Document:

Exhibit 4.2

 

Execution Version

 

SUPPLEMENTAL INDENTURE (this
“Supplemental Indenture”) dated as of March 19, 2010, 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 MELLON, 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 January 20,
2010 (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 10% Senior Notes Due 2018 (the “Securities”), and (b) a
Supplemental Indenture dated March 19, 2010, pursuant to which Level 3 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 Merrill Lynch Capital Corporation, as administrative agent and collateral
agent (the “Administrative Agent”), have entered into a Credit Agreement
dated as of March 13, 2007 (as amended and restated as of April 16,
2009 and as amended as of May 15, 2009, and as may be further amended,
amended and restated or otherwise modified from time to time, the “Credit
Agreement”), under which the Issuer has borrowed term loans in an aggregate
principal amount of $1,680,000,000 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 Level 3 LLC;

 

WHEREAS the proceeds of the Term Loans have
been advanced to Level 3 LLC under an intercompany demand note dated March 13,
2007 in an initial principal amount of $1,400,000,000 and subsequently
increased to $1,680,000,000, 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 further
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, 

 

1

 

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 Issuer Restricted
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 1308
of the Indenture, the Trustee, Parent, the Issuer and Level 3 LLC are
authorized to execute and deliver this Supplemental Indenture;

 

WHEREAS all things and acts necessary to make
this Supplemental Indenture the legal, valid and binding obligation of the
Issuer, Parent and Level 3 LLC have been done.

 

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”).

 

2

 

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 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.

 

3

 

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:

 

“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 March 19,
2010, among Level 3 Communications, Inc., Level 3 Communications, LLC,
Level 3 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 

 

4

 

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 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 2.6.  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 2.7.  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.  

 

5

 

IN WITNESS WHEREOF, the parties hereto have
caused this Supplemental Indenture to be duly executed as of the date first
above written.

 

	
   

  	
  LEVEL 3 COMMUNICATIONS,
  INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Sunit S. Patel

  
	
   

  	
   

  	
   

  	
  Name: Sunit S. Patel

  
	
   

  	
   

  	
   

  	
  Title: Executive Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LEVEL 3 FINANCING, INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Robin E. Grey

  
	
   

  	
   

  	
   

  	
  Name: Robin E. Grey

  
	
   

  	
   

  	
   

  	
  Title: Senior Vice
  President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LEVEL 3 COMMUNICATIONS,
  LLC,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Neil J. Eckstein

  
	
   

  	
   

  	
   

  	
  Name: Neil J. Eckstein

  
	
   

  	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK
  MELLON, as Trustee,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Geovanni Barris

  
	
   

  	
   

  	
   

  	
  Name: Geovanni Barris

  
	
   

  	
   

  	
   

  	
  Title:
  Vice President

  

 

6Exhibit 10.13

 

UNITED
STATES OF AMERICA

DEPARTMENT
OF THE TREASURY

COMPTROLLER
OF THE CURRENCY

 

	
  In the Matter of:

  	
  )

  	
   

  
	
  Solera National Bank

  	
  )

  	
  AA-WE-10-14

  
	
  Lakewood, Colorado

  	
  )

  	
   

  

 

CONSENT
ORDER

 

The Comptroller of
the Currency of the United States of America (“Comptroller”), through his
National Bank Examiner, has supervisory authority over the Solera National
Bank, Lakewood, Colorado (“Bank”).

 

The Bank, by and
through its duly elected and acting Board of Directors (“Board”), has executed
a “Stipulation and Consent to the Issuance of a Consent Order,” dated March 18,
2010, that is accepted by the Comptroller. 
By this Stipulation and Consent, which is incorporated by reference, the
Bank has consented to the issuance of this Consent Order (“Order”) by the Comptroller.

 

Pursuant to the
authority vested in it by the Federal Deposit Insurance Act, as amended,
12 U.S.C. § 1818, the Comptroller hereby orders that:

 

Article I

 

COMPLIANCE
COMMITTEE

 

(1)           Within five (5) days of this Order, the Board
shall appoint a Compliance Committee of at least five (5) members and, of
which no more than two (2) shall be employees of the Bank or any of its
affiliates (as the term “affiliate” is defined in 12 U.S.C.
§ 371c(b)(1)), or a family member of any such person.  Upon appointment, the names of the members of
the Compliance Committee and, in the event of a change of the membership, the
name of any new 

 

1

 

member shall be submitted
in writing to the Assistant Deputy Comptroller.

 

(2)           The Compliance Committee shall be responsible for
monitoring and coordinating the Bank’s adherence to the provisions of this
Order and shall meet at least monthly.

 

(3)           By no later than March 31, 2010, and by the end
of every calendar month thereafter, the Compliance Committee shall submit a
written progress report to the Board setting forth in detail:

 

(a)                                  a description of the action needed to
achieve full compliance with each Article of this Order;

 

(b)           actions taken to comply with each Article of this
Order; and

 

(c)           the results and status of those actions.

 

(4)           The Board shall provide a summary report of the
progress reached in attaining compliance with each Article of this Order
to the Assistant Deputy Comptroller within fifteen (15) days of the end of each
calendar quarter.

 

(5)           All reports or plans which the Bank or Board has
agreed to submit to the Assistant Deputy Comptroller pursuant to this Order
shall be forwarded to the:

 

Assistant Deputy Comptroller

Denver Field Office

1225 17th Street, Suite 450

Denver, Colorado 80202

 

(6)           The Board shall ensure that the Bank has processes,
personnel, and control 

 

2

 

systems to ensure
implementation of and adherence to the policies, procedures and programs required
by this Order.

 

Article II

 

BSA PROGRAM

 

(1)           To provide for compliance with the Bank Secrecy Act,
as amended (31 U.S.C. §§ 5311 et seq.), the regulations promulgated
thereunder at 31 C.F.R. Part 103, as amended, and 12 C.F.R. Part 21,
Subparts B and C, and the rules and regulations of the Office of Foreign
Assets Control (“OFAC”) (collectively referred to as the “Bank Secrecy Act” or “BSA”),
the Board shall perform, within thirty (30) days of this Order, a comprehensive
BSA risk assessment, to include at a minimum:

 

(a)                                  identification of the risks associated
with the Bank’s products, services, customers, and geographies served; and

 

(b)                                 an evaluation of its existing internal
controls to determine the need for enhanced controls to mitigate the risks
identified in Subparagraph (1)(a) of this Article.

 

(2)           Within sixty (60) days of this Order, the Bank shall
revise, adopt, implement and thereafter ensure Bank adherence to a written
program of policies and procedures to provide for compliance with the BSA (“Risk-Based
BSA Program”) to include consideration of:

 

(a)                                  the findings of the BSA risk assessment;

 

(b)                                 the deficiencies identified in the Report
of Examination conducted as of September 30, 2009 (the “ROE”);

 

3

 

(c)                                  the requirements of 12 C.F.R. § 21.21;
and

 

(d)                                 the requirements of this Order relating
to Compliance Staff, Training, Internal Controls and Audit.

 

Article III

 

BSA COMPLIANCE
STAFF

 

(1)           Within thirty (30) days of this Order, the Board shall
determine whether any changes are needed regarding the Bank’s BSA Officer,
including the responsibilities, authority, structure, independence or skills of
the Bank Secrecy Act Officer.  In
particular, the Board shall ensure that the BSA Officer has sufficient training,
authority, and skill to perform the assigned responsibilities.

 

Article IV

 

BSA TRAINING

 

(1)           The Risk-Based BSA Program shall include a
comprehensive training program for all appropriate operational and supervisory
personnel to ensure their awareness of their specific assigned responsibilities
for compliance with the requirements of the Bank Secrecy Act.  The program must include advanced training
for supervisory personnel as appropriate for their respective BSA
responsibilities.

 

Article V

 

BSA INTERNAL
CONTROLS

 

(1)           The Risk-Based BSA Program shall include policies and
procedures for the appropriate identification and monitoring of transactions
that pose greater than normal risk for 

 

4

 

compliance with the BSA,
to include at a minimum:

 

(a)                                  the creation of a list of customers or
accounts exhibiting high risk characteristics for money laundering, terrorist
financing, or other illicit activity;

 

(b)                                 enhanced policies and procedures for
recording, maintaining, and recalling information about transactions that pose
greater than normal risk for compliance with the BSA;

 

(c)                                  adequate controls and procedures to
identify and report suspicious and large currency transactions;

 

(d)                                 well-defined policies and procedures for
investigating and resolving transactions that have been identified as unusual
or suspicious;

 

(e)                                  procedures to maintain records on
monetary instrument transactions and funds transfers, as required by the BSA;
and

 

(f)                                    policies and procedures to ensure that
new locations, products and services are included, monitored and assessed
within the Bank’s program for compliance with the BSA.

 

(2)           The Risk-Based BSA Program shall include policies and
procedures to provide for the Bank’s monitoring of suspicious cash, monetary
instruments, wire transfers, and other activities for all types of
transactions, accounts, customers, products, services, and geographic areas, to
include at a minimum:

 

(a)           periodic reviews of cash purchases of monetary
instruments;

 

5

 

(b)                                 periodic analysis of aggregate cash,
monetary instrument, and wire activity;

 

(c)           periodic analysis of Currency Transaction Report
filings;

 

(d)                                 periodic review and analysis of high risk
transactions, accounts, customers, products, services, and geographic areas;
and

 

(e)           submission of SARs based on these reviews and
analyses.

 

(3)           The Risk-Based BSA Program shall maintain policies and
procedures for expanded account-opening procedures for all accounts that pose
greater than normal risk for compliance with the Bank Secrecy Act.

 

(4)           Within ninety (90) days of this Order, the Board shall
ensure that the BSA Program includes policies and procedures for the
maintenance of an integrated, accurate system for all Bank areas to produce
periodic reports designed to identify unusual or suspicious activity, including
patterns of activity, to monitor and evaluate unusual or suspicious activity,
and to maintain accurate information needed to produce these reports.

 

(5)           The BSA Officer or designee shall periodically review,
not less than each calendar year, all account documentation for all high-risk
customers and accounts and the related accounts of those customers at the Bank
to determine whether the account activity is consistent with the customer’s
business or occupation and the stated purpose of the account.

 

Article VI

 

BSA AUDIT

 

(1)           The Board shall ensure the continuance of an external
BSA audit, that is 

 

6

 

independent, adequate in
scope and frequency, and designed to ensure compliance with the BSA in all
areas of the Bank.

 

(2)           A copy of the proposed engagement letter for the
external BSA audit shall be submitted to the Assistant Deputy Comptroller.  Upon receipt of no supervisory objection to
the proposed engagement letter, the Board shall, within thirty (30) days,
proceed with the proposed external BSA audit.

 

(3)           All audit reports shall be in writing and supported by
adequate workpapers, which must be provided to the Bank.  The Board shall ensure that immediate actions
are undertaken to remedy any deficiencies cited in audit reports, and that the
Board maintain a written record describing those actions.

 

Article VII

 

CREDIT RISK MANAGEMENT

 

(1)           Within forty-five (45) days of this Order, the Board
shall prepare and submit to the Assistant Deputy Comptroller for a prior
written determination of no supervisory objection, a program (including
policies and procedures) designed to ensure the Bank manages and controls the
risk in the loan portfolio.  The written
program shall include, at a minimum:

 

(a)                                  the establishment of commercial real
estate lending (“CRE”) concentration limits stratified by type, locality and
other meaningful measures supported by written analysis;

 

(b)                                 the establishment of a concentration
limit for the Business Manager Accounts Receivable line of business and an
established limit for 

 

7

 

aggregate outstanding individual
customer invoices;

 

(c)                                  procedures to ensure that any
participations purchased are consistent with safe and sound banking practices,
the guidelines set forth in Banking Circular 181 (Revised), dated August 2,
1984, and the requirements of 12 C.F.R. Part 34;

 

(d)                                 a workout policy that outlines reasonable
loan terms and amortization periods;

 

(e)                                  policies and procedures to ensure that
Criticized Asset Action Plans include the following information:

 

(i)                                     the purpose and terms of the original
note and any modification of terms;

 

(ii)                                  an identification of the expected sources
of repayment and an analysis of their adequacy;

 

(iii)                               the appraised value of supporting
collateral and the position of the Bank’s lien on such collateral where
applicable as well as other necessary documentation to support the collateral
valuation; and

 

(iv)                              the proposed action to eliminate the
basis of criticism and the time frame for its accomplishment, including the
rationale supporting any workout arrangement or concession.

 

(2)           Upon receiving a written determination of no
supervisory objection from the Assistant Deputy Comptroller, the Board shall
immediately implement and thereafter ensure

 

8

 

adherence to the program,
policies and procedures required by this Article.

 

Article VIII

 

CLOSING

 

(1)           Although the Bank is required to submit certain
proposed actions and programs for the review or prior written determination of
no supervisory objection of the Assistant Deputy Comptroller, the Board has the
ultimate responsibility for proper and sound management of the Bank and the
completeness and accuracy of the Bank’s books and records.

 

(2)           If, at any time, the Comptroller deems it appropriate
in fulfilling the responsibilities placed upon him by the several laws of the United
States to undertake any action affecting the Bank, nothing in this Order shall
in any way inhibit, estop, bar or otherwise prevent the Comptroller from so
doing.

 

(3)           The provisions of this Order shall remain effective
and enforceable, except to the extent that, and until such time as, any
provisions of this Order shall have been amended, suspended, waived, or
terminated in writing by the Comptroller.

 

(4)           In each instance in this Order in which the Bank or
the Board is required to ensure implementation of or adherence to, or to
undertake to perform, an obligation of the Bank, the Board shall:

 

(a)           authorize and adopt such actions on behalf of the Bank
as may be necessary or appropriate for the Bank to perform its obligations under
this Order;

 

(b)           require the timely reporting by Bank management of
such actions

 

9

 

directed by the Board to
be taken under the terms of this Order;

 

(c)                                  follow up on any non-compliance with such
actions in a timely and appropriate manner; and

 

(d)                                 require corrective action be taken in a
timely manner for any non-compliance with such actions.

 

(5)           This Order is
intended to be, and shall be construed to be, a final order issued pursuant to
12 U.S.C. § 1818(b), and expressly does not form, and may not be construed to
form, a contract binding the Comptroller or the United States.

 

(6)           The terms of this Order, including this Paragraph, are
not subject to amendment or modification by any extraneous expression, prior
agreements or prior arrangements between the parties, whether oral or written.

 

IN
TESTIMONY WHEREOF,
the undersigned has hereunto set her hand.

 

	
  /s/ Karen M. Boehler

  	
   

  	
  March 18, 2010

  
	
  Karen M. Boehler

  	
   

  	
  Date

  
	
  Assistant Deputy
  Comptroller

  	
   

  	
   

  
	
  Denver Field Office

  	
   

  	
   

  

 

10

 

UNITED
STATES OF AMERICA

DEPARTMENT
OF THE TREASURY

COMPTROLLER
OF THE CURRENCY

 

	
  In the Matter of:

  	
  )

  	
   

  
	
  Solera National Bank

  	
  )

  	
  AA-WE-10-14

  
	
  Lakewood, Colorado

  	
  )

  	
   

  

 

STIPULATION
AND CONSENT TO THE

ISSUANCE
OF A CONSENT ORDER

 

The Comptroller of
the Currency of the United States of America (“Comptroller”) intends to
initiate cease and desist proceedings against the Solera National Bank,
Lakewood, Colorado (“Bank”), pursuant to 12 U.S.C. § 1818(b) through
the issuance of a Notice of Charges for an Order to Cease and Desist for a
violation of 12 C.F.R. § 21.21.

 

The Bank, in the
interest of compliance and cooperation, consents to the issuance of a Consent
Order, dated March 18, 2010 (the “Order”);

 

In consideration
of the above premises, the Comptroller, through his authorized representative,
and the Bank, through its duly elected and acting Board of Directors, hereby
stipulate and agree to the following:

 

Article I

 

Jurisdiction

 

(1)           The Bank is a national banking association chartered
and examined by the Comptroller pursuant to the National Bank Act of 1864, as
amended, 12 U.S.C. § 1 et seq.

 

(2)           The Comptroller is “the appropriate Federal banking
agency” regarding the Bank pursuant to 12 U.S.C. §§ 1813(q) and
1818(b).

 

11

 

(3)           The Bank is an “insured depository institution” within
the meaning of 12 U.S.C. § 1818(b)(1).

 

Article II

 

Agreement

 

(1)           The Bank, without admitting or denying any wrongdoing,
hereby consents and agrees to the issuance of the Order by the Comptroller.

 

(2)           The Bank further agrees that said Order shall be
deemed an “order issued with the consent of the depository institution” as
defined in 12 U.S.C. § 1818(h)(2), and consents and agrees that said
Order shall become effective upon its issuance and shall be fully enforceable
by the Comptroller under the provisions of 12 U.S.C. § 1818(i).  Notwithstanding the absence of mutuality of
obligation, or of consideration, or of a contract, the Comptroller may enforce
any of the commitments or obligations herein undertaken by the Bank under his
supervisory powers, including 12 U.S.C. § 1818(i), and not as a matter of
contract law.  The Bank expressly
acknowledges that neither the Bank nor the Comptroller has any intention to
enter into a contract.

 

(3)           The Bank also expressly acknowledges that no officer
or employee of the Comptroller has statutory or other authority to bind the
United States, the U.S. Treasury Department, the Comptroller, or any other
federal bank regulatory agency or entity, or any officer or employee of any of
those entities to a contract affecting the Comptroller’s exercise of his
supervisory responsibilities.

 

12

 

Article III

 

Waivers

 

(1)           The Bank, by signing this Stipulation and Consent,
hereby waives:

 

(a)           the issuance of a Notice of Charges pursuant to
12 U.S.C. § 1818(b);

 

(b)                                 any and all procedural rights available
in connection with the issuance of this Order;

 

(c)                                  all rights to a hearing and a final
agency decision with regard to the issuance of this Order pursuant to 12 U.S.C.
§ 1818(i), 12 C.F.R. Part 19;

 

(d)                                 all rights to seek any type of
administrative or judicial review with regard to the issuance of this Order;
and

 

(e)           any and all rights to challenge or contest the validity
of the Order.

 

Article IV

 

Other Action

 

(1)           The Bank agrees that the provisions of this
Stipulation and Consent shall not inhibit, estop, bar, or otherwise prevent the
Comptroller from taking any other action affecting the Bank if, at any time, it
deems it appropriate to do so to fulfill the responsibilities placed upon him
by the several laws of the United States of America.

 

IN
TESTIMONY WHEREOF,
the undersigned, authorized by the Comptroller, has hereunto set her hand on
behalf of the Comptroller.

 

 

	
  /s/ Karen M. Boehler

  	
   

  	
  March 18, 2010

  
	
  Karen M. Boehler

  	
   

  	
  Date

  
	
  Assistant Deputy
  Comptroller

  	
   

  	
   

  
	
  Denver Field Office

  	
   

  	
   

  

 

13

 

IN
TESTIMONY WHEREOF,
the undersigned, as the duly elected and acting Board of Directors of the Bank,
have hereunto set their hands on behalf of the Bank.

 

 

	
  /s/ Norma Akers

  	
   

  	
  March 18, 2010

  
	
  Norma Akers

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/ Rob Alvardo

  	
   

  	
  March 18, 2010

  
	
  Rob
  Alvardo

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Maria Arias

  	
   

  	
  March 18, 2010

  
	
  Maria
  Arias

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Douglas Crichfield

  	
   

  	
  March 18, 2010

  
	
  Douglas
  Crichfield

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Robert Gallegos

  	
   

  	
  March 18, 2010

  
	
  Robert
  Gallegos

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Ronald Montoya

  	
   

  	
  March 18, 2010

  
	
  Ronald
  Montoya

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Ray Nash

  	
   

  	
  March 18, 2010

  
	
  Ray
  Nash

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Basil Sabbah

  	
   

  	
  March 18, 2010

  
	
  Basil
  Sabbah

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Stan Sena

  	
   

  	
  March 18, 2010

  
	
  Stan
  Sena

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Larry Trujillo

  	
   

  	
  March 18, 2010

  
	
  Larry
  Trujillo

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  K.C. Veio

  	
   

  	
  March 18, 2010

  
	
  K.C. Veio

  	
   

  	
  Date

  

 

14

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