Exhibit 4.1
Execution Version
FRONTIER COMMUNICATIONS
CORPORATION
and
The Bank of New York
Mellon,
as Trustee
SECOND SUPPLEMENTAL
INDENTURE
Dated as of October 1,
2009
TABLE OF CONTENTS
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Page
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ARTICLE 1.
DEFINITIONS
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2
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Section 1.01.
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Generally
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2
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Section
1.02.
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Definitions
Used Herein
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2
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ARTICLE 2.
TERMS AND CONDITIONS OF THE NOTES
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10
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Section
2.01.
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Designation and
Principal Terms
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10
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Section
2.02.
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Issuance of
Additional Notes
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10
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Section
2.03.
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Denominations
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11
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Section
2.04.
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Form of
Note
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11
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Section
2.05.
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Global
Notes
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11
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Section
2.06.
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Other
Terms
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11
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ARTICLE 3.
COVENANTS
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11
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Section
3.01.
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Limitation on
Subsidiary Indebtedness
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11
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Section
3.02.
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Limitations on
Liens
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12
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Section
3.03.
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Repurchase of
Notes upon a Change of Control Triggering Event
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14
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Section
3.04.
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Termination of
Certain Covenants
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16
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Section
3.05.
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Defeasance
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16
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ARTICLE 4.
REDEMPTION
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16
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Section
4.01.
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Optional
Redemption
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16
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Section
4.02.
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Partial
Redemption
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17
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ARTICLE 5.
MISCELLANEOUS
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18
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Section
5.01.
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Ratification of
Indenture
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18
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Section
5.02.
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Governing
Law
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18
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Section
5.03.
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Direction to
Trustee
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18
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Section
5.04.
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The
Trustee
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18
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Section
5.05.
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Successors
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18
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Section
5.06.
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Severability
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18
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Section
5.07.
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Counterpart
Originals
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18
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Section
5.08.
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Table of
Contents, Headings, etc
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18
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EXHIBIT
A
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A-1
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i
SECOND SUPPLEMENTAL INDENTURE, dated
as of October 1, 2009 (this “Supplemental
Indenture”), between FRONTIER COMMUNICATIONS CORPORATION, a
Delaware corporation (the “Company”), and THE BANK OF
NEW YORK MELLON, a New York banking corporation, as trustee (the
“Trustee”).
W I T N E S S E T H
:
WHEREAS, the Company and the Trustee
have duly executed and delivered an Indenture, dated as of
April 9, 2009 (the “Base Indenture”), as
supplemented and amended by the First Supplemental Indenture, dated
as of April 9, 2009 (the “First Supplemental
Indenture” and, together with the Base Indenture, the
“Indenture”), providing for the authentication,
issuance and delivery of notes to be issued in one or more series
from time to time by the Company (the
“Securities”);
WHEREAS, pursuant to the terms of
the Base Indenture, the Company desires to provide for the
establishment of a new series of Securities to be known as its
8.125% Senior Notes due 2018 (the “Notes”) to be issued
under the Indenture in an aggregate principal amount of
$600,000,000, which may be authenticated and delivered as provided
in the Base Indenture;
WHEREAS, the Company desires to
supplement and amend the provisions of the Indenture to issue the
Notes;
WHEREAS, Section 9.01 of the
Base Indenture expressly permits the Company, when authorized by a
Board Resolution, and the Trustee, upon the written request of the
Company, to enter into one or more supplemental indentures for the
purposes, inter alia , of providing for the issuance of and
establishing the forms and terms of Notes of any series as
permitted by Sections 2.01 and 2.02 of the Base Indenture, and
permits the execution of such supplemental indentures without the
consent of the Holders of any Notes then Outstanding;
WHEREAS, for the purposes
hereinabove recited, and pursuant to a Board Resolution and due
corporate action, the Company has duly determined to execute and
deliver to the Trustee this Supplemental Indenture;
WHEREAS, the Company has requested
that the Trustee execute and deliver this Supplemental
Indenture;
WHEREAS, no consent of any Holder is
required to execute and deliver this Supplemental Indenture;
and
WHEREAS, all conditions and
requirements necessary to make this Supplemental Indenture a valid
and binding instrument in accordance with its terms have been done
and performed, and the execution and delivery hereof has been in
all respects duly authorized.
1
NOW, THEREFORE, in consideration of
the covenants and agreements set forth herein and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Trustee mutually
covenant and agree as follows:
Article 1. Definitions
.
Section 1.01. Generally
. Unless the context otherwise requires:
(a) A term not defined herein that
is defined in the Base Indenture has the same meaning when used in
this Supplemental Indenture;
(b) A term defined anywhere in this
Supplemental Indenture has the same meaning throughout;
(c) A reference to a Section or
Article is to a Section or Article of this Supplemental Indenture;
and
(d) All dollars are United States
dollars.
Section 1.02. Definitions
Used Herein . For all purposes of this Supplemental Indenture,
except as expressly provided or unless the context otherwise
requires, the terms defined in this Section 1.02 shall have
the respective meanings specified in this
Section 1.02.
“ Acquired Indebtedness
” means Indebtedness of a Person existing at the time such
Person becomes a Subsidiary of the Company or Indebtedness of a
Subsidiary of the Company assumed in connection with an Asset
Acquisition by such Subsidiary; provided such Indebtedness
was not Incurred in connection with or in contemplation of such
Person becoming a Subsidiary or such Asset Acquisition.
“ Adjusted Treasury
Rate ” means, with respect to any redemption
date:
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(1)
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the yield,
under the heading which represents the average for the immediately
preceding week, appearing in the most recently published
statistical release designated “H.15(519)” or any
successor publication which is published weekly by the Board of
Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption “Treasury
Constant Maturities,” for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months
before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Comparable Treasury
Issue shall be determined and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight line
basis, rounding to the nearest month); or
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(2)
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if such release
(or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the
rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price
for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such
redemption date.
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The Adjusted Treasury Rate shall be
calculated on the third Business Day preceding the redemption
date.
“ Asset Acquisition
” means (1) an investment by the Company or any of its
Subsidiaries in any other Person pursuant to which such Person
shall become a Subsidiary or shall be merged into or consolidated
with the Company or any of its Subsidiaries; or (2) an
acquisition by the Company or any of its Subsidiaries of the
property and assets of any Person other than the Company or any of
its Subsidiaries that constitute substantially all of a division,
operating unit or line of business of such Person.
“ Beneficial Owner
” has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular “person” as such
term is used in Section 13(d)(3) of the Exchange Act, such
“person” shall be deemed to have beneficial ownership
of all securities that such “person” has the right to
acquire by conversion or exercise of other securities, whether such
right is currently exercisable or is exercisable only upon the
occurrence of a subsequent condition.
“ Capital Lease
Obligations ” means Indebtedness represented by
obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP. The amount of
Indebtedness shall be the capitalized amount of the obligations
determined in accordance with GAAP consistently applied.
“ Capital Stock ”
means, with respect to any entity, any and all shares, interests,
participations or other equivalents (however designated) of or in
such entity’s Common Stock or other equity interests, and
options, rights or warrants to purchase such Common Stock or other
equity interests, whether now outstanding or issued after the Issue
Date.
“ Change of Control
” means the occurrence of any of the following:
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(1)
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the adoption of
a plan relating to the liquidation or dissolution of the
Company;
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(2)
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any
“person,” as such term is used in Section 13(d)(3)
of the Exchange Act, becomes the Beneficial Owner, directly or
indirectly, of more than 50% of the voting power of the Voting
Stock of the Company; provided that a transaction in which
the Company becomes a Subsidiary of another Person shall not
constitute a Change of Control if (a) the stockholders of the
Company immediately prior to such transaction beneficially own,
directly or indirectly through one or more intermediaries, 50% or
more of the voting power of the outstanding Voting Stock of such
other Person of whom the Company is then a Subsidiary and
(b) immediately following such transaction no person (as
defined above) other than such other Person, Beneficially Owns,
directly or indirectly, more than 50% of the voting power of the
Voting Stock of the Company; or
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(3)
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the first day
on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors.
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“ Change of Control
Triggering Event ” means the occurrence of both a Change
of Control and a Ratings Decline.
“ Commodity Agreement
” means any forward contract, commodity swap agreement,
commodity option agreement or other similar agreement or
arrangement.
“ Common Stock ”
means:
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(1)
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in the case of
a corporation, corporate stock;
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(2)
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in the case of
an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of
corporate stock;
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(3)
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in the case of
a partnership or limited liability company, partnership or
membership interests (whether general or limited); and
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(4)
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any other
interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
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“ Comparable Treasury
Issue ” means the United States Treasury security
selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Notes that would be
utilized, at the time of selection and in accordance with customary
financial practice in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of the
Notes (“ Remaining Life ”).
4
“ Comparable Treasury
Price ” means, for any redemption date, (1) the
average of four Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest Reference
Treasury Dealer Quotations, or (2) if the Independent
Investment Banker obtains fewer than four such Reference Treasury
Dealer Quotations the average of all such quotations.
“ Continuing Director
” means, as of any date of determination, any member of the
Board of Directors of the Company who:
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(1)
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was a member of
such Board of Directors on the Issue Date; or
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(2)
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was nominated
for election or elected to such Board of Directors with the
approval of a majority of the Continuing Directors who were members
of such Board at the time of such nomination or
election.
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“ Credit Facilities
” means one or more debt facilities or commercial paper
facilities, in each case with banks or other lenders, including the
Rural Telephone Finance Cooperative, providing for revolving credit
loans, term loans, receivables financings, including through the
sale of receivables to such lenders or to special purpose entities
formed to borrow from such lenders against such receivables,
letters of credit or other borrowings, including capital markets
debt, in each case, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to
time.
“ Currency Agreement
” means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
“ Designated Subsidiary
” means any Subsidiary of the Company (a) the Capital
Stock of which the Company intends to distribute to its
shareholders or (b) the assets or Capital Stock of which the
Company intends to sell or otherwise dispose of to any Person other
than the Company or any of its Subsidiaries, in each case, as
evidenced by a Board Resolution.
“ Disqualified Stock
” means any class or series of Capital Stock of any Person
that by its terms or otherwise is (1) required to be redeemed
prior to the Stated Maturity of the Notes, (2) redeemable at
the option of the holder of such class or series of Capital Stock
at any time prior to the Stated Maturity of the Notes or
(3) convertible into or exchangeable for Capital Stock
referred to in clause (1) or (2) above or Indebtedness
having a scheduled maturity prior to the Stated Maturity of the
Notes.
5
“ Fair Market Value
” means the price that would be paid in an arm’s length
transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no
compulsion to buy, as determined in good faith by the Board of
Directors, whose determination, unless otherwise specified, shall
be conclusive if evidenced by a Board Resolution.
“ GAAP ” means
generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and in the
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, as
in effect from time to time. All ratios and computations contained
or referred to in this Supplemental Indenture and the Base
Indenture shall be computed in conformity with GAAP applied on a
consistent basis.
“ Global Notes ”
means, individually and collectively, each of the Notes that is a
Global Security, issued in accordance with Section 2.05
hereof, substantially in the form of Exhibit A hereto.
“ Guarantee ”
means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other
Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such
Person (1) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness of such other Person
(whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or
services (unless such purchase arrangements are on
arm’s-length terms and are entered into in the ordinary
course of business), to take-or-pay, or to maintain financial
statement conditions or otherwise) or (2) entered into for
purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part);
provided that the term “Guarantee” shall not
include endorsements for collection or deposit in the ordinary
course of business. The term “Guarantee” used as a verb
has a corresponding meaning.
“ Incur ” means,
with respect to any Indebtedness, to incur, create, issue, assume,
Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise,
such Indebtedness; provided that (1) any Indebtedness
of a Person existing at the time such Person becomes a Subsidiary
shall be deemed to be incurred by such Subsidiary at the time it
becomes a Subsidiary and (2) neither the accrual of interest
nor the accretion or amortization of original issue discount nor
the payment of interest or dividend in the form of additional
Indebtedness shall be considered an Incurrence of
Indebtedness.
6
“ Indebtedness ”
means, with respect to any Person at any date of determination
(without duplication):
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(1)
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all
indebtedness of such Person for borrowed money;
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(2)
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all obligations
of such Person evidenced by bonds, debentures, notes or other
similar instruments;
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(3)
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all obligations
of such Person in respect of letters of credit or other similar
instruments (including reimbursement obligations with respect
thereto, but excluding obligations with respect to letters of
credit (including trade letters of credit) securing obligations
entered into in the ordinary course of business of such Person to
the extent such letters of credit are not drawn upon or, if drawn
upon, to the extent such drawing is reimbursed no later than the
fifth Business Day following receipt by such Person of a demand for
reimbursement);
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(4)
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all obligations
of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than one
year after the date of placing such property in service or taking
delivery and title thereto or the completion of such services,
except Trade Payables;
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(5)
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all Capital
Lease Obligations of such Person;
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(6)
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all
Indebtedness of other Persons secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such
Person; provided that the amount of such Indebtedness shall
be the lesser of (A) the Fair Market Value of such asset at
such date of determination and (B) the amount of such
Indebtedness;
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(7)
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all
Indebtedness of other Persons Guaranteed by such Person to the
extent such Indebtedness is Guaranteed by such Person;
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(8)
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to the extent
not otherwise included in this definition, obligations under
Interest Rate Agreements, Commodity Agreements and Currency
Agreements, except for Interest Rate Agreements, Commodity
Agreements and Currency Agreements entered into for the purpose of
fixing, hedging or swapping interest rate, commodity price or
foreign currency exchange rate risk; and
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(9)
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all
Disqualified Stock issued by such Person with the amount of
Indebtedness represented by such Disqualified Stock being equal to
the greater of its voluntary or involuntary liquidation preference
and its maximum fixed repurchase price, but excluding accrued
dividends, if any.
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7
The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date of
all unconditional obligations as described above and, with respect
to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation,
provided :
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(A)
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that the amount
outstanding at any time of any Indebtedness issued with original
issue discount is the face amount of such Indebtedness less the
remaining unamortized portion of the original issue discount of
such Indebtedness at such time as determined in conformity with
GAAP;
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(B)
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that money
borrowed and set aside at the time of the Incurrence of any
Indebtedness in order to prefund the payment of the interest on
such Indebtedness shall not be deemed to be
“Indebtedness” so long as such money is held to secure
the payment of such interest; and
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(C)
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that
Indebtedness shall not include:
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(I) any liability for federal,
state, local or other taxes;
(II) workers’ compensation
claims, self-insurance obligations, performance, surety, appeal and
similar bonds and completion guarantees provided in the ordinary
course of business;
(III) obligations arising from the
honoring by a bank or other financial institution of a check, draft
or similar instrument drawn against insufficient funds in the
ordinary course of business, provided that such Indebtedness
is extinguished within two business days of its Incurrence;
or
(IV) any Indebtedness defeased or
called for redemption.
“ Independent Investment
Banker ” means one of the Reference Treasury Dealers
appointed by the Company.
“ Interest Rate
Agreement ” means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement, option or
future contract or other similar agreement or
arrangement.
“ Issue Date ”
means October 1, 2009.
8
“ Lien ” means,
with respect to any property or assets, including Capital Stock,
any mortgage or deed of trust, pledge, lien, hypothecation,
assignment, deposit arrangement, security interest, charge,
easement or zoning restriction that materially impairs usefulness
or marketability, encumbrance, security agreement, Capital Lease
Obligation, conditional sale, any other agreement that has the same
economic effect as any of the above, or any sale and leaseback
transaction.
“ Moody’s ”
means Moody’s Investor Services, Inc. or any successor rating
agency.
“ Permitted Amount
” means, at any time, the sum of (a) 10% of the value of
the consolidated total assets of the Company and (b) 20% of
the sum of the total consolidated current assets and net property,
plant and equipment of the Company, in each case, as shown on, or
computed from, the most recent quarterly or annual consolidated
balance sheet filed by the Company with the Commission or provided
to the Trustee.
“ Ratings Agencies
” means Moody’s and S&P.
“ Ratings Decline
” means the occurrence of the following on, or within 90 days
after, the date of the public notice of the occurrence of a Change
of Control or of the intention by the Company or any third-party to
effect a Change of Control (which period shall be extended so long
as the rating of the Notes is under publicly announced
consideration for possible downgrade by any of the Ratings
Agencies): (1) in the event that the Notes have an Investment
Grade Rating by both Ratings Agencies, the Notes cease to have an
Investment Grade Rating by one or both of the Ratings Agencies, or
(2) in any other event, the rating of the Notes by either of
the Ratings Agencies decreases by one or more gradations (including
gradations within ratings categories as well as between rating
categories) or is withdrawn.
“ Reference Treasury
Dealer ” means any of the primary U.S. Government
securities dealers in New York City.
“ Reference Treasury Dealer
Quotations ” means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined
by the Independent Investment Banker, of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the
Independent Investment Banker at 5:00 p.m., New York City time, on
the third Business Day preceding such redemption date.
“ S&P ” means
Standard & Poor’s Rating Services, a division of The
McGraw-Hill Companies, Inc., or any successor rating
agency.
9
“ Stated Maturity
” means, (1) with respect to any debt security, the date
specified in such debt security as the fixed date on which the
final installment of principal of such debt security is due and
payable and (2) with respect to any scheduled installment of
principal of or interest on any debt security, the date specified
in such debt security as the fixed date on which such installment
is due and payable.
“ Subsidiary ”
means, with respect to any Person, any corporation, association or
other business entity of which more than 50% of the voting power of
the outstanding Voting Stock is owned, directly or