ESCROWAGREEMENT

 

 

This ESCROW AGREEMENT (this “Escrow Agreement”) is made and entered into as of April 12, 2010 among New Communications Holdings Inc., a Delaware corporation (the “Company”), Frontier Communications Corporation, a Delaware corporation (“Frontier”), The Bank of New York Mellon, as Trustee under the Indenture referred to below (in such capacity, the “Trustee”) and The Bank of New York Mellon, as escrow agent (in such capacity, the “Escrow Agent”) and J.P. Morgan Securities Inc. (“Representative”), as the representative of the several initial purchasers listed in Schedule 1 to the Purchase Agreement (as defined herein) (collectively, the “Initial Purchasers”), in favor of Holders (as defined in the Indenture) of the Notes (as defined herein) issued on the date hereof by the Company under the Indenture referred to below.

 

 

WHEREAS, the Company, Frontier and the Initial Purchasers are parties to a Purchase Agreement dated March 26, 2010 (as such agreement may be amended, the “Purchase  Agreement”), pursuant to which the Company will issue and sell to the Initial Purchasers an aggregate of $500,000,000 principal amount of its 7.875% Senior Notes due 2015 (the “2015 Notes”), an aggregate of $1,100,000,000 principal amount of its 8.250% Senior Notes due 2017 (the “2017 Notes”), an aggregate of $1,100,000,000 principal amount of its 8.500% Senior Notes due 2020 (the “2020 Notes”) and an aggregate of $500,000,000 principal amount of its 8.750% Senior Notes due 2022 (the “2022 Notes”, and together with the 2015 Notes, the 2017 Notes and the 2020 Notes, the “Notes”);

 

WHEREAS, the Company and the Trustee have entered into that certain Indenture dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”), pursuant to which the Company is issuing the Notes on the date hereof;

 

WHEREAS, on the date hereof, pursuant to the Purchase Agreement, (a) the Initial Purchasers are required to deposit, or direct the deposit, into the Escrow Account (as defined herein) of $3,136,000,000 (representing the aggregate purchase price paid by the Initial Purchasers for the Notes) (the “Net Offering Proceeds”), (b) the Initial Purchasers are required to deposit, or direct the deposit, into the Escrow Account of $64,000,000 (representing the difference between the purchase price paid by the Initial Purchasers for the Notes and the resale price of the Notes) (the “Initial Purchasers’ Discount” and together with the Net Offering Proceeds, the “Gross Offering Proceeds”), and (c) Frontier is required to deposit, or direct the deposit, into the Escrow Account the Additional Commitments (as defined herein), which amounts specified in clauses (a), (b) and (c) above in the aggregate shall, at a minimum, be an amount sufficient to redeem the Notes in cash at the Special Redemption Price (as defined herein) on October 1, 2010, and shall be held by the Escrow Agent for the benefit of the Trustee and the ratable benefit of the Holders as their interests may appear;

 

WHEREAS, in the event that (x) the Spin-Off and the Merger (each as defined herein) have not been consummated substantially as described in the Offering Memorandum (as defined herein) by 11:59 p.m. (New York City time) on October 1, 2010, or (y) the Merger Agreement (as defined herein) is terminated in accordance with its terms prior to or on October 1, 2010, the Company shall be required to redeem the Notes at the Special Redemption Price on the Special Redemption Date (as defined herein) pursuant to the special redemption provisions of the Indenture (the “Special Redemption Obligations”);

 

 

 

 

 

 

 

 

NOW, THEREFORE, in consideration of the premises herein contained, the Company, Frontier, the Trustee, the Representative (on behalf of the Initial Purchasers) and the Escrow Agent hereby agree, for the benefit of the Trustee and for the ratable benefit of the Holders, as follows:

 

SECTION 1.          Certain Definitions; Appointment; Deposit and Investment.

 

1.1           Definitions.

 

“Additional Commitments” means $125,517,708.33 in cash, which represents the sum of (i) $18,484,375.00 (which represents interest on the aggregate principal amount of the 2015 Notes at a rate of 7.875% per annum, as calculated in accordance with the terms of the Indenture and the Notes, from and including the date hereof to but excluding October 1, 2010), (ii) $42,602,083.33 (which represents interest on the aggregate principal amount of the 2017 Notes at a rate of 8.250% per annum, as calculated in accordance with the terms of the Indenture and the Notes, from and including the date hereof to but excluding October 1, 2010), (iii) $43,893,055.56 (which represents interest on the aggregate principal amount of the 2020 Notes at a rate of 8.500% per annum, as calculated in accordance with the terms of the Indenture and the Notes, from and including the date hereof to but excluding October 1, 2010) and (iv) $20,538,194.44 (which represents interest on the aggregate principal amount of the 2022 Notes at a rate of 8.750% per annum, as calculated in accordance with the terms of the Indenture and the Notes, from and including April 12, 2010 to but excluding October 1, 2010).

 

“Business Day” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law, regulation or executive order to close in New York City.

 

“Cash Equivalents” means (i) non-interest bearing bank deposits; (ii) interest bearing bank deposits; (iii) investments in any readily accessible money market fund with assets under management of at least $10 billion that invests solely in U.S. Government Securities; provided, however, that the Escrowed Funds deposited in any such fund may not represent more than 2.0% of the assets in such fund; (iv) investments in any prime money market fund with assets in excess of $35 billion, provided that no more than $750 million of the Escrowed Funds may be invested in any single such fund; or (v) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof having maturities of not more than six months from the date hereof.

 

“Distribution Agreement” means the Distribution Agreement, dated as of May 13, 2009, by and between Verizon and the Company, as such agreement may be amended, modified or supplemented from time to time.

 

 

 

 

 

 

“Escrow End Date” means October 1, 2010.

 

“Escrowed Funds” means the aggregate amount of the Gross Offering Proceeds plus the aggregate amount of the Additional Commitments plus the Top-Up Commitments (if required), including all investments thereof made hereunder, plus all interest, dividends and other distributions and payments thereon received by the Escrow Agent.

 

 

“Merger Agreement” means the Agreement and Plan of Merger, dated as of May 13, 2009, among Verizon, the Company and Frontier, as such agreement may be amended, modified or supplemented from time to time.

 

“Offering Memorandum” means the final offering memorandum of the Company, dated March 26, 2010, relating to the offering of the Notes, including the information incorporated therein by reference.

 

“Paying Agent” shall have the meaning ascribed thereto in the Indenture.

 

“Person” or “person” means a natural person, corporation, company, joint venture, individual business trust, trust association, partnership, limited partnership, limited liability company or other entity.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Special Payment” shall have the meaning ascribed thereto in the Distribution Agreement (as defined herein).

 

“Special Redemption Price” means (i) $500,000,000 (which represents the portion of the Gross Offering Proceeds attributable to the 2015 Notes, or 100% of the issue price thereof), (ii) $1,100,000,000 (which represents the portion of the Gross Offering Proceeds attributable to the 2017 Notes, or 100% of the issue price thereof), (iii) (i) $1,100,000,000 (which represents the portion of the Gross Offering Proceeds attributable to the 2020 Notes, or 100% of the issue price thereof) and (iv) $500,000,000 (which represents the portion of the Gross Offering Proceeds attributable to the 2022 Notes, or 100% of the issue price thereof), plus in each case accrued and unpaid interest on the Notes, as calculated in accordance with the terms of the Indenture and the Notes, from and including the date hereof to, but excluding, the Special Redemption Date (as defined herein).

 

“Top-Up Commitment” means an amount in cash equal to (x) the Special Redemption Price (calculated, for the purpose of this definition, assuming the Special Redemption Date is October 4, 2010) minus (y) the aggregate amount of Escrowed Funds (not including, for this purpose, the Top-Up Commitment) as of 9:00 a.m. (New York City time) on September 30, 2010, provided that in no event shall the Top-Up Commitment be less than $0.

 

“Transaction Parties” means the Company and Frontier.

 

 

“U.S. Government Securities” means securities that are (i) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America which, in either case, are not callable or redeemable at the option of the issuer thereof and shall also include (a) a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended), as custodian, with respect to any such U.S. Government Securities or a specific payment of principal of or interest on any such U.S. Government Securities held by such custodian for the account of the holder of such depository receipt; provided, however, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Securities or the specific payment of principal of or interest on the U.S. Government Securities evidenced by such depository receipt and (b) reverse repurchase agreements in respect of the securities described above.

 

 

 

1.2          Appointment of the Escrow Agent

 

Each of the Company, Frontier and the Initial Purchasers hereby appoint The Bank of New York Mellon as Escrow Agent in accordance with the terms and conditions set forth herein and The Bank of New York Mellon hereby accepts such appointment. Any and all Escrowed Funds shall be deposited with the Escrow Agent in the Escrow Account, in U.S. Dollars, by wire transfer. The Escrow Agent shall not be required, or have any duty, to notify anyone of any payment or maturity under the terms of any instrument deposited hereunder, nor to take any legal action to enforce payment of any check, note or security deposited hereunder or to exercise any right or privilege which may be afforded to the holder of any such security.

 

1.3          Establish Account

 

The Escrow Agent shall establish and maintain the Escrow Account herein provided for in accordance with the terms of this Escrow Agreement.

 

 

 

 

 

 

1.4          Deposit of Escrowed Funds

 

On the date hereof and concurrently with the closing of the sale of the Notes, (x) the Initial Purchasers shall deposit, or direct the deposit of, at the direction of the Company and pursuant to the Purchase Agreement, the Net Offering Proceeds, (y) the Initial Purchasers shall deposit, or direct the deposit of, pursuant to the Purchase Agreement, the Initial Purchasers’ Discount, and (z) Frontier shall deposit, or direct the deposit of, the Additional Commitments, into the Escrow Account.

 

SECTION 2.          Maintaining the Escrow Account

 

Except as otherwise provided by the provisions of Section 4 and Section 9 hereof:

 

(a)           Until (i) the Escrowed Funds have been disbursed in accordance with the provisions of Sections 4(a) and 4(b) and the Merger Confirmation Certificate (as defined herein) has been provided, or (ii) the Special Redemption Price has been paid in full in accordance with the provisions of Sections 4(c), the Company will maintain the Escrow Account with the Escrow Agent.

 

(b)           It shall be a term and condition of the Escrow Account, notwithstanding any term or condition to the contrary in any other agreement relating to the Escrow Account (other than this Escrow Agreement), that no amount (including interest, dividends or other distributions or payments on Escrow Investments (as defined herein)) shall be paid or released to or for the account of, or withdrawn by or for the account of, the Company, Frontier, the Initial Purchasers or any other Person from the Escrow Account except in accordance with the provisions of this Escrow Agreement.

 

(c) The Escrow Account shall be subject to such applicable laws, and such applicable regulations of the Board of Governors of the Federal Reserve System and of any other appropriate banking or governmental authority, as may now or hereafter be in effect.

 

SECTION 3.           Investing of Escrowed Funds

 

Prior to the occurrence of an Event of Default (as defined in the Indenture), Escrowed Funds held by the Escrow Agent in the Escrow Account shall be invested and reinvested by the Escrow Agent in the name of the Escrow Agent in Cash Equivalents (such investments and reinvestments, the “Escrow Investments”), at the written direction of the Company or, failing such written direction, Frontier; and after an Event of Default of which a Responsible Officer (as defined in the Indenture) of the Trustee has received written notice or in the absence of any written direction from the Company or Frontier, the Escrow Agent shall invest and reinvest the Escrowed Funds held by the Escrow Agent in the Escrow Account in the name of the Escrow Agent in interest bearing bank deposits. In no event shall the Escrow Agent or the Company be liable for any loss in the Escrow Investments unless such loss results from Escrowed Funds being invested in investments other than Cash Equivalents or such party’s bad faith, gross negligence or willful misconduct.

 

 

 

 

SECTION 4.          Disbursements

 

The Escrow Agent shall hold the Escrowed Funds in the Escrow Account and release the same only as follows:

 

 

 

 

 

 

 

 

 

 

 

 

SECTION 5.          Conditions to Release of Escrowed Funds

 

The release of the Net Offering Proceeds pursuant to Section 4(a) above is subject to the following additional conditions (based solely on the Spin-Off/Merger Release Certificate confirming that such conditions have been satisfied):

 

 

SECTION 6.          Representations and Warranties

 

(a)           Each of the Transaction Parties hereby severally represents and warrants that:

 

 

(b)           The Escrow Agent hereby represents and warrants that:

 

 

 

 

 

 

(c)           The Trustee hereby represents and warrants that:

 

SECTION 7.          Escrow Agent Rights and Duties

 

(a)        The duties, responsibilities and obligations of the Escrow Agent shall be limited to those expressly set forth herein and no duties, responsibilities or obligations shall be inferred or implied. The Escrow Agent shall not be subject to, nor required to comply with, any other agreement between or among any or all of the other parties hereto or to which any of them is a party, even though reference thereto may be made herein, or to comply with any direction or instruction (other than those contained herein or delivered in accordance with this Escrow Agreement) from any such party or any entity acting on its behalf. The Escrow Agent shall not be required to, and shall not, expend or risk any of its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder.

 

 

 

 

 

 

 

(b)            If at any time the Escrow Agent is served with any judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process

which in any way affects Escrowed Funds (including but not limited to orders of attachment or garnishment or other forms of levies or injunctions or stays relating to the transfer of Escrowed Funds), the Escrow Agent is authorized to comply therewith in any manner as it or its legal counsel of its own choosing deems appropriate; and if the Escrow Agent complies with any such judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process, the Escrow Agent shall not be liable to any of the parties hereto or to any other Person even though such order, judgment, decree, writ or process may be subsequently modified or vacated or otherwise determined to have been without legal force or effect; provided, however, that the Escrow Agent shall inform each of the Transaction Parties promptly and no later than two Business Days thereafter of receipt of such order, judgment, decree, writ or process and, to the extent permitted under applicable law, will deliver to each of the Transaction Parties all relevant documents ancillary to such order, judgment, decree, writ or process so that each of the Transaction Parties may seek an appropriate protective order or pursue other legal remedies; provided, further, however, that the Escrow Agent will not comply with such judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process until such time as it is, in the opinion of its counsel, legally compelled to do so.

 

 

(d)           The Escrow Agent may perform any of its duties hereunder by or through agents or employees.

 

 

 

 

 

 

 

 

 

(l)           The Escrow Agent and its directors, officers, employees, attorneys and agents shall be entitled to conclusively rely on any communication, instrument or document reasonably believed by it or them to be genuine and correct and to have been signed or sent by the proper Person or Persons. Any communication, instrument or document shall be in writing and shall be given to the address set forth in the Section 10.1 (or to such other address as may be substituted therefor by written notification to the Transaction Parties). Notices to Escrow Agent shall be deemed to be given when actually received by Escrow Agent's Corporate Finance Unit of the Corporate Trust Division. Whenever under the terms hereof the time for giving a notice or performing an act falls upon a non-Business Day, such time shall be extended to the next Business Day on which the Escrow Agent is open for business.

 

(m)           In the event of any dispute between, or conflicting claims, demands or instructions by or among, any parties to this Escrow Agreement (other than the Escrow Agent) with respect to any Escrowed Funds, the Escrow Agent shall be entitled, in its sole discretion, to refuse to comply with any and all claims, demands or instructions with respect to such Escrowed Funds so long as such dispute or conflict shall continue, and the Escrow Agent shall not be or become liable in any way for such failure or refusal to comply with such conflicting claims, demands or instructions; provided, however, notwithstanding anything to the contrary in the foregoing, the Escrow Agent shall release the Escrowed Funds in accordance with Section 4. The Escrow Agent shall be entitled to refuse to act until, in its sole discretion, either (i) such conflicting or adverse claims or demands shall have been determined by a final order, judgment or decree of a court of competent jurisdiction, which order, judgment or decree is not subject to appeal, or settled by agreement between the conflicting parties as evidenced in a writing satisfactory to the Escrow Agent or (ii) the Escrow Agent shall have received security or an indemnity satisfactory to it sufficient to hold it harmless from and against any and all Losses (as defined herein) which it may incur by reason of so acting. The Escrow Agent may, in addition, elect, in its sole discretion, to commence an interpleader action or seek other judicial relief or orders as it may deem, in its sole discretion, necessary. The costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with such proceeding shall be paid by, and shall be deemed an obligation of, Frontier.

 

(n)           The rights and remedies conferred upon the Escrow Agent and each of the parties hereto shall be cumulative, and the exercise or waiver of any such right or remedy shall not preclude or inhibit the exercise of any additional rights or remedies. The waiver of any right or remedy hereunder shall not preclude the subsequent exercise of such right or remedy.

 

(o)           The Escrow Agent does not have any interest in the Escrowed Funds hereunder but is serving as escrow holder only and having only possession and/or control thereof. Frontier shall pay or reimburse the Escrow Agent upon request for any transfer taxes or other taxes relating to the Escrowed Funds incurred in connection herewith and shall indemnify and hold harmless the Escrow Agent for any amounts that it is obligated to pay in the way of such taxes. Frontier shall pay or reimburse each Initial Purchaser upon request for any transfer taxes or other taxes relating to any income earned on that portion of the Escrowed Funds constituting the Initial Purchasers’ Discount incurred in connection herewith and shall indemnify and hold harmless each Initial Purchaser for any amounts that it is obligated to pay in the way of such taxes. Upon execution of this Escrow Agreement, each of the parties hereto (other than Trustee) shall provide the Escrow Agent with a fully executed Internal Revenue Service Form W-9 (or other applicable form). The parties hereto agree that (i) for tax reporting purposes, and for any tax year, all interest or other income earned under the Escrow Agreement attributable to the Gross Offering Proceeds shall be allocable to the Company and (ii) to the extent permitted by applicable law, the Company will include all amounts earned under the Escrow Agreement attributable to the Gross Offering Proceeds in its gross income for federal, state and local income tax (collectively, “income tax”) purposes and pay any income tax resulting therefrom. The parties hereto agree that (i) for tax reporting purposes, and for any tax year, all interest or other income earned under the Escrow Agreement attributable to the Additional Commitments shall be allocable to Frontier and (ii) to the extent permitted by applicable law, Frontier will include all amounts earned under the Escrow Agreement attributable to the Additional Commitments in its gross income for income tax purposes and pay any income tax resulting therefrom. Any payments of income from the account established hereunder may be subject to withholding regulations then in force with respect to United States taxes. It is understood that the Escrow Agent shall be responsible for income reporting only with respect to any income which may be earned on investment of funds which are a part of the Escrowed Funds and is not responsible for any other reporting.

 

 

 

 

 

 

 

 

SECTION 8.         Indemnity

 

Frontier shall indemnify, hold harmless and defend the Escrow Agent and its directors, officers, agents and employees, from and against any and all claims, losses, actions, obligations, liabilities, damages, costs and expenses (“Losses”) directly or indirectly arising out of, relating to or in connection with its acceptance of its appointment hereunder or its performance as Escrow Agent (including but not limited to Losses incurred by the Escrow Agent in connection with its successful defense, in whole or in part, of any claim of bad faith, willful misconduct or gross negligence on its part), provided that such Losses do not arise from the Escrow Agent’s bad faith, willful misconduct or gross negligence.

 

SECTION 9.         Compensation; Expenses

 

Frontier will upon demand pay to the Escrow Agent the amount of any and all reasonable expenses, including, without limitation, the reasonable fees, expenses and disbursements of its counsel that the Escrow Agent may incur in connection with (a) the review, negotiation and administration of this Escrow Agreement, (b) the exercise or enforcement of any of the rights of the Escrow Agent and the Holders of the Notes hereunder or (c) the failure by any party hereto to perform or observe any of the provisions hereof. The Escrow Agent’s sole recourse for any payment of fees, expenses or costs is against Frontier, and the Escrow Agent has no right to sell, convey or dispose the Escrowed Funds other than in accordance with Section 4 hereof.

 

SECTION 10.          Miscellaneous Provisions.

 

10.1          Notices

 

Any notice or communication shall be sufficiently given if in writing and delivered in person or mailed by first class mail, commercial courier service or telecopier communication, addressed as follows:

 

If to the Company:

 

New Communications Holdings Inc.

3900 Washington Street, 2nd Floor

Wilmington, DE 19802

Attn: Janet M. Garrity, Treasurer

Fax: (302) 761-4245

 

With copies to:

 

Debevoise & Plimpton LLP

919 Third Avenue

New York, NY 10022

Attn: Steven J. Slutzky

Fax: (212) 909-6836

 

 

 

 

 

 

 

If to Frontier:

 

Frontier Communications Corporation

3 High Ridge Park

Stamford, Connecticut 06905

Attn: Hilary E. Glassman, Esq., General Counsel

Fax: (203) 614-4602

 

With copies to:

 

Cravath, Swaine & Moore LLP

825 Eighth Avenue

New York, NY 10019

Attn: Craig F. Arcella

Fax: (212) 474-3700

 

If to the Escrow Agent:

 

The Bank of New York Mellon

101 Barclay Street, Floor 8W

New York, NY 10286

Attn: Corporate Trust Division - Corporate Finance Unit

Fax: (212) 815-5704

 

If to the Trustee:

 

The Bank of New York Mellon

101 Barclay Street, Floor 8W

New York, NY 10286

Attn: Corporate Trust Division - Corporate Finance Unit

Fax: (212) 815-5704

 

 

If to the Initial Purchasers:

 

c/o J.P. Morgan Securities Inc.

383 Madison Avenue

New York, NY 10179

Attn: Richard Gabriel

Fax: (212) 270-1063

 

With copies to:

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Attn: Rod Miller

Fax: (212) 310-8007

 

Whenever under the terms hereof the time for giving a notice or performing an act falls upon a day that is not a Business Day, such time shall be extended to the next Business Day.

 

10.2          No Adverse Interpretation of Other Agreements

 

Except as provided in Section 10. 8, this Escrow Agreement may not be used to interpret another pledge, security or debt agreement of the Company, Frontier or of their respective subsidiaries and no such pledge, security or debt agreement (other than the Indenture) may be used to interpret this Escrow Agreement.

 

10.3          Severability

 

The provisions of this Escrow Agreement are severable, and if any clause or provision shall be held invalid, illegal or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect in that jurisdiction only such clause or provision, or part thereof, and shall not in any manner affect such clause or provision in any other jurisdiction or any other clause or provision of this Escrow Agreement in any jurisdiction.

 

10.4          Headings

 

The headings in this Escrow Agreement have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof.

 

10.5          Counterpart Originals

 

This Escrow Agreement may be signed in two or more counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same agreement.

 

 

 

 

 

 

 

This Escrow Agreement shall be binding upon each of the Transaction Parties, its transferees, successors and assigns, and shall inure, together with the rights and remedies of the Escrow Agent hereunder, to the benefit of the Escrow Agent, Trustee, Initial Purchasers, Holders and their respective successors, permitted transferees and assigns.

 

Nothing in this Escrow Agreement, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Holders and the Trustee on behalf of the Holders, any benefit or any legal or equitable right, remedy or claim under this Escrow Agreement.

 

 

Any amendment or waiver of any provision of this Escrow Agreement and any consent to any departure by the Transaction Parties from any provision of this Escrow Agreement shall be effective only if made or duly given with the written consent of the Escrow Agent, the Trustee and each of the Transaction Parties; provided, however, that any amendment or waiver of any provision of the Escrow Agreement and any consent to any departure by any of the Transaction Parties from any provision of this Escrow Agreement that would reduce the amount distributable to the Initial Purchasers upon release of the Escrowed Funds pursuant to Section 4(a) and 4(b) hereof shall be effective only if made or duly given with the written consent of the Representative. None of the Escrow Agent, the Trustee, the Representative or any Holder shall be deemed, by any act, delay, indulgence, omission or otherwise, to have waived any right or remedy hereunder or to have acquiesced in any default of any obligation or in any breach of any of the terms and conditions hereof. Failure of the Escrow Agent, the Trustee, the Representative or any Holder to exercise, or delay in exercising, any right, power or privilege hereunder shall not preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Escrow Agent, the Trustee, the Representative or any Holder of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the Escrow Agent, the Trustee, the Representative or such Holder would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.

 

 

To the extent a term or provision of this Escrow Agreement (other than Sections 7, 8 and 9 hereof) conflicts with the Indenture, the Indenture shall control with respect to the subject matter of such term or provision. Acceptance of or acquiescence in a course of performance rendered under this Escrow Agreement shall not be relevant to determine the meaning of this Escrow Agreement even though the accepting or acquiescing party had knowledge of the nature of the performance and opportunity for objection. Regardless of any provision in any such customer agreement, the State of New York shall be deemed to be the Escrow Agent’s location for purposes of this Escrow Agreement.

 

 

 

 

 

 

10.9          Termination

 

(a)        This Escrow Agreement shall, unless otherwise provided in the Indenture or in this Escrow Agreement, remain in full force and effect.

 

(b)        This Escrow Agreement shall terminate immediately upon (i) the disbursement of the Escrowed Funds in accordance with the provisions of Sections 4(a) and 4(b) or (ii) the disbursement of the Escrowed Funds in accordance with the provisions of Sections 4(c). The Escrow Agent further agrees to execute and deliver such documents, instruments or other agreements as the Transaction Parties or the Initial Purchasers may reasonably request (all at the expense of the Transaction Parties) to evidence the release and terminations contemplated in this Section 10.9.

 

10.10         Survival Provisions

 

Anything herein to the contrary notwithstanding, (a) all representations, warranties and covenants of each of the Transaction Parties contained herein shall survive the execution and delivery of this Escrow Agreement, and shall terminate only upon the termination of this Escrow Agreement, and (b) the obligations of Frontier under Sections 8 and 9 hereof shall survive the termination of this Escrow Agreement and the resignation or removal of the Escrow Agent.

 

10.11          Waivers

 

The Transaction Parties waive presentment and demand for payment of the Special Redemption Obligations, protest and notice of dishonor or default with respect to the Special Redemption Obligations, and all other notices to which the Transaction Parties might otherwise be entitled, except as otherwise expressly provided herein or in the Indenture.

 

10.12          Authority of the Escrow Agent

 

The Escrow Agent shall have and be entitled to exercise all powers hereunder that are specifically granted to the Escrow Agent by the terms hereof, together with such powers as are reasonably incident thereto.

 

10.13          Final Expression

 

This Escrow Agreement, together with the terms of the Indenture expressly referred to herein, is intended by the parties as a final expression of this Escrow Agreement and is intended as a complete and exclusive statement of the terms and conditions thereof.

 

10.14          Rights of Holders

 

No Holder shall have any independent rights hereunder other than those rights granted to individual Holders pursuant to the applicable sections of the Indenture; provided that nothing in this subsection shall limit any rights granted to the Escrow Agent under the Notes or the Indenture.

 

 

 

 

 

 

 

10.16          Payments to the Initial Purchasers

 

The Escrow Agent shall make all payments owing to the Initial Purchasers hereunder to J.P. Morgan Securities Inc. as per the following wire payment instructions:

 

Bank Name: JP Morgan Chase Bank

ABA #: 021-000-021

F/A/O: JPMSI

Account #: 066-916402

Attn.: Joel Ferrari

 

 

 

 

 

 

 

 

 

FORM OF SPIN-OFF/MERGER RELEASE CERTIFICATE

 

OFFICER’S CERTIFICATE

 

OF

 

NEW COMMUNICATIONS HOLDINGS INC.

 

AND

 

FRONTIER COMMUNICATIONS CORPORATION

 

 

This certificate is being delivered pursuant to Section 4(a) of the Escrow Agreement dated as of April 12, 2010 (the “Escrow Agreement”), among New Communications Holdings Inc., a Delaware corporation (the “Company”), Frontier Communications Corporation, a Delaware corporation (“Frontier”), The Bank of New York Mellon, as Escrow Agent (the “Escrow Agent”), The Bank of New York Mellon, as Trustee under the Indenture referred to in the Escrow Agreement (the “Trustee”) and J.P. Morgan Securities Inc. (“Representative”), as the representative of the several initial purchasers listed in Schedule 1 to the Purchase Agreement (as defined in the Escrow Agreement) (collectively, the “Initial Purchasers”). Unless otherwise indicated, capitalized terms used but not defined herein have the respective meanings specified in Escrow Agreement.

 

 

1.            The Spin-Off is expected to be consummated substantially as described in the Offering Memorandum promptly upon release of the Escrowed Funds.

 

2.            The Merger is expected be consummated substantially as described in the Offering Memorandum promptly following the consummation of the Spin-Off.

 

3.            The Company hereby directs the Escrow Agent to disburse the Escrowed Funds as instructed below.

 

 

 

The Net Offering Proceeds shall be disbursed in accordance with the Company’s written direction, delivered separately to the Escrow Agent.

 

 

 

 

IN WITNESS WHEREOF, each of the Company and Frontier, through its respective undersigned officer, has signed this officer’s certificate as of the date first above written.

 

 

FORM OF MERGER CONFIRMATION CERTIFICATE

 

OFFICER’S CERTIFICATE

 

OF

 

FRONTIER COMMUNICATIONS CORPORATION

 

 

 

 

 

 

 

 

 

 

 

FORM OF TERMINATION CERTIFICATE

 

OF

 

 

This certificate is being delivered pursuant to Section 4(c) of the Escrow Agreement dated as of April 12, 2010 (the “Escrow Agreement”), among New Communications Holdings, Inc., a Delaware corporation (the “Company”), Frontier Communications Corporation, a Delaware corporation (“Frontier”), The Bank of New York Mellon, as Escrow Agent (the “Escrow Agent”), The Bank of New York Mellon, as Trustee under the Indenture referred to in the Escrow Agreement (the “Trustee”) and J.P. Morgan Securities Inc. (“Representative”), as the representative of the several initial purchasers listed in Schedule 1 to the Purchase Agreement (as defined in the Escrow Agreement) (collectively, the “Initial Purchasers”). Unless otherwise indicated, capitalized terms used but not defined herein have the respective meanings specified in Escrow Agreement.

 

 

The Merger Agreement was terminated pursuant to its terms on [          ].

 

IN WITNESS WHEREOF, [the Company][Frontier], through the undersigned officer, has signed this officer’s certificate as of the date first above written.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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