SYSTEMS PTE LIMITED GLOBAL MARINE SYSTEMS (JAPAN) LIMITED VIBRO EINSPULTECHNIK DUKER-UND WASSERBAU GMBH By /s/ David Sheffey ------------------------------------------ Name: David Sheffey Title: Attorney-in-fact GLOBAL MARINE SYSTEMS (DEPOTS) LIMITED By /s/ David Sheffey ------------------------------------------ Name: David Sheffey Title: Authorized Signatory Executed as a deed by GLOBAL MARINE SYSTEMS LIMITED By /s/ Terrence L. Dugan ------------------------------------------ Name: Terrence L. Dugan Title: Attorney-in-fact By /s/ David Sheffey ------------------------------------------ Name: David Sheffey Title: Attorney-in-fact Caribbean and Latin American Guarantors: GC ST. CROIX COMPANY, INC. GLOBAL CROSSING MEXICANA S. DE R.L. DE C.V. GLOBAL CROSSING PANAMA INC. GC SAC ARGENTINA S.R.L. SAC BRASIL HOLDING LTDA. SAC BRASIL LTDA. SAC CHILE S.A. SAC COLOMBIA LIMITADA SAC PANAMA S.A. SAC PERU S.R.L. By /s/ David Sheffey ------------------------------------------ Affiliate Subordination Agreement 13 Name: David Sheffey Title: Attorney-in-fact Affiliate Subordination Agreement 14 TRUSTEE Acknowledged: WELLS FARGO BANK MINNESOTA, N.A., not in its individual capacity but solely as Trustee under the Indenture on behalf of the Holders By: /s/ Jane Y. Schweiger ----------------------------------------- Name: Jane Y. Schweiger Title: Vice President Affiliate Subordination Agreement